UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter ended July | Commission File Number | |
0-19517 |
THE BON-TON STORES, INC.
2801 East Market Street
York, Pennsylvania 17402
(717) 757-7660
Incorporated in Pennsylvania |
| IRS No. 23-2835229 |
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 twelve 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. Yes x No o
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). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o | Accelerated filer | Non-accelerated filer o | Smaller reporting company x | Emerging growth company o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of August 26, 2016,24, 2017, there were 18,559,32518,570,320 shares of Common Stock, $.01 par value, and 2,951,490 shares of Class A Common Stock, $.01 par value, outstanding.
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE BON-TON STORES, INC.
CONSOLIDATED BALANCE SHEETS
|
| (Unaudited) |
|
|
|
| (Unaudited) |
|
|
| ||||||||||
|
| July 30, |
| August 1, |
| January 30, |
|
| July 29, |
| July 30, |
| January 28, |
| ||||||
(In thousands, except share and per share data) |
| 2016 |
| 2015 |
| 2016 |
|
| 2017 |
| 2016 |
| 2017 |
| ||||||
|
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| ||||||
Assets |
|
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| ||||||
Current assets: |
|
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|
|
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| ||||||
Cash and cash equivalents |
| $ | 7,047 |
| $ | 20,935 |
| $ | 6,879 |
|
| $ | 6,335 |
| $ | 7,047 |
| $ | 6,736 |
|
Merchandise inventories |
| 693,810 |
| 738,089 |
| 711,699 |
|
| 658,218 |
| 693,810 |
| 724,454 |
| ||||||
Prepaid expenses and other current assets |
| 74,897 |
| 79,926 |
| 97,254 |
|
| 82,801 |
| 74,897 |
| 98,558 |
| ||||||
Total current assets |
| 775,754 |
| 838,950 |
| 815,832 |
|
| 747,354 |
| 775,754 |
| 829,748 |
| ||||||
Property, fixtures and equipment at cost, net of accumulated depreciation and amortization of $998,415, $929,783 and $951,786 at July 30, 2016, August 1, 2015 and January 30, 2016, respectively |
| 613,763 |
| 641,748 |
| 635,334 |
| |||||||||||||
Intangible assets, net of accumulated amortization of $65,090, $66,198 and $62,204 at July 30, 2016, August 1, 2015 and January 30, 2016, respectively |
| 79,176 |
| 86,964 |
| 82,062 |
| |||||||||||||
Property, fixtures and equipment at cost, net of accumulated depreciation and amortization of $1,049,212, $998,415 and $1,024,435 at July 29, 2017, July 30, 2016 and January 28, 2017, respectively |
| 547,279 |
| 613,763 |
| 584,803 |
| |||||||||||||
Intangible assets, net of accumulated amortization of $68,371, $65,090 and $65,646 at July 29, 2017, July 30, 2016 and January 28, 2017, respectively |
| 70,386 |
| 79,176 |
| 73,111 |
| |||||||||||||
Other long-term assets |
| 16,053 |
| 15,649 |
| 17,398 |
|
| 21,729 |
| 16,053 |
| 17,401 |
| ||||||
Total assets |
| $ | 1,484,746 |
| $ | 1,583,311 |
| $ | 1,550,626 |
|
| $ | 1,386,748 |
| $ | 1,484,746 |
| $ | 1,505,063 |
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Liabilities and Shareholders’ (Deficit) Equity |
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Liabilities and Shareholders’ Deficit |
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Current liabilities: |
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| ||||||
Accounts payable |
| $ | 214,957 |
| $ | 241,272 |
| $ | 162,831 |
|
| $ | 177,689 |
| $ | 214,957 |
| $ | 185,900 |
|
Accrued payroll and benefits |
| 25,999 |
| 24,436 |
| 28,527 |
|
| 26,288 |
| 25,999 |
| 25,821 |
| ||||||
Accrued expenses |
| 143,738 |
| 138,597 |
| 147,378 |
|
| 136,610 |
| 143,738 |
| 150,441 |
| ||||||
Current maturities of long-term debt |
| 57,183 |
| 103,810 |
| — |
|
| — |
| 57,183 |
| — |
| ||||||
Current maturities of obligations under capital leases |
| 5,666 |
| 5,133 |
| 5,394 |
| |||||||||||||
Current maturities of capital lease and financing obligations |
| 6,986 |
| 5,666 |
| 6,685 |
| |||||||||||||
Total current liabilities |
| 447,543 |
| 513,248 |
| 344,130 |
|
| 347,573 |
| 447,543 |
| 368,847 |
| ||||||
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| ||||||
Long-term debt, less current maturities |
| 762,326 |
| 732,298 |
| 855,977 |
|
| 849,332 |
| 762,326 |
| 848,777 |
| ||||||
Obligations under capital leases, less current maturities |
| 123,796 |
| 129,461 |
| 126,692 |
| |||||||||||||
Capital lease and financing obligations, less current maturities |
| 130,471 |
| 123,796 |
| 133,857 |
| |||||||||||||
Other long-term liabilities |
| 189,589 |
| 192,775 |
| 188,911 |
|
| 170,307 |
| 189,589 |
| 176,363 |
| ||||||
Total liabilities |
| 1,523,254 |
| 1,567,782 |
| 1,515,710 |
|
| 1,497,683 |
| 1,523,254 |
| 1,527,844 |
| ||||||
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Contingencies (Note 9) |
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Contingencies (Note 10) |
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Shareholders’ (deficit) equity |
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Shareholders’ deficit |
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Preferred Stock — authorized 5,000,000 shares at $0.01 par value; no shares issued |
| — |
| — |
| — |
|
| — |
| — |
| — |
| ||||||
Common Stock — authorized 40,000,000 shares at $0.01 par value; issued shares of 18,944,025, 18,351,727 and 18,532,577 at July 30, 2016, August 1, 2015 and January 30, 2016, respectively |
| 189 |
| 184 |
| 185 |
| |||||||||||||
Class A Common Stock — authorized 20,000,000 shares at $0.01 par value; issued and outstanding shares of 2,951,490 at July 30, 2016, August 1, 2015 and January 30, 2016 |
| 30 |
| 30 |
| 30 |
| |||||||||||||
Treasury stock, at cost — 337,800 shares at July 30, 2016, August 1, 2015 and January 30, 2016 |
| (1,387 | ) | (1,387 | ) | (1,387 | ) | |||||||||||||
Common Stock — authorized 40,000,000 shares at $0.01 par value; issued shares of 18,908,120, 18,944,025 and 18,972,718 at July 29, 2017, July 30, 2016 and January 28, 2017, respectively |
| 189 |
| 189 |
| 190 |
| |||||||||||||
Class A Common Stock — authorized 20,000,000 shares at $0.01 par value; issued and outstanding shares of 2,951,490 at July 29, 2017, July 30, 2016 and January 28, 2017, respectively |
| 30 |
| 30 |
| 30 |
| |||||||||||||
Treasury stock, at cost — 337,800 shares at July 29, 2017, |
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July 30, 2016 and January 28, 2017 |
| (1,387 | ) | (1,387 | ) | (1,387 | ) | |||||||||||||
Additional paid-in capital |
| 165,820 |
| 163,006 |
| 164,428 |
|
| 168,285 |
| 165,820 |
| 166,932 |
| ||||||
Accumulated other comprehensive loss |
| (74,388 | ) | (78,517 | ) | (76,122 | ) |
| (71,391 | ) | (74,388 | ) | (72,909 | ) | ||||||
Accumulated deficit |
| (128,772 | ) | (67,787 | ) | (52,218 | ) |
| (206,661 | ) | (128,772 | ) | (115,637 | ) | ||||||
Total shareholders’ (deficit) equity |
| (38,508 | ) | 15,529 |
| 34,916 |
| |||||||||||||
Total liabilities and shareholders’ (deficit) equity |
| $ | 1,484,746 |
| $ | 1,583,311 |
| $ | 1,550,626 |
| ||||||||||
Total shareholders’ deficit |
| (110,935 | ) | (38,508 | ) | (22,781 | ) | |||||||||||||
Total liabilities and shareholders’ deficit |
| $ | 1,386,748 |
| $ | 1,484,746 |
| $ | 1,505,063 |
|
The accompanying notes are an integral part of these consolidated financial statements.
THE BON-TON STORES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
|
| THIRTEEN |
| TWENTY-SIX |
|
| THIRTEEN |
| TWENTY-SIX |
| ||||||||||||||||
|
| WEEKS ENDED |
| WEEKS ENDED |
|
| WEEKS ENDED |
| WEEKS ENDED |
| ||||||||||||||||
(In thousands, except per share data) |
| July 30, |
| August 1, |
| July 30, |
| August 1, |
|
| July 29, |
| July 30, |
| July 29, |
| July 30, |
| ||||||||
(Unaudited) |
| 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| 2017 |
| 2016 |
| 2017 |
| 2016 |
| ||||||||
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Net sales |
| $ | 542,360 |
| $ | 555,431 |
| $ | 1,133,367 |
| $ | 1,166,369 |
|
| $ | 504,424 |
| $ | 542,360 |
| $ | 1,040,565 |
| $ | 1,133,367 |
|
Other income |
| 16,252 |
| 15,568 |
| 33,668 |
| 31,872 |
|
| 21,037 |
| 16,252 |
| 37,917 |
| 33,668 |
| ||||||||
|
| 558,612 |
| 570,999 |
| 1,167,035 |
| 1,198,241 |
|
| 525,461 |
| 558,612 |
| 1,078,482 |
| 1,167,035 |
| ||||||||
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Costs and expenses: |
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| ||||||||
Costs of merchandise sold |
| 344,273 |
| 350,828 |
| 735,186 |
| 755,293 |
|
| 325,195 |
| 344,273 |
| 688,756 |
| 735,186 |
| ||||||||
Selling, general and administrative |
| 211,872 |
| 215,186 |
| 428,057 |
| 433,872 |
|
| 191,191 |
| 211,872 |
| 396,276 |
| 428,057 |
| ||||||||
Gain on insurance recovery |
| — |
| (748 | ) | — |
| (748 | ) | |||||||||||||||||
Depreciation and amortization |
| 24,999 |
| 24,193 |
| 48,193 |
| 46,226 |
|
| 23,135 |
| 24,999 |
| 45,342 |
| 48,193 |
| ||||||||
Amortization of lease-related interests |
| 1,008 |
| 1,061 |
| 2,015 |
| 2,162 |
|
| 955 |
| 1,008 |
| 1,909 |
| 2,015 |
| ||||||||
Impairment charges |
| 178 |
| 222 |
| 178 |
| 222 |
|
| 147 |
| 178 |
| 147 |
| 178 |
| ||||||||
Loss from operations |
| (23,718 | ) | (19,743 | ) | (46,594 | ) | (38,786 | ) |
| (15,162 | ) | (23,718 | ) | (53,948 | ) | (46,594 | ) | ||||||||
Interest expense, net |
| 15,162 |
| 15,196 |
| 30,248 |
| 30,386 |
|
| 18,029 |
| 15,162 |
| 36,047 |
| 30,248 |
| ||||||||
Loss on extinguishment of debt |
| — |
| 4,862 |
| — |
| 4,862 |
|
| — |
| — |
| 559 |
| — |
| ||||||||
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Loss before income taxes |
| (38,880 | ) | (39,801 | ) | (76,842 | ) | (74,034 | ) |
| (33,191 | ) | (38,880 | ) | (90,554 | ) | (76,842 | ) | ||||||||
Income tax benefit |
| (144 | ) | (238 | ) | (288 | ) | (397 | ) | |||||||||||||||||
Income tax provision (benefit) |
| 18 |
| (144 | ) | (30 | ) | (288 | ) | |||||||||||||||||
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Net loss |
| $ | (38,736 | ) | $ | (39,563 | ) | $ | (76,554 | ) | $ | (73,637 | ) |
| $ | (33,209 | ) | $ | (38,736 | ) | $ | (90,524 | ) | $ | (76,554 | ) |
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Per share amounts — |
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Basic: |
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Net loss |
| $ | (1.95 | ) | $ | (2.01 | ) | $ | (3.86 | ) | $ | (3.75 | ) |
| $ | (1.64 | ) | $ | (1.95 | ) | $ | (4.49 | ) | $ | (3.86 | ) |
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Diluted: |
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Net loss |
| $ | (1.95 | ) | $ | (2.01 | ) | $ | (3.86 | ) | $ | (3.75 | ) |
| $ | (1.64 | ) | $ | (1.95 | ) | $ | (4.49 | ) | $ | (3.86 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
THE BON-TON STORES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
|
| THIRTEEN |
| TWENTY-SIX |
| ||||||||
|
| WEEKS ENDED |
| WEEKS ENDED |
| ||||||||
(In thousands) |
| July 30, |
| August 1, |
| July 30, |
| August 1, |
| ||||
(Unaudited) |
| 2016 |
| 2015 |
| 2016 |
| 2015 |
| ||||
|
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| ||||
Net loss |
| $ | (38,736 | ) | $ | (39,563 | ) | $ | (76,554 | ) | $ | (73,637 | ) |
Other comprehensive income, net of tax: |
|
|
|
|
|
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|
|
| ||||
Pension and postretirement benefit plans |
| 867 |
| 906 |
| 1,734 |
| 1,888 |
| ||||
Comprehensive loss |
| $ | (37,869 | ) | $ | (38,657 | ) | $ | (74,820 | ) | $ | (71,749 | ) |
|
| THIRTEEN |
| TWENTY-SIX |
| ||||||||
|
| WEEKS ENDED |
| WEEKS ENDED |
| ||||||||
(In thousands) |
| July 29, |
| July 30, |
| July 29, |
| July 30, |
| ||||
(Unaudited) |
| 2017 |
| 2016 |
| 2017 |
| 2016 |
| ||||
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Net loss |
| $ | (33,209 | ) | $ | (38,736 | ) | $ | (90,524 | ) | $ | (76,554 | ) |
Other comprehensive income, net of tax: |
|
|
|
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|
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|
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| ||||
Pension and postretirement benefit plans |
| 755 |
| 867 |
| 1,518 |
| 1,734 |
| ||||
Comprehensive loss |
| $ | (32,454 | ) | $ | (37,869 | ) | $ | (89,006 | ) | $ | (74,820 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
THE BON-TON STORES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
| TWENTY-SIX |
|
| TWENTY-SIX |
| ||||||||
|
| WEEKS ENDED |
|
| WEEKS ENDED |
| ||||||||
(In thousands) |
| July 30, |
| August 1, |
|
| July 29, |
| July 30, |
| ||||
(Unaudited) |
| 2016 |
| 2015 |
|
| 2017 |
| 2016 |
| ||||
Cash flows from operating activities: |
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| ||||
Net loss |
| $ | (76,554 | ) | $ | (73,637 | ) |
| $ | (90,524 | ) | $ | (76,554 | ) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
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|
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|
|
| ||||
Depreciation and amortization |
| 48,193 |
| 46,226 |
|
| 45,342 |
| 48,193 |
| ||||
Amortization of lease-related interests |
| 2,015 |
| 2,162 |
|
| 1,909 |
| 2,015 |
| ||||
Impairment charges |
| 178 |
| 222 |
|
| 147 |
| 178 |
| ||||
Share-based compensation expense |
| 1,516 |
| 1,598 |
|
| 896 |
| 1,516 |
| ||||
Loss (gain) on sale of property, fixtures and equipment |
| 22 |
| (1,490 | ) | |||||||||
(Gain) loss on sale of property, fixtures and equipment |
| (5,538 | ) | 22 |
| |||||||||
Reclassifications of accumulated other comprehensive loss |
| 2,927 |
| 3,183 |
|
| 2,567 |
| 2,927 |
| ||||
Loss on extinguishment of debt |
| — |
| 4,862 |
|
| 559 |
| — |
| ||||
Amortization of deferred financing costs |
| 1,704 |
| 1,488 |
| |||||||||
Amortization of deferred financing costs and debt discount |
| 2,892 |
| 1,704 |
| |||||||||
Deferred income tax benefit |
| (288 | ) | (397 | ) |
| (30 | ) | (288 | ) | ||||
Changes in operating assets and liabilities: |
|
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|
|
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|
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| ||||
Decrease (increase) in merchandise inventories |
| 17,888 |
| (3,132 | ) | |||||||||
Decrease in merchandise inventories |
| 66,236 |
| 17,888 |
| |||||||||
Decrease in prepaid expenses and other current assets |
| 22,358 |
| 12,120 |
|
| 15,757 |
| 22,358 |
| ||||
Decrease in other long-term assets |
| 632 |
| 895 |
|
| 49 |
| 632 |
| ||||
Increase in accounts payable |
| 49,514 |
| 45,570 |
| |||||||||
(Decrease) increase in accounts payable |
| (6,698 | ) | 49,514 |
| |||||||||
Decrease in accrued payroll and benefits and accrued expenses |
| (6,495 | ) | (18,242 | ) |
| (11,966 | ) | (6,495 | ) | ||||
Decrease in other long-term liabilities |
| (41 | ) | (10,464 | ) |
| (10,254 | ) | (41 | ) | ||||
Net cash provided by operating activities |
| 63,569 |
| 10,964 |
|
| 11,344 |
| 63,569 |
| ||||
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| ||||
Cash flows from investing activities: |
|
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|
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|
|
| ||||
Capital expenditures |
| (25,749 | ) | (47,350 | ) |
| (21,184 | ) | (25,749 | ) | ||||
Proceeds from insurance claim |
| — |
| 1,510 |
| |||||||||
Proceeds from sale of property, fixtures and equipment |
| 7 |
| 84,066 |
|
| 21,422 |
| 7 |
| ||||
Net cash (used in) provided by investing activities |
| (25,742 | ) | 38,226 |
| |||||||||
Net cash provided by (used in) investing activities |
| 238 |
| (25,742 | ) | |||||||||
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Cash flows from financing activities: |
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| ||||
Payments on long-term debt and capital lease obligations |
| (303,258 | ) | (392,183 | ) | |||||||||
Proceeds from issuance of long-term debt |
| 263,669 |
| 370,390 |
| |||||||||
Cash dividends paid |
| — |
| (2,004 | ) | |||||||||
Payments on long-term debt and capital lease and financing obligations |
| (279,382 | ) | (303,258 | ) | |||||||||
Proceeds from issuance of long-term debt and financing obligations |
| 275,866 |
| 263,669 |
| |||||||||
Restricted shares forfeited in lieu of payroll taxes |
| (120 | ) | (399 | ) |
| (44 | ) | (120 | ) | ||||
Proceeds from stock options exercised |
| — |
| 454 |
| |||||||||
Deferred financing costs paid |
| (495 | ) | — |
|
| (6,842 | ) | (495 | ) | ||||
Increase (decrease) in book overdraft balances |
| 2,545 |
| (13,266 | ) | |||||||||
(Decrease) increase in book overdraft balances |
| (1,581 | ) | 2,545 |
| |||||||||
Net cash used in financing activities |
| (37,659 | ) | (37,008 | ) |
| (11,983 | ) | (37,659 | ) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
Net increase in cash and cash equivalents |
| 168 |
| 12,182 |
| |||||||||
Net (decrease) increase in cash and cash equivalents |
| (401 | ) | 168 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
| ||||
Cash and cash equivalents at beginning of period |
| 6,879 |
| 8,753 |
|
| 6,736 |
| 6,879 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
Cash and cash equivalents at end of period |
| $ | 7,047 |
| $ | 20,935 |
|
| $ | 6,335 |
| $ | 7,047 |
|
The accompanying notes are an integral part of these consolidated financial statements.
