Elder-Beerman Reports Fiscal 2002 Operating Results.Business Editors DAYTON Dayton, city (1990 pop. 182,044), seat of Montgomery co., SW Ohio, on the Great Miami River where it is joined by the Stillwater River; inc. 1805. It is the trade center for a fertile farm area, but is best known for its involvement with industry, invention, and , Ohio--(BUSINESS WIRE)--March 20, 2003 The Elder-Beerman Elder-Beerman is a U.S. chain of department stores founded in 1883 and owned by The Bon-Ton. The chain is based primarily in the United States' Midwest region. | History Beginnings Stores Corp. (Nasdaq:EBSC EBSC Elder-Beerman Stores Corp. EBSC East Bay Sanctuary Covenant (Berkeley, CA) EBSC Embedded Bitmap Scaling EBSC Elmbrook Swim Club (Brookfield, Wisconsin) EBSC English Bay Swim Club ) reported income before the cumulative effect of changes in accounting principles of $0.9 million or $0.08 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the fiscal year ended February 1, 2003 compared to a net loss of $0.9 million or $0.08 per diluted share in the same period last year. The net loss including the cumulative effect of changes in accounting principles for fiscal year 2002 was $14.2 million or $1.24 per diluted share. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for 2002 were $639.8 million compared to $643.1 million last year, a 0.5 percent decrease. Comparable store sales decreased 2.4 percent. Bud Bergren, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , stated, "I am excited about the progress at Elder-Beerman. Although the economic environment and retail climate were challenging in 2002, we made significant progress. -- In 2002, Elder-Beerman reported a profit of $0.08 per diluted share before the cumulative effect of accounting changes compared to a loss of $0.08 per diluted share last year. -- Net gains in productivity along with other expense initiatives throughout the organization enabled us to reduce SG&A for the year by $6.0 million to 27.4 percent of sales, an 80 basis point improvement over 2001. "We increased the productivity of our inventories by lowering overall levels and improving our merchandise presentations and assortments. -- Year-end inventory levels were 8.6 percent lower than 2001. -- Retail inventory turnover increased 15 percent to 2.2 times in 2002. -- Inventory freshness improved 11 percent. "Throughout 2002, my primary focus for Elder-Beerman was to improve the organization's productivity and financial strength. Today, through the efforts of all of our associates, we are in a strong financial condition. The improvements in operating results, expense and working capital management, most notably inventory control, and disciplined capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. provided free cash flow to reduce long term debt by $33.4 million during 2002. Year-end revolver revolver: see small arms. revolver Pistol with a revolving cylinder that provides multishot action. Some early versions, known as pepperboxes, had several barrels, but as early as the 17th century pistols were being made with a revolving chamber to borrowings were reduced to $6.0 million from $36.6 million at the end of 2001." Bergren concluded, "The quality of the balance sheet has improved. Our expense structure is moving in the right direction. We have substantial borrowing availability. Our financial condition provides the flexibility to manage through difficult economic conditions. I am proud of the way our associates have responded to the challenges and opportunities presented in 2002." Items Included in 2002 and 2001 Results As previously announced, the company's board of directors approved a plan to terminate the Stone & Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs defined benefit plan Defined benefit plan A pension plan obliging the sponsor to make specified dollar payments to qualifying employees at retirement. The pension obligations are effectively the debt obligation of the plan sponsor. Related: Defined contribution plan in 2003. In connection with this decision, during the fourth quarter of 2002, Elder-Beerman changed its method of accounting for actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin gains and losses associated with defined benefit plans, in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Statement of Financial Accounting Standards No. 87 "Employers' Accounting for Pensions" to accelerate recognition of such gains and losses. The company believes that this accelerated recognition is preferable. As a result of that accounting change, fourth quarter 2002 income from operations includes a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern charge of $3.6 million related to the immediate recognition of losses arising in 2002 associated with this plan. Additionally, the cumulative effect of this change as of February 3, 2002 of $1.1 million after tax has been recorded in the 2002 results of operations, retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin to the first quarter, as a cumulative effect of a change in accounting principle. Fiscal year 2002 results also include a cumulative effect of an accounting change related to the company's adoption of the Statement of Financial Accounting Standards No. 142 "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ," which resulted in a non-cash after-tax charge of $14.0 million reflected in first quarter results. Fiscal 2002 results also include pretax charges of: $1.0 million related to a store closing in Dayton, Ohio Dayton is a city in southwestern Ohio, United States. It is the county seat and largest city of Montgomery County. As of the 2005 census estimate, the population of Dayton was 158,873. ; $1.6 million in charges related to severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when , management changes and implementation of expense initiatives; $1.0 million related to write-downs of long-term assets Long-Term Assets 1. Reported on the balance sheet, it's the value of a company's property, equipment and other capital assets, less depreciation. 