<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter ended May 1, 1999 Commission File Number
0-19517
THE BON-TON STORES, INC.
2801 East Market Street
York, Pennsylvania 17402
(717) 757-7660
Incorporated in Pennsylvania IRS No. 23-2835229
__________________________
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, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ____
----
As of May 28, 1999 there were 12,274,581 shares of Common Stock, $0.01 par
value, and 2,989,853 shares of Class A Common Stock, $0.01 par value,
outstanding.
================================================================================
<PAGE>
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE BON-TON STORES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
May 1, January 30,
(In thousands except share and per share data) 1999 1999
- ---------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C>
Assets
Current Assets:
Cash and cash equivalents $ 10,137 $ 10,607
Trade and other accounts receivable, net of allowance for doubtful accounts
of $3,075 and $3,692 at May 1, 1999 and January 30, 1999, respectively 26,397 34,677
Merchandise inventories 202,526 192,872
Prepaid expenses and other current assets 9,315 8,292
-----------------------------
Total current assets 248,375 246,448
-----------------------------
Property, fixtures and equipment at cost,
less accumulated depreciation and amortization 118,528 112,521
Other assets 20,137 19,150
-----------------------------
Total assets $ 387,040 $ 378,119
=============================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 56,751 $ 71,448
Accrued payroll and benefits 6,663 9,639
Accrued expenses 20,486 25,594
Current portion of long-term debt 631 615
Current portion of obligations under capital leases 417 409
Deferred income taxes 240 26
Income taxes payable 73 9,740
-----------------------------
Total current liabilities 85,261 117,471
-----------------------------
Long-term debt, less current maturities 118,056 74,387
Obligations under capital leases, less current maturities 1,762 1,868
Deferred income taxes 1,249 823
Other long-term liabilities 3,315 3,359
-----------------------------
Total liabilities 209,643 197,908
-----------------------------
Commitments and contingencies
Shareholders' equity
Common Stock - authorized 40,000,000 shares at $0.01 par value; issued and outstanding
shares of 12,274,506 and 12,278,120 at May 1, 1999 and January 30, 1999, respectively 123 123
Class A Common Stock - authorized 20,000,000 shares at $0.01 par value;
issued and outstanding shares of 2,989,853 at May 1, 1999 and January 30, 1999 30 30
Additional paid-in-capital 108,056 108,260
Deferred compensation (2,858) (3,114)
Retained earnings 72,046 74,912
-----------------------------
Total shareholders' equity 177,397 180,211
-----------------------------
Total liabilities and shareholders' equity $ 387,040 $ 378,119
=============================
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
2
<PAGE>
THE BON-TON STORES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THIRTEEN
WEEKS ENDED
--------------------------------------------
(In thousands except per share data) May 1, May 2,
(Unaudited) 1999 1998
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net sales $ 142,399 $ 143,267
Other income, net 517 499
--------------------------------------------
142,916 143,766
--------------------------------------------
Costs and expenses:
Costs of merchandise sold 93,190 91,435
Selling, general and administrative 48,560 47,029
Depreciation and amortization 3,256 3,090
--------------------------------------------
(Loss) income from operations (2,090) 2,212
Interest expense, net 1,920 2,633
--------------------------------------------
Loss before income taxes (4,010) (421)
Income tax benefit (1,524) (175)
--------------------------------------------
Loss before extraordinary item (2,486) (246)
Extraordinary item - loss on early extinguishment of debt,
net of income tax benefit of $232 (378) -
--------------------------------------------
Net loss $ (2,864) $ (246)
============================================
Per shares amounts:
Basic:
Loss before extraordinary item $ (0.17) $ (0.02)
Effect of extraordinary item (0.02) -
--------------------------------------------
Net loss $ (0.19) $ (0.02)
============================================
Basic shares outstanding 14,703 11,506
Diluted:
Loss before extraordinary item $ (0.17) $ (0.02)
Effect of extraordinary item (0.02) -
--------------------------------------------
Net loss $ (0.19) $ (0.02)
============================================
Diluted shares outstanding 14,703 11,506
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
3
<PAGE>
THE BON-TON STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THIRTEEN
WEEKS ENDED
