-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OYa6nvgaR019zR9BxtUBqA5v1H5wghKM5Qmqys2QLQM4pL2itLNq1kIgpGEYhLaO WDIORs8mV6SijfIbbZsxFg== /in/edgar/work/20000606/0000063416-00-000016/0000063416-00-000016.txt : 20000919 0000063416-00-000016.hdr.sgml : 20000919 ACCESSION NUMBER: 0000063416-00-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000429 FILED AS OF DATE: 20000606 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAY DEPARTMENT STORES CO CENTRAL INDEX KEY: 0000063416 STANDARD INDUSTRIAL CLASSIFICATION: [5311 ] IRS NUMBER: 431104396 STATE OF INCORPORATION: DE FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-00079 FILM NUMBER: 649745 BUSINESS ADDRESS: STREET 1: 611 OLIVE ST CITY: ST LOUIS STATE: MO ZIP: 63101 BUSINESS PHONE: 3143426300 10-Q 1 0001.txt 1ST QUARTER FORM 10-Q DATED APRIL 29, 2000 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 April 29, 2000 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 1-79 THE MAY DEPARTMENT STORES COMPANY (Exact name of registrant as specified in its charter) Delaware 43-1104396 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 611 Olive Street, St. Louis, Missouri 63101 (Address of principal executive offices) (Zip Code) (314) 342-6300 (Registrant's telephone number, including area code) Indicate by check mark 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 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. 317,891,786 shares of common stock, $.50 par value, as of April 29, 2000. 1 PART 1 - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Millions) April 29, May 1, Jan. 29, ASSETS 2000 1999 2000 Current Assets: Cash and cash equivalents $ 40 $ 152 $ 41 Accounts receivable, net 1,913 1,906 2,173 Merchandise inventories 3,191 2,930 2,817 Other current assets 83 69 84 Total Current Assets 5,227 5,057 5,115 Property and Equipment, at cost 7,945 7,356 7,797 Accumulated Depreciation (3,136) (2,850) (3,028) Net Property and Equipment 4,809 4,506 4,769 Goodwill and Other Assets 1,044 1,021 1,051 Total Assets $ 11,080 $ 10,584 $ 10,935 LIABILITIES AND SHAREOWNERS' EQUITY Current Liabilities: Notes payable $ 49 $ - $ - Current maturities of long-term debt 260 104 259 Accounts payable 1,323 1,181 1,030 Accrued expenses 824 741 892 Income taxes 100 78 234 Total Current Liabilities 2,556 2,104 2,415 Long-term Debt 3,709 3,791 3,560 Deferred Income Taxes 548 489 540 Other Liabilities 307 306 314 ESOP Preference Shares 311 325 315 Unearned Compensation (248) (277) (286) Shareowners' Equity 3,897 3,846 4,077 Total Liabilities and Shareowners' Equity $ 11,080 $ 10,584 $ 10,935 The accompanying notes to condensed consolidated financial statements are an integral part of this balance sheet. 2 THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (Unaudited) (Millions, except per share) 13 Weeks Ended April 29, May 1, 2000 1999 Net Retail Sales $ 3,041 $ 2,937 Revenues $ 3,050 $ 2,989 Cost of sales 2,141 2,086 Selling, general and administrative expenses 638 629 Interest expense, net 71 71 Earnings before income taxes 200 203 Provision for income taxes 80 81 Net Earnings $ 120 $ 122 Basic earnings per share $ .36 $ .35 Diluted earnings per share $ .35 $ .34 Dividends paid per common share $ .23-1/4 $ .22-1/4 Weighted average shares outstanding: Basic 322.5 334.7 Diluted 344.2 358.6 The accompanying notes to condensed consolidated financial statements are an integral part of this statement. 3 THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (Millions) 13 Weeks Ended April 29, May 1, 2000 1999 Operating Activities: Net earnings $ 120 $ 122 Depreciation and amortization 119 111 Decrease (increase) in working capital (29) 3 Other, net 4 18 214 254 Investing Activities: Net additions to property and equipment (153) (97) (153) (97) Financing Activities: Net issuances of notes payable 49 - Net issuances (repayments) of long-term debt 192 (2) Net purchases of common stock (223) (36) Dividend payments, net of tax benefit (80) (79) (62) (117) Increase (decrease) in Cash and Cash Equivalents $ (1) $ 40 Cash paid during the period: Interest $ 67 $ 70 Income Taxes 202 181 The accompanying notes to condensed consolidated financial statements are an integral part of this statement. 