Professional Documents
Culture Documents
FORM
10-Q
(Quarterly Report)
2801 E MARKET ST
YORK, PA 17402-2406
7177577660
0000878079
BONT
5311 - Department Stores
Retail (Department & Discount)
Services
01/31
http://www.edgar-online.com
Copyright 2016, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
WASHINGTON,DC20549
FORM10-Q
QuarterlyReportPursuanttoSection13or15(d)
oftheSecuritiesExchangeActof1934
FortheQuarterendedApril30,2016
CommissionFileNumber
0-19517
THEBON-TONSTORES,INC.
2801EastMarketStreet
York,Pennsylvania17402
(717)757-7660
IncorporatedinPennsylvania
IRSNo.23-2835229
Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934
duringtheprecedingtwelvemonths(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfiling
requirementsforthepast90days.Yesx
Noo
IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyandpostedonitscorporateWebsite,ifany,everyInteractiveDataFile
requiredtobesubmittedandpostedpursuanttoRule405ofRegulationS-T(232.405ofthischapter)duringthepreceding12months(orforsuchshorterperiod
thattheregistrantwasrequiredtosubmitandpostsuchfiles).Yesx
Noo
Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,orasmallerreportingcompany.See
thedefinitionsoflargeacceleratedfiler,acceleratedfilerandsmallerreportingcompanyinRule12b-2oftheExchangeAct.
Largeacceleratedfilero
Acceleratedfilerx
Non-acceleratedfilero
Smallerreportingcompanyo
(Donotcheckifasmallerreporting
company)
Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheExchangeAct).Yeso
Nox
AsofMay27,2016,therewere18,613,025sharesofCommonStock,$.01parvalue,and2,951,490sharesofClassACommonStock,$.01parvalue,
outstanding.
PARTI:FINANCIALINFORMATION
ITEM1.FINANCIALSTATEMENTS
THEBON-TONSTORES,INC.
CONSOLIDATEDBALANCESHEETS
(Unaudited)
April30,
2016
(Inthousands,exceptshareandpersharedata)
Assets
Currentassets:
Cashandcashequivalents
Merchandiseinventories
Prepaidexpensesandothercurrentassets
Totalcurrentassets
Property,fixturesandequipmentatcost,netofaccumulateddepreciationandamortization
of$974,272,$931,661and$951,786atApril30,2016,May2,2015andJanuary30,
2016,respectively
Intangibleassets,netofaccumulatedamortizationof$63,647,$64,625and$62,204at
April30,2016,May2,2015andJanuary30,2016,respectively
Otherlong-termassets
Totalassets
LiabilitiesandShareholders(Deficit)Equity
Currentliabilities:
Accountspayable
Accruedpayrollandbenefits
Accruedexpenses
Currentmaturitiesoflong-termdebt
Currentmaturitiesofobligationsundercapitalleases
Totalcurrentliabilities
Long-termdebt,lesscurrentmaturities
Obligationsundercapitalleases,lesscurrentmaturities
Otherlong-termliabilities
Totalliabilities
Contingencies(Note9)
Shareholders(deficit)equity
PreferredStockauthorized5,000,000sharesat$0.01parvalue;nosharesissued
CommonStockauthorized40,000,000sharesat$0.01parvalue;issuedsharesof
18,954,675,18,331,899and18,532,577atApril30,2016,May2,2015and
January30,2016,respectively
ClassACommonStockauthorized20,000,000sharesat$0.01parvalue;issuedand
outstandingsharesof2,951,490atApril30,2016,May2,2015andJanuary30,2016
Treasurystock,atcost337,800sharesatApril30,2016,May2,2015and
January30,2016
Additionalpaid-incapital
Accumulatedothercomprehensiveloss
Accumulateddeficit
Totalshareholders(deficit)equity
Totalliabilitiesandshareholders(deficit)equity
7,807
712,113
72,246
792,166
80,619
16,713
1,512,584
635,334
88,538
14,609
1,570,191
159,818
22,309
146,585
5,529
334,241
864,856
125,269
189,477
1,513,843
190
183
185
30
(1,387)
165,199
(75,255)
(90,036)
(1,259)
1,512,584
30
30
162,831
28,527
147,378
5,394
344,130
855,977
126,692
188,911
1,515,710
197,789
21,116
152,598
209,358
4,061
584,922
690,648
43,629
196,549
1,515,748
82,062
17,398
1,550,626
642,268
623,086
6,879
711,699
97,254
815,832
8,711
738,231
77,834
824,776
(1,387)
162,253
(79,423)
(27,213)
54,443
1,570,191
Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.
