SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 29, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number 1-6140
DILLARD DEPARTMENT STORES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 71-0388071
(State or other (IRS Employer
jurisdiction of incorporation Identification Number)
or organization)
1600 CANTRELL ROAD, LITTLE ROCK, ARKANSAS 72201
(Address of principal executive offices)
(Zip Code)
(501) 376-5200
(Registrant's telephone number, including area code)
Indicate by checkmark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes x No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
CLASS A COMMON STOCK as of April 29, 1995 109,028,595
CLASS B COMMON STOCK as of April 29, 1995 4,017,061
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1 Financial Statements
CONSOLIDATED BALANCE SHEETS
DILLARD DEPARTMENT STORES, INC.
(Unaudited)
(Thousands)
April 29 January 28 April 30
1995 1995 1994
ASSETS
CURRENT ASSETS
Cash and cash equivalents $48,889 $51,095 $49,619
Trade accounts receivable 1,034,356 1,102,104 1,031,967
Merchandise inventories 1,584,719 1,362,756 1,480,884
Other current assets 9,410 8,847 5,086
TOTAL CURRENT ASSETS 2,677,374 2,524,802 2,567,556
INVESTMENTS AND OTHER ASSETS 75,653 68,810 68,038
PROPERTY AND EQUIPMENT, NET 1,942,851 1,911,453 1,874,578
CONSTRUCTION IN PROGRESS 33,399 49,469 19,293
BUILDINGS UNDER CAPITAL LEASES 22,831 23,223 24,788
$4,752,108 $4,577,757 $4,554,253
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable and
accrued expenses $660,364 $545,522 $633,105
Commercial paper 129,825 89,906 137,124
Federal and state income taxes 44,967 65,454 46,036
Current portion of long-term debt 55,865 55,903 65,082
Current portion of capital lease
obligations 2,038 2,173 2,060
TOTAL CURRENT LIABILITIES 893,059 758,958 883,407
LONG-TERM DEBT 1,173,998 1,178,503 1,236,616
CAPITAL LEASE OBLIGATIONS 22,046 22,279 23,890
DEFERRED INCOME TAXES 294,450 294,450 282,648
STOCKHOLDERS' EQUITY
Preferred Stock 440 440 440
Common Stock 1,130 1,130 1,130
Additional paid-in capital 624,086 624,086 622,634
Retained earnings 1,742,899 1,697,911 1,503,488
2,368,555 2,323,567 2,127,692
$4,752,108 $4,577,757 $4,554,253
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
DILLARD DEPARTMENT STORES, INC.
(Unaudited)
(Thousands, except per share data)
Three Months Ended Twelve Months Ended
April 30 May 1 April 30 May 1
1994 1993 1994 1993
Net sales (including leased
departments) $1,326,754 $1,283,941 $5,588,616 $5,251,410
Service charges, interest, 47,522 48,022 182,285 182,393
and other 1,374,276 1,331,963 5,770,901 5,433,803
Cost and expenses:
Cost of sales 881,928 853,079 3,643,477 3,405,886
Advertising, selling,
administrative and general
expenses 327,460 311,210 1,344,603 1,256,628
Depreciation and amortization 47,816 45,716 192,399 175,941
Rentals 11,629 13,395 63,150 65,487
Interest and debt expense 27,414 30,652 121,044 128,564
1,296,247 1,254,052 5,364,673 5,032,506
INCOME BEFORE INCOME TAXES 78,029 77,911 406,228 401,297
Federal and state income taxes 29,650 29,605 154,365 160,030
NET INCOME 48,379 48,306 251,863 241,267
Retained earnings at beginning
of period 1,697,911 1,457,443 1,503,488 1,271,275
1,746,290 1,505,749 1,755,351 1,512,542
Cash dividends declared (3,391) (2,261) (12,452) (9,054)
RETAINED EARNINGS AT END
OF PERIOD $1,742,899 $1,503,488 $1,742,899 $1,503,488
Net income per common share $0.43 $0.43 $2.23 $2.14
Cash dividends declared
per common share $0.03 $0.02 $0.08 $0.08
Average shares outstanding 113,046 113,001 112,888 112,888
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
DILLARD DEPARTMENT STORES, INC.
