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Bon-Ton Announces 2nd Quarter Results

Company says sales at stores up slightly for first two quarters of the year.

The Bon-Ton Stores, Inc. has announced results for the second quarter of fiscal 2012, ended July 28. The has a store in the Palmer Park Mall.

Second Quarter Highlights

  • Comparable store sales increased 0.1%.
  • Gross margin rate was 36.0% compared with 37.2% in the second quarter of fiscal 2011.
  • Operating loss, which includes a $4.0 million charge for severance and other one-time costs related to targeted reductions to the Company’s cost structure, totaled $17.6 million, compared with an operating loss of $11.8 million in the second quarter of fiscal 2011.
  • EBITDA, inclusive of the aforementioned $4.0 million of severance and other one-time costs, was $7.1 million, compared with $15.6 million in the second quarter of fiscal 2011. EBITDA is not a measure recognized under generally accepted accounting principles (see Note 1).
  • Net loss totaled $45.0 million, or $2.43 per diluted share, compared with a net loss of $32.3 million, or $1.78 per diluted share, for the second quarter of fiscal 2011. The results for the second quarter of fiscal 2012 include a pre-tax charge of $6.3 million, or $0.34 per diluted share, for fees associated with the recently completed exchange of $330 million of the Company’s 10¼% Senior Notes due 2014 for new 10⅝% Second Lien Senior Secured Notes due 2017 and a pre-tax charge of $4.0 million, or $0.21 per diluted share, for the aforementioned severance and other one-time costs.

Year-to-date Highlights

  • Comparable stores sales decreased 0.6%.
  • Gross margin rate was 35.1% compared with 36.3% in the prior year period.
  • Operating loss totaled $36.1 million, compared with an operating loss of $14.4 million in the prior year period. Operating loss for the fiscal 2012 period includes a $6.9 million charge for severance and other one-time costs related to targeted reductions to the Company’s cost structure.
  • EBITDA, inclusive of the aforementioned $6.9 million of severance and other one-time costs, was $12.0 million, compared with $38.7 million in the prior year period (see Note 1).
  • Net loss totaled $85.8 million, or $4.66 per diluted share, compared with a net loss of $68.3 million, or $3.79 per diluted share, for the prior year period. Year-to-date results for fiscal 2012 include a charge of $6.3 million, or $0.34 per diluted share, for fees associated with the senior notes exchange, a charge of $6.9 million, or $0.38 per diluted share, for the aforementioned severance and other one-time costs and a net gain of $1.9 million, or $0.10 per diluted share, related to the Company’s sale of certain Rochester, NY locations and subsequent prepayment penalty on the extinguishment of its related mortgage debt. Year-to-date fiscal 2011 loss included a charge of $9.5 million, or $0.52 per diluted share, associated with the voluntary prepayment of the Company’s second lien term loan and the refinancing of its revolving credit facility.

Net Sales

For the second quarter of fiscal 2012, comparable stores sales increased 0.1%. Total sales for the thirteen weeks ended July 28, 2012 decreased 0.1% to $594.9 million compared with $595.5 million for the prior year period.

Other Income

Other income in the second quarter of fiscal 2012 was $12.4 million, compared with $13.8 million in the second quarter of fiscal 2011.

Gross Margin

In the second quarter of fiscal 2012, gross margin dollars decreased $7.4 million to $214.1 million, compared with $221.6 million in the second quarter of fiscal 2011. The gross margin rate for the second quarter of fiscal 2012 decreased to 36.0% of net sales from 37.2% of net sales in the prior year period. The decline in the gross margin rate in the second quarter is largely attributable to increased net markdowns.

About The Bon-Ton Stores, Inc.

The Bon-Ton Stores, Inc., with corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 272 department stores, which includes 11 furniture galleries, in 23 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger’s and Younkers nameplates and, in the Detroit, Michigan area, under the Parisian nameplate.

The stores offer a broad assortment of national and private brand fashion apparel and accessories for women, men and children, as well as cosmetics and home furnishings. For further information, please visit the investor relations section of the Company’s website at http://investors.bonton.com.

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