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 12, 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 December 12, 2000 CPI Corp. issued the following press
release:
CPI CORP. ANNOUNCES THIRD QUARTER RESULTS
- EPS from continuing operations 37 cents share vs. loss of 27
cents last year
- Sales slightly behind last year
ST. LOUIS, MO., DECEMBER 12, 2000 - CPI CORP. (NYSE - CPY) today
reported net earnings from continuing operations for the 16-week
third quarter ended November 11, 2000 were $3.0 million, up from
the net loss of $2.7 million from continuing operations reported in
the comparable 1999 period. The 1999 16-week period includes a
pre-tax $3.0 million failed merger transaction write-off last year.
Portrait Studio sales were $96.5 million, down slightly from $97.6
million recorded for 1999, while operating earnings increased to
$10.3 million in 2000 from $3.0 million in 1999. Diluted earnings
per share ("EPS") from continuing operations for the 16-weeks of
2000 were 37 cents, an increase from the 1999 diluted loss per
share of 27 cents.
For the 40-weeks ended November 11, 2000, net earnings from
continuing operations were $7.1 million, up from the $2.3 million
net loss from continuing operations recorded for the same time
period in 1999. Portrait Studio sales were $224.2 million and
$221.2 million for the 40-weeks of 2000 and 1999, respectively, and
operating earnings were $24.8 million and $7.7 million,
respectively. Diluted EPS from continuing operations for the 40-
weeks ended November 11, 2000 were 88 cents, an increase from 1999
diluted loss per share of 23 cents.
For the 52-weeks ended November 11, 2000 and November 13, 1999, net
earnings from continuing operations were $12.6 million and $10.4
million, respectively, Portrait Studio sales were $322.2 million
and $322.1 million respectively, and operating earnings were $38.4
million and $31.9 million, respectively. Diluted EPS from
continuing operations for the 52-weeks ended November 11, 2000 were
$1.50, an increase from 1999 EPS of $1.01.
Due to the repurchase of 156,505, 1,186,205, and 1,699,555 shares
of common stock under various repurchase programs since last year
in the 16-week, 40-week and 52-week timeframes, the weighted
average number of common and equivalent shares outstanding used to
determine EPS at the end of the third quarter declined 19.5%, 17.4%
and 17.8%, respectively.
Commenting, Alyn V. Essman, Chairman and Chief Executive Officer,
said, "The third quarter continued to show positive earnings
contributions from the operating controls and the elimination of
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the unusual expenses that affected the comparable 1999 quarter.
Sales continue to be soft as they have been all year, decreasing
5.4% from last year before being offset by the favorable impact of
deferred revenues from the Smile Savers program. However,
Portrait Studio operating earnings are close to our expectations.
At this point, the softness in sales has continued into the 4th
quarter, leading us to expect sales from continuing operations at
levels 3% to 4% less than last year for the quarter after the
favorable impact of Smile Savers. Consequently, although Portrait
Studio operating earnings for the quarter and full year should be
dramatically more than last year, they will probably not reach the
level reported for 1998 as we previously expected."
Further, Essman said, "While continuing our efforts to seek a buyer
for the Wall Decor business, third quarter net earnings have been
adjusted to include a $2.8 million after tax loss to adjust the
valuation of the segment to its current estimated fair value."
In closing, Essman remarked, "As always, the 4th quarter operations
are critical to the company's performance. Costs are well in
control and all possible efforts have been extended to serve as
many customers as possible."
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 1,030 Sears
Portraits Studios in the United States, Puerto Rico and Canada.
<PAGE>
<TABLE>
CPI CORP. CONDENSED STATEMENTS OF EARNINGS - FOR THE SIXTEEN WEEKS
ENDED NOVEMBER 11, 2000 AND NOVEMBER 13, 1999 (in thousands of
dollars except per share amounts) (Unaudited)
<CAPTION>
16 Weeks Ended
----------------------
11/11/00 11/13/99
---------- ----------
<S> <C> <C>
Net Sales: Portrait studios $ 96,453 $ 97,596
========== ==========
Operating earnings: Portrait studios $ 10,296 $ 3,038
General corporate expense 4,566 4,583
---------- ----------
Income (loss) from operations 5,730 (1,545)
Net interest expense 939 572
Other expense 260 3,000
Other income 15 1,019
---------- ----------
Earnings (loss) from continuing operations
before income taxes 4,546 (4,098)
Income tax expense (benefit) 1,591 (1,435)
---------- ----------
Net earnings (loss) from continuing
operations 2,955 (2,663)
Earnings (loss) from discontinued
operations net of income tax benefits (544) (680)