(Unaudited)
(Thousands)
Three Months Ended
April 29 April 30
1995 1994
OPERATING ACTIVITITES
Net income $48,379 $48,306
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 48,153 46,118
Changes in operating assets and liabilities:
Decrease in trade accounts receivable 67,748 64,563
Increase in merchandise inventories and
other current assets (222,526) (177,050)
Increase in investments and other assets (7,180) (16,330)
Increase in trade accounts payable and
accrued expenses and income taxes 94,365 95,644
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 28,939 61,251
INVESTING ACTIVITIES
Purchase of property and equipment (62,752) (42,905)
NET CASH USED IN INVESTING ACTIVITIES (62,752) (42,905)
FINANCING ACTIVITIES
Net increase (decrease) in commercial paper 39,919 (8,152)
Principal payments on long-term debt and
capital lease obligations (4,911) (9,569)
Dividends paid (3,401) (2,250)
NET CASH PROVIDED BY FINANCING ACTIVITIES 31,607 (19,971)
DECREASE INCREASE IN CASH AND CASH EQUIVALENTS (2,206) (1,625)
Cash and cash equivalents at beginning of period 51,095 51,244
CASH AND CASH EQUIVALENTS AT END OF PERIOD $48,889 $49,619
See notes to consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the three month period ended April 29, 1995 are
not necessarily indicative of the results that may be expected for the
fiscal year ended February 3, 1996 due to the seasonal nature of the
business. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's annual report
on Form 10-K for the fiscal year ended January 28, 1995.
2. The retail last-in, first-out (LIFO) inventory method is used to value
merchandise inventories. Under this method, at April 29, 1995, and
April 30, 1994, the LIFO cost of merchandise inventories was
approximately $500,000 and $14,500,000, respectively, less than the
first-in, first-out (FIFO) cost. At January 28, 1995, the LIFO cost of
merchandise inventories was approximately equal to FIFO cost. At
January 29, 1994, the LIFO cost of merchandise inventories was
approximately $13,200,000 less than FIFO cost.
3. Net sales include leased department sales of $7,300,000 and $8,900,000
for the quarters ending April 29, 1995 and April 30, 1994, respectively.
Leased department sales for the twelve months ending April 29, 1995 and
April 30, 1994 were $44,600,000 and $61,200,000, respectively.
4. On June 1, 1995, the Company issued $100,000,000 aggregate principal
amount of its 6.875% coupon, (6.99% yeild to maturity) notes due June 1,
2005. The notes were sold in an underwritten public offering. <PAGE>
<PAGE>
ITEM 2 Management's Discussion And Analysis Of
Financial Condition And Results Of Operations
Results of Operations
The following table sets forth operating results expressed as a
percentage of net sales for the periods indicated:
Three Months Ended Twelve Months Ended
April 29 April 30 April 29 April 30
1995 1994 1995 1994
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 66.5 66.4 65.2 64.9
Gross Profit 100.0 100.0 100.0 100.0
Advertising, selling, administrative
and general expenses 24.7 24.2 24.1 23.9
Depreciation and amortization 3.6 3.6 3.4 3.4
Rentals 0.9 1.0 1.1 1.2
Interest and debt expense 2.0 2.4 2.2 2.4
Total operating expenses 31.2 31.2 30.8 30.9
Other income 3.6 3.7 3.3 3.5
Income before income taxes 5.9 6.1 7.3 7.7
Federal and state income taxes 2.2 2.3 2.8 3.1
Net income 3.7 3.8 4.5 4.6
<PAGE>
Sales for the first quarter of 1995 were $1,326,754,000 as
compared to $1,283,941,000 for the first quarter of 1994.
This is an increase of 3%. The sales increase for comparable
stores was 1%. The twelve month sales increase for 1995 over
1994 was 6%, for comparable stores the increase was 4%.
Cost of sales increased from 66.4% of net sales for the first
quarter of 1994 to 66.5% for the first quarter of 1995. For
the twelve months ended April 29, 1995 and April 30, 1994, the
increase was from 64.9% to 65.2%. These increases are due to
a slightly higher level of markdowns than in the prior year.
