================================================================================
FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(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 001-14035
STAGE STORES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of 76-0407711
incorporation or organization) (I.R.S. Employer Identifications No.)
10201 MAIN STREET, HOUSTON, TEXAS 77025
(Address of principal executive offices) (Zip Code)
(713) 667-5601
Registrant's telephone number, including area code
Indicate by check mark 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 [ ]
The number of shares of common stock of Stage Stores, Inc. outstanding as of
September 14, 1998 was 26,636,786 shares of Common Stock and 1,250,584 shares of
Class B Common Stock.
================================================================================
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
STAGE STORES, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands, except par values)
(unaudited)
<TABLE>
<CAPTION>
August 1, 1998 January 31, 1998
-------------- ----------------
ASSETS
<S> <C> <C>
Cash and cash equivalents ........................................................ $ 18,890 $ 23,315
Undivided interest in accounts receivable trust .................................. 57,285 61,211
Merchandise inventories, net ..................................................... 384,157 303,115
Prepaid expenses ................................................................. 42,373 20,417
Other current assets ............................................................. 52,379 57,788
--------- ---------
Total current assets ....................................................... 555,084 465,846
Property, equipment and leasehold improvements, net .............................. 216,621 171,654
Goodwill, net .................................................................... 94,019 95,486
Other assets ..................................................................... 23,873 26,410
--------- ---------
Total assets ............................................................... $ 889,597 $ 759,396
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable ................................................................. $ 108,674 $ 91,799
Accrued interest ................................................................. 3,082 2,044
Accrued expenses and other current liabilities ................................... 101,177 53,939
--------- ---------
Total current liabilities .................................................. 212,933 147,782
108
Long-term debt ................................................................... 450,015 395,248
Other long-term liabilities ...................................................... 10,501 11,288
--------- ---------
Total liabilities .......................................................... 673,449 554,318
--------- ---------
Preferred stock, par value $1.00, non-voting,
3 shares authorized, no shares
issued or outstanding .......................................................... -- --
Common stock, par value $0.01, 75,000 shares
authorized, 26,637 and 26,500 shares
issued and outstanding, respectively ........................................... 266 265
Class B common stock, par value $0.01, non-voting,
3,000 shares authorized, 1,250 shares
issued and outstanding ......................................................... 13 13
Additional paid-in capital ....................................................... 265,393 264,679
Accumulated deficit .............................................................. (49,524) (59,324)
Accumulated other comprehensive income ........................................... -- (555)
--------- ---------
Stockholders' equity .......................................................... 216,148 205,078
--------- ---------
Commitments and contingencies .................................................... -- --
--------- ---------
Total liabilities and stockholders' equity ................................. $ 889,597 $ 759,396
========= =========
</TABLE>
The accompanying notes are an
integral part of this statement.
2
<PAGE>
STAGE STORES, INC.
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------------ ------------------------------
AUGUST 1, 1998 AUGUST 2, 1997 AUGUST 1, 1998 AUGUST 2, 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net sales ..................................... $271,805 $ 238,137 $544,593 $ 429,649
Cost of sales and related buying,
occupancy and distribution expenses ........ 189,566 164,235 375,129 293,822
-------- --------- -------- ---------
Gross profit .................................. 82,239 73,902 169,464 135,827
Selling, general and administrative expenses .. 67,853 53,405 129,483 94,663
Store opening and closure costs ............... 1,708 761 2,025 904
-------- --------- -------- ---------
Operating income .............................. 12,678 19,736 37,956 40,260
Interest, net ................................. 11,423 9,449 21,890 18,391
-------- --------- -------- ---------
Income before income tax and extraordinary item 1,255 10,287 16,066 21,869
Income tax expense ............................ 490 4,041 6,266 8,529
-------- --------- -------- ---------
Income before extraordinary item .............. 765 6,246 9,800 13,340
Extraordinary item - early retirement of debt . -- (17,380) -- (17,380)
-------- --------- -------- ---------
Net income (loss) ............................. $ 765 $ (11,134) $ 9,800 $ (4,040)
======== ========= ======== =========
BASIC EARNINGS (LOSS) PER COMMON SHARE DATA:
Basic earnings per common share before
extraordinary item ....................... $ 0.03 $ 0.25 $ 0.35 $ 0.55
Extraordinary item - early retirement of debt . -- (0.70) -- (0.72)
Basic earnings (loss) per common share ........ $ 0.03 $ (0.45) $ 0.35 $ (0.17)
Basic weighted average common
shares outstanding ........................ 27,874 24,841 27,833 24,066
======== ========= ======== =========
DILUTED EARNINGS (LOSS) PER COMMON SHARE DATA:
Diluted earnings per common share before
extraordinary item ....................... $ 0.03 $ 0.25 $ 0.34 $ 0.54
Extraordinary item - early retirement of debt . -- (0.69) -- (0.70)
-------- --------- -------- ---------
Diluted earnings (loss) per common share ...... $ 0.03 $ (0.44) $ 0.34 $ (0.16)
======== ========= ======== =========
Diluted weighted average common
shares outstanding ........................ 28,582 25,478 28,569 24,688
======== ========= ======== =========
</TABLE>
The accompanying notes are an integral part of this statement.