(1,387)
164,428
(76,122)
(52,218)
34,916
1,550,626
January30,
2016
May2,
2015
THEBON-TONSTORES,INC.
CONSOLIDATEDSTATEMENTSOFOPERATIONS
THIRTEEN
WEEKSENDED
April30,
May2,
2016
2015
(Inthousands,exceptpersharedata)
(Unaudited)
Netsales
Otherincome
Costsandexpenses:
Costsofmerchandisesold
Selling,generalandadministrative
Depreciationandamortization
Amortizationoflease-relatedinterests
Lossfromoperations
Interestexpense,net
Lossbeforeincometaxes
Incometaxbenefit
Netloss
$
Pershareamounts
Basic:
Netloss
$
Diluted:
Netloss
$
Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.
591,007
17,416
608,423
(1.91)
(1.74)
(1.74)
(1.91)
404,465
218,686
22,033
1,101
(19,043)
15,190
(34,233)
(159)
(34,074)
390,913
216,185
23,194
1,007
(22,876)
15,086
(37,962)
(144)
(37,818)
610,938
16,304
627,242
THEBON-TONSTORES,INC.
CONSOLIDATEDSTATEMENTSOFCOMPREHENSIVELOSS
THIRTEEN
WEEKSENDED
April30,
May2,
2016
2015
(Inthousands)
(Unaudited)
Netloss
Othercomprehensiveincome,netoftax:
Pensionandpostretirementbenefitplans
Comprehensiveloss
(37,818)
(34,074)
982
(33,092)
Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.
4
867
(36,951)
THEBON-TONSTORES,INC.
CONSOLIDATEDSTATEMENTSOFCASHFLOWS
(Inthousands)
(Unaudited)
THIRTEEN
WEEKSENDED
April30,
May2,
2016
2015
Cashflowsfromoperatingactivities:
Netloss
$
Adjustmentstoreconcilenetlosstonetcashprovidedby(usedin)operatingactivities:
Depreciationandamortization
Amortizationoflease-relatedinterests
Share-basedcompensationexpense
Lossonsaleofproperty,fixturesandequipment
Reclassificationsofaccumulatedothercomprehensiveloss
Amortizationofdeferredfinancingcosts
Deferredincometaxbenefit
Changesinoperatingassetsandliabilities:
Increaseinmerchandiseinventories
Decreaseinprepaidexpensesandothercurrentassets
Decreaseinotherlong-termassets
Increase(decrease)inaccountspayable
Decreaseinaccruedpayrollandbenefitsandaccruedexpenses
Increase(decrease)inotherlong-termliabilities
Netcashprovidedby(usedin)operatingactivities
Cashflowsfrominvestingactivities:
Capitalexpenditures
Proceedsfromsaleofproperty,fixturesandequipment
Netcashusedininvestingactivities
Cashflowsfromfinancingactivities:
Paymentsonlong-termdebtandcapitalleaseobligations
Proceedsfromissuanceoflong-termdebt
Cashdividendspaid
Restrictedsharesforfeitedinlieuofpayrolltaxes
Proceedsfromstockoptionsexercised
Deferredfinancingcostspaid
Decreaseinbookoverdraftbalances
Netcashprovidedbyfinancingactivities
Netincrease(decrease)incashandcashequivalents
Cashandcashequivalentsatbeginningofperiod
Cashandcashequivalentsatendofperiod
$
Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.
(37,818)
(34,074)
23,194
1,007
896
21
1,464
849
(144)
22,033
1,101
844
1,591
747
(159)
(414)
25,008
577
2,533
(5,102)
207
12,278
(3,274)
15,560
484
(5,634)
(10,676)
(6,373)
(17,830)
(12,626)
7
(12,619)
(24,448)
(24,448)
(144,117)
151,461
(120)
(495)
(5,460)
1,269
928
6,879
7,807
(139,000)
187,611
(991)
(399)
454
(5,439)
42,236
(42)
8,753
8,711
THEBON-TONSTORES,INC.
