EX-99 3 a4401584ex991.txt EXHIBIT 99.1 Exhibit 99.1 Elder-Beerman Reports Improved First Quarter 2003 Operating Results DAYTON, Ohio--(BUSINESS WIRE)--May 22, 2003--The Elder-Beerman Stores Corp. (Nasdaq:EBSC) reported a net loss of $2.5 million or $0.22 per diluted share for the first quarter ended May 3, 2003, versus a net loss of $18.6 million or $1.64 per diluted share in the same period in 2002. Before the effects of changes in accounting principles, the company reported a loss of $2.5 million or $0.22 per diluted share for the first quarter 2003, versus a loss of $3.5 million or $0.31 per diluted share in 2002, a 29 percent improvement over 2002 operating results. Net sales for the quarter decreased 7.2 percent versus last year to $131.1 million. Comparable store sales decreased 7.7 percent. Bud Bergren, Elder-Beerman's president and CEO, stated, "We are pleased with the improvement in our first quarter results. We continue to make progress in the key areas of productivity and expense management. Because we remained disciplined and focused on these areas we were able to improve bottom line performance and reduce long-term debt by 20 percent over last year's first quarter." Bergren continued, "Along with our competitors and peers, sales were difficult in the first quarter, due to unseasonable weather, economic uncertainty and the war in Iraq. We continue to manage our business through this environment. "Our new-format stores continue to perform well. As a group, the new-format stores showed positive sales growth. "In the first quarter we celebrated the successful grand opening of our De Kalb, Illinois store, our 11th new format store. We announced the November 2003 opening of our Muscatine, Iowa store, marking our expansion into a new state. We also closed a suburban Cincinnati store that did not fit into our strategy of locating stores in smaller to midsized markets where we can be a dominant retail presence." Changes in Accounting Principles - Last Year (2002) First quarter 2002 results include a cumulative effect of an accounting change related to the company's adoption of the 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. On May 16, 2003, Elder-Beerman announced that it had recently received unsolicited expressions of interest relating to the possible acquisition of the company. It also stated that it entered into discussions, on an exclusive basis and for a limited period of time, with one of the parties concerning the possible sale of the company and that there can be no assurance that these discussions will result in any transaction involving the company. These discussions are continuing. The company does not anticipate having any additional comment on this subject at its first quarter earnings conference call today. A conference call to discuss 2003 first 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 May 30, 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 May 3, 2003 % Sales May 4, 2002 % Sales ----------- ------- ----------- ------- Revenues: Net sales $ 131,052 100.0% $ 141,166 100.0% Financing 6,862 5.2% 7,158 5.1% Other 699 0.5% 688 0.5% ----------- ------- ----------- ------- Total revenues 138,613 105.8% 149,012 105.6% ----------- ------- ----------- ------- Costs and expenses: Cost of merchandise sold, occupancy, and buying expenses 97,140 74.1% 105,145 74.5% Selling, general, administrative, and other expenses 37,960 29.0% 41,495 29.4% Depreciation and amortization 4,917 3.8% 4,971 3.5% Interest expense 2,463 1.9% 2,840 2.0% ----------- ------- ----------- ------- Total costs and expenses 142,480 108.7% 154,451 109.4% ----------- ------- ----------- ------- Loss before income tax benefit (3,867) -3.0% (5,439) -3.9% Income tax benefit (1,392) -1.1% (1,958) -1.4% ----------- ------- ----------- ------- Loss before cumulative effect of changes in accounting principles (2,475) -1.9% (3,481) -2.5% Cumulative effect of changes in accounting principles - 0.0% (15,118) -10.7% ----------- ------- ----------- ------- Net loss $ (2,475) -1.9% $ (18,599) -13.2% =========== ======= =========== ======= Net loss per common share - basic and diluted Loss before cumulative effect of changes in accounting principles $ (0.22) $ (0.31) Cumulative effect of changes in accounting principles - (1.33) ----------- ----------- Net loss $ (0.22) $ (1.64) Weighted average number of shares outstanding 11,406,800 11,369,834 THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Dollars in thousands) May 3, 2003 May 4, 2002 Feb. 1, 2003 ----------- ----------- ------------ ASSETS Current assets: Cash and equivalents $ 7,345 $ 7,532 $ 9,735 Customer accounts receivable (less allowance for doubtful accounts: May 3, 2003 - $2,998; May 4, 2002 - $2,677; February 2, 2002 - $3,298) 120,147 123,973 127,786 Merchandise inventories 149,784 150,562 138,748 Other current assets 15,723 21,215 17,162 ----------- ----------- ------------ Total current assets 292,999 303,282 293,431 ----------- ----------- ------------ Property, fixtures and equipment, less accumulated depreciation and amortization 89,261 98,833 90,181 Other assets 26,587 25,263 27,436 ----------- ----------- ------------ Total assets $ 408,847 $ 427,378 $ 411,048 =========== =========== ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term obligations $ 4,763 $ 7,329 $ 5,456 Accounts payable 50,092 39,548 40,607 Other accrued liabilities 26,213 24,812 31,918 ----------- ----------- ------------ Total current liabilities 81,068 71,689 77,981 ----------- ----------- ------------ Long-term obligations, less current portion 112,681 141,112 115,127 Deferred items 10,021 13,296 11,214 Shareholders' equity: Common stock, no par, 11,581,064 shares at May 3, 2003, 11,531,554 shares at May 4, 2002, and 11,536,460 shares at February 1, 2003 issued and outstanding 243,424 243,456 243,419 Unearned compensation - restricted stock (145) (338) (197) Deficit (36,518) (37,411) (34,043) Other comprehensive loss (1,684) (4,426) (2,453) ----------- ----------- ------------ Total shareholders' equity 205,077 201,281 206,726 ----------- ----------- ------------ Total liabilities and shareholders' equity $ 408,847 $ 427,378 $ 411,048 =========== =========== ============ CONTACT: The Elder-Beerman Stores Corp. Edward Tomechko, 937/296-2683 or Gloria Siegler, 937/296-7339