3
<PAGE>
STAGE STORES, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
---------------------------------
AUGUST 1, 1998 AUGUST 2, 1997
---------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .......................................................... $ 9,800 $ (4,040)
--------- ---------
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation and amortization ..................................... 14,411 8,003
Deferred income taxes ............................................. 513 364
Accretion of discount ............................................. 527 579
Amortization of debt issue costs .................................. 1,205 1,016
Loss on early extinguishment of debt .............................. -- 17,380
Changes in operating assets and liabilities:
Decrease in undivided interest in accounts receivable trust ..... 3,926 28,850
Increase in merchandise inventories ............................. (81,042) (17,267)
(Increase) decrease in other assets ............................. (16,237) 360
Increase (decrease) in accounts payable and accrued liabilities . 15,286 (4,616)
--------- ---------
Total adjustments ............................................. (61,411) 34,669
--------- ---------
Net cash provided by (used in) operating activities ............. (51,611) 30,629
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired .................................. -- (4,996)
Additions to property, equipment and leasehold improvements ......... (56,837) (20,797)
--------- ---------
Net cash used in investing activities ........................... (56,837) (25,793)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from working capital facility .............................. 103,500 5,000
Proceeds from long-term debt ........................................ -- 299,720
Proceeds from issuance of common stock .............................. 715 224
Proceeds from long-term debt ........................................ (192) (296,805)
Additions to debt issue costs ....................................... -- (12,332)
--------- ---------
Net cash provided by (used in) financing activities ............. 104,023 (4,193)
--------- ---------
Net decrease in cash and cash equivalents ........................... (4,425) 643
Cash and cash equivalents:
Beginning of period ............................................... 23,315 18,286
--------- ---------
End of period ..................................................... $ 18,890 $ 18,929
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid ....................................................... $ 17,484 $ 25,594
========= =========
Income taxes paid (refunded) ........................................ $ (2,837) $ 3,175
========= =========
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE>
STAGE STORES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
COMMON STOCK
----------------------------------------
CLASS B
--------------------
ADDITIONAL ACCUMULATED
SHARES SHARES PAID-IN ACCUMULATED COMPREHENSIVE
OUTSTANDING AMOUNT OUTSTANDING AMOUNT CAPITAL DEFICIT INCOME TOTAL
------------ ------- ----------- ------- --------- ----------- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, January 31, 1998 .... 26,500 $ 265 1,250 $ 13 $264,679 $(59,324) $ (555) $205,078
Net income ................... -- -- -- -- -- 9,800 -- 9,800
Adjustment for minimum pension
liability .................... -- -- -- -- -- -- 555 555
Issuance of stock ............ 137 1 -- -- 714 -- -- 715
-------- -------- -------- -------- -------- -------- -------- --------
Balance, August 1, 1998 ...... 26,637 $ 266 1,250 $ 13 $265,393 $(49,524) -- $216,148
======== ======== ======== ======== ======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of this statement.
5
<PAGE>
STAGE STORES, INC.
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. The accompanying unaudited consolidated condensed financial
statements of Stage Stores, Inc. ("Stage Stores") have been prepared in
accordance with Rule 10-01 of Regulation S-X and do not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements. Those adjustments, which include only normal
recurring adjustments that are in the opinion of management necessary for a fair
presentation of the results of the interim periods, have been made. The results
of operations for such interim periods are not necessarily indicative of the
results of operations for a full year. The unaudited consolidated condensed
financial statements should be read in conjunction with the audited consolidated
financial statements and notes thereto for the year ended January 31, 1998 filed
with Stage Stores's Annual Report on Form 10-K. The fiscal years discussed
herein end on the Saturday nearest to January 31 in the following calendar year.
For example, references to "1998" mean the fiscal year ending January 30, 1999.
Stage Stores conducts its business primarily through it's wholly
owned subsidiary Specialty Retailers, Inc. ("SRI") which, as of August 1, 1998,
operated 630 family apparel stores predominately located in the central United
States. Stage Stores and SRI are collectively referred to herein as the
"Company".
2. Pursuant to the accounts receivable securitization program (the
"Accounts Receivable Program"), an indirect wholly owned subsidiary of the
Company, SRI Receivables Purchase Co., Inc. ("SRPC") purchases the accounts
receivable generated by the Company's private label credit card program. Such
accounts receivable are transferred to a master trust (the "Trust") which has
issued certain certificates to third parties representing undivided interests in
the Trust. SRPC owns an undivided interest in the accounts receivable not
supporting the certificates issued to third parties by the Trust (the "Retained
Interest"). SRPC is a separate corporate entity from the Company and SRPC's
creditors have a claim on its assets prior to those assets becoming available to
any creditor of the Company.
3. During June 1997, SRI completed an offering of $300.0 million of
long-term indebtedness consisting of $200.0 million in aggregate principal
amount of 8 1/2% Senior Notes due 2005 and $100.0 million in aggregate principal
amount of 9% Senior Subordinated Notes due 2007 (collectively, the "Note
Offering"). The gross proceeds from the issuance of these notes (approximately
$299.7 million) were used to: (i) retire the Company's existing 10% Senior Notes
due 2000 and 11% Senior Subordinated Notes due 2003; (ii) to pay related fees
and expenses; and (iii) to pay costs associated with the acquisition of C.R.
Anthony Company ("CR Anthony"). Concurrently with this transaction, the Company
entered into a new credit facility with a group of lenders (the "Credit
Facility"). The Credit Facility provides for a $100.0 million working capital
and letter of credit facility and a $100.0 million expansion revolving credit
facility. The Credit Facility replaced the Company's existing $75.0 million
credit facility. In connection with the above transactions, the Company recorded
an extraordinary charge during the second quarter of 1997 of $17.4 million, net
of applicable income taxes of $11.1 million, related to the tender premiums and
write off of unamortized debt issue costs associated with the retired debt.
4. During June 1997, the Company acquired CR Anthony which operated
246 family apparel stores in small markets throughout the central and midwestern
United States under the names "Anthony's" and "Anthony's Limited". The Company
issued 3,607,044 shares in exchange for the outstanding common stock of CR
Anthony. The purchase price for CR Anthony (including the common stock issued by
the Company) was approximately $77.2 million, including acquisition costs and
net of cash acquired. CR Anthony had net sales of $288.4 million and net income
of $4.8 million for the year ended February 1, 1997.