Advertising, selling, administrative and general expenses
increased from 24.2% of net sales for the first quarter of
1994 to 24.7% for the first quarter of 1995, primarily due to
an increase in payroll expense in the selling area. For the
twelve months ended April 29, 1995 and April 30, 1994 the
percent to net sales increased from 23.9% to 24.1%.
Depreciation and amortization expense remained constant as a
percentage of sales from 1994 in the three and twelve month
periods ended April 29, 1995.
Rental expense decreased slightly from 1% of net sales for the
first quarter of 1994 to .9% of net sales in the three months
ended April 29, 1995. For the twelve months ended April 29,
1995 rental expense as a percent of net sales decreased
slightly from 1.2% of net sales to 1.1% of net sales in 1995.
This was due to a higher proportion of the Company's
properties being owned rather than leased.
Interest and debt expense decreased from 2.4% of net sales for
the first quarter of 1994 to 2.0% of net sales for the first
quarter of 1995. For the twelve months ended April 29, 1995
interest and debt expense decreased slightly from 2.4% of net
sales in 1994 to 2.2% of net sales in 1995. Interest and debt
expense declined as a percentage of net sales due to an
overall lower level of debt partially offset by higher
interest rates on short-term debt.
Service charges, interest and other income decreased to 3.6%
of net sales in the first quarter of 1995 from 3.7% of net
sales in 1994. For the twelve months ended April 29, 1995
this decreased to 3.3% of net sales from 3.5% of net sales in
1994.
The effective federal and state income tax rate was 38% for
the first quarter of 1995 and 38% for the first quarter of
1994.
<PAGE>
Financial Condition
The Company's working capital was $1,784,315,000 at April 29,
1995, $1,765,844,000 at January 28, 1995, and $1,684,149,000
at April 30, 1994. The current ratio for these periods was
3.0, 3.3 and 2.9, respectively. The long-term debt to
capitalization ratio was 33.6%, 34.1% and 37.2% at April 29,
1995, January 28, 1995, and April 30, 1994, respectively.
On June 1, 1995, the Company issued $100,000,000 6.875% notes
due June 1, 2005. The proceeds were used to reduce short
term borrowings.
The Company invested $62,752,000 in capital expenditures for
the three months ended April 29, 1995 as compared to
$42,905,000 for the three months ended April 30, 1994. In
1995, the Compnay plans to build eleven stores, two of which
will be replacement stores and to remodel and expand eight
additional stores. In 1994, the Company opened nine new
stores, two of which were replacement stores and significantly
remodeled and expanded two additional stores.
Merchandise inventories increased by 7% from $1,480,884,000 at
April 30, 1994 to $1,584,719,000 at April 29, 1995. This
increase is due to the opening of seven new stores in 1994 and
four stores in the first quarter of 1995. On a comparable
store basis, the rate of increase in merchandise inventories
was 2%.
Fluctuations in certain other balance sheet accounts between
January 28, 1995 and April 29, 1995 reflect normal seasonal
variations within the retail industry.
<PAGE>
PART II OTHER INFORMATION
ITEM 4 Submission of Matters to a Vote of Security Holders
The annual meeting of stockholders of the Company was held on May
20, 1995. The matters submitted to a vote of the stockholders were
the election of directors and a stockholder proposal requesting
preparation of an employment practices report. The holders of
Class A Common Stock elected five directors and the holders of
Class B Common Stock elected ten directors. The individuals
elected as directors and the votes received were as follows:
Nominee For Against
Class A Nominees
Robert C. Connor 92,412,903 900,660
Will D. Davis 92,354,774 958,789
John Paul Hammerschmidt 92,112,274 1,201,289
William B. Harrison 92,422,169 891,394
J.M. Hessels 92,118,093 1,195,470
Class B Nominees
William Dillard 3,998,568 0
Calvin N. Clyde 3,998,568 0
Drue Corbusier 3,998,568 0
Alex Dillard 3,998,568 0
Mike Dillard 3,998,568 0
William Dillard II 3,998,568 0
James I. Freeman 3,998,568 0
John H. Johnson 3,998,568 0
E. Ray Kemp 3,998,568 0
William H. Sutton 3,998,568 0
The voting for the stockholder proposal was as follows:
For 10,524,179.92 Against 68,829,043.44 Abstain 10,811,635.64
<PAGE>
ITEM 5 Other Information
Ratio of Earnings to Fixed Charges
The Company has calculated the ratio of earnings to fixed charges
pursuant to Item 503 of Regulation S-K of the Securities and
Exchange Commission as follows:
Three Months Ended Fiscal Year Ended
April 29 April 30 January 28 January 29 January 30 February 1 February 2
1995 1994 1995 1994 1993 1992 1991
3.36 3.19 3.72 3.57 3.59 3.40 3.38
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibit (11): Statement re: Computation of Per Share Earnings
Exhibit (12): Statement re: Computation of Ratio of Earnings to
Fixed Charges
(b) Reports on Form 8-K filed during the first quarter:
The Company filed a report dated May 24, 1995 relating to the
issue of 6 7/8% Notes of $100,000,000 aggregate principal amount
maturing on June 1, 2005.
