FORM 8-K
UNITED STATES 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 18, 1999
(Date of Report, date of earliest event reported)
Stage Stores, Inc.
(Exact name of registrant as specified in its charter)
Commission file number 001-14035
DELAWARE 76-0407711
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identifications No.)
10201 Main Street, Houston, 77025
Texas (Zip Code)
(Address of principal executive
offices)
(713) 667-5601
(Registrant's telephone number, including area code)
Not Applicable
(Former name or address, if changed since last report)
ITEM 5. Other Events.
A press release regarding the Company's third quarter 1999
results of operations and certain other matters was issued by the
Company on November 18, 1999 and is attached hereto as Exhibit
99.1.
ITEM 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
99.1 Press release dated November 18, 1999 issued by the
Company.
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 18, 1999 /s/ James A. Marcum
(Date) James A. Marcum
Vice Chairman and,
Chief Financial Officer
Exhibit 99.1
NEWS RELEASE
CONTACT:
Bob Aronson
Director of Investor Relations
(800) 579-2302
FOR IMMEDIATE RELEASE
STAGE STORES, INC. ANNOUNCES THIRD QUARTER 1999 RESULTS
-- Earnings of $0.03 Per Share Before Costs Related to Store
Closure Program Reported, As Compared To A Loss Of $0.11 Per
Share Last Year --
______________________________
HOUSTON, TX, November 18, 1999 -- Stage Stores, Inc. (NYSE: SGE)
today announced results for the third quarter ended October 30,
1999.
Net sales for the third quarter of 1999 were $264.3 million as
compared to $271.6 million for the third quarter of 1998. The
decrease in total sales primarily reflects the closure of stores
included in the Company's store closure program as well as a
decrease in comparable store sales for the quarter of 3.8% as
compared to the same period last year.
Net income for this year's third quarter before costs related to
the Company's store closure program was $0.8 million, or $0.03
per share on a diluted basis, as compared to a loss of $3.2
million, or $0.11 per share, for the prior year period. Earnings
before interest, taxes, depreciation and amortization ("EBITDA")
for the third quarter of 1999 was $22.2 million (before costs
related to the store closure program) as compared to $13.9
million for last year's third quarter. In conjunction with its
store closure program, during the quarter, the Company recorded
pretax charges of $0.9 million which represent store operating
costs for the affected stores prior to their closure. With the
store closure costs included, the Company's net income for the
third quarter of this year was $0.2 million, or $0.01 per share
on a diluted basis, while EBITDA was $21.3 million.
Commenting on the results, Carl E. Tooker, Chairman, President
and Chief Executive Officer, stated, "Our operations for the
third quarter of 1999 generated a significant year-over-year
increase in both EBITDA and net income as compared to the third
quarter of 1998. The improved results for the period were driven
primarily by stronger merchandise margins, lower selling, general
and administrative ("SG&A") expenses and reduced store opening
costs."
Mr. Tooker continued, "During the third quarter, we continued to
focus on the initiatives that we put into place at the beginning
of the year to improve our financial performance. These include
improving our merchandise margins, transitioning our merchandise
mix to reflect the looks and the brands that we believe have the
greatest appeal to our customer base, managing our product
receipt flows to ensure a high degree of freshness within our
inventories and prudently managing our SG&A expenses. We are
pleased with the progress we have made on each one of these
initiatives."
Mr. Tooker further stated, "We continue to make improvements in
our merchandise margins, which were up by 140 basis points over
last year's third quarter level. In addition, during the third
quarter, we continued to see strength in those categories of
business that performed well last quarter. Further, we saw
significant improvements in the majority of our families of
business which under-performed throughout the Spring. With
respect to expense control, our SG&A expenses were below last
year's level primarily as a result of the closure of our under-
performing stores and reduced payroll and payroll related costs."
Mr. Tooker concluded, "Although our sales for the first two weeks
of November were below expectations, we are getting ready to
enter the all important holiday selling season where the majority
of the fourth quarter's business is done. We will release our
holiday period sales results on or about January 6, 2000."
Stage Stores, Inc. brings nationally recognized brand name
apparel, accessories, cosmetics and footwear for the entire
family to small towns and communities throughout the United
States. The company operated 654 stores in 33 states at the end
of the third quarter, primarily under the Stage, Bealls and
Palais Royal trade names.
