SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 12, 1997
CARSON PIRIE SCOTT & CO.
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(Exact name of registrant as specified in its charter)
Illinois
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(State or other jurisdiction of incorporation)
0-22682 37-0175980
Commission File Number (IRS Employer Identification No.)
331 West Wisconsin Avenue, Milwaukee, Wisconsin 53203
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(Address of principal executive offices) (Zip Code)
(414) 347-4141
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Registrant's Telephone Number
Page 1
Item 5. Other Events.
On November 12, 1997 Carson Pirie Scott & Co. (the "registrant") reported
its third quarter and year to date financial results in a news release, a copy
of which is attached as Exhibit 99.1.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
(c) Exhibits. The following exhibit is filed as part of this report:
99.1 News release dated November 13, 1997.
SIGNATURE
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.
Dated: November 17, 1997
CARSON PIRIE SCOTT & CO.
By: /s/ Charles J. Hansen
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Name: Charles J. Hansen
Title: Vice President,
General Counsel,
and Secretary
Page 2
EXHIBIT INDEX
Exhibit
Number Description
99.1 News release dated November 13, 1997.
Page 3
EXHIBIT 99.1
Investors Media
James L. Stoffel Edward P. Carroll, Jr.
V.P. - Treasurer Executive V.P. Marketing
(414) 278-5769 (414) 347-5340
FOR IMMEDIATE RELEASE THURSDAY, NOVEMBER 13, 1997
CARSON PIRIE SCOTT & CO. THIRD QUARTER OPERATING
EARNINGS INCREASE 26% TO $0.39 PER SHARE
Milwaukee, Wisconsin, November 13, 1997 - Carson Pirie Scott & Co. (NYSE:CRP)
today reported its third quarter and year to date financial results. Stanton J.
Bluestone, Chairman and Chief Executive Officer of Carson Pirie Scott & Co.,
commented:
"I am pleased to report our tenth consecutive quarter of improvement in
operating earnings per share. A combination of solid sales growth and diligent
expense control generated the 26% operating EPS gain in the quarter."
"Our top line grew 5.8% in the quarter by virtue of a 4.0% comparable store
sales gain and the continued solid performance from the new stores the Company
added in 1996. Sales growth was restrained during September and early October
due to unseasonably warm weather. However, sales rebounded strongly during the
last three weeks of the quarter with the return to more seasonal temperatures."
"Nearly all merchandise categories contributed to our comparable store sales
growth. Feminine Apparel continued its brisk sales trend with a 6% comparable
store sales gain in the quarter and a 10% sales gain in the first nine months.
In addition, the Men's apparel area performed well, particularly in the Better
Sportswear categories. Shoes, Tabletop and Home Textiles also posted above
average sales gains in the quarter."
"Our margin rate declined 0.8 percentage points in the quarter due to higher
markdowns resulting from excess summer merchandise and a change in the mix of
merchandise sold. Our expense rate improved 1.3 percentage points moving from
30.3% in 1996 to 29.0% in 1997 which more than offset the margin rate decline.
The expense rate improvement resulted from productivity gains throughout the
Company, the spreading of fixed expenses across a larger sales base and the
absence of new store preopening charges in the current quarter. These operating
improvements resulted in a 15% jump in EBITDA and a 26% operating EPS increase.
Net income for the quarter improved to $5.4 million compared to a loss of $1.2
million in the prior year third quarter."
"The third quarter results were a continuation of our strong trend in 1997.
Year-to-date total sales have increased 7.6% while comparable store sales have
increased 4.4%. These strong sales results combined with diligent management of
expenses have generated a 20% increase in EBITDA and a 31% increase in operating
EPS."
The Company also announced on October 29, 1997 that it has entered into an
Agreement and Plan of Merger with Proffitt's, Inc. (NYSE:PFT) The Company filed
a Form 8-K with the Securities and Exchange Commission dated October 29, 1997
and encourages its shareholders to review these materials.
Carson Pirie Scott & Co., a major department store retailer, operates 52
traditional department stores and 4 furniture stores: 31 Carson Pirie Scott
stores in greater Chicago, Indiana and Minnesota; 13 Bergner's in central
Illinois; and 12 Boston Stores in Wisconsin.