--------------------------------------------
(In thousands) May 1, May 2,
(Unaudited) 1999 1998
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (2,864) $ (246)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 3,256 3,090
Changes in operating assets and liabilities, net (30,039) (13,451)
--------------------------------------------
Net cash used in operating activities $ (29,647) $ (10,607)
Cash flows from investing activities:
Capital expenditures, net (9,252) (2,661)
Proceeds from sale of property, fixtures and equipment 28 1,451
Proceeds from sale of accounts receivable, net (3,000) (4,000)
Payment for the acquisition of business, net of cash received (2,192) -
--------------------------------------------
Net cash used in investing activities (14,416) (5,210)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations (51,713) (95,404)
Proceeds from issuance of long-term debt 95,300 68,000
Proceeds from equity offering - 43,443
Exercised stock options 6 432
--------------------------------------------
Net cash provided by financing activities 43,593 16,471
Net (decrease) increase in cash and cash equivalents (470) 654
Cash and cash equivalents at beginning of period 10,607 9,109
--------------------------------------------
Cash and cash equivalents at end of period $ 10,137 $ 9,763
============================================
Supplemental Cash Flow Information:
Interest paid $ 1,522 $ 2,964
Income taxes paid $ 7,286 $ 5,519
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
4
<PAGE>
THE BON-TON STORES, INC. AND SUBSIDIARIES
The Bon-Ton Stores, Inc., a Pennsylvania corporation, was incorporated on
January 31, 1996 as the successor of a company established on January 31, 1929
and currently operates, as one business segment, 66 retail department stores
located in Pennsylvania, New York, Maryland, Massachusetts, West Virginia and
New Jersey.
1. BASIS OF PRESENTATION:
The accompanying unaudited consolidated financial statements include accounts of
The Bon-Ton Stores, Inc. and its wholly-owned subsidiaries (the "Company"). All
intercompany transactions and balances have been eliminated in consolidation.
The unaudited consolidated financial statements have been prepared in accordance
with the instructions for Form 10-Q and do not include all information and
footnotes required by generally accepted accounting principles. In the opinion
of management, all adjustments (primarily consisting of normal recurring
accruals) considered necessary for a fair presentation for interim periods have
been included. The Company's business is seasonal in nature and the results of
operations for the interim periods presented are not necessarily indicative of
the results for the full fiscal year. It is suggested these consolidated
financial statements be read in conjunction with the financial statements and
the notes thereto included in the Company's Annual Report on Form 10-K for the
fiscal year ended January 30, 1999 (the "1998 Annual Report").
2. PER SHARE AMOUNTS:
The Company adopted Statement of Financial Accounting Standards No. 128,
"Earnings per Share" ("SFAS No. 128") in fiscal 1997. SFAS No. 128 requires dual
presentation of basic and diluted earnings per share ("EPS") on the face of the
statement of operations. Basic EPS is computed by dividing reported earnings
available to common shareholders by weighted average number of common shares
outstanding for the period. Diluted EPS is computed assuming the conversion of
all dilutive securities, such as options and restricted stock. The statement
requires a reconciliation of the numerators and denominators used in the basic
and diluted EPS calculations. The numerator, net loss, is identical in both
calculations. The following table presents a reconciliation of the shares
outstanding for the respective calculations for each period presented on the
accompanying Consolidated Statements of Operations.
<TABLE>
<CAPTION>
May 1, May 2,
1999 1998
----------------- -----------------
<S> <C> <C>
Basic Calculation 14,703,000 11,506,000
Dilutive Securities ---
Restricted Shares - -
Options - -
------------------------------------------
Diluted Calculation 14,703,000 11,506,000
------------------------------------------
Antidilutive shares and options ---
Restricted Shares 563,000 464,000
Options 1,308,000 1,120,000
</TABLE>
Antidilutive shares and options, consisting of restricted shares and options to
purchase shares outstanding, were excluded from the computation of dilutive
securities due to the Company's net loss position in the first quarter of 1999
and 1998.
5
<PAGE>
THE BON-TON STORES, INC. AND SUBSIDIARIES
The following table reflects the approximate dilutive securities calculated
under the treasury stock method had the Company reported a profit for the first
quarter of 1999 and 1998.
