UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street NW
Washington, D.C. 29549
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):
|
August 17, 2004 | |
THE CATO CORPORATION
| Delaware | 1-31340 | 56-0484485 | ||
| (State or Other Jurisdiction | (Commission | (I.R.S. Employer | ||
| of Incorporation) | File Number) | Identification Number) |
| 8100 Denmark Road, Charlotte, North Carolina | 28273-5975 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(704) 554-8510
Not Applicable
1
THE CATO CORPORATION
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit 99.1 – Press Released issued August 17, 2004
Item 9. Regulation FD Disclosure; and
Item 12. Results of Operations and Financial Condition.
On August 17, 2004, The Cato Corporation issued a press release regarding its financial results for the second quarter ending July 31, 2004. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated by reference herein. The information being furnished in this report (including Exhibit 99.1) is not deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 and is not incorporated by reference into any filing under the Securities Act of 1933.
2
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.
| THE CATO CORPORATION | ||
August 18, 2004
|
/s/ John P. Derham Cato | |
Date
|
John P. Derham Cato | |
| Chairman, President and | ||
| Chief Executive Officer | ||
August 18, 2004
|
/s/ Michael O. Moore | |
Date
|
Michael O. Moore | |
| Executive Vice President | ||
| Chief Financial Officer and Secretary |
3
Exhibit Index
| Exhibit |
Exhibit No. |
|||
Press Release issued August 17, 2004
|
99.1 | |||
4
Exhibit 99.1
| NEWS RELEASE | ||
| FOR IMMEDIATE RELEASE | ||
| CEO Approval ____________ | ||
| For Further Information Contact: | ||
| Michael O. Moore | ||
| Executive Vice President | ||
| Chief Financial Officer | ||
| 704-551-7201 |
CATO REPORTS 2Q EARNINGS
Provides 3Q Guidance
Charlotte, N.C. (August 17, 2004) – The Cato Corporation (NYSE: CTR) today reported net income of $8.2 million or $.39 per diluted share for the second quarter ended July 31, 2004, compared to net income of $7.7 million or $.30 per diluted share for the second quarter ended August 2, 2003. Net income increased 6% and earnings per diluted share increased 30% from last year. Sales for the second quarter were $197.1 million, a 5% increase over sales of $188.2 million last year. The Company’s second quarter comparable store sales decreased 1%.
For the six months ended July 31, 2004, the Company earned net income of $25.0 million or $1.20 per diluted share, compared with net income of $25.2 million or $.98 per diluted share for the six months ended August 2, 2003, a net income decrease of 1% and a per diluted share increase of 22%. Sales were $402.3 million for the first half of 2004, a 4% increase over sales of $385.5 million last year. Comparable store sales decreased 2% for the first half.
“Our second quarter earnings per share of $.39 exceeded our estimate of $.33 to $.38 due to an improved gross margin rate resulting from less markdowns than last year,” said John Cato, Chairman, President, and Chief Executive Officer.
The Company’s expectations for third quarter earnings per diluted share are in the range of $.05 to $.09 versus $.04 in 2003. These expectations are based on comparable store sales in the range of down 2% to up 2%. The Company’s earnings per diluted share in third quarter 2003
8100 Denmark Road
P.O. Box 34216
Charlotte, NC 28234
(704) 554-8510
5
were negatively impacted by a charge of $.08 related to retirement agreements signed with the Company’s founders.
During the first half, the Company opened 30 stores and relocated 17 stores. The Company expects to open 80 new stores for the year, as compared to the original estimate of 90 new stores. As of July 31, 2004, The Cato Corporation operated 1,132 stores in 28 states, compared to 1,051 stores in 26 states as of August 2, 2003.
The Cato Corporation is a leading specialty retailer of value-priced women’s fashion apparel operating two divisions, “Cato” and “It’s Fashion!”. The Company primarily offers exclusive merchandise with fashion and quality comparable to mall specialty stores at low prices, everyday. Additional information on The Cato Corporation is available at www.catocorp.com.
Statements in this press release not historical in nature including, without limitation, statements regarding the Company’s expected financial results for the third quarter and expected plans for full year store openings are considered “forward-looking” within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations that are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contemplated by the forward-looking statements. Such factors include, but are not limited to, the following: general economic conditions; competitive factors and pricing pressures; the Company’s ability to predict fashion trends; consumer apparel buying patterns; adverse weather conditions and inventory risks due to shifts in market demand. The Company does not undertake to publicly update or revise the forward-looking statements even if experience or future changes make it clear that the projected results expressed or implied therein will not be realized. The Company is not responsible for any changes made to this press release by wire or Internet services.
