Exhibit 99.1
Elder-Beerman Reports Second Quarter 2003 Operating Results
DAYTON, Ohio--(BUSINESS WIRE)--Aug. 21, 2003--The Elder-Beerman
Stores Corp. (Nasdaq:EBSC) reported a net loss of $2.1 million or
$0.19 per diluted share for the second quarter ended August 2, 2003,
versus a net loss of $1.7 million or $0.15 per diluted share for the
same period in 2002.
Comparable store sales for the quarter increased 1.6 percent
versus last year. Net sales decreased 0.8 percent to $132.6 million.
Year to Date Results
Elder-Beerman reported a net loss of $4.6 million or $0.40 per
diluted share for the 26 weeks ended August 2, 2003, versus a net loss
of $20.3 million or $1.79 per diluted share for the same period in
2002. Before the cumulative effect of changes in accounting
principles, the company reported a loss of $4.6 million or $0.40 per
diluted share for the year to date period in 2003, versus a loss of
$5.2 million or $0.46 per diluted share for the same period in 2002.
Comparable store sales for the year to date decreased 3.2 percent
versus last year. Net sales decreased 4.1 percent to $263.6 million.
Bud Bergren, Elder-Beerman's president and CEO, stated, "We were
pleased with the comparable stores sales improvement in the second
quarter. We ended spring season with inventory levels well positioned
for fall. Through continued focus on expense controls and supply chain
initiatives, we have been able to reduce long-term debt by $29 million
over last year's second quarter and $12 million from the end of 2002.
Bergren continued, "Our new-format stores continue to perform
well. As a group, for the first half of the year the new-format stores
showed a healthy comparable store sales increase."
Changes in Accounting Principles - (2002)
Year to date 2002 results include a cumulative effect of an
accounting change related to the company's adoption of 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.
Recent Events
On July 29, 2003, Elder-Beerman announced that it had received a
letter from The Bon-Ton Stores, Inc. in which Bon-Ton proposed to pay
$7.00 for each Elder-Beerman common share, subject to completion of
due diligence and financing arrangements. Elder-Beerman and Bon-Ton
have entered into a confidentiality agreement under which Bon-Ton and
its representatives are in the process of conducting due diligence.
There can be no assurance as to the outcome of such review or whether
Bon-Ton will make any definitive proposal to the company.
Elder-Beerman filed with the Securities and Exchange Commission a
preliminary proxy statement on July 18, 2003, for a special meeting of
its shareholders to vote on approving the merger agreement with Wright
Holdings, Inc. The merger agreement, which remains in effect, provides
for the acquisition of all Elder-Beerman shares at $6.00 per share by
Wright Holdings. The company is working towards completion of the
regulatory review of the proxy statement so that it may proceed with a
special meeting of shareholders to vote on the merger agreement.
Elder-Beerman does not anticipate any additional comment on this
subject during its second quarter earnings conference call today.