<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.
DILLARD DEPARTMENT STORES, INC.
(Registrant)
DATE: June 9, 1995 /s/ James I. Freeman
James I. Freeman
Senior Vice President &
Chief Financial Officer
(Principal Financial & Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibits to Form 10-Q
Exhibit Number Exhibit
11 Statement re: Computation of Per Share Earnings
12 Statement re: Computation of Ratio of Earnings
to Fixed Charges
<PAGE>
EXHIBIT 11 - STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
Three Months Ended Twelve Months Ended
April 29 April 30 April 29 April 30
1995 1994 1995 1994
Average shares outstanding 113,045,656 112,991,719 113,012,890 112,859,235
Net effect of dilutive
stock options based on
the treasury stock method
using average market price 0 9,716 12,163 28,802
Total 113,045,656 113,001,435 113,025,053 112,888,037
Net Income $48,379,000 $48,306,000 $251,863,000 $241,267,000
Less preferred dividends (5,500) (5,500) (22,000) (22,000)
Net income available to
common shares $48,373,500 $48,300,500 $251,841,000 $241,245,000
Per share $0.43 $0.43 $2.23 $2.14
<PAGE>
EXHIBIT 12 - STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
Three Months Ended Fiscal Year Ended
April 29 April 30 January 28 January 29 January 30 February 1 February 2
1995 1994 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated pretax income $78,029 $77,911 $406,110 $399,534 $375,330 $322,157 $280,778
Fixed charges (less
capitalized interest) 31,299 35,126 145,957 152,604 142,892 128,925 115,125
EARNINGS $109,328 $113,037 $552,067 $552,138 $518,222 $451,082 $395,903
Interest $27,414 $30,652 $124,282 $130,915 $121,940 $109,386 $97,032
Preferred stock dividends 9 9 36 36 35 34 34
Capitalized interest 1,195 301 2,545 1,882 1,646 3,574 1,928
Interest factor in rent
expense 3,876 4,465 21,639 21,653 20,917 19,505 18,059
FIXED CHARGES $32,494 $35,427 $148,502 $154,486 $144,538 $132,499 $117,053
Ratio of earnings to
fixed charges 3.36 3.19 3.72 3.57 3.59 3.40 3.38
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-3-1996
<PERIOD-END> APR-29-1995
<CASH> 48,889
<SECURITIES> 0
<RECEIVABLES> 1,034,356
<ALLOWANCES> 15,227
<INVENTORY> 1,584,719
<CURRENT-ASSETS> 2,677,374
<PP&E> 3,128,419
<DEPRECIATION> 1,129,339
<TOTAL-ASSETS> 4,752,108
<CURRENT-LIABILITIES> 893,059
<BONDS> 1,196,044
<COMMON> 1,130
0
440
<OTHER-SE> 2,366,985
<TOTAL-LIABILITY-AND-EQUITY> 4,752,108
<SALES> 1,326,754
<TOTAL-REVENUES> 1,374,276
<CGS> 881,928
<TOTAL-COSTS> 881,928
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 11,588
<INTEREST-EXPENSE> 27,414
<INCOME-PRETAX> 78,029
<INCOME-TAX> 29,650
<INCOME-CONTINUING> 48,379
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 48,379
<EPS-PRIMARY> .43
<EPS-DILUTED> .43
</TABLE>