# # #
8100 Denmark Road
P.O. Box 34216
Charlotte, NC 28234
(704) 554-8510
6
THE CATO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE PERIODS ENDED JULY 31, 2004 AND AUGUST 2, 2003
(Dollars in thousands, except per share data)
| Quarter Ended |
Six Months Ended |
|||||||||||||||||||||||||||||||
| July 31, | % | August 2, | % | July 31, | % | August 2, | % | |||||||||||||||||||||||||
| 2004 |
Sales |
2003 |
Sales |
2004 |
Sales |
2003 |
Sales |
|||||||||||||||||||||||||
REVENUES |
||||||||||||||||||||||||||||||||
Retail sales |
$ | 197,068 | 100.0 | % | $ | 188,218 | 100.0 | % | $ | 402,261 | 100.0 | % | $ | 385,522 | 100.0 | % | ||||||||||||||||
Other income (principally finance,
late fees and layaway charges) |
3,816 | 1.9 | % | 3,775 | 2.0 | % | 7,824 | 1.9 | % | 7,681 | 1.9 | % | ||||||||||||||||||||
Total revenues |
200,884 | 101.9 | % | 191,993 | 102.0 | % | 410,085 | 101.9 | % | 393,203 | 101.9 | % | ||||||||||||||||||||
GROSS MARGIN (Memo) |
61,017 | 31.0 | % | 55,602 | 29.5 | % | 133,866 | 33.3 | % | 125,908 | 32.6 | % | ||||||||||||||||||||
COSTS AND EXPENSES, NET |
||||||||||||||||||||||||||||||||
Cost of goods sold |
136,051 | 69.0 | % | 132,616 | 70.5 | % | 268,395 | 66.7 | % | 259,614 | 67.4 | % | ||||||||||||||||||||
Selling, general and administrative |
47,387 | 24.0 | % | 44,565 | 23.7 | % | 93,210 | 23.2 | % | 88,010 | 22.8 | % | ||||||||||||||||||||
Depreciation |
5,091 | 2.6 | % | 4,562 | 2.4 | % | 10,070 | 2.5 | % | 9,013 | 2.3 | % | ||||||||||||||||||||
Interest expense |
167 | 0.1 | % | 1 | 0.0 | % | 329 | 0.1 | % | 4 | 0.0 | % | ||||||||||||||||||||
Interest and other income |
(656 | ) | -0.3 | % | (1,888 | ) | -1.0 | % | (1,162 | ) | -0.3 | % | (3,018 | ) | -0.8 | % | ||||||||||||||||
Cost and expenses, net |
188,040 | 95.4 | % | 179,856 | 95.6 | % | 370,842 | 92.2 | % | 353,623 | 91.7 | % | ||||||||||||||||||||
Income Before Income Taxes |
12,844 | 6.5 | % | 12,137 | 6.4 | % | 39,243 | 9.7 | % | 39,580 | 10.2 | % | ||||||||||||||||||||
Income Tax Expense |
4,662 | 2.4 | % | 4,406 | 2.3 | % | 14,245 | 3.5 | % | 14,368 | 3.7 | % | ||||||||||||||||||||
| |
||||||||||||||||||||||||||||||||
Net Income |
$ | 8,182 | 4.1 | % | $ | 7,731 | 4.1 | % | $ | 24,998 | 6.2 | % | $ | 25,212 | 6.5 | % | ||||||||||||||||
| |
||||||||||||||||||||||||||||||||
Basic Earnings Per Share |
$ | 0.40 | $ | 0.30 | $ | 1.22 | $ | 0.99 | ||||||||||||||||||||||||
Basic Weighted Average Shares |
20,515,017 | 25,478,008 | 20,527,831 | 25,458,696 | ||||||||||||||||||||||||||||
Diluted Earnings Per Share |
$ | 0.39 | $ | 0.30 | $ | 1.20 | $ | 0.98 | ||||||||||||||||||||||||
Diluted Weighted Average Shares |
20,880,031 | 25,888,333 | 20,890,832 | 25,850,621 | ||||||||||||||||||||||||||||
THE CATO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
| July 31, | August 2, | |||||||||||
| 2004 | 2003 | January 31, | ||||||||||
| (Unaudited) |
(Unaudited) |
2004 |
||||||||||
ASSETS |
||||||||||||
Current
Assets |
||||||||||||
Cash and cash equivalents |
$ | 29,439 | $ | 59,836 | $ | 23,857 | ||||||
Short-term investments |
76,494 | 66,255 | 47,545 | |||||||||
Accounts receivable — net |
50,260 | 53,092 | 52,714 | |||||||||
Merchandise inventories |
86,355 | 79,998 | 97,292 | |||||||||
Other current assets |
6,047 | 7,181 | 5,992 | |||||||||
Total Current Assets |
248,595 | 266,362 | 227,400 | |||||||||
Property and Equipment — net |
114,783 | 113,131 | 114,367 | |||||||||
Other Assets |
10,194 | 9,617 | 9,806 | |||||||||
| |
||||||||||||
TOTAL |
$ | 373,572 | $ | 389,110 | $ | 351,573 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||
Current Liabilities |
$ | 119,052 | $ | 88,014 | $ | 114,492 | ||||||
Noncurrent Liabilities |
21,912 | 15,010 | 21,470 | |||||||||
Long Term Debt |
18,500 | 0 | 21,500 | |||||||||
Stockholders’ Equity |
214,108 | 286,086 | 194,111 | |||||||||
TOTAL |
$ | 373,572 | $ | 389,110 | $ | 351,573 | ||||||