-----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, GkMq8rPmsqQTE9FX5VufxMAfywy5qJ812rp0KFc2gZdHH/x4w0e41FTGTQl00Mxu QJ7tl3Mxab3nfKxQRD1/vg== 0000063416-03-000113.txt : 20030812 0000063416-03-000113.hdr.sgml : 20030812 20030812162315 ACCESSION NUMBER: 0000063416-03-000113 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030812 ITEM INFORMATION: FILED AS OF DATE: 20030812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAY DEPARTMENT STORES CO CENTRAL INDEX KEY: 0000063416 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 431104396 STATE OF INCORPORATION: DE FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00079 FILM NUMBER: 03837847 BUSINESS ADDRESS: STREET 1: 611 OLIVE ST CITY: ST LOUIS STATE: MO ZIP: 63101 BUSINESS PHONE: 3143426300 8-K 1 q2earnings8k.txt FORM 8K DATED AUGUST 12, 2003 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported)- August 12, 2003 THE MAY DEPARTMENT STORES COMPANY (Exact name of Registrant as specified in its charter) Delaware I-79 43-1104396 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 611 Olive Street, St. Louis, Missouri 63101 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (314) 342-6300 Item 7. Financial Statements and Exhibits. (c) Exhibits. The following document is furnished as an Exhibit. Exhibit No. Exhibit 99.1 Press Release, dated August 12, 2003 Item 12. Results of Operations and Financial Condition. On August 12, 2003, the registrant issued a press release announcing its financial results for the 13 and 26 weeks ending August 2, 2003. A copy of the press release is furnished herewith as Exhibit 99.1. SIGNATURE 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 hereunto duly authorized. THE MAY DEPARTMENT STORES COMPANY Dated: August 12, 2003 By: /s/ Richard A. Brickson Richard A. Brickson Secretary and Senior Counsel EX-99.1 CHARTER 3 earningsrelease2qtr.txt EARNINGS RELEASE DATED AUGUST 12, 2003 MAY NEWS THE MAY DEPARTMENT STORES COMPANY REPORTS RESULTS FOR THE SECOND QUARTER AND FIRST SIX MONTHS OF FISCAL 2003 ST. LOUIS, Aug. 12, 2003 - The May Department Stores Company [NYSE: MAY] today announced results for the second quarter of fiscal 2003. For the 13 weeks ended Aug. 2, 2003, net loss per share was 39 cents, compared with earnings per share of 22 cents in the similar period a year ago. Net loss was $110 million, compared with net earnings of $69 million the prior year. Second quarter 2003 results include a charge of $318 million, or 69 cents per share, for asset impairment and other costs related to the recently announced divestiture of 34 stores. Excluding these costs, second quarter 2003 earnings were $92 million, or 30 cents per share. Second quarter 2002 earnings include $59 million, or 12 cents per share, of division combination costs. Excluding this charge, second quarter 2002 net earnings were $106 million, or 34 cents per share. Second-quarter net sales were $3.00 billion, a 1.0% decrease, compared with $3.03 billion in 2002. Store-for-store sales decreased 3.1% for the quarter. For the six months ended Aug. 2, 2003, net loss per share was 16 cents, compared with earnings per share of 45 cents in 2002. Net loss was $38 million versus net earnings of $139 million a year ago. Results for the first six months of 2003 include store divestiture costs of $318 million, or 69 cents per share, and a $31 million, or 10 cents per share, tax credit recorded following the resolution of various federal and state income tax issues. Results for the first six months of 2002 include division combination charges of $99 million, or 20 cents per share. Net sales for the first six months of 2003 were $5.87 billion, a 