THE BON-TON STORES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ (DEFICIT) EQUITY
|
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|
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| Accumulated |
| (Accumulated |
|
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|
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| Accumulated |
|
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| ||||||||||||||
|
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|
| Class A |
|
|
| Additional |
| Other |
| Deficit) |
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|
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| Class A |
|
|
| Additional |
| Other |
|
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|
|
| ||||||||||||||
(In thousands, except per share data) |
| Common |
| Common |
| Treasury |
| Paid-in |
| Comprehensive |
| Retained |
|
|
| |||||||||||||||||||||||||||||
(In thousands) |
| Common |
| Common |
| Treasury |
| Paid-in |
| Comprehensive |
| Accumulated |
|
|
| |||||||||||||||||||||||||||||
(Unaudited) |
| Stock |
| Stock |
| Stock |
| Capital |
| Loss |
| Earnings |
| Total |
|
| Stock |
| Stock |
| Stock |
| Capital |
| Loss |
| Deficit |
| Total |
| ||||||||||||||
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| |||||||||||||||||||||||||||||
BALANCE AT JANUARY 31, 2015 |
| $ | 178 |
| $ | 30 |
| $ | (1,387 | ) | $ | 161,359 |
| $ | (80,405 | ) | $ | 7,873 |
| $ | 87,648 |
| ||||||||||||||||||||||
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|
|
|
|
| |||||||||||||||||||||||||||||
Net loss |
| — |
| — |
| — |
| — |
| — |
| (73,637 | ) | (73,637 | ) | |||||||||||||||||||||||||||||
Other comprehensive income |
| — |
| — |
| — |
| — |
| 1,888 |
| — |
| 1,888 |
| |||||||||||||||||||||||||||||
Dividends to shareholders, $0.10 per share |
| — |
| — |
| — |
| — |
| — |
| (2,023 | ) | (2,023 | ) | |||||||||||||||||||||||||||||
Restricted shares forfeited in lieu of payroll taxes |
| (1 | ) | — |
| — |
| (398 | ) | — |
| — |
| (399 | ) | |||||||||||||||||||||||||||||
Proceeds from stock options exercised |
| 1 |
| — |
| — |
| 453 |
| — |
| — |
| 454 |
| |||||||||||||||||||||||||||||
Share-based compensation expense |
| 6 |
| — |
| — |
| 1,592 |
| — |
| — |
| 1,598 |
| |||||||||||||||||||||||||||||
BALANCE AT AUGUST 1, 2015 |
| $ | 184 |
| $ | 30 |
| $ | (1,387 | ) | $ | 163,006 |
| $ | (78,517 | ) | $ | (67,787 | ) | $ | 15,529 |
| ||||||||||||||||||||||
|
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
BALANCE AT JANUARY 30, 2016 |
| $ | 185 |
| $ | 30 |
| $ | (1,387 | ) | $ | 164,428 |
| $ | (76,122 | ) | $ | (52,218 | ) | $ | 34,916 |
|
| $ | 185 |
| $ | 30 |
| $ | (1,387 | ) | $ | 164,428 |
| $ | (76,122 | ) | $ | (52,218 | ) | $ | 34,916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Net loss |
| — |
| — |
| — |
| — |
| — |
| (76,554 | ) | (76,554 | ) |
| — |
| — |
| — |
| — |
| — |
| (76,554 | ) | (76,554 | ) | ||||||||||||||
Other comprehensive income |
| — |
| — |
| — |
| — |
| 1,734 |
| — |
| 1,734 |
|
| — |
| — |
| — |
| — |
| 1,734 |
| — |
| 1,734 |
| ||||||||||||||
Restricted shares forfeited in lieu of payroll taxes |
| (1 | ) | — |
| — |
| (119 | ) | — |
| — |
| (120 | ) |
| (1 | ) | — |
| — |
| (119 | ) | — |
| — |
| (120 | ) | ||||||||||||||
Share-based compensation expense |
| 5 |
| — |
| — |
| 1,511 |
| — |
| — |
| 1,516 |
|
| 5 |
| — |
| — |
| 1,511 |
| — |
| — |
| 1,516 |
| ||||||||||||||
BALANCE AT JULY 30, 2016 |
| $ | 189 |
| $ | 30 |
| $ | (1,387 | ) | $ | 165,820 |
| $ | (74,388 | ) | $ | (128,772 | ) | $ | (38,508 | ) |
| $ | 189 |
| $ | 30 |
| $ | (1,387 | ) | $ | 165,820 |
| $ | (74,388 | ) | $ | (128,772 | ) | $ | (38,508 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
BALANCE AT JANUARY 28, 2017 |
| $ | 190 |
| $ | 30 |
| $ | (1,387 | ) | $ | 166,932 |
| $ | (72,909 | ) | $ | (115,637 | ) | $ | (22,781 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Cumulative adjustment to adopt ASU 2016-09 (Note 1) |
| — |
| — |
| — |
| 500 |
| — |
| (500 | ) | — |
| |||||||||||||||||||||||||||||
Net loss |
| — |
| — |
| — |
| — |
| — |
| (90,524 | ) | (90,524 | ) | |||||||||||||||||||||||||||||
Other comprehensive income |
| — |
| — |
| — |
| — |
| 1,518 |
| — |
| 1,518 |
| |||||||||||||||||||||||||||||
Restricted shares forfeited in lieu of payroll taxes |
| (1 | ) | — |
| — |
| (43 | ) | — |
| — |
| (44 | ) | |||||||||||||||||||||||||||||
Share-based compensation expense |
| — |
| — |
| — |
| 896 |
| — |
| — |
| 896 |
| |||||||||||||||||||||||||||||
BALANCE AT JULY 29, 2017 |
| $ | 189 |
| $ | 30 |
| $ | (1,387 | ) | $ | 168,285 |
| $ | (71,391 | ) | $ | (206,661 | ) | $ | (110,935 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
1. BASIS OF PRESENTATION
The Bon-Ton Stores, Inc., a Pennsylvania corporation, was incorporated on January 31, 1996 as the successor of a company incorporated on January 31, 1929. As of July 30, 2016,29, 2017, The Bon-Ton Stores, Inc. operated, through its subsidiaries, 267261 stores, including nine furniture galleries and four clearance centers, in 2625 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates.
The accompanying unaudited consolidated financial statements include the accounts of The Bon-Ton Stores, Inc. (the “Parent”) and its subsidiaries (collectively, the “Company”). All intercompany transactions have been eliminated in consolidation.
The unaudited consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and do not include all information and footnotes required in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States. In the opinion of management, all adjustments considered necessary for a fair presentation of interim periods have been included. The Company’s business is seasonal in nature and results of operations for the interim periods presented are not necessarily indicative of results for the full fiscal year. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2016.28, 2017.
For purposes of the following discussion, references to the “second quarter of 2016”2017” and the “second quarter of 2015”2016” are to the 13 weeks ended July 29, 2017 and July 30, 2016, and August 1, 2015, respectively. References to “fiscal 2017” are to the 53 weeks ending February 3, 2018; references to “fiscal 2016” are to the 52 weeks endingended January 28, 2017; references to “fiscal 2015” are to the 52 weeks ended January 30, 2016.2017.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires that management make estimates and assumptions about future events. These estimates and assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and the reported amounts of revenues and expenses. Such estimates include those related to merchandise returns, the valuation of inventories, long-lived assets, intangible assets, insurance reserves, contingencies, litigation and assumptions used in the calculation of income taxes and retirement and other post-employment benefits, among others. These estimates and assumptions are based on management’s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.
ReclassificationsRecently Adopted Accounting Standards
Certain prior year balances presented inEffective January 29, 2017, the consolidated financial statements and notes thereto have been reclassified to conform to the current year presentation. These reclassifications did not impact the Company’s net loss for the second quarter in each of 2016 and 2015. As a result of adoptingCompany adopted Accounting Standards Update (“ASU”) No. 2015-17,2016-09, Income Taxes (Topic 740): Balance Sheet ClassificationStock Compensation. The new standard is intended to simplify several aspects of Deferred Taxes (“ASU 2015-17”)the accounting for share-based payment award transactions. In connection with the adoption of this standard, the Company made a policy election to record the expense associated with forfeitures under its share-based payment plans when they occur (rather than estimating forfeitures and recording over the vesting term of the award). The Company made this election to reduce the complexity of accounting for its awards. The Company used a modified retrospective approach to recording this change and recorded a $500 increase to both additional paid-in capital and accumulated deficit at the time of the adoption to eliminate the forfeiture estimates previously recorded for awards outstanding as of January 30, 2016, the Company reclassified the August 1, 2015 consolidated balance sheet resulting in a reduction of $13,239 in long-term deferred income tax assets, a reduction in current deferred income tax liabilities of $22,834 and an increase in other long-term liabilities of $9,595.29, 2017.
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
Recently Adopted Accounting Standards
Effective January 31, 2016, the Company adopted ASU No. 2015-03, Interest-Imputation of Interest (“ASU 2015-03”) and ASU No. 2015-15 (an amendment to ASU 2015-03) and retrospectively applied their provisions. The new standards require that debt issuance costs related to a recognized debt liability, other than those relating to line-of-credit arrangements, be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. As a result of adopting this guidance, as of August 1, 2015 and January 30, 2016, the Company reclassified $7,202 and $6,580, respectively, of the unamortized debt issuance costs for all debt instruments except the senior secured credit facility from other long-term assets to long-term debt and current maturities of long-term debt on the consolidated balance sheets.
Effective January 31, 2016, the Company adopted ASU No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software and prospectively applied its provisions. The new standard provides guidance on the accounting for fees paid by a customer in a cloud computing arrangement. If a cloud computing arrangement includes a software license, then the customer is required to account for the software license consistent with the acquisition of other software licenses. Conversely, if the arrangement does not include a software license, the customer should account for the arrangement as a service contract. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Accounting Standards
In August 2016, the Financial Accounting Standards Board issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. The new standard provides guidance on eight targeted areas and how they are presented and classified in the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017. The Company is currently reviewing the guidance and assessing the potential impact on its consolidated financial statements.
