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 August 1, 1998
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'S, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 71-0388071
(State or other (IRS Employer Identification Number)
jurisdiction of incorporation
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 August 1, 1998 102,800,501
CLASS B COMMON STOCK as of August 1, 1998 4,016,929
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1 Financial Statements
CONSOLIDATED BALANCE SHEETS
DILLARD'S, INC.
(Unaudited)
(Thousands)
August 1 January 31 August 2
1998 1998 1997
ASSETS
CURRENT ASSETS
Cash and cash equivalents $65,019 $41,833 $73,225
Trade accounts receivable 1,027,344 1,158,682 1,031,524
Merchandise inventories 1,863,459 1,784,765 1,750,239
Other current assets 13,294 12,777 9,281
TOTAL CURRENT ASSETS 2,969,116 2,998,057 2,864,269
INVESTMENTS AND OTHER ASSETS 113,462 92,298 90,403
PROPERTY AND EQUIPMENT, NET 2,470,643 2,463,801 2,260,592
CONSTRUCTION IN PROGRESS 75,309 37,691 131,816
$5,628,530 $5,591,847 $5,347,080
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable and
accrued expenses $696,486 $530,034 $629,502
Commercial paper 229,366 419,136 234,829
Federal and state income taxes 26,782 40,761 18,513
Current portion of long-term debt 157,268 107,268 156,564
Current portion of capital lease
obligations 1,596 1,651 1,589
TOTAL CURRENT LIABILITIES 1,111,498 1,098,850 1,040,997
LONG-TERM DEBT 1,362,173 1,365,716 1,319,758
CAPITAL LEASE OBLIGATIONS 11,532 12,205 12,963
DEFERRED INCOME TAXES 322,028 307,138 261,094
STOCKHOLDERS' EQUITY
Preferred Stock 440 440 440
Common Stock 1,149 1,143 1,138
Additional paid-in capital 677,708 657,137 643,987
Retained earnings 2,417,176 2,314,709 2,167,838
Less Treasury Stock (275,174) (165,491) (101,135)
2,821,299 2,807,938 2,712,268
$5,628,530 $5,591,847 $5,347,080
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
DILLARD'S, INC.
(Unaudited)
(Thousands, except per share data)
<TABLE>
Three Months Ended Six Months Ended Twelve Months Ended
August 1 August 2 August 1 August 2 August 1 August 2
1998 1997 1998 1997 1998 1997
<S> <C> <C> <C> <C> <C> <C>
Net sales $1,504,504 $1,453,152 $3,186,720 $2,968,496 $6,849,976 $6,402,453
Service charges, interest, and other 47,496 46,188 95,165 93,401 186,921 182,922
1,552,000 1,499,340 3,281,885 3,061,897 7,036,897 6,585,375
Cost and expenses:
Cost of sales 964,144 946,119 2,081,365 1,941,322 4,533,334 4,238,486
Advertising, selling, administrative
and general expenses 412,231 387,191 826,279 769,781 1,686,219 1,580,961
Depreciation and amortization 54,290 51,326 108,844 102,528 206,255 195,670
Rentals 9,892 10,837 20,183 21,467 53,402 55,170
Interest and debt expense 35,342 33,480 68,998 63,939 134,296 125,729
1,475,899 1,428,953 3,105,669 2,899,037 6,613,506 6,196,016
INCOME BEFORE INCOME TAXES 76,101 70,387 176,216 162,860 423,391 389,359
Income taxes 28,155 26,045 65,200 60,260 156,650 144,065
NET INCOME $47,946 $44,342 $111,016 $102,600 $266,741 $245,294
Retained earnings at beginning
of period 2,373,513 2,127,980 2,314,709 2,074,214 2,167,838 1,940,617
2,421,459 2,172,322 2,425,725 2,176,814 2,434,579 2,185,911
Cash dividends declared (4,283) (4,484) (8,549) (8,976) (17,403) (18,073)
RETAINED EARNINGS AT END
OF PERIOD $2,417,176 $2,167,838 $2,417,176 $2,167,838 $2,417,176 $2,167,838
BASIC EARNINGS PER SHARE $0.45 $0.40 $1.03 $0.92 $2.44 $2.18
DILUTED EARNINGS PER SHARE $0.45 $0.40 $1.03 $0.91 $2.43 $2.17
Cash dividends declared per common share $0.04 $0.04 $0.08 $0.08 $0.16 $0.16
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
DILLARD'S, INC.
