-----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, V/ZhzpLJE4m/9+fQbI4NZ7UI5z9W/PXP5OGDtQt6bQqCGIBk6NxrdMlVnJW80HUS vAHjrMl/ofykkRSzX2ZEYg== 0000006885-99-000044.txt : 19990914 0000006885-99-000044.hdr.sgml : 19990914 ACCESSION NUMBER: 0000006885-99-000044 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990731 FILED AS OF DATE: 19990913 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STAGE STORES INC CENTRAL INDEX KEY: 0000006885 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 760407711 STATE OF INCORPORATION: DE FISCAL YEAR END: 0130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-14035 FILM NUMBER: 99710487 BUSINESS ADDRESS: STREET 1: 10201 MAIN ST CITY: HOUSTON STATE: TX ZIP: 77025 BUSINESS PHONE: 7136675601 MAIL ADDRESS: STREET 1: 10201 MAIN STREET CITY: HOUSTON STATE: TX ZIP: 77025 FORMER COMPANY: FORMER CONFORMED NAME: APPAREL RETAILERS INC DATE OF NAME CHANGE: 19930908 10-Q 1 Form 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (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 31, 1999 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 001-14035 Stage Stores, Inc. (Exact name of registrant as specified in its charter) DELAWARE 76-0407711 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identifications No.) 10201 Main Street, Houston, 77025 Texas (Zip Code) (Address of principal executive offices) (713) 667-5601 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 (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 The number of shares of common stock of Stage Stores, Inc. outstanding as of September 7, 1999 was 26,832,284 shares of Common Stock and 1,250,584 shares of Class B Common Stock. PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS Stage Stores, Inc. Consolidated Condensed Balance Sheet (in thousands, except par values) (unaudited) July 31, 1999 January 30, 1999 ASSETS Cash and cash equivalents $ 8,970 $ 12,832 Undivided interest in accounts receivable trust 66,729 69,816 Merchandise inventories, net 362,498 341,316 Prepaid expenses and other current assets 71,153 84,473 Total current assets 509,350 508,437 Property, equipment and leasehold improvements, net 223,431 233,263 Goodwill, net 88,183 92,551 Other assets 19,220 23,429 Total assets $ 840,184 $ 857,680 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 71,655 $ 82,779 Accrued expenses and other current liabilities 42,715 52,706 Current portion of long-term debt 70,130 4,814 Total current liabilities 184,500 140,299 Long-term debt 444,186 487,968 Other long-term liabilities 26,616 25,021 Total liabilities 655,302 653,288 Preferred stock, par value $1.00, non- voting, 3 shares authorized, no shares issued or outstanding -- -- Common stock, par value $0.01, 75,000 shares authorized, 26,832 and 26,718 shares issued and outstanding, respectively 268 267 Class B common stock, par value $0.01, non-voting, 3,000 shares authorized, 1,250 shares issued and outstanding 13 13 Additional paid-in capital 265,967 265,716 Accumulated deficit (75,372) (55,610) Accumulated other comprehensive income (5,994) (5,994) Stockholders' equity 184,882 204,392 Commitments and contingencies -- -- Total liabilities and stockholders' equity $ 840,184 $ 857,680 The accompanying notes are an integral part of this statement. Stage Stores, Inc. Consolidated Condensed Statement of Operations (in thousands, except per share amounts) (unaudited) Three Months Ended Six Months Ended July 31, 1999 August 1, 1998 July 31, 1999 August 1, 1998 Net sales $ 269,848 $ 271,805 $ 532,439 $ 544,593 Cost of sales and related buying, occupancy and distribution expenses 195,827 189,566 388,059 375,129 Gross profit 74,021 82,239 144,380 169,464 Selling, general and administrative expenses 66,888 67,853 128,107 129,483 Store opening and closure program costs 15,465 1,708 16,214 2,025 Operating income (8,332) 12,678 59 37,956 Interest, net 12,646 11,423 24,757 21,890 Income (loss) before income tax and cumulative effect of a change in accounting principle (20,978) 1,255 (24,698) 16,066 Income tax expense (benefit) (5,887) 490 (7,338) 6,266 Income (loss) before cumulative effect of a change in accounting principle (15,091) 765 (17,360) 9,800 Cumulative effect of a change in accounting principle, net of tax - reporting costs of start-up activities -- -- (2,402) -- Net income (loss) $ (15,091) $ 765 $ (19,762) $ 9,800 Basic earnings (loss) per common share data: Basic earnings (loss) per common share before cumulative effect of a change in accounting principle $ (0.54) $ 0.03 $ (0.62) $ 0.35 Cumulative effect of a change in accounting principle, net of tax - reporting costs of start-up activities -- -- (0.09) -- Basic earnings (loss) per common share $ (0.54) $ 0.03 $ (0.71) $ 0.35 Basic weighted average common shares outstanding 28,022 27,874 27,990 27,833 Diluted earnings (loss) per common share data: Diluted earnings (loss) per common share before cumulative effect of a change in accounting principle $ (0.54) $ 0.03 $ (0.62) $ 0.34 Cumulative effect of a change in accounting principle, net of tax - reporting costs of start-up activities -- -- (0.09) -- Diluted earnings (loss) per common share $ (0.54) $ 0.03 $ (0.71) $ 0.34 Diluted weighted average common shares outstanding 28,022 28,582 27,990 28,569 The accompanying notes are an integral part of this statement. Stage Stores, Inc. Consolidated Condensed Statement of Cash Flows (in thousands) (unaudited) Six Months Ended July 31, 1999 August 1, 1998 Cash flows from operating activities: Net income (loss) $ (19,762) $ 9,800 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 27,578 14,411 Deferred income taxes (2,120) 513 Accretion of discount 591 527 Amortization of debt issue costs 1,517 1,205 Cumulative effect of a change in accounting principle 2,402 -- Change in working capital (24,218) (78,067) Total adjustments 5,750 (61,411) Net cash used in operating activities (14,012) (51,611) Cash flows from investing activities: Additions to property, equipment and leasehold improvements (11,045) (56,837) Net cash used in investing activities (11,045) (56,837) Cash flows from financing activities: Proceeds from working capital facility 23,300 103,500 Proceeds from issuance of common stock 252 715 Payments on long-term debt (2,357) (192) Net cash provided by financing activities 21,195 104,023 Net decrease in cash and cash equivalents (3,862) (4,425) Cash and cash equivalents: Beginning of period 12,832 23,315 End of period $ 8,970 $ 18,890 Supplemental disclosure of cash flow information: Interest paid $ 22,311 $ 17,484 Income taxes paid (refunded) $ 162 $ (2,837) The accompanying notes are an integral part of this statement. Stage Stores, Inc. Consolidated Statement of Stockholders' Equity