A conference call to discuss 2003 second 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 August 29, 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
Aug. 2, 2003 % Sales Aug. 3, 2002 % Sales
------------ ------- ------------ -------
Revenues:
Net sales $132,558 100.0% $133,578 100.0%
Financing 6,587 5.0% 6,629 5.0%
Other 624 0.5% 697 0.5%
------------ ------- ------------ -------
Total revenues 139,769 105.4% 140,904 105.5%
------------ ------- ------------ -------
Costs and expenses:
Cost of merchandise sold,
occupancy, and buying
expenses 97,385 73.5% 95,938 71.8%
Selling, general,
administrative, and other
expenses 38,590 29.1% 39,909 29.9%
Depreciation and
amortization 4,935 3.7% 5,006 3.7%
Interest expense 2,197 1.7% 2,768 2.1%
------------ ------- ------------ -------
Total costs and expenses 143,107 108.0% 143,621 107.5%
------------ ------- ------------ -------
Loss before income tax
benefit (3,338) -2.5% (2,717) -2.0%
Income tax benefit (1,202) -0.9% (978) -0.7%
------------ ------- ------------ -------
Net loss $(2,136) -1.6% $(1,739) -1.3%
============ ======= ============ =======
Net loss per common share -
basic and diluted $(0.19) $(0.15)
Weighted average number of
shares outstanding 11,415,401 11,378,922
THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
26-weeks ended 26-weeks ended
Aug. 2, 2003 % Sales Aug. 3, 2002 % Sales
------------ -------- ------------ -------
Revenues:
Net sales $263,610 100.0% $274,744 100.0%
Financing 13,449 5.1% 13,787 5.0%
Other 1,323 0.5% 1,385 0.5%
------------ -------- ------------ -------
Total revenues 278,382 105.6% 289,916 105.5%
------------ -------- ------------ -------
Costs and expenses:
Cost of merchandise sold,
occupancy, and buying
expenses 194,525 73.8% 201,083 73.2%
Selling, general,
administrative, and
other expenses 76,550 29.0% 81,404 29.6%
Depreciation and
amortization 9,852 3.7% 9,977 3.6%
Interest expense 4,660 1.8% 5,608 2.0%
------------ -------- ------------ -------
Total costs and
expenses 285,587 108.3% 298,072 108.5%
------------ -------- ------------ -------
Loss before income tax
benefit (7,205) -2.7% (8,156) -3.0%
Income tax benefit (2,594) -1.0% (2,936) -1.1%
------------ -------- ------------ -------
Loss before cumulative
effect of changes in
accounting principles (4,611) -1.7% (5,220) -1.9%
Cumulative effect of
changes in accounting
principles - 0.0% (15,118) -5.5%
------------ -------- ------------ -------
Net loss $(4,611) -1.7% $(20,338) -7.4%
============ ======== ============ =======
Net loss per common share -
basic and diluted
Loss before cumulative
effect of changes in
accounting principles $(0.40) $(0.46)
Cumulative effect of
changes in accounting
principles - (1.33)
------------ ------------
Net loss $(0.40) $(1.79)
Weighted average number of
shares outstanding 11,411,101 11,374,378
THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Dollars in thousands)
Aug. 2, Aug. 3, Feb. 1,
2003 2002 2003
--------- --------- ---------
ASSETS
Current assets:
Cash and equivalents $7,325 $6,881 $9,735
Customer accounts receivable (less
allowance for doubtful accounts:
August 2, 2003 - $2,438; August 3,
2002 - $2,250; February 2, 2002 -
$3,298) 113,577 117,138 127,786
Merchandise inventories 144,286 146,799 138,748
Other current assets 17,082 20,073 17,162
--------- --------- ---------
Total current assets 282,270 290,891 293,431
--------- --------- ---------
Property, fixtures and equipment, less
accumulated depreciation
and amortization 88,027 96,237 90,181
Other Assets 25,834 27,309 27,436
--------- --------- ---------
Total assets $396,131 $414,437 $411,048
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term
obligations $3,896 $7,311 $5,456
Accounts payable 51,280 39,627 40,607
Other accrued liabilities 25,700 22,693 31,918
--------- --------- ---------
Total current liabilities 80,876 69,631 77,981
--------- --------- ---------
Long-term obligations, less current
portion 102,978 132,120 115,127
Deferred items 8,568 13,502 11,214
Shareholders' equity:
Common stock, no par, 11,585,457
shares at May 3, 2003, 11,528,587
shares at August 2, 2003, and
11,536,460 shares at February 1, 2003
issued and outstanding 243,444 243,382 243,419
Unearned compensation - restricted
stock (92) (258) (197)
Deficit (38,654) (40,208) (34,043)
Other comprehensive loss (989) (3,732) (2,453)
--------- --------- ---------
Total shareholders' equity 203,709 199,184 206,726
--------- --------- ---------
Total liabilities and
shareholders' equity $396,131 $414,437 $411,048
========= ========= =========
CONTACT: Elder-Beerman Stores Corp.
Edward Tomechko, 937-296-2683
Gloria Siegler, 937-296-7339