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
NOVEMBER 25, 1996
(DATE OF REPORT, DATE OF EARLIEST EVENT REPORTED)
STAGE STORES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 000-21011 76-0407711
(STATE OR OTHER (COMMISSION (IRS EMPLOYER
JURISDICTION OF FILE NUMBER) IDENTIFICATION
INCORPORATION) NO.)
10201 Main Street, Houston, Texas 77025
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(713) 667-5601
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Not Applicable
(FORMER NAME OR ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE>
ITEM 5. OTHER EVENTS.
A press release announcing operating results for Stage Stores, Inc. (the
"Company") for the three and nine months ended November 2, 1996 was issued by
the Company on November 25, 1996 and is attached hereto as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements:
Not applicable.
(b) Pro Forma Financial Information:
Not applicable.
(c) Exhibits:
99.1 Press Release dated November 25, 1996 issued by the Company.
<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.
STAGE STORES, INC.
November 25, 1996 /s/ JAMES MARCUM
(Date) James Marcum
Executive Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
FOR: STAGE STORES, INC.
APPROVED BY: James A. Marcum
Executive Vice President,
Chief Financial Officer
Stage Stores, Inc.
(800) 579-2302
CONTACT: Naomi Rosenfeld/Valerie Martinez
Media Contact:
Stacy Berns/Jeff Siegel
Morgen-Walke Associates
(212) 850-5600
FOR IMMEDIATE RELEASE
STAGE STORES, INC. ANNOUNCES IMPROVED THIRD QUARTER RESULTS
--PRO FORMA THIRD QUARTER EARNINGS INCREASE TO $0.09 FROM $0.06 LAST YEAR--
Houston, TX, November 25, 1996--Stage Stores, Inc. (Nasdaq: STGE) today
announced results for the third quarter and nine months ended November 2, 1996.
For the third quarter of fiscal 1996, the Company reported a net loss,
before extraordinary charges, of $265,000, or $ 0.02 per share, compared to a
net loss of $899,000, or $ 0.07 per share, for the comparable quarter last year.
On a pro forma basis, net earnings for the third quarter of 1996 increased 40%
to $2.1 million, or $0.09 per share, compared to $1.5 million, or $0.06 per
share for the same period in 1995. Net sales for the third quarter increased
14.7% to $182.6 million, compared to $159.2 million for the third quarter of
fiscal 1995. On a comparable reporting calendar, sales increased 2.7% for the
third quarter ended November 2, 1996.
For the nine months ended November 2, 1996, net income before
extraordinary charges increased 83.3% to $3.3 million, or $0.24 per share,
compared to $1.8 million, or $ 0.14 per share, in the comparable period last
year. On a pro forma basis, net earnings on a year-to-date basis were $10.7
million, or $ 0.45 per share, compared to $8.4 million, or $ 0.36 per share, in
the comparable 1995 period. The Company reported a net loss, after the
extraordinary item, of $12.5 million, or $0.95 per share. Net sales for the
recently completed nine months increased 15.9% to $528.5 million, compared to
$456.1 million last year. Same store sales increased 4.4% in the year-to-date
period.
During the third quarter, the Company completed its initial public
offering and used the net proceeds to retire its 12 3/4% senior discount
debentures and other short-term borrowings. As a result,
-more-
<PAGE>
Page - 2
the Company recorded an extraordinary charge of $15.8 million. Pro forma
financial results assume the offering had been completed at the beginning of the
respective periods and exclude extraordinary and non-recurring charges.
Carl Tooker, President and Chief Executive Officer, commented, " We are
very pleased with our third quarter results and are happy to report that our
operating margin remains among the highest in the industry. We believe that our
broad assortment of brand name merchandise will make our stores a strong draw
for holiday shoppers, and look forward to reporting our continued progress when
we release holiday sales results in January."
Mr. Tooker continued, "The success of our recent initial public offering
will allow us to continue pursuing our growth strategy and help fuel our
expansion. As of today, we have added 69 new stores this year on top of 68 new
stores last year, and are operating 324 stores in 20 states. We continue to open
stores in under-served markets throughout the central United States where we
believe our department store atmosphere and service is allowing us to carve a
key competitive niche."
The company also announced today that it successfully negotiated the
closure of 9 stores. The majority of these stores are the remnants of the
Fashion Bar store chain acquired in 1992. At the end of 1994, the company
decided to close the Fashion Bar stores, once favorable lease settlement terms
could be reached. The settlements negotiated for these stores will allow the
company to exit these stores with no negative impact on earnings. As a group,
these stores were experiencing annual operating losses; therefore, the closure
of these stores should be accretive to operating income in future years despite
the lost sales volume.
Stage Stores, Inc. operates 324 department stores in 20 states across
the central United States under the names Stage, Bealls and Palais Royal.
Located primarily in towns and small cities, the stores emphasize brand names in
men's, women's and children's merchandise and apparel.
