-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, XWIIp/LYzRHmlhTBa+NOQY6XJAs9iTvFUBRup/P9QxWFd5sB85pOYbj/W7HgeN3Z tATn5sFDX7hsv34LhhQQ+g== 0000028917-94-000011.txt : 19941209 0000028917-94-000011.hdr.sgml : 19941209 ACCESSION NUMBER: 0000028917-94-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19941029 FILED AS OF DATE: 19941208 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DILLARD DEPARTMENT STORES INC CENTRAL INDEX KEY: 0000028917 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 710388071 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06140 FILM NUMBER: 94563967 BUSINESS ADDRESS: STREET 1: 1600 CANTRELL RD CITY: LITTLE ROCK STATE: AR ZIP: 72201 BUSINESS PHONE: 5013765200 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 29, 1994 OR [ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number 1-6140 DILLARD DEPARTMENT STORES, INC. (Exact name of registrant as specified in its charter) DELAWARE 71-0388071 (State or other (IRS Employer jurisdiction of incorporation Identification Number) or organization) 1600 CANTRELL ROAD, LITTLE ROCK, ARKANSAS 72201 (Address of principal executive offices) (Zip Code) (501) 376-5200 (Registrant's telephone number, including area code) Indicate by checkmark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. CLASS A COMMON STOCK as of October 29, 1994 108,987,158 CLASS B COMMON STOCK as of October 29, 1994 4,017,061 PART I FINANCIAL INFORMATION ITEM 1 Financial Statements CONSOLIDATED BALANCE SHEETS DILLARD DEPARTMENT STORES, INC. (Unaudited) (Thousands) October 29 January 29 October 30 1994 1994 1993 ASSETS CURRENT ASSETS Cash and cash equivalents $46,318 $51,244 $41,784 Trade accounts receivable 999,248 1,096,530 997,530 Merchandise inventories 1,742,353 1,299,944 1,636,555 Other current assets 18,807 8,976 22,687 TOTAL CURRENT ASSETS 2,806,726 2,456,694 2,698,556 INVESTMENTS AND OTHER ASSETS 66,741 52,110 51,276 PROPERTY AND EQUIPMENT, NET 1,918,933 1,878,077 1,837,778 CONSTRUCTION IN PROGRESS 28,931 13,977 23,079 BUILDINGS UNDER CAPITAL LEASES 23,745 29,416 29,990 $4,845,076 $4,430,274 $4,640,679 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Trade accounts payable and accrued expenses $853,510 $529,475 $758,058 Commercial paper 150,107 145,276 226,258 Federal and state income taxes 31,524 54,011 39,804 Current portion of long-term debt 115,742 65,061 54,379 Current portion of capital lease obligations 2,146 2,242 2,197 TOTAL CURRENT LIABILITIES 1,153,029 796,065 1,080,696 LONG-TERM DEBT 1,179,593 1,238,293 1,307,079 CAPITAL LEASE OBLIGATIONS 22,827 31,621 32,199 DEFERRED INCOME TAXES 282,648 282,648 251,851 STOCKHOLDERS' EQUITY Preferred stock 440 440 440 Common stock 1,130 1,130 1,129 Additional paid-in capital 623,024 622,634 618,914 Retained earnings 1,582,385 1,457,443 1,348,371 2,206,979 2,081,647 1,968,854 $4,845,076 $4,430,274 $4,640,679 See notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS DILLARD DEPARTMENT STORES, INC. (Unaudited) (Thousands, except per share data) Three Months Ended Nine Months Ended Twelve Months Ended October 29 October 30 October 29 October 30 October 29 October 30 1994 1993 1994 1993 1994 1993 Net sales (including leased departments) $1,333,630 $1,228,065 $3,801,887 $3,495,962 $5,436,573 $5,035,841 Service charges, interest, and other 44,775 44,547 138,345 137,392 182,699 179,643 1,378,405 1,272,612 3,940,232 3,633,354 5,619,272 5,215,484 Cost and expenses: Cost of sales 866,249 785,969 2,494,126 2,249,796 3,551,087 3,247,220 Advertising, selling, administrative and general expenses 336,329 312,776 957,366 898,380 1,298,035 1,222,085 Depreciation and amortization 50,966 47,025 142,695 128,236 185,640 155,837 Rentals 12,176 13,620 38,183 38,855 64,286 64,957 Interest and debt expense 30,748 32,345 93,569 98,772 125,712 130,693 1,296,468 1,191,735 3,725,939 3,414,039 5,224,760 4,820,792 INCOME BEFORE INCOME TAXES 81,937 80,877 214,293 219,315 394,512 394,692 Federal and state income taxes 31,135 38,500 81,430 89,525 150,305 154,445 NET INCOME 50,802 42,377 132,863 129,790 244,207 240,247 Retained earnings at beginning of period 1,534,973 1,308,249 1,457,443 1,225,353 1,348,371 1,126,526 Cash dividends declared (3,390) (2,255) (7,921) (6,772) (10,193) (9,032) Issuance of common stock under stock option, employee savings and stock bonus plans (9,370) RETAINED EARNINGS AT END OF PERIOD $1,582,385 $1,348,371 $1,582,385 $1,348,371 $1,582,385 $1,348,371 Net income per common share $0.45 $0.38 $1.18 $1.15 $2.16 $2.13 Cash dividends declared per common share $0.03 $0.02 $0.07 $0.06 $0.09 $0.08 Average shares outstanding 113,004 112,840 