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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 7, 1999
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ZALE CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 1-04129 75-0675400
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
901 W. Walnut Hill Lane, Irving, Texas 75038-1003
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (972) 580-4000
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Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On September 7, 1999, Zale Corporation (the "Company") announced a
stock repurchase program pursuant to which the Company, from time to time and
at management's discretion, may purchase through the current fiscal year up to
an aggregate of $50 million of Zale common stock on the open market.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits.
99 Press Release issued by the Company on September 7, 1999.
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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 hereunto duly authorized.
Zale Corporation
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Registrant
By: /s/ Mark R. Lenz
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Mark R. Lenz
Senior Vice President, Controller
(principal accounting officer
of the registrant)
Date: September 7, 1999
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EXHIBIT INDEX
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<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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99 Press Release issued by the Company on September 7, 1999.
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EXHIBIT 99
CONTACT: Investor:
Cynthia T. Gordon
Senior Director, Investor Relations
(972) 580-5047
Media:
Mary Forte'
Executive Vice President and Chief Administrative
Officer
(972) 580-4810
ZALE CORPORATION ANNOUNCES 30% INCREASE IN FISCAL 1999
EARNINGS PER SHARE
DALLAS, Texas, September 7, 1999 - Zale Corporation (NYSE: ZLC), North
America's largest specialty retailer of fine jewelry, today announced that it
achieved a 30% increase in net earnings per share during the Company's fiscal
year ended July 31, 1999, reporting diluted earnings per share of $2.21 versus
earnings of $1.70, excluding unusual items for the prior year.
Net sales for fiscal 1999 were $1.429 billion compared to $1.314
billion last year, reflecting a total sales increase of 8.8% and a comparable
store sales increase of 6.0%. Operating earnings increased to $159.9 million
from $133.4 million, excluding unusual items for the prior year. Net earnings
for the year were $80.9 million compared to $63.3 million, excluding unusual
items, in fiscal 1998.
Net sales for the fourth quarter were $326.0 million compared to
$280.9 million for the same period last year. Comparable store sales increased
5.6% for the same period. During the recently completed quarter, operating
earnings increased 30% to $21.9 million from $16.9 million, excluding unusual
items for the same period last year. Net earnings for the quarter were $8.5
million, or $0.23 per diluted share, compared to $5.8 million, or $0.16 per
diluted share, excluding unusual items, for the prior year.
-More-
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"We are extremely pleased with our results as they mark the
completion of yet another year of 30% growth in earnings per share. The
disciplines put in place five years ago, combined with innovative merchandising
and marketing and consistent store and support execution, continue to result in
excellent earnings growth," commented Robert J. DiNicola, Chairman and Chief
Executive Officer. "Our current momentum accompanied by the substantial
opportunities provided by our latest growth vehicles, Peoples Jewellers, Zales
Outlet, and Zales.Com give us much to look forward to as we head into the
millennium."
Separately, the Company announced that its Board of Directors has
approved a stock repurchase program pursuant to which the Company, from time to
time and at management's discretion, may purchase through the current fiscal
year, up to an aggregate of $50 million of Zale common stock on the open
market. In June 1999, the Company completed the $50 million repurchase plan
initiated in September 1998.
"Our decision to implement another stock repurchase program
demonstrates our continued commitment to optimizing our capital resources and
increasing shareholder value," commented Mr. DiNicola.
Zale Corporation operates approximately 1,330 specialty retail jewelry
stores located throughout the United States, Canada, Puerto Rico, and online,
including Zales Jewelers, Zales Outlet, Zales Direct at www.zales.com, Gordon's
Jewelers, Bailey Banks & Biddle Fine Jewelers and Peoples Jewellers. Additional
information on Zale Corporation and its operating divisions is available on the
Internet at www.zalecorp.com.
This release includes certain forward-looking information that is
based upon management's beliefs as well as on assumptions made by and data
currently available to management. This information which has been, or in the
future may be, included in reliance on the "safe harbor" provisions on the
Private Securities Litigation Reform Act of 1995, is subject to a number of
risks and uncertainties, including but not limited to the factors identified in
the Company's 10-K and other documents filed with the Securities and Exchange
Commission. Actual results may differ materially from those anticipated in such
forward-looking statements. The Company undertakes no obligation to update or
revise any forward-looking statements to reflect subsequent events or
circumstances even if experience or future changes make it clear that any
projected results expressed or implied therein may not be realized.
# # #
(Tables to follow)
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ZALE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
July 31, July 31,
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1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Net Sales $ 325,994 $ 280,867 $ 1,428,868 $ 1,313,710
Cost of Sales 168,553 145,887 737,188 681,908
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Gross Margin 157,441 134,980 691,680 631,802
Selling, General and Administrative Expenses 126,159 111,594 502,279 475,846
Depreciation and Amortization Expense 9,403 6,508 29,478 22,565
Unusual Item - Gain on Sale of Diamond Park
Fine Jewelers -- -- -- (1,634)
Unusual Item - Gain on Sale of Land -- (2,593) -- (7,313)
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Operating Earnings 21,879 19,471 159,923 142,338
Interest Expense, Net 8,186 7,453 30,488 32,039
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Earnings Before Income Taxes 13,693 12,018 129,435 110,299
Income Taxes 5,151 4,567 48,503 41,362
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Net Earnings $ 8,542 $ 7,451 $ 80,932 $ 68,937
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Earnings Per Common Share:
Basic $ 0.24 $ 0.22 $ 2.24 $ 1.96
Diluted $ 0.23 $ 0.20 $ 2.21 $ 1.84
Weighted Average Number of Common
Shares and Common Share Equivalents
Outstanding:
Basic 36,118 34,647 36,059 35,201
Diluted 36,921 36,887 36,688 37,368
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ZALE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
July 31, July 31,
1999 1998
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<S> <C> <C>
ASSETS
Current Assets:
Cash and Cash Equivalents $ 35,403 $ 173,069
Restricted Cash 6,029 6,192
Customer Receivables, Net 510,714 495,468
Merchandise Inventories 571,669 478,467
Other Current Assets 36,827 26,720
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Total Current Assets 1,160,642 1,179,916
Property and Equipment, Net 203,841 162,884
Other Assets 99,654 44,326
Deferred Tax Asset, Net 62,795 58,803
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Total Assets $ 1,526,932 $ 1,445,929
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LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Short-term Borrowings $ 353,000 $ ---
Accounts Payable and Accrued Liabilities 237,392 187,621
Deferred Tax Liability, Net 13,364 20,800
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Total Current Liabilities 603,756 208,421
Non-current Liabilities 70,892 50,190
Long-term Debt 99,589 480,275
Excess of Revalued Net Assets Over
Stockholders' Investment, Net 53,084 58,982
Commitments and Contingencies
Stockholders' Investment:
Preferred Stock --- ---
Common Stock 392 380
Additional Paid-In Capital 504,300 477,657
Accumulated Other Comprehensive Income 376 2,851
Accumulated Earnings 292,273 211,341
Deferred Compensation (5,005) ---
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792,336 692,229
Treasury Stock (92,725) (44,168)
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Total Stockholders' Investment 699,611 648,061
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Total Liabilities and Stockholders' Investment $ 1,526,932 $ 1,445,929
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