Any statements in this press release that may be considered
forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially. These
risks and uncertainties are discussed in periodic reports filed
by the Company with the Securities and Exchange Commission that
the Company urges investors to consider.
(Tables to Follow)
Stage Stores, Inc.
Consolidating Condensed Statement of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months
Ended
(As Reported)
10/30/99 10/31/98
Net sales $ 264,327 $ 271,605
Cost of sales and related
buying, occupancy and
distribution expenses 187,124 196,353
Gross profit 77,203 75,252
Selling, general and
administrative expenses 63,715 65,140
Store opening and closure
program costs 928 2,886
Operating income (loss) 12,560 7,226
Interest expense, net 12,192 12,394
Income (loss) before income tax 368 (5,168)
Income tax expense (benefit) 144 (2,016)
Net income (loss) $ 224 $ (3,152)
Basic earnings (loss) per
common share data:
Basic earnings (loss) per
common share $ 0.01 $ (0.11)
Basic weighted average
common shares outstanding 28,083 27,926
Diluted earnings (loss)
per common share data:
Diluted earnings (loss)
per common share $ 0.01 $ (0.11)
Diluted weighted average
common shares outstanding 28,231 27,926
(Table Continued)
Stage Stores, Inc.
Consolidating Condensed Statement of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended 10/30/99
Pro Forma For Store Closure Costs (1)
Store Before Store
Closure Costs Closure Costs
Net sales $ -- $ 264,327
Cost of sales and related
buying, occupancy and
distribution expenses -- 187,124
Gross profit -- 77,203
Selling, general and
administrative expenses -- 63,715
Store opening and closure
program costs 928 --
Operating income (loss) (928) 13,488
Interest expense, net -- 12,192
Income (loss) before income tax (928) 1,296
Income tax expense (benefit) (362) 506
Net income (loss) $ (566) $ 790
Basic earnings (loss) per
common share data:
Basic earnings (loss) per
common share $ (0.02) $ 0.03
Basic weighted average
common shares outstanding 28,083 28,083
Diluted earnings (loss)
per common share data:
Diluted earnings (loss)
per common share $ (0.02) $ 0.03
Diluted weighted average
common shares outstanding 28,231 28,231
(1) The pro forma data is included to demonstrate the impact that
the store closure costs had on the Company's financial statements
for the three months ended 10/30/99 and is not meant to be a
presentation in accordance with generally accepted accounting
principles.
Stage Stores, Inc.
Consolidating Condensed Statement of Operations
(in thousands, except per share amounts)
(unaudited)
Nine Months
Ended
(As Reported)
10/30/99 10/31/98
Net sales ......... $ 796,766 $ 816,198
Cost of sales and related
buying, occupancy and
distribution expenses 575,183 571,482
Gross profit ........ 221,583 244,716
Selling, general and
administrative expenses 191,822 194,623
Store opening and closure
program costs ....... 17,142 4,911
Operating income (loss) 12,619 45,182
Interest expense, net 36,949 34,284
Income (loss) before income
tax and cumulative effect
of a change in accounting
principle....... (24,330) 10,898
Income tax expense (benefit) (7,194) 4,250
Income (loss) before
cumulative effect of a
change in accounting
principle .............. (17,136) 6,648
Cumulative effect of a
change in accounting
principle, net of tax -
reporting costs of start-
up activities..... (2,402) --
Net income (loss) $ (19,538) $ 6,648
Basic earnings (loss) per
common share data:
Basic earnings(loss) per
common share before
cumulative effect of a
change in accounting
principle $ (0.61) $ 0.24
Cumulative effect of a
change in accounting
principle, net of tax -
reporting costs of start-
up activities (0.09) --
Basic earnings (loss) per
common share $ (0.70) $ 0.24
Basic weighted average
common shares outstanding 28,015 27,864
Diluted earnings (loss)
per common share data:
Diluted earnings (loss)
per common share before
cumulative effect of a
change in accounting
principle $ (0.61) $ 0.23
Cumulative effect of a
change in accounting
principle, net of tax -
reporting costs of start-
up activities (0.09) --
Diluted earnings (loss)
per common share ...... $ (0.70) $ 0.23
Diluted weighted average
common shares outstanding 28,015 28,474
(Table Continued)
Stage Stores, Inc.