(Unaudited)
(Thousands)
Six Months Ended
August 1 August 2
1998 1997
OPERATING ACTIVITITES
Net income $111,016 $102,600
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 110,030 103,284
Changes in operating assets and liabilities:
Decrease in trade accounts receivable 131,338 98,980
Increase in merchandise inventories and
other current assets (79,211) (193,482)
(Increase) decrease in investments and
other assets (22,350) 15,998
Increase in trade accounts payable and
accrued expenses and income taxes 167,363 69,654
NET CASH PROVIDED BY OPERATING ACTIVITIES 418,186 197,034
INVESTING ACTIVITIES
Purchase of property and equipment (153,304) (303,003)
NET CASH USED IN INVESTING ACTIVITIES (153,304) (303,003)
FINANCING ACTIVITIES
Net (decrease) increase in commercial paper (189,770) 106,091
Proceeds from long-term borrowings 100,000 200,000
Principal payments on long-term debt and
capital lease obligations (54,271) (78,927)
Dividends paid (8,549) (13,530)
Common stock sold 20,577 2,601
Purchase of treasury stock (109,683) (101,135)
NET CASH (USED) PROVIDED BY FINANCING ACTIVITIES (241,696) 115,100
INCREASE IN CASH AND CASH EQUIVALENTS 23,186 9,131
Cash and cash equivalents at beginning of period 41,833 64,094
CASH AND CASH EQUIVALENTS AT END OF PERIOD $65,019 $73,225
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 six month period ended August 1,
1998 are not necessarily indicative of the results that may be
expected for the fiscal year ending January 30, 1999 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 31, 1998.
2. On February 24, 1998, the Company issued $100 million aggregate
principal amount of its 6.3% notes due February 15, 2008. The notes
were sold in an underwritten public offering.
3. On February 21, 1997, the Board of Directors authorized the
implementation of a Class A common stock repurchase program of up to
$300 million. For the quarter ended August 1, 1998, a total of 371,900
shares were purchased for a total of $13.7 million.
4. On August 13, 1998, wholly owned subsidiaries of the Company acquired
36,043,339 shares of the common stock of Mercantile Stores Company, Inc.
("Mercantile"), which together with shares already owned by the Company
represented approximately 98% of Mercantile's outstanding shares of common
stock, for a cash price of $80.00 per share. Mercantile operates 103
predominantly fashion apparel stores and 16 home stores in 17 states. On
August 18, 1998, the Company completed the merger of Mercantile Merger
Corporation, a wholly owned subsidiary of the Company, with Mercantile.
Upon consummation of the merger, Mercantile became a wholly owned
subsidiary of the Company, and the shareholders of Mercantile who did not
tender their shares became entitled to receive $80.00 per share. The total
purchase price for Mercantile was approximately $3 billion plus certain
additional amounts to be paid in respect of outstanding stock options and
transaction expenses. The funds used to consummate the acquisition were
raised through the issuance of $1 billion of long-term debt, the issuance
of $200 million of capital securities, the issuance of $385 million of
commercial paper and $1.35 billion of receivables financing by the Company.
The remainder of the funds came from existing cash of the Company.
The Company has entered into two separate agreements to sell 26
department store locations and related property. Proffit's, Inc. has
agreed to acquire the real and personal property of 15 former
Mercantile store locations along with certain inventory and accounts
receivable. The stores are located in several markets which include
Nashville, Tennessee, and Orlando, Florida. The transaction, which is
subject to normal conditions, is expected to close by the end of the
third quarter of 1998. The May Department Stores Company has agreed to
acquire 11 former Mercantile locations in certain markets which
include Kansas City, Missouri and Colorado. The transaction closed on
September 9, 1998. In addition, the Company and Belk, Inc. have signed
a letter of intent agreeing to exchange seven former Mercantile stores
located in Florida and South Carolina for nine Belk stores located in
Virginia and Tennessee. The transaction is expected to close in the
third quarter.
