Exhibit 99.1
The Bon-Ton Stores, Inc. Announces Second Quarter Results
YORK, Pa.--(BUSINESS WIRE)--Aug. 18, 2005--The Bon-Ton Stores,
Inc. (NASDAQ:BONT) today reported results for the second quarter ended
July 30, 2005.
Income
For the second quarter of fiscal 2005, the Company reported a net
loss of $1.4 million, or $0.09 per share, which includes an after-tax
charge of $0.04 per share associated with the sale of its proprietary
credit card operations, compared to a net loss of $388,000, or $0.02
per share, in the prior year period, which included an after-tax
charge of $0.07 per share for costs associated with the closing of the
Company's Pottstown, Pennsylvania store. For the six months ended July
30, 2005, the Company reported a net loss of $5.9 million, or $0.36
per share, versus a net loss of $5.9 million, or $0.38 per share,
reported for the comparable period last year.
Sales
As previously announced, for the second quarter of fiscal 2005,
total sales decreased 3.5% to $274.3 million compared to $284.2
million for the same period last year. Comparable store sales
decreased 3.0%.
Year-to-date total sales decreased 2.3% to $536.9 million compared
to $549.3 million for the same period last year. Comparable store
sales decreased 1.8%.
Gross Margin
In the second quarter, gross margin dollars decreased $5.9 million
from the prior year period, primarily due to the lower sales for the
current period. The gross margin rate decreased 0.8 percentage point
to 36.6% of sales as compared to 37.4% reported last year, reflecting
higher markdowns in the second quarter of fiscal 2005. Year-to-date
gross margin dollars decreased $6.2 million. Year-to-date gross margin
rate decreased by 0.3 percentage point to 36.4% versus 36.7% reported
in the prior year period.
Selling, General and Administrative Expenses
Selling, general and administrative (SG&A) expenses decreased $4.6
million in the second quarter of 2005. The SG&A expense rate decreased
0.4 percentage point to 34.1% of sales, reflecting reduced corporate,
store and integration expenses, partially offset by a $1.0 million
pre-tax charge associated with the sale of the Company's proprietary
credit card, compared to 34.5% for the same period last year, which
included a $1.7 million pre-tax charge associated with the closing of
the Company's Pottstown, Pennsylvania store. Year-to-date SG&A
expenses decreased $6.1 million. The year-to-date SG&A expense rate
decreased 0.3 percentage point to 35.0% of sales compared to 35.3% in
the prior year period.
Depreciation and Amortization
Depreciation and amortization expense in the second quarter was
comparable with the prior year period. Year-to-date depreciation and
amortization expense decreased $0.6 million, reflecting the impact of
final purchase price allocation adjustments recorded in fiscal 2004.
Interest
Interest expense, net increased $0.2 million in the second quarter
and $0.3 million in the first six months of fiscal 2005, reflecting
the additional borrowings required to fund increased inventory and
higher average interest rates for the period. Interest expense was
positively impacted by a pay down in long-term debt as a result of
applying the proceeds from the credit card sale in early July 2005.
Comments
James H. Baireuther, Vice Chairman and Chief Administrative
Officer, commented, "We did not achieve the second quarter and spring
sales results we expected. A major factor for the sales decline in
spring 2005 was the sale of 'non-go-forward' merchandise in spring
2004 which reflected the realignment of assortments during the
integration of Elder-Beerman. These goods generated non-recurring
clearance sales of approximately $27.0 million in the first half of
2004. The replacement of sales from new merchandise did not occur to
the degree we had anticipated. Additionally, apparel sales were
impacted by unseasonably cool weather in May, but had favorable
results with the arrival of warmer weather. Among the weakest areas of
business was home, primarily due to a decrease in sales of clearance
goods as compared to the prior year. This has greatly affected our
business, as home sales represented 19% of total sales last year. We
will continue to monitor this and intend to accelerate the recovery of
these sales as we move forward into fall season."