113,016 112,748 113,009 112,729 See notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS DILLARD DEPARTMENT STORES, INC. (Unaudited) (Thousands) Nine Months Ended October 29 October 30 1994 1993 OPERATING ACTIVITITES Net income $132,863 $129,790 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 143,868 129,470 Changes in operating assets and liabilities: Decrease in trade accounts receivable 97,282 92,690 Increase in merchandise inventories and other current assets (452,240) (475,167) Decrease in investments and other assets (15,804) (1,050) Increase in trade accounts payable and accrued expenses and income taxes 300,429 219,881 NET CASH PROVIDED BY OPERATING ACTIVITIES 206,398 95,614 INVESTING ACTIVITIES Purchase of property and equipment (192,834) (243,127) NET CASH USED IN INVESTING ACTIVITIES (192,834) (243,127) FINANCING ACTIVITIES Net increase in commercial paper 4,831 169,637 Principal payments on long-term debt and capital lease obligations (16,909) (77,710) Dividends paid (6,802) (9,032) Common stock sold 390 13,818 NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (18,490) 96,713 DECREASE IN CASH AND CASH EQUIVALENTS (4,926) (50,800) Cash and cash equivalents at beginning of period 51,244 92,584 CASH AND CASH EQUIVALENTS AT END OF PERIOD $46,318 $41,784 See notes to consolidated financial statements. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine month period ended October 29, 1994 are not necessarily indicative of the results that may be expected for the fiscal year ended January 28, 1995 due to the seasonal nature of the business. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the fiscal year ended January 29, 1994. 2. The retail last-in, first-out (LIFO) inventory method is used to value merchandise inventories, with such LIFO merchandise inventories not being carried in excess of current cost. Under this method, at October 29, 1994, and October 30, 1993, the LIFO cost of merchandise inventories was approximately $16.3 million and $16.4 million, respectively, less than current cost. At January 29, 1994, the LIFO cost of merchandise inventories was approximately $13.2 million less than current cost. 3. Net sales include leased department sales of $8.9 million and $13.3 million for the quarters ended October 29, 1994 and October 30, 1993, respectively. Leased department sales for the nine months ended October 29, 1994 and October 30, 1993 were $27.8 million and $43.0 million, respectively. Leased department sales for the twelve months ended October 29, 1994 and October 30, 1993 were $51.3 million and $79.9 million, respectively. 4. The effective income tax rate was 38% for the first nine months of 1994 and 41% for the first nine months of 1993. During the third quarter of 1993, Congress passed the Omnibus Budget Reconciliation Act of 1993 (the "Act") which raised the federal income tax rate by 1% effective January 1, 1993. Included in income tax expense for the three and nine months ended October 30, 1993 is a charge of approximately $8 million for the retroactive effect of the Act on the earnings for the first half of 1993 and for the cumulative effect of the Act on the Company's deferred income taxes. No allocation between current and deferred income taxes was made during the interim periods as such amounts would not be material to the consolidated balance sheets. The provision for income taxes is based on an estimated annual effective tax rate. ITEM 2 Management's Discussion And Analysis Of Financial Condition And Results Of Operations Results of Operations The following table sets forth operating results expressed as a percentage of net sales for the periods indicated: Three Months Ended Nine Months Ended Twelve Months Ended October 29 October 30 October 29 October 30 October 29 October 30 1994 1993 1994 1993 1994 1993 Net sales 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Cost of sales 65.0 64.0 65.6 64.3 65.3 64.5 Gross Profit 35.0 36.0 34.4 35.7 34.7 35.5 Advertising, selling, administrative and general expenses 25.2 25.5 25.2 25.7 23.9 24.3 Depreciation and amortization 3.8 3.8 3.7 3.7 3.4 3.1 Rentals 0.9 1.1 1.0 1.1 1.2 1.3 Interest and debt expense 2.3 2.6 2.5 2.8 2.3 2.6 Total operating expenses 32.2 33.0 32.4 33.3 30.8 31.3 Other income 3.3 3.6 3.6 3.9 3.4 3.6 Income before income taxes 6.1 6.6 5.6 6.3 7.3 7.8 Federal and state income taxes 2.3 3.1 2.1 2.6 2.8 3.1 Net income 3.8 3.5 3.5 3.7 4.5 4.8