<PAGE>
The following table sets forth the computation of basic and diluted
earnings per share.
(thousands, except per share data) Three Months Ended Six Months Ended
August 1 August 2 August 1 August 2
1998 1997 1998 1997
Basic:
Net Income $ 47,946$ 44,342 $111,016 $102,600
Average shares outstanding 106,727 111,028 107,525 111,911
Earnings per shares - basic $.45 $.40 $1.03 $.92
Diluted:
Net Income $ 47,946$ 44,342 $111,016 $102,600
Preferred stock dividends (6) (6) (11) (11)
Net earnings available for
per-share calculations 47,940 44,336 $111,001 $102,589
Average shares outstanding 106,727 111,028 107,525 111,911
Stock options 882 641 755 421
Total average equivalent shares 107,609 111,669 108,280 112,332
Earnings per share - diluted $.45 $ .40 $1.03 $ .91
Twelve Months Ended
August 1 August 2
1998 1997
Basic:
Net Income $266,111 $245,294
Average shares outstanding 109,110 112,743
Earnings per shares - basic $2.44 $2.18
Diluted:
Net Income $266,111 $ 245,294
Preferred stock dividends (22) (22)
Net earnings available for
per-share calculations 266,089 245,272
Average shares outstanding 109,110 112,743
Stock options 858 373
Total average equivalent shares 109,968 113,116
Earnings per share - diluted $2.43 $ 2.17
Options to purchase 1,695,225 and 3,064,145 shares of Class A common
stock at prices ranging from $37.375 to $45.13 per share were
outstanding at August 1, 1998 and August 2, 1997, respectively, but
were not included in the computation of diluted earnings per share
because they would have been antidilutive.
<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:
<TABLE>
Three Months Ended Six Months Ended Twelve Months Ended
August 1 August 2 August 1 August 2 August 1 August 2
1998 1997 1998 1997 1998 1997
<S> <C> <C> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales 64.1% 65.1% 65.3% 65.4% 66.2% 66.2%
Gross profit 35.9% 34.9% 34.7% 34.6% 33.8% 33.8%
Advertising, selling, administrative
and general expenses 27.4% 26.6% 25.9% 25.9% 24.6% 24.7%
Depreciation and amortization 3.6% 3.5% 3.4% 3.5% 3.0% 3.1%
Rentals 0.7% 0.8% 0.7% 0.7% 0.8% 0.8%
Interest and debt expense 2.3% 2.3% 2.2% 2.2% 1.9% 2.0%
Total operating expenses 34.0% 33.2% 32.2% 32.3% 30.3% 30.6%
Other income 3.2% 3.2% 3.0% 3.2% 2.7% 2.9%
Income before income taxes 5.1% 4.9% 5.5% 5.5% 6.2% 6.1%
Income taxes 1.9% 1.8% 2.0% 2.0% 2.3% 2.3%
Net income 3.2% 3.1% 3.5% 3.5% 3.9% 3.8%
</TABLE>
<PAGE>
Net sales for the second quarter of 1998 were $1,504.5 million as
compared to $1,453.2 million for the second quarter of 1997. This is
an increase of 4%. The net sales in comparable stores increased 1%
for the period versus last year. The six month sales increase for
1998 over 1997 was 7%; for comparable stores the increase was 4%. The
twelve month sales increase for 1998 over 1997 was 7%; for comparable
stores the increase was 3%. The majority of the increase in sales was
attributable to an increase in the volume of goods sold rather than an
increase in the price of goods.
