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) August 22, 2000
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.)
<PAGE>
ITEM 5. OTHER EVENTS
A. On August 22, 2000, CPI Corp. issued the following press
release:
CPI CORP. ANNOUNCES SECOND QUARTER RESULTS
- Earnings up sharply in spite of soft sales
- Diluted EPS from continuing operations 25 cents vs. 3 cents
loss last year
ST. LOUIS, MO., August 22, 2000--CPI Corp. (NYSE--CPY) today
reported 2000 second quarter net earnings from continuing
operations were $2.0 million, up from the $321,000 net loss
from continuing operations reported in the comparable 1999
period. Sales were $60.8 million, up from $58.5 million for
1999. Operating earnings for Portrait Studios increased to
$7.3 million in 2000 from $1.7 million in 1999.
For the first half of 2000 and 1999, net earnings from
continuing operations were $4.2 million and $385,000
respectively, sales were $127.7 million and $123.6 million
respectively, and operating earnings for Portrait Studios
were $14.5 million and $4.7 million respectively.
Diluted earnings per share ("EPS") from continuing operations
for the second quarter and first half of 2000 were $0.25 and
$0.50 respectively, an increase from the 1999 second quarter
EPS loss of $0.03 and first half EPS profit of $0.04. The
EPS reflects the repurchase of 299,300 shares and 1,029,700
shares of common stock in the second quarter and first half
of 2000, respectively.
The net earnings for the second quarter and first half of
2000 were up to $1.4 million and $3.6 million, respectively,
from 1999 net losses of $960,000 and $886,000 respectively.
Accordingly, the net earnings per share on a diluted basis
was $0.18 and $0.43 for the second quarter and first half of
2000 respectively, up from a 1999 EPS loss of $0.10 and
$0.09, respectively.
Alyn V. Essman, Chairman and Chief Executive Officer, said,
"The second quarter results were a confirmation of our return
to steady profitability. Although studio sales were softer
than the first quarter, the volume levels were similar to
last year. After the favorable impact of deferred revenues
from the Smile Savers program, revenues showed a 4.0%
increase from last year. Earnings gains were achieved even
with the relatively soft sales performance, reflecting the
tight operating cost controls being executed this year."
<PAGE>
Continuing, Essman said, "We are pleased to report that first
half photography segment earnings at $14.5 million (11.4% of
sales) are higher than any year since 1992, when earnings
were $16.1 million (15.3% of sales). Corporate expenses are
under control and we see no reason for change as the year
progresses. If sales continue at levels approximately equal
to last year, we expect to reach our goal of operating
earnings from the photography segment comparable to those
experienced in 1998. Increasing sales would improve that
expectation."
Finally, Essman said, "Although we are disappointed with the
failure of the sale of our Wall Decor business to Huron
Capital, we continue to seek a buyer for while we encourage
Wall Decor management to concentrate on achieving the best
possible performance during the coming fall season."
The statements contained in this release that 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 Sears Portrait Studios, future cash
requirements and capital expenditures, are only predictions or
expectations; actual events or results may differ materially as
a result of risks facing the Company. Such risks include, but
are not limited to: customer demand for the Company's products
and services, the overall level of economic activity in the
Company's major markets, competitors' actions, manufacturing
interruptions, dependence on certain suppliers, changes in the
Company's relationship with Sears, Roebuck and Company
("Sears") and the condition and strategic planning of Sears,
fluctuations in operating results, the attraction and
retention of qualified personnel 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 5, 2000.
CPI Corp. is a consumer services company with $319.1 million
in fiscal 1999 sales from continuing operations, operating
1,026 Sears Portrait Studios in the United States, Puerto
Rico and Canada.