4.1% decrease, compared with $6.13 billion in the similar 2002 period. Store-for-store sales decreased 6.0% for the first half of fiscal 2003. During the 2003 second quarter, the company announced its intention to divest 32 Lord & Taylor stores, a Famous-Barr store, and a Jones Store location. When the divestitures are completed, the company expects to save approximately $50 million, or 10 cents per share, annually. May also announced the acquisition of Modern Tuxedo, the leading tuxedo rental and sales retailer in the Chicago metropolitan area, as well as a licensing agreement with Hearst Magazines to jointly market a variety of home merchandise under the House Beautiful trademark beginning in 2005. - more - 2 Year-to-date, May has opened six new department stores: two Foley's stores in Houston, Texas, and Lake Charles, La.; two Kaufmann's stores - both in Columbus, Ohio; a Filene's store in Brockton, Mass.; and a Meier & Frank store in Ogden, Utah. Five department stores will open in the second half of 2003: a Lord & Taylor store in Miami; a Famous-Barr store in Columbia, Mo.; a Foley's store in Dallas; a Hecht's store in Richmond, Va.; and a Kaufmann's store in Pittsburgh. Year-to-date store openings for May's Bridal Group include 11 David's Bridal stores and three After Hours Formalwear stores, as well as 25 Modern Tuxedo stores acquired by After Hours. At the end of the second quarter, May operated 447 department stores under the names of Lord & Taylor, Famous-Barr, Filene's, Foley's, Hecht's, Kaufmann's, L.S. Ayres, Meier & Frank, Robinsons-May, Strawbridge's, and The Jones Store, as well as 191 David's Bridal stores, 259 After Hours Formalwear stores, and 10 Priscilla of Boston stores. May operates in 45 states, the District of Columbia, and Puerto Rico. # # # This release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. While this release reflects all available information and management's judgment and estimates of current and anticipated conditions and circumstances and is 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, our ability to hire and retain qualified associates, and our ability to manage the business to minimize the risk of disruption to sales and customer service as a result of the combinations. Because of these factors, actual performance could differ materially from that described in forward-looking statements. CONDENSED CONSOLIDATED FINANCIAL INFORMATION FOLLOWS 3 THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED RESULTS OF OPERATIONS (unaudited) (millions, except per share) 13 Weeks Ended 26 Weeks Ended Aug. 2, 2003 Aug. 3, 2002 Aug. 2, 2003 Aug. 3, 2002 % to % to % to % to $ Net Sales $ Net Sales $ Net Sales $ Net Sales Net sales $ 3,000 $ 3,030 $ 5,873 $ 6,126 Cost of sales: Recurring 2,118 70.6% 2,119 69.9% 4,206 71.6% 4,322 70.6% Restructuring markdowns - 0.0 20 0.7 - 0.0 20 0.3 Selling, general, and administrative expenses 657 21.9 657 21.7 1,297 22.1 1,315 21.5 Restructuring costs 318 10.6 39 1.3 318 5.4 79 1.3 Interest expense, net 80 2.7 86 2.8 160 2.7 169 2.7 Earnings (loss) before income taxes (173) (5.8) 109 3.6 (108) (1.8) 221 3.6 Provision (credit) for income taxes (63) 37.0* 40 36.6* (70) 65.4* 82 37.0* Net earnings (loss) $ (110) (3.6)% $ 69 2.3% $ (38) (0.6)% $ 139 2.3% Diluted earnings (loss) per share $ (0.39) $ 0.22 $ (0.16) $ 0.45 Excluding restructuring costs: Net earinings $ 92 3.1% $ 106 3.5% $ 163 2.8% $ 201 3.3% Diluted earnings per share $ 0.30 $ 0.34 $ 0.53 $ 0.65 Dividends paid per common share $ 0.24 $ 0.23-3/4 $ 0.48 $ 0.47-1/2 Diluted average shares and equivalents 289.8 308.9 289.8 308.9 * Percent represents effective income tax rate.