5. During September 1997, the Company completed an offering of
approximately 7.1 million shares of common stock, 6.4 million shares of which
were secondary shares representing the shares owned by two venture capital
firms. The remaining 650,000 shares were issued as primary shares, a result of
an over-allotment provision. The shares sold by the Company resulted in net
proceeds to the Company of approximately $20.7 million, which were used to
reduce borrowings outstanding under the Company's Credit Facility.
6. During the first quarter of 1998, the Company adopted Statement of
Financial Accounting Standards No. 130 "Reporting Comprehensive Income" ("SFAS
130"). SFAS 130 establishes standards for reporting and display of comprehensive
income and its components (revenues, expenses, gains, and losses) in a full set
of general-purpose financial statements.
6
<PAGE>
7. The consolidating condensed financial information for Stage Stores
and its wholly owned subsidiaries is presented to satisfy disclosure
requirements pursuant to Sections 13 and 15(d) of the Securities Exchange Act of
1934 with respect to wholly owned subsidiaries of Stage Stores who are
individually registrants with the SEC. SRI is the primary obligor under the 8
1/2% Senior Notes due 2005 and 9% Senior Subordinates Notes due 2007 (see Note
3). Stage Stores and Specialty Retailers, Inc. (NV), a wholly owned subsidiary
of Stage Stores which was incorporated during June 1997, are guarantors under
such indebtedness. Stage Stores has not presented separate financial statements
and other disclosures concerning SRI and Specialty Retailers, Inc. (NV) because
management has determined that such information is not material to investors.
SRPC, a wholly owned subsidiary of Stage Stores, securitizes the
credit receivables of the Company. The results of operations of SRPC are not
indicative of the total operating performance of the Company's Accounts
Receivable Program. For a summary of the total consolidated operating
performance of the Company's Accounts Receivable Program, see Note 4 to the
Company's Consolidated Financial Statements filed with Stage Stores's Annual
Report on Form 10-K. The consolidating condensed financial information for Stage
Stores and its wholly-owned subsidiaries are presented below.
<PAGE>
CONSOLIDATING CONDENSED BALANCE SHEET
AUGUST 1, 1998
(in thousands, unaudited)
<TABLE>
<CAPTION>
Specialty SRI
Retailers, Receivables SRI SRI
Inc. Purchase Co. Eliminations Consolidated
--------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C>
Cash and cash equivalents........ $ 16,888 $ -- $ -- $ 16,888
Undivided interest in accounts
receivable trust.............. (12,827) 70,112 -- 57,285
Merchandise inventories, net..... 384,157 -- -- 384,157
Prepaid expenses................. 41,934 439 -- 42,373
Other current assets............. 47,056 5,323 -- 52,379
--------------------------------------------------------
Total current assets.......... 477,208 75,874 -- 553,082
Property, equipment and
leasehold improvements, net... 214,691 -- -- 214,691
Goodwill, net.................... 94,019 -- -- 94,019
Other assets..................... 18,755 5,118 -- 23,873
Investment in subsidiaries ...... 42,429 -- (42,429) --
--------------------------------------------------------
$ 847,102 $ 80,992 $(42,429) $885,665
========================================================
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable................. $ 108,674 $ -- $ -- $108,674
Accrued interest................. 2,599 483 -- 3,082
Accrued expenses and other
current liabilities........... 99,579 1,438 -- 101,017
--------------------------------------------------------
Total current liabilities..... 210,852 1,921 -- 212,773
Long-term debt................... 420,015 30,000 -- 450,015
Intercompany notes/advances...... 161,343 6,642 -- 167,985
Other long-term liabilities ..... 8,710 -- -- 8,710
--------------------------------------------------------
Total liabilities............. 800,920 38,563 -- 839,483
--------------------------------------------------------
Preferred stock.................. -- -- -- --
Common stock..................... -- -- -- --
Class B common stock............. -- -- -- --
Additional paid-in capital....... 3,317 36,419 (36,419) 3,317
Accumulated earnings (deficit)... 42,865 6,010 (6,010) 42,865
--------------------------------------------------------
Stockholders' equity.......... 46,182 42,429 (42,429) 46,182
--------------------------------------------------------
$ 847,102 $ 80,992 $(42,429) $885,665
========================================================
Specialty
Stage Retailers, Stage Stores
Stores, Inc. Inc. (NV) Eliminations Consolidated
-------------------------------------------------------
ASSETS
Cash and cash equivalents........ $ 2 $ 2,000 $ -- $ 18,890
Undivided interest in accounts
receivable trust.............. -- -- -- 57,285
Merchandise inventories, net..... -- -- -- 384,157
Prepaid expenses................. -- -- -- 42,373
Other current assets............. -- -- -- 52,379
-------------------------------------------------------
Total current assets.......... 2 2,000 -- 555,084
Property, equipment and
leasehold improvements, net... -- 1,930 -- 216,621
Goodwill, net.................... -- -- -- 94,019
Other assets..................... -- -- -- 23,873
Investment in subsidiaries ...... 215,474 -- (215,474) --
-------------------------------------------------------
$ 215,476 $ 3,930 $(215,474) $889,597
=======================================================
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable................. $ -- $ -- $ -- $108,674
Accrued interest................. -- -- -- 3,082
Accrued expenses and other
current liabilities........... 160 -- -- 101,177
-------------------------------------------------------
Total current liabilities..... 160 -- -- 212,933
Long-term debt................... -- -- -- 450,015
Intercompany notes/advances...... (2,623) (165,362) -- --
Other long-term liabilities ..... 1,791 -- -- 10,501
-------------------------------------------------------
Total liabilities............. (672) (165,362) -- 673,449
-------------------------------------------------------
Preferred stock.................. -- -- -- --
Common stock..................... 266 -- -- 266
Class B common stock............. 13 -- -- 13
Additional paid-in capital....... 265,393 159,002 (162,319) 265,393
Accumulated earnings (deficit)... (49,524) 10,290 (53,155) (49,524)
-------------------------------------------------------