CONSOLIDATEDSTATEMENTSOFSHAREHOLDERS(DEFICIT)EQUITY
(Inthousands,exceptpersharedata)
(Unaudited)
Common
Stock
BALANCEATJANUARY31,2015
Netloss
Othercomprehensiveincome
Dividendstoshareholders,$0.05pershare
Restrictedsharesforfeitedinlieuofpayroll
taxes
Proceedsfromstockoptionsexercised
Share-basedcompensationexpense
BALANCEATMAY2,2015
BALANCEATJANUARY30,2016
Netloss
Othercomprehensiveincome
Restrictedsharesforfeitedinlieuofpayroll
taxes
Share-basedcompensationexpense
BALANCEATAPRIL30,2016
178 $
(1)
1
5
183 $
185 $
Treasury
Stock
30
(1,387) $
(1,387) $
(1,387) $
(1,387) $
30 $
30 $
5
190
30 $
ClassA
Common
Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
161,359 $
Total
7,873 $
(34,074)
(1,012)
87,648
(34,074)
982
(1,012)
(27,213) $
(52,218) $
(37,818)
(399)
454
844
54,443
34,916
(37,818)
867
(79,423) $
(76,122) $
867
(75,255) $
Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.
6
(Accumulated
Deficit)
Retained
Earnings
(120)
891
165,199 $
(80,405) $
982
(398)
453
839
162,253 $
164,428 $
(90,036) $
(120)
896
(1,259)
THEBON-TONSTORES,INC.
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS
(Inthousands,exceptshareandpersharedata)
1.BASISOFPRESENTATION
TheBon-TonStores,Inc.,aPennsylvaniacorporation,wasincorporatedonJanuary31,1996asthesuccessorofacompanyincorporatedonJanuary31,
1929.AsofApril30,2016,TheBon-TonStores,Inc.operated,throughitssubsidiaries,267stores,includingninefurnituregalleriesandfourclearancecenters,in
26statesintheNortheast,MidwestandupperGreatPlainsundertheBon-Ton,Bergners,BostonStore,Carsons,Elder-Beerman,HerbergersandYounkers
nameplates.
TheaccompanyingunauditedconsolidatedfinancialstatementsincludetheaccountsofTheBon-TonStores,Inc.(theParent)anditssubsidiaries
(collectively,theCompany).Allintercompanytransactionshavebeeneliminatedinconsolidation.
TheunauditedconsolidatedfinancialstatementshavebeenpreparedinaccordancewiththeinstructionsforForm10-Qanddonotincludeallinformation
andfootnotesrequiredinannualconsolidatedfinancialstatementspreparedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStates.In
theopinionofmanagement,alladjustmentsconsiderednecessaryforafairpresentationofinterimperiodshavebeenincluded.TheCompanysbusinessis
seasonalinnatureandresultsofoperationsfortheinterimperiodspresentedarenotnecessarilyindicativeofresultsforthefullfiscalyear.Theseunaudited
consolidatedfinancialstatementsshouldbereadinconjunctionwiththeconsolidatedfinancialstatementsandnotestheretoincludedintheCompanysAnnual
ReportonForm10-KforthefiscalyearendedJanuary30,2016.
Forpurposesofthefollowingdiscussion,referencestothefirstquarterof2016andthefirstquarterof2015aretothe13weeksendedApril30,2016
andMay2,2015,respectively.Referencestofiscal2016aretothe52weeksendingJanuary28,2017;referencestofiscal2015aretothe52weeksended
January30,2016.
ThepreparationoffinancialstatementsinconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesrequiresthatmanagementmake
estimatesandassumptionsaboutfutureevents.Theseestimatesandassumptionsaffecttheamountsofassetsandliabilitiesreported,disclosuresaboutcontingent
assetsandliabilities,andthereportedamountsofrevenuesandexpenses.Suchestimatesincludethoserelatedtomerchandisereturns,thevaluationofinventories,
long-livedassets,intangibleassets,insurancereserves,contingencies,litigationandassumptionsusedinthecalculationofincometaxesandretirementandother
post-employmentbenefits,amongothers.Theseestimatesandassumptionsarebasedonmanagementsbestestimatesandjudgments.Managementevaluatesits
estimatesandassumptionsonanongoingbasisusinghistoricalexperienceandotherfactors,includingthecurrenteconomicenvironment,whichmanagement
believestobereasonableunderthecircumstances.Managementadjustssuchestimatesandassumptionswhenfactsandcircumstancesdictate.Asfutureevents
andtheireffectscannotbedeterminedwithprecision,actualresultscoulddiffersignificantlyfromtheseestimates.Changesinthoseestimatesresultingfrom
continuingchangesintheeconomicenvironmentwillbereflectedinthefinancialstatementsinfutureperiods.