<TABLE>
<CAPTION>
May 1, May 2,
1999 1998
----------------- -----------------
<S> <C> <C>
Approximate Dilutive Securities ---
Restricted Shares 92,000 45,000
Options 54,000 395,000
</TABLE>
Options to purchase shares with exercise prices greater than the average market
price were excluded from the above table for the first quarter of 1999 and the
first quarter of 1998 in the approximate amounts of 853,000 and 0, respectively,
as they would have been antidilutive.
3. ACQUISTIONS:
On March 23, 1999, the Company acquired the leasehold interests and certain
other assets in three department stores located in Hamden, Connecticut, Red
Bank, New Jersey and Brick Township, New Jersey, through a bankruptcy auction,
for a total cost of $2,192. The leasehold interests were held by Steinbach
Stores, Inc., a wholly-owned subsidiary of Crowley, Milner and Company. The
Company will remodel these stores and anticipates opening them in the fall of
fiscal 1999. Certain fixed assets and customer lists were also included in the
purchase. This business combination was accounted for under the purchase method.
4. REFINANCING:
On April 7, 1999, the Company amended its revolving credit facility to extend
the term of the facility to April 15, 2004. The amended agreement extends the
term of the available fixed assets and real estate borrowing base and provides a
more favorable interest pricing structure, with substantially all other terms
and conditions remaining unchanged. As a result of this transaction, the Company
incurred a one-time after-tax charge of $378 in the first quarter of 1999
relating to the early extinguishment of debt.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
The following table summarizes the changes in selected operating indicators,
illustrating the relationship of various income and expense items expressed as a
percentage of net sales for each period presented:
<TABLE>
<CAPTION>
THIRTEEN
WEEKS ENDED
--------------------------------
May 1, May 2,
1999 1998
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Net sales 100.0 % 100.0 %
Other income, net 0.4 0.3
--------------------------------
100.4 100.3
--------------------------------
Costs and expenses:
Costs of merchandise sold 65.4 63.8
Selling, general and administrative 34.1 32.8
Depreciation and amortization 2.3 2.2
--------------------------------
Loss from operations (1.5) 1.5
Interest expense, net 1.3 1.8
--------------------------------
Loss before income taxes (2.8) (0.3)
Income tax benefit (1.1) (0.1)
--------------------------------
Loss before extraordinary item (1.7) (0.2)
Extraordinary item - loss on early extinguishment of debt (0.3) -
--------------------------------
Net loss (2.0)% (0.2)%
================================
</TABLE>
Thirteen Weeks Ended May 1, 1999 Compared to Thirteen Weeks Ended May 2, 1998
For the purposes of the following discussions, all references to "first quarter
of 1999" and "first quarter of 1998" are to the Company's thirteen week period
ended May 1, 1999 and May 2, 1998, respectively.
Net sales. Net sales were $142.4 million for the thirteen weeks ended May 1,
1999, a decrease of 0.6% to the same period last year. Comparable store sales
decreased 1.8% for the period, with home, accessories and cosmetics achieving
sales increases during the quarter.
Other income, net. Net other income, which consisted mainly of income from
leased departments, increased to 0.4% of net sales in the first quarter of 1999
from 0.3% of net sales in the first quarter of 1998, primarily as a result of
added leased departments in the Company's two new stores.
Costs and expenses. Gross margin, in the first quarter of 1999, decreased $2.6
million compared to the first quarter of 1998 reflecting the decrease in sales
and an increase in the ratio of markdowns to sales. Gross profit as a percentage
of net sales decreased 1.6 percentage points to 34.6% for the thirteen week
period ended May 1, 1999 from 36.2% for the comparable period last year.
Selling, general and administrative expenses for the first quarter of 1999 were
$48.6 million, or 34.1% of net sales, as compared to $47.0 million, or 32.8% of
net sales, in the first quarter of 1998. During the first quarter of 1998,
selling, general and administrative expenses were reduced by the gain from the
sale of a vacant property (see Note 5 of the 1998 Annual Report) in the amount
of $1.4 million, or 1.0% of net sales. The remaining percentage increase of 0.3%
in the first quarter of 1999 was primarily attributable to the cost of
7
<PAGE>
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS - (continued)
improving customer service, including personnel costs, and the decrease in
sales, partially offset by an improvement in credit operations.
Depreciation and amortization increased to 2.3% of net sales in the first
quarter of 1999 from 2.2% of net sales in the first quarter of 1998. The
increase was primarily due to the addition of $19.4 million of new assets in
fiscal 1998.
