-----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, l7MkJGPNLuI/GWlssHkZZFmHfdh2N9mhvTJxyBuhJe/bkwaykJ3V9YgZsmGOj6H1 laz7IarUOljUZPbB5A8Tig== 0000028917-94-000010.txt : 19940914 0000028917-94-000010.hdr.sgml : 19940914 ACCESSION NUMBER: 0000028917-94-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19940730 FILED AS OF DATE: 19940912 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DILLARD DEPARTMENT STORES INC CENTRAL INDEX KEY: 0000028917 STANDARD INDUSTRIAL CLASSIFICATION: 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: 94548743 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 July 30, 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 July 30, 1994 108,987,158 CLASS B COMMON STOCK as of July 30, 1994 4,017,061 PART I FINANCIAL INFORMATION ITEM 1 Financial Statements CONSOLIDATED BALANCE SHEETS DILLARD DEPARTMENT STORES, INC. (Unaudited) (Thousands)
July 30 January 29 July 31 1994 1994 1993 ASSETS CURRENT ASSETS Cash and cash equivalents $49,502 $51,244 $41,744 Trade accounts receivable 986,112 1,096,530 987,007 Merchandise inventories 1,361,721 1,299,944 1,262,492 Other current assets 11,258 8,976 11,124 TOTAL CURRENT ASSETS 2,408,593 2,456,694 2,302,367 INVESTMENTS AND OTHER ASSETS 69,690 52,110 53,354 PROPERTY AND EQUIPMENT, NET 1,879,245 1,878,077 1,783,751 CONSTRUCTION IN PROGRESS 43,690 13,977 29,988 BUILDINGS UNDER CAPITAL LEASES 24,266 29,416 30,563 $4,425,484 $4,430,274 $4,200,023 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Trade accounts payable and accrued expenses $525,591 $529,475 $522,909 Commercial paper 115,947 145,276 88,174 Federal and state income taxes 15,980 54,011 22,307 Current portion of long-term debt 115,501 65,061 54,648 Current portion of capital lease obligations 2,102 2,242 2,153 TOTAL CURRENT LIABILITIES 775,121 796,065 690,191 LONG-TERM DEBT 1,184,768 1,238,293 1,307,634 CAPITAL LEASE OBLIGATIONS 23,380 31,621 32,765 DEFERRED INCOME TAXES 282,648 242,648 245,682 STOCKHOLDERS' EQUITY Preferred Stock 440 440 440 Common Stock 1,130 1,130 1,128 Additional paid-in capital 623,024 622,634 613,934 Retained earnings 1,534,973 1,457,443 1,308,249 2,159,567 2,081,647 1,923,751 $4,425,484 $4,390,274 $4,200,023 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 Six Months Ended Twelve Months Ended July 30 July 31 July 30 July 31 July 30 July 31 1994 1993 1994 1993 1994 1993 Net sales (including leased departments) $1,184,316 $1,104,718 $2,468,257 $2,267,897 $5,331,008 $4,973,104 Service charges, interest, and other 45,548 45,470 93,570 92,845 182,471 178,470 1,229,864 1,150,188 2,561,827 2,360,742 5,513,479 5,151,574 Cost and expenses: Cost of sales 774,798 709,877 1,627,877 1,463,827 3,470,807 3,212,659 Advertising, selling, administrative and general expenses 309,827 291,973 621,037 585,604 1,274,482 1,212,279 Depreciation and amortization 46,013 40,255 91,729 81,211 181,699 148,388 Rentals 12,612 12,369 26,007 25,235 65,730 63,898 Interest and debt expense 32,169 33,424 62,821 66,427 127,309 130,025 1,175,419 1,087,898 2,429,471 2,222,304 5,120,027 4,767,249 INCOME BEFORE INCOME TAXES 54,445 62,290 132,356 138,438 393,452 384,325 Federal and state income taxes 20,690 23,050 50,295 51,025 157,670 142,035 NET INCOME 33,755 39,240 82,061 87,413 235,782 242,290 Retained earnings at beginning of period 1,503,488 1,271,275 1,457,443 1,225,353 1,308,249 1,084,343 1,537,243 1,310,515 1,539,504 1,312,766 1,544,031 1,326,633 Cash dividends declared (2,270) (2,266) (4,531) (4,517) (9,058) (9,014) Shares issued under stock option, employee savings and stock bonus plans (net of shares canceled) (9,370) RETAINED EARNINGS AT END OF PERIOD $1,534,973 $1,308,249 $1,534,973 $1,308,249 $1,534,973 $1,308,249 Net income per common share $0.30 $0.35 $0.73 $0.78 $2.09 $2.15 Cash dividends declared per common share $0.02 $0.02 $0.04 $0.04 $0.08 $0.08 Average shares outstanding 113,042 112,723 113,022 112,703 112,968 112,572 See notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS DILLARD DEPARTMENT STORES, INC. (Unaudited) (Thousands) Six Months Ended July 30 July 31 1994 1993
