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EXHIBIT INDEX ON PAGE 3
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 14, 1997
CARSON PIRIE SCOTT & CO.
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(Exact name of registrant as specified in its charter)
Illinois
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(State or other jurisdiction of incorporation)
0-22682 37-0175980
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Commission File Number (IRS Employer Identification No.)
331 West Wisconsin Avenue, Milwaukee, Wisconsin 53203
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(Address of principal executive offices) (Zip Code)
(414) 347-4141
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Registrant's Telephone Number
Page 1 of 9
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Item 5. Other Events.
On August 14, 1997, Carson Pirie Scott & Co. reported its second quarter
and year to date financial results in a news release, a copy of which is
attached as Exhibit 12.
Item 7. Exhibits.
See Exhibit Index on page 3 of this Current Report on Form 8-K.
SIGNATURE
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.
Dated August 21, 1997.
CARSON PIRIE SCOTT & CO.
By: /s/ Charles J. Hansen
------------------------
Charles J. Hansen
Vice President,
General Counsel,
and Secretary
Page 2 of 9
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EXHIBIT INDEX
1. News release, dated August 14, 1997
Page 3 of 9
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EXHIBIT 1
Investors Media
James L. Stoffel Edward P. Carroll, Jr.
V.P. - Treasurer Executive V.P. Marketing
(414) 278-5769 (414) 347-5340
FOR IMMEDIATE RELEASE THURSDAY, AUGUST 14, 1997
CARSON PIRIE SCOTT & CO. SECOND QUARTER OPERATING
EARNINGS INCREASE 35% TO $0.23 PER SHARE
Milwaukee, Wisconsin, August 14, 1997 - Carson Pirie Scott & Co. (NYSE:CRP)
today reported its second quarter and year to date financial results. Stanton J.
Bluestone, Chairman and Chief Executive Officer of Carson Pirie Scott & Co.,
commented:
"I am pleased to report our ninth consecutive quarter of improvement in
operating earnings per share. A combination of solid sales growth and diligent
expense control generated the 35% operating EPS gain in the quarter."
"Our top line grew 8.3% in the quarter by virtue of a healthy 5.5% comparable
store sales gain and the continued solid performance from the new stores the
Company added in 1996. Nearly all merchandise categories contributed to our
comparable store sales growth. Feminine Apparel continued its brisk sales trend
with a 10% sales gain in the quarter and for the first half. In addition, the
Men's Better Sportswear area grew 32% in the quarter with the largest sales
increases in the American Designer lines. Shoes and Home Textiles also posted
above average sales gains in the quarter."
"Our margin rate declined 40 basis points in the quarter. The decline was in
line with our expectations and is partially due to a change in the mix of
merchandise sold. Our expense rate improved 1.4 percentage points moving from
31.8% in 1996 to 30.4% in 1997 which more than offset the margin rate decline.
The expense rate improvement resulted from the spreading of fixed expenses
across a larger sales base and the absence of new store preopening charges in
the current quarter. These operating improvements resulted in a 27% jump in
EBITDA and a 35% operating EPS increase."
"The second quarter results brought to a close a very successful first half of
1997. Total sales increased 8.7% while comparable store sales increased 4.7%.
These strong sales results combined with diligent management of expenses
generated a 23% increase in EBITDA and a 32% increase in operating EPS."
"I am cautiously optimistic about our prospects for the remainder of the year.
As we enter the second half, our inventory is well positioned and the sales
momentum in our core merchandise categories is encouraging."
Carson Pirie Scott & Co., a major department store retailer, operates 52
traditional department stores and 4 furniture stores: 31 Carson Pirie Scott
stores in greater Chicago, Indiana and Minnesota; 13 Bergner's in central
Illinois; and 12 Boston Stores in Wisconsin.
