-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ksog3yoDjHUdtmhcD/YeL7sPTWYCdO3Tbeq37/aVVfQw14FBIU+y63pyo8lGjXbA 78ugoYP/Lndpl3WwieJ4aA== 0000019353-03-000081.txt : 20030522 0000019353-03-000081.hdr.sgml : 20030522 20030521203853 ACCESSION NUMBER: 0000019353-03-000081 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030522 ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030522 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHARMING SHOPPES INC CENTRAL INDEX KEY: 0000019353 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-WOMEN'S CLOTHING STORES [5621] IRS NUMBER: 231721355 STATE OF INCORPORATION: PA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-07258 FILM NUMBER: 03715232 BUSINESS ADDRESS: STREET 1: 450 WINKS LANE CITY: BENSALEM STATE: PA ZIP: 19020 BUSINESS PHONE: 2152459100 MAIL ADDRESS: STREET 1: 450 WINKS LANE CITY: BENSALEM STATE: PA ZIP: 19020 8-K 1 q1048k.txt FIRST QUARTER 2004 PRESS RELEASE ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported) May 22, 2003 Charming Shoppes, Inc. (Exact Name of Registrant as Specified in its Charter) Pennsylvania (State or Other Jurisdiction of Incorporation) 000-07258 23-1721355 (Commission File Number) (I.R.S. Employer Identification No.) 450 Winks Lane, Bensalem, PA 19020 (Address of Principal Executive Offices) (Zip Code) (215) 245-9100 (Registrant's Telephone Number, Including Area Code) Not Applicable (Former Name or Former Address, if Changed Since Last Report) ================================================================================ Item 7. Financial Statements and Exhibits. The Exhibit Index on page 3 of this report is incorporated herein by reference. Item 9. Regulation FD Disclosure. and Item 12. Results of Operations and Financial Condition. On May 22, 2003 we issued a press release announcing our earnings for the quarter ended May 3, 2003 (the first quarter of our fiscal year ending January 31, 2004). The earnings announcement is attached as Exhibit 99 to this report. The information furnished under this Item 9 is intended to be furnished under "Item 12. Results of Operations and Financial Condition" in accordance with Securities and Exchange Commission Release No. 33-8216. The information in this Form 8-K, and the exhibit attached hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. 1 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 hereunto duly authorized. CHARMING SHOPPES, INC. ---------------------- (Registrant) Dated: May 22, 2003 By: /S/ ERIC M. SPECTER ------------------------ Name: Eric M. Specter Title: Executive Vice President and Chief Financial Officer 2 EXHIBIT INDEX Exhibit. No. 99 Press Release dated May 22, 2003 3 EX-99 3 ex99q104.txt FIRST QUARTER 2004 PRESS RELEASE EXHIBIT 99 FOR IMMEDIATE RELEASE CHARMING SHOPPES REPORTS FIRST QUARTER NET INCOME OF $9.7 MILLION; PROVIDES REVISED EARNINGS PROJECTIONS FOR CURRENT FISCAL YEAR Bensalem, PA, May 22, 2003 - Charming Shoppes, Inc. (NASDAQ:CHRS) the retail apparel chain specializing in women's plus-size apparel, today reported earnings and sales for the 1st fiscal quarter ended May 3, 2003. The Company also provided revised earnings projections for the 2nd fiscal quarter ending August 2, 2003, and the fiscal year ending January 31, 2004. 1st Quarter Ended May 3, 2003 o For the three months ended May 3, 2003, net income was $9,689,000 or $0.08 per diluted share. Net income includes pre-tax expense in the amount of $4,431,000 ($2,707,000 after tax or $0.02 per diluted share) related to the Company's Cost Reduction Plan, which was announced on March 18, 2003. o For the corresponding period ended May 4, 2002, net income before cumulative effect of accounting changes was $17,272,000 or $0.14 per diluted share. Net (loss) after cumulative effect of accounting changes was ($31,826,000) or ($0.24) per diluted share for the corresponding period ended May 4, 2002. o Net sales for the three months ended May 3, 2003 decreased 11% to $564,286,000, compared to sales of $630,616,000 for the three months ended May 4, 2002. Comparable store sales for the corporation decreased 6% during the three months ended May 3, 2003. The Company operated 2,245 stores at the end of the 1st quarter ended May 3, 2003, compared to 2,415 stores at the end of the corresponding period last year. Commenting on sales and earnings, Dorrit J. Bern, Chairman, Chief Executive Officer and President of Charming Shoppes, Inc., said, "We continue to be affected by a weak economic environment, resulting in soft consumer demand for apparel. As a result, we did not meet our sales plan for the quarter, primarily attributable to lower traffic levels in our stores. We have been able to partially offset sales shortfalls to plan by focusing on and reducing our controllable expenses. Additionally, strong inventory management has led to improved merchandise margins at our Fashion Bug and Catherine's Plus Sizes brands. Our Lane Bryant brand continues to underperform, as we continue to sell through Spring apparel assortments that have not met with customer acceptance." Revised Earnings Projections for 2nd Fiscal Quarter and Fiscal Year 2004 The Company has revised earnings projections for the 2nd fiscal