EX-99 3 a4401701ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 The Bon-Ton Stores, Inc. Announces First Quarter Results; Earnings Per Share Improved from the Prior Year YORK, Pa.--(BUSINESS WIRE)--May 22, 2003--The Bon-Ton Stores, Inc. (NASDAQ:BONT) today reported results for the first quarter ended May 3, 2003. Income The Company reported a net loss of $2.9 million, or $0.20 per share, for the first quarter of fiscal 2003 compared to a net loss of $4.4 million, or $0.29 per share, for the first quarter of fiscal 2002. Sales As previously announced, first quarter comparable store sales for the quarter decreased 5.6%. Total sales for the thirteen weeks ended May 3, 2003 decreased 6.2% to $141.1 million from $150.5 million reported for the same period last year due to the continuing weak economy. Increases in coats, accessories and shoes were offset by decreases in men's, children's, junior's and misses'. Gross Margin/Inventory In the first quarter, the gross margin rate increased 3.7 percentage points to 37.0% this year versus 33.3% reported for the same period last year. At the end of the first quarter, inventory at retail decreased 1.6% compared to the prior year. Selling, General and Administrative Expenses Selling, general and administrative (SG&A) expenses increased $0.7 million from last year. The SG&A expense rate in the first quarter increased 2.8 percentage points to 36.4% of sales from 33.6% of sales for the prior year period, largely reflecting the sales shortfall. Comments James H. Baireuther, Vice Chairman and Chief Administrative Officer, commented, "We reduced our first quarter loss to $2.9 million from $4.4 million in the prior year period, even with disappointing sales. Gross margin increased $2.1 million and as a percentage of sales increased to 37.0% from 33.3% last year. This increase reflects the benefits of our 2002 inventory control initiative which included stringent currency and turnover standards, resulting in minimal impact from seasonal merchandise on the first quarter of fiscal 2003. This inventory initiative had a significant positive impact on gross margin in the first quarter of 2003 as compared to the first quarter of the prior year. We expect it will not have the same impact on our gross margin rate in the remaining quarters of 2003. SG&A expenses increased $0.7 million from the prior year period. SG&A expenses as a percent to sales increased 2.8 percentage points largely reflecting the sales shortfall." Mr. Baireuther continued, "We will maintain our aggressive promotional stance to address market share while continuing to control our inventory and expenses. We reinforce our original earnings guidance for fiscal 2003 in the range of $0.65 to $0.70 per share." The Company's quarterly conference call to discuss the first quarter 2003 results will be broadcast live over the Internet on May 22, at 10:00 a.m. eastern time. To access the call, please visit the investor relations section of the Company's website at www.bonton.com. An online archive of the broadcast will be available within one hour after the conclusion of the call. The Bon-Ton Stores, Inc. operates 72 department stores in targeted markets in Pennsylvania, New York, Maryland, New Jersey, Connecticut, Massachusetts, New Hampshire, Vermont and West Virginia. The stores carry a broad assortment of quality, brand-name fashion apparel and accessories for women, men and children, as well as distinctive home furnishings. Statements made in this press release, other than statements of historical information, are forward looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause results to differ materially from those set forth in these statements. Factors that could cause such differences include, but are not limited to, risks related to retail businesses generally, additional competition from existing and new competitors, uncertainties associated with opening new stores or expanding or remodeling existing stores, the Company's presence in and dependence on limited geographic markets, the ability to attract and retain qualified management, the dependence upon key vendor relationships and the ability to obtain financing for working capital, capital expenditures and general corporate purposes. Additional factors that could cause the Company's actual results to differ from those contained in these forward looking statements are discussed in greater detail in the Company's periodic reports filed with the Securities and Exchange Commission. -tables to follow- THE BON-TON STORES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS THIRTEEN WEEKS ENDED ----------------------- (In thousands except share and per share data) May 3, May 4, (Unaudited) 2003 2002 ---------------------------------------------------------------------- Net sales $141,111 $150,517 Other income, net 526 534 ----------------------- 141,637 151,051 ----------------------- Costs and expenses: Costs of merchandise sold 88,927 100,397 Selling, general and administrative 51,380 50,636 Depreciation and amortization 4,764 5,057 ----------------------- Loss from operations (3,434) (5,039) Interest expense, net 1,244 1,977 ----------------------- Loss before income taxes (4,678) (7,016) Income tax benefit (1,730) (2,631) ----------------------- Net loss $(2,948) $(4,385) ----------------------- Per share amounts -- Basic: Net loss $(0.20) $(0.29) ----------------------- Basic weighted average shares outstanding 15,033,345 15,283,017 Diluted: Net loss $(0.20) $(0.29) ----------------------- Diluted weighted average shares outstanding 15,033,345 15,283,017 THE BON-TON STORES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS May 3, Feb. 1, (In thousands except share and per share data) 2003 2003 ---------------------------------------------------------------------- Assets (Unaudited) Current assets: Cash and cash equivalents $11,625 $16,796 Trade and other accounts receivable, net of allowance for doubtful accounts and sales returns of $3,126 and $3,540 at May 3, 2003 and February 1, 2003, respectively 44,257 46,735 Merchandise inventories 171,896 148,618 Prepaid expenses and other current assets 14,966 12,958 Deferred income taxes 3,172 3,205 --------------------- Total current assets 245,916 228,312 --------------------- Property, fixtures and equipment at cost, less accumulated depreciation and amortization 132,552 136,201 Deferred income taxes 4,185 3,980 Goodwill and intangible assets 9,414 9,511 Other assets 3,880 4,019 --------------------- Total assets $395,947 $382,023 --------------------- Liabilities and Shareholders' Equity Current liabilities: Accounts payable $72,103 $53,367 Accrued payroll and benefits 9,573 14,037 Accrued expenses 19,762 25,546 Current portion of long-term debt 733 715 Current portion of obligations under capital leases 257 250 Income taxes payable 2,377 5,249 --------------------- Total current liabilities 104,805 99,164 --------------------- Long-term debt, less current maturities 76,104 64,194 Obligations under capital leases, less current maturities 400 468 Other long-term liabilities 5,476 5,851 --------------------- Total liabilities 186,785 169,677 --------------------- Shareholders' equity Preferred Stock - authorized 5,000,000 shares at $0.01 par value; no shares issued - - Common Stock - authorized 40,000,000 shares at $0.01 par value; issued and outstanding shares of 12,135,332 and 12,220,285 at May 3, 2003 and February 1, 2003, respectively 125 125 Class A Common Stock - authorized 20,000,000 shares at $0.01 par value; issued and outstanding shares of 2,989,853 at May 3, 2003 and February 1, 2003 30 30 Treasury stock, at cost - shares of 335,200 and 277,000 at May 3, 2003 and February 1, 2003, respectively (1,375) (1,132) Additional paid-in-capital 107,361 107,415 Deferred compensation (142) (222) Accumulated other comprehensive income (1,893) (1,876) Retained earnings 105,056 108,006 --------------------- Total shareholders' equity 209,162 212,346 --------------------- Total liabilities and shareholders' equity $395,947 $382,023 --------------------- CONTACT: The Bon-Ton Stores, Inc. Mary Kerr, 717/751-3071