Attached files
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EXCEL - IDEA: XBRL DOCUMENT - BON TON STORES INC | Financial_Report.xls |
EX-31.1 - EX-31.1 - BON TON STORES INC | a14-21465_1ex31d1.htm |
EX-10.2 - EX-10.2 - BON TON STORES INC | a14-21465_1ex10d2.htm |
EX-31.2 - EX-31.2 - BON TON STORES INC | a14-21465_1ex31d2.htm |
EX-10.1 - EX-10.1 - BON TON STORES INC | a14-21465_1ex10d1.htm |
EX-32.1 - EX-32.1 - BON TON STORES INC | a14-21465_1ex32d1.htm |
UNITED STATES
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 November 1, 2014 |
|
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 twelve 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 o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated |
Accelerated filer x |
Non-accelerated filer o |
Smaller reporting |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of November 28, 2014, there were 17,480,523 shares of Common Stock, $.01 par value, and 2,951,490 shares of Class A Common Stock, $.01 par value, outstanding.
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE BON-TON STORES, INC.
CONSOLIDATED BALANCE SHEETS
|
|
(Unaudited) |
|
|
| |||||
|
|
November 1, |
|
November 2, |
|
February 1, |
| |||
(In thousands, except share and per share data) |
|
2014 |
|
2013 |
|
2014 |
| |||
|
|
|
|
|
|
|
| |||
Assets |
|
|
|
|
|
|
| |||
Current assets: |
|
|
|
|
|
|
| |||
Cash and cash equivalents |
|
$ |
7,516 |
|
$ |
8,082 |
|
$ |
7,058 |
|
Merchandise inventories |
|
970,649 |
|
914,603 |
|
709,733 |
| |||
Prepaid expenses and other current assets |
|
79,059 |
|
91,120 |
|
76,285 |
| |||
Total current assets |
|
1,057,224 |
|
1,013,805 |
|
793,076 |
| |||
Property, fixtures and equipment at cost, net of accumulated depreciation and amortization of $922,608, $867,012 and $865,111 at November 1, 2014, November 2, 2013 and February 1, 2014, respectively |
|
637,217 |
|
649,966 |
|
640,004 |
| |||
Deferred income taxes |
|
20,486 |
|
16,659 |
|
15,765 |
| |||
Intangible assets, net of accumulated amortization of $62,811, $62,657 and $62,068 at November 1, 2014, November 2, 2013 and February 1, 2014, respectively |
|
91,891 |
|
104,932 |
|
102,800 |
| |||
Other long-term assets |
|
23,162 |
|
23,139 |
|
25,584 |
| |||
Total assets |
|
$ |
1,829,980 |
|
$ |
1,808,501 |
|
$ |
1,577,229 |
|
|
|
|
|
|
|
|
| |||
Liabilities and Shareholders Equity |
|
|
|
|
|
|
| |||
Current liabilities: |
|
|
|
|
|
|
| |||
Accounts payable |
|
$ |
376,070 |
|
$ |
351,281 |
|
$ |
200,465 |
|
Accrued payroll and benefits |
|
24,248 |
|
25,369 |
|
28,343 |
| |||
Accrued expenses |
|
157,462 |
|
161,224 |
|
150,595 |
| |||
Current maturities of long-term debt |
|
7,286 |
|
7,247 |
|
7,363 |
| |||
Current maturities of obligations under capital leases |
|
3,888 |
|
3,878 |
|
3,797 |
| |||
Deferred income taxes |
|
28,784 |
|
23,222 |
|
22,744 |
| |||
Income taxes payable |
|
|
|
4 |
|
|
| |||
Total current liabilities |
|
597,738 |
|
572,225 |
|
413,307 |
| |||
|
|
|
|
|
|
|
| |||
Long-term debt, less current maturities |
|
971,608 |
|
931,776 |
|
804,372 |
| |||
Obligations under capital leases, less current maturities |
|
46,034 |
|
49,609 |
|
48,977 |
| |||
Other long-term liabilities |
|
165,897 |
|
206,017 |
|
182,617 |
| |||
Total liabilities |
|
1,781,277 |
|
1,759,627 |
|
1,449,273 |
| |||
|
|
|
|
|
|
|
| |||
Contingencies (Note 9) |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| |||
Shareholders equity |
|
|
|
|
|
|
| |||
Preferred Stock authorized 5,000,000 shares at $0.01 par value; no shares issued |
|
|
|
|
|
|
| |||
Common Stock authorized 40,000,000 shares at $0.01 par value; issued shares of 17,818,323, 17,857,457 and 17,846,457 at November 1, 2014, November 2, 2013 and February 1, 2014, respectively |
|
178 |
|
179 |
|
178 |
| |||
Class A Common Stock authorized 20,000,000 shares at $0.01 par value; issued and outstanding shares of 2,951,490 at November 1, 2014, November 2, 2013 and February 1, 2014 |
|
30 |
|
30 |
|
30 |
| |||
Treasury stock, at cost 337,800 shares at November 1, 2014, November 2, 2013 and February 1, 2014 |
|
(1,387 |
) |
(1,387 |
) |
(1,387 |
) | |||
Additional paid-in capital |
|
160,759 |
|
160,185 |
|
160,772 |
| |||
Accumulated other comprehensive loss |
|
(48,006 |
) |
(68,589 |
) |
(50,448 |
) | |||
(Accumulated deficit) retained earnings |
|
(62,871 |
) |
(41,544 |
) |
18,811 |
| |||
Total shareholders equity |
|
48,703 |
|
48,874 |
|
127,956 |
| |||
Total liabilities and shareholders equity |
|
$ |
1,829,980 |
|
$ |
1,808,501 |
|
$ |
1,577,229 |
|
The accompanying notes are an integral part of these consolidated financial statements.
THE BON-TON STORES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
THIRTEEN |
|
THIRTY-NINE |
| ||||||||
|
|
WEEKS ENDED |
|
WEEKS ENDED |
| ||||||||
(In thousands, except per share data) |
|
November 1, |
|
November 2, |
|
November 1, |
|
November 2, |
| ||||
(Unaudited) |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net sales |
|
$ |
642,735 |
|
$ |
651,161 |
|
$ |
1,813,647 |
|
$ |
1,855,205 |
|
Other income |
|
16,022 |
|
15,412 |
|
45,780 |
|
44,236 |
| ||||
|
|
658,757 |
|
666,573 |
|
1,859,427 |
|
1,899,441 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Costs and expenses: |
|
|
|
|
|
|
|
|
| ||||
Costs of merchandise sold |
|
409,484 |
|
412,932 |
|
1,159,846 |
|
1,185,528 |
| ||||
Selling, general and administrative |
|
220,901 |
|
215,204 |
|
659,027 |
|
651,553 |
| ||||
Depreciation and amortization |
|
22,073 |
|
21,149 |
|
67,678 |
|
65,248 |
| ||||
Amortization of lease-related interests |
|
1,101 |
|
1,117 |
|
3,442 |
|
3,388 |
| ||||
Impairment charges |
|
273 |
|
321 |
|
447 |
|
452 |
| ||||
Income (loss) from operations |
|
4,925 |
|
15,850 |
|
(31,013 |
) |
(6,728 |
) | ||||
Interest expense, net |
|
15,506 |
|
16,492 |
|
46,224 |
|
52,747 |
| ||||
Loss on extinguishment of debt |
|
|
|
20 |
|
153 |
|
4,297 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Loss before income taxes |
|
(10,581 |
) |
(662 |
) |
(77,390 |
) |
(63,772 |
) | ||||
Income tax provision |
|
427 |
|
269 |
|
1,322 |
|
1,123 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net loss |
|
$ |
(11,008 |
) |
$ |
(931 |
) |
$ |
(78,712 |
) |
$ |
(64,895 |
) |
|
|
|
|
|
|
|
|
|
| ||||
Per share amounts |
|
|
|
|
|
|
|
|
| ||||
Basic: |
|
|
|
|
|
|
|
|
| ||||
Net loss |
|
$ |
(0.57 |
) |
$ |
(0.05 |
) |
$ |
(4.06 |
) |
$ |
(3.40 |
) |
|
|
|
|
|
|
|
|
|
| ||||
Diluted: |
|
|
|
|
|
|
|
|
| ||||
Net loss |
|
$ |
(0.57 |
) |
$ |
(0.05 |
) |
$ |
(4.06 |
) |
$ |
(3.40 |
) |
The accompanying notes are an integral part of these consolidated financial statements.
THE BON-TON STORES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
|
|
THIRTEEN |
|
THIRTY-NINE |
| ||||||||
|
|
WEEKS ENDED |
|
WEEKS ENDED |
| ||||||||
(In thousands) |
|
November 1, |
|
November 2, |
|
November 1, |
|
November 2, |
| ||||
(Unaudited) |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net loss |
|
$ |
(11,008 |
) |
$ |
(931 |
) |
$ |
(78,712 |
) |
$ |
(64,895 |
) |
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
| ||||
Pension and postretirement benefit plans |
|
814 |
|
1,551 |
|
2,442 |
|
4,653 |
| ||||
Comprehensive (loss) income |
|
$ |
(10,194 |
) |
$ |
620 |
|
$ |
(76,270 |
) |
$ |
(60,242 |
) |
The accompanying notes are an integral part of these consolidated financial statements.