(Tables to Follow)
<PAGE>
STAGE STORES, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except earnings per share)
<TABLE>
<CAPTION>
For The Three Months Ended For The Nine Months Ended
----------------------- -------------------------
11/2/96 10/28/95 11/2/96 10/28/95
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Sales ........................... $ 182,562 $ 159,161 $ 528,489 $ 456,092
Cost of sales ................... 126,354 110,502 363,577 314,595
--------- --------- --------- ---------
Gross profit .................... 56,208 48,659 164,912 141,497
Selling, general &
administrative expenses ....... 43,071 37,759 121,504 103,512
Store opening & closure costs ... 795 1,176 1,096 2,352
--------- --------- --------- ---------
Operating income ................ 12,342 9,724 42,312 35,633
Interest, net ................... 12,795 11,215 36,849 32,580
--------- --------- --------- ---------
Income (loss) before income tax &
extraordinary item ............ (453) (1,491) 5,463 3,053
Income tax expense (benefit) .... (188) (592) 2,208 1,293
--------- --------- --------- ---------
Income (loss) before
extraordinary item ............ (265) (899) 3,255 1,760
Extraordinary item - early
extinguishment of debt ........ (15,806) -- (15,806) --
--------- --------- --------- ---------
Net income (loss) ............... $ (16,071) $ (899) $ (12,551) $ 1,760
EARNINGS (LOSS) PER COMMON
SHARE DATA:
Earnings (loss) per common
share before extraordinary
item .......................... $ (0.02) $ (0.07) $ 0.24 $ 0.14
Extraordinary item - early
extinguishment of debt ........ (1.12) -- (1.19) --
--------- --------- --------- ---------
Earnings (loss) per common
share after extraordinary
item .......................... $ (1.14) $ (0.07) $ (0.95) $ 0.14
--------- --------- --------- ---------
Weighted average common
shares outstanding ............ 14,091 12,715 13,231 12,712
--------- --------- --------- ---------
Pro forma income statement data:
Income (loss) before
extraordinary item .......... $ (265) $ (899) $ 3,255 $ 1,760
Interest savings .............. 3,842 3,758 11,725 10,777
Amortization of debt issue
costs ....................... 105 116 326 328
Management fee ................ 125 125 375 375
Income tax .................... (1,690) (1,588) (5,022) (4,862)
--------- --------- --------- ---------
Pro forma net income (loss)* .. $ 2,117 $ 1,512 $ 10,659 $ 8,378
--------- --------- --------- ---------
Pro forma net income (loss)
per share* .................. $ 0.09 $ 0.06 $ 0.45 $ 0.36
Pro forma weighted average
shares* ..................... 23,882 23,465 23,882 23,462
Comparable store sales data:
Fiscal basis .................. 0.1% 2.7% 4.4% 2.5%
Calendar basis ................ 2.7% -- 3.7% --
</TABLE>
* Pro forma data assumes the initial public offering and related
transactions occurred at the beginning of the periods presented and are
not indicative of the results of operations for any future period.
<PAGE>
STAGE STORES, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(unaudited)
(in thousands)
NOVEMBER 2, FEBRUARY 3, OCTOBER 28,
1996 1996 1995
--------- --------- ---------
ASSETS
Cash ................................. $ 16,443 $ 20,273 $ 10,397
Accounts receivable .................. 59,802 65,740 46,719
Inventories .......................... 214,965 150,032 180,663
Other current assets ................. 26,119 24,457 25,207
--------- --------- ---------
Total current assets ............ 317,329 260,502 262,986
Fixed assets, net .................... 111,088 93,118 90,756
Goodwill, net ........................ 47,141 30,876 30,768
Other assets ......................... 26,128 27,837 26,585
--------- --------- ---------
$ 501,686 $ 412,333 $ 411,095
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable ..................... $ 72,186 $ 41,494 $ 63,258
Other current liabilities ............ 29,043 48,900 38,066
--------- --------- ---------
Total current liabilities ........... 101,131 90,394 101,324
Long-term debt ....................... 300,824 380,039 376,525
Other long-term liabilities .......... 18,238 14,214 12,467
--------- --------- ---------
Total liabilities ............ 420,193 484,647 490,316
--------- --------- ---------
Stockholders' equity ................. 81,395 (72,314) (79,221)
--------- --------- ---------
$ 501,686 $ 412,333 $ 411,095
========= ========= =========
<PAGE>
STAGE STORES, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(unaudited)
(in thousands)
NINE MONTHS ENDED
-----------------------
11/2/96 10/28/95
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ......................................... $ (12,551) $ 1,760
Adjustments to net income:
Depreciation & amortization ................... 10,029 8,982
Other ......................................... 23,352 (2,713)
Debt issue costs & accretion of discount ...... 12,610 11,670
Changes in working capital .................... (39,114) (30,564)
--------- ---------
Net cash used in operating activities ......... (5,674) (10,865)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions ....................................... (28,151) --
Additions to fixed assets .......................... (22,899) (22,819)
Other .............................................. -- (100)
--------- ---------
Cash used in investing activities ............. (51,050) (22,919)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from:
Common stock .................................. 166,170 39
Long-term debt ................................ (110,526) 16,343
Additions to debt issue costs ...................... (2,750) (794)
--------- ---------
Net cash provided by financing activities ..... 52,894 15,588
--------- ---------
Net decrease in cash & cash equivalents ....... (3,830) (18,196)
Cash:
Beginning of period ........................... 20,273 28,593
--------- ---------
End of period ................................. $ 16,443 $ 10,397
========= =========
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