2. PER-SHARE AMOUNTS
The following table presents a reconciliation of net loss and weighted average shares outstanding used in basic and diluted earnings (loss)loss per share (“EPS”) calculations for each period presented:
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
|
| THIRTEEN |
| TWENTY-SIX |
|
| THIRTEEN |
| TWENTY-SIX |
| ||||||||||||||||
|
| WEEKS ENDED |
| WEEKS ENDED |
|
| WEEKS ENDED |
| WEEKS ENDED |
| ||||||||||||||||
|
| July 30, |
| August 1, |
| July 30, |
| August 1, |
|
| July 29, |
| July 30, |
| July 29, |
| July 30, |
| ||||||||
|
| 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| 2017 |
| 2016 |
| 2017 |
| 2016 |
| ||||||||
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| ||||||||
Basic Loss Per Common Share |
|
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|
|
|
|
| ||||||||
Net loss |
| $ | (38,736 | ) | $ | (39,563 | ) | $ | (76,554 | ) | $ | (73,637 | ) |
| $ | (33,209 | ) | $ | (38,736 | ) | $ | (90,524 | ) | $ | (76,554 | ) |
Less: Income allocated to participating securities |
| — |
| — |
| — |
| — |
|
| — |
| — |
| — |
| — |
| ||||||||
Net loss available to common shareholders |
| $ | (38,736 | ) | $ | (39,563 | ) | $ | (76,554 | ) | $ | (73,637 | ) |
| $ | (33,209 | ) | $ | (38,736 | ) | $ | (90,524 | ) | $ | (76,554 | ) |
|
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|
|
|
|
|
|
| ||||||||
Weighted average common shares outstanding |
| 19,909,198 |
| 19,718,423 |
| 19,834,823 |
| 19,640,016 |
|
| 20,271,746 |
| 19,909,198 |
| 20,155,397 |
| 19,834,823 |
| ||||||||
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|
|
|
| ||||||||
Basic loss per common share |
| $ | (1.95 | ) | $ | (2.01 | ) | $ | (3.86 | ) | $ | (3.75 | ) |
| $ | (1.64 | ) | $ | (1.95 | ) | $ | (4.49 | ) | $ | (3.86 | ) |
|
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|
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|
|
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| ||||||||
Diluted Loss Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net loss |
| $ | (38,736 | ) | $ | (39,563 | ) | $ | (76,554 | ) | $ | (73,637 | ) |
| $ | (33,209 | ) | $ | (38,736 | ) | $ | (90,524 | ) | $ | (76,554 | ) |
Less: Income allocated to participating securities |
| — |
| — |
| — |
| — |
|
| — |
| — |
| — |
| — |
| ||||||||
Net loss available to common shareholders |
| $ | (38,736 | ) | $ | (39,563 | ) | (76,554 | ) | (73,637 | ) |
| $ | (33,209 | ) | $ | (38,736 | ) | (90,524 | ) | (76,554 | ) | ||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Weighted average common shares outstanding |
| 19,909,198 |
| 19,718,423 |
| 19,834,823 |
| 19,640,016 |
|
| 20,271,746 |
| 19,909,198 |
| 20,155,397 |
| 19,834,823 |
| ||||||||
Common shares issuable - stock options |
| — |
| — |
| — |
| — |
|
| — |
| — |
| — |
| — |
| ||||||||
Weighted average common shares outstanding assuming dilution |
| 19,909,198 |
| 19,718,423 |
| 19,834,823 |
| 19,640,016 |
|
| 20,271,746 |
| 19,909,198 |
| 20,155,397 |
| 19,834,823 |
| ||||||||
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|
|
|
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| ||||||||
Diluted loss per common share |
| $ | (1.95 | ) | $ | (2.01 | ) | $ | (3.86 | ) | $ | (3.75 | ) |
| $ | (1.64 | ) | $ | (1.95 | ) | $ | (4.49 | ) | $ | (3.86 | ) |
Due to the Company’s net loss position, weighted average unvested restricted shares (participating securities) of 1,382,4121,138,433 and 890,0651,382,142 for the second quarter in each of 20162017 and 2015,2016, respectively, and 1,301,2951,244,027 and 799,5131,301,295 for the 26 weeks ended July 29, 2017 and July 30, 2016, and August 1, 2015, respectively, were not considered in the calculation of net loss available to common shareholders used for both basic and diluted EPS.
In addition, weighted average stock option shares (non-participating securities) totaling 17,555 for the second quarter of 2015 and 63,876 for the 26 weeks ended August 1, 2015, were excluded from the computation of diluted weighted average common shares outstanding, as their effect would have been antidilutive. Certain of these stock option shares were excluded solely due to the Company’s net loss position. Had the Company reported net income for the 26 weeks ended August 1, 2015, these shares would have increased diluted weighted average common shares outstanding by 8,395. There were no stock options outstanding during the 26 weeks ended July 30, 2016.
3. FAIR VALUE MEASUREMENTS
Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value and establishes a framework for measuring fair value. ASC 820 establishes fair value hierarchy levels that prioritize the inputs used in valuations determining fair value. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 inputs are primarily quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs based on the Company’s own assumptions.
9The carrying values of the Company’s cash and cash equivalents, accounts payable and financial instruments reported within prepaid expenses and other current assets and other long-term assets approximate fair value.
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The carrying valuesvalue and estimated fair value of the Company’s cashlong-term debt, excluding capital lease and cash equivalents, accounts payablefinancing obligations and financial instruments reported within prepaid expensesunamortized second lien senior secured notes deferred financing costs and other current assets and other long-term assets approximate fair value.discount on senior secured credit facility — Tranche A-1, as of July 29, 2017 are as follows:
|
|
|
|
|
| Fair Value Measurements Using |
| |||||||||
|
| Carrying |
| Estimated |
| Quoted |
| Significant |
| Significant |
| |||||
Second lien senior secured notes |
| $ | 350,000 |
| $ | 140,000 |
| $ | 140,000 |
| $ | — |
| $ | — |
|
Senior secured credit facility |
| 506,258 |
| 506,258 |
| — |
| — |
| 506,258 |
| |||||
Total |
| $ | 856,258 |
| $ | 646,258 |
| $ | 140,000 |
| $ | — |
| $ | 506,258 |
|
The carrying value and estimated fair value of the Company’s long-term debt, including current maturities but excluding capital leaseslease and financing obligations and unamortized debt issuancesecond lien senior secured notes deferred financing costs, as of July 30, 2016 are as follows:
|
|
|
|
|
| Fair Value Measurements Using |
| |||||||||
|
| Carrying |
| Estimated |
| Quoted |
| Significant |
| Significant |
| |||||
Second lien senior secured notes |
| $ | 407,292 |
| $ | 207,250 |
| $ | 207,250 |
| $ | — |
| $ | — |
|
Senior secured credit facility |
| 418,301 |
| 418,301 |
| — |
| — |
| 418,301 |
| |||||
Total |
| $ | 825,593 |
| $ | 625,551 |
| $ | 207,250 |
| $ | — |
| $ | 418,301 |
|
The carrying value and estimated fair value of the Company’s long-term debt, including current maturities but excluding capital leaseslease and financing obligations and unamortized debt issuancesecond lien senior secured notes deferred financing costs and discount on senior secured credit facility — Tranche A-1, as of August 1, 2015January 28, 2017 are as follows:
|
|
|
|
|
| Fair Value Measurements Using |
| |||||||||
|
| Carrying |
| Estimated |
| Quoted |
| Significant |
| Significant |
| |||||
Second lien senior secured notes |
| $ | 407,292 |
| $ | 322,027 |
| $ | 322,027 |
| $ | — |
| $ | — |
|
Mortgage facility |
| 103,916 |
| 104,579 |
| — |
| — |
| 104,579 |
| |||||
Senior secured credit facility |
| 332,102 |
| 332,102 |
| — |
| — |
| 332,102 |
| |||||
Total |
| $ | 843,310 |
| $ | 758,708 |
| $ | 322,027 |
| $ | — |
| $ | 436,681 |
|
The carrying value and estimated fair value of the Company’s long-term debt, including current maturities but excluding capital leases and unamortized debt issuance costs, as of January 30, 2016 are as follows:
|
|
|
|
|
| Fair Value Measurements Using |
| |||||||||
|
| Carrying |
| Estimated |
| Quoted |
| Significant |
| Significant |
| |||||
Second lien senior secured notes |
| $ | 407,292 |
| $ | 168,584 |
| $ | 168,584 |
| $ | — |
| $ | — |
|
Senior secured credit facility |
| 455,265 |
| 455,265 |
| — |
| — |
| 455,265 |
| |||||
Total |
| $ | 862,557 |
| $ | 623,849 |
| $ | 168,584 |
| $ | — |
| $ | 455,265 |
|
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
|
|
|
|
|
| Fair Value Measurements Using |
| |||||||||
|
| Carrying |
| Estimated |
| Quoted |
| Significant |
| Significant |
| |||||
Second lien senior secured notes |
| $ | 350,000 |
| $ | 177,331 |
| $ | 177,331 |
| $ | — |
| $ | — |
|
Senior secured credit facility |
| 506,689 |
| 506,689 |
| — |
| — |
| 506,689 |
| |||||
Total |
| $ | 856,689 |
| $ | 684,020 |
| $ | 177,331 |
| $ | — |
| $ | 506,689 |
|
The Level 3 fair value estimates are determined by a discounted cash flow analysis utilizing a discount rate the Company believes is appropriate and would be used by market participants. There was no change in the valuation technique used to determine the Level 3 fair value estimates.
4. SUPPLEMENTAL BALANCE SHEET INFORMATION
Prepaid expenses and other current assets were comprised of the following:
|
| July 30, |
| August 1, |
| January 30, |
| |||
|
| 2016 |
| 2015 |
| 2016 |
| |||
Other receivables |
| $ | 36,475 |
| $ | 36,705 |
| $ | 60,514 |
|
Prepaid expenses |
| 38,422 |
| 43,221 |
| 36,740 |
| |||
Total |
| $ | 74,897 |
| $ | 79,926 |
| $ | 97,254 |
|
5.SUPPLEMENTAL CASH FLOW INFORMATION
The following supplemental cash flow information is provided for the periods reported:
|
| TWENTY-SIX |
| ||||
|
| WEEKS ENDED |
| ||||
|
| July 30, |
| August 1, |
| ||
|
| 2016 |
| 2015 |
| ||
|
|
|
|
|
| ||
Cash paid for: |
|
|
|
|
| ||
Interest, net of amounts capitalized |
| $ | 28,363 |
| $ | 29,027 |
|
Income taxes, net of refunds received |
| (2 | ) | (47 | ) | ||
|
|
|
|
|
| ||
Non-cash investing and financing activities: |
|
|
|
|
| ||
Property, fixtures and equipment included in accrued expenses |
| $ | 5,838 |
| $ | 2,391 |
|
Assets acquired under capital lease |
| — |
| 88,229 |
| ||
Declared dividends to shareholders included in accrued expenses |
| — |
| 1,010 |
|
6. EXIT OR DISPOSAL ACTIVITIES
The following table summarizes exit or disposal activities during the 26 weeks ended July 30, 2016 related to store closings in fiscal 2015 and 2016, the consolidation of eCommerce fulfillment activities in connection with the Company’s new eCommerce fulfillment center and the Company’s expense efficiency initiative:
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
|
| Termination |
| Other |
| Total |
| |||
Accrued balance as of January 30, 2016 |
| $ | 3,696 |
| $ | — |
| $ | 3,696 |
|
Provisions |
|
|
|
|
|
|
| |||
Thirteen weeks ended April 30, 2016 |
| 421 |
| 41 |
| 462 |
| |||
Thirteen weeks ended July 30, 2016 |
| 1,873 |
| — |
| 1,873 |
| |||
Payments |
|
|
|
|
|
|
| |||
Thirteen weeks ended April 30, 2016 |
| (1,906 | ) | (41 | ) | (1,947 | ) | |||
Thirteen weeks ended July 30, 2016 |
| (1,349 | ) | — |
| (1,349 | ) | |||
Accrued balance as of July 30, 2016 |
| $ | 2,735 |
| $ | — |
| $ | 2,735 |
|
|
| July 29, |
| July 30, |
| January 28, |
| |||
|
| 2017 |
| 2016 |
| 2017 |
| |||
Other receivables |
| $ | 43,872 |
| $ | 36,475 |
| $ | 68,270 |
|
Prepaid expenses |
| 38,929 |
| 38,422 |
| 30,288 |
| |||
Total |
| $ | 82,801 |
| $ | 74,897 |
| $ | 98,558 |
|
5.SUPPLEMENTAL CASH FLOW INFORMATION
The following supplemental cash flow information is provided for the periods reported:
|
| TWENTY-SIX |
| ||||
|
| WEEKS ENDED |
| ||||
|
| July 29, |
| July 30, |
| ||
|
| 2017 |
| 2016 |
| ||
|
|
|
|
|
| ||
Cash paid for: |
|
|
|
|
| ||
Interest, net of amounts capitalized |
| $ | 32,913 |
| $ | 28,363 |
|
Income taxes, net of refunds received |
| — |
| (2 | ) | ||
|
|
|
|
|
| ||
Non-cash investing and financing activities: |
|
|
|
|
| ||
Property, fixtures and equipment included in accrued expenses |
| $ | 3,420 |
| $ | 5,838 |
|
6.EXIT OR DISPOSAL ACTIVITIES
The following table summarizes exit or disposal activities during the 26 weeks ended July 29, 2017 related to store closings in fiscal 2017 and 2016 and the Company’s expense efficiency initiative:
|
| Termination |
| Other |
| Total |
| |||
Accrued balance as of January 28, 2017 |
| $ | 952 |
| $ | — |
| $ | 952 |
|
Provisions |
|
|
|
|
|
|
| |||
Thirteen weeks ended April 29, 2017 |
| 132 |
| 239 |
| 371 |
| |||
Thirteen weeks ended July 29, 2017 |
| 421 |
| 34 |
| 455 |
| |||
Payments |
|
|
|
|
|
|
| |||
Thirteen weeks ended April 29, 2017 |
| (666 | ) | (239 | ) | (905 | ) | |||
Thirteen weeks ended July 29, 2017 |
| (313 | ) | (34 | ) | (347 | ) | |||
Accrued balance as of July 29, 2017 |
| $ | 526 |
| $ | — |
| $ | 526 |
|
The above provisions were included within selling, general and administrative expense.
During the second quarter of 2017, the Company recorded $7,810 of gains related to various real estate transactions which were included in selling, general and administrative expense.
7. EMPLOYEE DEFINED AND POSTRETIREMENT BENEFIT PLANS
The Company provides benefits to certain current and former associates who are eligible under a qualified defined benefit pension plan and various non-qualified supplemental pension plans (collectively, the “Pension
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
“Pension Plans”). Net periodic benefit expense for the Pension Plans includes the following (income) and expense components:
|
| THIRTEEN |
| TWENTY-SIX |
|
| THIRTEEN |
| TWENTY-SIX |
| ||||||||||||||||
|
| WEEKS ENDED |
| WEEKS ENDED |
|
| WEEKS ENDED |
| WEEKS ENDED |
| ||||||||||||||||
|
| July 30, |
| August 1, |
| July 30, |
| August 1, |
|
| July 29, |
| July 30, |
| July 29, |
| July 30, |
| ||||||||
|
| 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| 2017 |
| 2016 |
| 2017 |
| 2016 |
| ||||||||
Interest cost |
| $ | 1,784 |
| $ | 1,700 |
| $ | 3,569 |
| $ | 3,401 |
|
| $ | 1,666 |
| $ | 1,784 |
| $ | 3,332 |
| $ | 3,569 |
|
Expected return on plan assets |
| (2,100 | ) | (2,409 | ) | (4,200 | ) | (4,819 | ) |
| (1,933 | ) | (2,100 | ) | (3,867 | ) | (4,200 | ) | ||||||||
Recognition of net actuarial loss |
| 1,572 |
| 1,698 |
| 3,143 |
| 3,396 |
|
| 1,407 |
| 1,572 |
| 2,814 |
| 3,143 |
| ||||||||
Net periodic benefit expense |
| $ | 1,256 |
| $ | 989 |
| $ | 2,512 |
| $ | 1,978 |
|
| $ | 1,140 |
| $ | 1,256 |
| $ | 2,279 |
| $ | 2,512 |
|
During the 26 weeks ended July 30, 2016,29, 2017, contributions of $325$282 were made to the Pension Plans. The Company anticipates contributing an additional $377$273 to fund the Pension Plans in fiscal 20162017 for an annual total of $702.$555.