THE BON-TON STORES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
THIRTY-NINE |
| ||||
|
|
WEEKS ENDED |
| ||||
(In thousands) |
|
November 1, |
|
November 2, |
| ||
(Unaudited) |
|
2014 |
|
2013 |
| ||
Cash flows from operating activities: |
|
|
|
|
| ||
Net loss |
|
$ |
(78,712 |
) |
$ |
(64,895 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
| ||
Depreciation and amortization |
|
67,678 |
|
65,248 |
| ||
Amortization of lease-related interests |
|
3,442 |
|
3,388 |
| ||
Impairment charges |
|
447 |
|
452 |
| ||
Share-based compensation expense |
|
1,902 |
|
3,000 |
| ||
Gain on sale of property, fixtures and equipment |
|
(2,542 |
) |
(403 |
) | ||
Reclassifications of accumulated other comprehensive loss |
|
2,442 |
|
4,653 |
| ||
Loss on extinguishment of debt |
|
153 |
|
4,297 |
| ||
Amortization of deferred financing costs |
|
2,195 |
|
3,029 |
| ||
Deferred income tax provision |
|
1,318 |
|
1,317 |
| ||
Changes in operating assets and liabilities: |
|
|
|
|
| ||
Increase in merchandise inventories |
|
(260,915 |
) |
(156,203 |
) | ||
Increase in prepaid expenses and other current assets |
|
(2,774 |
) |
(20,520 |
) | ||
Decrease (increase) in other long-term assets |
|
296 |
|
(1,159 |
) | ||
Increase in accounts payable |
|
169,757 |
|
151,986 |
| ||
Increase (decrease) in accrued payroll and benefits and accrued expenses |
|
1,793 |
|
(13,953 |
) | ||
Decrease in income taxes payable |
|
|
|
(735 |
) | ||
Decrease in other long-term liabilities |
|
(13,676 |
) |
(2,893 |
) | ||
Net cash used in operating activities |
|
(107,196 |
) |
(23,391 |
) | ||
|
|
|
|
|
| ||
Cash flows from investing activities: |
|
|
|
|
| ||
Capital expenditures |
|
(63,961 |
) |
(60,780 |
) | ||
Proceeds from sale of property, fixtures and equipment |
|
5,297 |
|
1,274 |
| ||
Net cash used in investing activities |
|
(58,664 |
) |
(59,506 |
) | ||
|
|
|
|
|
| ||
Cash flows from financing activities: |
|
|
|
|
| ||
Payments on long-term debt and capital lease obligations |
|
(411,051 |
) |
(917,791 |
) | ||
Proceeds from issuance of long-term debt |
|
575,231 |
|
1,007,791 |
| ||
Cash dividends paid |
|
(1,981 |
) |
(1,966 |
) | ||
Restricted shares forfeited in lieu of payroll taxes |
|
(1,937 |
) |
(2,134 |
) | ||
Proceeds from stock options exercised |
|
22 |
|
595 |
| ||
Deferred financing costs paid |
|
(69 |
) |
(8,712 |
) | ||
Increase in book overdraft balances |
|
6,103 |
|
5,270 |
| ||
Net cash provided by financing activities |
|
166,318 |
|
83,053 |
| ||
|
|
|
|
|
| ||
Net increase in cash and cash equivalents |
|
458 |
|
156 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents at beginning of period |
|
7,058 |
|
7,926 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents at end of period |
|
$ |
7,516 |
|
$ |
8,082 |
|
The accompanying notes are an integral part of these consolidated financial statements.
THE BON-TON STORES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
(Accumulated |
|
|
| |||||||
|
|
|
|
Class A |
|
|
|
Additional |
|
Other |
|
Deficit) |
|
|
| |||||||
(In thousands, except per share data) |
|
Common |
|
Common |
|
Treasury |
|
Paid-in |
|
Comprehensive |
|
Retained |
|
|
| |||||||
(Unaudited) |
|
Stock |
|
Stock |
|
Stock |
|
Capital |
|
Loss |
|
Earnings |
|
Total |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
BALANCE AT FEBRUARY 2, 2013 |
|
$ |
175 |
|
$ |
30 |
|
$ |
(1,387 |
) |
$ |
158,728 |
|
$ |
(73,242 |
) |
$ |
26,302 |
|
$ |
110,606 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net loss |
|
|
|
|
|
|
|
|
|
|
|
(64,895 |
) |
(64,895 |
) | |||||||
Other comprehensive income |
|
|
|
|
|
|
|
|
|
4,653 |
|
|
|
4,653 |
| |||||||
Dividends to shareholders, $0.15 per share |
|
|
|
|
|
|
|
|
|
|
|
(2,951 |
) |
(2,951 |
) | |||||||
Restricted shares forfeited in lieu of payroll taxes |
|
(2 |
) |
|
|
|
|
(2,132 |
) |
|
|
|
|
(2,134 |
) | |||||||
Proceeds from stock options exercised |
|
1 |
|
|
|
|
|
594 |
|
|
|
|
|
595 |
| |||||||
Share-based compensation expense |
|
5 |
|
|
|
|
|
2,995 |
|
|
|
|
|
3,000 |
| |||||||
BALANCE AT NOVEMBER 2, 2013 |
|
$ |
179 |
|
$ |
30 |
|
$ |
(1,387 |
) |
$ |
160,185 |
|
$ |
(68,589 |
) |
$ |
(41,544 |
) |
$ |
48,874 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
BALANCE AT FEBRUARY 1, 2014 |
|
$ |
178 |
|
$ |
30 |
|
$ |
(1,387 |
) |
$ |
160,772 |
|
$ |
(50,448 |
) |
$ |
18,811 |
|
$ |
127,956 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net loss |
|
|
|
|
|
|
|
|
|
|
|
(78,712 |
) |
(78,712 |
) | |||||||
Other comprehensive income |
|
|
|
|
|
|
|
|
|
2,442 |
|
|
|
2,442 |
| |||||||
Dividends to shareholders, $0.15 per share |
|
|
|
|
|
|
|
|
|
|
|
(2,970 |
) |
(2,970 |
) | |||||||
Restricted shares forfeited in lieu of payroll taxes |
|
(2 |
) |
|
|
|
|
(1,935 |
) |
|
|
|
|
(1,937 |
) | |||||||
Proceeds from stock options exercised |
|
|
|
|
|
|
|
22 |
|
|
|
|
|
22 |
| |||||||
Share-based compensation expense |
|
2 |
|
|
|
|
|
1,900 |
|
|
|
|
|
1,902 |
| |||||||
BALANCE AT NOVEMBER 1, 2014 |
|
$ |
178 |
|
$ |
30 |
|
$ |
(1,387 |
) |
$ |
160,759 |
|
$ |
(48,006 |
) |
$ |
(62,871 |
) |
$ |
48,703 |
|
The accompanying notes are an integral part of these consolidated financial statements.
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
1. BASIS OF PRESENTATION
The Bon-Ton Stores, Inc., a Pennsylvania corporation, was incorporated on January 31, 1996 as the successor of a company incorporated on January 31, 1929. As of November 1, 2014, The Bon-Ton Stores, Inc. operated, through its subsidiaries, 273 stores, including ten furniture galleries and four clearance centers, in 26 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergners, Boston Store, Carsons, Elder-Beerman, Herbergers and Younkers nameplates.
The accompanying unaudited consolidated financial statements include the accounts of The Bon-Ton Stores, Inc. (the Parent) and its subsidiaries (collectively, the Company). Variable interest entities are consolidated where it has been determined the Company is the primary beneficiary of those entities operations. All intercompany transactions 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 in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States. In the opinion of management, all adjustments considered necessary for a fair presentation of interim periods have been included. The Companys business is seasonal in nature and results of operations for the interim periods presented are not necessarily indicative of results for the full fiscal year. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the fiscal year ended February 1, 2014.
For purposes of the following discussion, references to the third quarter of 2014 and the third quarter of 2013 are to the 13 weeks ended November 1, 2014 and November 2, 2013, respectively. References to fiscal 2014 are to the 52 weeks ending January 31, 2015; references to fiscal 2013 are to the 52 weeks ended February 1, 2014.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires that management make estimates and assumptions about future events. These estimates and assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and the reported amounts of revenues and expenses. Such estimates include those related to merchandise returns, the valuation of inventories, long-lived assets, intangible assets, insurance reserves, contingencies, litigation and assumptions used in the calculation of income taxes and retirement and other post-employment benefits, among others. These estimates and assumptions are based on managements best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.
2. PER-SHARE AMOUNTS
The following table presents a reconciliation of net loss and weighted average shares outstanding used in basic and diluted earnings (loss) per share (EPS) calculations for each period presented:
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
|
|
THIRTEEN |
|
THIRTY-NINE |
| ||||||||
|
|
WEEKS ENDED |
|
WEEKS ENDED |
| ||||||||
|
|
November 1, |
|
November 2, |
|
November 1, |
|
November 2, |
| ||||
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Basic Loss Per Common Share |
|
|
|
|
|
|
|
|
| ||||
Net loss |
|
$ |
(11,008 |
) |
$ |
(931 |
) |
$ |
(78,712 |
) |
$ |
(64,895 |
) |
Less: Income allocated to participating securities |
|
|
|
|
|
|
|
|
| ||||
Net loss available to common shareholders |
|
$ |
(11,008 |
) |
$ |
(931 |
) |
$ |
(78,712 |
) |
$ |
(64,895 |
) |
|
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares outstanding |
|
19,470,674 |
|
19,202,416 |
|
19,393,072 |
|
19,066,734 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Basic loss per common share |
|
$ |
(0.57 |
) |
$ |
(0.05 |
) |
$ |
(4.06 |
) |
$ |
(3.40 |
) |
|
|
|
|
|
|
|
|
|
| ||||
Diluted Loss Per Common Share |
|
|
|
|
|
|
|
|
| ||||
Net loss |
|
$ |
(11,008 |
) |
$ |
(931 |
) |
$ |
(78,712 |
) |
$ |
(64,895 |
) |
Less: Income allocated to participating securities |
|
|
|
|
|
|
|
|
| ||||
Net loss available to common shareholders |
|
$ |
(11,008 |
) |
$ |
(931 |
) |
$ |
(78,712 |
) |
$ |
(64,895 |
) |
|
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares outstanding |
|
19,470,674 |
|
19,202,416 |
|
19,393,072 |
|
19,066,734 |
| ||||
Common shares issuable - stock options |
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares outstanding assuming dilution |
|
19,470,674 |
|
19,202,416 |
|
19,393,072 |
|
19,066,734 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Diluted loss per common share |
|
$ |
(0.57 |
) |
$ |
(0.05 |
) |
$ |
(4.06 |
) |
$ |
(3.40 |
) |
Due to the Companys net loss position, weighted average unvested restricted shares (participating securities) of 715,140 and 857,754 for the third quarter in each of 2014 and 2013, respectively, and 710,101 and 939,333 for the 39 weeks ended November 1, 2014 and November 2, 2013, respectively, were not considered in the calculation of net loss available to common shareholders used for both basic and diluted EPS.
In addition, weighted average stock option shares (non-participating securities) totaling 197,593 and 300,523 for the third quarter in each of 2014 and 2013, respectively, and 218,184 and 388,758 for the 39 weeks ended November 1, 2014 and November 2, 2013, respectively, were excluded from the computation of diluted weighted average common shares outstanding, as their effect would have been antidilutive. Certain of these stock option shares were excluded solely due to the Companys net loss position. Had the Company reported net income for the third quarter in each of 2014 and 2013, these shares would have increased diluted weighted average common shares outstanding by 86,974 and 114,837, respectively. Had the Company reported net income for the 39 weeks ended November 1, 2014 and November 2, 2013, these shares would have increased diluted weighted average common shares outstanding by 96,646 and 145,748, respectively.
