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
August 19, 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 second quarter 1999
results of operations and certain other matters was issued by the
Company on August 19, 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 August 19, 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.
August 19, 1999 /s/ James A. Marcum
(Date) James A. Marcum
Vice Chairman and,
Chief Financial Officer
NEWS RELEASE
CONTACT:
Bob Aronson
Director of Investor Relations
(800) 579-2302
FOR IMMEDIATE RELEASE
STAGE STORES, INC. ANNOUNCES SECOND QUARTER 1999 RESULTS
-- Earnings of $0.04 Per Share Before Costs Related to Store
Closure Program Reported, As Compared to $0.03 Per Share Last
Year --
______________________________
HOUSTON, TX, August 19, 1999 -- Stage Stores, Inc. (NYSE: SGE)
today announced results for the second quarter ended July 31,
1999.
Net sales for the second quarter of 1999 decreased 0.7% to $269.8
million from $271.8 million for last year's second quarter.
Comparable store sales for the quarter decreased 5.7% as compared
to the same period last year.
Net income for this year's second quarter before costs related to
the previously announced store closure program was $1.1 million,
or $0.04 per share on a diluted basis, as compared to $0.8
million, or $0.03 per share on a diluted basis, for the second
quarter of 1998. Earnings before interest, taxes, depreciation
and amortization for the second quarter of 1999 were $23.7
million (before costs related to the store closure program) as
compared to $20.8 million for the second quarter of 1998. During
the quarter, the Company recorded pretax charges of $22.8 million
in conjunction with its store closure program. Of the total,
$7.3 million was charged to cost of sales while the remaining
$15.5 million was charged to store opening and closure costs.
With the store closure costs included, the Company had a net loss
for the quarter of $0.54 per share on a diluted basis.
Commenting on the results, Carl E. Tooker, Chairman, President
and Chief Executive Officer stated, "We are pleased that our
operations for the second quarter of 1999, excluding costs
related to the store closure program, generated a year-over-year
increase in net income as compared to the second quarter of 1998.
We achieved these results by improving our merchandise margins
and by prudently managing our selling, general and administrative
("SG&A") expenses."
Mr. Tooker continued, "In analyzing the second quarter's sales
results, it should be noted that our performance was impacted by
a more conservative promotional cadence throughout the quarter as
well as a shift in the timing of our back to school sale event
from the last week of July to the first week of August. Although
this shift in our promotional calendar moved a significant amount
of volume out of July, we made this change in order to
maximize our sales opportunities from Texas' inaugural sales
tax holiday period which ran this year from August 6th - 8th.
Based on the results of the sales during this three day period,
we believe this was the right thing to do."
Mr. Tooker further stated, "During the second quarter, we focused
on improving our merchandise margins as well as continuing to
transition our merchandise assortments to reflect the branded
fashion mix that we believe has the greatest appeal to our
customer base. Even though our conservative promotional posture
did have an impact on our sales performance, it allowed us to
substantially increase the sell through of our regular priced
goods throughout the quarter, and as a result, we were able to
significantly improve our merchandise margins over this year's
first quarter as well as the second quarter of last year. The
fact that our merchandise margins improved, as well as the fact
that the key drivers of our business, namely misses' sportswear,
activewear, cosmetics, juniors and young men's, all posted
positive comparable store sales for the quarter, confirms that
significant strides were made on these initiatives. While there
is still work to be done in improving the quality and assortment
of the merchandise mix in several of our other categories of
business, we firmly believe that our results for the second
quarter reflect the progress we have made in improving the
financial performance of the business."
Mr. Tooker concluded, "In addition to improving our merchandise
margins, we continued to prudently control our SG&A expenses.
The level of SG&A expenses for the second quarter of 1999 was
below last year's level primarily as a result of reduced payroll
and payroll related costs and an improved performance in our
credit card portfolio. This, coupled with our improved
merchandise margins, accounted for the improvement in our
financial results."
