EX-99 3 a4458467ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Elder-Beerman Reports Second Quarter 2003 Operating Results DAYTON, Ohio--(BUSINESS WIRE)--Aug. 21, 2003--The Elder-Beerman Stores Corp. (Nasdaq:EBSC) reported a net loss of $2.1 million or $0.19 per diluted share for the second quarter ended August 2, 2003, versus a net loss of $1.7 million or $0.15 per diluted share for the same period in 2002. Comparable store sales for the quarter increased 1.6 percent versus last year. Net sales decreased 0.8 percent to $132.6 million. Year to Date Results Elder-Beerman reported a net loss of $4.6 million or $0.40 per diluted share for the 26 weeks ended August 2, 2003, versus a net loss of $20.3 million or $1.79 per diluted share for the same period in 2002. Before the cumulative effect of changes in accounting principles, the company reported a loss of $4.6 million or $0.40 per diluted share for the year to date period in 2003, versus a loss of $5.2 million or $0.46 per diluted share for the same period in 2002. Comparable store sales for the year to date decreased 3.2 percent versus last year. Net sales decreased 4.1 percent to $263.6 million. Bud Bergren, Elder-Beerman's president and CEO, stated, "We were pleased with the comparable stores sales improvement in the second quarter. We ended spring season with inventory levels well positioned for fall. Through continued focus on expense controls and supply chain initiatives, we have been able to reduce long-term debt by $29 million over last year's second quarter and $12 million from the end of 2002. Bergren continued, "Our new-format stores continue to perform well. As a group, for the first half of the year the new-format stores showed a healthy comparable store sales increase." Changes in Accounting Principles - (2002) Year to date 2002 results include a cumulative effect of an accounting change related to the company's adoption of 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. Recent Events On July 29, 2003, Elder-Beerman announced that it had received a letter from The Bon-Ton Stores, Inc. in which Bon-Ton proposed to pay $7.00 for each Elder-Beerman common share, subject to completion of due diligence and financing arrangements. Elder-Beerman and Bon-Ton have entered into a confidentiality agreement under which Bon-Ton and its representatives are in the process of conducting due diligence. There can be no assurance as to the outcome of such review or whether Bon-Ton will make any definitive proposal to the company. Elder-Beerman filed with the Securities and Exchange Commission a preliminary proxy statement on July 18, 2003, for a special meeting of its shareholders to vote on approving the merger agreement with Wright Holdings, Inc. The merger agreement, which remains in effect, provides for the acquisition of all Elder-Beerman shares at $6.00 per share by Wright Holdings. The company is working towards completion of the regulatory review of the proxy statement so that it may proceed with a special meeting of shareholders to vote on the merger agreement. Elder-Beerman does not anticipate any additional comment on this subject during its second quarter earnings conference call today. A conference call to discuss 2003 second 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 August 29, 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 Aug. 2, 2003 % Sales Aug. 3, 2002 % Sales ------------ ------- ------------ ------- Revenues: Net sales $132,558 100.0% $133,578 100.0% Financing 6,587 5.0% 6,629 5.0% Other 624 0.5% 697 0.5% ------------ ------- ------------ ------- Total revenues 139,769 105.4% 140,904 105.5% ------------ ------- ------------ ------- Costs and expenses: Cost of merchandise sold, occupancy, and buying expenses 97,385 73.5% 95,938 71.8% Selling, general, administrative, and other expenses 38,590 29.1% 39,909 29.9% Depreciation and amortization 4,935 3.7% 5,006 3.7% Interest expense 2,197 1.7% 2,768 2.1% ------------ ------- ------------ ------- Total costs and expenses 143,107 108.0% 143,621 107.5% ------------ ------- ------------ ------- Loss before income tax benefit (3,338) -2.5% (2,717) -2.0% Income tax benefit (1,202) -0.9% (978) -0.7% ------------ ------- ------------ ------- Net loss $(2,136) -1.6% $(1,739) -1.3% ============ ======= ============ ======= Net loss per common share - basic and diluted $(0.19) $(0.15) Weighted average number of shares outstanding 11,415,401 11,378,922 THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (Dollars in thousands, except per share amounts) 26-weeks ended 26-weeks ended Aug. 2, 2003 % Sales Aug. 3, 2002 % Sales ------------ -------- ------------ ------- Revenues: Net sales $263,610 100.0% $274,744 100.0% Financing 13,449 5.1% 13,787 5.0% Other 1,323 0.5% 1,385 0.5% ------------ -------- ------------ ------- Total revenues 278,382 105.6% 289,916 105.5% ------------ -------- ------------ ------- Costs and expenses: Cost of merchandise sold, occupancy, and buying expenses 194,525 73.8% 201,083 73.2% Selling, general, administrative, and other expenses 76,550 29.0% 81,404 29.6% Depreciation and amortization 9,852 3.7% 9,977 3.6% Interest expense 4,660 1.8% 5,608 2.0% ------------ -------- ------------ ------- Total costs and expenses 285,587 108.3% 298,072 108.5% ------------ -------- ------------ ------- Loss before income tax benefit (7,205) -2.7% (8,156) -3.0% Income tax benefit (2,594) -1.0% (2,936) -1.1% ------------ -------- ------------ ------- Loss before cumulative effect of changes in accounting principles (4,611) -1.7% (5,220) -1.9% Cumulative effect of changes in accounting principles - 0.0% (15,118) -5.5% ------------ -------- ------------ ------- Net loss $(4,611) -1.7% $(20,338) -7.4% ============ ======== ============ ======= Net loss per common share - basic and diluted Loss before cumulative effect of changes in accounting principles $(0.40) $(0.46) Cumulative effect of changes in accounting principles - (1.33) ------------ ------------ Net loss $(0.40) $(1.79) Weighted average number of shares outstanding 11,411,101 11,374,378 THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Dollars in thousands) Aug. 2, Aug. 3, Feb. 1, 2003 2002 2003 --------- --------- --------- ASSETS Current assets: Cash and equivalents $7,325 $6,881 $9,735 Customer accounts receivable (less allowance for doubtful accounts: August 2, 2003 - $2,438; August 3, 2002 - $2,250; February 2, 2002 - $3,298) 113,577 117,138 127,786 Merchandise inventories 144,286 146,799 138,748 Other current assets 17,082 20,073 17,162 --------- --------- --------- Total current assets 282,270 290,891 293,431 --------- --------- --------- Property, fixtures and equipment, less accumulated depreciation and amortization 88,027 96,237 90,181 Other Assets 25,834 27,309 27,436 --------- --------- --------- Total assets $396,131 $414,437 $411,048 ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term obligations $3,896 $7,311 $5,456 Accounts payable 51,280 39,627 40,607 Other accrued liabilities 25,700 22,693 31,918 --------- --------- --------- Total current liabilities 80,876 69,631 77,981 --------- --------- --------- Long-term obligations, less current portion 102,978 132,120 115,127 Deferred items 8,568 13,502 11,214 Shareholders' equity: Common stock, no par, 11,585,457 shares at May 3, 2003, 11,528,587 shares at August 2, 2003, and 11,536,460 shares at February 1, 2003 issued and outstanding 243,444 243,382 243,419 Unearned compensation - restricted stock (92) (258) (197) Deficit (38,654) (40,208) (34,043) Other comprehensive loss (989) (3,732) (2,453) --------- --------- --------- Total shareholders' equity 203,709 199,184 206,726 --------- --------- --------- Total liabilities and shareholders' equity $396,131 $414,437 $411,048 ========= ========= ========= CONTACT: Elder-Beerman Stores Corp. Edward Tomechko, 937-296-2683 Gloria Siegler, 937-296-7339