Exhibit 99.1
Elder-Beerman Reports Improved First Quarter 2003 Operating Results
DAYTON, Ohio--(BUSINESS WIRE)--May 22, 2003--The Elder-Beerman
Stores Corp. (Nasdaq:EBSC) reported a net loss of $2.5 million or
$0.22 per diluted share for the first quarter ended May 3, 2003,
versus a net loss of $18.6 million or $1.64 per diluted share in the
same period in 2002. Before the effects of changes in accounting
principles, the company reported a loss of $2.5 million or $0.22 per
diluted share for the first quarter 2003, versus a loss of $3.5
million or $0.31 per diluted share in 2002, a 29 percent improvement
over 2002 operating results.
Net sales for the quarter decreased 7.2 percent versus last year
to $131.1 million. Comparable store sales decreased 7.7 percent.
Bud Bergren, Elder-Beerman's president and CEO, stated, "We are
pleased with the improvement in our first quarter results. We continue
to make progress in the key areas of productivity and expense
management. Because we remained disciplined and focused on these areas
we were able to improve bottom line performance and reduce long-term
debt by 20 percent over last year's first quarter."
Bergren continued, "Along with our competitors and peers, sales
were difficult in the first quarter, due to unseasonable weather,
economic uncertainty and the war in Iraq. We continue to manage our
business through this environment.
"Our new-format stores continue to perform well. As a group, the
new-format stores showed positive sales growth.
"In the first quarter we celebrated the successful grand opening
of our De Kalb, Illinois store, our 11th new format store. We
announced the November 2003 opening of our Muscatine, Iowa store,
marking our expansion into a new state. We also closed a suburban
Cincinnati store that did not fit into our strategy of locating stores
in smaller to midsized markets where we can be a dominant retail
presence."
Changes in Accounting Principles - Last Year (2002)
First quarter 2002 results include a cumulative effect of an
accounting change related to the company's adoption of the Statement
of Financial Accounting Standards No. 142 "Goodwill and Other
Intangible Assets." Elder-Beerman also changed its method of
accounting for net actuarial gains and losses associated with its
defined benefit plans, accounted for in accordance with Statement of
Financial Accounting Standards No. 87 "Employers' Accounting for
Pensions." The cumulative effect of these changes in accounting
principles in 2002 was a non-cash after-tax charge of $15.1 million or
$1.33 loss per diluted share.
On May 16, 2003, Elder-Beerman announced that it had recently
received unsolicited expressions of interest relating to the possible
acquisition of the company. It also stated that it entered into
discussions, on an exclusive basis and for a limited period of time,
with one of the parties concerning the possible sale of the company
and that there can be no assurance that these discussions will result
in any transaction involving the company. These discussions are
continuing. The company does not anticipate having any additional
comment on this subject at its first quarter earnings conference call
today.
A conference call to discuss 2003 first quarter results will take
place today at 11:00 a.m., Eastern Time. The call will be webcast live
on the Investor Relations section of Elder-Beerman's web site at
www.elder-beerman.com and on www.streetevents.com. A replay will be
available online at those sites until midnight on May 30, 2003.
The nation's ninth largest independent department store chain, The
Elder-Beerman Stores Corp. is headquartered in Dayton, Ohio and
operates 68 stores in Ohio, West Virginia, Indiana, Michigan,
Illinois, Kentucky, Wisconsin and Pennsylvania. In November 2003,
Elder-Beerman will expand operations to a ninth state with the opening
of its Muscatine, Iowa store. For more information about the company
see Elder-Beerman's web site at www.elder-beerman.com.
This press release may contain "forward-looking statements,"
including predictions of future operating performance, events or
developments such as future sales, profits, expenses, income and
earnings per share. Words such as "expects," "anticipates," "intends,"
"plans," "believes," "hopes," and "estimates," and variations of such
words and similar expressions, are intended to identify
forward-looking statements.
Because forward-looking statements are based on a number of
beliefs, estimates and assumptions by management that could ultimately
prove inaccurate, there is no assurance that forward-looking
statements will prove to be accurate. Many factors could materially
affect actual future operations and results. Factors that could
materially affect performance include the following: increasing price
and product competition; fluctuations in consumer demand and
confidence, especially in light of current economic conditions; the
availability and mix of inventory; fluctuations in costs and expenses;
consumer response to merchandising strategies, advertising, marketing
and promotional programs; the timing and effectiveness of new store
openings, particularly the new concept store opened in April 2003 (De
Kalb, IL and the new store scheduled to open in November 2003
(Muscatine, IA; weather conditions that affect consumer traffic; the
continued availability and terms of bank and lease financing and trade
credit; the outcome of pending and future litigation; consumer energy
costs, debt levels and paydown rates on consumer debts, including
amounts owed to Elder-Beerman; the impact of new consumer bankruptcy
laws; inflation, interest rates and the condition of the capital
markets. National security threats and warnings in the wake of
September 11, 2001 and continued U.S. involvement in Iraq could
magnify some of those factors.
