The Bon-Ton Stores, Inc. said total sales for the first quarter of fiscal 2009 ended May 2, 2009. were $644.5 million compared with $700.2 million in the first quarter of fiscal 2008. The gross margin rate for the first quarter of fiscal 2009 increased 80 basis points to 34.8% of net sales compared with the prior year period.

 

Selling, general and administrative expenses in the first quarter of fiscal 2009 decreased $18.9 million compared with the first quarter of fiscal 2008. Operating loss for the first quarter of fiscal 2009 was $23.6 million, an improvement from the $25.5 million loss reported in the same period of 2008. EBITDA, defined as earnings before interest, income taxes and depreciation and amortization, including amortization of lease-related interests, increased $1.0 million in the first quarter of fiscal 2009 to $5.7 million compared with $4.7 million in the first quarter of fiscal 2008. 

 

Net loss totaled $45.4 million, or $2.67 per diluted share, for the first quarter of fiscal 2009 compared with a net loss of $34.1 million, or $2.03 per diluted share, for the first quarter of fiscal 2008.

 

President and CEO Bud Bergren commented, “I could not be more proud of our associates as they continue to focus on execution in this difficult economic environment. Our ongoing efforts to carefully manage inventory levels and control costs yielded results in the first quarter of 2009 in line with our previously provided guidance. We reduced our comparable store and clearance inventories by 11% and 16%, respectively, and generated an 80 basis-point improvement in our gross margin. We also realized a net reduction of $18.9 million in our selling, general and administrative expenses, and we believe we remain on track to achieve our goal of $70 million in annual savings. The combined efforts delivered an improvement in our operating results. In addition, our excess borrowing capacity under our credit facility was $165 million at the end of the first quarter, well above the $75 million minimum availability covenant under our credit facility.”

 

Bergren continued, “We will continue to manage our business with an emphasis on maintaining strong cash flow and liquidity. Our focus is on driving sales through our differentiated assortment of national and exclusive brands, expansion and enhancement of our eCommerce website, and our value-oriented marketing campaign.”

 

Sales

 

For the first quarter of fiscal 2009, comparable store sales decreased 8.6%. Total sales for the first quarter of fiscal 2009 decreased 8.0% to $644.5 million compared with $700.2 million for the same period last year. Other Income Other income in the first quarter of fiscal 2009 decreased to $18.4 million compared with $22.8 million in the first quarter of fiscal 2008. The current year decrease primarily reflects the reduced sales volume and reduced income from our proprietary credit card. Gross Margin In the first quarter of fiscal 2009, gross margin dollars decreased $13.6 million compared with the first quarter of fiscal 2008, reflecting the current year decrease in sales volume. The gross margin rate for the first quarter of fiscal 2009 increased 80 basis points to 34.8% of net sales compared with 34.0% in the first quarter of fiscal 2008, reflecting disciplined inventory control which resulted in reduced net markdowns.

 

Selling, General and Administrative Expenses

 

Selling, general and administrative (“SG&A”) expenses in the first quarter of fiscal 2009 decreased $18.9 million to $236.8 million compared with $255.8 million in the first quarter of fiscal 2008. The SG&A expense rate for the first quarter of fiscal 2009 was 36.7% compared with 36.5% for the first quarter of fiscal 2008, reflecting the reduced sales volume. EBITDA EBITDA increased $1.0 million in the first quarter of fiscal 2009 to $5.7 million compared with $4.7 million in the first quarter of fiscal 2008.

 

Depreciation and Amortization / Amortization of Lease-related Interests

 

Depreciation and amortization expense, including amortization of lease-related interests, decreased $0.9 million to $29.3 million in the first quarter of fiscal 2009 compared with $30.2 million in the first quarter of fiscal 2008.

 

Interest Expense, Net

 

Interest expense, net, decreased $1.4 million to $22.9 million in the first quarter of fiscal 2009 compared with $24.4 million in the first quarter of fiscal 2008. The decrease reflects reduced interest rates and borrowing levels in the current year period. Income Tax Benefit The income tax benefit decreased $14.7 million to $1.1 million in the first quarter of fiscal 2009 compared with $15.8 million in the first quarter of fiscal 2008. The current year decrease principally reflects the Company’s continuation of a valuation allowance position against virtually all net deferred tax assets throughout the first quarter of 2009.

 

Guidance

 

Keith Plowman, EVP and CFO, stated, “As noted in the vompany’s May 7, 2009 sales press release, our April excess borrowing capacity under our revolving credit facility was $165 million, well above the required minimum availability. This does not reflect the estimated $30 million tax refund which is expected to be received in the second quarter of fiscal 2009.” Plowman continued, “We are maintaining our full year 2009 guidance of EBITDA in the range of $140 million to $155 million and loss per diluted share in the range of $3.40 to $4.30. Additionally, our current estimate for cash flow is a range of $5 million to $20 million for the year, permitting us to manage and reduce our year-end debt levels. Assumptions reflected in this guidance include: Comparable store sales decrease in the range of 6.5% to 9.0%; Gross margin rate of 35.5% to 36.0%; SG&A expense decrease of a minimum of $70 million; Effective tax rate of 0%; Capital expenditures of $40 million, net of landlord contributions; and Estimated weighted average shares outstanding of 17 million.”

 













































































































































































































































































































THE BON-TON STORES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
   
THIRTEEN
WEEKS ENDED
(In thousands except share and per share data) May 2, May 3,
(Unaudited)   2009   2008
 
Net sales $ 644,531 $ 700,248
Other income     18,392       22,775  
        662,923       723,023  
 
Costs and expenses:
Costs of merchandise sold 420,366 462,500
Selling, general and administrative 236,827 255,774
Depreciation and amortization 28,098 29,018
Amortization of lease-related interests     1,227       1,208  
Loss from operations (23,595 ) (25,477 )
Interest expense, net     22,926       24,362  
 
Loss before income taxes (46,521 ) (49,839 )
Income tax benefit     (1,080 )     (15,776 )
 
Net loss     $ (45,441 )   $ (34,063 )
 
Per share amounts –
Basic:
Net loss   $ (2.67 )   $ (2.03 )
 
Basic weighted average shares outstanding 16,987,939 16,777,587
 
Diluted:
Net loss   $ (2.67 )   $ (2.03 )
 
Diluted weighted average shares outstanding 16,987,939 16,777,587
 
Other financial data:
EBITDA (1) $ 5,730 $ 4,749