quarter and fiscal year 2004 which incorporate the costs and benefits of the previously announced Cost Reduction Plan, as well as the Company's current outlook on sales. o Projected Annual Sales and Earnings Per Share: For fiscal year 2004, the Company projects total sales revenue of approximately $2.3 billion, including same store sales projections for the Company in the negative low-single digits. For fiscal year 2004, the Company projects diluted earnings per share in the range of $0.26 - $0.28. This projection assumes annual pre-tax expenses related to the Company's Cost Reduction Plan of approximately $10.4 million ($6.4 million after tax or $0.05 per diluted share). o Projected 2nd Fiscal Quarter Earnings Per Share: For the 2nd fiscal quarter, the Company projects diluted earnings per share in the range of $0.12 - $0.14. This projection assumes pre-tax expense related to the Company's Cost Reduction Plan of approximately $5.7 million ($3.5 1 million after tax or $0.03 per diluted share), and includes same store sales projections for the Company in the negative low-single digits. Charming Shoppes, Inc. will host its 1st Fiscal Quarter earnings conference call today at 9:15 am (EDT). To listen to the conference call, please dial 1-800-283-1485 followed by the passcode 2594# approximately 10 minutes prior to the scheduled event. The conference call will also be simulcast at http://www.charming.com/investor/conferencecalls.asp. The general public is invited to listen to the conference call via the webcast or the dial-in telephone number. This press release, a transcript of prepared conference call remarks, and certain other financial and statistical information will be available, prior to today's conference call, on the Company's corporate website, www.charmingshoppes.com. An audio rebroadcast of the conference call will be accessible at http://www.charming.com/investor/conferencecalls.asp, following the live conference. The conference call will be recorded on behalf of Charming Shoppes, Inc. and consists of copyrighted material. It may not be re-recorded, reproduced, transmitted or rebroadcast, in whole or in part, without the Company's express written permission. Accessing this call or the rebroadcast represents consent to these terms and conditions. Participation in this call serves as consent to having any comments or statements made appear on any transcript, broadcast or rebroadcast of this call. At the end of the quarter, Charming Shoppes, Inc., operated 2,245 stores in 48 states under the names LANE BRYANT(R), FASHION BUG(R), FASHION BUG PLUS(R), CATHERINE'S PLUS SIZES(R), MONSOON(R) and ACCESSORIZE(R). Monsoon and Accessorize are registered trademarks of Monsoon Accessorize Ltd. In connection with the Cost Reduction Plan announced March 18, 2003, the Company plans to close the Monsoon/Accessorize stores under the Company's operation. During the three months ended May 3, 2003, the Company opened 12, relocated 15, converted 4 and closed 19 stores. The Company ended the quarter with 1,073 Fashion Bug and Fashion Bug Plus stores, 699 Lane Bryant stores, 465 Catherine's Plus Sizes stores, and 8 Monsoon/Accessorize stores. The Company ended the quarter with approximately 15,815,000 square feet of leased space. Please visit www.charmingshoppes.com for additional information about Charming Shoppes, Inc. This release contains and the conference call will contain certain forward- looking statements concerning the Company's operations, performance, and financial condition. These forward-looking statements include statements regarding future performance, including earnings, sales performance, store openings and closings, the implementation of the cost reduction plan and other matters. Such forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those indicated. Such risks and uncertainties may include, but are not limited to: failure to achieve successful integrations, failure to successfully implement the restructuring plan and cost reductions, failure to successfully implement the Company's business plan for increased profitability and growth in the plus-size women's apparel business, changes in or miscalculation of fashion trends, extreme or unseasonable weather conditions, economic downturns, a weakness in overall consumer demand, failure to find suitable store locations, the ability to hire and train associates, trade restrictions and political or financial instability in countries where goods are manufactured, the interruption of merchandise flow to the Company's retail stores from its centralized distribution facilities, competitive pressures, and the adverse effects of acts or threats of war, terrorism, or other armed conflict on the United States and international economies. These, and other risks and uncertainties, are detailed in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on 2 Form 10-K for the fiscal year ended February 1, 2003 and to other Company filings with the Securities and Exchange Commission. Charming Shoppes assumes no duty to update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. CONTACT: Gayle M. Coolick Director of Investor Relations 215-638-6955 3 CHARMING SHOPPES, INC.
