Federated Reports 34% Increase in 1Q Earnings Per Share.CINCINNATI Cincinnati (sĭnsənăt`ē, –năt`ə), city (1990 pop. 364,040), seat of Hamilton co., extreme SW Ohio, on the Ohio River opposite Newport and Covington, Ky.; inc. as a city 1819. -- Federated Connected and treated as one. See federated database and federated directories. Department Stores This is a list of department stores. In the case of department store groups the location of the flagship store is given. This list does not include large specialist stores, which sometimes resemble department stores. , Inc. (NYSE NYSE See: New York Stock Exchange :FD)(PCX (1) A bitmapped graphics file format that handles monochrome, 2-bit, 4-bit, 8-bit and 24-bit color and uses RLE to achieve compression ratios of approximately 1.1:1 to 1.5:1. Images with large blocks of solid colors compress best under the RLE method. See PC Paintbrush. :FD) today reported diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of 71 cents for the fiscal first quarter of 2005, reflecting strong sales and margin performance in the first 13 weeks of the retail year. Earnings per share in the quarter exceeded the company's initial guidance of 45-50 cents and revised guidance of 65-70 cents a 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, and reflects an increase of 34 percent over diluted earnings per share of 53 cents for the first quarter of 2004. "We obviously were very pleased with the quarter's results and our above-expectations sales performance, especially since these comparisons are against a strong first quarter last year," said Terry J. Lundgren Terry J. Lundgren (b. 1952) is the CEO, Chairman of the Board, President, and Director at Macy's, Inc., the parent company of Macy*s and Bloomingdale's department stores. Lundgren is also the namesake of the Terry J. , Federated's chairman, president and chief executive officer. "It demonstrates to us that focusing on sales is right for our business, and that our four key priorities - differentiated dif·fer·en·ti·ate v. dif·fer·en·ti·at·ed, dif·fer·en·ti·at·ing, dif·fer·en·ti·ates v.tr. 1. To constitute the distinction between: assortments, simplified sim·pli·fy tr.v. sim·pli·fied, sim·pli·fy·ing, sim·pli·fies To make simple or simpler, as: a. To reduce in complexity or extent. b. To reduce to fundamental parts. c. pricing, an improved shopping experience and more effective marketing - are the right approach to making us a more attractive retailer." Lundgren Lundgren is a Swedish surname and may refer to:
"We are more enthusiastic than ever before about the tremendous potential inherent in combining these two retail businesses, and eagerly await AWAIT, crim. law. Seems to signify what is now understood by lying in wait, or way-laying. regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approvals so we may broadly communicate with May Co. employees to share the details of our exciting vision for the combined company," Lundgren said. Operating Income/Cash Flow Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. in the first quarter ended April 30, 2005 was $252 million or 7.0 percent of sales. This is an increase of 16 percent over operating income of $217 million or 6.2 percent of sales for the first quarter of 2004. Federated's first quarter earnings last year included store closing and consolidation costs of $19 million or 0.5 percent of sales. Cash flow from operating activities was $56 million in the first quarter of 2005, compared to $73 million in the same period last year. After first-quarter investing activities of $61 million this year and $110 million last year, cash used before financing activities was $5 million in the first quarter this year compared to $37 million in the same period last year. The company repurchased no shares of Federated common stock in the first quarter. There were an average of 172.8 million diluted shares outstanding for the first quarter of 2005, compared to 184.2 million in the same period last year. Net Income Federated's net income in the first quarter of 2005 was $123 million, an increase of 27 percent compared to net income of $97 million in the same period last year. Sales Sales for the first quarter of 2005 totaled $3.605 billion, an increase of 2.5 percent from sales of $3.517 billion in the same period last year. On a same-store basis, Federated's year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. sales were up 2.6 percent. The company opened no new stores in the first quarter of 2005. Looking Ahead Federated is expecting to generate earnings of 80-85 cents a share in the second quarter, which ends July July: see month. 