The Company also provides medical and life insurance benefits to certain former associates under a postretirement benefit plan (“Postretirement Benefit Plan”). Net periodic benefit income for the Postretirement Benefit Plan includes the following (income) and expense components:
|
| THIRTEEN |
| TWENTY-SIX |
|
| THIRTEEN |
| TWENTY-SIX |
| ||||||||||||||||
|
| WEEKS ENDED |
| WEEKS ENDED |
|
| WEEKS ENDED |
| WEEKS ENDED |
| ||||||||||||||||
|
| July 30, |
| August 1, |
| July 30, |
| August 1, |
|
| July 29, |
| July 30, |
| July 29, |
| July 30, |
| ||||||||
|
| 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| 2017 |
| 2016 |
| 2017 |
| 2016 |
| ||||||||
Interest cost |
| $ | 16 |
| $ | 16 |
| $ | 31 |
| $ | 32 |
|
| $ | 13 |
| $ | 16 |
| $ | 26 |
| $ | 31 |
|
Recognition of net actuarial gain |
| (109 | ) | (106 | ) | (216 | ) | (213 | ) |
| (124 | ) | (109 | ) | (247 | ) | (216 | ) | ||||||||
Net periodic benefit income |
| $ | (93 | ) | $ | (90 | ) | $ | (185 | ) | $ | (181 | ) |
| $ | (111 | ) | $ | (93 | ) | $ | (221 | ) | $ | (185 | ) |
During the 26 weeks ended July 30, 2016,29, 2017, the Company contributed $100$63 to fund the Postretirement Benefit Plan, and anticipates contributing an additional $227$204 to fund the Postretirement Benefit Plan in fiscal 2016,2017 for an annual total of $327.$267.
8.LONG-TERM DEBT
On April 28, 2017, The Bon-Ton Department Stores, Inc. and certain subsidiaries as borrowers and certain other subsidiaries as guarantors entered into a Fifth Amendment (the “Fifth Amendment”) to the Second Amended and Restated Loan and Security Agreement (the “Second Amended Revolving Credit Facility”) with Bank of America, N.A., as Agent, and certain financial institutions as lenders. The Fifth Amendment extends the maturity date of the $730,000 Tranche A of the Second Amended Revolving Credit Facility (“Tranche A”). Tranche A is now due to mature on April 28, 2022 provided that Tranche A-1 of the Second Amended Revolving Credit Facility (“Tranche A-1”) is repaid prior to March 15, 2021 or the maturity of Tranche A-1 is extended to at least April 28, 2022. If Tranche A-1 is not so repaid or so extended, or is extended to a date earlier than April 28, 2022, Tranche A will mature on the same date as Tranche A-1. In any event, Tranche A remains subject to a “springing” maturity date that is sixty days prior to the earliest of the maturity date of (1) any senior note debt (which is currently comprised of the 8.00% Second Lien Senior Secured Notes due June 15, 2021) and (2) if incurred, certain permitted debt secured by junior liens.
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Fifth Amendment did not change the total lender commitment under the facility, which remains at $880,000 (for both Tranche A and Tranche A-1). Pricing and other terms of the Second Amended Revolving Credit Facility remain essentially unchanged.
In connection with the Fifth Amendment, the Company incurred a loss on extinguishment of debt of $559 due to the write-off of certain deferred fees.
9. INCOME TAXES
The provisions codified within ASC Topic 740, Income Taxes (“ASC 740”), require companies to assess whether valuation allowances should be established against their deferred tax assets based on consideration of all available evidence using a “more likely than not” standard. In accordance with ASC 740, the Company maintained a full valuation allowance throughout fiscal 20152016 and the 26 weeks ended July 30, 201629, 2017 on all of the Company’s net deferred tax assets. The Company’s deferred tax asset valuation allowance totaled $242,759, $218,177 $192,858 and $186,582$206,089 as of July 29, 2017, July 30, 2016 August 1, 2015 and January 30, 2016,28, 2017, respectively.
The Company recorded net income tax expense of $18 and net income tax benefit of $30 for the 13 and 26 weeks ended July 29, 2017, respectively, which includes $528 and $1,049 non-cash income tax benefits from continuing operations during the 13 and 26 weeks ended July 29, 2017, respectively. The Company recorded net income tax benefits of $144 and $288 for the 13 and 26 weeks ended July 30, 2016, respectively, which includes $596 and $1,193 non-cash income tax benefits from continuing operations during the 13 and 26 weeks ended July 30, 2016, respectively. The Company recorded net income tax benefits of $238 and $397 for the 13 and 26 weeks ended August 1, 2015, respectively, which includes $686 and $1,295 non-cash income tax benefits from continuing operations during the 13 and 26 weeks ended August 1, 2015, respectively. Pursuant to ASC 740, the Company is required to consider all items (including items recorded in other comprehensive income) in determining the amount of tax benefit that results from a loss from continuing operations and that should be allocated to continuing operations. As a result, the Company recorded tax benefits on the losses from continuing operations for the 13 and 26 weeks ended July 29, 2017 and July 30, 2016, and August 1, 2015, respectively, which are exactly offset by income tax expense on other comprehensive income. The net income tax benefitsexpense and benefit includes $546 and $1,019 recorded in the 13 and 26 weeks ended July 29, 2017, respectively, and $452 and $905 recorded in the 13 and 26 weeks ended July 30, 2016, respectively, and $448 and $898 recorded in the 13 and 26 weeks ended August 1, 2015, respectively, for recognition of deferred tax liabilities associated with indefinite-lived assets.
9.10. CONTINGENCIES
In the second quarter of 2015, the Company recognized a gain on insurance recovery of $748 related to a fire at one of the Company’s stores, which is shown separately in the accompanying consolidated statements of operations.
The Company is party to legal proceedings and claims that arise during the ordinary course of business. In the opinion of management, the ultimate outcome of any such litigation and claims will not have a material adverse effect on the Company’s financial position, results of operations or liquidity.
THE BON-TON STORES, INC.11.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
10. COMPREHENSIVE LOSS
Accumulated other comprehensive loss is comprised of the net actuarial loss associated with the Pension Plans and Postretirement Benefit Plan. Other comprehensive income is comprised entirely of the amortization of the net actuarial loss (gain) associated with the Pension Plans and Postretirement Benefit Plan.
The changes recognized within other comprehensive income reflect income tax expense of $596$528 and $686$596 for the 13 weeks endedsecond quarter in each of July 30,2017 and 2016, and August 1, 2015, respectively, and $1,193$1,049 and $1,295$1,193 for the 26 weeks ended inon each of July 29, 2017 and July 30, 2016, and August 1, 2015, respectively (see Note 8)9).
The before-tax amount of amortization of net actuarial loss (gain) (see Note 7) was recorded within selling, general and administrative expense.
11. THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
12.CONDENSED CONSOLIDATING FINANCIAL INFORMATION
Certain debt obligations of the Company, which constitute debt obligations of The Bon-Ton Department Stores, Inc. (the “Issuer”), are guaranteed by the Parent and by each of its subsidiaries, other than the Issuer, that is an obligor under the Company’s Second Amended and Restated Loan and Security Agreement (the “Second Amended Revolving Credit Facility”).Facility. Separate financial statements of the Parent, the Issuer and such subsidiary guarantors are not presented because the guarantees by the Parent and each 100% owned subsidiary guarantor are joint and several, full and unconditional, except for certain customary limitations which are applicable only to a subsidiary guarantor. These customary limitations include releases of a guarantee (1) if the subsidiary guarantor no longer guarantees other indebtedness of the Issuer; (2) if there is a sale or other disposition of the capital stock of a subsidiary guarantor and if such sale complies with the covenant regarding asset sales; and (3) if the subsidiary guarantor is properly designated as an “unrestricted subsidiary.”
The condensed consolidating financial information for the Parent, the Issuer and the guarantor subsidiaries as of July 29, 2017, July 30, 2016 August 1, 2015 and January 30, 201628, 2017 and for the second quarter in each of 20162017 and 20152016 and the 26 weeks ended July 29, 2017 and July 30, 2016 and August 1, 2015 as presented below has been prepared from the books and records maintained by the Parent, the Issuer and the guarantor subsidiaries. The condensed financial information may not necessarily be indicative of the results of operations or financial position had the guarantor subsidiaries operated as independent entities. Certain intercompany revenues and expenses included in the subsidiary records are eliminated in consolidation. As a result of this activity, an amount due to/due from affiliates will exist at any time.
On January 15, 2016, the CompanyTHE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and certain other subsidiaries as borrowers or obligors (collectively, the “Obligors”) entered into a Consent and Third Amendment to the Second Amended Revolving Credit Facility, which among other changes, provided for the joinders of the special purpose entities (“SPEs”) that had previously participated in the Company’s mortgage loan facility as Obligors under the Second Amended Revolving Credit Facility, and as “Restricted Subsidiaries” and guarantors under the indentures for both the 10per share data)
5/8% second lien senior secured notes due 2017 and the 8.00% second lien senior secured notes due 2021. The SPEs and their assets were then added to the second lien security agreement. For comparative purposes, the condensed consolidating financial information as presented below has been retrospectively adjusted as if the activity described above occurred at the beginning of each period presented.Bon-Ton Stores, Inc.
Condensed Consolidating Balance Sheet
July 29, 2017
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| |||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Assets |
|
|
|
|
|
|
|
|
|
|
| |||||
Current assets: |
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and cash equivalents |
| $ | 1 |
| $ | 3,351 |
| $ | 2,983 |
| $ | — |
| $ | 6,335 |
|
Merchandise inventories |
| — |
| 428,205 |
| 230,013 |
| — |
| 658,218 |
| |||||
Prepaid expenses and other current assets |
| — |
| 78,602 |
| 4,379 |
| (180 | ) | 82,801 |
| |||||
Total current assets |
| 1 |
| 510,158 |
| 237,375 |
| (180 | ) | 747,354 |
| |||||
Property, fixtures and equipment at cost, net |
| — |
| 261,890 |
| 285,389 |
| — |
| 547,279 |
| |||||
Intangible assets, net |
| — |
| 16,445 |
| 53,941 |
| — |
| 70,386 |
| |||||
Investment in and advances to affiliates |
| (110,936 | ) | 387,475 |
| 468,174 |
| (744,713 | ) | — |
| |||||
Other long-term assets |
| — |
| 23,896 |
| 875 |
| (3,042 | ) | 21,729 |
| |||||
Total assets |
| $ | (110,935 | ) | $ | 1,199,864 |
| $ | 1,045,754 |
| $ | (747,935 | ) | $ | 1,386,748 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Liabilities and Shareholders’ (Deficit) Equity |
|
|
|
|
|
|
|
|
|
|
| |||||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
| |||||
Accounts payable |
| $ | — |
| $ | 177,689 |
| $ | — |
| $ | — |
| $ | 177,689 |
|
Accrued payroll and benefits |
| — |
| 21,717 |
| 4,571 |
| — |
| 26,288 |
| |||||
Accrued expenses |
| — |
| 73,806 |
| 62,984 |
| (180 | ) | 136,610 |
| |||||
Current maturities of capital lease and financing obligations |
| — |
| 2,104 |
| 4,882 |
| — |
| 6,986 |
| |||||
Total current liabilities |
| — |
| 275,316 |
| 72,437 |
| (180 | ) | 347,573 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Long-term debt and capital lease and financing obligations, less current maturities |
| — |
| 920,266 |
| 59,537 |
| — |
| 979,803 |
| |||||
Other long-term liabilities |
| — |
| 122,576 |
| 50,773 |
| (3,042 | ) | 170,307 |
| |||||
Total liabilities |
| — |
| 1,318,158 |
| 182,747 |
| (3,222 | ) | 1,497,683 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Shareholders’ (deficit) equity |
| (110,935 | ) | (118,294 | ) | 863,007 |
| (744,713 | ) | (110,935 | ) | |||||
Total liabilities and shareholders’ (deficit) equity |
| $ | (110,935 | ) | $ | 1,199,864 |
| $ | 1,045,754 |
| $ | (747,935 | ) | $ | 1,386,748 |
|
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Balance Sheet
July 30, 2016
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| ||||||||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Cash and cash equivalents |
| $ | 1 |
| $ | 3,020 |
| $ | 4,026 |
| $ | — |
| $ | 7,047 |
|
| $ | 1 |
| $ | 3,020 |
| $ | 4,026 |
| $ | — |
| $ | 7,047 |
|
Merchandise inventories |
| — |
| 461,278 |
| 232,532 |
| — |
| 693,810 |
|
| — |
| 461,278 |
| 232,532 |
| — |
| 693,810 |
| ||||||||||
Prepaid expenses and other current assets |
| — |
| 70,812 |
| 4,265 |
| (180 | ) | 74,897 |
|
| — |
| 70,812 |
| 4,265 |
| (180 | ) | 74,897 |
| ||||||||||
Total current assets |
| 1 |
| 535,110 |
| 240,823 |
| (180 | ) | 775,754 |
|
| 1 |
| 535,110 |
| 240,823 |
| (180 | ) | 775,754 |
| ||||||||||
Property, fixtures and equipment at cost, net |
| — |
| 300,997 |
| 312,766 |
| — |
| 613,763 |
|
| — |
| 300,997 |
| 312,766 |
| — |
| 613,763 |
| ||||||||||
Intangible assets, net |
| — |
| 19,640 |
| 59,536 |
| — |
| 79,176 |
|
| — |
| 19,640 |
| 59,536 |
| — |
| 79,176 |
| ||||||||||
Investment in and advances to affiliates |
| (38,509 | ) | 417,681 |
| 400,054 |
| (779,226 | ) | — |
|
| (38,509 | ) | 417,681 |
| 400,054 |
| (779,226 | ) | — |
| ||||||||||
Other long-term assets |
| — |
| 18,250 |
| 1,024 |
| (3,221 | ) | 16,053 |
|
| — |
| 18,250 |
| 1,024 |
| (3,221 | ) | 16,053 |
| ||||||||||
Total assets |
| $ | (38,508 | ) | $ | 1,291,678 |
| $ | 1,014,203 |
| $ | (782,627 | ) | $ | 1,484,746 |
|
| $ | (38,508 | ) | $ | 1,291,678 |
| $ | 1,014,203 |
| $ | (782,627 | ) | $ | 1,484,746 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Liabilities and Shareholders’ (Deficit) Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Accounts payable |
| $ | — |
| $ | 214,957 |
| $ | — |
| $ | — |
| $ | 214,957 |
|
| $ | — |
| $ | 214,957 |
| $ | — |
| $ | — |
| $ | 214,957 |
|
Accrued payroll and benefits |
| — |
| 20,687 |
| 5,312 |
| — |
| 25,999 |
|
| — |
| 20,687 |
| 5,312 |
| — |
| 25,999 |