4 THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Interim Results. These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of The Securities and Exchange Commission and should be read in conjunction with the Notes to Consolidated Financial Statements (pages 26-31) in the 1999 Annual Report. In the opinion of management, this information is fairly presented and all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the results for the interim periods have been included; however, certain items are included in these statements based on estimates for the entire year. Also, operating results of periods which exclude the Christmas season may not be indicative of the operating results that may be expected for the full fiscal year. Inventories. Merchandise inventories are stated on the LIFO (last- in, first-out) cost basis. The LIFO provision for the first quarter was $8 million in 2000 and 1999. Long-term Debt. During the first quarter of 2000, the company issued $200 million of 7.875% debentures due March 1, 2030. Subsequent to the first quarter of 2000, the company issued $250 million of 8.75% debentures due May 15, 2029 and $200 million of 8.5% debentures due June 1, 2019. The company intends to use the net proceeds from the sale of the debentures for stock repurchases, capital expenditures, working capital needs, and other general corporate purposes including investments and acquisitions. Common Stock Repurchase Program. During the first quarter of 2000, May's board of directors authorized a common stock repurchase program of up to $650 million. This authorization, combined with the remaining $139 million of common stock repurchases related to the 1999 stock purchase program, allows May to purchase up to $789 million of common stock in 2000. Through the end of the first quarter, May has repurchased approximately $217 million of common stock, or approximately 7.8 million shares at an average price of $28 per share. Such purchases are being made in the open market as market conditions and regulatory rules allow. Summarized Financial Information - The May Department Stores Company, New York. Summarized financial information for The May Department Stores Company, New York, is set forth below for 2000 and 1999. April 29, Jan. 29, 2000 2000 Financial Position Current assets $ 5,213 $ 5,104 Noncurrent assets 6,093 5,818 Current liabilities 2,543 2,425 Noncurrent liabilities 8,198 8,043 13 Weeks Ended April 29, May 1, 2000 1999 Operating Results Revenues $ 3,050 $ 2,989 Cost of sales 2,141 2,086 Net earnings 68 75 5 Earnings per share. The following tables reconcile net earnings and weighted average shares outstanding to amounts used to calculate basic and diluted earnings per share ("EPS") for the periods shown (millions, except per share). 13 Weeks Ended April 29, 2000 May 1, 1999 Earnings Shares EPS Earnings Shares EPS Net earnings $ 120 $ 122 ESOP preference shares' dividends (5) (5) Basic EPS 115 322.5 $ 0.36 117 334.7 $ 0.35 ESOP preference shares 4 20.9 4 21.7 Assumed exercise of options (treasury stock method) - 0.8 - 2.2 Diluted EPS $ 119 344.2 $ 0.35 $ 121 358.6 $ 0.34 Reclassifications. Certain prior period amounts have been reclassified to conform with current year presentation. Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Net retail sales (sales) represent sales of stores operating at the end of the latest period including lease department sales and excluding finance charge revenues and the sales of stores that have been closed and not replaced. Store-for-store sales represent sales of those stores open during both periods. Sales percent increases are as follows: Store-for- Total Store 13 Weeks Ended April 29, 2000 3.5% 0.0% The following table presents the components of costs and expenses, as a percent of revenues, for the first quarter of 2000 and 1999. Revenues include sales from all stores operating during the period, finance charge revenues and lease department income. 