Reclassifications
Certainprioryearbalancespresentedintheconsolidatedfinancialstatementsandnotestheretohavebeenreclassifiedtoconformtothecurrentyear
presentation.ThesereclassificationsdidnotimpacttheCompanysnetlossforthefirstquarterineachof2016and2015.AsaresultofadoptingAccounting
StandardsUpdate(ASU)No.2015-17,Income
Taxes
(Topic
740):
Balance
Sheet
Classification
of
Deferred
Taxes
(ASU
2015-17)
asofJanuary30,2016,the
CompanyreclassifiedtheMay2,2015consolidatedbalancesheetresultinginareductionof$17,373inlong-termdeferredincometaxassets,areductionincurrent
deferredincometaxliabilitiesof$26,519andanincreaseinotherlong-termliabilitiesof$9,146.
THEBON-TONSTORES,INC.
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS
(Inthousands,exceptshareandpersharedata)
EffectiveJanuary31,2016,theCompanyadoptedASUNo.2015-03,Interest-Imputation
of
Interest
(ASU2015-03)andASUNo.2015-15(an
amendmenttoASU2015-03)andretrospectivelyappliedtheirprovisions.Thenewstandardsrequirethatdebtissuancecostsrelatedtoarecognizeddebtliability,
otherthanthoserelatingtoline-of-creditarrangements,bepresentedinthebalancesheetasadirectdeductionfromthecarryingamountofthatdebtliability.Asa
resultofadoptingthisguidance,asofMay2,2015andJanuary30,2016,theCompanyreclassified$7,643and$6,580,respectively,oftheunamortizeddebt
issuancecostsforalldebtinstrumentsexcepttheseniorsecuredcreditfacilityfromotherlong-termassetstolong-termdebtandcurrentmaturitiesoflong-term
debtontheconsolidatedbalancesheets.
EffectiveJanuary31,2016,theCompanyadoptedASUNo.2015-05,Intangibles-Goodwill
and
Other-Internal-Use
Software
andprospectivelyapplied
itsprovisions.Thenewstandardprovidesguidanceontheaccountingforfeespaidbyacustomerinacloudcomputingarrangement.Ifacloudcomputing
arrangementincludesasoftwarelicense,thenthecustomerisrequiredtoaccountforthesoftwarelicenseconsistentwiththeacquisitionofothersoftwarelicenses.
Conversely,ifthearrangementdoesnotincludeasoftwarelicense,thecustomershouldaccountforthearrangementasaservicecontract.Theadoptionofthis
guidancedidnothaveamaterialimpactontheCompanysconsolidatedfinancialstatements.
2.PER-SHAREAMOUNTS
Thefollowingtablepresentsareconciliationofnetlossandweightedaveragesharesoutstandingusedinbasicanddilutedearnings(loss)pershare
(EPS)calculationsforeachperiodpresented:
THIRTEEN
WEEKSENDED
April30,
May2,
2016
2015
(37,818)
(37,818)
19,760,448
19,760,448
(1.91)
(34,074)
(34,074)
19,561,610
19,561,610
(1.74)
(34,074)
(34,074)
19,561,610
(1.74)
(37,818)
(37,818)
19,760,448
(1.91)
BasicLossPerCommonShare
Netloss
Less:Incomeallocatedtoparticipatingsecurities
Netlossavailabletocommonshareholders
Weightedaveragecommonsharesoutstanding
Basiclosspercommonshare
DilutedLossPerCommonShare
Netloss
Less:Incomeallocatedtoparticipatingsecurities
Netlossavailabletocommonshareholders
Weightedaveragecommonsharesoutstanding
Commonsharesissuable-stockoptions
Weightedaveragecommonsharesoutstandingassumingdilution
Dilutedlosspercommonshare
THEBON-TONSTORES,INC.