For the Six Months Ended July 31, 1999 (in thousands) Shares Outstanding Shares of common stock issued: Beginning balance 26,718 Issuance of stock 114 Ending balance 26,832 Shares of Class B stock issued: Beginning balance 1,250 Ending balance 1,250 Stockholders' Equity Common stock issued: Beginning balance $ 267 Issuance of stock 1 Ending balance 268 Class B stock issued: Beginning balance 13 Ending balance 13 Additional Paid-in Capital: Beginning balance 265,716 Issuance of stock 251 Ending balance 265,967 Accumulated deficit and accumulated other comprehensive income: Beginning balance (61,604) Comprehensive income (loss): Net income (loss) (19,762) Other comprehensive income (loss) -- Total comprehensive income (loss) (19,762) Ending balance (81,366) Total Stockholders' Equity $ 184,882 Accumulated other comprehensive income: Beginning balance $ (5,994) Ending balance $ (5,994) The accompanying notes are an integral part of this statement. Stage Stores, Inc. Notes to Unaudited Consolidated Condensed Financial Statements 1. The accompanying unaudited consolidated condensed financial statements of Stage Stores, Inc. ("Stage Stores") have been prepared in accordance with Rule 10-01 of Regulation S-X and do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. Those adjustments, which include only normal recurring adjustments that are in the opinion of management necessary for a fair presentation of the results of the interim periods, have been made. The results of operations for such interim periods are not necessarily indicative of the results of operations for a full year. The unaudited consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended January 30, 1999 filed with Stage Stores' Annual Report on Form 10-K. The fiscal years discussed herein end on the Saturday nearest to January 31 in the following calendar year. For example, references to "1999" mean the fiscal year ending January 29, 2000. Stage Stores conducts its business primarily through its wholly owned subsidiary Specialty Retailers, Inc. ("SRI") which, as of July 31, 1999, operated 683 family apparel stores in thirty- four states located throughout the United States. Stage Stores and SRI are collectively referred to herein as the "Company". 2. Pursuant to the accounts receivable securitization program (the "Accounts Receivable Program"), an indirect wholly owned subsidiary of the Company, SRI Receivables Purchase Co., Inc. ("SRPC") purchases the accounts receivable generated by the Company's private label credit card program. Such accounts receivable are transferred to a master trust (the "Trust") which has issued certain certificates to third parties representing undivided interests in the Trust. SRPC owns an undivided interest in the accounts receivable not supporting the certificates issued to third parties by the Trust as set forth in the accompanying Consolidated Condensed Balance Sheet. SRPC is a separate corporate entity from the Company and SRPC's creditors have a claim on its assets prior to those assets becoming available to any creditor of the Company. 3. During the first quarter of 1999, the Company adopted the Accounting Standards Executive Committee's Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities" ("SOP 98-5") which requires costs of start-up activities and organization costs be expensed as incurred. The initial adoption of SOP 98-5 during the quarter, reported as the cumulative effect of a change in accounting principle, resulted in an after tax charge of $2.4 million. 4. During the second quarter of 1999, the Company announced a store closure program under which the Company will close approximately 35 underperforming stores. Four of these stores were closed during the second quarter of 1999 and the remaining stores will be closed during the third quarter of 1999 after the completion of their respective inventory liquidation programs. In connection with the store closure program, the Company recorded $22.8 million of pretax costs during the second quarter of 1999, of which $7.3 million is included in cost of sales while the remaining $15.5 million is included in store opening and closure program costs. Of the total $22.8 million charge, approximately $2.5 million represents severance and lease termination costs, approximately $1.6 million represents operating costs for the stores in the closure program for the second quarter of 1999 and the remainder are non-cash charges of which approximately $7.3 million represents a lower of cost or market reserve related to the inventory to be liquidated in the stores to be closed, while the balance relates primarily to the write-off of fixed assets and intangibles associated with the stores in the closure program. 5. The consolidating condensed financial information for Stage Stores and its wholly owned subsidiaries is presented to satisfy disclosure requirements pursuant to Sections 13 and 15(d) of the Securities Exchange Act of 1934 with respect to wholly owned subsidiaries of Stage Stores. Stage Stores does not prepare separate financial statements and related disclosures for its wholly owned subsidiaries SRI and Specialty Retailers, Inc. (NV) because management has determined that such information is not material to investors. SRI is the primary obligor under the 8.5% Senior Notes due 2005 and 9% Senior Subordinated Notes due 2007 (see Note 5 to the Company's Consolidated Financial Statements filed with Stage Stores' Annual Report on Form 10-K for the year ended January 30, 1999). Stage Stores and Specialty Retailers, Inc. (NV), a wholly owned subsidiary of Stage Stores which was incorporated during June 1997, are guarantors of such indebtedness. SRPC securitizes the credit receivables of the Company. The results of operations of SRPC are not indicative of the total operating performance of the Company's Accounts Receivable Program. For a summary of the total consolidated operating performance of the Company's Accounts Receivable Program see Note 3 to the Company's Consolidated Financial Statements filed with Stage Stores' Annual Report on Form 10-K for the year ended January 30, 1999. The following consolidating condensed financial information for Stage Stores and its wholly-owned subsidiaries, including all significant intercompany transactions eliminated in consolidation, are presented below. Consolidating Condensed Balance Sheet July 31, 1999 (in thousands, unaudited) SRI Specialty Receivables SRI SRI Retailers, Inc. Purchase Co. Eliminations Consolidated ASSETS Cash and cash equivalents $ 7,022 $ -- $ -- $ 7,022 Undivided interest in accounts receivable trust (11,571) 78,300 -- 66,729 Merchandise inventories, net 362,498 -- -- 362,498 Prepaid expenses and other