Cost of sales decreased from 65.1% of net sales for the second quarter
of 1997 to 64.1% for the second quarter of 1998. For the six months
ended August 1, 1998 and August 2, 1997, the cost of sales decreased
slightly from 65.4% to 65.3% of net sales. This was caused by a lower
level of markdowns in the current period versus the prior period. For
the twelve months ended August 1, 1998 and August 1, 1997, the cost
of sales remained constant at 66.2% of net sales.
Advertising, selling, administrative and general expenses increased
from 26.6% of net sales for the second quarter of 1997 to 27.4% of net
sales for the second quarter of 1998. This increase was primarily
caused by an increase in payroll expense in the selling area. For the
six months ended August 1, 1998 and August 2, 1997, these expenses
were constant at 25.9% of net sales. For the twelve months ended
August 1, 1998 and August 2, 1998 these expenses decreased from 24.7%
to 24.6% of net sales.
Depreciation and amortization expense increased slightly as a
percentage of sales for the three months ended August 1, 1998 compared
to the three months ended August 2, 1997 and decreased slightly as a
percentage of sales from 1997 in the six and twelve month periods
ended August 1, 1998.
Rental expense decreased slightly from .8% of net sales for the second
quarter of 1997 to .7% for the second quarter of 1998. For the six
months ended August 1, 1998 and August 2, 1997, rental expense was .7%
of net sales. For the twelve months ended August 1, 1998 and August
2, 1997, rental expense was .8% of net sales.
Interest and debt expense remained constant at 2.3% of net sales for
the second quarter of 1998 and 1997. For the six months ended August
1, 1998 and August 2, 1997 interest and debt expense remained constant
at 2.2% of net sales. For the twelve months ended August 1, 1998 and
August 2, 1997 it decreased from 2.0% to 1.9% of net sales.
Service charges, interest and other income remained constant at 3.2%
of net sales for the second quarter of 1998. For the six months ended
August 1, 1998 and August 2, 1997 service charges, interest and other
income decreased from 3.2% to 3.0% of net sales. For the twelve
months ended August 1, 1998 and August 2, 1997 the decrease was from
2.9% to 2.7% of net sales. The primary cause for this decrease was a
decline in proprietary credit card sales as a percentage of total
sales.
The effective federal and state income tax rate was 37% for the second
quarter of 1998 and 1997.
<PAGE>
Financial Condition
Net cash flows from operations was $418 million for the first six
months of fiscal 1998. In addition to the cash flows from operations,
the Company borrowed $100 million by issuing notes in an underwritten
public offering. These notes mature on February 15, 2008. The
Company also reduced its commercial paper borrowings by $190 million
during the six months ended August 1, 1998.
The Company invested $153.3 million in capital expenditures for the
six months ended August 1, 1998 as compared to $303 million for the
six months ended August 2, 1997. In the first six months of 1998 the
Company opened three new stores. During 1998, the Company plans to
build five additional stores (two of which will be replacement
stores). During 1997, the Company built twelve new stores, expanded
and remodeled four stores, acquired eleven stores and closed three.
On February 21, 1997, the Board of Directors authorized the
implementation of a Class A common stock repurchase program of up to
$300 million. For the six months of 1998, a total of 3.0 million
shares were purchased for a total of $109.7 million.
Merchandise inventories increased by 6% from $1.75 billion at August
2, 1997 to $1.86 billion at August 1, 1998. The Company operated 15
more stores at August 1, 1998 versus August 2, 1997. This was the
primary reason for the increase in inventory. On a comparable store
basis, the rate of increase in merchandise inventories was 1%.
Fluctuations in certain other balance sheet accounts between January
31, 1998 and August 2, 1998 reflect normal seasonal variations within
the retail industry. The levels of merchandise inventories and
accounts receivable fluctuate due to the seasonal nature of the
retail business. Along with the fluctuations in these current assets,
there is also a corresponding fluctuation in trade accounts payable
and commercial paper.