(Loss) income from operations. Loss from operations in the first quarter of
1999 amounted to $2.1 million, or 1.5% of net sales, compared to an income from
operations of $2.2 million, or 1.5% of net sales, in the first quarter of 1998.
The Company sells receivables through its accounts receivable facility to
provide additional working capital. On a pro-forma basis, if the Company had
on-balance sheet financing, it would have reduced selling, general and
administrative expenses by $1.7 million in the first quarter of 1999 and $2.0
million in the first quarter of 1998. The lower selling, general and
administrative expenses would have been offset by a corresponding increase in
interest expense for both periods. The net result of the pro-forma
reclassification would reflect a loss from operations of $0.4 million in the
first quarter of 1999 and income from operations of $4.2 million for the first
quarter of 1998.
Interest expense, net. Net interest expense decreased $0.7 million to $1.9
million, or 1.3% of net sales, in the first quarter of 1999 from $2.6 million,
or 1.8% of net sales, in the first quarter of 1998. The decrease was primarily
attributable to lower average borrowing levels reflecting the issuance of
additional shares completed in May 1998 (see Note 7 of the Company's 1998 Annual
Report) and lower borrowing rates due to a change in the debt mix and a
reduction in the cost of funds borrowed under the revolving credit facility.
Extraordinary item. The Company amended its revolving credit facility on April
7, 1999 (see Note 4). As a result of this transaction, the Company incurred an
extraordinary charge of $0.4 million, net of a $0.2 million income tax benefit,
in the first quarter of 1999.
Net loss. The net loss in the first quarter of 1999 amounted to $2.9 million
compared to a net loss of $0.2 million in the first quarter of 1998.
Due to the seasonal nature of the Company's business, the results for the
current period are not necessarily indicative of the results that may be
achieved for the full fiscal year of 1999.
Year 2000 Readiness Disclosure
The Year 2000 issue refers to the inability of some computer programs and
microprocessors to correctly interpret the century from a date in which the year
is represented by only two digits (e.g., 98). As a result, on January 1, 2000,
computer systems throughout the world may experience operating difficulties
unless they are modified or upgraded to properly process date-related
information. The Year 2000 issue can arise at any point in a company's supply,
operational, distribution or financial process.
Breakdowns or malfunctions in any number of the Company's computer systems or
applications could prevent the Company from being able to receive and sell its
merchandise. Examples are failures in the Company's receiving, inventory,
payment or point-of-sale applications software, computer chips embedded in
equipment, lack of supply of products from its vendors or lack of power, heat or
water from utilities servicing its facilities.
8
<PAGE>
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS - (continued)
State of Readiness: The Company implemented a comprehensive risk-based plan
designed to make its operations Year 2000 compliant. The Company established a
corporate project team, which reports to the Vice Chairman and Chief Operating
Officer, to oversee, monitor and coordinate the company-wide Year 2000 effort.
The Company's plan focuses on four areas --- applications and mainframe
software, service providers, miscellaneous equipment providers and merchandise
vendors --- and generally covers three stages, including (i) assessment, (ii)
remediation and (iii) testing and certification. The remediation and testing
and certification stages do not apply to the merchandise vendor area. The
Company is primarily utilizing internal resources to complete its Year 2000
initiatives.
The applications and mainframe software area includes the Company's proprietary
and third party computer systems and related hardware, software and data and
telephone networks. The Company's merchandise system, which supports
procurement and distribution, inventory control and point-of-sale reporting
systems, is primarily proprietary. With respect to the Company's credit
business, the Company utilizes a third party software support vendor and has
obtained assurances from said vendor that it expects its systems to be Year 2000
compliant. A majority of the Company's information systems are presently Year
2000 compliant. Remediation and testing of remaining systems is in process,
with substantial completion anticipated by August 1999.
The service providers area includes systems and processes provided by outside
agencies, such as freight carriers, inventory and direct mail service providers.
Based on assurances from third parties, the Company believes these systems
present little Year 2000 risk.
The miscellaneous equipment area includes equipment and systems that contain
embedded computer technology such as elevators, phone systems and security
systems. The Company believes the majority of these systems are presently Year
2000 compliant and the remaining systems present little Year 2000 exposure or
risk.