Stockholders' equity.......... 216,148 169,292 (215,474) 216,148
-------------------------------------------------------
$ 215,476 $ 3,930 $(215,474) $889,597
=======================================================
</TABLE>
7
<PAGE>
CONSOLIDATING CONDENSED BALANCE SHEET
JANUARY 31, 1998
(in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Specialty SRI
Retailers, Receivables SRI SRI
Inc. Purchase Co. Eliminations Consolidated
-----------------------------------------------------
ASSETS
<S> <C> <C> <C> <C>
Cash and cash equivalents....... $ 23,299 $ -- $ -- $ 23,299
Undivided interest in accounts
receivable trust............. (11,234) 72,445 -- 61,211
Merchandise inventories, net.... 303,115 -- -- 303,115
Prepaid expenses................ 19,944 473 -- 20,417
Other current assets............ 49,980 7,808 -- 57,788
-----------------------------------------------------
Total current assets......... 385,104 80,726 -- 465,830
Property, equipment and
leasehold improvements, net.. 170,401 -- -- 170,401
Goodwill, net................... 95,486 -- -- 95,486
Other assets.................... 20,653 5,757 -- 26,410
Investment in subsidiaries...... 40,312 -- (40,312) --
-----------------------------------------------------
$711,956 $ 86,483 $ (40,312) $ 758,127
=====================================================
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable................ $ 91,799 $ -- $ -- $ 91,799
Accrued interest................ 1,556 488 -- 2,044
Accrued expenses and other
current liabilities.......... 53,545 142 -- 53,687
-----------------------------------------------------
Total current liabilities.... 146,900 630 -- 147,530
Long-term debt.................. 365,248 30,000 -- 395,248
Intercompany notes/advances..... 149,258 14,324 -- 163,582
Other long-term liabilities..... 9,874 1,217 -- 11,091
-----------------------------------------------------
Total liabilities............ 671,280 46,171 -- 717,451
Preferred stock................. -- -- -- --
Common stock.................... -- -- -- --
Class B common stock............ -- -- -- --
Additional paid-in capital...... 3,317 34,556 (34,556) 3,317
Accumulated earnings (deficit).. 37,914 5,756 (5,756) 37,914
Accumulated other comprehensive
income....................... (555) -- -- (555)
-----------------------------------------------------
Stockholders' equity......... 40,676 40,312 (40,312) 40,676
-----------------------------------------------------
$711,956 $ 86,483 $ (40,312) $ 758,127
=====================================================
Specialty
Stage Retailers, Stage Stores
Stores, Inc. Inc. (NV) Eliminations Consolidated
-------------------------------------------------------
ASSETS
Cash and cash equivalents....... $ 16 $ -- $ -- $ 23,315
Undivided interest in accounts
receivable trust............. -- -- -- 61,211
Merchandise inventories, net.... -- -- -- 303,115
Prepaid expenses................ -- -- -- 20,417
Other current assets............ -- -- -- 57,788
-------------------------------------------------------
Total current assets......... 16 -- -- 465,846
Property, equipment and
leasehold improvements, net.. -- 1,253 -- 171,654
Goodwill, net................... -- -- -- 95,486
Other assets.................... -- -- -- 26,410
Investment in subsidiaries...... 205,075 -- (205,075) --
-------------------------------------------------------
$ 205,091 $ 1,253 $(205,075) $ 759,396
=======================================================
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable................ $ -- $ -- $ -- $ 91,799
Accrued interest................ -- -- -- 2,044
Accrued expenses and other
current liabilities.......... 252 -- -- 53,939
-------------------------------------------------------
Total current liabilities.... 252 -- -- 147,782
Long-term debt.................. -- -- -- 395,248
Intercompany notes/advances..... (436) (163,146) -- --
Other long-term liabilities..... 197 -- -- 11,288
-------------------------------------------------------
Total liabilities............ 13 (163,146) -- 554,318
Preferred stock................. -- -- -- --
Common stock.................... 265 -- -- 265
Class B common stock............ 13 -- -- 13
Additional paid-in capital...... 264,679 159,002 (162,319) 264,679
Accumulated earnings (deficit).. (59,324) 5,397 (43,311) (59,324)
Accumulated other comprehensive
income....................... (555) -- 555 (555)
-------------------------------------------------------
Stockholders' equity......... 205,078 164,399 (205,075) 205,078
-------------------------------------------------------
$ 205,091 $ 1,253 $(205,075) $ 759,396
=======================================================
</TABLE>
8
<PAGE>
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
SIX MONTHS ENDED AUGUST 1, 1998
(in thousands, unaudited)
<TABLE>
<CAPTION>
Specialty SRI
Retailers, Receivables SRI SRI
Inc. Purchase Co. Eliminations Consolidated
---------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales ....................... $ 544,593 $ -- $ -- $ 544,593
Cost of sales and related
buying, occupancy and
distribution expenses ........ 375,129 -- -- 375,129
---------------------------------------------------------
Gross profit .................... 169,464 -- -- 169,464
Selling, general and
administrative expenses ...... 129,859 (440) -- 129,419
Store opening and closure costs . 2,025 -- -- 2,025
---------------------------------------------------------
Operating income (loss) ......... 37,580 440 -- 38,020
Interest expense, net ........... 31,004 (1,564) -- 29,440
---------------------------------------------------------
Income (loss) before income
taxes....................... 6,576 2,004 -- 8,580
Income tax expense............... 2,887 743 -- 3,630
---------------------------------------------------------
Income (loss) before equity in
net earnings of subsidiaries 3,689 1,261 -- 4,950
Equity in net earnings of
subsidiaries ................. 1,261 -- (1,261) --
---------------------------------------------------------
Net income ..................... $ 4,950 $ 1,261 $ (1,261) $ 4,950
=========================================================
Specialty
Stage Retailers, Stage Stores
Stores, Inc. Inc. (NV) Eliminations Consolidated
--------------------------------------------------------
Net sales ....................... $ -- $ -- $ -- $ 544,593
Cost of sales and related
buying, occupancy and
distribution expenses ........ -- -- -- 375,129
--------------------------------------------------------