The Company's Registration Statement registering $2.5 billion in
securities went effective on July 24, 1998. On August 7, 1998, the
Company issued $1 billion in debt securities in an underwritten public
offering. On August 12, 1998, the Company issued $200 million in
capital securities in an underwritten public offering. As discussed
below, the proceeds from the issuance of these securities were used to
fund the purchase of Mercantile. After these transactions, the Company
has an effective shelf registration for securities in the amount of
$1.3 billion.
On August 13, 1998, wholly owned subsidiaries of the Company acquired
36,043,339 shares of common stock of Mercantile, which together with
shares already owned by the Company represented approximately 98% of
Mercantile's outstanding shares of common stock, for a cash price of
$80.00 per share. Mercantile operates 103 predominantly fashion
apparel stores and 16 home stores in 17 states. On August 18, 1998,
the Company completed the merger of Mercantile Merger Corporation, a
wholly owned subsidiary of the Company, with Mercantile. Upon
consummation of the merger, Mercantile became a wholly owned
subsidiary of the Company, and the shareholders of Mercantile who did
not tender their shares became entitled to receive $80.00 per share.
The total purchase price for Mercantile was approximately $3 billion
plus certain additional amounts to be paid in respect of outstanding
stock options and transaction expenses. The funds used to consummate
the acquisition were raised through the issuance of $1 billion of
long-term debt, the issuance of $200 million of capital securities, the
issuance of $385 million of commercial paper and $1.35 billion of
receivables financing by the Company. The remainder of the funds came
from existing cash of the Company.
The Company has entered into two separate agreements to sell 26
department store locations and related property. Proffit's, Inc. has
agreed to acquire the real and personal property of 15 former
Mercantile store locations along with certain inventory and accounts
receivable. The stores are located in several markets which include
Nashville, Tennessee and Orlando, Florida. The transaction, which is
subject to normal conditions, is expected to close by the end of the
third quarter of 1998. The May Department Stores Company has agreed to
acquire 11 former Mercantile locations in certain markets which
include Kansas City, Missouri and Colorado Springs, Colorado. The
transaction, which is subject to normal conditions, is expected to
close by September 4, 1998. In addition, the Company and Belk, Inc.
have signed a letter of intent agreeing to exchange seven former
Mercantile stores located in Florida and South Carolina for nine Belk
stores located in Virginia and Tennessee. The transaction is expected
to close in the third quarter.
<PAGE>
Year 2000 Compliance Statement
All computers systems including embedded processors (such as phone
systems, security systems, etc.) have been assessed and work is well
underway to remediate the non-year 2000 compliant systems.
Approximately 75% of these systems have been remediated or were
originally developed as year 2000 compliant. The remaining systems
are expected to be remediated no later than the second quarter of 1999.
The cost of remediating non-compliant systems will not exceed
$2.5 million. The Comapny has obtained letters of certification from
most of its vendors stating that their systems are compliant. Due to
the significant risks to the Company of mission-critical system
failures, management monitors the progress of this effort closely.
Also, business resumption contingency plans are in the process of
being developed to address how the Company will continue to do business
if a mission-critical system were to fail.
Forward- Looking Information
The Company cautions that any forward-looking statements (as such term
is defined in the Private Securities Litigation Reform Act of 1995)
contained in this quarterly report on Form 10-Q or made by management
of the Company involve risks and uncertainties and are subject to
change based on various important factors. The following factors,
among others, could affect the Company's financial performance and
could cause actual results for 1998 and beyond to differ materially
from those expressed or implied in any such forward-looking
statements: economic and weather conditions in the regions in which
the Company's stores are located and their effect on the buying
patterns of the Company's customers, changes in consumer spending
patterns and debt levels, trends in personal bankruptcies and the
impact of competitive market factors.
<PAGE>
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
During the six months ended August 1, 1998, the Company issued $100
million of Notes in an underwritten public offering. These Notes
mature in ten years and have an interest rate of 6.3%. The only other
activity during the quarter in the Company's debt obligations was the
scheduled payments of $3.9 million on the Company's mortgage notes.
Item 4. Submission of matters to a Vote of Security Holders
The annual meeting of the stockholders of the Company was held on
May 16, 1998.