Merchandise vendors are currently being monitored by an outside agency, co-
sponsored by a group of retailers, which is surveying the vendors for Year 2000
readiness. The survey results are monitored by the retailers via an internet
webpage. The Company is reviewing its vendors' responses on the webpage and
expects to conduct follow-up assessments of certain of its critical vendors to
further monitor such vendors' progress.
Costs: The aggregate expenditures to achieve Year 2000 readiness are not
expected to exceed $1.3 million. These costs, which include modifying software,
consultant expenses and replacing non-compliant hardware and software, will be
incurred over the two-year period from 1998 through 1999, with the majority
expended in 1999. All costs incurred to modify existing internal-use software
or to correct problems associated with Year 2000 readiness will be expensed as
incurred and funded from operating cash flows. The Company's expenditures
associated with Year 2000 readiness through May 1, 1999 are approximately $0.8
million.
Risks and Contingency Plans: Despite the Company's significant efforts to make
its systems and facilities Year 2000 compliant, the ability of third party
service providers, merchandise vendors and other third parties, including
governmental entities and utility companies, to be Year 2000 compliant, is
beyond the Company's control. Accordingly, no assurances can be given that the
systems of others on which the Company's systems rely will be timely converted
or compatible with the Company's systems. Additionally, there can be no
assurance that the Company's systems will be rendered Year 2000 compliant in a
timely manner. Failure of a third party or the Company to comply on a timely
basis could have a material adverse effect on the Company. At present, the
Company does not expect Year 2000 issues to materially affect its supply of
merchandise, services, competitive position or financial performance.
9
<PAGE>
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS - (continued)
The Company believes it is very difficult to accurately predict the most
reasonably likely worst case Year 2000 scenario. However, a reasonably likely
worst case Year 2000 scenario would include the failure of a third party
(including, without limitation, merchandise vendors and service and utility
providers) to timely complete remediation of its Year 2000 deficiencies for any
substantial period of time. This could have a material adverse effect upon the
Company's ability to provide and sell merchandise to its customers.
Additionally, a failure by the Company to timely remediate its Year 2000
deficiencies could impair the Company's ability to conduct its business of
providing and selling merchandise in a timely or profitable manner. The Company
is developing contingency plans, such as identifying alternative sourcing,
increasing inventory on basic stock items and identifying what actions need to
be taken if a critical system or third party provider is not Year 2000
compliant. The Company expects these plans to be finalized by July 1999.
The foregoing statements as to costs and dates relating to Year 2000 efforts are
forward-looking and are made in reliance on the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. They are based on the
Company's best estimates, which may be updated as additional information becomes
available. The Company's forward-looking statements are also based on
assumptions about many important factors, including the technical skills of
employees and independent contractors, the representations and preparedness of
third parties, the failure of vendors to deliver merchandise or perform services
required by the Company and the collateral effects of the Year 2000 issues on
the Company's business partners and customers. While the Company believes its
assumptions are reasonable, it cautions that it is impossible to predict the
impact of certain factors that could cause actual costs or timetables to differ
materially from the expected results.
Liquidity and Capital Resources
The Company's working capital requirements are currently met through a
combination of cash, borrowings under its revolving credit facility and proceeds
from its accounts receivable facility.
The following table summarizes material measures of the Company's liquidity and
capital resources:
<TABLE>
<CAPTION>
May 1, May 2,
(Dollars in millions) 1999 1998
----------------------------------------------------------------------------
<S> <C> <C>
Working capital $ 163.1 $ 140.8
Current ratio 2.91:1 2.46:1
Funded debt to total capitalization 0.40:1 0.36:1
Unused availability under lines of credit $ 51.2 $ 85.3
</TABLE>
For the thirteen weeks ended May 1, 1999, net cash used in operating activities
amounted to $29.6 million as compared to $10.6 million for the comparable period
last year. The increase in net cash used in the first quarter of 1999 as
compared to the first quarter of 1998 was primarily attributable to the decline
in the Company's earnings and increased working capital requirements. The
increased working capital requirements reflect a decrease in accounts payable,
accrued expenses and income taxes payable, partially offset by a decrease in
accounts receivable and reduced cash requirements for merchandise inventory.
Net cash used in investing activities amounted to $14.4 million in the first
quarter of 1999 compared to $5.2 million for the comparable period last year.
