-----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, LypuM9ARa6PBrC9YsaeZhyiEQ7g2dYKUdhox0U/CZz21cIrofoSZeq/WJXr25GkG WUVZu9gm+UhcDNLLc+Ay0Q== 0000019353-04-000144.txt : 20041117 0000019353-04-000144.hdr.sgml : 20041117 20041117082932 ACCESSION NUMBER: 0000019353-04-000144 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041117 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041117 DATE AS OF CHANGE: 20041117 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: 041150848 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 q3rel8k.txt QUARTER 3 PRESS RELEASE 8-K UNITED STATES 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) Novemer 17, 2004 CHARMING SHOPPES, INC. ---------------------- (Exact name of registrant as specified in its charter) PENNSYLVANIA 000-07258 23-1721355 ------------ --------- ---------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 450 WINKS LANE, BENSALEM, PA 19020 ---------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (215) 245-9100 -------------- NOT APPLICABLE -------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. On November 17, 2004 we issued a press release announcing our earnings for the quarter and nine months ended October 30, 2004. The earnings announcement is attached as Exhibit 99 to this report. In accordance with general instruction B.2 to Form 8-K, the information included in this Item 2.02, and the exhibit attached hereto, shall be deemed to be "furnished" and shall not be deemed to be "filed" with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Item 9.01. Financial Statements and Exhibits. The Exhibit Index on page 3 of this report is incorporated herein by reference. 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) Date November 17, 2004 /S/ ERIC M. SPECTER ------------------- Eric M. Specter Executive Vice President Chief Financial Officer 2 EXHIBIT INDEX Exhibit. No. 99 Press Release dated November 17, 2004 3 EX-99 2 q3rel.txt QUARTER 3 PRESS RELEASE EXHIBIT 99 FOR IMMEDIATE RELEASE CHARMING SHOPPES REPORTS THIRD QUARTER NET INCOME OF $7.0 MILLION, AN INCREASE OF 226% OVER PRIOR YEAR; PROVIDES 4TH QUARTER EARNINGS OUTLOOK Bensalem, PA, November 17, 2004 - Charming Shoppes, Inc. (NASDAQ:CHRS) a leading retail apparel chain specializing in women's plus-size apparel, today reported sales and earnings for the third quarter ended October 30, 2004. The Company also provided an outlook for the 4th fiscal quarter ending January 29, 2005. 3 Months Ended October 30, 2004 - ------------------------------- o For the three months ended October 30, 2004, net income increased 226% to $7,032,000 or $0.06 per diluted share. o For the corresponding period ended November 1, 2003, net income was $2,159,000 or $0.02 per diluted share. o Net sales for the three months ended October 30, 2004 increased 2% to $541,759,000, compared to sales of $530,291,000 for the three months ended November 1, 2003. Comparable store sales for the consolidated corporation increased 1% during the three months ended October 30, 2004. 9 Months Ended October 30, 2004 - ------------------------------- o For the nine months ended October 30, 2004, net income increased 102% to $61,698,000 or $0.49 per diluted share. o For the corresponding period ended November 1, 2003, net income was $30,493,000 or $0.26 per diluted share. Net income included pre-tax expense in the amount of $10,968,000 ($6,705,000 after tax or $0.05 per diluted share) related to the Company's Cost Reduction Plan, which was announced on March 18, 2003. o Net sales for the nine months ended October 30, 2004 increased 3% to $1,746,234,000, compared to sales of $1,700,033,000 for the nine months ended November 1, 2003. Comparable store sales for the consolidated corporation increased 2% for the nine months ended October 30, 2004. Commenting on earnings, Dorrit J. Bern, Chairman, Chief Executive Officer and President of Charming Shoppes, Inc., said, "Our continued improvement at Lane Bryant was the primary driver of our increase in earnings for the third quarter. Our Fall and early Holiday merchandise assortments at Lane Bryant have been well received by the customer, and drove the expansion in our gross margin for the quarter." Outlook for the Fourth Quarter ending January 29, 2005 - ------------------------------------------------------ For the fourth quarter ending January 29, 2005, the Company projects diluted earnings per share in the range of $0.08 - $0.10. This compares to $0.09 per diluted share earned in the 3 month period ended January 31, 2004. The Company's diluted earnings per share projection for the fourth quarter includes projected total sales of approximately $610 million and a comparable store sales increase for the consolidated corporation in the low single digits. November consolidated comparable store sales are projected to increase low single digits. Updated Outlook for the Fiscal Year ending January 29, 2005 - ----------------------------------------------------------- The Company has updated projections for diluted earnings per share to a range of $0.57 - $0.59 for the fiscal year ending January 29, 2005. This compares to $0.35 per diluted share earned in the 12 month period ended January 31, 2004, which included pre-tax expense in the amount of $11,534,000 ($7,340,000 after tax or $0.06 per diluted share) related to the Company's Cost Reduction Plan, which was announced on March 18, 2003. The Company's diluted earnings per share projection for the fiscal year ending January 29, 2005 includes total sales projections of approximately $2.36 billion and comparable store sales for the consolidated corporation of low single digit increases. Charming Shoppes, Inc. will host its third quarter fiscal year 2005 earnings conference call today at 9:15 am Eastern time. To listen to the conference call, please dial 1-866-814-8476 with the passcode 2594 approximately 10 minutes prior to the scheduled event. The conference call will also be simulcast at http://phx.corporate-ir.net/phoenix.zhtml?c=106124&p=irol-eventDetails. 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, at http://phx.corporate-ir.net/phoenix.zhtml?c=106124&p=irol-audioArchives. An audio rebroadcast of the conference call will be accessible at http://phx.corporate-ir.net/phoenix.zhtml?c=106124&p=irol-audioArchives, 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 period, Charming Shoppes, Inc. operated 2,241 stores in 48 states under the names LANE BRYANT(R), FASHION BUG(R), FASHION BUG PLUS(R), and CATHERINES PLUS SIZES(R). During the nine months ended October 30, 2004, the Company opened 41, relocated 39, and closed 27 stores. The Company ended the period with 1,037 Fashion Bug and Fashion Bug Plus stores, 729 Lane Bryant stores, 475 Catherines Plus Sizes stores, and approximately 15,566,000 square feet of leased space. Please visit www.charmingshoppes.com for additional information about Charming Shoppes, Inc. This press release and the Company's 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, sales, expenses, gross margin, capital expenditures, earnings per share, store openings and closings, 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 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 Form 10-K for the fiscal year ended January 31, 2004 and 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 CHARMING SHOPPES, INC. (Unaudited)
3rd Quarter 3rd Quarter Ended Ended Percent Oct. 30, Percent Nov. 1, Percent (in thousands, except per share amounts) Change 2004 of Sales 2003(c) of Sales(b) - ---------------------------------------- -------- ---------- ------- ---------- ------- Net sales ............................................... 2.2% $ 541,759 100.0% $ 530,291 100.0% -------- ---------- ------- ---------- ------- Cost of goods sold, buying, and occupancy ............... (1.3) 377,457 69.7 382,273 72.1 Selling, general, and administrative .................... 6.5 149,769 27.6 140,600 26.5 Expenses related to cost reduction plan (a) ............. 308.8 605 0.1 148 0.0 -------- ---------- ------- ---------- ------- Total operating expenses ................................ 0.9 527,831 97.4 523,021 98.6 -------- ---------- ------- ---------- ------- Income from operations .................................. 91.6 13,928 2.6 7,270 1.4 Other income, principally interest ...................... 127.6 783 0.1 344 0.1 Interest expense ........................................ (6.0) (3,876) (0.7) (4,123) (0.8) -------- ---------- ------- ---------- ------- Income before income taxes and minority interest ........ 210.4 10,835 2.0 3,491 0.7 Income tax provision .................................... 183.6 3,803 0.7 1,341 0.3 -------- ---------- ------- ---------- ------- Income before minority interest ......................... 227.1 7,032 1.3 2,150 0.4 Minority interest in net loss of consolidated subsidiary (100.0) 0 0.0 9 0.0 -------- ---------- ------- ---------- ------- Net income .............................................. 225.7% $ 7,032 1.3% $ 2,159 0.4% ======== ========== ======= ========== ======= Basic net income per share .............................. $ 0.06 $ 0.02 ========== ========== Weighted average shares outstanding ..................... 117,217 112,533 ========== ========== Net income per share, assuming dilution ................. $ 0.06 $ 0.02 ========== ========== Weighted average shares and equivalents outstanding ..... 118,633 114,956 ========== ========== (a) Expenses related to the Company's Cost Reduction Plan, announced on March 18, 2003. During the third quarter ended October 30, 2004, the Company revised its estimate on a lease obligation related to the Cost Reduction Plan and recognized expense of $605. (b) Results do not add due to rounding. (c) Certain prior year amounts have been reclassified to conform to the current-year presentation.
