The Elder-Beerman Stores Corp. reported income before the cumulative effect of changes in accounting principles of $0.9 million or $0.08 per diluted share for the fiscal year ended February 1, 2003 compared to a net loss of $0.9 million or $0.08 per diluted share in the same period last year. The net loss including the cumulative effect of changes in accounting principles for fiscal year 2002 was $14.2 million or $1.24 per diluted share.

Net sales for 2002 were $639.8 million compared to $643.1 million last year, a 0.5 percent decrease. Comparable store sales decreased 2.4 percent.

Bud Bergren, president and CEO, stated, “I am excited about the progress at Elder-Beerman. Although the economic environment and retail climate were challenging in 2002, we made significant progress.

    --  In 2002, Elder-Beerman reported a profit of $0.08 per diluted
        share before the cumulative effect of accounting changes
        compared to a loss of $0.08 per diluted share last year.

    --  Net gains in productivity along with other expense initiatives
        throughout the organization enabled us to reduce SG&A for the
        year by $6.0 million to 27.4 percent of sales, an 80 basis
        point improvement over 2001.

“We increased the productivity of our inventories by lowering overall levels and improving our merchandise presentations and assortments.

— Year-end inventory levels were 8.6 percent lower than 2001.

    --  Retail inventory turnover increased 15 percent to 2.2 times in
        2002.

    --  Inventory freshness improved 11 percent.

“Throughout 2002, my primary focus for Elder-Beerman was to improve the organization’s productivity and financial strength. Today, through the efforts of all of our associates, we are in a strong financial condition. The improvements in operating results, expense and working capital management, most notably inventory control, and disciplined capital spending provided free cash flow to reduce long term debt by $33.4 million during 2002. Year-end revolver borrowings were reduced to $6.0 million from $36.6 million at the end of 2001.”

Bergren concluded, “The quality of the balance sheet has improved. Our expense structure is moving in the right direction. We have substantial borrowing availability. Our financial condition provides the flexibility to manage through difficult economic conditions. I am proud of the way our associates have responded to the challenges and opportunities presented in 2002.”

Items Included in 2002 and 2001 Results

As previously announced, the company’s board of directors approved a plan to terminate the Stone & Thomas defined benefit plan in 2003. In connection with this decision, during the fourth quarter of 2002, Elder-Beerman changed its method of accounting for actuarial gains and losses associated with defined benefit plans, in accordance with Statement of Financial Accounting Standards No. 87 “Employers Accounting for Pensions” to accelerate recognition of such gains and losses. The company believes that this accelerated recognition is preferable.

As a result of that accounting change, fourth quarter 2002 income from operations includes a pretax charge of $3.6 million related to the immediate recognition of losses arising in 2002 associated with this plan. Additionally, the cumulative effect of this change as of February 3, 2002 of $1.1 million after tax has been recorded in the 2002 results of operations, retroactively to the first quarter, as a cumulative effect of a change in accounting principle.

Fiscal year 2002 results also include a cumulative effect of an accounting change related to the company’s adoption of the Statement of Financial Accounting Standards No. 142 “Goodwill and Other Intangible Assets,” which resulted in a non-cash after-tax charge of $14.0 million reflected in first quarter results.

Fiscal 2002 results also include pretax charges of: $1.0 million related to a store closing in Dayton, Ohio; $1.6 million in charges related to severance, management changes and implementation of expense initiatives; $1.0 million related to write-downs of long-term assets to their current fair value; and an offset of $0.8 million of miscellaneous pretax income from insurance proceeds and the sale of noncore assets.

Fiscal 2001 results included pretax charges of $7.0 million: $3.3 million relating to the former CEO’s retirement and the new CEO search; $4.3 million related to a writedown of a receivable from the divestiture of Shoebilee, Inc.; and an offset of $0.6 million in pretax income related to the recovery of a prior investment in a cooperative buying group.

Fourth Quarter Results

The company reported net income for the fourth quarter ended February 1, 2003 of $8.3 million or $0.72 per diluted share compared to net income of $9.7 million or $0.84 per diluted share in the same period last year. Fourth quarter results include a $3.6 million pretax charge related to the immediate recognition of losses associated with the Stone & Thomas defined benefit plan.

Net sales for the fourth quarter were $214.2 million compared to $219.6 million last year, a 2.4 percent decrease. Comparable store sales decreased 2.6 percent.

           THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES
           Condensed Consolidated Statements of Operations
           (Dollars in thousands, except per share amounts)



                                  52-weeks ended     52-weeks ended
                                   Feb. 1,     %      Feb. 2,     %
                                    2003     Sales     2002     Sales
                                 ----------- ------ ----------- ------

Revenues:
   Net sales                       $639,848  100.0%   $643,052  100.0%
   Financing                         27,570    4.3%     27,273    4.2%
   Other                              3,200    0.5%      3,191    0.5%
                                 ----------- ------ ----------- ------
Total revenues                      670,618  104.8%    673,516  104.7%
                                 ----------- ------ ----------- ------

Costs and expenses:
   Cost of merchandise sold,
    occupancy, and buying
    expenses                        462,001   72.2%    459,886   71.5%
   Selling, general,
    administrative, and other
    expenses                        175,469   27.4%    181,480   28.2%
   Depreciation and amortization     20,083    3.1%     19,578    3.0%
   Interest expense                  11,299    1.8%     13,574    2.1%
                                 ----------- ------ ----------- ------
      Total costs and expenses      668,852  104.5%    674,518  104.9%
                                 ----------- ------ ----------- ------

Earnings (loss) before income
 tax expense (benefit)                1,766    0.3%     (1,002)  -0.2%

Income tax expense (benefit)            821    0.1%        (82)   0.0%
                                 ----------- ------ ----------- ------

Earnings (loss) before
 cumulative effect of changes in
 accounting principles                  945    0.1%       (920)  -0.1%

Cumulative effect of changes in
 accounting principles              (15,118)  -2.4%          -    0.0%
                                 ----------- ------ ----------- ------

Net earning (loss)                 $(14,173)  -2.2%      $(920)  -0.1%