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 683 stores in 34 states at the end
of the second 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)
7/31/99 8/1/98
Net sales $269,848 $271,805
Cost of sales and related
buying, occupancy and
distribution expenses 195,827 189,566
Gross profit 74,021 82,239
Selling, general and
administrative expenses 66,888 67,853
Store opening and
closure program costs 15,465 1,708
Operating income (loss) (8,332) 12,678
Interest expense, net 12,646 11,423
Income (loss) before
income tax (20,978) 1,255
Income tax expense (benefit) (5,887) 490
Net income (loss) $(15,091) $ 765
Basic earnings (loss)
per common share data:
Basic earnings (loss)
per common share $ (0.54) $ 0.03
Basic weighted average
common shares outstanding 28,022 27,874
Diluted earnings (loss)
per common share data:
Diluted earnings (loss)
per common share $ (0.54) $ 0.03
Diluted weighted average
common shares outstanding 28,022 28,582
(Table Continued)
Three Months Ended 7/31/99
Pro Forma For Store Closure Costs (1)
Store Before Store
Closure Costs Closure Costs
Net sales $ -- $269,848
Cost of sales and related
buying, occupancy and
distribution expenses 7,303 188,524
Gross profit (7,303) 81,324
Selling, general and
administrative expenses -- 66,888
Store opening and
closure program costs 15,465 --
Operating income (loss) (22,768) 14,436
Interest expense, net -- 12,646
Income (loss) before
income tax (22,768) 1,790
Income tax expense (benefit) (6,585) 698
Net income (loss) $(16,183) $ 1,092
Basic earnings (loss)
per common share data:
Basic earnings (loss)
per common share $ (0.58) $ 0.04
Basic weighted average
common shares outstanding 28,022 28,022
Diluted earnings (loss)
per common share data:
Diluted earnings (loss) $ (0.58) $ 0.04
per common share
Diluted weighted average
common shares outstanding 28,022 28,183
(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 7/31/99 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)
7/31/99 1/30/99 8/1/98
ASSETS
Cash and cash equivalents $ 8,970 $ 12,832 $18,890
Undivided interest in accounts
receivable trust 66,729 69,816 57,285
Merchandise inventories, net 362,498 341,316 384,157
Other current assets 71,153 84,473 94,752
Total current assets 509,350 508,437 555,084
Fixed assets, net 223,431 233,263 216,621
Goodwill, net 88,183 92,551 94,019
Other assets 19,220 23,429 23,873
$840,184 $857,680 $889,597
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable $71,655 $ 82,779 $108,674
Accrued expenses and other current
liabilities 42,715 52,706 52,436
Current portion of long-term debt 70,130 4,814 51,823
Total current liabilities 184,500 140,299 212,933
Long-term debt including credit
facilities 444,186 487,968 450,015
Other long-term liabilities 26,616 25,021 10,501
Total liabilities 655,302 653,288 673,449
Stockholders' equity 184,882 204,392 216,148
$840,184 $857,680 $889,597
Stage Stores, Inc.
Consolidated Condensed Statement of Cash Flows
(in thousands)
(unaudited)
Six Months Ended
7/31/99 8/1/98
Cash flows from operating activities:
Net income (loss) $ (19,762) $ 9,800
Adjustments to net income (loss):
Depreciation and amortization 27,578 14,411
Amortization of debt issue costs and
accretion of discount 2,108 1,732
Other 282 513
Changes in working capital (24,218) (78,067)
Net cash used in operating
activities (14,012) (51,611)
Cash flows from investing activities:
Additions to fixed assets (11,045) (56,837)
Net cash used in investing
activities (11,045) (56,837)
Cash flows from financing activities:
Proceeds from working capital facility 23,300 103,500
Proceeds from issuance of common stock 252 715
Payments on long-term debt (2,357) (192)
Net cash provided by financing
activities 21,195 104,023
Net decrease in cash and cash
equivalents (3,862) (4,425)
Cash and cash equivalents:
Beginning of period 12,832 23,315
End of period $ 8,970 $ 18,890