2000 1999 Revenues 100.0% 100.0% Cost of sales 70.2 69.8 Selling, general and administrative expenses 20.9 21.0 Interest expense, net 2.4 2.4 Earnings before income taxes 6.5 6.8 Provision for income taxes 40.0* 40.0* Net Earnings 3.9% 4.1% *-Percent represents effective income tax rate. 6 Cost of sales was $2,141 million in the 2000 first quarter, up 2.6% from $2,086 million in the 1999 first quarter. The overall increase is primarily related to higher sales. As a percent of revenues, cost of sales increased 0.4% compared with the first quarter of 1999 due to higher markdowns and an increase in buying and occupancy costs. Selling, general and administrative expenses were $638 million in the 2000 first quarter, compared with $629 million in the 1999 first quarter, a 1.5% increase. The increase is primarily related to higher sales volume. Selling, general and administrative expenses as a percent of revenues decreased 0.1% for the first quarter of 2000 as compared with 1999 mainly due to lower employee benefit expenses which were partially offset by increases in payroll expenses. Net interest expense for the first quarter 2000 and 1999 was as follows (millions): 2000 1999 Interest expense $ 79 $ 78 Interest income (4) (4) Capitalized interest (4) (3) Net Interest Expense $ 71 $ 71 Operating results for the trailing years were as follows (millions, except per share): 52 Weeks Ended April 29, May 1, 2000 1999 Net retail sales $ 13,958 $ 13,266 Revenues 13,927 13,319 Net earnings 925 861 Diluted earnings per share 2.61 2.35 Financial Condition Key financial ratios for the periods indicated are as follows: April 29, May 1, Jan. 29, 2000 1999 2000 Current Ratio 2.0 2.4 2.1 Debt-Capitalization Ratio 46% 45% 44% Fixed Charge Coverage* 4.8x 4.5x 4.8x * Fixed charge coverage, which is presented for the 52 weeks ended April 29, 2000, May 1, 1999 and January 29, 2000, is defined as earnings before gross interest expense, the expense portion of interest on the ESOP debt, rent expense and income taxes divided by gross interest expense, interest expense on the ESOP debt and total rent expense. Forward-looking Statements. Management's Discussion and Analysis contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. While such statements reflect all available information and management's judgment and estimates of current and anticipated conditions and circumstances and are prepared with the assistance of specialists within and outside the company, there are many factors outside of our control that have an impact on our operations. Such factors include, but are not limited to: competitive changes, general and regional economic conditions, consumer preferences and spending patterns, availability of adequate locations for building or acquiring new stores, and our ability to hire and retain qualified associates. Because of these factors, actual performance could differ materially from that described in the forward-looking statements. 7 PART II - OTHER INFORMATION Item 1 - Legal Proceedings There are no material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which registrant or any of its subsidiaries is a party or of which any of their property is the subject. Item 2 - Changes in Securities - None. Item 3 - Defaults Upon Senior Securities - None. Item 4 - Submission of Matters to a Vote of Security Holders - None. Item 5 - Other Information - None. Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits (12) - Computation of Ratio of Earnings to Fixed Charges (15) - Letter Re: Unaudited Interim Financial Information (27) - Financial Data Schedule (b) Reports on Form 8-K A report dated February 24, 2000, which contained a press release announcing registrant's January and fiscal 1999 sales results and a press release announcing registrant's fiscal 1999 earnings results, including Condensed Consolidated Results of Operations for the 13 and 52 weeks ended January 29, 2000 and a Condensed Consolidated Balance Sheet as of January 29, 2000. A reported dated February 29, 2000, which contained information concerning the registrant's sale of $200 million principal amount of its 7-7/8% debentures due March 1, 2030. A report dated April 19, 2000, which contained information concerning debt ratings and incorporated by reference registrant's Annual Report on Form 10-K for the fiscal year ended January 29, 2000. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE MAY DEPARTMENT STORES COMPANY (Registrant) Date: June 6, 2000 /s/ John L. Dunham John L. Dunham Executive Vice President and Chief Financial Officer 8 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors and Shareowners of The May Department Stores Company: We have reviewed the accompanying condensed consolidated balance sheet of The May Department Stores Company (a Delaware corporation) and subsidiaries as of April 29, 2000, and May 1, 1999, and the related condensed consolidated statements of earnings and cash flows for the thirteen week periods ended April 29, 2000 and May 1, 1999. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States. We have previously audited, in accordance with auditing standards generally accepted in the United States, the consolidated balance sheet of The May Department Stores Company as of January 29, 2000, (not presented separately herein), and in our report dated February 9, 2000, we expressed an unqualified opinion on that statement. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of January 29, 2000, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. /s/Arthur Andersen LLP St. Louis, Missouri June 6, 2000 EX-15 2 0002.txt LETTER RE: UNAUDITED INTERIM FINANCIAL INFORMATION Exhibit 15 To the Board of Directors and Shareowners of The May Department Stores Company: We are aware that The May Department Stores Company, Inc. has incorporated by reference in its Registration Statements on Form S-3 (No. 333-71413, 333-71413-01, 333-11539 and 333-11539-01) and Form S-8 (No. 33-21415, 33-98045, 33-58985, 333-00957 and 333-76227) its Form 10-Q for the quarter ended April 29, 2000, which includes our report dated June 6, 2000 covering the unaudited interim financial information contained therein. Pursuant to Regulation C of the Securities Act of 1933, that report is not considered a part of the registration statement prepared or certified by our firm or a report prepared or certified by our firm within the meaning of Sections 7 and 11 of the Act. /s/Arthur Andersen LLP St. Louis, Missouri June 6, 2000 9 EX-12 3 0003.txt
Exhibit 12 THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES FOR THE FIVE FISCAL YEARS ENDED JANUARY 29, 2000 AND FOR THE THIRTEEN WEEKS ENDED APRIL 29, 2000, AND MAY 1, 1999 13 Weeks Ended Fiscal Year Ended April 29, May 1, Jan. 29, Jan. 30, Jan. 31, Feb. 1, Feb. 3, 2000 1999 2000 1999 1998 1997 1996 Earnings Available for Fixed Charges: Pretax earnings from continuing operations $ 200 $ 203 $ 1,523 $ 1,395 $ 1,279 $ 1,232 $ 1,160 Fixed charges (excluding interest capitalized and pretax preferred stock dividend requirements) 87 88 346 344 363 346 317 Dividends on ESOP Preference Shares (6) (6) (24) (25) (26) (26) (28) Capitalized interest amortization 2 2 7 7 6 6 5 283 287 1,852 1,721 1,622 1,558 1,454 Fixed Charges: Gross interest expense (a) $ 85 $ 85 $ 340 $ 339 $ 353 $ 341 $ 316 Interest factor attributable to rent expense 6 6 22 21 23 22 20 91 91 362 360 376 363 336 Ratio of Earnings to Fixed Charges 3.1 3.2 5.1 4.8 4.3 4.3 4.3 (a) Represents interest expense on long-term and short-term debt, ESOP debt and amortization of debt discount and debt issue expense.
EX-27 4 0004.txt
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MAY DEPARTMENT STORES COMPANY FORM 10-Q FOR THE QUARTER ENDED APRIL 29, 2000 AND IS QUALIFIED IN ITS ENTIRETY TO SUCH FINANCIAL STATEMENTS. 1,000,000 3-MOS FEB-03-2001 APR-29-2000 23 17 1,979 66 3,191 5,227 7,945 3,136 11,080 2,556 3,709 0 0 0 3,897 11,080 3,041 3,050 2,141 2,141 0 0 71 200 80 120 0 0 0 120 0.36 0.35
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