Nine Months Nine Months Ended Ended Percent Oct. 30, Percent Nov. 1, Percent (in thousands, except per share amounts) Change 2004 of Sales 2003(c) of Sales(b) - ---------------------------------------- -------- ----------- ------- ----------- ------- Net sales ............................................... 2.7% $ 1,746,234 100.0% $ 1,700,033 100.0% -------- ----------- ------- ----------- ------- Cost of goods sold, buying, and occupancy ............... 0.2 1,208,592 69.2 1,206,186 71.0 Selling, general, and administrative .................... 2.0 431,260 24.7 422,764 24.9 Expenses related to cost reduction plan (a) ............. (94.5) 605 0.0 10,968 0.6 -------- ----------- ------- ----------- ------- Total operating expenses ................................ 0.0 1,640,457 93.9 1,639,918 96.5 -------- ----------- ------- ----------- ------- Income from operations .................................. 76.0 105,777 6.1 60,115 3.5 Other income, principally interest ...................... 21.7 1,592 0.1 1,308 0.1 Interest expense ........................................ (1.2) (11,639) (0.7) (11,777) (0.7) -------- ----------- ------- ----------- ------- Income before income taxes and minority interest ........ 92.8 95,730 5.5 49,646 2.9 Income tax provision .................................... 76.4 34,032 1.9 19,295 1.1 -------- ----------- ------- ----------- ------- Income before minority interest ......................... 103.3 61,698 3.5 30,351 1.8 Minority interest in net loss of consolidated subsidiary (100.0) 0 0.0 142 0.0 -------- ----------- ------- ----------- ------- Net income .............................................. 102.3% $ 61,698 3.5% $ 30,493 1.8% ======== =========== ======= =========== ======= Basic net income per share .............................. $ 0.53 $ 0.27 =========== =========== Weighted average shares outstanding ..................... 115,474 112,438 =========== =========== Net income per share, assuming dilution ................. $ 0.49 $ 0.26 =========== =========== Weighted average shares and equivalents outstanding ..... 132,400 128,759 =========== =========== (a) Expenses related to the Company's Cost Reduction Plan, announced on March 18, 2003. During the third quarter ended October 30, 2004, the Company revised its estimate on a lease obligation related to the Cost Reduction Plan and recognized expense of $605. (b) Results do not add due to rounding. (c) Certain prior year amounts have been reclassified to conform to the current-year presentation.
