SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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) December 18, 1995
CPI CORP.
__________________________________________________________________
(exact name of registrant as specified in its charter)
Delaware 0-11227 43-1256674
___________________________________________________________________
(State or other jurisdiction (Commission file (IRS Employer
of incorporation) Number) Identification No.)
1706 Washington Avenue, St. Louis, Missouri 63103-1790
___________________________________________________________________
(Address of principal executive offices) (Zip code)
Registrants's telephone number, including area code (314) 231-1575
___________________________________________________________________
___________________________________________________________________
(Former name or former address, if changes since last report.)
<PAGE>
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 thereunto duly authorized.
CPI CORP.
(Registrant)
/s/ Barry Arthur
-----------------------------
Barry Arthur
Authorized Officer and
Principal Financial Officer
Dated: December 22, 1995
<PAGE>
ITEM 5. OTHER EVENTS
On December 18, 1995, CPI Corp. issued the following Press Release:
<PAGE>
ITEM 5(A)
CPI CORP ANNOUNCES THIRD QUARTER RESULTS
- Earnings per share of 23 cents versus 28 cents in
comparable 1994 period
- Sales down 2.2% to $171.5 million
- Margin improvements continue in Portrait Studios
- Management anticipates double-digit EPS increase for full year
St. Louis, MO., December 18, 1995 - CPI Corp. (NYSE - CPY) said
today that third quarter sales declined 2.2% year-to-year, although
a one-time 1994 change in the operations of Sears Portrait Studios
obscured a clear comparison of the revenues. The portrait studio
segment continues to show significant profit margin improvements.
However, those gains were offset during the quarter by lower 1995
photofinishing results and higher corporate expenses, resulting in
an earnings decline of five cents per share.
Sales in the 16 weeks ended November 11, 1995 decreased to $171.5
million from $175.4 million in the 16 weeks ended November 12,
1994. Income from continuing operations declined to $6.6 million
from $7.6 million. General corporate expense increased from $5.4
million to $6.5 million, primarily due to increased employee
benefit costs. Net earnings were $3.2 million versus last year's
$3.8 million, while earnings per share were 23 cents versus 28
cents. Weighted average common shares outstanding increased by
1.9%.
For the 40 weeks ended November 11, 1995, the company recorded net
earnings per share of 34 cents versus 21 cents for last year's
comparable period. For the 52 weeks ended November 11, 1995, net
earnings per share were $1.19 versus $0.78.
Although third quarter Portrait Studio revenues of $90.9 million
were down from 1994's reported $96.5 million, operating earnings
increased to $12.3 million from $12.0 million. Commenting on the
results, Alyn V. Essman, chairman and chief executive officer,
said, "It should be noted that last year's results included
accelerated recognition of about two weeks of revenues in the U.S.
studios due to customers placing their orders at the time of
sitting -- enabled by the new digital technology -- rather than
ordering later when viewing the finished portraits. Revenues in
the third quarter of 1995 would have exceeded those of 1994's
comparable period if the 1994 accelerated revenues were not
considered. Segment earnings were also up in spite of a 1995
negative earnings swing in the Canadian studios and the
non-comparable 1994 profits resulting from the accelerated
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revenues. Considering the fact that Canada was six to nine months
later in converting to digital imaging, and 1994 U.S. studio
earnings were distorted by the change in operations, we are very
pleased with the continued margin improvements in the Portrait
Studio segment. "
In discussing the Photofinish segment, Essman said, "In the third
quarter, revenues declined by 2.4% to $58.0 million from $59.4
million. The reduction was primarily due to 5.3% fewer operating
weeks as over 30 unprofitable locations were closed since the end
of 1994's comparable period. The segment recorded an operating
loss of $0.1 million compared to last year's profit of $1.0
million. The loss was the result of lower revenues, even though
gross margin as a percentage of sales was essentially constant.
Despite the continuing competitive environment and fewer stores in
operation, sales in the first three quarters of the year have
declined by only one percent. In order to improve operating
efficiencies, we are continuing to review closely the performance
of each location for future planning as we concurrently test new
technologies and marketing approaches."
Turning to the Wall Decor segment, Essman said, "Third quarter
revenues increased to $17.0 million from $14.4 million, mainly the
result of an 18.6% increase in operating weeks from new store
openings. Operating earnings grew to $1.0 million from $0.9
million.
In the Other Products and Services segment, revenues increased to
$5.6 million from $5.1 million as a result of sales growth in
existing stores. The gain occurred in spite of 11.9% fewer
operating weeks due to the closing of unproductive copy store
locations. Operating losses were reduced to $0.1 million from last
year's $1.0 million.
Looking ahead, Essman said, "In our major divisions, we have
experienced a sluggish retail environment thus far in the fourth
quarter, with significantly reduced customer traffic. With the
1994 sales distortion behind us, the fourth quarter studio margins
should continue to be ahead of last year, but photofinish earnings
will continue to suffer. Assuming that current trends continue, we
expect full-year earnings to be about 15% to 20% above last year's
$1.05 per share -- not as much as we expected, but quite
satisfactory in the face of a very slow holiday season."