Mr. Baireuther continued, "We are encouraged by the favorable
response from our customers to early fall receipts as we aggressively
manage seasonal conversion and levels of inventory. We believe we can
attain top line growth in the second half of 2005 by focusing on
customer service and offering trend-right and basic assortments, along
with compelling marketing. As previously stated in our July sales
release, we are reaffirming our earnings guidance for fiscal 2005 of
$1.70 to $1.85 per share."
The Company's quarterly conference call to discuss the second
quarter of 2005 will be broadcast live over the Internet on August 18,
2005 at 10:00 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 139 department stores and two
furniture 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, 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
(In thousands except WEEKS ENDED WEEKS ENDED
share and per share -----------------------------------------------
data) July 30, July 31, July 30, July 31,
(Unaudited) 2005 2004 2005 2004
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Net sales $ 274,346 $ 284,198 $ 536,879 $ 549,281
Other income 1,814 2,221 3,972 4,199
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276,160 286,419 540,851 553,480
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Costs and expenses:
Costs of merchandise
sold 174,048 178,009 341,463 347,669
Selling, general and
administrative 93,425 98,048 188,089 194,159
Depreciation and
amortization 7,584 7,617 14,017 14,586
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Income (loss) from
operations 1,103 2,745 (2,718) (2,934)
Interest expense, net 3,600 3,364 6,906 6,568
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Loss before income
taxes (2,497) (619) (9,624) (9,502)
Income tax benefit (1,052) (231) (3,767) (3,563)
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Net loss $ (1,445) $ (388) $ (5,857) $ (5,939)
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Per share amounts -
Basic:
Net loss $ (0.09) $ (0.02) $ (0.36) $ (0.38)
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Basic weighted average
shares outstanding 16,186,097 15,975,641 16,154,326 15,831,028
Diluted:
Net loss $ (0.09) $ (0.02) $ (0.36) $ (0.38)
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Diluted weighted
average shares
outstanding 16,186,097 15,975,641 16,154,326 15,831,028
THE BON-TON STORES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data) July 30, January 29,
(Unaudited) 2005 2005
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Assets
Current assets:
Cash and cash equivalents $ 13,908 $ 25,222
Retained interest in trade receivables and
other, net of allowance for doubtful accounts
and sales returns of $1,702 and $6,416 at
July 30, 2005 and January 29, 2005,
respectively 7,344 92,229
Merchandise inventories 306,466 294,152
Prepaid expenses and other current assets 23,561 14,483
Deferred income taxes 4,986 4,819
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Total current assets 356,265 430,905
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Property, fixtures and equipment at cost, net of
accumulated depreciation and amortization of
$211,947 and $198,797 at July 30, 2005 and
January 29, 2005, respectively 164,824 168,304
Deferred income taxes 25,766 24,908
Goodwill 2,965 2,965
Intangible assets, net of accumulated
amortization of $5,780 and $5,364 at July 30,
2005 and January 29, 2005, respectively 8,809 9,400
Other assets 7,502 9,674
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Total assets $566,131 $ 646,156
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 98,250 $ 101,151
Accrued payroll and benefits 17,103 25,361
Accrued expenses 47,678 46,646
Current maturities of long-term debt 976 869
Current maturities of obligations under
capital leases 467 939
Income taxes payable 2,452 4,817
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Total current liabilities 166,926 179,783
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Long-term debt, less current maturities 100,768 178,257
Obligations under capital leases, less current
maturities 62 98
Other long-term liabilities 39,845 25,461
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Total liabilities 307,601 383,599
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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 14,059,789
and 13,568,977 at July 30, 2005 and January
29, 2005, respectively 141 136
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,
2005 and January 29, 2005 30 30
Treasury stock, at cost - shares of 337,800 at
July 30, 2005 and January 29, 2005 (1,387) (1,387)
Additional paid-in-capital 127,534 119,284
Deferred compensation (6,965) (1,096)
Accumulated other comprehensive loss (152) (427)
Retained earnings 139,329 146,017
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Total shareholders' equity 258,530 262,557
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Total liabilities and shareholders' equity $566,131 $ 646,156
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CONTACT: The Bon-Ton Stores, Inc.
Mary Kerr
Vice President
Corporate Communications
717-751-3071