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS
(Inthousands,exceptshareandpersharedata)
DuetotheCompanysnetlossposition,weightedaverageunvestedrestrictedshares(participatingsecurities)of1,220,177and708,961forthefirst
quarterineachof2016and2015,respectively,werenotconsideredinthecalculationofnetlossavailabletocommonshareholdersusedforbothbasicanddiluted
EPS.
Inaddition,weightedaveragestockoptionshares(non-participatingsecurities)totaling0and110,196forthefirstquarterineachof2016and2015,
respectively,wereexcludedfromthecomputationofdilutedweightedaveragecommonsharesoutstanding,astheireffectwouldhavebeenantidilutive.Certainof
thesestockoptionshareswereexcludedsolelyduetotheCompanysnetlossposition.HadtheCompanyreportednetincomeforthefirstquarterineachof2016
and2015,theseshareswouldhaveincreaseddilutedweightedaveragecommonsharesoutstandingby0and16,790,respectively.
3.FAIRVALUEMEASUREMENTS
AccountingStandardsCodification(ASC)Topic820,Fair
Value
Measurements
and
Disclosures
(ASC820),definesfairvalueandestablishesa
frameworkformeasuringfairvalue.ASC820establishesfairvaluehierarchylevelsthatprioritizetheinputsusedinvaluationsdeterminingfairvalue.Level1
inputsareunadjustedquotedpricesinactivemarketsforidenticalassetsorliabilities.Level2inputsareprimarilyquotedpricesforsimilarassetsorliabilitiesin
activemarketsorinputsthatareobservablefortheassetorliability,eitherdirectlyorindirectly.Level3inputsareunobservableinputsbasedontheCompanys
ownassumptions.
ThecarryingvaluesoftheCompanyscashandcashequivalents,accountspayableandfinancialinstrumentsreportedwithinprepaidexpensesandother
currentassetsandotherlong-termassetsapproximatefairvalue.
ThecarryingvalueandestimatedfairvalueoftheCompanyslong-termdebt,includingcurrentmaturitiesbutexcludingcapitalleasesandunamortized
debtissuancecosts,asofApril30,2016areasfollows:
Carrying
Value
Secondlienseniorsecurednotes
Seniorsecuredcreditfacility
Total
407,292
463,898
871,190
Estimated
FairValue
Quoted
Pricesin
Active
Markets
(Level1)
204,563
463,898
668,461
204,563
204,563
FairValueMeasurementsUsing
Significant
Other
Significant
Observable
Unobservable
Inputs
Inputs
(Level2)
(Level3)
463,898
463,898
THEBON-TONSTORES,INC.
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS
(Inthousands,exceptshareandpersharedata)
ThecarryingvalueandestimatedfairvalueoftheCompanyslong-termdebt,includingcurrentmaturitiesbutexcludingcapitalleasesandunamortizeddebt
issuancecosts,asofMay2,2015areasfollows:
Carrying
Value
Secondlienseniorsecurednotes
Mortgagefacility
Seniorsecuredcreditfacility
Total
Quoted
Pricesin
Active
Markets
(Level1)
354,228
211,637
290,705
856,570
354,228
354,228
FairValueMeasurementsUsing
Significant
Other
Significant
Observable
Unobservable
Inputs
Inputs
(Level2)
(Level3)
Estimated
FairValue
407,292
209,652
290,705
907,649
211,637
290,705
502,342
ThecarryingvalueandestimatedfairvalueoftheCompanyslong-termdebt,includingcurrentmaturitiesbutexcludingcapitalleasesandunamortized
debtissuancecosts,asofJanuary30,2016areasfollows:
Secondlienseniorsecurednotes
Seniorsecuredcreditfacility
Total
Carrying
Value
Estimated
FairValue
168,584
455,265
623,849
407,292
455,265
862,557
FairValueMeasurementsUsing
Significant
Quoted
Other
Significant
Pricesin
Observable
Unobservable
ActiveMarkets
Inputs
Inputs
(Level1)
(Level2)
(Level3)
168,584
168,584
455,265
455,265
TheLevel3fairvalueestimatesaredeterminedbyadiscountedcashflowanalysisutilizingadiscountratetheCompanybelievesisappropriateand
wouldbeusedbymarketparticipants.TherewasnochangeinthevaluationtechniqueusedtodeterminetheLevel3fairvalueestimates.
4.