Three Months Three Months Ended Ended Percent May 3, Percent May 4, Percent (In thousands, except per share amounts) Change 2003 of Sales 2002(a) of Sales ------ ---- -------- ------- -------- Net sales .................................................... (10.5)% $ 564,286 100.0% $ 630,616 100.0% --------- ----- --------- ----- Cost of goods sold, buying, and occupancy .................... (9.5) 395,488 70.1 437,235 69.3 Selling, general, and administrative ......................... (8.7) 145,265 25.7 159,156 25.3 Expenses related to cost reduction plan(c) ................... NA 4,431 0.8 0 0.0 --------- ----- --------- ----- Total operating expenses ..................................... (8.6) 545,184 96.6 596,391 94.6 --------- ----- --------- ----- Income from operations ....................................... (44.2) 19,102 3.4 34,225 5.4 Other income, principally interest ........................... (4.5) 424 0.1 444 0.1 Interest expense ............................................. (44.1) (3,805) (0.7) (6,802) (1.1) --------- ----- --------- ----- Income before income taxes and cumulative effect of accounting changes ........................................... (43.6) 15,721 2.8 27,867 4.4 Income tax provision ......................................... (42.6) 6,116 1.1 10,656 1.7 --------- ----- --------- ----- Income before minority interest and cumulative effect of accounting changes ........................................ (44.2) 9,605 1.7 17,211 2.7 Minority interest in net loss of consolidated subsidiary ..... 37.7 84 0.0 61 0.0 --------- ----- --------- ----- Income before cumulative effect of accounting changes ........ (43.9) 9,689 1.7 17,272 2.7 Cumulative effect of accounting changes, net of income taxes . (100.0) 0 0.0 (49,098) (7.8) --------- ----- --------- ----- Net income (loss) ............................................ NA% $ 9,689 1.7% $ (31,826) NA% ========= ===== ========= ===== Basic net income (loss) per share: Income before cumulative effect of accounting changes......... $0.09 $ 0.15 Cumulative effect of accounting changes....................... 0.00 (0.44) ----- ------ Net income (loss)............................................. $0.09 $(0.28)(b) ===== ====== Weighted average shares outstanding........................... 112,361 111,741 Net income (loss) per share, assuming dilution: Income before cumulative effect of accounting changes......... $0.08 $ 0.14 Cumulative effect of accounting changes....................... 0.00 (0.39) ----- ------ Net income (loss)............................................. $0.08 $(0.24)(b) ===== ====== Weighted average shares and equivalents outstanding........... 127,728 127,003 (a) Restated for the adoption of EITF 02-16, "Accounting by a Reseller for Cash Consideration Received from a Vendor" and SFAS No. 142, "Goodwill and Other Intangible Assets" as of the beginning of fiscal year ended February 1, 2003. (b) Results do not add due to rounding. (c) Expenses related to the Company's Cost Reduction Plan, announced on March 18, 2003. Expenses include workforce reduction costs, accelerated depreciation, lease termination, and other related costs.