OPERATING ACTIVITITES Net income $82,061 $87,413 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 92,533 82,005 Changes in operating assets and liabilities: Decrease in trade accounts receivable 110,418 103,213 Increase in merchandise inventories and other current assets (64,059) (89,541) Increase in investments and other assets (18,384) (2,689) Decrease in trade accounts payable and accrued expenses and income taxes (39,655) (38,933) NET CASH PROVIDED BY OPERATING ACTIVITIES 162,914 141,468 INVESTING ACTIVITIES Purchase of property and equipment (117,460) (149,557) NET CASH USED IN INVESTING ACTIVITIES (117,460) (149,557) FINANCING ACTIVITIES Net (decrease) increase in commercial paper (29,329) 31,553 Principal payments on long-term debt and capital lease obligations (11,466) (76,364) Dividends paid (6,791) (6,777) Common stock sold 390 8,837 NET CASH (USED IN) FINANCING ACTIVITES (47,196) (42,751) DECREASE IN CASH AND CASH EQUIVALENTS (1,742) (50,840) Cash and cash equivalents at beginning of period 51,244 92,584 CASH AND CASH EQUIVALENTS AT END OF PERIOD $49,502 $41,744 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 six month period ended July 30, 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 July 30, 1994 and July 31, 1993, the LIFO cost of merchandise inventories was approximately $15,500,000 and $15,600,000, respectively, less than current cost. At January 29, 1994, the LIFO cost of merchandise inventories was approximately $13,200,000 less than current cost. 3. Net sales include leased department sales of $10,035,000 and $15,553,000 for the quarters ending July 30, 1994 and July 31, 1993, respectively. Leased department sales for the six months ended July 30, 1994 and July 31, 1993 were $18,893,000 and $29,766,000, respectively. Leased department sales for the twelve months ended July 30, 1994 and July 31, 1993 were $55,650,000 and $85,795,000, respectively. 4. The effective income tax rate was 38% for the first six months of 1994 and 37% for the first six months of 1993. 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 Six Months Ended Twelve Months Ended July 30 July 31 July 30 July 31 July 30 July 31 1994 1993 1994 1993 1994 1993 Net sales 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Cost of sales 65.4 64.3 66.0 64.5 65.1 64.6 Gross profit 34.6 35.7 34.0 35.5 34.9 35.4 Advertising, selling, administrative and general expenses 26.1 26.4 25.2 25.8 23.9 24.4 Depreciation and amortization 3.9 3.7 3.7 3.6 3.4 3.0 Rentals 1.1 1.1 1.1 1.1 1.2 1.3 Interest and debt expense 2.7 3.0 2.5 3.0 2.4 2.6 Total operating expenses 33.8 34.2 32.5 33.5 30.9 31.3 Other income 3.8 4.1 3.8 4.1 3.4 3.6 Income before income taxes 4.6 5.6 5.3 6.1 7.4 7.7 Federal and state income taxes 1.7 2.1 2.0 2.2 3.0 2.8 Net income 2.9 3.5 3.3 3.9 4.4 4.9
Net income for the three months ended July 30, 1994 was $33,755,000 as compared to $39,240,000 for the three months ended July 31, 1993. This was a decrease of 14%. For the six months ended July 30, 1994, net income decreased 6% to $82,061,000 as compared to $87,413,000 for the same period in 1993. For the twelve month period ended July 30, 1994, the decrease was 3% from the prior period. Sales for the second quarter of 1994 were $1,184,316,000 as compared to $1,104,718,000 for the second quarter of 1993. This is an increase of 7%. The sales increase for comparable stores was 4%. The six month sales increase for 1994 over 1993 was 9%. The year to date comparable stores sales increase was 6%. The twelve month sales increase for 1994 over 1993 was 7%; for comparable stores the increase was 4%. Cost of sales increased from 64.3% of net sales for the second quarter of 1993 to 65.4% for the second quarter of 1994. For the six months ended July 30, 1994 the cost of sales as a percent of net sales increased to 66.0% from 64.5% for the same period in 1993. For the twelve months ended July 30, 1994 and July 31, 1993, the increase was from 64.6% to 65.1%. This increase in cost of sales was caused by a higher level of markdowns in the current year than in the prior year. Advertising, selling, administrative and general expenses decreased from 26.4% of net sales for the second quarter of 1993 to 26.1% for the second quarter of 1994. For the six months ended July 30, 1994 and July 31, 1993 advertising, selling, administration and general expenses as a percentage of net sales decreased from 25.8% to 25.2%. For the twelve months ended July 30, 1994 and July 31, 1993 advertising, selling, administration and general expenses as a percentage of net sales decreased from 24.4% to 23.9%. The Company continues to control these expenses as sales grow. Depreciation and amortization expense increased as a percentage of net sales from 3.7% in the second quarter of 1993 to 3.9% in the second quarter of 1994. For the six months ended July 30, 1994 and July 31, 1993 depreciation and amortization expense as a percentage of net sales increased from 3.6% to 3.7%. For the twelve months ended July 30, 1994 and July 31, 1993 the depreciation and amortization as a percentage of net sales increased from 3.0% to 3.4%. This was due to a higher proportion of the Company's properties being owned rather than leased. Rental expense remained constant at 1.1% of