| ||||||||||
Accrued expenses |
| — |
| 71,344 |
| 72,574 |
| (180 | ) | 143,738 |
|
| — |
| 71,344 |
| 72,574 |
| (180 | ) | 143,738 |
| ||||||||||
Current maturities of long-term debt and obligations under capital leases |
| — |
| 58,684 |
| 4,165 |
| — |
| 62,849 |
| |||||||||||||||||||||
Current maturities of long-term debt and capital lease and financing obligations |
| — |
| 58,684 |
| 4,165 |
| — |
| 62,849 |
| |||||||||||||||||||||
Total current liabilities |
| — |
| 365,672 |
| 82,051 |
| (180 | ) | 447,543 |
|
| — |
| 365,672 |
| 82,051 |
| (180 | ) | 447,543 |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Long-term debt and obligations under capital leases, less current maturities |
| — |
| 834,954 |
| 51,168 |
| — |
| 886,122 |
| |||||||||||||||||||||
Long-term debt and capital lease and financing obligations, less current maturities |
| — |
| 834,954 |
| 51,168 |
| — |
| 886,122 |
| |||||||||||||||||||||
Other long-term liabilities |
| — |
| 134,951 |
| 57,859 |
| (3,221 | ) | 189,589 |
|
| — |
| 134,951 |
| 57,859 |
| (3,221 | ) | 189,589 |
| ||||||||||
Total liabilities |
| — |
| 1,335,577 |
| 191,078 |
| (3,401 | ) | 1,523,254 |
|
| — |
| 1,335,577 |
| 191,078 |
| (3,401 | ) | 1,523,254 |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Shareholders’ (deficit) equity |
| (38,508 | ) | (43,899 | ) | 823,125 |
| (779,226 | ) | (38,508 | ) |
| (38,508 | ) | (43,899 | ) | 823,125 |
| (779,226 | ) | (38,508 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total liabilities and shareholders’ (deficit) equity |
| $ | (38,508 | ) | $ | 1,291,678 |
| $ | 1,014,203 |
| $ | (782,627 | ) | $ | 1,484,746 |
|
| $ | (38,508 | ) | $ | 1,291,678 |
| $ | 1,014,203 |
| $ | (782,627 | ) | $ | 1,484,746 |
|
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Balance Sheet
August 1, 2015January 28, 2017
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| ||||||||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Cash and cash equivalents |
| $ | 1 |
| $ | 3,043 |
| $ | 17,891 |
| $ | — |
| $ | 20,935 |
|
| $ | 1 |
| $ | 3,575 |
| $ | 3,160 |
| $ | — |
| $ | 6,736 |
|
Merchandise inventories |
| — |
| 505,907 |
| 232,182 |
| — |
| 738,089 |
|
| — |
| 475,816 |
| 248,638 |
| — |
| 724,454 |
| ||||||||||
Prepaid expenses and other current assets |
| — |
| 72,712 |
| 7,730 |
| (516 | ) | 79,926 |
|
| — |
| 94,585 |
| 4,153 |
| (180 | ) | 98,558 |
| ||||||||||
Total current assets |
| 1 |
| 581,662 |
| 257,803 |
| (516 | ) | 838,950 |
|
| 1 |
| 573,976 |
| 255,951 |
| (180 | ) | 829,748 |
| ||||||||||
Property, fixtures and equipment at cost, net |
| — |
| 324,926 |
| 331,379 |
| (14,557 | ) | 641,748 |
|
| — |
| 277,511 |
| 307,292 |
| — |
| 584,803 |
| ||||||||||
Intangible assets, net |
| — |
| 23,147 |
| 63,817 |
| — |
| 86,964 |
|
| — |
| 17,715 |
| 55,396 |
| — |
| 73,111 |
| ||||||||||
Investment in and advances to affiliates |
| 15,528 |
| 349,768 |
| 427,172 |
| (792,468 | ) | — |
|
| (22,782 | ) | 414,949 |
| 446,521 |
| (838,688 | ) | — |
| ||||||||||
Other long-term assets |
| — |
| 18,256 |
| 824 |
| (3,431 | ) | 15,649 |
|
| — |
| 19,800 |
| 733 |
| (3,132 | ) | 17,401 |
| ||||||||||
Total assets |
| $ | 15,529 |
| $ | 1,297,759 |
| $ | 1,080,995 |
| $ | (810,972 | ) | $ | 1,583,311 |
|
| $ | (22,781 | ) | $ | 1,303,951 |
| $ | 1,065,893 |
| $ | (842,000 | ) | $ | 1,505,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Liabilities and Shareholders’ (Deficit) Equity |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Accounts payable |
| $ | — |
| $ | 241,272 |
| $ | — |
| $ | — |
| $ | 241,272 |
|
| $ | — |
| $ | 185,900 |
| $ | — |
| $ | — |
| $ | 185,900 |
|
Accrued payroll and benefits |
| — |
| 19,192 |
| 5,244 |
| — |
| 24,436 |
|
| — |
| 21,405 |
| 4,416 |
| — |
| 25,821 |
| ||||||||||
Accrued expenses |
| — |
| 70,471 |
| 68,642 |
| (516 | ) | 138,597 |
|
| — |
| 70,988 |
| 79,633 |
| (180 | ) | 150,441 |
| ||||||||||
Current maturities of long-term debt and obligations under capital leases |
| — |
| 1,293 |
| 107,650 |
| — |
| 108,943 |
| |||||||||||||||||||||
Current maturities of capital lease and financing obligations |
| — |
| 1,995 |
| 4,690 |
| — |
| 6,685 |
| |||||||||||||||||||||
Total current liabilities |
| — |
| 332,228 |
| 181,536 |
| (516 | ) | 513,248 |
|
| — |
| 280,288 |
| 88,739 |
| (180 | ) | 368,847 |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Long-term debt and obligations under capital leases, less current maturities |
| — |
| 806,426 |
| 55,333 |
| — |
| 861,759 |
| |||||||||||||||||||||
Long-term debt and capital lease and financing obligations, less current maturities |
| — |
| 920,782 |
| 61,852 |
| — |
| 982,634 |
| |||||||||||||||||||||
Other long-term liabilities |
| — |
| 146,152 |
| 50,054 |
| (3,431 | ) | 192,775 |
|
| — |
| 132,165 |
| 47,330 |
| (3,132 | ) | 176,363 |
| ||||||||||
Total liabilities |
| — |
| 1,284,806 |
| 286,923 |
| (3,947 | ) | 1,567,782 |
|
| — |
| 1,333,235 |
| 197,921 |
| (3,312 | ) | 1,527,844 |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Shareholders’ equity |
| 15,529 |
| 12,953 |
| 794,072 |
| (807,025 | ) | 15,529 |
| |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total liabilities and shareholders’ equity |
| $ | 15,529 |
| $ | 1,297,759 |
| $ | 1,080,995 |
| $ | (810,972 | ) | $ | 1,583,311 |
| ||||||||||||||||
Shareholders’ (deficit) equity |
| (22,781 | ) | (29,284 | ) | 867,972 |
| (838,688 | ) | (22,781 | ) | |||||||||||||||||||||
Total liabilities and shareholders’ (deficit) equity |
| $ | (22,781 | ) | $ | 1,303,951 |
| $ | 1,065,893 |
| $ | (842,000 | ) | $ | 1,505,063 |
|
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Balance SheetStatement of Operations
January 30, 2016Thirteen Weeks Ended July 29, 2017
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| |||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Assets |
|
|
|
|
|
|
|
|
|
|
| |||||
Current assets: |
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and cash equivalents |
| $ | 1 |
| $ | 2,822 |
| $ | 4,056 |
| $ | — |
| $ | 6,879 |
|
Merchandise inventories |
| — |
| 467,262 |
| 244,437 |
| — |
| 711,699 |
| |||||
Prepaid expenses and other current assets |
| — |
| 88,346 |
| 9,088 |
| (180 | ) | 97,254 |
| |||||
Total current assets |
| 1 |
| 558,430 |
| 257,581 |
| (180 | ) | 815,832 |
| |||||
Property, fixtures and equipment at cost, net |
| — |
| 319,736 |
| 315,598 |
| — |
| 635,334 |
| |||||
Intangible assets, net |
| — |
| 20,964 |
| 61,098 |
| — |
| 82,062 |
| |||||
Investment in and advances to affiliates |
| 34,915 |
| 437,894 |
| 382,958 |
| (855,767 | ) | — |
| |||||
Other long-term assets |
| — |
| 19,846 |
| 863 |
| (3,311 | ) | 17,398 |
| |||||
Total assets |
| $ | 34,916 |
| $ | 1,356,870 |
| $ | 1,018,098 |
| $ | (859,258 | ) | $ | 1,550,626 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
| |||||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
| |||||
Accounts payable |
| $ | — |
| $ | 162,831 |
| $ | — |
| $ | — |
| $ | 162,831 |
|
Accrued payroll and benefits |
| — |
| 23,154 |
| 5,373 |
| — |
| 28,527 |
| |||||
Accrued expenses |
| — |
| 70,386 |
| 77,172 |
| (180 | ) | 147,378 |
| |||||
Current maturities of long-term debt and obligations under capital leases |
| — |
| 1,395 |
| 3,999 |
| — |
| 5,394 |
| |||||
Total current liabilities |
| — |
| 257,766 |
| 86,544 |
| (180 | ) | 344,130 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Long-term debt and obligations under capital leases, less current maturities |
| — |
| 929,377 |
| 53,292 |
| — |
| 982,669 |
| |||||
Other long-term liabilities |
| — |
| 138,810 |
| 53,412 |
| (3,311 | ) | 188,911 |
| |||||
Total liabilities |
| — |
| 1,325,953 |
| 193,248 |
| (3,491 | ) | 1,515,710 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Shareholders’ equity |
| 34,916 |
| 30,917 |
| 824,850 |
| (855,767 | ) | 34,916 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total liabilities and shareholders’ equity |
| $ | 34,916 |
| $ | 1,356,870 |
| $ | 1,018,098 |
| $ | (859,258 | ) | $ | 1,550,626 |
|
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| |||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net sales |
| $ | — |
| $ | 314,012 |
| $ | 190,412 |
| $ | — |
| $ | 504,424 |
|
Other income |
| — |
| 10,682 |
| 10,355 |
| — |
| 21,037 |
| |||||
|
| — |
| 324,694 |
| 200,767 |
| — |
| 525,461 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
| |||||
Costs of merchandise sold |
| — |
| 204,830 |
| 120,365 |
| — |
| 325,195 |
| |||||
Selling, general and administrative |
| — |
| 115,486 |
| 80,606 |
| (4,901 | ) | 191,191 |
| |||||
Depreciation and amortization |
| — |
| 13,027 |
| 10,108 |
| — |
| 23,135 |
| |||||
Amortization of lease-related interests |
| — |
| 455 |
| 500 |
| — |
| 955 |
| |||||
Impairment charges |
| — |
| 147 |
| — |
| — |
| 147 |
| |||||
Loss from operations |
| — |
| (9,251 | ) | (10,812 | ) | 4,901 |
| (15,162 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
| |||||
Intercompany income |
| — |
| 382 |
| 13,476 |
| (13,858 | ) | — |
| |||||
Equity in (losses) earnings of subsidiaries |
| (33,191 | ) | 1,587 |
| — |
| 31,604 |
| — |
| |||||
Interest expense, net |
| — |
| (25,909 | ) | (1,077 | ) | 8,957 |
| (18,029 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
(Loss) income before income taxes |
| (33,191 | ) | (33,191 | ) | 1,587 |
| 31,604 |
| (33,191 | ) | |||||
Income tax provision |
| 18 |
| 18 |
| 275 |
| (293 | ) | 18 |
| |||||
Net (loss) income |
| $ | (33,209 | ) | $ | (33,209 | ) | $ | 1,312 |
| $ | 31,897 |
| $ | (33,209 | ) |
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Comprehensive (Loss) Income
Thirteen Weeks Ended July 29, 2017
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| |||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net (loss) income |
| $ | (33,209 | ) | $ | (33,209 | ) | $ | 1,312 |
| $ | 31,897 |
| $ | (33,209 | ) |
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
| |||||
Pension and postretirement benefit plans |
| 755 |
| 755 |
| — |
| (755 | ) | 755 |
| |||||
Comprehensive (loss) income |
| $ | (32,454 | ) | $ | (32,454 | ) | $ | 1,312 |
| $ | 31,142 |
| $ | (32,454 | ) |
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
Thirteen Weeks Ended July 30, 2016
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| |||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net sales |
| $ | — |
| $ | 324,079 |
| $ | 218,281 |
| $ | — |
| $ | 542,360 |
|
Other income |
| — |
| 9,814 |
| 6,438 |
| — |
| 16,252 |
| |||||
|
| — |
| 333,893 |
| 224,719 |
| — |
| 558,612 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
| |||||
Costs of merchandise sold |
| — |
| 205,933 |
| 138,340 |
| — |
| 344,273 |
| |||||
Selling, general and administrative |
| — |
| 129,087 |
| 87,810 |
| (5,025 | ) | 211,872 |
| |||||
Depreciation and amortization |
| — |
| 14,297 |
| 10,702 |
| — |
| 24,999 |
| |||||
Amortization of lease-related interests |
| — |
| 468 |
| 540 |
| — |
| 1,008 |
| |||||
Impairment charges |
| — |
| 178 |
| — |
| — |
| 178 |
| |||||
Loss from operations |
| — |
| (16,070 | ) | (12,673 | ) | 5,025 |
| (23,718 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
| |||||
Intercompany income |
| — |
| 427 |
| 12,606 |
| (13,033 | ) | — |
| |||||
Equity in losses of subsidiaries |
| (38,880 | ) | (1,078 | ) | — |
| 39,958 |
| — |
| |||||
Interest expense, net |
| — |
| (22,159 | ) | (1,011 | ) | 8,008 |
| (15,162 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Loss before income taxes |
| (38,880 | ) | (38,880 | ) | (1,078 | ) | 39,958 |
| (38,880 | ) | |||||
Income tax (benefit) provision |
| (144 | ) | (144 | ) | 234 |
| (90 | ) | (144 | ) | |||||
Net loss |
| $ | (38,736 | ) | $ | (38,736 | ) | $ | (1,312 | ) | $ | 40,048 |
| $ | (38,736 | ) |
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Comprehensive Loss
Thirteen Weeks Ended July 30, 2016
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| |||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net loss |
| $ | (38,736 | ) | $ | (38,736 | ) | $ | (1,312 | ) | $ | 40,048 |
| $ | (38,736 | ) |
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
| |||||
Pension and postretirement benefit plans |
| 867 |
| 867 |
| — |
| (867 | ) | 867 |
| |||||
Comprehensive loss |
| $ | (37,869 | ) | $ | (37,869 | ) | $ | (1,312 | ) | $ | 39,181 |
| $ | (37,869 | ) |
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
ThirteenTwenty-Six Weeks Ended August 1, 2015July 29, 2017
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| ||||||||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Net sales |
| $ | — |
| $ | 327,803 |
| $ | 227,628 |
| $ | — |
| $ | 555,431 |
|
| $ | — |
| $ | 649,516 |
| $ | 391,049 |
| $ | — |
| $ | 1,040,565 |
|
Other income |
| — |
| 9,150 |
| 6,418 |
| — |
| 15,568 |
|
| — |
| 21,495 |
| 16,422 |
| — |
| 37,917 |
| ||||||||||
|
| — |
| 336,953 |
| 234,046 |
| — |
| 570,999 |
|
| — |
| 671,011 |
| 407,471 |
| — |
| 1,078,482 |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Costs of merchandise sold |
| — |
| 206,924 |
| 143,904 |
| — |
| 350,828 |
|
| — |
| 434,235 |
| 254,521 |
| — |
| 688,756 |
| ||||||||||
Selling, general and administrative |
| — |
| 132,276 |
| 74,672 |
| 8,238 |
| 215,186 |
|
| — |
| 242,922 |
| 163,290 |
| (9,936 | ) | 396,276 |
| ||||||||||
Gain on insurance recovery |
| — |
| — |
| (748 | ) | — |
| (748 | ) | |||||||||||||||||||||
Depreciation and amortization |
| — |
| 12,975 |
| 11,272 |
| (54 | ) | 24,193 |
|
| — |
| 25,312 |
| 20,030 |
| — |
| 45,342 |
| ||||||||||
Amortization of lease-related interests |
| — |
| 494 |
| 567 |
| — |
| 1,061 |
|
| — |
| 909 |
| 1,000 |
| — |
| 1,909 |
| ||||||||||
Impairment charges |
| — |
| 222 |
| — |
| — |
| 222 |
|
| — |
| 147 |
| — |
| — |
| 147 |
| ||||||||||
(Loss) income from operations |
| — |
| (15,938 | ) | 4,379 |
| (8,184 | ) | (19,743 | ) | |||||||||||||||||||||
Loss from operations |
| — |
| (32,514 | ) | (31,370 | ) | 9,936 |
| (53,948 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Intercompany income |
| — |
| 446 |
| 11,265 |
| (11,711 | ) | — |
|
| — |
| 780 |
| 29,110 |
| (29,890 | ) | — |
| ||||||||||
Equity in losses of subsidiaries |
| (39,801 | ) | (7,450 | ) | — |
| 47,251 |
| — |
|
| (90,554 | ) | (4,439 | ) | — |
| 94,993 |
| — |
| ||||||||||
Interest expense, net |
| — |
| (16,859 | ) | (3,675 | ) | 5,338 |
| (15,196 | ) |
| — |
| (53,822 | ) | (2,179 | ) | 19,954 |
| (36,047 | ) | ||||||||||
Loss on extinguishment of debt |