CHARMING SHOPPES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
May 3, February 1, (In thousands) 2003 2003 ---- ---- (Unaudited) ASSETS Current assets Cash and cash equivalents .......................................... $ 97,629 $ 102,026 Available-for-sale securities ...................................... 54,613 50,286 Merchandise inventories ............................................ 342,448 286,472 Deferred taxes ..................................................... 17,986 11,726 Prepayments and other .............................................. 81,379 77,504 ----------- ----------- Total current assets ........................................... 594,055 528,014 ----------- ----------- Property, equipment, and leasehold improvements - at cost .......... 681,106 668,168 Less: accumulated depreciation and amortization .................... 360,033 348,295 ----------- ----------- Net property, equipment, and leasehold improvements ............ 321,073 319,873 ----------- ----------- Trademarks and other intangible assets ............................. 170,973 171,138 Goodwill ........................................................... 68,594 68,594 Available-for-sale securities, including fair value adjustments of $(196) and $(134), respectively ................................ 24,864 23,472 Other assets ....................................................... 28,253 28,065 ----------- ----------- Total assets ....................................................... $ 1,207,812 $ 1,139,156 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable ................................................... $ 206,401 $ 147,952 Accrued expenses ................................................... 147,324 163,598 Income taxes payable ............................................... 14,047 7,144 Current portion - long-term debt ................................... 13,644 12,595 Accrued expenses related to cost reduction plan .................... 1,581 0 ----------- ----------- Total current liabilities ...................................... 382,997 331,289 ----------- ----------- Deferred taxes and other non-current liabilities ................... 49,492 43,188 Long-term debt ..................................................... 203,450 203,045 Stockholders' equity Common Stock $.10 par value: Authorized - 300,000,000 shares Issued - 125,247,463 shares and 125,149,242 shares, respectively 12,525 12,515 Additional paid-in capital ......................................... 200,683 200,040 Treasury stock at cost - 12,265,993 shares ......................... (84,136) (84,136) Deferred employee compensation ..................................... (3,521) (3,370) Accumulated other comprehensive loss ............................... (502) (550) Retained earnings .................................................. 446,824 437,135 ----------- ----------- Total stockholders' equity ..................................... 571,873 561,634 ----------- ----------- Total liabilities and stockholders' equity ......................... $ 1,207,812 $ 1,139,156 =========== =========== Subject to Reclassification
CHARMING SHOPPES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Thirteen Weeks Ended May 3, May 4, (In thousands) 2003 2002 ---- ---- (Restated) Operating activities Net income (loss) ................................................... $ 9,689 $ (31,826) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization ................................... 19,270 18,335 Write-down of Catherine's goodwill .............................. 0 43,975 Cumulative effect of capitalization of cash received from vendors 0 7,881 Deferred income taxes ........................................... (1,025) (2,211) Other, net ...................................................... 694 33 Changes in operating assets and liabilities: Merchandise inventories ...................................... (55,976) (39,866) Accounts payable ............................................. 58,449 41,664 Prepayments and other ........................................ (4,048) (14,148) Accrued expenses ............................................. (16,274) 29,890 Income taxes payable ......................................... 6,903 0 Accrued expenses related to cost reduction plan .............. 1,581 (1,274) --------- --------- Net cash provided by operating activities ........................... 19,263 52,453 --------- --------- Investing activities Investment in capital assets ........................................ (13,325) (10,606) Proceeds from sales of available-for-sale securities ................ 8,888 3 Gross purchases of available-for-sale securities .................... (14,669) (8,996) Decrease in other assets ............................................ (1,431) (1,239) --------- --------- Net cash used in investing activities ............................... (20,537) (20,838) --------- --------- Financing activities Proceeds from short-term borrowings ................................. 81,172 222,613 Repayments of short-term borrowings ................................. (81,172) (255,167) Repayments of long-term borrowings .................................. (3,382) (2,355) Proceeds from exercise of stock options ............................. 259 4,053 --------- --------- Net cash used in financing activities ............................... (3,123) (30,856) --------- --------- Increase (decrease) in cash and cash equivalents .................... (4,397) 759 Cash and cash equivalents, beginning of period ...................... 102,026 36,640 --------- --------- Cash and cash equivalents, end of period ............................ $ 97,629 $ 37,399 ========= ========= Non-cash financing and investing activities Common stock issued on conversion of convertible notes .............. $ 0 $ 13 ========= ========= Equipment acquired through capital leases ........................... $ 4,836 $ 640 ========= ========= Subject to Reclassification
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