current assets 65,403 5,750 -- 71,153 Total current assets 423,352 84,050 -- 507,402 Property, equipment and leasehold improvements, net 221,809 -- -- 221,809 Goodwill, net 88,183 -- -- 88,183 Other assets 17,109 2,051 -- 19,160 Investment in subsidiaries 38,474 -- (38,474) -- Total assets $ 788,927 $ 86,101 $ (38,474) $ 836,554 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 71,655 $ -- $ -- $ 71,655 Accrued expenses and other current liabilities 39,954 2,749 -- 42,703 Current portion of long-term debt 70,130 -- -- 70,130 Total current liabilities 181,739 2,749 -- 184,488 Long-term debt 414,186 30,000 -- 444,186 Intercompany notes/advances 165,546 14,878 -- 180,424 Other long-term liabilities 26,616 -- -- 26,616 Total liabilities 788,087 47,627 -- 835,714 Preferred stock -- -- -- -- Common stock -- -- -- -- Class B common stock -- -- -- -- Additional paid-in capital 3,317 33,166 (33,166) 3,317 Accumulated earnings (deficit) 3,517 5,308 (5,308) 3,517 Accumulated other comprehensive income (5,994) -- -- (5,994) Stockholders' equity 840 38,474 (38,474) 840 Total liabilities and stockholders' equity $ 788,927 $ 86,101 $ (38,474) $ 836,554 Consolidating Condensed Balance Sheet July 31, 1999 (in thousands, unaudited) Specialty Stage Retailers, Inc. Stage Stores Stores, Inc. (NV) Eliminations Consolidated ASSETS Cash and cash equivalents $ 2 $ 1,946 $ -- $ 8,970 Undivided interest in accounts receivable trust -- -- -- 66,729 Merchandise inventories, net -- -- -- 362,498 Prepaid expenses and other current assets -- -- -- 71,153 Total current assets 2 1,946 -- 509,350 Property, equipment and leasehold improvements, net -- 1,622 -- 223,431 Goodwill, net -- -- -- 88,183 Other assets -- 60 -- 19,220 Investment in subsidiaries 184,909 -- (184,909) -- Total assets $ 184,911 $ 3,628 $(184,909) $ 840,184 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ -- $ -- $ -- $ 71,655 Accrued expenses and other current liabilities 12 -- -- 42,715 Current portion of long-term debt -- -- -- 70,130 Total current liabilities 12 -- -- 184,500 Long-term debt -- -- -- 444,186 Intercompany notes/advances 17 (180,441) -- -- Other long-term liabilities -- -- -- 26,616 Total liabilities 29 (180,441) -- 655,302 Preferred stock -- -- -- -- Common stock 268 -- -- 268 Class B common stock 13 -- -- 13 Additional paid-in capital 265,967 160,292 (163,609) 265,967 Accumulated earnings (deficit) (75,372) 23,777 (27,294) (75,372) Accumulated other comprehensive income (5,994) -- 5,994 (5,994) Stockholders' equity 184,882 184,069 (184,909) 184,882 Total liabilities and stockholders' equity $ 184,911 $ 3,628 $(184,909) $ 840,184 Consolidating Condensed Balance Sheet January 30, 1999 (in thousands, unaudited) SRI Specialty Receivables SRI SRI Retailers, Inc. Purchase Co. Eliminations Consolidated ASSETS Cash and cash equivalents $ 10,882 $ -- $ -- $ 10,882 Undivided interest in accounts receivable trust (13,228) 83,044 -- 69,816 Merchandise inventories, net 341,316 -- -- 341,316 Prepaid expenses and other current assets 77,648 6,825 -- 84,473 Total current assets 416,618 89,869 -- 506,487 Property, equipment and leasehold improvements, net 231,499 -- -- 231,499 Goodwill, net 92,551 -- -- 92,551 Other assets 18,967 4,402 -- 23,369 Investment in subsidiaries 37,886 -- (37,886) -- Total assets $ 797,521 $ 94,271 $ (37,886) $ 853,906 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 82,779 $ -- $ -- $ 82,779 Accrued expenses and other current liabilities 49,726 2,888 -- 52,614 Current portion of long-term debt 4,814 -- -- 4,814 Total current liabilities 137,319 2,888 -- 140,207 Long-term debt 457,968 30,000 -- 487,968 Intercompany notes/advances 151,273 23,497 -- 174,770 Other long-term liabilities 25,021 -- -- 25,021 Total liabilities 771,581 56,385 -- 827,966 Preferred stock -- -- -- -- Common stock -- -- -- -- Class B common stock -- -- -- -- Additional paid-in capital 3,317 32,130 (32,130) 3,317 Accumulated earnings (deficit) 28,617 5,756 (5,756) 28,617 Accumulated other comprehensive income (5,994) -- -- (5,994) Stockholders' equity 25,940 37,886 (37,886) 25,940 Total liabilities and stockholders' equity $ 797,521 $ 94,271 $ (37,886) $ 853,906 Consolidating Condensed Balance Sheet January 30, 1999 (in thousands, unaudited) Specialty Stage Retailers, Inc. Stage Stores Stores, Inc. (NV) Eliminations Consolidated ASSETS Cash and cash equivalents $ 2 $ 1,948 $ -- $ 12,832 Undivided interest in accounts receivable trust -- -- -- 69,816 Merchandise inventories, net -- -- -- 341,316 Prepaid expenses and other current assets -- -- -- 84,473 Total current assets 2 1,948 -- 508,437 Property, equipment and leasehold improvements, net -- 1,764 -- 233,263 Goodwill, net -- -- -- 92,551 Other assets -- 60 -- 23,429 Investment in subsidiaries 204,349 -- (204,349) -- Total assets $ 204,351 $ 3,772 $(204,349) $ 857,680 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ -- $ -- $ -- $ 82,779 Accrued expenses and other current liabilities 92 -- -- 52,706 Current portion of long-term debt -- -- -- 4,814 Total current liabilities 92 -- -- 140,299 Long-term debt -- -- -- 487,968 Intercompany notes/advances (133) (174,637) -- -- Other long-term liabilities -- -- -- 25,021 Total liabilities (41) (174,637) -- 653,288 Preferred stock -- -- -- -- Common stock 267 -- -- 267 Class B common stock 13 -- -- 13 Additional paid-in capital 265,716 160,040 (163,357) 265,716 Accumulated earnings (deficit) (55,610) 18,369 (46,986) (55,610) Accumulated other comprehensive income (5,994) -- 5,994 (5,994) Stockholders' equity 204,392 178,409 (204,349) 204,392 Total liabilities and stockholders' equity $ 204,351 $ 3,772 $(204,349) $ 857,680 Consolidating Condensed Statement of Operations Six Months Ended July 31, 1999 (in thousands, unaudited) SRI Specialty Receivables SRI SRI Retailers, Inc. Purchase Co. Eliminations Consolidated Net sales $ 532,439 $ -- $ -- $ 532,439 Cost of sales and related buying, occupancy and distribution expenses 388,059 -- -- 388,059 Gross profit 144,380 -- -- 144,380 Selling, general and administrative expenses 131,504 (3,298) -- 128,206 Store opening and closure program costs 16,214 -- -- 16,214 Operating income (loss) (3,338) 3,298 -- (40) Interest expense, net 30,813 2,095 -- 32,908 Income (loss) before income taxes (34,151) 1,203 -- (32,948) Income tax expense (benefit) (10,694) 445 -- (10,249) Income (loss) before equity in net earnings of subsidiaries and cumulative effect of a change in accounting principle (23,457) 758 -- (22,699) Equity in net earnings of subsidiaries (448) -- 448 -- Income (loss) before cumulative effect of a change in accounting principle (23,905) 758 448 (22,699) Cumulative effect of a change in accounting principle, net of tax - reporting costs of start-up activities (1,196) (1,206) -- (2,402) Net income (loss) $ (25,101) $ (448) $ 448 $ (25,101) Consolidating Condensed Statement of Operations Six Months Ended July 31, 1999 (in thousands, unaudited) Specialty Stage Retailers, Inc. Stage Stores Stores, Inc. (NV) Eliminations Consolidated Net sales $ -- $ -- $ -- $ 532,439 Cost of sales and related buying, occupancy and distribution expenses -- -- -- 388,059 Gross profit -- -- -- 144,380 Selling, general and administrative expenses 69 (168) -- 128,107 Store opening and closure program costs -- -- -- 16,214 Operating income (loss) (69) 168 -- 59 Interest expense, net -- (8,151) -- 24,757 Income (loss) before income taxes (69) 8,319 -- (24,698) Income tax expense (benefit) -- 2,911 -- (7,338) Income (loss) before equity in net earnings of subsidiaries and cumulative effect of a change in accounting principle (69) 5,408 -- (17,360) Equity in net earnings of subsidiaries (19,693) -- 19,693 -- Income (loss) before cumulative effect of a change in accounting principle (19,762) 5,408 19,693 (17,360) Cumulative effect of a change in accounting principle, net of tax - reporting costs of start-up activities -- -- -- (2,402) Net income (loss) $ (19,762) $ 5,408 $ 19,693 $ (19,762) Consolidating Condensed Statement of Operations Six Months Ended August 1, 1998 (in thousands, unaudited) SRI Specialty Receivables SRI SRI Retailers, Inc. Purchase Co. Eliminations Consolidated Net sales $ 544,593 $ -- $ -- $ 544,593 Cost of sales and related buying, occupancy and distribution expenses 375,129 -- -- 375,129 Gross profit 169,464 -- -- 169,464 Selling, general and administrative expenses 129,859 (440) -- 129,419 Store opening and closure program costs 2,025 -- -- 2,025 Operating income (loss) 37,580 440 -- 38,020 Interest expense, net 31,004 (1,564) -- 29,440 Income (loss) before income taxes 6,576 2,004 -- 8,580 Income tax expense 2,887 743 -- 3,630 Income (loss) before equity in net earnings of subsidiaries 3,689 1,261 -- 4,950 Equity in net earnings of subsidiaries 1,261 -- (1,261) -- Net income $ 4,950 $ 1,261 $ (1,261) $ 4,950 Consolidating Condensed Statement of Operations Six Months Ended August 1, 1998 (in thousands, unaudited) Specialty Stage Retailers, Inc. Stage Stores Stores, Inc. (NV) Eliminations Consolidated Net sales $ -- $ -- $ -- $ 544,593 Cost of sales and related buying, occupancy and distribution expenses -- -- -- 375,129 Gross profit -- -- -- 169,464 Selling, general and administrative expenses 43 21 -- 129,483 Store opening and closure program costs -- -- -- 2,025 Operating income (loss) (43) (21) -- 37,956 Interest expense, net -- (7,550) -- 21,890 Income (loss) before income taxes (43) 7,529 -- 16,066 Income tax expense -- 2,636 -- 6,266 Income (loss) before equity in net earnings of subsidiaries (43) 4,893 -- 9,800 Equity in net earnings of subsidiaries 9,843 -- (9,843) -- Net income $ 9,800 $ 4,893 $ (9,843) $ 9,800 Consolidating Condensed Statement of Cash Flows Six Months Ended July 31, 1999 (in thousands, unaudited) SRI Specialty Receivables SRI SRI Retailers, Inc. Purchase Co. Eliminations Consolidated Cash flows from operating activities: Net cash used in operating activities $ (7,111) $ (6,647) $ -- $ (13,758) Cash flows from investing activities: Investment in subsidiary -- -- -- -- Additions to property, equipment and leasehold improvements (11,045) -- -- (11,045) Proceeds from the sales of accounts receivable, net (6,647) 6,647 -- -- Net cash provided by (used in) investing activities (17,692) 6,647 -- (11,045) Cash flows from financing activities: Proceeds from working capital facility 23,300 -- -- 23,300 Proceeds from issuance of common stock -- -- -- -- Proceeds from capital contribution -- -- -- -- Payments on long-term debt (2,357) -- -- (2,357) Net cash provided by (used in) financing activities 20,943 -- -- 20,943 Net decrease in cash and cash equivalents (3,860) -- -- (3,860) Cash and cash equivalents: Beginning of period 10,882 -- -- 10,882 End of period $ 7,022 $ -- $ -- $ 7,022 Consolidating Condensed Statement of Cash Flows Six Months Ended July 31, 1999 (in thousands, unaudited) Specialty Stage Retailers, Inc. Stage Stores Stores, Inc. (NV) Eliminations Consolidated Cash flows from operating activities: Net cash used in operating activities $ -- $ (254) $ -- $ (14,012) Cash flows from investing activities: Investment in subsidiary (252) -- 252 -- Additions to property, equipment and leasehold improvements -- -- -- (11,045) Proceeds from the sales of accounts receivable, net -- -- -- -- Net cash provided by (used in) investing activities (252) -- 252 (11,045) Cash flows from financing activities: Proceeds from working capital facility -- -- -- 23,300 Proceeds from issuance of common stock 252 -- -- 252 Proceeds from capital contribution -- 252 (252) -- Payments on long-term debt -- -- -- (2,357) Net cash provided by (used in) financing activities 252 252 (252) 21,195 Net decrease in cash and cash equivalents -- (2) -- (3,862) Cash and cash equivalents: Beginning of period 2 1,948 -- 12,832 End of period $ 2 $ 1,946 $ -- $ 8,970 Consolidating Condensed Statement of Cash Flows Six Months Ended August 1, 1998 (in thousands, unaudited) SRI Specialty Receivables SRI SRI Retailers, Inc. Purchase Co. Eliminations Consolidated Cash flows from operating activities: Net cash used in operating activities $ (45,964) $ (5,633) $ -- $ (51,597) Cash flows from investing activities: Intercompany notes/advances (1,285) -- -- (1,285) Additions to property, equipment and leasehold improvements (56,837) -- -- (56,837) Proceeds from the sales of accounts receivable, net (6,640) 6,640 -- -- Dividend from subsidiary 1,007 -- (1,007) -- Net cash provided by (used in) investing activities (63,755) 6,640 (1,007) (58,122) Cash flows from financing activities: Proceeds from working capital facility 103,500 -- -- 103,500 Proceeds from issuance of common stock -- -- -- -- Payments on long-term debt (192) -- -- (192) Dividend paid -- (1,007) 1,007 -- Net cash provided by (used in) financing activities 103,308 (1,007) 1,007 103,308 Net decrease in cash and cash equivalents (6,411) -- -- (6,411) Cash and cash equivalents: Beginning of period 23,299 -- -- 23,299 End of period $ 16,888 $ -- $ -- $ 16,888 Consolidating Condensed Statement of Cash Flows Six Months Ended August 1, 1998 (in thousands, unaudited) Specialty Stage Retailers, Inc. Stage Stores Stores, Inc. (NV) Eliminations Consolidated Cash flows from operating activities: Net cash used in operating activities $ (14) $ -- $ -- $ (51,611) Cash flows from investing activities: Intercompany notes/advances (715) 2,000 -- -- Additions to property, equipment and leasehold improvements -- -- -- (56,837) Proceeds from the sales of accounts receivable, net -- -- -- -- Dividend from subsidiary -- -- -- -- Net cash provided by (used in) investing activities (715) 2,000 -- (56,837) Cash flows from financing activities: Proceeds from working capital facility -- -- -- 103,500 Proceeds from issuance of common stock 715 -- -- 715 Payments on long-term debt -- -- -- (192) Dividend paid -- -- -- -- Net cash provided by (used in) financing activities 715 -- -- 104,023 Net decrease in cash and cash equivalents (14) 2,000 -- (4,425) Cash and cash equivalents: Beginning of period 16 -- -- 23,315 End of period $ 2 $ 2,000 $ -- $ 18,890 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. Certain items discussed or incorporated by reference herein contain forward-looking statements that involve risks and uncertainties including, but not limited to, the ability to obtain financing on terms reasonably satisfactory to the Company and the seasonality of demand for apparel which can be affected by weather patterns, levels of competition, competitors' marketing strategies, changes in fashion trends, availability of product on normal payment terms and the failure to achieve the expected results of merchandising and marketing plans and store opening or closing plans. The occurrence of any of the above could have a material adverse impact on the Company's operating results. See additional risk factors discussed in the Company's Annual Report on Form 10-K. Certain information herein contains estimates which represent management's best judgement as of the date hereof based on information currently available; however, the Company does not intend to update this information to reflect developments or information obtained after the date hereof and disclaims any legal obligation to the contrary. General Overview. The Company operates the store of choice for nationally recognized brand name family apparel, accessories, cosmetics and footwear in over 500 small towns and communities throughout the United States. The Company has recognized the high level of brand awareness and demand for fashionable, quality apparel by consumers in small markets and has identified these markets as a profitable and underserved niche. The Company has developed a unique franchise focused on these small markets, differentiating itself from the competition by offering a broad range of brand name merchandise with a high level of customer service in convenient locations. The financial information, discussion and analysis that follow should be read in conjunction with the Company's Consolidated Financial Statements included in the Company's 1998 Annual Report on Form 10-K. Results of Operations Sales for the three months ended July 31, 1999 decreased 0.7% to $269.8 million from $271.8 million in the comparable period of 1998. Comparable store sales decreased 5.7% for the three months ended July 31, 1999. Sales results for the three months ended July 31, 1999 were negatively impacted by a reduction in the number of promotional events and a lower level of price discounting during the second quarter of 1999 as compared to the second quarter of 1998. The reduction in promotional events included, among other things, a shift in the timing of the Company's traditional July Back to School Promotion into the third quarter of 1999 to coincide with Texas' inaugural sales tax holiday period which ran from August 6 through August 8, 1999. For the six months ended July 31, 1999 sales results decreased 2.2% to $532.4 million from $544.6 million in the comparable period of 1998. Comparable store sales decreased 7.9% for the six months ended July 31, 1999. Sales results for the six months ended July 31, 1999 reflect the impact on the first quarter of the heavy promotional and inventory management activities which were put into place during the fall of 1998. These initiatives negatively impacted the Company's merchandise mix and to a lesser extent the Company's customer base. As a result, the Company began the first part of the year with significantly lower levels of inventory compared to the same period last year on a comparable store basis, particularly with respect to clearance merchandise. The lower levels of clearance inventory, as well as continued aggressive pricing on this clearance merchandise throughout February along with the factors discussed above which impacted sales in the second quarter of 1999 were significant contributors to the decline in comparable store sales for the six months ended July 31, 1999. Sales for the first six months of 1999 were also negatively impacted by the Company's efforts to transition and rebuild merchandise assortments as well as improving the merchandise mix across all merchandise categories. These efforts impacted the content and quantity of merchandise inventory in certain categories which depressed sales in these categories. Although the Company has made significant improvements in its merchandise mix during the first six months of 1999, this process will continue into the early part of the third quarter in certain merchandise categories. Gross profit decreased 10.0% to $74.0 million for the three months ended July 31, 1999 from $82.3 million in the comparable period of 1998. Gross profit as a percent of sales decreased to 27.4% for the three months ended July 31, 1999 from 30.3% in 1998. Gross margin for the second quarter of 1999 included a $7.3 million provision related to the store closure program as discussed below. Prior to this provision, gross margin was $81.3 million, or 30.1% of sales, for the second quarter of 1999. The decline in gross profit as a percent of sales for the second quarter of 1999 reflects the negative leverage associated with the Company's fixed buying, occupancy and distribution expenses which are included in cost of goods sold offset by a 100 basis point improvement in the Company's merchandise margin during the second quarter of 1999. The improvement in the merchandise margin was the result of the reduction in the number of promotional events and level of discounting during the quarter, as discussed above. For the six months ended July 31, 1999 gross profit decreased 14.8% to $144.4 million from $169.5 million in the comparable period of 1998. Gross profit as a percent of sales decreased to 27.1% for the six months ended July 31, 1999 from 31.1% in 1998. The decline in gross margin as a percent of sales reflects the impact during the first quarter of 1999 of aggressive pricing on clearance inventory in February, lower vendor discounts on new store inventory purchases and reduced levels of store grand opening sales, which typically carry a higher level of gross margin and the $7.3 million provision associated