Elder-Beerman undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
13-weeks ended 13-weeks ended
May 3, 2003 % Sales May 4, 2002 % Sales
----------- ------- ----------- -------
Revenues:
Net sales $ 131,052 100.0% $ 141,166 100.0%
Financing 6,862 5.2% 7,158 5.1%
Other 699 0.5% 688 0.5%
----------- ------- ----------- -------
Total revenues 138,613 105.8% 149,012 105.6%
----------- ------- ----------- -------
Costs and expenses:
Cost of merchandise sold,
occupancy, and buying
expenses 97,140 74.1% 105,145 74.5%
Selling, general,
administrative, and other
expenses 37,960 29.0% 41,495 29.4%
Depreciation and
amortization 4,917 3.8% 4,971 3.5%
Interest expense 2,463 1.9% 2,840 2.0%
----------- ------- ----------- -------
Total costs and expenses 142,480 108.7% 154,451 109.4%
----------- ------- ----------- -------
Loss before income tax
benefit (3,867) -3.0% (5,439) -3.9%
Income tax benefit (1,392) -1.1% (1,958) -1.4%
----------- ------- ----------- -------
Loss before cumulative effect
of changes in accounting
principles (2,475) -1.9% (3,481) -2.5%
Cumulative effect of changes
in accounting principles - 0.0% (15,118) -10.7%
----------- ------- ----------- -------
Net loss $ (2,475) -1.9% $ (18,599) -13.2%
=========== ======= =========== =======
Net loss per common share -
basic and diluted
Loss before cumulative
effect of changes in
accounting principles $ (0.22) $ (0.31)
Cumulative effect of
changes in accounting
principles - (1.33)
----------- -----------
Net loss $ (0.22) $ (1.64)
Weighted average number of
shares outstanding 11,406,800 11,369,834
THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Dollars in thousands)
May 3, 2003 May 4, 2002 Feb. 1, 2003
----------- ----------- ------------
ASSETS
Current assets:
Cash and equivalents $ 7,345 $ 7,532 $ 9,735
Customer accounts receivable
(less allowance for doubtful
accounts:
May 3, 2003 - $2,998; May 4,
2002 - $2,677; February 2,
2002 - $3,298) 120,147 123,973 127,786
Merchandise inventories 149,784 150,562 138,748
Other current assets 15,723 21,215 17,162
----------- ----------- ------------
Total current assets 292,999 303,282 293,431
----------- ----------- ------------
Property, fixtures and
equipment, less accumulated
depreciation and amortization 89,261 98,833 90,181
Other assets 26,587 25,263 27,436
----------- ----------- ------------
Total assets $ 408,847 $ 427,378 $ 411,048
=========== =========== ============
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Current portion of long-term
obligations $ 4,763 $ 7,329 $ 5,456
Accounts payable 50,092 39,548 40,607
Other accrued liabilities 26,213 24,812 31,918
----------- ----------- ------------
Total current liabilities 81,068 71,689 77,981
----------- ----------- ------------
Long-term obligations, less
current portion 112,681 141,112 115,127
Deferred items 10,021 13,296 11,214
Shareholders' equity:
Common stock, no par,
11,581,064 shares at May 3,
2003, 11,531,554 shares at
May 4, 2002, and 11,536,460
shares at February 1, 2003
issued and outstanding 243,424 243,456 243,419
Unearned compensation -
restricted stock (145) (338) (197)
Deficit (36,518) (37,411) (34,043)
Other comprehensive loss (1,684) (4,426) (2,453)
----------- ----------- ------------
Total shareholders' equity 205,077 201,281 206,726
----------- ----------- ------------
Total liabilities and
shareholders' equity $ 408,847 $ 427,378 $ 411,048
=========== =========== ============
CONTACT: The Elder-Beerman Stores Corp.
Edward Tomechko, 937/296-2683
or Gloria Siegler, 937/296-7339