Page 4 of 9
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<TABLE>
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CARSON PIRIE SCOTT & CO. AND SUBSIDIARIES
Consolidated Statements of Operations
(dollars in thousands, except per share amounts)
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<CAPTION>
Three Months Ended Six Months Ended Trailing Twelve Months
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August 2, August 3, August 2, August 3, August 2, August 3,
1997 1996 1997 1996 1997 1996
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<S> <C> <C> <C> <C> <C> <C>
Net sales $243,765 $224,986 $501,899 $461,755 $1,142,970 $1,075,460
Cost of sales (154,268) (141,464) (322,023) (295,206) (726,897) (685,434)
Selling, general and
administrative expenses (74,192) (71,470) (150,484) (142,710) (314,906) (300,105)
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EBITDA 15,305 12,052 29,392 23,839 101,167 89,921
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Depreciation and
amortization expense (5,003) (4,031) (10,050) (8,063) (17,508) (13,285)
Other 91 (42) 151 (135) 473 35
Nonrecurring items (3,645) 0 (4,162) 0 (4,162) 904
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Income from operations 6,748 7,979 15,331 15,641 79,970 77,575
Nonrecurring items 0 0 0 12,065 (10,525) 5,230
Interest expense, net (4,055) (3,391) (8,318) (7,135) (17,093) (16,390)
------------------------------------------------------------------------------------------------------------------------
Income before income taxes 2,693 4,588 7,013 20,571 52,352 66,415
Income tax expense (1,066) (1,808) (2,777) (8,105) (20,772) (26,445)
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Net income $1,627 $2,780 $4,236 $12,466 $31,580 $39,970
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Shares outstanding (in 000's) 16,448 16,782 16,479 16,791 16,511 16,762
Net income per share:
Operating $0.23 $0.17 $0.41 $0.31 $2.43 $2.12
Primary $0.10 $0.17 $0.26 $0.74 $1.91 $2.38
Fully diluted $0.10 $0.17 $0.26 $0.74 $1.91 $2.38
Statistics:
Same-store sales increase 5.5% (0.4%) 4.7% 2.1% 3.3% 2.6%
Gross margin rate 36.7% 37.1% 35.8% 36.1% 36.4% 36.3%
SG&A rate (30.4%) (31.8%) (30.0%) (30.9%) (27.6%) (27.9%)
EBITDA rate 6.3% 5.4% 5.9% 5.2% 8.9% 8.4%
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</TABLE>
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The Company provided the following highlights for the second quarter results:
<TABLE>
<CAPTION>
1997 Second Quarter Results Summary 1996 Second Quarter Results Summary
------------------------------------------- -------------------------------------------
------------------------------------------- -------------------------------------------
Net Net Net Net
($ in millions, except EPS) Sales EBITDA Income EPS Sales EBITDA Income EPS
- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating results (1)<F1> $243.8 $15.3 $3.8 $0.23 $225.0 $12.1 $2.8 $0.17
Nonrecurring Item:
Year 2000 costs - - ($2.2) ($0.13) - - - -
=========================================== =============================================
Total Company $243.8 $15.3 $1.6 $0.10 $225.0 $12.1 $2.8 $0.17
=========================================== =============================================
<FN>
<F1>
(1) Excludes nonrecurring items.
</FN>
</TABLE>
Sales: Sales increased 8.3% to $243.8 million in the second quarter of 1997 from
the prior year's sales of $225.0 million. Sales rose 5.5% on a comparable store
basis.
EBITDA: Earnings before interest, taxes, depreciation, amortization and other
nonrecurring items ("EBITDA") increased 27% to $15.3 million in 1997 from $12.1
million in 1996. The EBITDA rate for the second quarter increased approximately
90 basis points from 5.4% in 1996 to 6.3% in 1997. The EBITDA rate improvement
resulted primarily from leveraging of fixed expenses across a larger sales base.
Depreciation and amortization: The Company's depreciation and amortization
expense increased from $4.0 million in 1996 to $5.0 million in 1997. The $1.0
million increase resulted from the higher fixed asset balances created through
the Company's capital expenditure program and new store openings being added to
an artificially low base due to fresh start accounting. The Company is
anticipating a similar dollar increase to depreciation and amortization expense
in each of the remaining quarters of 1997.
Interest Expense: Interest expense increased to $4.1 million in 1997 from $3.4
million in 1996. The increase occurred because the 1997 results do not include
$0.5 million of interest income recorded in 1996 on an investment in County Seat
Holdings, Inc. County Seat Holdings, Inc. filed for Chapter 11 bankruptcy
protection in the third quarter of 1996 and the Company sold its investment in
the first quarter of fiscal 1997.
Earnings per share ("EPS") results: Net income excluding nonrecurring items
increased $1.0 million in the quarter versus the prior year second quarter. The
improved EBITDA performance was partially offset by higher depreciation and
interest charges. Operating EPS improved 35% from $0.17 to $0.23 per share. On a
Total Company basis, EPS was $0.10 in 1997. The $0.13 difference versus
operating EPS of $0.23 related to Year 2000 computer system preparation costs
which included a previously disclosed $3.1 million write-down of the
undepreciated asset value of a mainframe computer in conjunction with its lease
termination.
