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) June 2, 1999
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' telephone number, including area code (314)231-1575
________________________________________________________________
_______________________________________________________________
(Former name or former address, if changes since last report.)
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ITEM 5. OTHER EVENTS
A. On June 2, 1999, CPI Corp. issued the following press
release:
CPI CORP ANNOUNCES FIRST QUARTER RESULTS
- Sales up 5.9%, with increased operating earnings
- Sears Portrait Studios realize increased operating margins
- Earnings of one cent per share versus prior-year loss of
five cents
St. Louis, MO, June 2, 1999 - CPI Corp. (NYSE - CPY) today
reported 1999 first quarter sales of $77.7 million, up 5.9%
from last year's $73.4 million, with operating earnings of
$2.0 million compared with $0.8 million in 1998. The gains
were due to improved performance in the core Portrait Studio
segment, as results in the Wall Decor segment declined.
While both years' first quarter results included recognition
of $1.2 million income from the non-compete agreement with
Kodak, and general corporate expenses were relatively flat,
the company recorded 1999 first-quarter net earnings of
$74,000 (1 cent per share) versus a loss of $506,000 (5 cents
per share) in the 1998 first quarter.
Sales for the 52 weeks ended May 1, 1999 were $393.8 million,
6.5% above the $369.9 million for the 53 weeks ended May 2,
1998, with operating earnings of $46.5 million, up 8.5% from
the prior period's $42.8 million. Net earnings were $22.5
million compared to $14.6 million in the prior period.
Diluted earnings per share were $2.21 compared to $1.27.
Discussing first quarter results, Alyn V. Essman, chairman
and chief executive officer, said, "We are pleased that sales
in the Sears Portrait Studios increased to $65.1 million
compared to the prior year's $60.1 million, and operating
earnings increased to $3.0 million from $1.6 million, with
operating margin of 4.5% compared to 2.7%. These increases
are a continuation of the improvements we saw throughout
1998."
Continuing, Essman said, "Sales in our Prints Plus business
declined 4.7% to $12.6 million from last year's $13.2
million, while operating losses increased slightly to $1.0
million from $0.9 million. In addition to four fewer stores
in operation this year, these minor decreases reflect
comparisons against high 1998 sales levels which were
stimulated by the introduction of new feature posters related
to the movie 'Titanic' and other strong intros."
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Concluding, Essman said, "1999 is still a year for building
and investing to support future growth, but we are pleased
to see the year off to a good start."
The statements contained in this release which are not
historical facts are forward-looking statements that
involve risks and uncertainties. Management wishes to
caution the reader that these forward-looking statements,
such as the Company's outlook for the Portrait Studio and
Wall Decor segments, are only predictions; actual events or
results may differ materially as a result of risks facing
the Company. Such risks include, but are not limited to,
the Company's ongoing ability to develop and introduce
attractive new products, the overall level of economic
activity in the Company's major markets, the effectiveness
of marketing activities of major competitors, manufacturing
interruptions, dependence on certain suppliers, fluctuations
in operating results, the attraction and retention of
qualified personnel, Year 2000 compliance issues and other
risks as may be described in the Company's filings with the
Securities and Exchange Commission, including its Form 10-K
for the year ended February 6, 1999.
CPI Corp. is a consumer services company currently operating
1,029 Sears Portrait Studios in the U.S., Puerto Rico and
Canada, and 152 Prints Plus wall decor locations.
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<TABLE>
CPI CORP.
CONDENSED STATEMENTS OF EARNINGS - FOR THE TWELVE WEEKS ENDED
MAY 1, 1999 AND MAY 2, 1998 (in thousands of dollars except
per share amounts) (Unaudited)
<CAPTION>
12 Weeks Ended
----------------------
05/01/99 05/02/98
---------- ----------
<S> <C> <C>
Net Sales:
Portrait studios $ 65,074 $ 60,145
Wall decor 12,588 13,209
---------- ----------
Total net sales $ 77,662 $ 73,354
========== ==========
Operating earnings:
Portrait studios $ 2,951 $ 1,642
Wall decor (975) (866)
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Total operating earnings 1,976 776
General corporate expense 2,750 2,578
---------- ----------
Income (loss) from operations (774) (1,802)
Net interest expense 292 229
Interest in joint venture loss - -
Gain (loss) on sale of
interest in Photofinishing
segment - -
Other income 1,180 1,253
---------- ----------
Earnings (loss) from
operations before income
taxes 114 (778)
Income tax expense (benefit) 40 (272)
---------- ----------
Net earnings (loss) $ 74 $ (506)
========== ==========
Earnings (loss) per common
share:
Diluted $ 0.01 $ (0.05)
Basic $ 0.01 $ (0.05)
Weighted average number of
common and common equivalent
shares outstanding:
Diluted 10,161 9,914
Basic 9,899 9,914
</TABLE>
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<TABLE>
CPI CORP.
CONDENSED STATEMENTS OF EARNINGS - FOR THE FIFTY-TWO WEEKS ENDED
MAY 1, 1999 AND THE FIFTY-THREE WEEKS ENDED MAY 2, 1998 (in
thousands of dollars except per share amounts) (Unaudited)
<CAPTION>
52 Weeks 53 Weeks
Ended Ended
---------- ----------
05/01/99 05/02/98
---------- ----------
<S> <C> <C>
Net Sales:
Portrait studios $ 330,476 $ 305,736
Wall decor 63,343 64,144
---------- ----------
Total net sales $ 393,819 $ 369,880
========== ==========
Operating earnings:
Portrait studios $ 45,585 $ 43,396
Wall decor 893 (576)
---------- ----------
Total operating earnings 46,478 42,820
General corporate expense 16,090 14,980
---------- ----------
Income (loss) from operations 30,388 27,840
Net interest expense 981 1,635
Interest in joint venture loss - (1,455)
Gain (loss) on sale of
interest in Photofinishing
segment - (4,189)
Other income 5,245 3,385
---------- ----------
Earnings (loss) from
operations before income
taxes 34,652 23,946
Income tax expense (benefit) 12,128 9,328
---------- ----------
Net earnings (loss) $ 22,524 $ 14,618
========== ==========
Earnings (loss) per common
share:
Diluted $ 2.21 $ 1.27
Basic $ 2.27 $ 1.30
Weighted average number of
common and common equivalent
shares outstanding:
Diluted 10,201 11,508
Basic 9,932 11,237
</TABLE>
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<TABLE>
CPI CORP.
CONDENSED BALANCE SHEETS - FOR MAY 1, 1999 AND
MAY 2, 1998 (in thousands - unaudited)
<CAPTION>
05/01/99 05/02/98
----------- ------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 66,189 $ 6,787
Other current assets 42,320 78,801
Net property and equipment 108,561 121,311
Other assets 9,821 9,403
----------- ------------
Total assets $ 226,891 $ 216,302
=========== ============
Liabilities and stockholders' equity
Current liabilities $ 30,622 $ 36,973
Long-term obligations 59,579 59,501
Other liabilities 20,328 17,721
Stockholders' equity 116,362 102,107
----------- ------------
Total liabilities and
stockholders' equity $ 226,891 $ 216,302
=========== ============
</TABLE>
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SIGNATURE
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: June 2, 1999
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