2. A stock, bond or other asset that you plan on holding in your portfolio for a lengthy period of time. to their current fair value; and an offset of $0.8 million of miscellaneous pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. from insurance proceeds and the sale of noncore assets. Fiscal 2001 results included pretax charges of $7.0 million: $3.3 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the former CEO's retirement and the new CEO search; $4.3 million related to a writedown writedown A reduction in the value of an asset carried on a firm's financial statements. For example, the firm's accountants, believing the inventory is overvalued, may decide to take a writedown by reducing inventory valuation. of a receivable from the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of Shoebilee, Inc.; and an offset of $0.6 million in pretax income related to the recovery of a prior investment in a cooperative buying group. Fourth Quarter Results The company reported net income for the fourth quarter ended February 1, 2003 of $8.3 million or $0.72 per diluted share compared to net income of $9.7 million or $0.84 per diluted share in the same period last year. Fourth quarter results include a $3.6 million pretax charge related to the immediate recognition of losses associated with the Stone & Thomas defined benefit plan. Net sales for the fourth quarter were $214.2 million compared to $219.6 million last year, a 2.4 percent decrease. Comparable store sales decreased 2.6 percent. Webcast Conference Call A conference call to discuss fiscal 2002 results will take place today at 11:00 a.m., Eastern Time. The call will be webcast live on the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of Elder-Beerman's web site at www.elder-beerman.com. A replay will be available online from 1:00 p.m. today until midnight on April 5, 2003. Annual Meeting Elder-Beerman's board of directors set the date for the company's annual meeting of shareholders for June 5, 2003. Shareholders of record as of April 7, 2003 will be entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to vote at the annual meeting. The nation's ninth largest independent department store chain, The Elder-Beerman Stores Corp. is headquartered in Dayton, Ohio and operates 68 stores in Ohio, West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. , Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). , Michigan Michigan (mĭsh`ĭgən), upper midwestern state of the United States. It consists of two peninsulas thrusting into the Great Lakes and has borders with Ohio and Indiana (S), Wisconsin (W), and the Canadian province of Ontario (N,E). , Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. , Kentucky Kentucky, state, United States Kentucky (kəntŭk`ē, kĭn–), one of the so-called border states of the S central United States. It is bordered by West Virginia and Virginia (E); Tennessee (S); the Mississippi R. , Wisconsin Wisconsin, state, United States Wisconsin (wĭskŏn`sən, –sĭn), upper midwestern state of the United States. It is bounded by Lake Superior and the Upper Peninsula of Michigan, from which it is divided by the Menominee and Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York . For more information about the company see Elder-Beerman's web site at www.elder-beerman.com. This press release may contain "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. ," including predictions of future operating performance, events or developments such as our future sales, profits, expenses, income and earnings per share. In addition, words such as "expects," "anticipates," "intends," "plans," "believes," "hopes," and "estimates," and variations of such words and similar expressions, are intended to identify forward-looking statements. Because forward-looking statements are based on a number of beliefs, estimates and assumptions by management that could ultimately prove inaccurate, there is no assurance that forward-looking statements will prove to be accurate. Many factors could materially affect our actual future operations and results. Factors that could materially affect performance include the following: increasing price and product competition; fluctuations in consumer demand and confidence, especially in light of current general economic conditions; the availability and mix of inventory; fluctuations in costs and expenses; consumer response to the Company's merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. strategies, advertising, marketing and promotional programs; the timing and effectiveness of new store openings, particularly its new stores opened in Spring Season 2002 (Coldwater, MI) and opening Spring Season 2003; weather conditions that affect consumer traffic in stores; the continued availability and terms of bank and lease financing and trade credit; the outcome of pending and future litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; consumer debt levels and paydown Paydown A payment made towards an outstanding loan balance. Notes: Every time you make a mortgage payment you are "paying down" your loan. See also: Loan, Mortgage, Principal paydown In a corporate or U.S. rates on consumer debts, including amounts owed to the Company; the impact of any new consumer bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most laws; and inflation and interest rates and the condition of the capital markets. National security threats and possible war with Iraq could magnify mag·ni·fy v. To increase the apparent size of, especially with a lens. some of those factors. Elder-Beerman undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