| — |
| — |
| (4,862 | ) | — |
| (4,862 | ) |
| — |
| (559 | ) | — |
| — |
| (559 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
(Loss) income before income taxes |
| (39,801 | ) | (39,801 | ) | 7,107 |
| 32,694 |
| (39,801 | ) | |||||||||||||||||||||
Loss before income taxes |
| (90,554 | ) | (90,554 | ) | (4,439 | ) | 94,993 |
| (90,554 | ) | |||||||||||||||||||||
Income tax (benefit) provision |
| (238 | ) | (238 | ) | 232 |
| 6 |
| (238 | ) |
| (30 | ) | (30 | ) | 527 |
| (497 | ) | (30 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (loss) income |
| $ | (39,563 | ) | $ | (39,563 | ) | $ | 6,875 |
| $ | 32,688 |
| $ | (39,563 | ) | ||||||||||||||||
Net loss |
| $ | (90,524 | ) | $ | (90,524 | ) | $ | (4,966 | ) | $ | 95,490 |
| $ | (90,524 | ) |
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Comprehensive (Loss) IncomeLoss
ThirteenTwenty-Six Weeks Ended August 1, 2015July 29, 2017
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| ||||||||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Net (loss) income |
| $ | (39,563 | ) | $ | (39,563 | ) | $ | 6,875 |
| $ | 32,688 |
| $ | (39,563 | ) | ||||||||||||||||
Net loss |
| $ | (90,524 | ) | $ | (90,524 | ) | $ | (4,966 | ) | $ | 95,490 |
| $ | (90,524 | ) | ||||||||||||||||
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Pension and postretirement benefit plans |
| 906 |
| 906 |
| — |
| (906 | ) | 906 |
|
| 1,518 |
| 1,518 |
| — |
| (1,518 | ) | 1,518 |
| ||||||||||
Comprehensive (loss) income |
| $ | (38,657 | ) | $ | (38,657 | ) | $ | 6,875 |
| $ | 31,782 |
| $ | (38,657 | ) | ||||||||||||||||
Comprehensive loss |
| $ | (89,006 | ) | $ | (89,006 | ) | $ | (4,966 | ) | $ | 93,972 |
| $ | (89,006 | ) |
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
Twenty-Six Weeks Ended July 30, 2016
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| ||||||||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Net sales |
| $ | — |
| $ | 681,575 |
| $ | 451,792 |
| $ | — |
| $ | 1,133,367 |
|
| $ | — |
| $ | 681,575 |
| $ | 451,792 |
| $ | — |
| $ | 1,133,367 |
|
Other income |
| — |
| 20,568 |
| 13,100 |
| — |
| 33,668 |
|
| — |
| 20,568 |
| 13,100 |
| — |
| 33,668 |
| ||||||||||
|
| — |
| 702,143 |
| 464,892 |
| — |
| 1,167,035 |
|
| — |
| 702,143 |
| 464,892 |
| — |
| 1,167,035 |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Costs of merchandise sold |
| — |
| 444,522 |
| 290,664 |
| — |
| 735,186 |
|
| — |
| 444,522 |
| 290,664 |
| — |
| 735,186 |
| ||||||||||
Selling, general and administrative |
| — |
| 262,205 |
| 175,993 |
| (10,141 | ) | 428,057 |
|
| — |
| 262,205 |
| 175,993 |
| (10,141 | ) | 428,057 |
| ||||||||||
Depreciation and amortization |
| — |
| 27,199 |
| 20,994 |
|
|
| 48,193 |
|
| — |
| 27,199 |
| 20,994 |
| — |
| 48,193 |
| ||||||||||
Amortization of lease-related interests |
| — |
| 936 |
| 1,079 |
| — |
| 2,015 |
|
| — |
| 936 |
| 1,079 |
| — |
| 2,015 |
| ||||||||||
Impairment charges |
| — |
| 178 |
| — |
| — |
| 178 |
|
| — |
| 178 |
| — |
| — |
| 178 |
| ||||||||||
Loss from operations |
| — |
| (32,897 | ) | (23,838 | ) | 10,141 |
| (46,594 | ) |
| — |
| (32,897 | ) | (23,838 | ) | 10,141 |
| (46,594 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Intercompany income |
| — |
| 901 |
| 24,615 |
| (25,516 | ) | — |
|
| — |
| 901 |
| 24,615 |
| (25,516 | ) | — |
| ||||||||||
Equity in losses of subsidiaries |
| (76,842 | ) | (1,256 | ) | — |
| 78,098 |
| — |
|
| (76,842 | ) | (1,256 | ) | — |
| 78,098 |
| — |
| ||||||||||
Interest expense, net |
| — |
| (43,590 | ) | (2,033 | ) | 15,375 |
| (30,248 | ) |
| — |
| (43,590 | ) | (2,033 | ) | 15,375 |
| (30,248 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Loss before income taxes |
| (76,842 | ) | (76,842 | ) | (1,256 | ) | 78,098 |
| (76,842 | ) |
| (76,842 | ) | (76,842 | ) | (1,256 | ) | 78,098 |
| (76,842 | ) | ||||||||||
Income tax (benefit) provision |
| (288 | ) | (288 | ) | 469 |
| (181 | ) | (288 | ) |
| (288 | ) | (288 | ) | 469 |
| (181 | ) | (288 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net loss |
| $ | (76,554 | ) | $ | (76,554 | ) | $ | (1,725 | ) | $ | 78,279 |
| $ | (76,554 | ) |
| $ | (76,554 | ) | $ | (76,554 | ) | $ | (1,725 | ) | $ | 78,279 |
| $ | (76,554 | ) |
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Comprehensive Loss
Twenty-Six Weeks Ended July 30, 2016
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| |||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net loss |
| $ | (76,554 | ) | $ | (76,554 | ) | $ | (1,725 | ) | $ | 78,279 |
| $ | (76,554 | ) |
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
| |||||
Pension and postretirement benefit plans |
| 1,734 |
| 1,734 |
| — |
| (1,734 | ) | 1,734 |
| |||||
Comprehensive loss |
| $ | (74,820 | ) | $ | (74,820 | ) | $ | (1,725 | ) | $ | 76,545 |
| $ | (74,820 | ) |
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of OperationsCash Flows
Twenty-Six Weeks Ended August 1, 2015July 29, 2017
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| |||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net sales |
| $ | — |
| $ | 688,269 |
| $ | 478,100 |
| $ | — |
| $ | 1,166,369 |
|
Other income |
| — |
| 18,620 |
| 13,252 |
| — |
| 31,872 |
| |||||
|
| — |
| 706,889 |
| 491,352 |
| — |
| 1,198,241 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
| |||||
Costs of merchandise sold |
| — |
| 446,036 |
| 309,257 |
| — |
| 755,293 |
| |||||
Selling, general and administrative |
| — |
| 267,107 |
| 165,930 |
| 835 |
| 433,872 |
| |||||
Gain on insurance recovery |
| — |
| — |
| (748 | ) | — |
| (748 | ) | |||||
Depreciation and amortization |
| — |
| 24,183 |
| 22,097 |
| (54 | ) | 46,226 |
| |||||
Amortization of lease-related interests |
| — |
| 989 |
| 1,173 |
| — |
| 2,162 |
| |||||
Impairment charges |
| — |
| 222 |
| — |
| — |
| 222 |
| |||||
Loss from operations |
| — |
| (31,648 | ) | (6,357 | ) | (781 | ) | (38,786 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
| |||||
Intercompany income |
| — |
| 896 |
| 22,629 |
| (23,525 | ) | — |
| |||||
Equity in losses of subsidiaries |
| (74,034 | ) | (11,007 | ) | — |
| 85,041 |
| — |
| |||||
Interest expense, net |
| — |
| (32,275 | ) | (7,860 | ) | 9,749 |
| (30,386 | ) | |||||
Loss on extinguishment of debt |
| — |
| — |
| (4,862 | ) | — |
| (4,862 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
(Loss) income before income taxes |
| (74,034 | ) | (74,034 | ) | 3,550 |
| 70,484 |
| (74,034 | ) | |||||
Income tax (benefit) provision |
| (397 | ) | (397 | ) | 468 |
| (71 | ) | (397 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net (loss) income |
| $ | (73,637 | ) | $ | (73,637 | ) | $ | 3,082 |
| $ | 70,555 |
| $ | (73,637 | ) |
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Comprehensive (Loss) Income
Twenty-Six Weeks Ended August 1, 2015
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| |||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net (loss) income |
| $ | (73,637 | ) | $ | (73,637 | ) | $ | 3,082 |
| $ | 70,555 |
| $ | (73,637 | ) |
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
| |||||
Pension and postretirement benefit plans |
| 1,888 |
| 1,888 |
| — |
| (1,888 | ) | 1,888 |
| |||||
Comprehensive (loss) income |
| $ | (71,749 | ) | $ | (71,749 | ) | $ | 3,082 |
| $ | 68,667 |
| $ | (71,749 | ) |
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| |||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| |||||
Net cash provided by (used in) operating activities |
| $ | 44 |
| $ | 18,449 |
| $ | (7,149 | ) | $ | — |
| $ | 11,344 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
| |||||
Capital expenditures |
| — |
| (14,881 | ) | (6,303 | ) | — |
| (21,184 | ) | |||||
Proceeds from sale of property, fixtures and equipment |
| — |
| 6,024 |
| 15,398 |
| — |
| 21,422 |
| |||||
Net cash (used in) provided by investing activities |
| — |
| (8,857 | ) | 9,095 |
| — |
| 238 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
| |||||
Payments on long-term debt and capital lease and financing obligations |
| — |
| (277,259 | ) | (2,123 | ) | — |
| (279,382 | ) | |||||
Proceeds from issuance of long-term debt and financing obligations |
| — |
| 275,866 |
| — |
|
|
| 275,866 |
| |||||
Deferred financing costs paid |
| — |
| (6,842 | ) | — |
| — |
| (6,842 | ) | |||||
Restricted shares forfeited in lieu of payroll taxes |
| (44 | ) | — |
| — |
| — |
| (44 | ) | |||||
Decrease in book overdraft balances |
| — |
| (1,581 | ) | — |
| — |
| (1,581 | ) | |||||
Net cash used in financing activities |
| (44 | ) | (9,816 | ) | (2,123 | ) | — |
| (11,983 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net decrease in cash and cash equivalents |
| — |
| (224 | ) | (177 | ) | — |
| (401 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and cash equivalents at beginning of period |
| 1 |
| 3,575 |
| 3,160 |
| — |
| 6,736 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and cash equivalents at end of period |
| $ | 1 |
| $ | 3,351 |
| $ | 2,983 |
| $ | — |
| $ | 6,335 |
|
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Cash Flows
Twenty-Six Weeks Ended July 30, 2016
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| ||||||||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| ||||||||||
Net cash provided by operating activities |
| $ | 120 |
| $ | 47,407 |
| $ | 16,042 |
| $ | — |
| $ | 63,569 |
|
| $ | 120 |
| $ | 47,407 |
| $ | 16,042 |
| $ | — |
| $ | 63,569 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Capital expenditures |
| — |
| (11,635 | ) | (14,114 | ) | — |
| (25,749 | ) |
| — |
| (11,635 | ) | (14,114 | ) | — |
| (25,749 | ) | ||||||||||
Proceeds from sale of property, fixtures and equipment |
| — |
| 7 |
| — |
| — |
| 7 |
|
| — |
| 7 |
| — |
| — |
| 7 |
| ||||||||||
Net cash used in investing activities |
| — |
| (11,628 | ) | (14,114 | ) | — |
| (25,742 | ) |
| — |
| (11,628 | ) | (14,114 | ) | — |
| (25,742 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Payments on long-term debt and capital lease obligations |
| — |
| (301,300 | ) | (1,958 | ) | — |
| (303,258 | ) | |||||||||||||||||||||
Proceeds from issuance of long-term debt |
| — |
| 263,669 |
| — |
| — |
| 263,669 |
| |||||||||||||||||||||
Payments on long-term debt and capital lease and financing obligations |
| — |
| (301,300 | ) | (1,958 | ) | — |
| (303,258 | ) | |||||||||||||||||||||
Proceeds from issuance of long-term debt and financing obligations |
| — |
| 263,669 |
| — |
| — |
| 263,669 |
| |||||||||||||||||||||
Deferred financing costs paid |
| — |
| (495 | ) | — |
| — |
| (495 | ) |
| — |
| (495 | ) | — |
| — |
| (495 | ) | ||||||||||
Restricted shares forfeited in lieu of payroll taxes |
| (120 | ) | — |
| — |
| — |
| (120 | ) |
| (120 | ) | — |
| — |
| — |
| (120 | ) | ||||||||||
Increase in book overdraft balances |
| — |
| 2,545 |
| — |
| — |
| 2,545 |
|
| — |
| 2,545 |
| — |
| — |
| 2,545 |
| ||||||||||
Net cash used in financing activities |
| (120 | ) | (35,581 | ) | (1,958 | ) | — |
| (37,659 | ) |
| (120 | ) | (35,581 | ) | (1,958 | ) | — |
| (37,659 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Net increase (decrease) in cash and cash equivalents |
| — |
| 198 |
| (30 | ) | — |
| 168 |
|
| — |
| 198 |
| (30 | ) | — |
| 168 |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Cash and cash equivalents at beginning of period |
| 1 |
| 2,822 |
| 4,056 |
| — |
| 6,879 |
|
| 1 |
| 2,822 |
| 4,056 |
| — |
| 6,879 |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Cash and cash equivalents at end of period |
| $ | 1 |
| $ | 3,020 |
| $ | 4,026 |
| $ | — |
| $ | 7,047 |
|
| $ | 1 |
| $ | 3,020 |
| $ | 4,026 |
| $ | — |
| $ | 7,047 |
|
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Cash Flows
Twenty-Six Weeks Ended August 1, 2015
|
|
|
|
|
| Guarantor |
| Consolidating |
| Company |
| |||||
|
| Parent |
| Issuer |
| Subsidiaries |
| Eliminations |
| Consolidated |
| |||||
Net cash provided by (used in) operating activities |
| $ | 2,403 |
| $ | (24,619 | ) | $ | 38,801 |
| $ | (5,621 | ) | $ | 10,964 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
| |||||
Capital expenditures |
| — |
| (37,807 | ) | (9,543 | ) | — |
| (47,350 | ) | |||||
Intercompany investing activity |
| (454 | ) | (32,239 | ) | — |
| 32,693 |
| — |
| |||||
Proceeds from insurance claim |
| — |
| — |
| 1,510 |
| — |
| 1,510 |
| |||||
Proceeds from sale of property, fixtures and equipment |
| — |
| 16,344 |
| 67,722 |
| — |
| 84,066 |
| |||||
Net cash (used in) provided by investing activities |
| (454 | ) | (53,702 | ) | 59,689 |
| 32,693 |
| 38,226 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
| |||||
Payments on long-term debt and capital lease obligations |
| — |
| (277,965 | ) | (114,218 | ) | — |
| (392,183 | ) | |||||
Proceeds from issuance of long-term debt |
| — |
| 370,390 |
| — |
| — |
| 370,390 |
| |||||
Intercompany financing activity |
| — |
| (2,004 | ) | 29,076 |
| (27,072 | ) | — |
| |||||
Cash dividends paid |
| (2,004 | ) | — |
| — |
| — |
| (2,004 | ) | |||||
Restricted shares forfeited in lieu of payroll taxes |
| (399 | ) | — |
| — |
| — |
| (399 | ) | |||||
Proceeds from stock options exercised |
| 454 |
| — |
| — |
| — |
| 454 |
| |||||
Decrease in book overdraft balances |
| — |
| (13,266 | ) | — |
| — |
| (13,266 | ) | |||||
Net cash (used in) provided by financing activities |
| (1,949 | ) | 77,155 |
| (85,142 | ) | (27,072 | ) | (37,008 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net (decrease) increase in cash and cash equivalents |
| — |
| (1,166 | ) | 13,348 |
| — |
| 12,182 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and cash equivalents at beginning of period |
| 1 |
| 4,209 |
| 4,543 |
| — |
| 8,753 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and cash equivalents at end of period |
| $ | 1 |
| $ | 3,043 |
| $ | 17,891 |
| $ | — |
| $ | 20,935 |
|
12. SUBSEQUENT EVENT
On August 15, 2016, The Bon-Ton Department Stores, Inc. and certain subsidiaries as borrowers and certain other subsidiaries as obligors entered into a Fourth Amendment (the “Fourth Amendment”) to the Second Amended Revolving Credit Facility which, among other changes, increased the A-1 Tranche of the Second Amended Revolving Credit Facility to a commitment of $150,000 (from the previous commitment of $100,000). This amendment brings total revolving commitments under the Second Amended Revolving Credit Facility to $880,000 ($730,000 under Tranche A and $150,000 under Tranche A-1).