Gross profit .................... -- -- -- 169,464
Selling, general and
administrative expenses ...... 43 21 -- 129,483
Store opening and closure costs . -- -- -- 2,025
--------------------------------------------------------
Operating income (loss) ......... (43) (21) -- 37,956
Interest expense, net ........... -- (7,550) -- 21,890
--------------------------------------------------------
Income (loss) before income
taxes....................... (43) 7,529 -- 16,066
Income tax expense............... -- 2,636 -- 6,266
--------------------------------------------------------
Income (loss) before equity in
net earnings of subsidiaries (43) 4,893 -- 9,800
Equity in net earnings of
subsidiaries ................. 9,843 -- (9,843) --
--------------------------------------------------------
Net income ..................... $ 9,800 $ 4,893 $ (9,843) $ 9,800
========================================================
</TABLE>
9
<PAGE>
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
SIX MONTHS ENDED AUGUST 2, 1997
(in thousands, unaudited)
<TABLE>
<CAPTION>
Specialty SRI
Retailers, Receivables SRI SRI
Inc. Purchase Co. Eliminations Consolidated
---------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 429,649 $ -- $ -- $ 429,649
Cost of sales and related
buying, occupancy and
distribution expenses ........ 293,822 -- -- 293,822
---------------------------------------------------------
Gross profit .................... 135,827 -- -- 135,827
Selling, general and
administrative expenses expenses
expenses ...................... 97,507 (2,849) -- 94,658
Store opening and closure costs . 904 -- -- 904
---------------------------------------------------------
Operating income ................ 37,416 2,849 -- 40,265
Interest expense, net ........... 19,863 (211) -- 19,652
---------------------------------------------------------
Income (loss) before income
taxes ......................... 17,553 3,060 -- 20,613
Income tax expense............... 6,946 1,138 -- 8,084
---------------------------------------------------------
Income (loss) before equity in
net earnings of subsidiaries
and extraordinary item ....... 10,607 1,922 -- 12,529
Equity in net earnings of
subsidiaries ................. 1,922 -- (1,922) --
---------------------------------------------------------
Income (loss) before
extraordinary item ........... 12,529 1,922 (1,922) 12,529
Extraordinary item - early
retirement of debt ............ (17,380) -- -- (17,380)
---------------------------------------------------------
Net income (loss) ............... $ (4,851) $ 1,922 $ (1,922) $ (4,851)
=========================================================
Stage Stage Stores
Stores, Inc. SRI (NV) Eliminations Consolidated
----------------------------------------------------------
Net sales $ -- $ -- $ -- $ 429,649
Cost of sales and related
buying, occupancy and
distribution expenses ........ -- -- -- 293,822
----------------------------------------------------------
Gross profit .................... -- -- -- 135,827
Selling, general and
administrative expenses expenses
expenses ...................... 15 (10) -- 94,663
Store opening and closure costs . -- -- -- 904
----------------------------------------------------------
Operating income ................ (15) 10 -- 40,260
Interest expense, net ........... -- (1,261) -- 18,391
----------------------------------------------------------
Income (loss) before income
taxes ......................... (15) 1,271 -- 21,869
Income tax expense............... -- 445 -- 8,529
----------------------------------------------------------
Income (loss) before equity in
net earnings of subsidiaries
and extraordinary item ....... (15) 826 -- 13,340
Equity in net earnings of
subsidiaries ................. (4,025) -- 4,025 --
----------------------------------------------------------
Income (loss) before
extraordinary item ........... (4,040) 826 4,025 13,340
Extraordinary item - early
retirement of debt ............ -- -- -- (17,380)
----------------------------------------------------------
Net income (loss) ............... $ (4,040) 826 4,025 $ (4,040)
==========================================================
</TABLE>
9
<PAGE>
CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED AUGUST 1, 1998
(in thousands, unaudited)
<TABLE>
<CAPTION>
Specialty SRI
Retailers, Receivables SRI SRI
Inc. Purchase Co. Eliminations Consolidated
---------------------------------------------------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash used in
operating activities ....... $ (45,964) $ (5,633) $ -- $ (51,597)
---------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Intercompany notes/advances ..... (1,285) -- -- (1,285)
Additions to property, equipment
and leasehold improvements ... (56,837) -- -- (56,837)
Proceeds from the sales of (6,640) 6,640 -- --
accounts receivable, net ..... 1,007 -- (1,007) --
Dividend from subsidiary.........
---------------------------------------------------------
Net cash provided by (used
in)investing
activities ................. (63,755) 6,640 (1,007) (58,122)
---------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from working capital
facility ..................... 103,500 -- -- 103,500
Proceeds from issuance of common
stock ........................ -- -- -- --
Payments on long-term debt ...... (192) -- -- (192)
Dividend paid ................... -- (1,007) 1,007 --
---------------------------------------------------------
Net cash provided by (used in)
financing activities ...... 103,308 (1,007) 1,007 103,308
---------------------------------------------------------
Net decrease in cash and cash
equivalents .................. (6,411) -- -- (6,411)
Cash and cash equivalents:
Beginning of period .......... 23,299 -- -- 23,299
---------------------------------------------------------
End of period ................ $ 16,888 $ -- $ -- $ 16,888
=========================================================
Specialty
Stage Retailers, Stage Stores
Stores, Inc. Inc. (NV) Eliminations Consolidated
---------------------------------------------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net cash used in
operating activities ....... $ (14) $ -- $ -- $ (51,611)
---------------------------------------------------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Intercompany notes/advances ..... (715) 2,000 -- --
Additions to property, equipment
and leasehold improvements ... -- -- -- (56,837)
Proceeds from the sales of -- -- -- --
accounts receivable, net ..... -- -- -- --
Dividend from subsidiary.........