Consolidating Condensed Statement of Operations
(in thousands, except per share amounts)
(unaudited)
Nine Months Ended 10/30/99
Pro Forma For Store Closure Costs (1)
Store Before Store
Closure Costs Closure Costs
Net sales ......... $ -- $ 796,766
Cost of sales and related
buying, occupancy and
distribution expenses 7,303 567,880
Gross profit ......... (7,303) 228,886
Selling, general and
administrative expenses -- 191,822
Store opening and closure
program costs ....... 16,393 749
Operating income (loss) (23,696) 36,315
Interest expense, net -- 36,949
Income (loss) before
income tax and cumulative
effect of a change in
accounting principle (23,696) (634)
Income tax expense (benefit) (6,947) (247)
Income (loss) before
cumulative effect of a
change in accounting
principle .............. (16,749) (387)
Cumulative effect of a
change in accounting
principle, net of tax -
reporting costs of start-
up activities..... -- (2,402)
Net income (loss) $ (16,749) $ (2,789)
Basic earnings (loss) per
common share data:
Basic earnings(loss) per
common share before
cumulative effect of a
change in accounting
principle $ (0.60) $ (0.01)
Cumulative effect of a
change in accounting
principle, net of tax -
reporting costs of start-
up activities -- (0.09)
Basic earnings (loss) per
common share ........ $ (0.60) $ (0.10)
Basic weighted average
common shares outstanding 28,015 28,015
Diluted earnings (loss)
per common share data:
Diluted earnings (loss)
per common share before
cumulative effect of a
change in accounting
principle $ (0.60) $ (0.01)
Cumulative effect of a
change in accounting
principle, net of tax -
reporting costs of start-
up activities -- (0.09)
Diluted earnings (loss)
per common share ...... $ (0.60) $ (0.10)
Diluted weighted average
common shares outstanding 28,015 28,015
(1) The pro forma data is included to demonstrate the impact that
the store closure costs had on the Company's financial statements
for the nine months ended 10/30/99 and is not meant to be a
presentation in accordance with generally accepted accounting
principles.
Stage Stores, Inc.,
Consolidated Condensed Balance Sheet
(in thousands)
(unaudited)
10/30/99 1/30/99 10/31/98
ASSETS
Cash and cash equivalents $ 7,533 $ 12,832 $ 11,226
Undivided interest in accounts
receivable trust 69,069 69,816 58,971
Merchandise inventories, net 389,926 341,316 421,658
Other current assets 61,444 84,473 82,242
Total current assets 527,972 508,437 574,097
Fixed assets, net 218,087 233,263 225,121
Goodwill, net 87,500 92,551 93,285
Other assets 18,364 23,429 24,858
$ 851,923 $ 857,680 $ 917,361
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable $ 78,773 $ 82,779 $ 102,787
Accrued expenses and other current
liabilities 52,660 52,706 57,734
Current portion of long-term debt 65,980 4,814 82,973
Total current liabilities 197,413 140,299 243,494
Long-term debt including credit
facilities 444,512 487,968 450,311
Other long-term liabilities 24,882 25,021 10,436
Total liabilities 666,807 653,288 704,241
Stockholders' equity 185,116 204,392 213,120
$ 851,923 $ 857,680 $ 917,361
Stage Stores, Inc.
Consolidated Condensed Statement of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended
10/30/99 10/31/98
Cash flows from operating activities:
Net income (loss) $ (19,538) $ 6,648
Adjustments to net income (loss):
Depreciation and amortization 36,329 21,046
Amortization of debt issue costs and
accretion of discount 3,154 2,628
Other 387 192
Changes in working capital (29,517) (106,691)
Net cash used in operating
activities (9,185) (76,177)
Cash flows from investing activities:
Additions to fixed assets (13,166) (71,202)
Net cash used in investing activities (13,166) (71,202)
Cash flows from financing activities:
Proceeds from working capital facility 19,150 134,650
Proceeds from issuance of common stock 262 839
Payments on long-term debt (2,360) (199)
Net cash provided by financing
activities 17,052 135,290
Net decrease in cash and cash equivalents (5,299) (12,089)
Cash and cash equivalents:
Beginning of period 12,832 23,315
End of period $ 7,533 $ 11,226