3. FAIR VALUE MEASUREMENTS
Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements and Disclosures (ASC 820), defines fair value and establishes a framework for measuring fair value. ASC 820 establishes fair value hierarchy levels that prioritize the inputs used in valuations determining fair value. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 inputs are primarily
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs based on the Companys own assumptions.
The carrying values of the Companys cash and cash equivalents, accounts payable and financial instruments reported within prepaid expenses and other current assets and other long-term assets approximate fair value.
The carrying value and estimated fair value of the Companys long-term debt, including current maturities but excluding capital leases, as of November 1, 2014 are as follows:
|
|
|
|
|
|
Fair Value Measurements Using |
| |||||||||
|
|
Carrying |
|
Estimated |
|
Quoted |
|
Significant |
|
Significant |
| |||||
Second lien senior secured notes |
|
$ |
407,292 |
|
$ |
360,792 |
|
$ |
360,792 |
|
$ |
|
|
$ |
|
|
Mortgage facilities |
|
213,292 |
|
215,552 |
|
|
|
|
|
215,552 |
| |||||
Senior secured credit facility |
|
358,310 |
|
358,310 |
|
|
|
|
|
358,310 |
| |||||
Total |
|
$ |
978,894 |
|
$ |
934,654 |
|
$ |
360,792 |
|
$ |
|
|
$ |
573,862 |
|
The carrying value and estimated fair value of the Companys long-term debt, including current maturities but excluding capital leases, as of November 2, 2013 are as follows:
|
|
|
|
|
|
Fair Value Measurements Using |
| |||||||||
|
|
Carrying |
|
Estimated |
|
Quoted |
|
Significant |
|
Significant |
| |||||
Second lien senior secured notes |
|
$ |
407,292 |
|
$ |
394,267 |
|
$ |
394,267 |
|
$ |
|
|
$ |
|
|
Mortgage facilities |
|
221,270 |
|
224,628 |
|
|
|
|
|
224,628 |
| |||||
Senior secured credit facility |
|
310,461 |
|
310,461 |
|
|
|
|
|
310,461 |
| |||||
Total |
|
$ |
939,023 |
|
$ |
929,356 |
|
$ |
394,267 |
|
$ |
|
|
$ |
535,089 |
|
The carrying value and estimated fair value of the Companys long-term debt, including current maturities but excluding capital leases, as of February 1, 2014 are as follows:
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
|
|
|
|
|
|
Fair Value Measurements Using |
| |||||||||
|
|
Carrying |
|
Estimated |
|
Quoted |
|
Significant |
|
Significant |
| |||||
Second lien senior secured notes |
|
$ |
407,292 |
|
$ |
398,972 |
|
$ |
398,972 |
|
$ |
|
|
$ |
|
|
Mortgage facilities |
|
219,564 |
|
222,168 |
|
|
|
|
|
222,168 |
| |||||
Senior secured credit facility |
|
184,879 |
|
184,879 |
|
|
|
|
|
184,879 |
| |||||
Total |
|
$ |
811,735 |
|
$ |
806,019 |
|
$ |
398,972 |
|
$ |
|
|
$ |
407,047 |
|
The Level 3 fair value estimates are determined by a discounted cash flow analysis utilizing a discount rate the Company believes is appropriate and would be used by market participants. There was no change in the valuation technique used to determine the Level 3 fair value estimates.
4. SUPPLEMENTAL BALANCE SHEET INFORMATION
Prepaid expenses and other current assets were comprised of the following:
|
|
November 1, |
|
November 2, |
|
February 1, |
| |||
|
|
2014 |
|
2013 |
|
2014 |
| |||
Other receivables |
|
$ |
35,264 |
|
$ |
45,461 |
|
$ |
39,569 |
|
Prepaid expenses |
|
43,795 |
|
45,659 |
|
36,716 |
| |||
Total |
|
$ |
79,059 |
|
$ |
91,120 |
|
$ |
76,285 |
|
5. SUPPLEMENTAL CASH FLOW INFORMATION
The following supplemental cash flow information is provided for the periods reported:
|
|
THIRTY-NINE |
| ||||
|
|
WEEKS ENDED |
| ||||
|
|
November 1, |
|
November 2, |
| ||
|
|
2014 |
|
2013 |
| ||
|
|
|
|
|
| ||
Cash paid for: |
|
|
|
|
| ||
Interest, net of amounts capitalized |
|
$ |
38,439 |
|
$ |
55,457 |
|
Income taxes, net of refunds received |
|
(3 |
) |
691 |
| ||
|
|
|
|
|
| ||
Non-cash investing and financing activities: |
|
|
|
|
| ||
Property, fixtures and equipment included in accrued expenses |
|
$ |
6,140 |
|
$ |
7,082 |
|
Declared dividends to shareholders included in accrued expenses |
|
989 |
|
985 |
|
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
6. EXIT OR DISPOSAL ACTIVITIES
The following table summarizes exit or disposal activities during the 39 weeks ended November 1, 2014 related to store closings in fiscal 2013, the consolidation of eCommerce fulfillment activities in advance of the Companys new eCommerce fulfillment center and the Companys expense efficiency initiative:
|
|
Termination |
|
Other |
|
Total |
| |||
Accrued balance as of February 1, 2014 |
|
$ |
232 |
|
$ |
188 |
|
$ |
420 |
|
Provisions: |
|
|
|
|
|
|
| |||
Thirteen weeks ended May 3, 2014 |
|
319 |
|
125 |
|
444 |
| |||
Thirteen weeks ended August 2, 2014 |
|
1,148 |
|
18 |
|
1,166 |
| |||
Thirteen weeks ended November 1, 2014 |
|
245 |
|
|
|
245 |
| |||
Payments: |
|
|
|
|
|
|
| |||
Thirteen weeks ended May 3, 2014 |
|
(217 |
) |
(313 |
) |
(530 |
) | |||
Thirteen weeks ended August 2, 2014 |
|
(377 |
) |
(18 |
) |
(395 |
) | |||
Thirteen weeks ended November 1, 2014 |
|
(417 |
) |
|
|
(417 |
) | |||
Accrued balance as of November 1, 2014 |
|
$ |
933 |
|
$ |
|
|
$ |
933 |
|
The above provisions were included within selling, general and administrative expense.
7. EMPLOYEE DEFINED AND POSTRETIREMENT BENEFIT PLANS
The Company provides benefits to certain current and former associates who are eligible under a qualified defined benefit pension plan and various non-qualified supplemental pension plans (collectively, the Pension Plans). Net periodic benefit expense for the Pension Plans includes the following (income) and expense components:
|
|
THIRTEEN |
|
THIRTY-NINE |
| ||||||||
|
|
WEEKS ENDED |
|
WEEKS ENDED |
| ||||||||
|
|
November 1, |
|
November 2, |
|
November 1, |
|
November 2, |
| ||||
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
Interest cost |
|
$ |
1,998 |
|
$ |
1,997 |
|
$ |
5,993 |
|
$ |
5,994 |
|
Expected return on plan assets |
|
(2,490 |
) |
(2,235 |
) |
(7,470 |
) |
(6,706 |
) | ||||
Recognition of net actuarial loss |
|
943 |
|
1,642 |
|
2,831 |
|
4,925 |
| ||||
Net periodic benefit expense |
|
$ |
451 |
|
$ |
1,404 |
|
$ |
1,354 |
|
$ |
4,213 |
|
During the 39 weeks ended November 1, 2014, contributions of $11,287 were made to the Pension Plans. The Company anticipates contributing an additional $1,682 to fund the Pension Plans in fiscal 2014 for an annual total of $12,969.
The Company also provides medical and life insurance benefits to certain former associates under a postretirement benefit plan (Postretirement Benefit Plan). Net periodic benefit income for the Postretirement Benefit Plan includes the following (income) and expense components:
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
|
|
THIRTEEN |
|
THIRTY-NINE |
| ||||||||
|
|
WEEKS ENDED |
|
WEEKS ENDED |
| ||||||||
|
|
November 1, |
|
November 2, |
|
November 1, |
|
November 2, |
| ||||
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
Interest cost |
|
$ |
23 |
|
$ |
30 |
|
$ |
67 |
|
$ |
91 |
|
Recognition of net actuarial gain |
|
(129 |
) |
(91 |
) |
(389 |
) |
(272 |
) | ||||
Net periodic benefit income |
|
$ |
(106 |
) |
$ |
(61 |
) |
$ |
(322 |
) |
$ |
(181 |
) |
During the 39 weeks ended November 1, 2014, the Company contributed $114 to fund the Postretirement Benefit Plan, and anticipates contributing an additional $297 to fund the Postretirement Benefit Plan in fiscal 2014, for a net annual total of $411.
8. INCOME TAXES
The provisions codified within ASC Topic 740, Income Taxes (ASC 740), require companies to assess whether valuation allowances should be established against their deferred tax assets based on consideration of all available evidence using a more likely than not standard. In accordance with ASC 740, the Company maintained a full valuation allowance throughout fiscal 2013 and the 39 weeks ended November 1, 2014 on all of the Companys net deferred tax assets. The Companys deferred tax asset valuation allowance totaled $176,495, $178,106 and $144,908 as of November 1, 2014, November 2, 2013 and February 1, 2014, respectively.
Given the Companys valuation allowance position, no tax benefit was recognized on the Companys loss before income taxes in the 13 and 39 weeks ended in each of November 1, 2014 and November 2, 2013. The income tax provision recorded in the 13 and 39 weeks ended in each of November 1, 2014 and November 2, 2013 primarily reflects the recognition of deferred tax liabilities associated with indefinite-lived assets.
As of November 1, 2014, it is reasonably possible that gross unrecognized tax benefits could decrease by $78 within the next 12 months due to the expiration of certain statutes of limitations.
9. CONTINGENCIES
The Company is party to legal proceedings and claims that arise during the ordinary course of business. In the opinion of management, the ultimate outcome of any such litigation and claims will not have a material adverse effect on the Companys financial position, results of operations or liquidity.
10. COMPREHENSIVE LOSS
Accumulated other comprehensive loss is comprised of the net actuarial loss associated with the Pension Plans and Postretirement Benefit Plan. Other comprehensive income is comprised entirely of the amortization of the net actuarial loss (gain) associated with the Pension Plans and Postretirement Benefit Plan.
As a result of the deferred tax asset valuation allowance maintained throughout fiscal 2013 and the 39 weeks ended November 1, 2014 (see Note 8), no tax effect was recorded on the changes recognized within other comprehensive income for all periods presented.
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The before-tax amount of amortization of net actuarial loss (gain) (see Note 7) was recorded within selling, general and administrative expense.
11. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES
Certain debt obligations of the Company, which constitute debt obligations of The Bon-Ton Department Stores, Inc. (the Issuer), are guaranteed by the Parent and by each of its subsidiaries, other than the Issuer, that is an obligor under the Companys senior secured credit facility. Separate financial statements of the Parent, the Issuer and such subsidiary guarantors are not presented because the guarantees by the Parent and each 100% owned subsidiary guarantor are joint and several, full and unconditional, except for certain customary limitations which are applicable only to a subsidiary guarantor. These customary limitations include releases of a guarantee (1) if the subsidiary guarantor no longer guarantees other indebtedness of the Issuer; (2) if there is a sale or other disposition of the capital stock of a subsidiary guarantor and if such sale complies with the covenant regarding asset sales; and (3) if the subsidiary guarantor is properly designated as an unrestricted subsidiary.
The condensed consolidating financial information for the Parent, the Issuer and the guarantor and non-guarantor subsidiaries as of November 1, 2014, November 2, 2013 and February 1, 2014 and for the third quarter in each of 2014 and 2013 and the 39 weeks ended November 1, 2014 and November 2, 2013 as presented below has been prepared from the books and records maintained by the Parent, the Issuer and the guarantor and non-guarantor subsidiaries. The condensed financial information may not necessarily be indicative of the results of operations or financial position had the guarantor and non-guarantor subsidiaries operated as independent entities. Certain intercompany revenues and expenses included in the subsidiary records are eliminated in consolidation. As a result of this activity, an amount due to/due from affiliates will exist at any time.
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Balance Sheet
November 1, 2014
|
|
|
|
|
|
Guarantor |
|
Non-Guarantor |
|
Consolidating |
|
Company |
| ||||||
|
|
Parent |
|
Issuer |
|
Subsidiaries |
|
Subsidiaries |
|
Eliminations |
|
Consolidated |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents |
|
$ |
1 |
|
$ |
2,879 |
|
$ |
4,636 |
|
$ |
|
|
$ |
|
|
$ |
7,516 |
|
Merchandise inventories |
|
|
|
628,017 |
|
342,632 |
|
|
|
|
|
970,649 |
| ||||||
Prepaid expenses and other current assets |
|
|
|
69,415 |
|
6,311 |
|
3,839 |
|
(506 |
) |
79,059 |
| ||||||
Total current assets |
|
1 |
|
700,311 |
|
353,579 |
|
3,839 |
|
(506 |
) |
1,057,224 |
| ||||||
Property, fixtures and equipment at cost, net |
|
|
|
259,079 |
|
148,437 |
|
229,701 |
|
|
|
637,217 |
| ||||||
Deferred income taxes |
|
|
|
3,392 |
|
17,094 |
|
|
|
|
|
20,486 |
| ||||||
Intangible assets, net |
|
|
|
25,365 |
|
66,526 |
|
|
|
|
|
91,891 |
| ||||||
Investment in and advances to affiliates |
|
48,702 |
|
421,602 |
|
299,047 |
|
|
|
(769,351 |
) |
|
| ||||||
Other long-term assets |
|
|
|
22,273 |
|
403 |
|
486 |
|
|
|
23,162 |
| ||||||
Total assets |
|
$ |
48,703 |
|
$ |
1,432,022 |
|
$ |
885,086 |
|
$ |
234,026 |
|
$ |
(769,857 |
) |
$ |
1,829,980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Liabilities and Shareholders Equity |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Accounts payable |
|
$ |
|
|
$ |
376,070 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
376,070 |
|
Accrued payroll and benefits |
|
|
|
19,622 |
|
4,626 |
|
|
|
|
|
24,248 |
| ||||||
Accrued expenses |
|
|
|
87,858 |
|
70,074 |
|
36 |
|
(506 |
) |
157,462 |
| ||||||
Current maturities of long-term debt and obligations under capital leases |
|
|
|
451 |
|
3,436 |
|
7,287 |
|
|
|
11,174 |
| ||||||
Deferred income taxes |
|
|
|
8,382 |
|
20,402 |
|
|
|
|
|
28,784 |
| ||||||
Total current liabilities |
|
|
|
492,383 |
|
98,538 |
|
7,323 |
|
(506 |
) |
597,738 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Long-term debt and obligations under capital leases, less current maturities |
|
|
|
770,946 |
|
40,690 |
|
206,006 |
|
|
|
1,017,642 |
| ||||||
Other long-term liabilities |
|
|
|
120,767 |
|
43,327 |
|
1,803 |
|
|
|
165,897 |
| ||||||
Total liabilities |
|
|
|
1,384,096 |
|
182,555 |
|
215,132 |
|
(506 |
) |
1,781,277 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Shareholders equity |
|
48,703 |
|
47,926 |
|
702,531 |
|
18,894 |
|
(769,351 |
) |
48,703 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total liabilities and shareholders equity |
|
$ |
48,703 |
|
$ |
1,432,022 |
|
$ |
885,086 |
|
$ |
234,026 |
|
$ |
(769,857 |
) |
$ |
1,829,980 |
|
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Balance Sheet
November 2, 2013
|
|
|
|
|
|
Guarantor |
|
Non-Guarantor |
|
Consolidating |
|
Company |
| ||||||
|
|
Parent |
|
Issuer |
|
Subsidiaries |
|
Subsidiaries |
|
Eliminations |
|
Consolidated |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents |
|
$ |
1 |
|
$ |
3,038 |
|
$ |
5,043 |
|
$ |
|
|
$ |
|
|
$ |
8,082 |
|
Merchandise inventories |
|
|
|
590,837 |
|
323,766 |
|
|
|
|
|
914,603 |
| ||||||
Prepaid expenses and other current assets |
|
|
|
83,315 |
|
4,439 |
|
3,944 |
|
(578 |
) |
91,120 |
| ||||||
Total current assets |
|
1 |
|
677,190 |
|
333,248 |
|
3,944 |
|
(578 |
) |
1,013,805 |
| ||||||
Property, fixtures and equipment at cost, net |
|
|
|
234,300 |
|
172,501 |
|
243,165 |
|
|
|
649,966 |
| ||||||
Deferred income taxes |
|
|
|
6,114 |
|
10,545 |
|
|
|
|
|
16,659 |
| ||||||
Intangible assets, net |
|
|
|
34,102 |
|
70,830 |
|
|
|
|
|
104,932 |
| ||||||
Investment in and advances to (from) affiliates |
|
48,873 |
|
429,589 |
|
272,151 |
|
(52 |
) |
(750,561 |
) |
|
| ||||||
Other long-term assets |
|
|
|
21,711 |
|
504 |
|
924 |
|
|
|
23,139 |
| ||||||
Total assets |
|
$ |
48,874 |
|
$ |
1,403,006 |
|
$ |
859,779 |
|
$ |
247,981 |
|
$ |
(751,139 |
) |
$ |
1,808,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Liabilities and Shareholders Equity |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Accounts payable |
|
$ |
|
|
$ |
351,281 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
351,281 |
|
Accrued payroll and benefits |
|
|
|
21,115 |
|
4,254 |
|
|
|
|
|
25,369 |
| ||||||
Accrued expenses |
|
|
|
92,851 |
|
68,875 |
|
76 |
|
(578 |
) |
161,224 |
| ||||||
Current maturities of long-term debt and obligations under capital leases |
|
|
|
669 |
|
3,209 |
|
7,247 |
|
|
|
11,125 |
| ||||||
Deferred income taxes |
|
|
|
10,290 |
|
12,932 |
|
|
|
|
|
23,222 |
| ||||||
Income taxes payable |
|
|
|
4 |
|
|
|
|
|
|
|
4 |
| ||||||
Total current liabilities |
|
|
|
476,210 |
|
89,270 |
|
7,323 |
|
(578 |
) |
572,225 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Long-term debt and obligations under capital leases, less current maturities |
|
|
|
723,512 |
|
43,850 |
|
214,023 |
|
|
|
981,385 |
| ||||||
Other long-term liabilities |
|
|
|
154,633 |
|
49,707 |
|
1,677 |
|
|
|
206,017 |
| ||||||
Total liabilities |
|
|
|
1,354,355 |
|
182,827 |
|
223,023 |
|
(578 |
) |
1,759,627 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Shareholders equity |
|
48,874 |
|
48,651 |
|
676,952 |
|
24,958 |
|
(750,561 |
) |
48,874 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total liabilities and shareholders equity |
|
$ |
48,874 |
|
$ |
1,403,006 |
|
$ |
859,779 |
|
$ |
247,981 |
|
$ |
(751,139 |
) |
$ |
1,808,501 |
|
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Balance Sheet
February 1, 2014
|
|
|
|
|
|
Guarantor |
|
Non-Guarantor |
|
Consolidating |
|
Company |
| ||||||
|
|
Parent |
|
Issuer |
|
Subsidiaries |
|
Subsidiaries |
|
Eliminations |
|
Consolidated |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents |
|
$ |
1 |
|
$ |
2,889 |
|
$ |
4,168 |
|
$ |
|
|
$ |
|
|
$ |
7,058 |
|
Merchandise inventories |
|
|
|
454,718 |
|
255,015 |
|
|
|
|
|
709,733 |
| ||||||
Prepaid expenses and other current assets |
|
|
|
67,670 |
|
4,437 |
|
4,726 |
|
(548 |
) |
76,285 |
| ||||||
Total current assets |
|
1 |
|
525,277 |
|
263,620 |
|
4,726 |
|
(548 |
) |
793,076 |
| ||||||
Property, fixtures and equipment at cost, net |
|
|
|
232,869 |
|
166,720 |
|
240,415 |
|
|
|
640,004 |
| ||||||
Deferred income taxes |
|
|
|
4,076 |
|
11,689 |
|
|
|
|
|
15,765 |
| ||||||
Intangible assets, net |
|
|
|
33,260 |
|
69,540 |
|
|
|
|
|
102,800 |
| ||||||
Investment in and advances to (from) affiliates |
|
127,955 |
|
344,188 |
|
387,556 |
|
(90 |
) |
(859,609 |
) |
|
| ||||||
Other long-term assets |
|
|
|
24,169 |
|
533 |
|
882 |
|
|
|
25,584 |
| ||||||
Total assets |
|
$ |
127,956 |
|
$ |
1,163,839 |
|
$ |
899,658 |
|
$ |
245,933 |