---------------------------------------------------------
Net cash provided by (used
in)investing
activities ................. (715) 2,000 -- (56,837)
---------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITI
Proceeds from working capital
facility ..................... -- -- -- 103,500
Proceeds from issuance of common
stock ........................ 715 -- 715
Payments on long-term debt ...... -- -- -- (192)
Dividend paid ................... -- -- -- --
---------------------------------------------------------
Net cash provided by (used in)
financing activities ...... 715 -- -- 104,023
---------------------------------------------------------
Net decrease in cash and cash
equivalents .................. (14) 2,000 -- (4,425)
Cash and cash equivalents:
Beginning of period .......... 16 -- -- 23,315
---------------------------------------------------------
End of period ................ $ 2 $ 2,000 $ -- $ 18,890
=========================================================
</TABLE>
10
<PAGE>
CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED AUGUST 2, 1997
(in thousands, unaudited)
<TABLE>
<CAPTION>
Specialty SRI
Retailers, Receivables SRI SRI
Inc. Purchase Co. Eliminations Consolidated
--------------------------------------------------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net cash provided by (used in)
Operating activities ........ $ 60,585 $ (29,956) $ -- $ 30,629
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisitions, net of cash
acquired...................... (4,996) -- -- (4,996)
Intercompany notes/advances ..... 224 -- -- 224
Additions to property, equipment
and leasehold improvements ... (20,797) -- -- (20,797)
Proceeds from the sales of
accounts receivable, net ..... (30,015) 30,015 -- --
--------------------------------------------------------
Net cash provided by (used
in) investing
activities ............... (55,584) 30,015 -- (25,569)
--------------------------------------------------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from working capital
facility ..................... 5,000 -- -- 5,000
Proceeds from issuance of
long-term debt ............ 299,720 -- -- 299,720
Proceeds from issuance of
common stock .............. -- -- -- --
Payments on long-term debt ...... (296,805) -- -- (296,805)
Additions to debt issue costs ... (12,273) (59) -- (12,332)
--------------------------------------------------------
Net cash provided by (used in)
financing activities ....... (4,358) (59) -- (4,417)
--------------------------------------------------------
Net decrease in cash and cash
equivalents .................. 643 -- -- 643
Cash and cash equivalents:
Beginning of period .......... 18,270 -- -- 18,270
--------------------------------------------------------
End of period ................ $ 18,913 $ -- $ -- $ 18,913
========================================================
Stage Stage Stores
Stores, Inc. SRI (NV) Eliminations Consolidated
--------------------------------------------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net cash provided by (used in)
Operating activities ........ $ -- $ -- $ -- $ 30,629
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisitions, net of cash
acquired...................... -- -- -- (4,996)
Intercompany notes/advances ..... (224) -- -- --
Additions to property, equipment
and leasehold improvements ... -- -- -- (20,797)
Proceeds from the sales of
accounts receivable, net ..... -- -- -- --
--------------------------------------------------------
Net cash provided by (used
in) investing
activities ............... (224) -- -- (25,793)
--------------------------------------------------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from working capital
facility ..................... -- -- -- 5,000
Proceeds from issuance of
long-term debt ............ -- -- -- 299,720
Proceeds from issuance of
common stock .............. 224 -- -- 224
Payments on long-term debt ...... -- -- -- (296,805)
Additions to debt issue costs ... -- -- -- (12,332)
--------------------------------------------------------
Net cash provided by (used in)
financing activities ....... 224 -- -- (4,193)
--------------------------------------------------------
Net decrease in cash and cash
equivalents .................. -- -- -- 643
Cash and cash equivalents:
Beginning of period .......... 16 -- -- 18,286
--------------------------------------------------------
End of period ................ $ 16 $ -- $ 18,929
========================================================
</TABLE>
11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION
AND RESULTS OF OPERATIONS
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995.
Certain items discussed or incorporated by reference herein contain
forward-looking statements that involve risks and uncertainties including, but
not limited to, the seasonality of demand for apparel which can be affected by
weather patterns, levels of competition, competitors' marketing strategies,
changes in fashion trends and availability of product, the failure to achieve
the expected results of merchandising and marketing plans or store opening or
closing plans. The occurrence of any of the above could have a material adverse
impact on the Company's operating results. Certain information herein contains
estimates which represent management's best judgement as to the date hereof
based on information currently available; however, the Company does not intend
to update this information to reflect developments or information obtained after
the date hereof and disclaims any legal obligation to the contrary.
GENERAL
OVERVIEW. The Company operates the store of choice for well known
national brand name family apparel in over 500 small towns and communities
predominately across the central United States. The Company has recognized the
high level of brand awareness and demand for fashionable, quality apparel by
consumers in small markets and has identified these markets as a profitable and
underserved niche. The Company has developed a unique franchise focused on these
small markets, differentiating itself from the competition by offering a broad
range of brand name merchandise with a high level of customer service in
convenient locations.
The financial information, discussion and analysis that follow should
be read in conjunction with the Company's Consolidated Financial Statements
included in the Company's 1997 Annual Report on Form 10-K.
RESULTS OF OPERATIONS
Sales for the three months ended August 1, 1998 increased 14.1% to
$271.8 million from $238.1 million in the comparable period of 1997. The
increase in the three months ended August 1, 1998 sales was due to approximately
a $15.5 million increase in sales from stores opened during 1998 and 1997 which
are not included in comparable store sales and a $27.0 million increase in sales
from the converted CR Anthony stores, offset by a 5% decline in comparable store
sales due to the extreme hot weather and drought conditions affecting a majority
of the Company's market area during late June and the entire month of July.
