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) May 31, 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 May 31, 2000, CPI Corp. issued the following press
release:
CPI CORP. ANNOUNCES FIRST QUARTER RESULTS
- Sales Up 2.8%
- Income from operations increased to $4.0 million from
$201,000
St. Louis, MO., May 31, 2000-CPI Corp. (NYSE - CPY) today
reported first quarter sales of $66.9 million, up 2.8% from
last year's $65.1 million. First quarter 2000 income from
operations increased to $4.0 million from $201,000 for the
first quarter 1999. Net earnings from continuing operations
of $2.2 million, or $0.26 per share, increased from net
earnings of $706,000 last year, or $0.07 per share. The
improvements were due to expense controls, coupled with
moderate sales increases, as the Company turned full
attention to its core Portrait Studio operations. First
quarter 1999 reflects income from the non-compete agreement
with Eastman Kodak Company in conjunction with the sale of
the photofinishing segment. The non-compete agreement
expired in October 1999. The Wall Decor business was
classified as a discontinued operation as of the end of
fiscal 1999.
Sales for the 52 weeks ended April 29, 2000 were $321.0
million versus $330.5 million reported for the 52 weeks ended
May 1, 1999. Income from operations was $10.6 million for
the 52 weeks ended April 29, 2000 compared to $29.5 million
for the 52 weeks ended May 1, 1999. As previously discussed,
the results for the 52 week period ended April 29, 2000
reflect the impact of higher employment costs, the write-off
of computer software and hardware and higher selling, general
and administrative costs incurred during fiscal 1999. Net
earnings from continuing operations for the 52 weeks ended
April 29, 2000 were $4.7 million compared to $21.9 million in
the prior period.
Commenting on the first quarter, Alyn V. Essman, Chairman and
Chief Executive Officer, said, "We are pleased with the
results of the first quarter and believe that we are on track
to achieve operating income from the portrait studio segment
for fiscal 2000 that is generally comparable to fiscal 1998.
The first quarter results support our assessment that many
factors that adversely affected fiscal 1999 would not recur
this year. With full attention now focused on our core
business, we are able to better manage our studio resources
as we realize the benefits of our extensive investments in
field personnel and technology over the last several years."
<PAGE>
Continuing, Essman explained, "The ongoing Smile Savers
Plan(R) customer loyalty program is designed to increase the
frequency of repeat visits, and though our customers spend
less in their return visits, the overall effect should be
moderate sales increases. Approaching the first anniversary
of the program, the deferral of revenue is only slightly more
than the recognition of amounts previously deferred. As we
progress through the second half of the year, this will
result in favorable revenue comparisons to last year when the
deferred revenues were growing rapidly with new enrollments."
Finally, Essman said, "As we have previously disclosed, the
extension of the Store Automation System into the camera
rooms has been rescheduled for 2001-2002, when we can expect
the new camera and printing technology to support it. We are
happy to report that the currently installed computer
equipment is outlasting its projected engineering life and
will allow an orderly replacement in accordance with the
proposed SAS installation schedule."
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
1,021 Sears Portraits Studios in the United States, Puerto
Rico and Canada.
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<TABLE>
CPI CORP. CONDENSED STATEMENTS OF EARNINGS - FOR THE TWELVE WEEKS
ENDED APRIL 29, 2000 AND MAY 1, 1999 (in thousands of dollars
except per share amounts) (Unaudited)
<CAPTION>
12 Weeks Ended
----------------------
04/29/00 05/01/99
---------- ---------
<S> <C> <C>
Net Sales: Portrait studios $ 66,901 $ 65,074
========= =========
Operating earnings: Portrait studios $ 7,181 $ 2,951
General corporate expense 3,146 2,750
--------- ---------
Income from operations 4,035 201
Net interest expense 608 295
Other expense 100 -
Other income 27 1,180
--------- ---------
Earnings from continuing operations before
income taxes 3,354 1,086
Income tax expense 1,174 380
--------- ---------
Net earnings from continuing operations 2,180 706
Earnings (loss) from discontinued operations
net of income tax benefits - (632)
Loss on disposal net of income tax benefits
of $3,548 - -
--------- ---------
Net earnings (loss) from discontinued
operations - (632)
--------- ---------
Net earnings (loss) $ 2,180 $ 74
========= =========
Earnings (loss) per common share-diluted
From continuing operations $ 0.26 $ 0.07
From discontinued operations - (0.06)
--------- ---------
Net earnings (loss)-diluted $ 0.26 $ 0.01
========= =========
Earnings (loss) per common share-basic
From continuing operations $ 0.26 $ 0.07
From discontinued operations - (0.06)
--------- ---------
Net earnings (loss)-basic $ 0.26 $ 0.01
========= =========
Weighted average number of common and
common equivalent shares outstanding:
Diluted 8,470 10,161
Basic 8,233 9,899
</TABLE>
<PAGE>
<TABLE>
CPI CORP. CONDENSED STATEMENTS OF EARNINGS - FOR THE FIFTY-TWO
WEEKS ENDED APRIL 29, 2000 AND MAY 1, 1999 (in thousands of
dollars except per share amounts) (Unaudited)
<CAPTION>
52 Weeks Ended
----------------------
04/29/00 05/01/99
---------- ---------
<S> <C> <C>
Net Sales: Portrait studios $320,962 $330,476
========= =========
Operating earnings: Portrait studios $ 25,473 $ 45,585
General corporate expense 14,904 16,090
--------- ---------
Income from operations 10,569 29,495
Net interest expense 2,006 1,003
Other expense 3,600 -
Other income 2,223 5,245
--------- ---------
Earnings from continuing operations before
income taxes 7,186 33,737
Income tax expense 2,515 11,808
--------- ---------
Net earnings from continuing operations 4,671 21,929
Earnings (loss) from discontinued operations
net of income tax benefits 792 595
Loss on disposal net of income tax benefits
of $3,548 (6,589) -
--------- ---------
Net earnings (loss) from discontinued
operations (5,797) 595
--------- ---------
Net earnings (loss) $ (1,126) $ 22,524
========= =========
Earnings (loss) per common share-diluted
From continuing operations $ 0.49 $ 2.15
From discontinued operations (0.61) 0.06
--------- ---------
Net earnings (loss)-diluted $ (0.12) $ 2.21
========= =========
Earnings (loss) per common share-basic
From continuing operations $ 0.50 $ 2.21
From discontinued operations (0.62) 0.06
--------- ---------
Net earnings (loss)-basic $ (0.12) $ 2.27
========= =========
Weighted average number of common and
common equivalent shares outstanding:
Diluted 9,619 10,201
Basic 9,285 9,932
</TABLE>
<PAGE>
<TABLE>
CPI CORP.
CONDENSED BALANCE SHEETS - FOR APRIL 29, 2000 AND MAY 1, 1999
(in thousands - unaudited)
<CAPTION>
04/29/00 05/01/99
----------- ------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 30,676 $ 66,189
Other current assets 36,202 42,320
Net property and equipment 82,926 108,561
Net assets of discontinued
operations 23,177 -
Other assets 8,468 9,821
----------- ------------
Total assets $ 181,449 $ 226,891
=========== ============
Liabilities and stockholders' equity
Current liabilities $ 42,148 $ 31,482
Long-term obligations 59,657 59,579
Other liabilities 14,563 19,468
Stockholders' equity 65,081 116,362
----------- ------------
Total liabilities and
stockholders' equity $ 181,449 $ 226,891
=========== ============
</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 1, 2000
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