Loss on disposal net of income tax
benefits (2,753) -
---------- ----------
Net earnings (loss) from discontinued
operations (3,297) (680)
---------- ----------
Net earnings (loss) $ (342) $ (3,343)
========== ==========
Earnings (loss) per common share-diluted:
From continuing operations $ 0.37 $ (0.27)
From discontinued operations (0.41) (0.07)
---------- ----------
Net earnings (loss)-diluted $ (0.04) $ (0.34)
========== ==========
Earnings (loss) per common share-basic:
From continuing operations $ 0.38 $ (0.27)
From discontinued operations (0.42) (0.07)
---------- ----------
Net earnings (loss)-basic $ (0.04) $ (0.34)
========== ==========
Weighted average number of common and
common equivalent shares outstanding:
Diluted 7,923 9,838
Basic 7,702 9,838
</TABLE>
<PAGE>
<TABLE>
CPI CORP. CONDENSED STATEMENTS OF EARNINGS - FOR THE FORTY WEEKS
ENDED NOVEMBER 11, 2000 AND NOVEMBER 13, 1999 (in thousands of
dollars except per share amounts) (Unaudited)
<CAPTION>
40 Weeks Ended
----------------------
11/11/00 11/13/99
---------- ----------
<S> <C> <C>
Net Sales: Portrait studios $ 224,199 $ 221,152
========== ==========
Operating earnings: Portrait studios $ 24,824 $ 7,715
General corporate expense 11,374 10,297
---------- ----------
Income (loss) from operations 13,450 (2,582)
Net interest expense 2,252 1,285
Other expense 411 3,000
Other income 207 3,361
---------- ----------
Earnings (loss) from continuing operations
before income taxes 10,994 (3,506)
Income tax expense (benefit) 3,848 (1,227)
---------- ----------
Net earnings (loss) from continuing
operations 7,146 (2,279)
Earnings (loss) from discontinued
operations net of income tax benefits (1,127) (1,950)
Loss on disposal net of income tax
benefits (2,753) -
---------- ----------
Net earnings (loss) from discontinued
operations (3,880) (1,950)
---------- ----------
Net earnings (loss) $ 3,266 $ (4,229)
========== ==========
Earnings (loss) per common share-diluted:
From continuing operations $ 0.88 $ (0.23)
From discontinued operations (0.48) (0.20)
---------- ----------
Net earnings (loss)-diluted $ 0.40 $ (0.43)
========== ==========
Earnings (loss) per common share-basic:
From continuing operations $ 0.90 $ (0.23)
From discontinued operations (0.49) (0.20)
---------- ----------
Net earnings (loss)-basic $ 0.41 $ (0.43)
========== ==========
Weighted average number of common and
common equivalent shares outstanding:
Diluted 8,163 9,880
Basic 7,939 9,880
</TABLE>
<PAGE>
<TABLE>
CPI CORP. CONDENSED STATEMENTS OF EARNINGS - FOR THE FIFTY-TWO
WEEKS ENDED NOVEMBER 11, 2000 AND NOVEMBER 13, 1999 (in thousands
of dollars except per share amounts) (Unaudited)
<CAPTION>
52 Weeks Ended
----------------------
11/11/00 11/13/99
---------- ----------
<S> <C> <C>
Net Sales: Portrait studios $ 322,181 $ 322,053
========== ==========
Operating earnings: Portrait studios $ 38,353 $ 31,892
General corporate expense 15,586 16,159
---------- ----------
Income (loss) from operations 22,767 15,733
Net interest expense 2,659 1,385
Other expense 911 3,000
Other income 221 4,612
---------- ----------
Earnings (loss) from continuing operations
before income taxes 19,418 15,960
Income tax expense (benefit) 6,796 5,586
---------- ----------
Net earnings (loss) from continuing
operations 12,622 10,374
Earnings (loss) from discontinued
operations net of income tax benefits 983 409
Loss on disposal net of income tax
benefits (9,342) -
---------- ----------
Net earnings (loss) from discontinued
operations (8,359) 409
---------- ----------
Net earnings (loss) $ 4,263 $ 10,783
========== ==========
Earnings (loss) per common share-diluted:
From continuing operations $ 1.50 $ 1.01
From discontinued operations (1.00) 0.04
---------- ----------
Net earnings (loss)-diluted $ 0.50 $ 1.05
========== ==========
Earnings (loss) per common share-basic:
From continuing operations $ 1.54 $ 1.05
From discontinued operations (1.02) 0.04
---------- ----------
Net earnings (loss)-basic $ 0.52 $ 1.09
========== ==========
Weighted average number of common and
common equivalent shares outstanding:
Diluted 8,401 10,223
Basic 8,176 9,871
</TABLE>
<PAGE>
<TABLE>
CPI CORP.
CONDENSED BALANCE SHEETS - FOR NOVEMBER 11, 2000 AND
NOVEMBER 13, 1999 (in thousands - unaudited)
<CAPTION>
11/11/00 11/13/99
--------- ---------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 18,862 $ 48,333
Other current assets 46,889 61,624
Net property and equipment 76,860 112,397
Net assets of discontinued
operations 19,094 -
Other assets 14,661 7,659
--------- ---------
Total assets $ 176,366 $ 230,013
========= =========
Liabilities and stockholders' equity
Current liabilities $ 58,173 $ 55,894
Long-term obligations 51,122 59,624
Other liabilities 13,789 21,165
Stockholders' equity 53,282 93,330
--------- ---------
Total liabilities and
stockholders' equity $ 176,366 $ 230,013
========= =========
</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: December 13, 2000
<PAGE>