CPI Corp. is a consumer services company with $533.2 million in
fiscal 1994 sales, operating over 1,800 retail locations, including
1,021 Sears Portrait Studios in the U.S., Puerto Rico and Canada,
635 CPI/Fox Photo/Proex photofinishing locations, 145 Prints Plus
wall decor locations, and 39 high-tech copy stores.
<PAGE>
<TABLE>
CONDENSED STATEMENTS OF EARNINGS - FOR THE 16 AND 40 WEEKS ENDED
NOVEMBER 11, 1995 AND NOVEMBER 12, 1994 (in thousands except per
share amounts - unaudited)
<CAPTION>
16 Weeks Ended 40 Weeks Ended
-------------------- --------------------
11/11/95 11/12/94 11/11/95 11/12/94
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Sales:
Portrait studios $ 90,894 $ 96,477 $ 195,607 $ 192,043
One-hour
photofinishing 58,028 59,448 141,937 143,348
Wall decor 16,972 14,389 38,460 31,907
Other products
and services 5,568 5,090 13,691 12,862
---------- ---------- ---------- ----------
Total net sales $ 171,462 $ 175,404 $ 389,695 $ 380,160
========== ========== ========== ==========
Operating earnings:
Portrait studios $ 12,322 $ 11,975 $ 23,736 $ 20,184
One-hour
photofinishing (125) 1,033 1,054 1,559
Wall decor 972 930 426 196
Other products
and services (89) (966) (974) (2,263)
---------- ---------- ---------- ----------
Total operating
earnings 13,080 12,972 24,242 19,676
General corp. exp. 6,509 5,401 13,374 12,420
---------- ---------- ---------- ----------
Income from operations 6,571 7,571 10,868 7,256
Net interest expense 1,691 1,436 3,657 2,751
Other income 161 91 335 295
---------- ---------- ---------- ----------
Earnings before
income taxes 5,041 6,226 7,546 4,800
Income tax expense 1,865 2,394 2,792 1,824
---------- ---------- ---------- ----------
Net earnings $ 3,176 $ 3,832 $ 4,754 $ 2,976
========== ========== ========== ==========
Earnings per common
share:
Net earnings $ 0.23 $ 0.28 $ 0.34 $ 0.21
========== ========== ========== ==========
Weighted average
number of common
and common
equivalent shares
outstanding 14,090 13,829 13,984 14,209
========== ========== ========== ==========
</TABLE>
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<TABLE>
CONDENSED STATEMENTS OF EARNINGS - FOR THE 52 WEEKS ENDED NOVEMBER
11, 1995 AND NOVEMBER 12, 1994 (in thousands except per share
amounts - unaudited)
<CAPTION>
52 Weeks Ended
--------------------
11/11/95 11/12/94
---------- ---------
<S> <C> <C>
Net Sales:
Portrait studios $ 279,041 $ 273,483
One-hour
photofinishing 189,775 189,335
Wall decor 56,497 47,177
Other products
and services 17,377 16,189
---------- ----------
Total net sales $ 542,690 $ 526,184
========== ==========
Operating earnings:
Portrait studios $ 42,625 $ 33,981
One-hour
photofinishing 4,066 3,293
Wall decor 5,721 4,345
Other products
and services (2,229) (3,361)
---------- ----------
Total operating
earnings 50,183 38,258
General corp. exp. 19,178 17,158
---------- ----------
Income from operations 31,005 21,100
Net interest expense 5,244 2,978
Other income 513 396
---------- ----------
Earnings before
income taxes 26,274 18,518
Income tax expense 9,674 7,307
---------- ----------
Net earnings $ 16,600 $ 11,211
========== ==========
Earnings per common
share:
Net earnings $ 1.19 $ 0.78
========== ==========
Weighted average
number of common
and common
equivalent shares
outstanding 13,929 14,309
========== ==========
</TABLE>
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<TABLE>
CONDENSED BALANCE SHEETS - FOR NOVEMBER 11, 1995 AND NOVEMBER 12,
1994 (in thousands - unaudited)
<CAPTION>
NOVEMBER 11, NOVEMBER 12,
1995 1994
----------- -----------
<S> <C> <C>
Assets
Current assets:
Cash and short-term investments $ 9,487 $ 17,715
Other current assets 83,801 88,121
Net property and equipment 170,500 157,111
Other assets 56,676 60,358
---------- ----------
Total assets $ 320,464 $ 323,305
========== ==========
Liabilities and stockholders' equity
Current liabilities $ 92,637 $ 102,676
Long-term obligations 54,792 59,738
Other liabilities 6,280 4,303
Stockholders' equity 166,755 156,588
---------- ----------
Total liabilities and
stockholders' equity $ 320,464 $ 323,305
========== ==========
</TABLE>