with the store closure program as discussed below. Also impacting gross margin for 1999 is the negative sales leverage associated with the Company's fixed buying, occupancy and distribution expenses which are included in cost of goods sold. Selling, general and administrative expenses for the three months ended July 31, 1999 decreased 1.5% to $66.9 million from $67.9 million for the comparable period of 1998 and, as a percentage of sales, decreased to 24.8% from 25.0%. For the six months ended July 31, 1999 selling, general and administrative expenses decreased 1.1% to $128.1 million from $129.5 million in the comparable period of 1998 and, as a percentage of sales, increased to 24.1% from 23.8% in the comparable period of 1998. Selling, general and administrative expenses for the first six months of 1999 benefited from the positive impact of the Company's credit card bank which became operational in the third quarter of 1998 along with approximately $4.7 million of reduced payroll and payroll related costs as well as the Company's continued effort in controlling selling, general and administrative expenses. The reduction in payroll related costs was primarily associated with reduced vacation expense resulting from a change in the Company's employee benefit program during the first quarter of this year. Store opening and closure program costs for the three months ended July 31, 1999 reflect the costs associated with the store closure program implemented during the second quarter. The store closure program will result in the closure of approximately 35 underperforming stores. Four of these stores were closed during the second quarter of 1999 and the remaining stores will be closed during the third quarter of 1999 after the completion of their respective inventory liquidation programs. In connection with the store closure program, the Company recorded $22.8 million of pretax costs during the second quarter of 1999, of which $7.3 million is included in cost of sales while the remaining $15.5 million is included in store opening and closure program costs. Of the total $22.8 million charge, approximately $2.5 million represents severance and lease termination costs, approximately $1.6 million represents operating costs for the stores in the closure program for the second quarter of 1999 and the remainder are non-cash charges of which approximately $7.3 million represents a lower of cost or market reserve related to the inventory to be liquidated in the stores to be closed, while the balance relates primarily to the write-off of fixed assets and intangibles associated with the stores in the closure program. There were no new store opening costs incurred during the second quarter of 1999 as the current year store opening program was completed during the first quarter, and in accordance with the adoption of SOP 98-5 in the first quarter, the opening costs associated with these stores were expensed at the time of opening. Store opening and closure program costs during the prior year were related to new store opening costs which were expensed over the year in which the store was opened. As a result of the factors discussed above, the Company had an operating loss of $8.3 million for the three months ended July 31, 1999 as compared to operating income of $12.7 million in the comparable period in 1998. For the six months ended July 31, 1999, operating income decreased to $0.1 million from $38.0 million for the same period of 1998. Net interest expense for the three months ended July 31, 1999 increased 10.5% to $12.6 million from $11.4 million for the comparable period in 1998 due to a higher level of average borrowings outstanding. Net interest expense for the six months ended July 31, 1999 increased 13.2% to $24.8 million from $21.9 million for the comparable period in 1998 also due to a higher level of average borrowings outstanding associated with the Company's expansion program and poor operating results in the fall of 1998 and the first six months of 1999. As a result of the foregoing, the Company's net loss for the three months ended July 31, 1999 was $15.1 million as compared to net income of $0.8 million for the comparable period in 1998. The Company's net loss before the cumulative effect of a change in accounting principle for the six months ended July 31, 1999 was $17.4 million as compared to net income of $9.8 million for the comparable period in 1998. In connection with the adoption of SOP 98-5, the Company recorded a cumulative effect of a change in accounting principle, net of tax charge of $2.4 million during the first quarter of 1999. The charge reflects the write-off of the unamortized organizational costs associated with the Company's accounts receivable trust and the recently formed credit card bank. Seasonality and Inflation The Company's business is seasonal and its quarterly sales and profits are traditionally lower during the first three quarters (February through October) and higher during the fourth quarter (November through January). In addition, working capital requirements fluctuate throughout the year, increasing substantially in October and November due to requirements for significantly higher inventory levels in anticipation of the holiday season. During 1998, the Company experienced poor sales and results of operations beginning in the second quarter which impacted these traditional trends during those periods. The following table shows certain unaudited financial information for the Company by quarter (dollars in thousands): 1999 1998 Q1 Q2 Q1 Q2 Q3 Q4 Net sales $ 262,591 $ 269,848 $ 272,788 $ 271,805 $ 271,605 $ 357,349 Gross profit 70,359 74,021 87,225 82,239 75,252 89,593 Operating income (loss) 8,391 (8,332) 25,278 12,678 7,226 7,458 Quarters' operating income as a percent of total -- -- 48% 24% 14% 14% Income (loss) before cumulative effect of a change in accounting principle $ (2,269) $ (15,091) $ 9,035 $ 765 $ (3,152) $ (2,934) Net income (loss) $ (4,671) $ (15,091) $ 9,035 $ 765 $ (3,152) $ (2,934) The Company does not believe that inflation had a material effect on its results of operations during the past two years. However, there can be no assurance that the Company's business will not be affected by inflation in the future. Liquidity and Capital Resources Total working capital decreased $43.2 million to $324.9 million at July 31, 1999 from $368.1 million at January 30, 1999. The most significant changes in working capital were: (i) an increase in inventories associated with the seasonal build of inventories offset by (ii) the inclusion of $65.3 million of the outstanding balance under the Company's $100 million working capital and letter of credit facility and the $100 million