EX-99.1 2 a4645369ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 The Bon-Ton Stores, Inc. Announces First Quarter Results YORK, Pa.--(BUSINESS WIRE)--May 20, 2004--The Bon-Ton Stores, Inc. (NASDAQ:BONT) today reported results for the first quarter ended May 1, 2004. Income The Company reported a net loss of $5.6 million, or $0.35 per share, for the first quarter of fiscal 2004 compared to a net loss of $2.9 million, or $0.20 per share, for the first quarter of fiscal 2003. Sales As previously announced, for the first quarter of fiscal 2004, total sales increased 87.9% to $265.1 million, including $125.7 million from the acquired Elder-Beerman stores, compared to $141.1 million for the same period last year. Bon-Ton comparable store sales decreased 2.0%. Elder-Beerman sales are not included in the Company's reported comparable store sales, therefore the following is provided for informational purposes only. Elder-Beerman comparable store sales for the thirteen weeks ended May 1, 2004 decreased 2.9%. For Elder-Beerman and Bon-Ton combined, comparable store sales for the thirteen weeks ended May 1, 2004 decreased 2.4%. Gross Margin/Inventory In the first quarter, gross margin dollars increased $44.2 million, or 85% over the prior year period, primarily due to the impact of Elder-Beerman operations. The gross margin rate decreased 0.6 percentage point to 36.4% this year versus 37.0% reported for the same period last year. The decrease in gross margin rate reflects the inclusion of Elder-Beerman sales at a comparably lower gross margin rate and an increase in the markdown rate. At the end of the first quarter, comparable store inventory at retail decreased 4.8% compared to the prior year. Selling, General and Administrative Expenses Selling, general and administrative (SG&A) expenses increased $45.1 million, including $41.4 million from Elder-Beerman operations, in the first quarter. The SG&A expense rate in the first quarter was even with last year at 36.4% of sales. SG&A includes integration costs and expense reductions reflecting the realization of synergies. Depreciation and Amortization Depreciation expense in the first quarter increased $1.8 million reflecting the expense for the Elder-Beerman operations. Interest Interest expense increased $2.0 million reflecting the increased borrowings required to fund the acquisition of Elder-Beerman and increased deferred financing fees associated with the Elder-Beerman acquisition. Comments James H. Baireuther, Vice Chairman and Chief Administrative Officer, commented, "First quarter results were impacted by a decrease in sales volume and a very promotional retail environment which negatively impacted the Company's profit performance. We are addressing this issue with the finalization of our vendor matrix, product assortment and inventory levels, along with a strong marketing calendar. We will leverage each company's respective strengths to drive increased value for our customers and shareholders as we continue the integration process and combine the two companies. The quarter results were positively impacted by synergies realized which offset all of the integration expenses incurred during the first quarter. We are not revising our original earnings guidance for fiscal 2004 of $1.20 to $1.40 per share; we believe this range is attainable." First quarter 2004 financial results will be released Thursday, May 20, 2004. The Company's quarterly conference call to discuss the first quarter 2004 will be broadcast live over the Internet on May 20, 2004 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/investor/home.asp. An online archive of the broadcast will be available within one hour after the conclusion of the call. The Bon-Ton Stores, Inc. operates 142 department stores in 16 states from the Northeast to the Midwest under the Bon-Ton and Elder-Beerman names. 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. For further information, please visit the investor relations section of the Company's website at www.bonton.com/investor/home.asp. 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, our ability to integrate the recently acquired Elder-Beerman stores into our over-all operations, additional competition from existing and new competitors, uncertainties associated with opening new stores or expanding or remodeling existing stores, 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. THE BON-TON STORES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS THIRTEEN WEEKS ENDED -------------------------- (In thousands except share and per share data) May 1, May 3, (Unaudited) 2004 2003 ---------------------------------------------------------------------- Net sales $ 265,083 $ 141,111 Other income, net 983 526 ---------------------------------------------------------------------- 266,066 141,637 ---------------------------------------------------------------------- Costs and expenses: Costs of merchandise sold 168,663 88,927 Selling, general and administrative 96,507 51,380 Depreciation and amortization 6,575 4,764 ---------------------------------------------------------------------- Loss from operations (5,679) (3,434) Interest expense, net 3,204 1,244 ---------------------------------------------------------------------- Loss before income taxes (8,883) (4,678) Income tax benefit (3,332) (1,730) ---------------------------------------------------------------------- Net loss $ (5,551) $ (2,948) ---------------------------------------------------------------------- Per share amounts - Basic: Net loss $ (0.35) $ (0.20) ---------------------------------------------------------------------- Basic weighted average shares outstanding 15,686,415 15,033,345 Diluted: Net loss $ (0.35) $ (0.20) ---------------------------------------------------------------------- Diluted weighted average shares outstanding 15,686,415 15,033,345 THE BON-TON STORES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS May 1, January (In thousands except share and per share data) 2004 31, 2004 ---------------------------------------------------------------------- Assets (Unaudited) Current assets: Cash and cash equivalents $ 19,565 $ 19,890 Retained interest in trade receivables and other, net of allowance for doubtful accounts and sales returns of $5,776 and $6,299 at May 1, 2004 and January 31, 2004, respectively 79,321 104,679 Merchandise inventories 288,588 257,372 Prepaid expenses and other current assets 21,267 14,683 Deferred income taxes 6,474 8,825 -------------------- Total current assets 415,215 405,449 -------------------- Property, fixtures and equipment at cost, less accumulated depreciation and amortization 158,773 160,923 Deferred income taxes 22,225 24,252 Goodwill and intangible assets 9,025 9,121 Other assets 11,236 12,100 --------------------- Total assets $ 616,474 $611,845 --------------------- Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 106,531 $ 88,118 Accrued payroll and benefits 24,587 36,344 Accrued expenses 41,409 42,519 Current portion of long-term debt 811 1,113 Current portion of obligations under capital leases 1,282 1,797 Income taxes payable - 13,531 --------------------- Total current liabilities 174,620 183,422 --------------------- Long-term debt, less current maturities 188,492 170,703 Obligations under capital leases, less current maturities 787 1,013 Other long-term liabilities 16,895 17,223 --------------------- Total liabilities 380,794 372,361 --------------------- 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 shares of 13,393,178 and 13,055,740 at May 1, 2004 and January 31, 2004, respectively 134 131 Class A Common Stock - authorized 20,000,000 shares at $0.01 par value; issued and outstanding shares of 2,951,490 and 2,989,853 at May 1, 2004 and January 31, 2004, respectively 30 30 Treasury stock, at cost - shares of 337,800 at May 1, 2004 and January 31, 2004 (1,387) (1,387) Additional paid-in-capital 116,423 114,687 Deferred compensation (36) (136) Accumulated other comprehensive loss (996) (1,298) Retained earnings 121,512 127,457 --------------------- Total shareholders' equity 235,680 239,484 --------------------- Total liabilities and shareholders' equity $ 616,474 $611,845 --------------------- CONTACT: The Bon-Ton Stores, Inc. Mary Kerr Vice President Corporate Communications (717) 751-3071