|
$ |
(860,157 |
) |
$ |
1,577,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Liabilities and Shareholders Equity |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Accounts payable |
|
$ |
|
|
$ |
200,465 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
200,465 |
|
Accrued payroll and benefits |
|
|
|
22,567 |
|
5,776 |
|
|
|
|
|
28,343 |
| ||||||
Accrued expenses |
|
|
|
74,115 |
|
76,981 |
|
47 |
|
(548 |
) |
150,595 |
| ||||||
Current maturities of long-term debt and obligations under capital leases |
|
|
|
548 |
|
3,249 |
|
7,363 |
|
|
|
11,160 |
| ||||||
Deferred income taxes |
|
|
|
8,451 |
|
14,293 |
|
|
|
|
|
22,744 |
| ||||||
Total current liabilities |
|
|
|
306,146 |
|
100,299 |
|
7,410 |
|
(548 |
) |
413,307 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Long-term debt and obligations under capital leases, less current maturities |
|
|
|
597,857 |
|
43,291 |
|
212,201 |
|
|
|
853,349 |
| ||||||
Other long-term liabilities |
|
|
|
132,690 |
|
48,220 |
|
1,707 |
|
|
|
182,617 |
| ||||||
Total liabilities |
|
|
|
1,036,693 |
|
191,810 |
|
221,318 |
|
(548 |
) |
1,449,273 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Shareholders equity |
|
127,956 |
|
127,146 |
|
707,848 |
|
24,615 |
|
(859,609 |
) |
127,956 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total liabilities and shareholders equity |
|
$ |
127,956 |
|
$ |
1,163,839 |
|
$ |
899,658 |
|
$ |
245,933 |
|
$ |
(860,157 |
) |
$ |
1,577,229 |
|
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
Thirteen Weeks Ended November 1, 2014
|
|
|
|
|
|
Guarantor |
|
Non-Guarantor |
|
Consolidating |
|
Company |
| ||||||
|
|
Parent |
|
Issuer |
|
Subsidiaries |
|
Subsidiaries |
|
Eliminations |
|
Consolidated |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net sales |
|
$ |
|
|
$ |
378,279 |
|
$ |
264,456 |
|
$ |
|
|
$ |
|
|
$ |
642,735 |
|
Other income |
|
|
|
9,457 |
|
6,565 |
|
|
|
|
|
16,022 |
| ||||||
|
|
|
|
387,736 |
|
271,021 |
|
|
|
|
|
658,757 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Costs of merchandise sold |
|
|
|
243,019 |
|
166,465 |
|
|
|
|
|
409,484 |
| ||||||
Selling, general and administrative |
|
|
|
135,706 |
|
92,366 |
|
32 |
|
(7,203 |
) |
220,901 |
| ||||||
Depreciation and amortization |
|
|
|
11,130 |
|
8,221 |
|
2,722 |
|
|
|
22,073 |
| ||||||
Amortization of lease-related interests |
|
|
|
495 |
|
606 |
|
|
|
|
|
1,101 |
| ||||||
Impairment charges |
|
|
|
273 |
|
|
|
|
|
|
|
273 |
| ||||||
(Loss) income from operations |
|
|
|
(2,887 |
) |
3,363 |
|
(2,754 |
) |
7,203 |
|
4,925 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Intercompany income |
|
|
|
460 |
|
3,289 |
|
6,525 |
|
(10,274 |
) |
|
| ||||||
Equity in (losses) earnings of subsidiaries |
|
(10,581 |
) |
6,145 |
|
|
|
|
|
4,436 |
|
|
| ||||||
Interest expense, net |
|
|
|
(14,299 |
) |
(833 |
) |
(3,445 |
) |
3,071 |
|
(15,506 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
(Loss) income before income taxes |
|
(10,581 |
) |
(10,581 |
) |
5,819 |
|
326 |
|
4,436 |
|
(10,581 |
) | ||||||
Income tax provision |
|
427 |
|
427 |
|
234 |
|
|
|
(661 |
) |
427 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net (loss) income |
|
$ |
(11,008 |
) |
$ |
(11,008 |
) |
$ |
5,585 |
|
$ |
326 |
|
$ |
5,097 |
|
$ |
(11,008 |
) |
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Comprehensive (Loss) Income
Thirteen Weeks Ended November 1, 2014
|
|
|
|
|
|
Guarantor |
|
Non-Guarantor |
|
Consolidating |
|
Company |
| ||||||
|
|
Parent |
|
Issuer |
|
Subsidiaries |
|
Subsidiaries |
|
Eliminations |
|
Consolidated |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net (loss) income |
|
$ |
(11,008 |
) |
$ |
(11,008 |
) |
$ |
5,585 |
|
$ |
326 |
|
$ |
5,097 |
|
$ |
(11,008 |
) |
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Pension and postretirement benefit plans |
|
814 |
|
814 |
|
|
|
|
|
(814 |
) |
814 |
| ||||||
Comprehensive (loss) income |
|
$ |
(10,194 |
) |
$ |
(10,194 |
) |
$ |
5,585 |
|
$ |
326 |
|
$ |
4,283 |
|
$ |
(10,194 |
) |
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
Thirteen Weeks Ended November 2, 2013
|
|
|
|
|
|
Guarantor |
|
Non-Guarantor |
|
Consolidating |
|
Company |
| ||||||
|
|
Parent |
|
Issuer |
|
Subsidiaries |
|
Subsidiaries |
|
Eliminations |
|
Consolidated |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net sales |
|
$ |
|
|
$ |
376,348 |
|
$ |
274,813 |
|
$ |
|
|
$ |
|
|
$ |
651,161 |
|
Other income |
|
|
|
8,881 |
|
6,531 |
|
|
|
|
|
15,412 |
| ||||||
|
|
|
|
385,229 |
|
281,344 |
|
|
|
|
|
666,573 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Costs of merchandise sold |
|
|
|
240,501 |
|
172,431 |
|
|
|
|
|
412,932 |
| ||||||
Selling, general and administrative |
|
|
|
131,649 |
|
90,831 |
|
30 |
|
(7,306 |
) |
215,204 |
| ||||||
Depreciation and amortization |
|
|
|
9,913 |
|
8,484 |
|
2,752 |
|
|
|
21,149 |
| ||||||
Amortization of lease-related interests |
|
|
|
425 |
|
692 |
|
|
|
|
|
1,117 |
| ||||||
Impairment charges |
|
|
|
321 |
|
|
|
|
|
|
|
321 |
| ||||||
Income (loss) from operations |
|
|
|
2,420 |
|
8,906 |
|
(2,782 |
) |
7,306 |
|
15,850 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Intercompany income |
|
|
|
439 |
|
4,898 |
|
6,651 |
|
(11,988 |
) |
|
| ||||||
Equity in (losses) earnings of subsidiaries |
|
(662 |
) |
13,194 |
|
|
|
|
|
(12,532 |
) |
|
| ||||||
Interest expense, net |
|
|
|
(16,695 |
) |
(891 |
) |
(3,588 |
) |
4,682 |
|
(16,492 |
) | ||||||
Loss on extinguishment of debt |
|
|
|
(20 |
) |
|
|
|
|
|
|
(20 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
(Loss) income before income taxes |
|
(662 |
) |
(662 |
) |
12,913 |
|
281 |
|
(12,532 |
) |
(662 |
) | ||||||
Income tax provision (benefit) |
|
269 |
|
269 |
|
(8 |
) |
|
|
(261 |
) |
269 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net (loss) income |
|
$ |
(931 |
) |
$ |
(931 |
) |
$ |
12,921 |
|
$ |
281 |
|
$ |
(12,271 |
) |
$ |
(931 |
) |
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Comprehensive Income
Thirteen Weeks Ended November 2, 2013
|
|
|
|
|
|
Guarantor |
|
Non-Guarantor |
|
Consolidating |
|
Company |
| ||||||
|
|
Parent |
|
Issuer |
|
Subsidiaries |
|
Subsidiaries |
|
Eliminations |
|
Consolidated |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net (loss) income |
|
$ |
(931 |
) |
$ |
(931 |
) |
$ |
12,921 |
|
$ |
281 |
|
$ |
(12,271 |
) |
$ |
(931 |
) |
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Pension and postretirement benefit plans |
|
1,551 |
|
1,551 |
|
|
|
|
|
(1,551 |
) |
1,551 |
| ||||||
Comprehensive income |
|
$ |
620 |
|
$ |
620 |
|
$ |
12,921 |
|
$ |
281 |
|
$ |
(13,822 |
) |
$ |
620 |
|
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
Thirty-Nine Weeks Ended November 1, 2014
|
|
|
|
|
|
Guarantor |
|
Non-Guarantor |
|
Consolidating |
|
Company |
| ||||||
|
|
Parent |
|
Issuer |
|
Subsidiaries |
|
Subsidiaries |
|
Eliminations |
|
Consolidated |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net sales |
|
$ |
|
|
$ |
1,070,319 |
|
$ |
743,328 |
|
$ |
|
|
$ |
|
|
$ |
1,813,647 |
|
Other income |
|
|
|
27,137 |
|
18,643 |
|
|
|
|
|
45,780 |
| ||||||
|
|
|
|
1,097,456 |
|
761,971 |
|
|
|
|
|
1,859,427 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Costs of merchandise sold |
|
|
|
688,176 |
|
471,670 |
|
|
|
|
|
1,159,846 |
| ||||||
Selling, general and administrative |
|
|
|
409,091 |
|
274,152 |
|
(2,307 |
) |
(21,909 |
) |
659,027 |
| ||||||
Depreciation and amortization |
|
|
|
34,642 |
|
24,811 |
|
8,225 |
|
|
|
67,678 |
| ||||||
Amortization of lease-related interests |
|
|
|
1,623 |
|
1,819 |
|
|
|
|
|
3,442 |
| ||||||
Impairment charges |
|
|
|
447 |
|
|
|
|
|
|
|
447 |
| ||||||
Loss from operations |
|
|
|
(36,523 |
) |
(10,481 |
) |
(5,918 |
) |
21,909 |
|
(31,013 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Intercompany income |
|
|
|
1,373 |
|
12,824 |
|
19,792 |
|
(33,989 |
) |
|
| ||||||
Equity in (losses) earnings of subsidiaries |
|
(77,390 |
) |
3,103 |
|
|
|
|
|
74,287 |
|
|
| ||||||
Interest expense, net |
|
|
|
(45,343 |
) |
(2,544 |
) |
(10,417 |
) |
12,080 |
|
(46,224 |
) | ||||||
Loss on extinguishment of debt |
|
|
|
|
|
|
|
(153 |
) |
|
|
(153 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
(Loss) income before income taxes |
|
(77,390 |
) |
(77,390 |
) |
(201 |
) |
3,304 |
|
74,287 |
|
(77,390 |
) | ||||||
Income tax provision |
|
1,322 |
|
1,322 |
|
704 |
|
|
|
(2,026 |
) |
1,322 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net (loss) income |
|
$ |
(78,712 |
) |
$ |
(78,712 |
) |
$ |
(905 |
) |
$ |
3,304 |
|
$ |
76,313 |
|
$ |