Borrowings under the Second Amended Revolving Credit Facility bear interest at either (1) Adjusted LIBOR (equal to the London Interbank Offered Rate for an interest period selected by the borrowers) plus an applicable margin or (2) a base rate (based on the highest of (a) the Federal Funds Rate plus 0.5%, (b) the Bank of America prime rate, and (c) Adjusted LIBOR based on an interest period of one month plus 1.0%) plus the applicable margin. The applicable margins in respect of the Tranche A-1 facility under the Fourth Amendment will be 9.5% for LIBOR loans and 8.5% for base rate loans. The applicable margins in respect of the Tranche A facility continue to be based upon the excess availability under the Second Amended Revolving Credit Facility.
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The financial covenant contained in the Second Amended Revolving Credit Facility requires that the minimum excess availability be an amount greater than or equal to the greater of (1) 10% of the lesser of: (a) the aggregate commitments at such time and (b) the aggregate borrowing base at such time and (2) $75,000. In addition, the Fourth Amendment requires that if, at any time on or after January 29, 2017 and for so long as excess availability under the loan agreement is less than 20% of the lesser of (a) the aggregate commitments at such time and (b) the aggregate borrowing base at such time, the fixed charge coverage ratio shall be at least 1.00 to 1.00.
The proceeds of the loans under the Tranche A-1 facility were used to repay existing Tranche A-1 loans and a portion of Tranche A loans and to pay fees and expenses incurred in connection with the Fourth Amendment.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For purposes of the following discussion, references to the “second quarter of 2016”2017” and the “second quarter of 2015”2016” are to the 13 weeks ended July 29, 2017 and July 30, 2016, and August 1, 2015, respectively. References to “2016”“2017” and “2015”“2016” are to the 26 weeks ended July 29, 2017 and July 30, 2016, and August 1, 2015, respectively. References to “fiscal 2017” are to the 53-week period ending February 3, 2018; references to “fiscal 2016” are to the 52-week period endingended January 28, 2017; references to “fiscal 2015” are to the 52-week period ended January 30, 2016.2017. References to the “Company,” “we,” “us,” and “our” refer to The Bon-Ton Stores, Inc. and its subsidiaries.
Overview
General
The Company, a Pennsylvania corporation, is one of the largest regional department store operators in the United States, offering a broad assortment of brand-name fashion apparel and accessories for women, men and children. Our merchandise offerings also include cosmetics, home furnishings and other goods. We currently operate 267260 stores, including nine furniture galleries and four clearance centers, in 2624 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates, encompassing a total of approximately 2524 million square feet.
We operate in the department store segment of the U.S. retail industry, a highly competitive environment. The department store industry continues to evolve in response to competitive retail formats—mass merchandisers, national chain retailers, specialty retailers and online retailers—and the expansion of mobile technology and social media.
Performance Summary and Fiscal 20162017 Guidance
During the second quarter of 2016,2017, we made progress on a number of our strategic initiatives:
· Delivered sales gainsExperienced strength in certain key growthmerchandise categories and brands and drove accelerated double digitcontinued double-digit growth in our omnichannel business with a triple digit increase on(reflecting sales via our website, mobile site and our Let Us Find It customer service program) as compared to the prior year period;second quarter of 2016;
· Continued to effectively execute on a number of profit improvement initiatives, substantially reducing our selling, general and administrative (“SG&A”) expense for the quarter; and
· Maintained careful inventory controls, as we reduced inventory by 6%5.1% as compared to the second quarter of 2015, with fewer markdowns;2016.
· Realized continued growth in the penetration of proprietary credit cardComparable store sales to total sales which, at 57.1%decreased 6.1% in the second quarter of 2016, exceeded2017, reflecting continued soft mall traffic. Our results were consistent with our expectations and showed an improvement over our performance in the first quarter. We remain focused on working to better position the business for the long-term. We will focus on further enhancing our merchandise assortment with an emphasis on our targeted growth categories, refining our marketing strategy to increase traffic and driving growth in our omnichannel business. We expect to achieve further cost reductions through the continued rollout of our profit improvement initiative.
On August 17, 2017, we reaffirmed that we continue to expect loss per share to be in a range of $2.08 to $2.59, inclusive of a $0.05 per share expense from the comparable prior period by 390 basis points; and53rd week.
Updated assumptions reflected in our full-year guidance include the following:
· ContinuedA comparable store sales decrease ranging from 3.5% to make progress on our cost savings initiatives.4.5%, which excludes sales from the 53rd week;
Comparable store sales decreased 2.0% in the second quarter of 2016, reflecting soft mall traffic. However, our omnichannel business, which reflects sales via our website, mobile site, and our Buy Online Pick Up In-Store and Let Us Find It initiatives, grew significantly, and we expect that it will continue· A gross margin rate ranging from a 40- to deliver strong performance. We also believe that the fall assortment will be our best to date. While we are cognizant that the operating environment remains difficult, we believe that we are well positioned for the second half of60-basis-point decrease from the fiscal year with a strong merchandising assortment, a compelling marketing program focused on new customer acquisition and continued discipline in inventory management and cost controls.2016 rate of 35.5%;
On August 15, 2016, we completed a closing of a new $150 million revolving commitment that replaces the existing $100 million A-1 Tranche of our Second Amended and Restated Loan and Security Agreement (the “Second Amended Revolving Credit Facility”) and increases the total commitments under the facility to $880 million (see “Liquidity and Capital Resources,” for further discussion).
On August 18, 2016, we reaffirmed our Fiscal 2016 guidance· SG&A expense between $834 million and $839 million, including approximately $10 million for the year. We continue53rd week, compared to expect loss perSG&A expense of $880.6 million in fiscal 2016;
· Capital expenditures not to exceed $30 million, net of external contributions; and
· An estimated 20.3 million weighted average diluted share in the range of $0.95 to $1.45.shares outstanding.
Results of Operations
The following table summarizes changes in selected operating indicators of the Company, illustrating the relationship of various income and expense items to net sales for the respective periods presented (components may not add or subtract to totals due to rounding):
|
| THIRTEEN |
| TWENTY-SIX |
|
| THIRTEEN |
| TWENTY-SIX |
| ||||||||
|
| WEEKS ENDED |
| WEEKS ENDED |
|
| WEEKS ENDED |
| WEEKS ENDED |
| ||||||||
|
| July 30, |
| August 1, |
| July 30, |
| August 1, |
|
| July 29, |
| July 30, |
| July 29, |
| July 30, |
|
|
| 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| 2017 |
| 2016 |
| 2017 |
| 2016 |
|
Net sales |
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Other income |
| 3.0 |
| 2.8 |
| 3.0 |
| 2.7 |
|
| 4.2 |
| 3.0 |
| 3.6 |
| 3.0 |
|
|
| 103.0 |
| 102.8 |
| 103.0 |
| 102.7 |
|
| 104.2 |
| 103.0 |
| 103.6 |
| 103.0 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of merchandise sold |
| 63.5 |
| 63.2 |
| 64.9 |
| 64.8 |
|
| 64.5 |
| 63.5 |
| 66.2 |
| 64.9 |
|
Selling, general and administrative |
| 39.1 |
| 38.7 |
| 37.8 |
| 37.2 |
|
| 37.9 |
| 39.1 |
| 38.1 |
| 37.8 |
|
Gain on insurance recovery |
| — |
| (0.1 | ) | — |
| (0.1 | ) | |||||||||
Depreciation and amortization |
| 4.6 |
| 4.4 |
| 4.3 |
| 4.0 |
|
| 4.6 |
| 4.6 |
| 4.4 |
| 4.3 |
|
Amortization of lease-related interests |
| 0.2 |
| 0.2 |
| 0.2 |
| 0.2 |
|
| 0.2 |
| 0.2 |
| 0.2 |
| 0.2 |
|
Impairment charges |
| — |
| — |
| — |
| — |
|
| — |
| — |
| — |
| — |
|
Loss from operations |
| (4.4 | ) | (3.6 | ) | (4.1 | ) | (3.3 | ) |
| (3.0 | ) | (4.4 | ) | (5.2 | ) | (4.1 | ) |
Interest expense, net |
| 2.8 |
| 2.7 |
| 2.7 |
| 2.6 |
|
| 3.6 |
| 2.8 |
| 3.5 |
| 2.7 |
|
Loss on extinguishment of debt |
| — |
| 0.9 |
| — |
| 0.4 |
|
| — |
| — |
| 0.1 |
| — |
|
Loss before income taxes |
| (7.2 | ) | (7.2 | ) | (6.8 | ) | (6.3 | ) |
| (6.6 | ) | (7.2 | ) | (8.7 | ) | (6.8 | ) |
Income tax benefit |
| — |
| — |
| — |
| — |
| |||||||||
Income tax provision (benefit) |
| — |
| — |
| — |
| — |
| |||||||||
Net loss |
| (7.1 | )% | (7.1 | )% | (6.8 | )% | (6.3 | )% |
| (6.6 | )% | (7.1 | )% | (8.7 | )% | (6.8 | )% |
Second Quarter of 20162017 Compared with Second Quarter of 20152016
Net sales: Net sales in the second quarter of 20162017 were $542.4$504.4 million, compared with $555.4$542.4 million in the second quarter of 2015,2016, reflecting a decrease of 2.4%7.0%. Comparable store sales decreased 2.0%6.1% in the period due to continued soft mall traffic trends.
The best performing merchandise categories in the second quarter of 20162017 were Active SportswearFine Jewelry (included in Accessories) and Dresses (included in Women’s Apparel), Furniture (included in Home) and Men’s Sportswear (included in Men’s Apparel). Active SportswearFine Jewelry benefited from sales increases in key itemsstrong promotional events and brands. Sales in Furniture increased through the expansion of merchandise to additional doors and sales increases in mattresses. Men’s Sportsweardoors. Dresses primarily benefited from increased inventory investmentsales in key items and growth in our activewear business.items.
Merchandise categories that were challenged in the period included BetterPetites’ Sportswear and DressesYoung Contemporary (both included in Women’s Apparel) and Children’s. Better. Petites’ Sportswear was adversely impacted duringby the second quarter; we have exited poor performing brandsstrategic reduction of product offerings within certain categories and are directing inventory investment to brands that are performing better. Dresses werebrands. Young Contemporary was adversely impacted by unfavorable sales in certain product assortments, including moderate traditional dresses; we are continuing our efforts to align investment with sales trends. Sales in Children’s, particularly denim and sleepwear, have been challenged during the second quarter. We are adjusting our inventory as appropriate, seeking to capitalize on stronger products.brands.
Other income: Other income, which includes income from revenues received under our credit card program agreement, miscellaneous revenue departments and gift and merchandise return card breakage, was
$16.3 $21.0 million in the second quarter of 20162017 as compared with $15.6$16.3 million in the second quarter of 2015.2016. The increase was primarily reflects increaseddue to income associated with gift card breakage and, to a lesser degree, revenues from our proprietary credit card operations. Proprietary credit card sales, as a percentage of total sales, increased 40 basis points to 57.4% in the second quarter of 2017.
Costs and expenses: Gross margin in the second quarter of 20162017 decreased $6.5$18.9 million to $198.1$179.2 million as compared with $204.6$198.1 million in the comparable prior year period, primarily due to the decreased sales volume in the current period. Gross margin as a percentage of net sales decreased 31100 basis points to 36.5%35.5% in the second quarter of 20162017 from 36.8%36.5% in the comparable prior year period, primarily due to an unfavorable cumulative markup percentage, partially offset by reduced markdowns.increase in the markdown rate.
SG&A expense in the second quarter of 20162017 decreased $3.3$20.7 million to $211.9$191.2 million as compared with $215.2$211.9 million in the second quarter of 2015.2016. This reduction was largely due to a benefit from expense control measures, specificallysavings associated with prior year closed stores and reductions in store expenses, partially offset by higherconsulting fees, medical claimsinsurance, payroll, taxes and rent, as well as severance costs and consulting expensesgains associated with our cost reduction initiative.various real estate transactions. The current period expense rate, 39.1%37.9% of net sales, increased 32decreased 120 basis points from that of the prior year period as a result of the decreased sales volume in the period.
Gain on insurance recovery of $0.7 million was due to an insurance settlement in the second quarter of 2015, a residual of claims associated with one store that experienced fire damage in the fourth quarter of fiscal 2014.
Depreciation and amortization expense and amortization of lease-related interests increased $0.8decreased $1.9 million to $24.1 million in the second quarter of 2017 from $26.0 million in the second quarter of 2016 from $25.3 million in the second quarter of 2015.2016.
Interest expense, net: Net interest expense was $15.2$18.0 million forin the second quarter of 2017 as compared with $15.2 million in eachthe second quarter of 20162016. The increase primarily reflects an increased weighted average interest rate and 2015.higher debt levels.
Income tax benefitprovision (benefit): The effective income tax rate in the second quarter in each of 20162017 and 20152016 largely reflects our valuation allowance position against all net deferred tax assets. The income tax expense in the second quarter of 2017 includes a $0.5 million benefit from the loss on continuing operations which was offset by the recognition of deferred tax liabilities associated with indefinite-lived assets. The $0.1 million income tax benefit in the second quarter of 2016 includes a $0.6 million benefit from the loss on continuing operations which was partially offset by the recognition of deferred tax liabilities associated with indefinite-lived assets. The $0.2 million income tax benefit in the second quarter of 2015 includes a $0.7 million benefit from the loss on continuing operations which was partially offset by the recognition of deferred tax liabilities associated with indefinite-lived assets.
20162017 Compared with 20152016
Net sales: Net sales in 20162017 were $1,133.4$1,040.6 million, compared with $1,166.4$1,133.4 million in 2015,2016, reflecting a decrease of 2.8%8.2%. Comparable store sales decreased 2.4%7.5% in the period due to continued soft mall traffic trends.
The best performing merchandise categories in 20162017 were Men’s SportswearFine Jewelry (included in Men’s Apparel), Active Sportswear (included in Women’s Apparel)Accessories) and Hard HomeFurniture (included in Home). Men’s SportswearFine Jewelry benefited from strong promotional events and the expansion of merchandise to additional doors. Sales in Furniture increased inventory investment in key itemsthrough the expansion of merchandise to additional doors and growth in our activewear business. Active Sportswear benefited from sales increases in key items and brands. Hard home achieved success from improved performance in luggage and seasonal decor.mattresses.