Sales for the six months ended August 1, 1998 increased 26.8% to $544.6 million
from $429.6 million in the comparable period of 1997. The increase in the six
months ended August 1, 1998 sales was primarily due to approximately a $28.7
million increase in sales from stores opened during 1998 and 1997 which are not
included in comparable store sales, a $88.8 million increase in sales from the
converted CR Anthony stores offset by a 1% decline in comparable store sales due
to the weather conditions discussed above.
Gross profit increased 11.2% to $82.2 million for the second quarter
of 1998 from $73.9 million in the comparable period of 1997. Gross profit as a
rate of sales decreased to 30.3% for the second quarter of 1998 from 31.0% in
1997. The decline in the gross profit rate was largely the result of the
merchandise mix sold during the quarter and the impact of the initiatives taken
to stimulate traffic during the severe weather conditions discussed above
resulting in higher levels of markdowns. Also, the gross margin rate was
negatively impacted due to the reductions in sales volume experienced during the
second quarter of 1998 without a corresponding reduction in the buying,
occupancy and distribution expense components included in cost of goods sold.
Gross profit increased 24.8% to $169.5 million for the first two quarters of
1998 from $135.8 million in the comparable period of 1997. Gross profit as a
rate of sales decreased to 31.1% for the first two quarters of 1998 from 31.6%
in 1997 as a result of the second quarter factors discussed above and the store
occupancy cost associated with the 105 CR Anthony stores which was included in
cost of goods sold with no offsetting sales volume while they were closed during
their conversion to the Company's format and trade names during the first
quarter of 1998.
Selling, general and administrative expenses for the three months
ended August 1, 1998 increased to $67.9 million from $53.4 million in the
comparable period of 1997. Selling, general and administrative expenses as a
percentage of sales for the second quarter of 1998 increased to 25.0% from 22.4%
in the comparable period of 1997. Selling, general and administrative expense as
a percent of sales for the quarter was negatively impacted by the decline in
sales from planned levels due to the severe weather
12
<PAGE>
conditions experienced during the second quarter while the increase in dollars
is principally attributable to the increase in the number of stores open in the
second quarter of the current year as compared to the prior year. Also,
contributing to the increase was an increase in the level of advertising related
to initiatives intended to increase customer traffic and higher utility costs
due to the heat offset partially by a gain associated with the curtailment of
the Company's defined benefit pension plan. Advertising expenses as a percentage
of sales was 4.4% and 4.0% for the second quarters of 1998 and 1997,
respectively, and 3.9% and 3.8% for the first six months of 1998 and 1997,
respectively. Selling, general and administrative expenses for the six months
ended August 1, 1998 increased to $129.5 million from $94.7 million in the
comparable period of 1997. Selling, general and administrative expenses as a
percentage of sales for the first two quarters of 1998 increased to 23.8% from
22.0% in the comparable period of 1997 due primarily to the sales decline in the
second quarter discussed above as well as the cost associated with the 105 CR
Anthony stores which were closed during a portion of the first quarter of 1998
in order to convert them to the Company's format and trade names.
Store opening and closure costs were $1.7 million for the second
quarter of 1998 as compared to $0.8 million for the same period of 1997. Store
opening and closure costs for the first two quarters of 1998 increased to $2.0
million from $0.9 million for the same period of 1997. These increases are due
to an increase in the number of stores opened during the first six months of
1998 as compared to the same period in 1997.
Operating income for the three months ended August 1, 1998
decreased to $12.7 million from $19.7 million for the same period of 1997.
Operating income as a percent of sales for the three months ended August 1, 1998
was 4.7% as compared to 8.3% for the same period of 1997 due to the factors
discussed above. Operating income for the six months ended August 1, 1998
decreased to $38.0 million from $40.3 million for the same period of 1997.
Operating income as a percent of sales for the six months ended August 1, 1998
was 7.0% as compared to 9.4% for the same period of 1997.
Net interest expense for the second quarter of 1998 increased 21.3%
to $11.4 million from $9.4 million for the comparable period in 1997 due to
higher levels of borrowings associated with the Company's expansion program and
the impact of the reduced sales volume in the second quarter of 1998 due to the
severe weather conditions. Net interest expense for the first two quarters of
1998 increased 19.0% to $21.9 million from $18.4 million for the comparable
period in 1997 due to higher levels of borrowings as noted above.
As a result of the foregoing, the Company's net income before
extraordinary items for the three months ended August 1, 1998 decreased to $0.8
million as compared to $6.2 million for the comparable period in 1997. The
Company's net income before extraordinary items for the six months ended August
1, 1998 decreased to $9.8 million as compared to $13.3 million for the
comparable period in 1997.
SEASONALITY AND INFLATION
The Company's business is seasonal and its quarterly sales and
profits are traditionally lower during the first three quarters (February
through October) and higher during the fourth quarter (November through
January). In addition, working capital requirements fluctuate throughout the
year, increasing substantially in October and November due to requirements for
significantly higher inventory levels in anticipation of the holiday season.
The following table shows certain unaudited financial information for
the Company by quarter (in thousands):
<TABLE>
<CAPTION>
1998 1997
-------------------------------- ----------------------------------------------------------------
Q1 Q2 Q1 Q2 Q3 Q4
--------------- --------------- -------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Net sales..................... $272,788 $271,805 $191,512 $ 238,137 $ 274,269 $ 369,398
Gross profit.................. 87,225 82,239 61,925 73,902 86,822 120,488
Operating income.............. 25,278 12,678 20,524 19,736 15,789 38,391
Quarters' operating income
as a percent of total....... -- -- 22% 21% 17% 40%
Income before extraordinary
items....................... $ 9,035 $ 765 $ 7,094 $ 6,246 $ 3,673 $ 17,527
Net income (loss) ............ $ 9,035 $ 765 $ 7,094 $ (11,134) $ 3,523 $ 16,762
</TABLE>
The Company does not believe that inflation had a material effect on
its results of operations during the past two years. However, there can be no
assurance that the Company's business will not be affected by inflation in the
future.