Sales for the third quarter of 1994 were $1,333.6 million as compared to $1,228.1 million for the third quarter of 1993. This was an increase of 9%. The sales increase for comparable stores was 5%. The nine month sales increase for 1994 over 1993 was 9%. The year to date comparable stores sales increase was 5%. The twelve month sales increase for 1994 over 1993 was 8%; for comparable stores the increase was 5%. Cost of sales increased from 64.0% of net sales for the third quarter of 1993 to 65.0% for the third quarter of 1994. For the nine months ended October 29, 1994 the cost of sales as a percent of net sales increased to 65.6% from 64.3% for the same period in 1993. For the twelve months ended October 29, 1994 and October 30, 1993, the increase was from 64.5% to 65.3%. This increase in cost of sales as a percentage of sales in the current year periods was due primarily to a higher level of markdowns and a slightly lower initial markup on merchandise purchases. Advertising, selling, administrative and general expenses decreased from 25.5% of net sales for the third quarter of 1993 to 25.2% for the third quarter of 1994. For the nine months ended October 29, 1994 and October 30, 1993 advertising, selling, administrative and general expenses as a percentage of net sales decreased from 25.7% to 25.2%. For the twelve months ended October 29, 1994 and October 30, 1993 advertising, selling, administrative and general expenses as a percentage of net sales decreased from 24.3% to 23.9%. The Company continues to control these expenses as sales increase. Depreciation and amortization expense as a percentage of net sales remained constant at 3.8% in the third quarter of 1994 and 1993 and at 3.7% for the nine months ended October 29, 1994 and October 30, 1993. For the twelve months ended October 29, 1994 and October 30, 1993 depreciation and amortization expense as a percentage of net sales increased from 3.1% to 3.4%. This was due to a higher proportion of the Company's properties being owned rather than leased. Rental expense decreased to .9% from 1.1% of net sales for the three months ended October 29, 1994 and October 30, 1993. For the nine months ended October 29, 1994 rental expense as a percentage of net sales decreased from 1.1% of net sales in 1993 to 1.0% of net sales in 1994. For the twelve months ended October 29, 1994 rental expense decreased from 1.3% of net sales in 1993 to 1.2% of net sales in 1994. This was due to a higher proportion of the Company's properties being owned rather than leased. Interest and debt expense decreased from 2.6% of net sales for the third quarter of 1993 to 2.3% for the third quarter of 1994 . For the nine months ended October 29, 1994 interest and debt expense decreased from 2.8% of net sales in 1993 to 2.5% of net sales in 1994. For the twelve months ended October 29, 1994 interest and debt expense decreased from 2.6% of net sales in 1993 to 2.3% of net sales in 1994. This was due to a lower level of debt for the first nine months of this year compared to last year. Service charges, interest and other income decreased from 3.6% of net sales in the three months of 1993 to 3.3% of net sales in 1994. For the nine months ended October 29, 1994 the decrease was from 3.9% of net sales in 1993 to 3.6% of net sales in 1994. For the twelve months ended October 29, 1994 this decreased to 3.4% of net sales in 1994 from 3.6% of net sales in 1993. This decline is caused by a decline in credit sales as a percentage of total sales. The effective federal and state income tax rate was 38% for the third quarter of 1994 and 48% for the third quarter of 1993. During the third quarter of 1993, Congress passed the Omnibus Budget Reconciliation Act of 1993 (the "Act"), which raised the federal income tax rate by 1% effective January 1, 1993. Included in income tax expense for the three and nine months ended October 30, 1993 is a charge of approximately $8 million for the retroactive effect of the Act on the earnings for the first half of 1993 and for the cumulative effect of the Act on the Company's deferred income taxes. Excluding the above described charge, the effective federal and state income tax rate was 38% for the third quarter of 1993. Net income for the three months ended October 29, 1994 was $50.8 million as compared to $42.4 million for the three months ended October 30, 1993. This was an increase of 20%. For the nine months ended October 29, 1994, net income increased 2% to $132.9 million as compared to $129.8 million for the same period in 1993. For the twelve month period ended October 29, 1994, the increase was 2% from the prior period. Financial Condition The Company's working capital was $1,653.7 million at October 29, 1994, $1,660.6 million at January 29, 1994, and $1,617.9 million at October 30, 