Merchandise categories that were challenged in the period included BetterPetites’ Sportswear and Dresses (both included(included in Women’s Apparel) and Children’s. BetterAccessories. Petites’ Sportswear was adversely impacted during 2016; we have exited poor performing brandsby the strategic reduction of product offerings within certain categories and are directing inventory investment to brands that are performing better. Dressesbrands. Accessories were adversely impactedaffected by unfavorablelower sales inof handbags, specifically within certain product assortments, including moderate traditional dresses; we are continuing our efforts to align investment with sales trends. Sales in Children’s, particularly denim and sleepwear, have been challenged during 2016. We are adjusting our inventory as appropriate, seeking to capitalize on stronger products.key brands.
Other income: Other income, which includes income from revenues received under our credit card program agreement, miscellaneous revenue departments and gift and merchandise return card breakage, was $37.9 million in 2017 as compared with $33.7 million in 2016 as compared with $31.9 million in 2015.2016. The increase primarily reflects increased revenues from our proprietary creditincome associated with gift card operations.breakage.
Costs and expenses: Gross margin in 20162017 decreased $12.9$46.4 million to $398.2$351.8 million as compared with $411.1$398.2 million in 2015.2016. Gross margin as a percentage of net sales decreased 11132 basis points to 33.8% in 2017 from 35.1% in 2016, from 35.2% in 2015, due primarily to an unfavorable cumulative markup percentage, partially offset by reduced markdowns.increase in the markdown rate.
SG&A expense in 20162017 decreased $5.8$31.8 million to $428.1$396.3 million as compared with $433.9$428.1 million in 2015.2016. This reduction was largely driven by expense control measures, specifically in store expenses, partially offset by higherreductions in consulting fees, medical claimsinsurance, payroll, taxes and rent, as well as severance costs and consulting expensesgains associated with our cost reduction initiative.various real estate transactions. The current period expense rate, 37.8%38.1% of net sales, increased 5731 basis points from that of the prior year.year as a result of decreased sales volume in the current period.
Gain on insurance recovery of $0.7 million was due to an insurance settlement in the second quarter of 2015, a residual of claims associated with one store that experienced fire damage in the fourth quarter of fiscal 2014.25
Depreciation and amortization expense and amortization of lease-related interests increased $1.8decreased $3.0 million to $47.3 million in 2017 from $50.2 million in 2016 from $48.4 million in 2015.2016.
Interest expense, net: Net interest expense was $36.0 million in 2017 as compared with $30.2 million in 2016 as compared with $30.4 million in 2015.2016. The decreaseincrease primarily reflects a reducedan increased weighted average interest rate partially offset byand higher debt levels.
Loss on extinguishment of debt: In 2015,2017, we recorded charges totaling $4.9$0.6 million due to the early terminationwrite-off of one of our mortgage facilities. As a result of the prepayment, we paid an early termination fee of $4.7 million. Additionally, unamortizedcertain deferred financing fees were accelerated onin connection with the date of termination.Fifth Amendment to the Second Amended Revolving Credit Facility.
Income tax benefitprovision (benefit): The effective income tax rate in each of 20162017 and 20152016 largely reflects our valuation allowance position against all net deferred tax assets. The $0.3 million income tax benefit in 20162017 includes a $1.2$1.0 million benefit from the loss on continuing operations which was partially offset by the recognition of deferred tax liabilities associated with indefinite-lived assets. The $0.4$0.3 million income tax benefit in 20152016 includes a $1.3$1.2 million benefit from the loss on continuing operations which was partially offset by the recognition of deferred tax liabilities associated with indefinite-lived assets.
Seasonality
Our business, like that of most retailers, is subject to seasonal fluctuations, with the major portion of sales and income realized during the second half of each fiscal year, which includes the holiday season. Due to the fixed nature of certain costs, SG&A expense is typically higher as a percentage of net sales during the first half of each fiscal year. We typically finance working capital increases in the second half of each fiscal year through additional borrowings under our $880.0 million Second Amended Revolving Credit Facility that expires on December 12, 2018 (see “Liquidity and Capital Resources,” below, for further discussion).
Because of the seasonality of our business, results for any quarter are not necessarily indicative of results that may be achieved for a full fiscal year.
Liquidity and Capital Resources
At July 30, 2016,29, 2017, we had $7.0$6.3 million in cash and cash equivalents and $224.8$171.5 million available under our Second Amended Revolving Credit Facility (before taking into account the minimum borrowing availability covenant under such facility)facility, which was $75.0 million at July 29, 2017). Excess availability was $265.2$224.8 million as of the comparable prior year period. The unfavorable excess availability comparison primarily reflects the repaymentearly payment of our mortgage facility in January 2016,senior notes due July 2017, partially offset by improved cash flows from operating activities.a net availability increase as a result of the August 2016 amendment to the Second Amended Revolving Credit Facility.
On August 15, 2016,April 28, 2017, The Bon-Ton Department Stores, Inc. and certain subsidiaries as borrowers and certain other subsidiaries as obligorsguarantors entered into a FourthFifth Amendment (the “Fourth“Fifth Amendment”) to the Second Amended Revolving Credit Facility which, among other changes, increasedwith Bank of America, N.A., as Agent, and certain financial institutions as lenders. The Fifth Amendment extends the A-1maturity date of the $730 million Tranche A of the
Second Amended Revolving Credit Facility to a commitment of $150.0 million (from the previous commitment of $100.0 million). This amendment brings total revolving commitments under the Second Amended Revolving Credit Facility to $880.0 million ($730.0 million under(“Tranche A”). Tranche A and $150.0 million underis now due to mature on April 28, 2022 provided that Tranche A-1).
Borrowings underA-1 of the Second Amended Revolving Credit Facility bear interest(“Tranche A-1”) is repaid prior to March 15, 2021 or the maturity of Tranche A-1 is extended to at either (1) Adjusted LIBOR (equalleast April 28, 2022. If Tranche A-1 is not so repaid or so extended, or is extended to a date earlier than April 28, 2022, Tranche A will mature on the same date as Tranche A-1. In any event, Tranche A remains subject to a “springing” maturity date that is sixty days prior to the London Interbank Offered Rate for an interest period selected by the borrowers) plus an applicable margin or (2) a base rate (based on the highest of (a) the Federal Funds Rate plus 0.5%, (b) the Bank of America prime rate, and (c) Adjusted LIBOR based on an interest period of one month plus 1.0%) plus the applicable margin. The applicable margins in respectearliest of the Tranche A-1 facility under the Fourth Amendment will be 9.5% for LIBOR loansmaturity date of (1) any senior note debt (which is currently comprised of our 8.00% Second Lien Senior Secured Notes due June 15, 2021) and 8.5% for base rate loans. The applicable margins in respect of the Tranche A facility continue to be based upon the excess availability under the Second Amended Revolving Credit Facility.(2) if incurred, certain permitted debt secured by junior liens.
The financial covenant contained inFifth Amendment did not change the total lender commitment under the facility, which remains at $880 million (for both Tranche A and Tranche A-1). Pricing and other terms of the Second Amended Revolving Credit Facility requires that the minimum excess availability be an amount greater than or equal to the greater of (1) 10% of the lesser of: (a) the aggregate commitments at such time and (b) the aggregate borrowing base at such time and (2), by virtue of the Fourth Amendment, $75.0 million. In addition, the Fourth Amendment requires that if, at any time on or after January 29, 2017 and for so long as excess availability under the loan agreement is less than 20% of the lesser of (a) the aggregate commitments at such time and (b) the aggregate borrowing base at such time, the fixed charge coverage ratio shall be at least 1.00 to 1.00.remain essentially unchanged.
The proceeds of the loans under the Tranche A-1 facility were used to repay existing Tranche A-1 loans and a portion of Tranche A loans and to pay fees and expenses incurred in connection with the Fourth Amendment. We intend to refinance our existing 105/8% Second Lien Secured Notes due in July 2017 prior to their maturity.26
Typically, cash flows from operations are impacted by the effect on sales of (1) consumer confidence, (2) weather in the geographic markets served by the Company, (3) general economic conditions and (4) competitive conditions existing in the retail industry. A downturn in any single factor or a combination of factors could have a material adverse impact upon our ability to generate sufficient cash flows to operate our business. While the current economic uncertainty affects our assessment of short-term liquidity, we consider our resources (including, but not limited to, cash flows from operations supplemented by borrowings under the Second Amended Revolving Credit Facility) adequate to satisfy our cash needs for at least the next 12 months.
Our primary sources of working capital are cash flows from operations and borrowings under our Second Amended Revolving Credit Facility, which provides for up to $880.0 million in borrowings (limited by amounts available pursuant to a borrowing base calculation). Our business follows a seasonal pattern; working capital fluctuates with seasonal variations, reaching its highest level in October or November to fund the purchase of merchandise inventories prior to the holiday season. The seasonality of our business historically provides greatest cash flow from operations during the holiday season, with fiscal fourth quarter net sales generating the strongest profits of our fiscal year. As holiday sales significantly reduce inventory levels, this reduction, combined with net income, historically provides us with strong cash flow from operations at the end of our fiscal year.
Cash provided by (used in) our operating, investing and financing activities is summarized as follows:
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Operating activities |
| $ | 63.6 |
| $ | 11.0 |
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| $ | 11.3 |
| $ | 63.6 |
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| (25.7 | ) | 38.2 |
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Financing activities |
| (37.7 | ) | (37.0 | ) |
| (12.0 | ) | (37.7 | ) |
Net cash provided by operating activities was $11.3 million and $63.6 million in 2017 and $11.0 million in 2016, and 2015, respectively. The increasedecrease in cash flow primarily reflects a $46.9higher net loss of $14.0 million, favorablea $19.9 million unfavorable change in cash flow from working capital.capital and a $10.2 million unfavorable change in cash flow from long-term liabilities. The improvementdecrease in cash flow from working capital was largely due to favorableunfavorable fluctuations of $21.0$56.2 million and $6.6 million in cash flows from merchandise inventories, $11.7accounts payable and prepaid expenses, respectively, partially offset by a favorable variance of $48.3 million in cash flows from accrued payroll and benefits and accrued expenses and $10.2 million in cash flows from prepaid expenses and other current assets.inventories.
Net cash used in investing activities was $25.7 million in 2016 and net cash provided by investing activities was $38.2$0.2 million in 2015.2017 compared with net cash used in investing activities of $25.7 million in 2016. In 2015,2017, the inflow of cash includes $84.0$21.4 million of proceeds from the sale of assets associated with the sale-leaseback transaction.various real estate transactions. Capital expenditures totaled $21.2 million and $25.7 million in 2017 and $47.4 million in 2016, and 2015, respectively, reflecting a planned decrease in capital expenditures. These expenditures do not reflect reductions for external contributions (primarily leasehold improvement and fixture allowances received from landlords or vendors) of $3.9 million and $14.1 million in 2017 and $4.5 million in 2016, and 2015, respectively. We anticipate that our fiscal 20162017 capital expenditures will not exceed $68.5$45.0 million (excluding external contributions of $28.5$15.0 million, reducing anticipated net capital investments to $40.0$30.0 million).
Net cash used in financing activities was $12.0 million and $37.7 million in 2017 and $37.0 million2016, respectively. The decrease in 2016 and 2015, respectively.cash used in financing activities is primarily a result of lower net payments on long term debt due to the reduced cash flow from operating activities.
Aside from planned capital expenditures, the Company’s primary cash requirements will be to service debt and finance working capital increases during peak selling seasons.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect reported amounts and disclosure of contingent assets and liabilities. There have been no significant changes in the critical accounting policies and estimates described in our Annual Report on Form 10-K for the year ended January 30, 2016.28, 2017.
Recently Adopted and Issued Accounting Standards
Recently adopted and issued accounting standards are discussed in Note 1 to the Consolidated Financial Statements.
Forward-Looking Statements
Certain information included in this report (as well as other communications made or to be made by the Company) and other materials filed or to be filed by the Company with the Securities and Exchange Commission contain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which may be identified by words or phrases such as “may,” “could,” “would,” “will,” “plan,” “expect,” “believe,“anticipate,” “anticipate,“believe,” “estimate,” “project,” “intend,” “look forward to” or other similar expressions includingand include the Company’s fiscal 20162017 guidance, and statements regarding enhancements to our online and mobile platforms, anticipated expense savings, future cash flows, inventory management initiatives and projected capital expenditures, involve important risks and uncertainties that could significantly affect results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. Factors that could cause such
differences include, but are not limited to,to: risks related to retail businesses generally; a significant and prolonged deterioration of general economic conditions which could negatively impact the Company in a number of ways, including the potential write-down of the current valuation of intangible assets and deferred taxes; risks related to the Company’s proprietary credit card program; potential increases in pension obligations; consumer spending patterns, debt levels, and the availability and cost of consumer credit; additional competition from existing and new competitors or changes in the competitive environment; inflation; deflation; changes in the costs of fuel and other energy and transportation costs; weather conditions that could negatively impact sales; uncertainties associated with expanding or remodeling existing stores; the ability to attract and retain qualified management; the dependence upon relationships with vendors and their factors; a data security breach or system failure; the ability to reduce or control SG&A expenses, including initiatives to reduce expenses and improve efficiency; operational disruptions; unsuccessful marketing initiatives; the ability to expand capacity and improve efficiency through the Company’s new eCommerce fulfillment center; changes in, or the failure to successfully implement, our key strategies, including initiatives to improve our merchandising, marketing and operations; adverse outcomes in litigation; the incurrence of unplanned capital expenditures; the ability to obtain financing for working capital, capital expenditures and general corporate purposes; the impact of regulatory requirements including the Health Care Reform Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act; the inability or limitations on the Company’s ability to favorably adjust the valuation allowance on deferred tax assets; and the financial condition of mall operators. Additional factors that could cause the Company’s actual results to differ from those contained in these forward-looking statements are discussed in greater detail under Item 1A of the Company’s Annual Report on Form 10-K for fiscal 20152016 filed with the Securities and Exchange Commission.
ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk and Financial Instruments
On August 15, 2016,April 28, 2017, we completed a closingclosed on an extension of a new $150.0our $730 million revolving commitment that replaces the existing $100.0 million A-1 Tranche A of our Second Amended Revolving Credit Facility as discussed in advance of the December 2018 maturity date. See “Liquidity and Capital Resources” within Management’s Discussion and Analysis of Financial Condition and Results of Operations.for further discussion on this extension.
There were no other material changes in our exposures, risk management strategies, or hedging positions since January 30, 2016.28, 2017. For further information, refer to Item 7A of our fiscal 20152016 Annual Report on Form 10-K.
ITEM 4.CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports filed pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report and, based on this evaluation, concluded that our disclosure controls and procedures are effective.
Changes in Internal Control over Financial Reporting
There were no changes to our internal controls over financial reporting that occurred during the thirteen weeks ended July 30, 201629, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II: OTHER INFORMATION
ITEM 6.EXHIBITS
(a) The following exhibits are filed pursuant to the requirements of Item 601 of Regulation S-K:
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10.1* | ||
10.2* | ||
31.1 |
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31.2 |
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32.1** |
| Certification Pursuant to Rules 13a-14(b) and 15d-14(b) of the Securities Exchange Act of 1934 |
101.INS |
| XBRL Instance Document |
101.SCH |
| XBRL Taxonomy Extension Schema Document |
101.CAL |
| XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
| XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
| XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
| XBRL Taxonomy Extension Presentation Linkbase Document |
* Constitutes a management contract or compensatory plan or arrangement.
**Furnished herewith.
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.
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DATE: | September | 6, 2017 |
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DATE: | September | 6, 2017 |
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DATE: | September | 6, 2017 |
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