13
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Total working capital increased $24.1 million to $342.2 million
at August 1, 1998 from $318.1 million at January 31, 1998. The most significant
changes in working capital were: (i) an increase in inventories associated with
the 105 CR Anthony stores which the Company converted to its format and trade
names during the first half of 1998 as well as the seasonal build of inventories
in the Company's stores, (ii) a decrease in accounts receivable as a result of
the liquidation of accounts receivable generated during the Christmas season,
(iii) an increase in accounts payable associated with the increase in inventory;
and (iv) the timing of interest payments on the Company's long-term debt.
Prepaid expenses increased primarily due to the prepaid expenses associated with
new store openings and the conversion of the CR Anthony stores. The increase in
accrued and other current liabilities is principally due to the $49.2 million
balance under the working capital facility and letter of credit component of the
Company's credit facility in current maturities of debt under the working
capital facility.
The Company's primary capital requirements are for working capital,
debt service and capital expenditures. Based upon the current capital structure,
management anticipates cash interest payments to be approximately $43.0 million
during each of 1998 and 1999. Capital expenditures are generally for new store
openings, remodeling of existing stores and facilities and customary store
maintenance. Capital expenditures for the first six months of 1998 were $56.8
million as compared to $20.8 million for the comparable period of 1997 as a
result of an increase in the number of new stores opened as well as the
conversion of the remaining CR Anthony stores to the Company's format and trade
names. Management expects capital expenditures to be approximately $81.0 million
during 1998, consisting primarily of at least 75 new store openings, remodeling
of existing stores, the conversion of the majority of the remaining CR Anthony
stores to the Company's format and the implementation of a new merchandising
system. Required aggregate principal payments on debt total $2.7 million and
$4.9 million for 1998 and 1999, respectively.
The Company's current short-term liquidity needs are provided by (i)
existing cash balances, (ii) operating cash flows, (iii) the Accounts Receivable
Program and (iv) the Credit Facility. The Company expects to fund its long-term
liquidity needs from its operating cash flows, the issuance of debt and/or
equity securities, the securitization of its accounts receivable and bank
borrowings. Outstanding borrowings under the Credit Facility were $149.2 million
at August 1, 1998 as compared to $45.7 million at January 31, 1998. The Company
had $50.8 million of availability under the Credit Facility at August 1, 1998.
The outstanding balances under the revolver certificates associated with the
Accounts Receivable Program were $74.1 million and $77.0 million at August 1,
1998 and January 31, 1998, respectively, while outstanding balances under term
certificates were $165.0 million at both August 1, 1998 and January 31, 1998.
Management believes that funds provided by operations, together with
funds available under the Credit Facility and the Accounts Receivable Program
will be adequate to meet the Company's anticipated requirements for working
capital, interest payments, planned capital expenditures and principal payments
on debt. Estimates as to working capital needs and other expenditures may be
materially affected if the foregoing sources are not available or do not
otherwise provide sufficient funds to meet the Company's obligations.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
14
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The 1998 Annual Meeting of Shareholders of the Company was held May
14, 1998. The following matters were submitted to a vote of the Company's
shareholders:
1. The election of eight directors (constituting the entire board
of directors) for the ensuing year and until their successors are duly elected
and qualified. The results of the election for each such director were as
follows:
VOTES AGAINST
DIRECTORS VOTES FOR OR WITHHELD
-------------------- ------------------
Carl Tooker 22,761,786 37,882
Jack Bush 22,760,525 39,143
Harold Compton 22,761,786 37,882
Robert Huth 22,761,786 37,882
Richard Jolosky 18,214,137 4,585,531
James Marcum 22,761,786 37,882
David Thomas 22,747,748 51,920
John Wiesner 22,760,367 39,301
2. The ratification of the selection of PricewaterhouseCoopers LLP as
the auditors to audit the consolidated financial statements of the Company and
the financial statements of certain of its subsidiaries for the year ending
January 30, 1999. The results of the vote with respect such proposal were as
follows:
<TABLE>
<CAPTION>
VOTES AGAINST ABSTENTIONS AND
VOTES FOR OR WITHHELD BROKER NON-VOTES
<S> <C> <C> <C>
Ratification of Selection of
Independent Auditors 22,780,488 259 18,921
</TABLE>
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
The Company filed a News Release on Form 8-K dated July 8, 1998
related to Stage Stores, Inc. anticipated earnings.
The Company filed a News Release on Form 8-K dated August 6, 1998
related to Stage Stores, Inc. second quarter sales.
The Company filed a News Release on Form 8-K dated August 20, 1998
related to Stage Stores, Inc. second quarter and six months 1998 results.
15
<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.
SEPTEMBER 14, 1998 /s/ CARL E. TOOKER
(Date) Carl E. Tooker
Chairman, Chief Executive Officer
and President
(principal executive officer)
SEPTEMBER 14, 1998 /s/ JAMES A. MARCUM
(Date) James A. Marcum
Vice Chairman and
Chief Financial Officer
(principal financial and accounting officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE RESTATED FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE STAGE STORES, INC. CONSOLIDATED FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-30-1999
<PERIOD-END> AUG-01-1998
<CASH> 18,890
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 384,157
<CURRENT-ASSETS> 555,084
<PP&E> 216,621
<DEPRECIATION> 0
<TOTAL-ASSETS> 889,597
<CURRENT-LIABILITIES> 212,933
<BONDS> 450,015
279
0
<COMMON> 0
<OTHER-SE> 215,869
<TOTAL-LIABILITY-AND-EQUITY> 889,597
<SALES> 544,593
<TOTAL-REVENUES> 544,593
<CGS> 375,129
<TOTAL-COSTS> 375,129
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,890
<INCOME-PRETAX> 16,066
<INCOME-TAX> 6,266
<INCOME-CONTINUING> 9,800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,800
<EPS-PRIMARY> 0.35
<EPS-DILUTED> 0.34
</TABLE>
