Exhibit 99.1
The Bon-Ton Stores, Inc. Announces Second Quarter Results
YORK, Pa.--(BUSINESS WIRE)--Aug. 19, 2004--The Bon-Ton Stores,
Inc. (NASDAQ:BONT) today reported results for the second quarter ended
July 31, 2004.
Income
The Company reported a net loss of $388,000, or $0.02 per share,
for the second quarter of fiscal 2004, which includes an after-tax
charge of $0.07 per share for costs associated with the closing of the
Company's Pottstown, Pennsylvania store. For the second quarter of
fiscal 2003, net income reported was $858,000, or $0.06 per share,
which included an after-tax gain on the sale of the Company's
Harrisburg distribution center of $0.04 per share. For the six months
ended July 31, 2004, the Company reported a net loss of $5.9 million,
or $0.38 per share, versus a net loss of $2.1 million, or $0.14 per
share, reported for the comparable period last year.
Sales
As previously announced, for the second quarter of fiscal 2004,
total sales increased 85.6% to $284.2 million, including $130.2
million from the acquired Elder-Beerman stores, compared to $153.1
million for the same period last year. Bon-Ton comparable store sales
decreased 0.5%.
Year-to-date total sales increased 86.7% to $549.3 million,
including $255.9 million from the acquired Elder-Beerman stores,
compared to $294.2 million for the same period last year. Bon-Ton
comparable store sales decreased 1.2%.
Elder-Beerman sales are not included in the Company's reported
comparable store sales and the following comparable store sales are
provided for informational purposes only. Elder-Beerman comparable
store sales for the thirteen weeks ended July 31, 2004 decreased 2.4%
and year-to-date comparable store sales decreased 2.7%. For
Elder-Beerman and Bon-Ton combined, comparable store sales for the
thirteen weeks ended July 31, 2004 decreased 1.4% and year-to-date
comparable store sales decreased 1.9%.
Gross Margin
In the second quarter, gross margin dollars increased $50.4
million over the prior year period, primarily due to the inclusion of
Elder-Beerman operations. The gross margin rate increased 0.6
percentage point to 37.7% this year versus 37.1% reported for the same
period last year. The increase in gross margin rate is primarily due
to a decrease in markdowns during the second quarter of fiscal 2004.
Year-to-date gross margin dollars increased $94.6 million, primarily
due to the impact of Elder-Beerman operations. Year-to-date gross
margin rate increased by a tenth of a percent to 37.1% versus 37.0%
reported in prior year period.
Selling, General and Administrative Expenses
Selling, general and administrative (SG&A) expenses increased
$48.7 million, including $40.8 million from Elder-Beerman operations,
in the second quarter. The SG&A expense rate increased 2.2 percentage
points to 34.6% of sales, compared to 32.4% for the same period last
year. As referenced above, SG&A expenses increased, in part, due to a
$1.7 million pre-tax charge associated with the closing of the
Company's Pottstown, Pennsylvania store. In the second quarter of
fiscal 2003, SG&A expenses included a $930,000 pre-tax gain on the
sale of the Company's Harrisburg distribution center. Year-to-date
SG&A expenses increased $93.8 million, including $82.2 million from
Elder-Beerman operations. The year-to-date SG&A expense rate increased
1.2 percentage points to 35.5% of sales compared to 34.3% in the prior
year period. SG&A expenses include expense reductions, net of
integration costs, reflecting the realization of operating synergies.
Depreciation and Amortization
Depreciation and amortization expense in the second quarter
increased $2.1 million, primarily reflecting the additional
depreciation expense for the Elder-Beerman asset base. Year-to-date
depreciation and amortization expense increased $3.9 million.
Interest
Interest expense, net increased $2.1 million in the second quarter
and $4.0 million in the first six months of fiscal 2004, reflecting
the increased borrowings required to fund the acquisition of
Elder-Beerman and increased deferred financing fees associated with
the Elder-Beerman acquisition.
Comments
James H. Baireuther, Vice Chairman and Chief Administrative
Officer, commented, "Second quarter results were impacted by a
decrease in sales volume as a result of a general slowdown in traffic
and the challenges of realizing a common merchandise assortment in the
combined entity. We are addressing these issues with the right balance
between trend and basic items, a consistent flow of fresh receipts and
the appropriate level of inventory to drive top-line growth, along
with a strong marketing calendar. We are pleased with the favorable
response from our customers on early fall receipts and anticipate an
improved sales performance upon completion of our merchandise
integration, at which time Bon-Ton and Elder-Beerman stores will each
have a full-line of comparable merchandise."
Mr. Baireuther continued, "We are leveraging each company's
respective strengths to drive increased value for our customers and
shareholders as we continue the process of combining the two
companies. The first six months results were positively impacted by
synergies realized which offset all of the integration expenses
incurred during the first half of 2004. We are maintaining our
original earnings guidance for fiscal 2004 of $1.20 to $1.40 per
share."
The Company's quarterly conference call to discuss the second
quarter of 2004 will be broadcast live over the Internet on August 26,
2004 at 11:00 a.m. Eastern Time. To access the call, please visit the
investor relations section of the Company's website at
www.bonton.com/investor/home.asp. An online archive of the broadcast
will be available within one hour after the conclusion of the call.