expansion revolving credit facility (the "Credit Facility") in current portion of long-term debt. This amount reflects the requirement contained in the Credit Facility agreement to reduce the aggregate balance under the facility to $100.0 million for a period of 45 days prior to July 2000. Outstanding borrowings under the Credit facility were $165.3 million at July 31, 1999 as compared to $142.0 million at January 30, 1999. The entire balance outstanding at January 30, 1999 was included in long-term debt as the Credit Facility was modified to allow a maximum of $170.0 million to be outstanding for thirty days during the period of January 27, 1999 through July 31, 1999. The Company's primary capital requirements are for working capital, debt service and capital expenditures. Based upon the current capital structure, management anticipates cash interest payments to be approximately $44.0 million during each of 1999 and 2000. Capital expenditures are generally for new store openings, remodeling of existing stores and customary store maintenance. Capital expenditures for the first six months of 1999 were $11.1 million as compared to $56.8 million for the comparable period of 1998. The reduction was a result of a decrease in the number of new stores opened as well as the completion of the conversion of the remaining CR Anthony stores to the Company's format and trade names, which occurred during the first and second quarters of 1998. Management expects capital expenditures to be approximately $23.0 million during 1999, consisting primarily of 10 new store openings, remodeling of existing stores and the implementation of a new merchandising system. Required aggregate principal payments on existing debt, excluding the Credit Facility, total $4.8 million and $34.8 million for 1999 and 2000, respectively. Included in the $34.8 million of principle repayments in 2000 are the $30.0 million in aggregate principle amount 12.5% Trust Certificate-Backed Notes ("SRPC Notes"). The SRPC Notes are collateralized by the retained interest in the Accounts Receivable Program. Principle repayments on the SRPC Notes are scheduled to begin during December 2000. The Company currently expects to refinance the SRPC Notes prior to that date. Therefore, the Company does not believe this will have an impact on its liquidity or cash flow for 1999 or 2000 although there can be no assurances that the Company will successfully refinance the SRPC Notes on terms favorable to the Company. The Company's current short-term liquidity needs are provided by (i) existing cash balances, (ii) operating cash flows, (iii) the Accounts Receivable Program, (iv) the Credit Facility (v) and normal trade credit terms from the vendor and factor community. The Company expects to fund its long-term liquidity needs from its operating cash flows, the issuance of debt and/or equity securities, the securitization of its accounts receivable and bank borrowings. Outstanding borrowings under the Credit Facility were $165.3 million at July 31, 1999 and $145.3 million at August 28, 1999 as compared to $149.2 million at August 1, 1998 and $160.5 million at August 29, 1998. The Company had $22.9 million of availability under the Credit Facility at July 31, 1999 and $43.8 million at August 28, 1999. The outstanding balances under the revolving certificates associated with the Accounts Receivable Program were $102.9 million and $115.6 million at July 31, 1999 and January 30, 1999, respectively, while outstanding balances under the term certificates were $165.0 million at both July 31, 1999 and January 30, 1999. Principal repayments under the term certificates are scheduled to commence on December 31, 1999. However, the Company currently expects to refinance these certificates prior to that date. Therefore, the Company does not believe this will have an impact on its liquidity or cash flow for 1999 although there can be no assurances that the Company will successfully refinance the Accounts Receivable Program on terms favorable to the Company. The Company continually monitors its liquidity position and compliance with its various debt agreements. During the third and fourth quarters of 1998, the Company's Credit Facility was amended to lessen certain covenant requirements and clarify certain defined terms contained in the Credit Facility. In addition, the Credit Facility was modified to allow a maximum of $170.0 million of borrowings to be outstanding for thirty days during the period from January 27, 1999 through July 31, 1999. This requirement had been satisfied as of February 25, 1999. The Company believes the current covenant levels provide sufficient flexibility to allow the Company to execute its business plan. Management believes that funds provided by operations, together with funds available under the Credit Facility, the Accounts Receivable Program and the normal trade credit terms from the vendor and factor community will be adequate to meet the Company's anticipated requirements for working capital, interest payments, planned capital expenditures and principal payments on debt. Estimates as to working capital needs and other expenditures may be materially affected if the foregoing sources are not available or do not otherwise provide sufficient funds to meet the Company's obligations. Year 2000 The Year 2000 issue relates to the way computer systems and programs define calendar dates. They could fail or make miscalculations due to interpreting a date including "00" to mean 1900, not 2000. Also, other systems and equipment may contain imbedded hardware or software that may have a time element and affect their operation. The Company began working on the Year 2000 compliance issue in 1996 and heightened its focus and resource commitment in 1997 with the establishment of a formalized project plan and management oversight function. The Company has divided its Year 2000 risk assessment and remediation efforts into the following three categories: information systems, peripheral systems and hardware and third party vendors. The Company has completed the evaluation of its critical information systems infrastructure for Year 2000 compliance and has developed detailed work plans to achieve compliance prior to possible system failures. The systems have been segregated into the following five logical, manageable groups: (1) human resource, time keeping and payroll systems (2) point-of-sale and sales audit systems (3) credit systems (4) financial reporting and accounts payable systems and (5) merchandising systems. Year 2000 remediation is being addressed through a combination of modifications or upgrades to existing applications or replacement. The Company has dedicated in-house