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CARSON PIRIE SCOTT & CO. AND SUBSIDIARIES
Consolidated Statements of Operations
(dollars in thousands, except per share amounts)
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Three Months Ended Nine Months Ended Trailing Twelve Months
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November 1, November 2, November 1, November 2, November 1, November 2,
1997 1996 1997 1996 1997 1996
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Net sales $281,740 $266,238 $783,639 $727,992 $1,158,472 $1,092,844
Cost of sales (180,467) (168,565) (502,490) (463,770) (738,799) (694,435)
Selling, general and
administrative expenses (81,701) (80,661) (232,185) (223,371) (315,946) (305,404)
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EBITDA 19,572 17,012 48,964 40,851 103,727 93,005
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Depreciation and
amortization expense (4,966) (4,057) (15,017) (12,120) (18,418) (14,697)
Other 66 (321) 218 (456) 861 (65)
Nonrecurring items (343) 0 (4,505) 0 (4,505) 904
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Income from operations 14,329 12,634 29,660 28,275 81,665 79,147
Nonrecurring items (1,415) (10,525) (1,415) 1,540 (1,415) (5,295)
Interest expense, net (3,929) (4,072) (12,247) (11,207) (16,950) (16,203)
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Income (loss) before taxes 8,985 (1,963) 15,998 18,608 63,300 57,649
Income tax expense (3,558) 774 (6,335) (7,331) (25,104) (22,945)
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Net income (loss) $5,427 ($1,189) $9,663 $11,277 $38,196 $34,704
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Shares outstanding (in 000's) 16,447 16,578 16,468 16,720 16,478 16,724
Net income (loss) per share:
Operating $0.39 $0.31 $0.80 $0.61 $2.53 $2.23
Primary $0.33 ($0.07) $0.59 $0.67 $2.32 $2.08
Fully diluted $0.33 ($0.07) $0.58 $0.67 $2.31 $2.07
Statistics:
Same-store sales increase 4.0% 3.5% 4.4% 2.6% 3.4% 2.8%
Gross margin rate 35.9% 36.7% 35.9% 36.3% 36.2% 36.5%
SG&A rate (29.0%) (30.3%) (29.6%) (30.7%) (27.3%) (27.9%)
EBITDA rate 6.9% 6.4% 6.2% 5.6% 9.0% 8.5%
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The Company provided the following highlights for the third quarter results:
1997 Third Quarter Results Summary 1996 Third Quarter Results Summary
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Net Net Net Net
($ in millions, except EPS) Sales EBITDA Income EPS Sales EBITDA Income EPS
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Operating results (1)<F1> $281.7 $19.6 $6.5 $0.39 $266.2 $17.0 $5.2 $0.31
Nonrecurring Item:
County Seat Write-down - - - - - - ($6.4) ($0.38)
Acquisition / legal costs - - ($0.6) ($0.04) - - - -
Write-off of loan fees - - ($0.3) ($0.01) - - - -
Year 2000 costs - - ($0.2) ($0.01) - - - -
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Total Company $281.7 $19.6 $5.4 $0.33 $266.2 $17.0 ($1.2) ($0.07)
=========================================== =============================================
<FN>
<F1>
(1) Excludes nonrecurring items.
</FN>
Sales: Sales increased 5.8% to $281.7 million in the third quarter of 1997 from
the prior year's sales of $266.2 million. Sales rose 4.0% on a comparable store
basis.
EBITDA: Earnings before interest, taxes, depreciation, amortization and other
nonrecurring items ("EBITDA") increased 15% to $19.6 million in 1997 from $17.0
million in 1996. The EBITDA rate for the third quarter increased approximately
50 basis points from 6.4% in 1996 to 6.9% in 1997. The EBITDA rate improvement
resulted primarily from productivity gains throughout the Company, the
leveraging of fixed expenses across a larger sales base and the absence of store
preopening costs in the current quarter.
Depreciation and amortization: The Company's depreciation and amortization
expense increased from $4.1 million in 1996 to $5.0 million in 1997. The $0.9
million increase resulted from the higher fixed asset balances created through
the Company's capital expenditure program and new store openings being added to
an artificially low base due to fresh start accounting.
Interest Expense: Interest expense decreased to $3.9 million in 1997 from $4.1
million in 1996 as a result of lower average debt levels during the current year
third quarter.
Earnings per share ("EPS") results: Net income excluding nonrecurring items
increased $1.3 million in the quarter versus the prior year third quarter. The
improved EBITDA performance was partially offset by higher depreciation charges.
Operating EPS improved 26% from $0.31 to $0.39 per share. On a Total Company
basis, EPS was $0.33 in 1997. The $0.06 difference versus operating EPS of $0.39
related to Year 2000 computer system preparation costs, acquisition / legal
costs and the write-off of loan fees. The nonrecurring acquisition and legal
costs relate to professional fees and expenses incurred by the Company to defend
and ultimately settle its lawsuit with Elder Beerman. The Company reached the
settlement in the third quarter, subject to bankruptcy court approval. In
addition, during the third quarter the Company entered into an unsecured credit
facility with lower fees and reduced covenants. The facility replaced an
existing credit agreement that was secured by inventory.