CHARMING SHOPPES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
October 30, January 31, (Dollars in thousands, except share amounts) 2004 2004 ---- ---- (Unaudited) ASSETS Current assets Cash and cash equivalents .......................................... $ 202,878 $ 123,781 Available-for-sale securities ...................................... 53,468 55,688 Merchandise inventories ............................................ 378,955 309,995 Deferred taxes ..................................................... 19,693 19,902 Prepayments and other .............................................. 77,143 57,494 ----------- ----------- Total current assets ........................................... 732,137 566,860 ----------- ----------- Property, equipment, and leasehold improvements - at cost .......... 737,839 705,257 Less accumulated depreciation and amortization ..................... 426,666 386,633 ----------- ----------- Net property, equipment, and leasehold improvements ............ 311,173 318,624 ----------- ----------- Trademarks and other intangible assets ............................. 169,983 170,478 Goodwill ........................................................... 66,956 66,956 Available-for-sale securities ...................................... 2,249 14,521 Other assets ....................................................... 31,709 27,440 ----------- ----------- Total assets ....................................................... $ 1,314,207 $ 1,164,879 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable ................................................... $ 167,244 $ 135,777 Accrued expenses ................................................... 150,693 138,166 Income taxes payable ............................................... 1,956 1,128 Current portion - long-term debt ................................... 22,558 17,278 Accrued expenses related to cost reduction plan .................... 2,984 2,596 ----------- ----------- Total current liabilities ...................................... 345,435 294,945 ----------- ----------- Deferred taxes and other non-current liabilities ................... 68,837 62,030 Long-term debt ..................................................... 203,223 202,819 Stockholders' equity Common Stock $.10 par value: Authorized - 300,000,000 shares Issued - 130,417,498 shares and 125,526,573 shares, respectively 13,042 12,553 Additional paid-in capital ......................................... 235,785 201,798 Treasury stock at cost - 12,265,993 shares ......................... (84,136) (84,136) Deferred employee compensation ..................................... (7,444) (2,539) Accumulated other comprehensive loss ............................... (7) (365) Retained earnings .................................................. 539,472 477,774 ----------- ----------- Total stockholders' equity ..................................... 696,712 605,085 ----------- ----------- Total liabilities and stockholders' equity ......................... $ 1,314,207 $ 1,164,879 =========== ===========
(Subject to Reclassification) CHARMING SHOPPES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Thirty-nine Weeks Ended October 30, November 1, (In thousands) 2004 2003 ---- ---- Operating activities Net income ........................................... $ 61,698 $ 30,493 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization .................... 51,426 56,714 Tax benefit related to stock plans ............... 4,187 0 Deferred income taxes ............................ 4,914 11,015 Loss from disposition of capital assets .......... 646 1,363 Other, net ....................................... 185 (142) Changes in operating assets and liabilities: Merchandise inventories ....................... (68,960) (121,698) Accounts payable .............................. 31,467 47,601 Prepayments and other ......................... (19,649) 13,382 Accrued expenses and other .................... 14,412 (8,007) Income taxes payable .......................... 828 (6,343) Accrued expenses related to cost reduction plan 388 2,877 --------- --------- Net cash provided by operating activities ............ 81,542 27,255 --------- --------- Investing activities Investment in capital assets ......................... (35,176) (39,376) Proceeds from sales of available-for-sale securities . 45,571 24,971 Gross purchases of available-for-sale securities ..... (30,887) (30,075) Increase in other assets ............................. (5,610) (3,632) --------- --------- Net cash used by investing activities ................ (26,102) (48,112) --------- --------- Financing activities Proceeds from short-term borrowings .................. 150,298 173,213 Repayments of short-term borrowings .................. (150,298) (173,213) Proceeds from long-term borrowings ................... 13,098 1,053 Repayments of long-term borrowings ................... (12,813) (10,792) Proceeds from issuance of common stock ............... 23,722 857 Payments of deferred financing costs ................. (350) 0 --------- --------- Net cash provided/(used) by financing activities ..... 23,657 (8,882) --------- --------- Increase (decrease) in cash and cash equivalents ..... 79,097 (29,739) Cash and cash equivalents, beginning of period ....... 123,781 102,026 --------- --------- Cash and cash equivalents, end of period ............. $ 202,878 $ 72,287 ========= ========= Non-cash financing and investing activities Equipment acquired through capital leases ............ $ 5,399 $ 9,210 ========= ========= Certain prior-year amounts have been reclassified to conform to the current-year presentation.
(Subject to Reclassification) -----END PRIVACY-ENHANCED MESSAGE-----