The Bon-Ton Stores, Inc. operates 141 department stores in 16
states from the Northeast to the Midwest under the Bon-Ton and
Elder-Beerman names. The stores carry a broad assortment of quality
brand-name fashion apparel and accessories for women, men and
children, as well as distinctive home furnishings. For further
information, please visit the investor relations section of the
Company's website at www.bonton.com/investor/home.asp.
Statements made in this press release, other than statements of
historical information, are forward looking statements and are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such statements involve risks and
uncertainties that may cause results to differ materially from those
set forth in these statements. Factors that could cause such
differences include, but are not limited to, risks related to retail
businesses generally, our ability to integrate the recently acquired
Elder-Beerman stores into our over-all operations, additional
competition from existing and new competitors, uncertainties
associated with opening new stores or expanding or remodeling existing
stores, the ability to attract and retain qualified management, the
dependence upon key vendor relationships and the ability to obtain
financing for working capital, capital expenditures and general
corporate purposes. 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 in the Company's periodic
reports filed with the Securities and Exchange Commission.
-Tables to Follow-
THE BON-TON STORES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THIRTEEN TWENTY-SIX
WEEKS ENDED WEEKS ENDED
----------------------- -----------------------
(In thousands except
share and per share
data) July 31, August 2, July 31, August 2,
(Unaudited) 2004 2003 2004 2003
- ---------------------------------------------- -----------------------
Net sales $ 284,198 $ 153,128 $ 549,281 $ 294,239
Other income, net 1,053 564 2,036 1,090
- ---------------------------------------------- -----------------------
285,251 153,692 551,317 295,329
- ---------------------------------------------- -----------------------
Costs and expenses:
Costs of merchandise
sold 177,005 96,311 345,668 185,238
Selling, general and
administrative 98,278 49,594 194,785 100,974
Depreciation and
amortization 7,223 5,123 13,798 9,887
- ---------------------------------------------- -----------------------
Income (loss) from
operations 2,745 2,664 (2,934) (770)
Interest expense, net 3,364 1,302 6,568 2,546
- ---------------------------------------------- -----------------------
Income (loss) before
income taxes (619) 1,362 (9,502) (3,316)
Income tax provision
(benefit) (231) 504 (3,563) (1,226)
- ---------------------------------------------- -----------------------
Net income (loss) $ (388) $ 858 $ (5,939) $ (2,090)
- ---------------------------------------------- -----------------------
Per share amounts -
Basic:
Net income (loss) $ (0.02) $ 0.06 $ (0.38) $ (0.14)
- ---------------------------------------------- -----------------------
Basic weighted average
shares outstanding 15,975,641 14,997,502 15,831,028 15,015,424
Diluted:
Net income (loss) $ (0.02) $ 0.06 $ (0.38) $ (0.14)
- ---------------------------------------------- -----------------------
Diluted weighted
average shares
outstanding 15,975,641 15,222,031 15,831,028 15,015,424
THE BON-TON STORES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data) July 31, January 31,
(Unaudited) 2004 2004
- ----------------------------------------------------------------------
Assets
Current assets:
Cash and cash equivalents $ 15,481 $ 19,890
Retained interest in trade receivables and
other, net of allowance for doubtful
accounts and sales returns of $7,131 and
$6,299 at July 31, 2004 and January 31,
2004, respectively 75,102 104,679
Merchandise inventories 283,447 257,372
Prepaid expenses and other current assets 32,399 14,683
Deferred income taxes 5,249 8,825
-----------------------
Total current assets 411,678 405,449
-----------------------
Property, fixtures and equipment at cost, less
accumulated depreciation and amortization 160,686 160,923
Deferred income taxes 20,592 24,252
Goodwill and intangible assets, net 8,927 9,121
Other assets 10,587 12,100
-----------------------
Total assets $ 612,470 $ 611,845
-----------------------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 114,053 $ 88,118
Accrued payroll and benefits 23,304 36,344
Accrued expenses 42,394 42,519
Current maturities of long-term debt 832 1,113
Current maturities of obligations under
capital leases 983 1,797
Income taxes payable - 13,531
-----------------------
Total current liabilities 181,566 183,422
-----------------------
Long-term debt, less current maturities 177,726 170,703
Obligations under capital leases, less current
maturities 557 1,013
Other long-term liabilities 16,687 17,223
-----------------------
Total liabilities 376,536 372,361
-----------------------
Shareholders' equity
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
13,414,844 and 13,055,740 at July 31, 2004
and January 31, 2004, respectively 134 131
Class A Common Stock - authorized 20,000,000
shares at $0.01 par value; issued and
outstanding shares of 2,951,490 and
2,989,853 at July 31, 2004 and January 31,
2004, respectively 30 30
Treasury stock, at cost - shares of 337,800
at July 31, 2004 and January 31, 2004 (1,387) (1,387)
Additional paid-in-capital 117,240 114,687
Deferred compensation (29) (136)
Accumulated other comprehensive loss (776) (1,298)
Retained earnings 120,722 127,457
-----------------------
Total shareholders' equity 235,934 239,484
-----------------------
Total liabilities and shareholders' equity $ 612,470 $ 611,845
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CONTACT: The Bon-Ton Stores, Inc.
Mary Kerr
Vice President
Corporate Communications
(717) 751-3071