30, 2005. Federated does not plan to update its second-half earnings forecast until a determination is made on the future of its credit business and the timing of the May merger transaction is known. The company noted, however, that the fundamental assumptions underlying its initial second-half projections have not changed. Federated, with corporate offices in Cincinnati and New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , is one of the nation's leading department store retailers, with annual sales of more than $15.6 billion. Federated operates more than 450 stores in 34 states, Guam Guam (gwäm), Chamorro Guåhan, the largest, most populous, and southernmost of the Mariana Islands (see also Northern Mariana Islands, an unincorporated territory of the United States (2005 est. pop. and Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. under the names of Macy's Macy's formerly R.H. Macy & Co., Inc. Major U.S. department-store chain. Its former flagship, an 11-story store that occupies a city block in New York City's Herald Square, was for many years the largest single store in the country. Rowland H. and Bloomingdale's This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. . The company also operates macys.com and Bloomingdale's By Mail. www.fds.com This press release contains 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. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such statements include, but are not limited to, statements about the benefits of the business combination transaction involving Federated and May, including future financial and operating results, the new company's plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of Federated's and May's management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements because of a variety of factors, including: the ability to obtain governmental approvals of the transaction on the proposed terms and schedule; the failure of Federated and May stockholders to approve the transaction; the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). associated with the renovation, conversion and transitioning of stores; competitive pressures from department and specialty stores Noun 1. specialty store - a store that sells only one kind of merchandise shop, store - a mercantile establishment for the retail sale of goods or services; "he bought it at a shop on Cape Cod" , general merchandise MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain stores, manufacturers' outlets, off-price off-price adj. 1. Of, relating to, or being a retail store that sells merchandise at prices lower than usual. 2. For sale at prices lower than usual: off-price assortments of women's clothing. and discount stores, and all other retail channels; and general consumer-spending levels, including the impact of the availability and level of consumer debt, and the effects of weather. Additional factors that could cause Federated's and May's results to differ materially from those described in the forward-looking statements can be found in the 2004 Forms 10-K of Federated and May filed with the SEC and available at the SEC's Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the site (http://www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. ). NOTE: Additional information on Federated is available on the Internet at www.fds/pressroom.com. A webcast of a call with financial analysts is slated to begin at 10:30 a.m. (ET) and is accessible to the media and general public either via the company's website or by calling in on 1-800-347-3350.
FEDERATED DEPARTMENT STORES, INC.
Consolidated Statements of Income (Unaudited) (Note 1)
------------------------------------------------------
(All amounts in millions except percentages and per share figures)
13 Weeks Ended
April 30, May 1,
2005 2004
--------- ---------
Net Sales $ 3,605 $ 3,517
--------- ---------
Cost of sales (Note 2) 2,153 2,105
Percent to sales 59.7% 59.9%
--------- ---------
Gross Margin 1,452 1,412
Percent to sales 40.3% 40.1%
Selling, general and administrative expenses
(Note 3) 1,200 1,195
Percent to sales 33.3% 33.9%
--------- ---------
Operating Income 252 217
Percent to sales 7.0% 6.2%
Interest expense - net (54) (60)
--------- ---------
Income Before Income Taxes 198 157
Federal, state and local income tax expense (75) (60)
--------- ---------
Net Income $ 123 $ 97
========= =========
Basic Earnings per Share $ .73 $ .54
========= =========
Diluted Earnings per Share (Note 4) $ .71 $ .53
========= =========
Average common shares:
Basic 168.8 180.5
Diluted 172.8 184.2
Depreciation and amortization expense $ 178 $ 177
FEDERATED DEPARTMENT STORES, INC.
Consolidated Statements of Income (Unaudited) (Note 1)
------------------------------------------------------
Notes:
(1) Because of the seasonal nature of the retail business, the results
of operations for the 13 weeks ended April 30, 2005 and May 1,
2004 (which do not include the Christmas season) are not
necessarily indicative of such results for the fiscal year.
(2) Merchandise inventories are primarily valued at the lower of cost
or market using the last-in, first-out (LIFO) retail inventory
method. Application of this method did not impact cost of sales
for the 13 weeks ended April 30, 2005 or May 1, 2004. For the 13
weeks ended May 1, 2004, cost of sales includes inventory
valuation adjustments of $4 million related to the Burdines-Macy's
consolidation.