The increase in net cash used for the thirteen week period ended May 1, 1999
primarily reflects increased capital expenditures and payment for the
acquisition of leasehold interests in three department stores (see Note 3).
10
<PAGE>
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS - (continued)
Net cash provided by financing activities amounted to $43.6 million for the
first quarter of 1999 compared to $16.5 million for the comparable period of
1998. The increase in cash provided by financing activities in the first quarter
of 1999 was attributable to increased advances from the Company's revolving
credit facilities and lower payments made on long-term debt, offset by the net
proceeds of $43.4 million, received in the first quarter of 1998, from the sale
of additional shares of its Common Stock.
The Company anticipates its cash flow from operations, supplemented by
borrowings under its revolving credit facility, as amended (see Note 4), and
proceeds from its accounts receivable facility, will be sufficient to satisfy
its operating cash requirements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company entered into two new interest rate swap agreements during the first
quarter of 1999. The two "variable to fixed" rate swaps, with a notional amount
of $30.0 million, increase the interest rate swaps held by the Company to $110.0
million. The average pay rate on the new swaps are 5.58% and both swaps mature
in 2004. Refer to the Company's discussion of "Market Risk and Financial
Instruments" in the 1998 Annual Report for additional information.
"Safe Harbor" Statement
- -----------------------
Certain information included in this report and other materials filed or to be
filed by the Company with the Securities and Exchange Commission contains
statements that are forward-looking within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements, which may be
identified by words such as "may," "will," "plan," "expect," "anticipate,"
"estimate," "project," "intend" or other similar expressions, involve important
risks and uncertainties that could significantly affect anticipated results in
the future and, accordingly, such results may differ from those expressed in any
forward-looking statements made by or on behalf of the Company. These risks and
uncertainties include, but are not limited to, uncertainties affecting retail
in general, such as consumer confidence and demand for soft goods; risks
relating to leverage and debt service; competition within markets in which the
Company's stores are located; and the need for, and costs associated with, store
renovations and other capital expenditures.
11
<PAGE>
THE BON-TON STORES, INC, AND SUBSIDIARIES
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There have been no material developments in any legal proceedings since the
Company's disclosure in its 1998 Annual Report.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed pursuant to the requirements of Item 601 of
Regulation S-K:
Exhibit No. Description
27 Financial Data Schedule
(b) Reports on Form 8-K filed during the quarter.
None.
12
<PAGE>
THE BON-TON STORES, INC. AND SUBSIDIARIES
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.
THE BON-TON STORES, INC.
DATE: June 11, 1999 BY: /s/ Michael L. Gleim
------------------ ----------------------------
Michael L. Gleim
Vice Chairman and
Chief Operating Officer
DATE: June 11, 1999 BY: /s/ James H. Baireuther
------------------ ----------------------------
James H. Baireuther
Senior Vice President and
Chief Financial Officer
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MAY 1, 1999 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-29-2000
<PERIOD-START> JAN-31-1999
<PERIOD-END> MAY-01-1999
<CASH> 10,137
<SECURITIES> 0
<RECEIVABLES> 29,472
<ALLOWANCES> 3,075
<INVENTORY> 202,526
<CURRENT-ASSETS> 248,375
<PP&E> 215,179
<DEPRECIATION> 96,651
<TOTAL-ASSETS> 387,040
<CURRENT-LIABILITIES> 85,261
<BONDS> 119,818
0
0
<COMMON> 153
<OTHER-SE> 177,244
<TOTAL-LIABILITY-AND-EQUITY> 387,040
<SALES> 142,399
<TOTAL-REVENUES> 142,916
<CGS> 93,190
<TOTAL-COSTS> 145,006
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,920
<INCOME-PRETAX> (4,010)
<INCOME-TAX> (1,524)
<INCOME-CONTINUING> (2,486)
<DISCONTINUED> 0
<EXTRAORDINARY> (378)
<CHANGES> 0
<NET-INCOME> (2,864)
<EPS-BASIC> (0.19)<F1>
<EPS-DILUTED> (0.19)<F1>
<FN>
<F1>EPS has been prepared in accordance with SFAS No. 128, and that basic and
diluted EPS have been entered in place of primary and fully diluted,
respectively.
</FN>
</TABLE>