52-weeks ended 52-weeks ended
Feb. 1, % Feb. 2, %
2003 Sales 2002 Sales
----------- ------ ----------- ------
Revenues:
Net sales $639,848 100.0% $643,052 100.0%
Financing 27,570 4.3% 27,273 4.2%
Other 3,200 0.5% 3,191 0.5%
----------- ------ ----------- ------
Total revenues 670,618 104.8% 673,516 104.7%
----------- ------ ----------- ------
Costs and expenses:
Cost of merchandise sold,
occupancy, and buying
expenses 462,001 72.2% 459,886 71.5%
Selling, general,
administrative, and other
expenses 175,469 27.4% 181,480 28.2%
Depreciation and amortization 20,083 3.1% 19,578 3.0%
Interest expense 11,299 1.8% 13,574 2.1%
----------- ------ ----------- ------
Total costs and expenses 668,852 104.5% 674,518 104.9%
----------- ------ ----------- ------
Earnings (loss) before income
tax expense (benefit) 1,766 0.3% (1,002) -0.2%
Income tax expense (benefit) 821 0.1% (82) 0.0%
----------- ------ ----------- ------
Earnings (loss) before
cumulative effect of changes in
accounting principles 945 0.1% (920) -0.1%
Cumulative effect of changes in
accounting principles (15,118) -2.4% - 0.0%
----------- ------ ----------- ------
Net earning (loss) $(14,173) -2.2% $(920) -0.1%
=========== ====== =========== ======
Net earnings (loss) per common
share - basic
Earnings (loss) before
cumulative effect of changes
in accounting principles $0.08 $(0.08)
Cumulative effect of changes
in accounting principles (1.33) -
----------- -----------
Net earning (loss) $(1.25) $(0.08)
Weighted average number of
shares outstanding 11,377,965 11,320,646
Net earnings (loss) per common
share - diluted
Earnings (loss) before
cumulative effect of changes
in accounting principles $0.08 $(0.08)
Cumulative effect of changes
in accounting principles (1.32) -
----------- -----------
Net earning (loss) $(1.24) $(0.08)
Diluted weighted average number
of shares outstanding 11,449,199 11,320,646
THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
13-weeks ended 13-weeks ended
Feb. 1, % Feb. 2, %
2003 Sales 2002 Sales
----------- ------ ----------- ------
Revenues:
Net sales $214,212 100.0% $219,571 100.0%
Financing 7,101 3.3% 7,073 3.2%
Other 1,111 0.5% 1,124 0.5%
----------- ------ ----------- ------
Total revenues 222,424 103.8% 227,768 103.7%
----------- ------ ----------- ------
Costs and expenses:
Cost of merchandise sold,
occupancy, and buying
expenses 150,463 70.2% 156,340 71.2%
Selling, general,
administrative, and other
expenses 50,852 23.7% 47,221 21.5%
Depreciation and amortization 5,079 2.4% 5,282 2.4%
Interest expense 2,807 1.3% 3,369 1.5%
----------- ------ ----------- ------
Total costs and expenses 209,201 97.7% 212,212 96.6%
----------- ------ ----------- ------
Earnings before income tax
expense 13,223 6.2% 15,556 7.1%
Income tax expense 4,945 2.3% 5,879 2.7%
----------- ------ ----------- ------
Net earnings $8,278 3.9% $9,677 4.4%
=========== ====== =========== ======
Net earnings per common share -
basic $0.73 $0.85
Weighted average number of
shares outstanding 11,382,823 11,331,871
Net earnings per common share -
diluted $0.72 $0.84
Diluted weighted average number
of shares outstanding 11,441,451 11,459,440
THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Dollars in thousands)
Feb. 1, Feb. 2,
2003 2002
--------- ---------
ASSETS
Current assets:
Cash and equivalents $9,735 $7,142
Customer accounts receivable (less allowance
for doubtful accounts:
February 1, 2003 - $3,298; February 2, 2002 -
$2,985) 127,786 129,121
Merchandise inventories 138,748 151,761
Other current assets 17,162 21,435
--------- ---------
Total current assets 293,431 309,459
--------- ---------
Property, fixtures and equipment, less
accumulated depreciation and amortization 90,181 98,078
Goodwill - 16,012
Other Assets 27,436 27,513
--------- ---------
Total assets $411,048 $451,062
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $5,456 $5,531
Accounts payable 40,607 39,108
Other accrued liabilities 31,918 26,819
--------- ---------
Total current liabilities 77,981 71,458
--------- ---------
Long-term obligations, less current portion 115,127 148,489
Deferred items 11,214 12,288
Shareholders' equity:
Common stock, no par, 11,536,460 shares at
February 1, 2003 and 11,494,266 shares at
February 2, 2002 issued and outstanding 243,419 243,890
Unearned compensation - restricted stock (197) (302)
Deficit (34,043) (19,870)
Other comprehensive loss (2,453) (4,891)
--------- ---------
Total shareholders' equity 206,726 218,827
--------- ---------
Total liabilities and shareholders' equity $411,048 $451,062
========= =========
See notes to condensed consolidated financial statements
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