(3) For the 13 weeks ended May 1, 2004, selling, general and
administrative expenses include $15 million of costs incurred in
connection with the Macy's home store centralization, the
Burdines-Macy's consolidation and other store closings.
(4) For the 13 weeks ended May 1, 2004, store closing and
consolidation costs and Macy's home store centralization costs
(See notes 2 and 3) amounted to $.06 per diluted share.
FEDERATED DEPARTMENT STORES, INC.
Consolidated Balance Sheets (Unaudited)
---------------------------------------
(millions)
April 30, January 29, May 1,
2005 2005 2004
----------- ----------- -----------
ASSETS:
Current Assets:
Cash and cash equivalents $ 918 $ 868 $ 913
Accounts receivable 3,313 3,418 3,100
Merchandise inventories 3,413 3,120 3,498
Supplies and prepaid expenses 125 104 121
----------- ----------- -----------
Total Current Assets 7,769 7,510 7,632
Property and Equipment - net 5,888 6,018 6,081
Goodwill 260 260 262
Other Intangible Assets - net 378 378 378
Other Assets 711 719 270
----------- ----------- -----------
Total Assets $ 15,006 $ 14,885 $ 14,623
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS'
EQUITY:
Current Liabilities:
Short-term debt $ 1,226 $ 1,242 $ 916
Accounts payable and accrued
liabilities 2,789 2,707 2,754
Income taxes 227 324 152
Deferred income taxes 63 28 -
----------- ----------- -----------
Total current liabilities 4,305 4,301 3,822
Long-Term Debt 2,635 2,637 3,149
Deferred Income Taxes 1,108 1,199 1,025
Other Liabilities 586 581 580
Shareholders' Equity 6,372 6,167 6,047
----------- ----------- -----------
Total Liabilities and
Shareholders' Equity $ 15,006 $ 14,885 $ 14,623
=========== =========== ===========
FEDERATED DEPARTMENT STORES, INC.
Consolidated Statements of Cash Flows (Unaudited)
-------------------------------------------------
(millions)
13 Weeks Ended
April 30, May 1,
2005 2004
--------- ---------
Cash flows from operating activities:
Net income $ 123 $ 97
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 177 176
Amortization of financing costs 1 1
Amortization of unearned restricted stock 1 1
Changes in assets and liabilities:
Decrease in proprietary and other
accounts receivable not separately
identified 121 152
Increase in merchandise inventories (294) (282)
Increase in supplies and prepaid
expenses (21) (22)
Decrease in other assets not separately
identified 7 -
Increase in accounts payable and
accrued liabilities not separately
identified 89 128
Decrease in current income taxes (97) (209)
Increase (decrease) in deferred income
taxes (56) 29
Increase in other liabilities
not separately identified 5 2
--------- ---------
Net cash provided by operating
activities 56 73
--------- ---------
Cash flows from investing activities:
Purchase of property and equipment (36) (72)
Capitalized software (16) (17)
Increase in non-proprietary accounts receivable (16) (39)
Collection of notes receivable - 17
Disposition of property and equipment 7 1
--------- ---------
Net cash used by investing activities (61) (110)
--------- ---------
Cash flows from financing activities:
Debt issued - 9
Debt repaid (18) (2)
Dividends paid (23) (22)
Increase (decrease) in outstanding checks (8) 9
Acquisition of treasury stock (1) (90)
Issuance of common stock 105 121
--------- ---------
Net cash provided by financing
activities 55 25
--------- ---------
Net increase (decrease) in cash and cash
equivalents 50 (12)
Cash and cash equivalents at beginning of period 868 925
--------- ---------
Cash and cash equivalents at end of period $ 918 $ 913
========= =========
Note - Certain reclassifications were made to prior year's amounts
to reflect increases in non-proprietary accounts receivable as cash
used by investing activities instead of operating activities to
conform with the classifications of such amounts for the most recent
year.
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