The matters submitted to a vote of the stockholders were as follows:
election of Directors, proposal to adopt a stock option plan for
certain key employees, proposal concerning child/convict labor, and
proposal for financial and social accountability in executive
compensation.
Election of Directors
Nominee For Against Abstain
Class A Nominees
Robert C. Connor 91,997,426 1,126,011 0
Will D. Davis 91,678,095 1,445,342 0
John Paul Hammerschmidt 91,891,371 1,232,066 0
William B. Harrison, Jr. 91,997,365 1,126,072 0
Jackson T. Stephens 91,911,559 1,211,878 0
Class B Nominees
William Dillard 4,010,568 0 0
Calvin N. Clyde, Jr. 4,010,568 0 0
Drue Corbusier 4,010,568 0 0
Alex Dillard 4,010,568 0 0
William Dillard, II 4,010,568 0 0
Mike Dillard 4,010,568 0 0
James I. Freeman 4,010,568 0 0
John H. Johnson 4,010,568 0 0
E. Ray Kemp 4,010,568 0 0
William H. Sutton 4,010,568 0 0
Other Proposals
Stock Option Plan 78,879,426 8,252,498 195,855
Child/Convict Labor 6,898,585 83,107,332 925,975
Executive Compensation 2,614,669 86,254,444 2,062,777
<PAGE>
PART II OTHER INFORMATION
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
August 1 August 2 January 31 February 1 February 3 January 28 January 29
1998 1997 1998 1997 1996 * 1995 1994
3.25 3.21 3.69 3.61 2.86 3.72 3.57
* 53 Weeks
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibit (12): Statement re: Computation of Ratio of Earnings to
Fixed Charges
(b) Reports on Form 8-K filed during the second quarter:
The Company filed a report on May 16, 1998, announcing the
purchase of the Mercantile Stores Company, Inc.
The Company filed a report dated July 30, 1998, relating to the
issue of $1 billion aggregate principal amount. The terms of which
are as follows:
$200 million in Notes at 6.43% due August 1, 2004
$100 million in Notes at 6.69% due August 1, 2007
$200 million in Debentures at 7.13% due August 1, 2018
$100 million in Reset Put Securities at 6.08% due August 1, 2010
$100 million in Reset Put Securities at 6.17% due August 1, 2011
$150 million in Reset Put Securities at 6.31% due August 1, 2012
$150 million in Reset Put Securities at 6.39% due August 1, 2013
The Company filed a report dated August 5, 1998, relating to the
issue of $200 million aggregate principal amount of 7.5% capital
securities maturing on August 1, 2038.
The Company filed a report on August 27, 1998, announcing the
completion of the merger of Mercantile Merger Corporation, a wholly
owned subsidiary of the Company, with Mercantile.
<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'S, INC.
(Registrant)
DATE: September 15, 1998 /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
12 Statement re: Computation of Ratio of Earnings
to Fixed Charges
EXHIBIT 12 - STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO
FIXED CHARGES
(Unaudited)
(Dollar amounts in thousands)
<TABLE>
Six Months Ended Fiscal Year Ended
August 1 August 2 January 31 February 1 February 3 January 28 January 29
1998 1997 1998 1997 1996 * 1995 1994
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated pretax income $176,216 $162,860 $410,035 $378,761 $269,653 $406,110 $399,534
Fixed charges (less capitalized
interest) 75,726 71,095 147,466 139,188 139,666 145,921 152,568
EARNINGS $251,942 $233,955 557,501 517,949 409,319 552,031 552,102
Interest $68,998 $63,939 129,237 120,599 120,054 124,282 130,915
Capitalized interest 1,876 1,786 3,644 4,420 3,567 2,545 1,882
Interest factor in rent expens 6,728 7,156 18,229 18,589 19,612 21,639 21,653
FIXED CHARGES $77,602 $72,881 151,110 143,608 143,233 148,466 154,450
Ratio of earnings to fixed charges 3.25 3.21 3.69 3.61 2.86 3.72 3.57
* 53 Weeks
</TABLE>