(78,712 |
) |
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Comprehensive (Loss) Income
Thirty-Nine Weeks Ended November 1, 2014
|
|
|
|
|
|
Guarantor |
|
Non-Guarantor |
|
Consolidating |
|
Company |
| ||||||
|
|
Parent |
|
Issuer |
|
Subsidiaries |
|
Subsidiaries |
|
Eliminations |
|
Consolidated |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net (loss) income |
|
$ |
(78,712 |
) |
$ |
(78,712 |
) |
$ |
(905 |
) |
$ |
3,304 |
|
$ |
76,313 |
|
$ |
(78,712 |
) |
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Pension and postretirement benefit plans |
|
2,442 |
|
2,442 |
|
|
|
|
|
(2,442 |
) |
2,442 |
| ||||||
Comprehensive (loss) income |
|
$ |
(76,270 |
) |
$ |
(76,270 |
) |
$ |
(905 |
) |
$ |
3,304 |
|
$ |
73,871 |
|
$ |
(76,270 |
) |
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
Thirty-Nine Weeks Ended November 2, 2013
|
|
|
|
|
|
Guarantor |
|
Non-Guarantor |
|
Consolidating |
|
Company |
| ||||||
|
|
Parent |
|
Issuer |
|
Subsidiaries |
|
Subsidiaries |
|
Eliminations |
|
Consolidated |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net sales |
|
$ |
|
|
$ |
1,076,195 |
|
$ |
779,010 |
|
$ |
|
|
$ |
|
|
$ |
1,855,205 |
|
Other income |
|
|
|
25,325 |
|
18,911 |
|
|
|
|
|
44,236 |
| ||||||
|
|
|
|
1,101,520 |
|
797,921 |
|
|
|
|
|
1,899,441 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Costs of merchandise sold |
|
|
|
691,896 |
|
493,632 |
|
|
|
|
|
1,185,528 |
| ||||||
Selling, general and administrative |
|
|
|
397,545 |
|
276,271 |
|
90 |
|
(22,353 |
) |
651,553 |
| ||||||
Depreciation and amortization |
|
|
|
31,200 |
|
25,794 |
|
8,254 |
|
|
|
65,248 |
| ||||||
Amortization of lease-related interests |
|
|
|
1,312 |
|
2,076 |
|
|
|
|
|
3,388 |
| ||||||
Impairment charges |
|
|
|
452 |
|
|
|
|
|
|
|
452 |
| ||||||
(Loss) income from operations |
|
|
|
(20,885 |
) |
148 |
|
(8,344 |
) |
22,353 |
|
(6,728 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Intercompany income |
|
|
|
1,407 |
|
13,980 |
|
20,170 |
|
(35,557 |
) |
|
| ||||||
Equity in (losses) earnings of subsidiaries |
|
(63,772 |
) |
12,405 |
|
|
|
|
|
51,367 |
|
|
| ||||||
Interest expense, net |
|
|
|
(52,402 |
) |
(2,718 |
) |
(10,831 |
) |
13,204 |
|
(52,747 |
) | ||||||
Loss on extinguishment of debt |
|
|
|
(4,297 |
) |
|
|
|
|
|
|
(4,297 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
(Loss) income before income taxes |
|
(63,772 |
) |
(63,772 |
) |
11,410 |
|
995 |
|
51,367 |
|
(63,772 |
) | ||||||
Income tax provision |
|
1,123 |
|
1,123 |
|
461 |
|
|
|
(1,584 |
) |
1,123 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net (loss) income |
|
$ |
(64,895 |
) |
$ |
(64,895 |
) |
$ |
10,949 |
|
$ |
995 |
|
$ |
52,951 |
|
$ |
(64,895 |
) |
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Comprehensive (Loss) Income
Thirty-Nine Weeks Ended November 2, 2013
|
|
|
|
|
|
Guarantor |
|
Non-Guarantor |
|
Consolidating |
|
Company |
| ||||||
|
|
Parent |
|
Issuer |
|
Subsidiaries |
|
Subsidiaries |
|
Eliminations |
|
Consolidated |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net (loss) income |
|
$ |
(64,895 |
) |
$ |
(64,895 |
) |
$ |
10,949 |
|
$ |
995 |
|
$ |
52,951 |
|
$ |
(64,895 |
) |
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Pension and postretirement benefit plans |
|
4,653 |
|
4,653 |
|
|
|
|
|
(4,653 |
) |
4,653 |
| ||||||
Comprehensive (loss) income |
|
$ |
(60,242 |
) |
$ |
(60,242 |
) |
$ |
10,949 |
|
$ |
995 |
|
$ |
48,298 |
|
$ |
(60,242 |
) |
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Cash Flows
Thirty-Nine Weeks Ended November 1, 2014
|
|
|
|
|
|
Guarantor |
|
Non-Guarantor |
|
Consolidating |
|
Company |
| ||||||
|
|
Parent |
|
Issuer |
|
Subsidiaries |
|
Subsidiaries |
|
Eliminations |
|
Consolidated |
| ||||||
Net cash provided by (used in) operating activities |
|
$ |
3,918 |
|
$ |
(122,314 |
) |
$ |
12,423 |
|
$ |
6,644 |
|
$ |
(7,867 |
) |
$ |
(107,196 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Capital expenditures |
|
|
|
(54,132 |
) |
(9,829 |
) |
|
|
|
|
(63,961 |
) | ||||||
Intercompany investing activity |
|
(22 |
) |
(618 |
) |
|
|
|
|
640 |
|
|
| ||||||
Proceeds from sale of property, fixtures and equipment |
|
|
|
9 |
|
288 |
|
5,000 |
|
|
|
5,297 |
| ||||||
Net cash (used in) provided by investing activities |
|
(22 |
) |
(54,741 |
) |
(9,541 |
) |
5,000 |
|
640 |
|
(58,664 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Payments on long-term debt and capital lease obligations |
|
|
|
(402,239 |
) |
(2,414 |
) |
(6,398 |
) |
|
|
(411,051 |
) | ||||||
Proceeds from issuance of long-term debt |
|
|
|
575,231 |
|
|
|
|
|
|
|
575,231 |
| ||||||
Intercompany financing activity |
|
|
|
(1,981 |
) |
|
|
(5,246 |
) |
7,227 |
|
|
| ||||||
Deferred financing costs paid |
|
|
|
(69 |
) |
|
|
|
|
|
|
(69 |
) | ||||||
Cash dividends paid |
|
(1,981 |
) |
|
|
|
|
|
|
|
|
(1,981 |
) | ||||||
Restricted shares forfeited in lieu of payroll taxes |
|
(1,937 |
) |
|
|
|
|
|
|
|
|
(1,937 |
) | ||||||
Proceeds from stock options exercised |
|
22 |
|
|
|
|
|
|
|
|
|
22 |
| ||||||
Increase in book overdraft balances |
|
|
|
6,103 |
|
|
|
|
|
|
|
6,103 |
| ||||||
Net cash (used in) provided by financing activities |
|
(3,896 |
) |
177,045 |
|
(2,414 |
) |
(11,644 |
) |
7,227 |
|
166,318 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net (decrease) increase in cash and cash equivalents |
|
|
|
(10 |
) |
468 |
|
|
|
|
|
458 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents at beginning of period |
|
1 |
|
2,889 |
|
4,168 |
|
|
|
|
|
7,058 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents at end of period |
|
$ |
1 |
|
$ |
2,879 |
|
$ |
4,636 |
|
$ |
|
|
$ |
|
|
$ |
7,516 |
|
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Cash Flows
Thirty-Nine Weeks Ended November 2, 2013
|
|
|
|
|
|
Guarantor |
|
Non-Guarantor |
|
Consolidating |
|
Company |
| ||||||
|
|
Parent |
|
Issuer |
|
Subsidiaries |
|
Subsidiaries |
|
Eliminations |
|
Consolidated |
| ||||||
Net cash provided by (used in) operating activities |
|
$ |
4,100 |
|
$ |
(44,641 |
) |
$ |
14,984 |
|
$ |
9,534 |
|
$ |
(7,368 |
) |
$ |
(23,391 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Capital expenditures |
|
|
|
(48,580 |
) |
(12,200 |
) |
|
|
|
|
(60,780 |
) | ||||||
Intercompany investing activity |
|
(595 |
) |
(437 |
) |
|
|
|
|
1,032 |
|
|
| ||||||
Proceeds from sale of property, fixtures and equipment |
|
|
|
1,272 |
|
2 |
|
|
|
|
|
1,274 |
| ||||||
Net cash used in investing activities |
|
(595 |
) |
(47,745 |
) |
(12,198 |
) |
|
|
1,032 |
|
(59,506 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Payments on long-term debt and capital lease obligations |
|
|
|
(910,373 |
) |
(2,254 |
) |
(5,164 |
) |
|
|
(917,791 |
) | ||||||
Proceeds from issuance of long-term debt |
|
|
|
1,007,791 |
|
|
|
|
|
|
|
1,007,791 |
| ||||||
Intercompany financing activity |
|
|
|
(1,966 |
) |
|
|
(4,370 |
) |
6,336 |
|
|
| ||||||
Deferred financing costs paid |
|
|
|
(8,712 |
) |
|
|
|
|
|
|
(8,712 |
) | ||||||
Cash dividends paid |
|
(1,966 |
) |
|
|
|
|
|
|
|
|
(1,966 |
) | ||||||
Restricted shares forfeited in lieu of payroll taxes |
|
(2,134 |
) |
|
|
|
|
|
|
|
|
(2,134 |
) | ||||||
Proceeds from stock options exercised |
|
595 |
|
|
|
|
|
|
|
|
|
595 |
| ||||||
Increase in book overdraft balances |
|
|
|
5,270 |
|
|
|
|
|
|
|
5,270 |
| ||||||
Net cash (used in) provided by financing activities |
|
(3,505 |
) |
92,010 |
|
(2,254 |
) |
(9,534 |
) |
6,336 |
|
83,053 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net (decrease) increase in cash and cash equivalents |
|
|
|
(376 |
) |
532 |
|
|
|
|
|
156 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents at beginning of period |
|
1 |
|
3,414 |
|
4,511 |
|
|
|
|
|
7,926 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents at end of period |
|
$ |
1 |
|
$ |
3,038 |
|
$ |
5,043 |
|
$ |
|
|
$ |
|
|
$ |
8,082 |
|
12. RECENTLY ISSUED ACCOUNTING STANDARDS
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09). The new standard provides a single revenue recognition model which is intended to enhance disclosures and improve comparability over a range of industries, companies and geographical boundaries. ASU 2014-09 creates a five-step model that requires companies to exercise judgment when considering all relevant facts and circumstances in the determination of when and how revenue is recognized. The guidance is effective for fiscal years beginning after December 15, 2016. The Company is currently reviewing the revised guidance and assessing the potential impact on its consolidated financial statements.