Share Repurchase Program: During the third quarter, the Company repurchased
150,477 shares of its common stock for $5.7 million under a January 1997 $20
million share repurchase authorization. The Company repurchased 394,777 shares
of its common stock for $13.1 million in the first nine months of 1997. The
Company suspended its share repurchase program in conjunction with its announced
merger with Proffitt's, Inc.
The Company provided the following highlights for its year to date financial
results:
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1997 Year-to-Date Results Summary 1996 Year-to-Date Results Summary
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Net Net Net Net
($ in millions, except EPS) Sales EBITDA Income EPS Sales EBITDA Income EPS
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Operating results (1)<F1> $783.6 $49.0 $13.2 $0.80 $728.0 $40.9 $10.4 $0.61
Nonrecurring Items:
Sale of marketable securities - - - - - - $9.0 $0.54
Charitable contribution - - - - - - ($1.5) ($0.09)
Write-off of loan fees - - ($0.3) ($0.01) - - ($0.2) ($0.01)
County Seat Write-Down - - - - - - ($6.4) ($0.38)
Acquisition / legal costs - - ($0.6) ($0.04) - - - -
Year 2000 costs - - ($2.7) ($0.16) - - - -
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Total Company $783.6 $49.0 $9.7 $0.59 $728.0 $40.9 $11.3 $0.67
========================================== =============================================
<FN>
<F1>
(1) Excludes nonrecurring items.
</FN>
Sales: Sales increased 7.6% to $783.6 million in the year-to-date of 1997 from
the prior year's sales of $728.0 million. Sales rose 4.4% on a comparable store
basis.
EBITDA: Earnings before interest, taxes, depreciation, amortization and other
nonrecurring items ("EBITDA") increased 20% to $49.0 million in 1997 from $40.9
million in 1996. The EBITDA rate for the first nine months increased
approximately 60 basis points from 5.6% in 1996 to 6.2% in 1997. The EBITDA rate
improvement resulted primarily from productivity improvements, the leveraging of
fixed expenses across a substantially larger sales base and the absence of store
preopening costs in the current year.
Depreciation and amortization: The Company's depreciation and amortization
expense increased from $12.1 million in 1996 to $15.0 million in 1997. The $2.9
million increase resulted from the higher fixed asset balances created through
the Company's capital expenditure program and new store openings being added to
an artificially low base due to fresh start accounting.
Interest Expense: Interest expense increased to $12.2 million in 1997 from $11.2
million in 1996. The increase occurred because the 1997 results do not include
$1.0 million of interest income recorded in 1996 on an investment in County Seat
Holdings, Inc. County Seat Holdings, Inc. filed for Chapter 11 bankruptcy
protection in the third quarter of 1996 and the Company sold its investment in
the first quarter of fiscal 1997.
Earnings per share ("EPS") results: Net income excluding nonrecurring items
increased $2.8 million in the current year versus the prior year. The improved
EBITDA performance was partially offset by higher depreciation and interest
charges. Operating EPS improved 31% from $0.61 to $0.80 per share. On a Total
Company basis, EPS was $0.59 in 1997. The $0.21 difference versus operating EPS
of $0.80 related to Year 2000 computer system preparation costs which included a
$3.1 million pre-tax write-down of the undepreciated asset value of a mainframe
computer in conjunction with its lease termination, professional fees and
expenses related to the Elder Beerman lawsuit, and the write-off of loan fees.
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CARSON PIRIE SCOTT & CO. AND SUBSIDIARIES
Consolidated Balance Sheets
(dollars in thousands)
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November 1, November 2,
Assets 1997 1996
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Cash and cash equivalents $ 20,920 $ 20,103
Receivables, net 250,835 237,364
Inventories 264,813 255,658
Other current assets 19,191 20,344
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Total current assets 555,759 533,469
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Property and equipment, net 199,315 167,677
Net deferred tax assets 37,201 41,199
Other assets 9,293 11,847
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$ 801,568 $ 754,192
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Liabilities and Shareholders' Equity
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Current maturities of long-term debt $ 2,406 $ 2,809
Current portion of accounts receivable securitization 26,700 -
Accounts payable and accrued liabilities 198,106 202,569
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Total current liabilities 227,212 205,378
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Other liabilities 50,007 43,924
Accounts receivable securitization 125,000 142,788
Long-term debt, less current maturities 41,196 46,752
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Total liabilities 443,415 438,842
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Shareholders' equity:
Common stock and paid-in-capital 166,716 162,108
Retained earnings 191,437 153,242
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Total shareholders' equity 358,153 315,350
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$ 801,568 $ 754,192
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Net Debt / Capitalization 32.7% 35.3%
Net Debt / Capitalization (excluding A/R Securitization) 6.0% 8.5%
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