<PAGE>
<TABLE>
CPI CORP. CONDENSED STATEMENTS OF EARNINGS - FOR THE TWELVE WEEKS
ENDED JULY 22, 2000 AND JULY 24, 1999 (in thousands of dollars
except per share amounts) (Unaudited)
<CAPTION>
12 Weeks Ended
----------------------
07/22/00 07/24/99
---------- ----------
<S> <C> <C>
Net Sales: Portrait studios $ 60,845 $ 58,482
========== ==========
Operating earnings: Portrait studios $ 7,348 $ 1,726
General corporate expense 3,662 2,964
---------- ----------
Income (loss) from operations 3,686 (1,238)
Net interest expense 706 417
Other expense 51 -
Other income 164 1,161
---------- ----------
Earnings (loss) from continuing operations
before income taxes 3,093 (494)
Income tax expense (benefit) 1,082 (173)
---------- ----------
Net earnings (loss) from continuing
operations 2,011 (321)
Earnings (loss) from discontinued
operations net of income tax benefits (583) (639)
Loss on disposal net of income tax
benefits of $3,548 - -
---------- ----------
Net earnings (loss) from discontinued
operations (583) (639)
---------- ----------
Net earnings (loss) $ 1,428 $ (960)
========== ==========
Earnings (loss) per common share-diluted:
From continuing operations $ 0.25 $ (0.03)
From discontinued operations (0.07) (0.07)
---------- ----------
Net earnings (loss)-diluted $ 0.18 $ (0.10)
========== ==========
Earnings (loss) per common share-basic:
From continuing operations $ 0.25 $ (0.03)
From discontinued operations (0.07) (0.07)
---------- ----------
Net earnings (loss)-basic $ 0.18 $ (0.10)
========== ==========
Weighted average number of common and
common equivalent shares outstanding:
Diluted 8,176 9,917
Basic 7,961 9,917
</TABLE>
<PAGE>
<TABLE>
CPI CORP. CONDENSED STATEMENTS OF EARNINGS - FOR THE TWENTY-FOUR
WEEKS ENDED JULY 22, 2000 AND JULY 24, 1999 (in thousands of
dollars except per share amounts) (Unaudited)
<CAPTION>
24 Weeks Ended
----------------------
07/22/00 07/24/99
---------- ----------
<S> <C> <C>
Net Sales: Portrait studios $ 127,746 $ 123,556
========== ==========
Operating earnings: Portrait studios $ 14,528 $ 4,677
General corporate expense 6,808 5,714
---------- ----------
Income (loss) from operations 7,720 (1,037)
Net interest expense 1,314 713
Other expense 151 -
Other income 192 2,342
---------- ----------
Earnings (loss) from continuing operations
before income taxes 6,447 592
Income tax expense (benefit) 2,256 207
---------- ----------
Net earnings (loss) from continuing
operations 4,191 385
Earnings (loss) from discontinued
operations net of income tax benefits (583) (1,271)
Loss on disposal net of income tax
benefits of $3,548 - -
---------- ----------
Net earnings (loss) from discontinued
operations (583) (1,271)
---------- ----------
Net earnings (loss) $ 3,608 $ (886)
========== ==========
Earnings (loss) per common share-diluted:
From continuing operations $ 0.50 $ 0.04
From discontinued operations (0.07) (0.13)
---------- ----------
Net earnings (loss)-diluted $ 0.43 $ (0.09)
========== ==========
Earnings (loss) per common share-basic:
From continuing operations $ 0.52 $ 0.04
From discontinued operations (0.07) (0.13)
---------- ----------
Net earnings (loss)-basic $ 0.45 $ (0.09)
========== ==========
Weighted average number of common and
common equivalent shares outstanding:
Diluted 8,323 9,908
Basic 8,097 9,908
</TABLE>
<PAGE>
<TABLE>
CPI CORP. CONDENSED STATEMENTS OF EARNINGS - FOR THE FIFTY-TWO
WEEKS ENDED JULY 22, 2000 AND JULY 24, 1999 (in thousands of
dollars except per share amounts) (Unaudited)
<CAPTION>
52 Weeks Ended
----------------------
07/22/00 07/24/99
---------- ----------
<S> <C> <C>
Net Sales: Portrait studios $ 323,325 $ 330,628
========== ==========
Operating earnings: Portrait studios $ 31,095 $ 42,431
General corporate expense 15,603 16,456
---------- ----------
Income (loss) from operations 15,492 25,975
Net interest expense 2,294 1,133
Other expense 3,651 -
Other income 1,227 5,190
---------- ----------
Earnings (loss) from continuing operations
before income taxes 10,774 30,032
Income tax expense (benefit) 3,771 10,511
---------- ----------
Net earnings (loss) from continuing
operations 7,003 19,521
Earnings (loss) from discontinued
operations net of income tax benefits 848 655
Loss on disposal net of income tax
benefits of $3,548 (6,589) -
---------- ----------
Net earnings (loss) from discontinued
operations (5,741) 655
---------- ----------
Net earnings (loss) $ 1,262 $ 20,176
========== ==========
Earnings (loss) per common share-diluted:
From continuing operations $ 0.77 $ 1.91
From discontinued operations (0.63) 0.07
---------- ----------
Net earnings (loss)-diluted $ 0.14 $ 1.98
========== ==========
Earnings (loss) per common share-basic:
From continuing operations $ 0.79 $ 1.97
From discontinued operations (0.65) 0.07
---------- ----------
Net earnings (loss)-basic $ 0.14 $ 2.04
========== ==========
Weighted average number of common and
common equivalent shares outstanding:
Diluted 9,116 10,208
Basic 8,834 9,909
</TABLE>
<PAGE>
<TABLE>
CPI CORP.
CONDENSED BALANCE SHEETS - FOR JULY 22, 2000 AND
JULY 24, 1999 (in thousands - unaudited)
<CAPTION>
07/22/00 07/24/99
--------- ---------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 24,451 $ 68,500
Other current assets 32,771 44,510
Net property and equipment 80,531 108,644
Net assets of discontinued
operations 23,627 -
Other assets 8,334 9,771
--------- ---------
Total assets $ 169,714 $ 231,425
========= =========
Liabilities and stockholders' equity
Current liabilities $ 46,023 $ 37,994
Long-term obligations 51,097 59,599
Other liabilities 13,757 20,015
Stockholders' equity 58,837 113,817
--------- ---------
Total liabilities and
stockholders' equity $ 169,714 $ 231,425
========= =========
</TABLE>
<PAGE>
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: August 23, 2000
<PAGE>