In August 2014, ASU No. 2014-15, Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern (ASU 2014-15), was issued, amending FASB Accounting Standards Subtopic 205-40 to provide guidance about managements responsibility to evaluate whether there is substantial doubt about an entitys ability to continue as a going concern and to provide related footnote disclosures. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period, (3) provide principles for considering the mitigating effect of managements plans, (4) require certain
THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
disclosures when substantial doubt is alleviated as a result of consideration of managements plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that financial statements are issued. ASU 2014-15 is effective for fiscal years ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently reviewing the guidance and assessing the potential impact on its consolidated financial statements.
13. SUBSEQUENT EVENT
On November 18, 2014, the Company declared a quarterly cash dividend of $0.05 per share on shares of Class A common stock and common stock, payable February 2, 2015 to shareholders of record as of January 16, 2015.
THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For purposes of the following discussion, references to the third quarter of 2014 and the third quarter of 2013 are to the 13 weeks ended November 1, 2014 and November 2, 2013, respectively. References to 2014 and 2013 are to the 39 weeks ended November 1, 2014 and November 2, 2013, respectively. References to fiscal 2014 are to the 52-week period ending January 31, 2015; references to fiscal 2013 are to the 52-week period ended February 1, 2014. References to the Company, we, us, and our refer to The Bon-Ton Stores, Inc. and its subsidiaries.
Overview
General
The Company, a Pennsylvania corporation, is one of the largest regional department store operators in the United States, offering a broad assortment of brand-name fashion apparel and accessories for women, men and children. Our merchandise offerings also include cosmetics, home furnishings and other goods. We currently operate 273 stores, including ten furniture galleries and four clearance centers, in 26 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergners, Boston Store, Carsons, Elder-Beerman, Herbergers and Younkers nameplates, encompassing a total of approximately 25 million square feet.
We operate in the department store segment of the U.S. retail industry, a highly competitive environment. The department store industry continues to evolve in response to competitive retail formatsmass merchandisers, national chain retailers, specialty retailers and online retailersand the expansion of mobile technology and social media.
Performance Summary and Fiscal 2014 Guidance
In the third quarter of 2014, we were disappointed in the slowing of store traffic in our markets and the ensuing sales weakness, particularly in light of having solid momentum through mid-October when we saw unseasonably warm weather. While our subsequent performance did not meet our expectations, we did achieve numerous measurable successes that bode well for ongoing business. Our eCommerce operations continued its double-digit sales growth in the period, fueled by a meaningful increase in conversion due to new product offerings, additional online promotions and targeted marketing efforts. We increased the sales penetration of our Let Us Find It initiative, a customer service tool that links our point-of-sale ordering system with real-time inventory, allowing our sales associates to sell a product that may be unavailable locally by selecting merchandise from other stores or online fulfillment centers for shipment to the customers home. Our revenues in the period benefited from increased proprietary credit card sales; we believe the continued growth of our Your Rewards credit card customer loyalty program confirms our meaningful engagement with this core customer.
We continued our focus on our localization initiative, tailoring merchandise assortments and marketing programs to better align with customer preferences in a market, using insights obtained from customer surveys, sophisticated analytical tools and regional field-personnel whose time is dedicated to identifying and communicating merchandise needs of local customers. Our regional planning organizations are working to build competitive and impactful merchandise presentations by door with the goal of accelerating sales growth in our existing stores.
On November 20, 2014, based on our results for the third quarter of 2014 and muted expectations for the remainder of the fiscal year, we revised our fiscal 2014 earnings per diluted share guidance to a range of a loss of $0.20 to earnings of $0.10. We provided the following assumptions with respect to our revised guidance:
· a comparable store sales performance ranging from flat to a 0.5% increase;
· a gross margin rate ranging from 10 to 20 basis points lower than the fiscal 2013 rate of 36.2%;
· a selling, general and administrative (SG&A) expense rate ranging from a 30- to 50-basis-point increase over the fiscal 2013 rate of 32.5%, reflecting the inclusion of approximately $8 million of implementation costs associated with our ongoing expense efficiency initiative;
· capital expenditures not to exceed $70 million, net of external contributions; and
· an estimated 21 million weighted average shares outstanding, assuming dilution.
Results of Operations
The following table summarizes changes in selected operating indicators of the Company, illustrating the relationship of various income and expense items to net sales for the respective periods presented (components may not add or subtract to totals due to rounding):
|
|
THIRTEEN |
|
THIRTY-NINE |
| ||||
|
|
WEEKS ENDED |
|
WEEKS ENDED |
| ||||
|
|
November 1, |
|
November 2, |
|
November 1, |
|
November 2, |
|
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
Net sales |
|
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% |
Other income |
|
2.5 |
|
2.4 |
|
2.5 |
|
2.4 |
|
|
|
102.5 |
|
102.4 |
|
102.5 |
|
102.4 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
Costs of merchandise sold |
|
63.7 |
|
63.4 |
|
64.0 |
|
63.9 |
|
Selling, general and administrative |
|
34.4 |
|
33.0 |
|
36.3 |
|
35.1 |
|
Depreciation and amortization |
|
3.4 |
|
3.2 |
|
3.7 |
|
3.5 |
|
Amortization of lease-related interests |
|
0.2 |
|
0.2 |
|
0.2 |
|
0.2 |
|
Impairment charges |
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
0.8 |
|
2.4 |
|
(1.7 |
) |
(0.4 |
) |
Interest expense, net |
|
2.4 |
|
2.5 |
|
2.5 |
|
2.8 |
|
Loss on extinguishment of debt |
|
|
|
|
|
|
|
0.2 |
|
Loss before income taxes |
|
(1.6 |
) |
(0.1 |
) |
(4.3 |
) |
(3.4 |
) |
Income tax provision |
|
0.1 |
|
|
|
0.1 |
|
0.1 |
|
Net loss |
|
(1.7 |
)% |
(0.1 |
)% |
(4.3 |
)% |
(3.5 |
)% |
Third Quarter of 2014 Compared with Third Quarter of 2013
Net sales: Net sales in the third quarter of 2014 were $642.7 million, compared with $651.2 million in the third quarter of 2013, reflecting a decrease of 1.3%. Comparable store sales decreased 0.8% in the period.
The best performing merchandise categories in the third quarter of 2014 were Coats (included in Womens Apparel), Home and Young Contemporary Apparel. Coats benefited through expansion of key brands as well as an additional promotional event. Home sales benefited from a favorable shift in the promotional calendar, with notable sales increases in bedding, cookware and small electronics. Increased sales in Young Contemporary Apparel grew as a result of continued refinements to the merchandise mix, including the introduction of a new national brand and expansion of successful brands.
Merchandise categories that were challenged in the period included Petites (included in Womens Apparel), Mens Sportswear (included in Mens Apparel) and Cosmetics. Sales in Petites Sportswear have been difficult for several seasons; we are redirecting inventory investment to those categories and vendors that are performing well. Mens Sportswear improved in several categories but the decrease in sales was primarily due to lackluster product offerings. Continued pressure remains in Cosmetics which had disappointing product launches during the quarter.
Other income: Other income, which includes income from revenues received under our credit card program agreement, miscellaneous revenue departments and gift and merchandise return card breakage, was $16.0 million in the third quarter of 2014 as compared with $15.4 million in the third quarter of 2013. The increase primarily reflects increased revenues from our proprietary credit card operations.
Costs and expenses: Gross margin in the third quarter of 2014 decreased $5.0 million to $233.3 million as compared with $238.2 million in the comparable prior year period. Gross margin as a percentage of net sales decreased 29 basis points to 36.3% in the third quarter of 2014 from 36.6% in the comparable prior year period, due to increased distribution and delivery costs associated with our omnichannel selling efforts, partially offset by a reduction in the net markdown rate.
SG&A expense in the third quarter of 2014 increased $5.7 million to $220.9 million as compared with $215.2 million in the third quarter of 2013. The increase is largely the result of reduced performance incentives in the third quarter of 2013 and continued investment in information technology and our omnichannel operations. The current year expense rate, 34.4% of net sales, increased 132 basis points over that of the prior year period.
Depreciation and amortization expense and amortization of lease-related interests increased $0.9 million to $23.2 million in the third quarter of 2014 from $22.3 million in the third quarter of 2013.
Interest expense, net: Net interest expense was $15.5 million in the third quarter of 2014 as compared with $16.5 million in the third quarter of 2013. The $1.0 million decrease primarily reflects reductions in cash fees and amortization of deferred fees and, to a lesser degree, a reduction in the borrowing rates associated with our revolving credit facility.
Income tax provision: The effective income tax rate in the third quarter in each of 2014 and 2013 largely reflects our valuation allowance position against all net deferred tax assets. The income tax provision of $0.4 million and $0.3 million recorded in each third quarter of 2014 and 2013, respectively, is primarily due to recognition of deferred tax liabilities associated with indefinite-lived assets.
2014 Compared with 2013
Net sales: Net sales in 2014 were $1,813.6 million, compared with $1,855.2 million in 2013, a decrease of 2.2%. Comparable store sales decreased 1.8% in 2014 primarily due to the sales erosion resulting from an extended period of unseasonable weather in our markets during the thirteen week period ended May 3, 2014.
The best performing merchandise categories in 2014 were Coats, Dresses and Womens Sportswear (all included in Womens Apparel). Coats achieved success through investment of favorable product brands and styles. Both Dresses and Womens Sportswear benefited from increased inventory of key fashionable items.
The merchandise categories most challenged in 2014 were the Petites, Moderate and Better Sportswear areas (all included in Womens Apparel) and Furniture (included in Home). Sales in Petites Sportswear have been challenged in 2014; we are redirecting inventory investment to those categories and vendors that are performing well. We are continuing our efforts to optimize our inventory in the Sportswear categories, aligning investment with sales trends and reengineering the businesses through additional merchandise adjustments. Despite our improved sales performance in the third quarter of 2014, Furniture sales were adversely impacted by the discontinuation by our vendors of certain key upholstered pieces and our difficulty in replacing these items as well as slow sales in mattresses in the first quarter.
Other income: Other income was $45.8 million in 2014 as compared with $44.2 million in 2013. The increase primarily reflects increased revenues from our proprietary credit card operations.