Page 6 of 9
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<TABLE>
The Company provided the following highlights for its year to date financial
results:
<CAPTION>
1997 First Half Results Summary 1996 First Half Results Summary
------------------------------------------- ---------------------------------------------
------------------------------------------- ---------------------------------------------
Net Net Net Net
($ in millions, except EPS) Sales EBITDA Income EPS Sales EBITDA Income EPS
- ---------------------------
------------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating results (1)<F1> $501.9 $29.4 $6.7 $0.41 $461.8 $23.8 $5.2 $0.31
Nonrecurring Items:
Sale of marketable - - - - - - $9.0 $0.53
securities
Charitable contribution - - - - - - ($1.5) ($0.09)
Write-off of loan fees - - - - - - ($0.2) ($0.01)
Year 2000 costs - - ($2.5) ($0.15) - - - -
=========================================== =============================================
Total Company $501.9 $29.4 $4.2 $0.26 $461.8 $23.8 $12.5 $0.74
=========================================== =============================================
<FN>
<F1>
(1) Excludes nonrecurring items.
</FN>
</TABLE>
Sales: Sales increased 8.7% to $501.9 million in the first half of 1997 from the
prior year's sales of $461.8 million. Sales rose 4.7% on a comparable-store
basis.
EBITDA: Earnings before interest, taxes, depreciation, amortization and other
nonrecurring items ("EBITDA") increased 23% to $29.4 million in 1997 from $23.8
million in 1996. The EBITDA rate for the first half increased approximately 70
basis points from 5.2% in 1996 to 5.9% in 1997. The EBITDA rate improvement
resulted primarily from leveraging of fixed expenses across a substantially
larger sales base.
Depreciation and amortization: The Company's depreciation and amortization
expense increased from $8.1 million in 1996 to $10.1 million in 1997. The $2.0
million increase resulted from the higher fixed asset balances created through
the Company's capital expenditure program and new store openings being added to
an artificially low base due to fresh start accounting.
Interest Expense: Interest expense increased to $8.3 million in 1997 from $7.1
million in 1996. The increase occurred because the 1997 results do not include
$1.0 million of interest income recorded in 1996 on an investment in County Seat
Holdings, Inc. County Seat Holdings, Inc. filed for Chapter 11 bankruptcy
protection in the third quarter of 1996 and the Company sold its investment in
the first quarter of fiscal 1997.
Page 7 of 9
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Earnings per share ("EPS") results: Net income excluding nonrecurring items
increased $1.5 million in the current year first half versus the prior year. The
improved EBITDA performance was partially offset by higher depreciation and
interest charges. Operating EPS improved 32% from $0.31 to $0.41 per share. On a
Total Company basis, EPS was $0.26 in 1997. The $0.15 difference versus
operating EPS of $0.41 related to Year 2000 computer system preparation costs
which included a previously disclosed $3.1 million write-down of the
undepreciated asset value of a mainframe computer in conjunction with its lease
termination.
Share Repurchase Program: During the second quarter, the Company repurchased
94,300 shares of its common stock for $2.9 million under a January 1997 $20
million share repurchase authorization. The Company repurchased 244,300 shares
of its common stock for $7.4 million in the first half of 1997.
Page 8 of 9
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<TABLE>
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<CAPTION>
CARSON PIRIE SCOTT & CO. AND SUBSIDIARIES
Consolidated Balance Sheets
(dollars in thousands)
==========================================================================================================================
August 2, August 3,
Assets 1997 1996
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<S> <C> <C>
Cash and cash equivalents $ 17,887 $ 25,946
Receivables, net 237,398 214,433
Inventories 198,502 186,587
Other current assets 19,630 19,701
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Total current assets 473,417 446,667
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Property and equipment, net 190,220 155,915
Net deferred tax assets 39,095 38,562
Other assets 10,785 22,840
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$ 713,517 $ 663,984
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Liabilities and Shareholders' Equity
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Current maturities of long-term debt $ 2,765 $ 2,766
Accounts payable and accrued liabilities 163,064 150,898
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Total current liabilities 165,829 153,664
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Other liabilities 49,989 43,451
Accounts receivable securitization 93,300 99,000
Long-term debt, less current maturities 46,525 47,431
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Total liabilities 355,643 343,546
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Shareholders' equity:
Common stock and paid-in-capital 171,864 166,006
Retained earnings 186,010 154,432
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Total shareholders' equity 357,874 320,438
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$ 713,517 $ 663,984
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Net Debt / Capitalization 25.8% 27.8%
Net Debt / Capitalization (excluding A/R Securitization) 8.1% 7.0%
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</TABLE>
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