Net Sales - Percent Decrease from Prior Year Net sales include merchandise sales and lease department income. Store-for-store sales compare sales of stores open during both years beginning the first day a new store has prior-year sales and excludes sales of stores closed during both periods. 13 Weeks Ended 26 Weeks Ended Aug. 2, 2003 Aug. 2, 2003 Store-for- Store-for- Total Store Total Store (1.0)% (3.1)% (4.1)% (6.0)% 4 THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (unaudited) (millions) Aug. 2, Aug. 3, LIABILITIES AND Aug. 2, Aug. 3, ASSETS 2003 2002 SHAREOWNERS' EQUITY 2003 2002 Cash and cash equivalents $ 77 $ 96 Notes payable $ 138 $ - Accounts receivable, net 1,479 1,579 Current maturities of Merchandise inventories 2,932 2,993 long-term debt 164 268 Other current assets 83 55 Accounts payable and Total Current Assets 4,571 4,723 accrued expenses 2,094 2,135 Total Current Liabilities 2,396 2,403 Property and equipment, net 5,202 5,349 Goodwill and other intangibles 1,627 1,610 Long-term debt 3,934 4,327 Other assets 131 118 Deferred income taxes 816 716 Other liabilities 371 374 ESOP preference shares 249 279 Unearned compensation (91) (152) Shareowners' equity 3,856 3,853 Total Liabilities and Total Assets $ 11,531 $ 11,800 Shareowners' Equity $ 11,531 $ 11,800
THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited) (millions) 26 Weeks Ended Aug. 2, Aug. 3, 2003 2002 Operating activities: Net earnings (loss) $ (38) $ 139 Depreciation and amortization 280 262 Asset impairment 315 - Decrease in working capital and other 1 244 Total operating activities 558 645 Investing activities: Net additions to property and equipment (333) (377) Business combination (16) - Total investing activities (349) (377) Financing activities: Net issuances (payments) of notes payable and long-term debt (28) (91) Net (purchases) issuances of common stock (13) 12 Dividend payments (146) (145) Total financing activities (187) (224) Increase in cash and cash equivalents 22 44 Cash and cash equivalents, beginning of period 55 52 Cash and cash equivalents, end of period $ 77 $ 96
5 THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION Interim Results The unaudited condensed consolidated results of operations have been prepared in accordance with the company's accounting policies as described in the 2002 Annual Report to Shareowners and should be read in conjunction with that 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 this statement based on estimates for the entire year. Operating results of periods, which exclude the Christmas season, may not be indicative of the operating results that may be expected for the fiscal year. Cost of Sales For the 13 weeks ended Aug. 2, 2003, recurring cost of sales as a percent of net sales increased 0.7%, principally due to a 0.4% increase in occupancy costs and a 0.5% increase in the cost of merchandise. In addition, $20 million of restructuring markdowns were incurred in the second quarter of 2002 related to division combinations to conform merchandise assortments and to synchronize pricing and promotional strategies. For the 26 weeks ended Aug. 2, 2003, recurring cost of sales as a percent of net sales increased 1.0%, principally due to a 0.7% increase in occupancy costs and a 0.4% increase in the cost of merchandise. Selling, General, and Administrative Expenses (SG&A) SG&A expenses as a percent of net sales increased from 21.7% in the second quarter of 2002 to 21.9% in the second quarter of 2003, principally due to a 0.3% increase in pension costs and 0.4% in severance costs, offset by a 0.2% decrease in credit expense and a 0.5% decrease in payroll costs. SG&A expenses as a percent of net sales increased from 21.5% in the first six months of 2002 to 22.1% in the first six months of 2003. For the first six months of 2003, pension costs increased 0.3%, payroll costs increased 0.3%, and other expenses increased 0.3%, offset by a 0.3% decrease in credit expense. Restructuring Costs Store Divestitures In the second quarter of 2003, the company announced its intention to divest 34 department stores. The store divestitures will result in asset impairment, severance and other charges of approximately $382 million, of which $318 million were recognized in the second quarter of 2003. Approximately $50 million of the $382 million represents the cash cost of the store divestitures, not including the benefit from future tax credits. Division Combination Costs In 2002, charges of $114 million were recognized related to division combinations. Of these charges, $59 million were recognized in the second quarter of 2002, $20 million of which were included as cost of sales. Charges of $99 million were recognized in the first six months of 2002, $20 million of which were included as cost of sales. Income Taxes The effective tax rate for the first six months of 2003 was 65.4%, compared with 37.0% for the first six months of 2002. The change is due to a $31 million tax credit recorded in the first quarter of 2003 upon the resolution of various federal and state income tax issues. Excluding the $31 million tax credit, the company's estimated 2003 effective income tax rate is 37.0%. Diluted Average Shares and Equivalents Diluted average shares and equivalents for the 2003 second quarter and first six months of 2003 exclude 17 million ESOP shares because their effect is antidilutive. Trailing Years' Results Operating results for the trailing years were as follows(millions, except per share): 52 Weeks Ended Aug. 2, Aug. 3, 2003 2002 Net sales $ 13,238 $ 13,837 Net earnings $ 365 $ 622 Diluted earnings per share $ 1.15 $ 1.97 -----END PRIVACY-ENHANCED MESSAGE-----