net sales for the three and six months ended July 30, 1994 and July 31, 1993. For the twelve months ended July 30, 1994 rental expense as a percent of net sales decreased from 1.3% of net sales 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 3.0% of net sales for the second quarter of 1993 to 2.7% for the second quarter of 1994 . For the six months ended July 30, 1994 and July 31, 1993 interest and debt expense as a percentage of net sales decreased from 3.0% to 2.5%. For the twelve months ended July 30, 1994 and July 31,1993 interest and debt expense decreased from 2.6% of net sales to 2.4% of net sales. This was due to a lower level of debt this year compared to last year. Service charges, interest and other income decreased from 4.1% of net sales in the three and six months of 1993 to 3.8% of net sales in 1994. For the twelve months ended July 30, 1994 and July 31, 1993 service charges, interest and other income as a percentage of net sales decreased from 3.6% to 3.4%. This decline was 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 second quarter of 1994 and 37% for the second quarter of 1993. Financial Condition The Company's working capital was $1,633,472,000 at July 30, 1994, $1,660,629,000 at January 29, 1994, and $1,612,176,000 at July 31, 1993. The current ratio for these periods was 3.1, 3.1 and 3.3, respectively. The ratio of long-term debt and capitalized lease obligations as a percentage of equity was 55.9%, 61.0% and 69.7% at July 30, 1994, January 29, 1994, and July 31, 1993, respectively. This ratio decreased due to a lower level of long-term debt as well as growth in stockholders' equity. The Company invested $117,460,000 in capital expenditures for the six months ended July 30, 1994 as compared to $149,557,000 for the six months ended July 31, 1993. In 1994, the Company plans to build eight new stores, one replacement store and to significantly remodel four additional stores. In 1993, the Company opened ten new stores and significantly remodeled twelve stores. Merchandise inventories increased by 8% from $1,262,492,000 at July 31, 1993 to $1,361,721,000 at July 30, 1994. This increase was due to the opening of ten new stores in 1993 and two stores in 1994. 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 July 30, 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: Six Months Ended Fiscal Year Ended July 30 July 31 January 29 January 30 February 1 February 2 February 3 1994 1993 1994 1993 1992 1991 1990* 2.81 2.81 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 second 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: September 12, 1994 /s/ 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 Six Months Ended Twelve Months Ended July 30 July 31 July 30 July 31 July 30 July 31 1994 1993 1994 1993 1994 1993 Average shares outstanding 112,993,367 112,682,763 112,992,543 112,618,618 112,936,886 112,345,287 Net effect of dilutive stock options based on the treasury stock method using average market price 48,652 40,454 29,184 84,158 30,852 226,465 Total 113,042,019 112,723,217 113,021,727 112,702,776 112,967,738 112,571,752 Net Income $33,755,000 $39,240,000 $82,061,000 $87,413,000 $235,782,000 $242,290,000 Less preferred dividends (5,500) (5,500) (11,000) (11,000) (22,000) (22,000) Net income available to common shares $33,749,500 $39,234,500 $82,050,000 $87,402,000 $235,760,000 $242,268,000 Per share $0.30 $0.35 $0.73 $0.78 $2.09 $2.15
EX-12 3 EXHIBIT 12 - STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Unaudited) (Dollar amounts in thousands)
Six Months Ended Fiscal Year Ended July 30 July 31 January 29 January 30 February 1 February 2 February 3 1994 1993 1994 1993 1992 1991 1990 * Consolidated pretax income $132,356 $138,438 $399,534 $375,330 $322,157 $280,778 $227,892 Fixed charges (less capitalized interest) 71,508 74,856 152,604 142,892 128,925 115,125 107,782 EARNINGS $203,864 $213,294 $552,138 $518,222 $451,082 $395,903 $335,674 Interest $62,821 $66,427 $130,915 $121,940 $109,386 $97,032 $91,836 Preferred stock dividends 18 17 36 35 34 34 34 Capitalized interest 1,008 984 1,882 1,646 3,574 1,928 1,504 Interest factor in rent expense 8,669 8,412 21,653 20,917 19,505 18,059 15,912 FIXED CHARGES $72,516 $75,840 $154,486 $144,538 $132,499 $117,053 $109,286 Ratio of earnings to fixed charges 2.81 2.81 3.57 3.59 3.40 3.38 3.07
EX-27 4
5 1,000 6-MOS JAN-28-1995 JUL-30-1994 49,502 0 986,112 12,900 1,361,721 2,408,593 2,880,267 1,001,022 4,425,484 775,121 1,184,768 1,130 0 440 2,157,997 4,425,484 2,468,257 2,561,827 1,627,877 2,429,471 0 17,801 62,821 132,356 50,295 82,061 0 0 0 82,061 .73 .73
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