resources and has contracted with third party vendors to complete the necessary coding changes, testing and installation. In August of 1999, the Company completed the installation of a new merchandising system which is year 2000 compliant. The Company is currently addressing various post-implementation issues; however, the Company does not anticipate that these issues will have a material impact on the results of operations of the Company. The Company believes Year 2000 readiness related to critical information systems infrastructure is substantially complete. In addition, the Company has substantially completed an inventory of its major peripheral systems and hardware and is in the process of assessing and remediating Year 2000 non-compliance issues. These include, but are not limited to, communications networks, personal computers and network systems, printers, store register systems and processors, scanners and emergency power systems. The Company believes Year 2000 readiness related to peripheral systems and hardware is substantially complete. The Company's plan is to have addressed its significant Year 2000 issues prior to being affected by them. However, if the Company identifies additional risks related to Year 2000 compliance or its progress in planned remediation efforts deviates from the anticipated timeline, the Company will develop contingency plans as deemed necessary at that time. The aggregate cost of the Company's Year 2000 efforts paid to third parties to assist in remediation has been approximately $2.3 million. These costs are being expensed as incurred. These amounts do not include any costs associated with the implementation of contingency plans or the cost associated with the replacement of information systems, hardware or equipment, substantially all of which would be capitalized. The failure to correct a material Year 2000 problem could result in an interruption in certain normal business activities or operations. Presently, the Company does not anticipate any material disruption in its operations as a result of any failure by the Company to be in compliance. The Company has limited information concerning Year 2000 compliance status of its suppliers. The Company has, however, identified its major suppliers and has sent a survey letter which is being used to evaluate the potential risk to the Company if these vendors fail to remedy their Year 2000 issues. In the event that the Company or any of its significant suppliers does not successfully and timely achieve Year 2000 compliance, the Company's business or operations could be adversely affected. PART II - OTHER INFORMATION Item 1. Legal Proceedings From time to time the Company and its subsidiaries are involved in various litigation matters arising in the ordinary course of its business. In addition, on March 30, 1999, a class action lawsuit was filed against the Company and certain of its officers, directors and stockholders in the United States District Court for the Southern District of Texas by John C. Weld, Jr., a stockholder who purchased 125 shares of the Company's common stock on August 3, 1998, alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder (the "Weld Suit"). The Company believes that the allegations of the Weld Suit are without merit and intends to defend the case vigorously. On July 23, 1999, the Company filed a motion to dismiss the Weld Suit. The United States District Court for the Southern District of Texas is not expected to render a final opinion on the motion to dismiss before the fall of 1999 or spring of 2000. Management believes that none of the matters in which the Company or its subsidiaries are currently involved, either individually or in the aggregate, is material to the financial position, results of operations or cash flows of the Company or its subsidiaries. Item 2. Changes in Securities None. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders. The 1999 Annual Meeting of Shareholders of the Company was held on May 13, 1999. The following matters were submitted to a vote of the Company's shareholders: 1. The election of eight directors (constituting the entire board of directors) for the ensuing year and until their successors are duly elected and qualified. The results of the election for each such director were as follows: Votes Directors Votes For Withheld Carl Tooker 23,281,060 98,045 Jack Bush 23,293,109 85,996 Harold Compton 23,296,029 83,076 Robert Huth 23,291,719 87,386 Richard Jolosky 23,293,819 85,286 James Marcum 23,282,240 96,865 David Thomas 23,296,219 82,886 John Wiesner 23,291,763 87,342 2. The ratification of the selection of PricewaterhouseCoopers LLP as the auditors to audit the consolidated financial statements of the Company and the financial statements of certain of its subsidiaries for the year ending January 29, 2000. The results of the vote with respect to such proposal were as follows: Votes Votes For Against Abstentions Ratification of Selection of Independent Auditors 23,352,928 20,720 5,457 3. The approval of the Amended and Restated 1996 Equity Incentive Plan. The results of the vote with respect such proposal were as follows: Votes Abstentions and Votes For Against Broker Non-Votes Approval of the Amended and Restated 1996 Equity Incentive Plan 9,936,624 8,932,942 4,509,539 Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 27.1 Financial Data Schedule. (b) Reports on Form 8-K The Company filed a News Release on Form 8-K dated May 6, 1999 related to Stage Stores, Inc. first quarter 1999 sales results. The Company filed a News Release on Form 8-K dated May 20, 1999 related to Stage Stores, Inc. first quarter 1999 results of operations. The Company filed a News Release on Form 8-K dated August 5, 1999 related to Stage Stores, Inc. second quarter 1999 sales results. The Company filed a News Release on Form 8-K dated August 19, 1999 related to Stage Stores, Inc. second quarter 1999 results of operations. 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. STAGE STORES, INC. September 10, 1999 /s/ Carl E. Tooker (Date) Carl E. Tooker Chairman, Chief Executive Officer and President (principal executive officer) September 10, 1999 /s/ James A. Marcum (Date) James A. Marcum Vice Chairman and Chief Financial Officer (principal financial and accounting officer) EX-27.1 2
5 THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE STAGE STORES, INC. CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1000 6-MOS JAN-29-2000 JUL-31-1999 8,970 0 0 0 362,498 509,350 223,431 0 840,184 184,500 444,186 281 0 0 184,601 840,184 532,439 532,439 388,059 388,059 0 0 24,757 (24,698) (7,338) (17,360) 0 (2,402) 0 (19,762) (0.71) (0.71)
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