1993. The current ratio for these periods was 2.4, 3.1 and 2.5, respectively. The ratio of long-term debt and capitalized lease obligations as a percentage of equity was 54.5%, 61.0% and 68.0% at October 29, 1994, January 29, 1994, and October 30, 1993, respectively. This ratio decreased due to reductions in long-term debt as well as an increase in stockholders' equity. The Company invested $192.8 million in capital expenditures for the nine months ended October 29, 1994 as compared to $243.1 million for the nine months ended October 30, 1993. In 1994, the Company has built eight new stores, one replacement store and remodeled significantly four additional stores. In 1993, the Company opened ten new stores and remodeled significantly twelve stores. Merchandise inventories increased by 6.5% from $1,636.6 million at October 30, 1993 to $1,742.4 million at October 29, 1994. This increase was due to the opening of eight new stores in 1994 and an increase in comparable store inventory levels. On a comparable store basis, the rate of increase in merchandise inventories was slightly lower than the rate of increase for comparable stores sales. Fluctuations in certain other balance sheet accounts between January 29, 1994 and October 29, 1994 reflect normal seasonal variations within the retail industry. PART II OTHER INFORMATION ITEM 5 Other Information Ratio of Earnings to Fixed Charges The Company has calculated the ratio of earnings to fixed charges pursuant to Item 503 of Regulation S-K of the Securities and Exchange Commission as follows: Nine Months Ended Fiscal Year Ended Oct 29 Oct 30 January 29 January 30 February 1 February 2 February 3 1994 1993 1994 1993 1992 1991 1990* 2.97 2.92 3.57 3.59 3.40 3.38 3.07 *53 weeks ITEM 6 Exhibits and Reports on Form 8-K (a) Exhibit (11): Statement re: Computation of Per Share Earnings Exhibit (12): Statement re: Computation of Ratio of Earnings to Fixed Charges Exhibit (27): Financial Data Schedule (b)Reports on Form 8-K filed during the third quarter: None. SIGNATURES 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. DILLARD DEPARTMENT STORES, INC. (Registrant) DATE: December 7, 1994 James I. Freeman James I. Freeman Senior Vice President & Chief Financial Officer (Principal Financial & Accounting Officer) EXHIBIT INDEX Exhibits to Form 10-Q Exhibit Number Exhibit 11 Statement re: Computation of Per Share Earnings 12 Statement re: Computation of Ratio of Earnings to Fixed Charges 27 Financial Data Schedule EX-11 2 EXHIBIT 11 - STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS (Unaudited) Three Months Ended Nine Months Ended Twelve Months Ended October 29 October 30 October 29 October 30 October 29 October 30 1994 1993 1994 1993 1994 1993 Average shares outstanding 113,004,219 112,814,450 112,996,435 112,683,895 112,984,329 112,590,514 Net effect of dilutive stock options based on the treasury stock method using average market price 0 25,453 19,456 64,590 24,488 138,410 Total 113,004,219 112,839,903 113,015,891 112,748,485 113,008,817 112,728,924 Net Income $50,802,000 $42,377,000 $132,863,000 $129,790,000 $244,207,000 $240,247,000 Less preferred dividends (5,500) (5,500) (16,500) (16,500) (22,000) (22,000) Net income available to common shares $50,796,500 $42,371,500 $132,846,500 $129,773,500 $244,185,000 $240,225,000 Per share $0.45 $0.38 $1.18 $1.15 $2.16 $2.13
EX-12 3 EXHIBIT 12 - STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Unaudited) (Dollar amounts in thousands) Nine Months Ended Fiscal Year Ended October 30 October 30 January 29 January 30 February 1 February 2 February 3 1993 1993 1994 1993 1992 1991 1990 * Consolidated pretax income $214,293 $219,315 $399,534 $375,330 $322,157 $280,778 $227,892 Fixed charges (less capitalized interest) 106,324 111,751 152,604 142,892 128,925 115,125 107,782 EARNINGS $320,617 $331,066 $552,138 $518,222 $451,082 $395,903 $335,674 Interest $93,569 $98,772 $130,915 $121,940 $109,386 $97,032 $91,836 Preferred stock dividends 27 27 36 35 34 34 34 Capitalized interest 1,764 1,655 1,882 1,646 3,574 1,928 1,504 Interest factor in rent expense 12,728 12,952 21,653 20,917 19,505 18,059 15,912 FIXED CHARGES $108,088 $113,406 $154,486 $144,538 $132,499 $117,053 $109,286 Ratio of earnings to fixed charges 2.97 2.92 3.57 3.59 3.40 3.38 3.07
EX-27 4
5 1,000 9-MOS JAN-28-1995 OCT-29-1994 46,318 0 999,248 13,145 1,742,353 2,806,726 3,040,016 1,068,407 4,845,076 1,153,029 1,202,420 1,130 0 440 2,205,409 4,845,076 3,801,887 3,940,232 2,494,126 2,494,126 0 30,249 93,569 214,293 81,430 132,863 0 0 0 132,863 1.18 1.18
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