Costs and expenses: Gross margin in 2014 was $653.8 million as compared with $669.7 million in 2013, reflecting a decrease of $15.9 million. The decrease in gross margin dollars was due to reduced sales volume in the period. Gross margin as a percentage of net sales remained stable from 2013 to 2014.
SG&A expense in 2014 was $659.0 million as compared with $651.6 million in 2013, an increase of $7.5 million. The increase is primarily due to higher advertising expenditures and implementation costs associated with our ongoing expense efficiency initiative, partially offset by gain on the sale of our remaining Rochester, New York store. The expense rate in 2014, at 36.3% of net sales, was 122 basis points higher than that of the prior year.
Depreciation and amortization expense and amortization of lease-related interests increased $2.5 million to $71.1 million in 2014.
Interest expense, net: Net interest expense was $46.2 million in 2014 as compared with $52.7 million in 2013. The $6.5 million decrease is largely due to reductions in borrowing rates and amortization of deferred fees.
Loss on extinguishment of debt: In 2014, we recorded a $0.2 million loss on extinguishment of debt related to the prepayment of mortgage debt associated with the sale of our remaining Rochester, New York store. In 2013, we recorded charges totaling $4.3 million for fees, tender premium and accelerated amortization of deferred fees in conjunction with the tender and redemption of certain of our senior notes.
Income tax provision: The effective tax rate in each of 2014 and 2013 largely reflects our valuation allowance position against all net deferred tax assets. The income tax provision of $1.3 million and $1.1 million recorded in each of 2014 and 2013, respectively, primarily reflects recognition of deferred tax liabilities associated with indefinite-lived assets.
Seasonality
Our business, like that of most retailers, is subject to seasonal fluctuations, with the major portion of sales and income realized during the second half of each fiscal year, which includes the holiday season. Due to the fixed nature of certain costs, SG&A expense is typically higher as a percentage of net sales during the first half of each fiscal year. We typically finance working capital increases in the second half of each fiscal year through additional borrowings under our $675.0 million senior secured Second Amended and Restated Loan and Security Agreement (the Second Amended Revolving Credit Facility) that expires on December 12, 2018.
Because of the seasonality of our business, results for any quarter are not necessarily indicative of results that may be achieved for a full fiscal year.
Liquidity and Capital Resources
At November 1, 2014, we had $7.5 million in cash and cash equivalents and $312.8 million available under our Second Amended Revolving Credit Facility (before taking into account the minimum borrowing availability covenant under such facility). Excess availability was $361.2 million as of the comparable prior year period. The unfavorable excess availability comparison primarily reflects increased direct borrowings to support current year operations.
Typically, cash flows from operations are impacted by the effect on sales of (1) consumer confidence, (2) weather in the geographic markets served by the Company, (3) general economic conditions and (4) competitive conditions existing in the retail industry. A downturn in any single factor or a combination
of factors could have a material adverse impact upon our ability to generate sufficient cash flows to operate our business. While the current economic uncertainty affects our assessment of short-term liquidity, we consider our resources (cash flows from operations supplemented by borrowings under the Second Amended Revolving Credit Facility) adequate to satisfy our cash needs for at least the next 12 months.
Our primary sources of working capital are cash flows from operations and borrowings under our Second Amended Revolving Credit Facility, which provides for up to $675.0 million in borrowings (limited by amounts available pursuant to a borrowing base calculation). Our business follows a seasonal pattern; working capital fluctuates with seasonal variations, reaching its highest level in October or November to fund the purchase of merchandise inventories prior to the holiday season. The seasonality of our business historically provides greatest cash flow from operations during the holiday season, with fiscal fourth quarter net sales generating the strongest profits of our fiscal year. As holiday sales significantly reduce inventory levels, this reduction, combined with net income, historically provides us with strong cash flow from operations at the end of our fiscal year.
Cash (used in) provided by our operating, investing and financing activities is summarized as follows:
|
|
THIRTY-NINE |
| ||||
|
|
WEEKS ENDED |
| ||||
|
|
November 1, |
|
November 2, |
| ||
(Dollars in millions) |
|
2014 |
|
2013 |
| ||
|
|
|
|
|
| ||
Operating activities |
|
$ |
(107.2 |
) |
$ |
(23.4 |
) |
Investing activities |
|
(58.7 |
) |
(59.5 |
) | ||
Financing activities |
|
166.3 |
|
83.1 |
| ||
Net cash used in operating activities was $107.2 million and $23.4 million in 2014 and 2013, respectively. The increase in cash outflow is primarily due to the unfavorable change in working capital, largely the result of the increase in inventories in the current year.
Net cash used in investing activities in the current year primarily reflects capital expenditures for a new store, renovations to support our strategic initiatives and information technology, partially offset by proceeds from the sale of property, fixtures and equipment, largely proceeds from the sale of the Rochester, New York store. Capital expenditures totaled $64.0 million and $60.8 million in 2014 and 2013, respectively; these expenditures do not reflect reductions for external contributions (primarily leasehold improvement and fixture allowances received from landlords or vendors) of $14.8 million and $15.2 million in 2014 and 2013, respectively. We anticipate our fiscal 2014 capital expenditures will not exceed $96.5 million (excluding external contributions of $26.5 million, reducing anticipated net capital investments to $70.0 million).
Net cash provided by financing activities was $166.3 million and $83.1 million in 2014 and 2013, respectively. The cash inflow in the current year primarily reflects increased net borrowings to support current year operating activities. A significant reduction in deferred financing fees paid resulted in decreased cash outflow in 2014.
Aside from planned capital expenditures, the Companys primary cash requirements will be to service debt and finance working capital increases during peak selling seasons.
We paid a quarterly cash dividend of $0.05 per share on shares of Class A common stock and common stock on February 3, 2014, May 5, 2014, August 5, 2014 and November 3, 2014 to shareholders of record as of January 17, 2014, April 17, 2014, July 18, 2014 and October 17, 2014, respectively. Additionally, a quarterly cash dividend of $0.05 per share on shares of Class A common stock and common stock was declared on November 18, 2014, payable February 2, 2015 to shareholders of record as of
January 16, 2015. Our Board of Directors may consider dividends in subsequent periods as it deems appropriate.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect reported amounts and disclosure of contingent assets and liabilities. There have been no significant changes in the critical accounting policies and estimates described in our Annual Report on Form 10-K for the year ended February 1, 2014.
Recently Issued Accounting Standards
Recently issued accounting standards are discussed in Note 12 to the Consolidated Financial Statements.
Forward-Looking Statements
Certain information included in this report and other materials filed or to be filed by the Company with the Securities and Exchange Commission contain 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 or phrases such as may, could, would, will, plan, expect, believe, anticipate, estimate, project, intend, look forward to or other similar expressions, involve important risks and uncertainties that could significantly affect 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. Factors that could cause such differences include, but are not limited to, risks related to retail businesses generally; a significant and prolonged deterioration of general economic conditions which could negatively impact the Company, including the potential write-down of the current valuation of intangible assets and deferred taxes; risks related to the Companys proprietary credit card program; potential increases in pension obligations; consumer spending patterns, debt levels, and the availability and cost of consumer credit; additional competition from existing and new competitors; inflation; deflation; changes in the costs of fuel and other energy and transportation costs; weather conditions that could negatively impact sales; uncertainties associated with expanding or remodeling existing stores; the ability to attract and retain qualified management; the dependence upon relationships with vendors and their factors; a data security breach or system failure; the ability to reduce or control SG&A expenses, including initiatives to reduce expenses and improve efficiency; operational disruptions; unsuccessful marketing initiatives; the ability to expand capacity and efficiency through the Companys new eCommerce fulfillment center; changes in, or the failure to successfully implement, our key strategies, including initiatives to improve our merchandising, marketing and operations; adverse outcomes in litigation; the incurrence of unplanned capital expenditures; the ability to obtain financing for working capital, capital expenditures and general corporate purposes; the impact of regulatory requirements including the Health Care Reform Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act; the inability or limitations on the Companys ability to favorably adjust the valuation allowance on deferred tax assets; and the financial condition of mall operators. Additional factors that could cause the Companys actual results to differ from those contained in these forward-looking statements are discussed in greater detail under Item 1A of the Companys Annual Report on Form 10-K for fiscal 2013 filed with the Securities and Exchange Commission.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk and Financial Instruments
There were no material changes in our exposures, risk management strategies, or hedging positions since February 1, 2014. For further information, refer to Item 7A of our 2013 Annual Report on Form 10-K.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports filed pursuant to the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report and, based on this evaluation, concluded that our disclosure controls and procedures are effective.
Changes in Internal Control over Financial Reporting
There were no changes to our internal controls over financial reporting that occurred during the thirteen weeks ended November 1, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II: OTHER INFORMATION
ITEM 6. EXHIBITS
(a) The following exhibits are filed pursuant to the requirements of Item 601 of Regulation S-K:
10.1# |
|
Amendment No. 1 to The Bon-Ton Stores, Inc. Amended and Restated Omnibus Incentive Plan |
10.2# |
|
Amendment No. 2 to The Bon-Ton Stores, Inc. Cash Bonus Plan |
10.3# |
|
Restricted Stock Agreement for Kathryn Bufano (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on July 31, 2014 (7/31/14 Form 8-K) |
10.4# |
|
Restricted Stock Agreement Performance Shares for Kathryn Bufano (incorporated by reference to Exhibit 10.3 to the 7/31/14 Form 8-K) |
31.1 |
|
Certification of Kathryn Bufano |
31.2 |
|
Certification of Keith E. Plowman |
32.1* |
|
Certification Pursuant to Rules 13a-14(b) and 15d-14(b) of the Securities Exchange Act of 1934 |
101.INS |
|
XBRL Instance Document |
101.SCH |
|
XBRL Taxonomy Extension Schema Document |
101.CAL |
|
XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
|
XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
|
XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
|
XBRL Taxonomy Extension Presentation Linkbase Document |
* Furnished herewith.
# Constitutes a management contract or compensatory plan
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: |
December 10, 2014 |
|
BY: |
/s/ Kathryn Bufano |
|
|
Kathryn Bufano | ||
|
|
President and | ||
|
|
Chief Executive Officer | ||
|
|
(Principal Executive Officer) | ||
|
| |||
DATE: |
December 10, 2014 |
|
BY: |
/s/ Keith E. Plowman |
|
|
Keith E. Plowman | ||
|
|
Executive Vice President | ||
|
|
Chief Financial Officer | ||
|
|
(Principal Financial Officer) | ||
|
| |||
DATE: |
December 10, 2014 |
|
BY: |
/s/ Michael W. Webb |
|
|
Michael W. Webb | ||
|
|
Group Vice President | ||
|
|
Chief Accounting Officer | ||
|
|
(Principal Accounting Officer) |