SUPPLEMENTALBALANCESHEETINFORMATION
Prepaidexpensesandothercurrentassetswerecomprisedofthefollowing:
April30,
2016
Otherreceivables
Prepaidexpenses
Total
10
39,167
33,079
72,246
35,198
42,636
77,834
60,514
36,740
97,254
January30,
2016
May2,
2015
THEBON-TONSTORES,INC.
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS
(Inthousands,exceptshareandpersharedata)
5.SUPPLEMENTALCASHFLOWINFORMATION
Thefollowingsupplementalcashflowinformationisprovidedfortheperiodsreported:
THIRTEEN
WEEKSENDED
April30,
May2,
2016
2015
Cashpaidfor:
Interest,netofamountscapitalized
$
8,668
$
9,315
Non-cashinvestingandfinancingactivities:
Property,fixturesandequipmentincludedinaccruedexpenses
$
3,449
$
5,711
Declareddividendstoshareholdersincludedinaccruedexpenses
1,012
6.EXITORDISPOSALACTIVITIES
Thefollowingtablesummarizesexitordisposalactivitiesduringthe13weeksendedApril30,2016relatedtostoreclosingsinfiscal2015and2016,the
consolidationofeCommercefulfillmentactivitiesinconnectionwiththeCompanysneweCommercefulfillmentcenterandtheCompanysexpenseefficiency
initiative:
Other
Costs
3,696
421
(1,906)
2,211
Total
41
(41)
Termination
Benefits
AccruedbalanceasofJanuary30,2016
Provisions
Payments
AccruedbalanceasofApril30,2016
3,696
462
(1,947)
2,211
Theaboveprovisionswereincludedwithinselling,generalandadministrativeexpense.
7.EMPLOYEEDEFINEDANDPOSTRETIREMENTBENEFITPLANS
TheCompanyprovidesbenefitstocertaincurrentandformerassociateswhoareeligibleunderaqualifieddefinedbenefitpensionplanandvariousnonqualifiedsupplementalpensionplans(collectively,thePensionPlans).NetperiodicbenefitexpenseforthePensionPlansincludesthefollowing(income)and
expensecomponents:
11
THEBON-TONSTORES,INC.
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS
(Inthousands,exceptshareandpersharedata)
THIRTEEN
WEEKSENDED
April30,
May2,
2016
2015
Interestcost
Expectedreturnonplanassets
Recognitionofnetactuarialloss
Netperiodicbenefitexpense
1,785
(2,100)
1,571
1,256
1,701
(2,410)
1,698
989
Duringthe13weeksendedApril30,2016,contributionsof$185weremadetothePensionPlans.TheCompanyanticipatescontributinganadditional
$517tofundthePensionPlansinfiscal2016foranannualtotalof$702.
TheCompanyalsoprovidesmedicalandlifeinsurancebenefitstocertainformerassociatesunderapostretirementbenefitplan(PostretirementBenefit
Plan).NetperiodicbenefitincomeforthePostretirementBenefitPlanincludesthefollowing(income)andexpensecomponents:
THIRTEEN
WEEKSENDED
April30,
May2,
2016
2015
Interestcost
Recognitionofnetactuarialgain
Netperiodicbenefitincome
15
(107)
(92)
16
(107)
(91)
Duringthe13weeksendedApril30,2016,theCompanycontributed$33tofundthePostretirementBenefitPlan,andanticipatescontributingan
additional$294tofundthePostretirementBenefitPlaninfiscal2016,foranetannualtotalof$327.
8.INCOMETAXES
TheprovisionscodifiedwithinASCTopic740,Income
Taxes
(ASC740),requirecompaniestoassesswhethervaluationallowancesshouldbe
establishedagainsttheirdeferredtaxassetsbasedonconsiderationofallavailableevidenceusingamorelikelythannotstandard.InaccordancewithASC740,
theCompanymaintainedafullvaluationallowancethroughoutfiscal2015andthefirstquarterof2016onalloftheCompanysnetdeferredtaxassets.The
Companysdeferredtaxassetvaluationallowancetotaled$202,277,$175,356and$186,582asofApril30,2016,May2,2015andJanuary30,2016,respectively.
TheCompanyrecordednetincometaxbenefitsof$144and$159forthefirstquarterineachof2016and2015,respectively,whichincludes$597and
$609non-cashincometaxbenefitsfromcontinuingoperationsduringthefirstquarterineachof2016and2015,respectively.PursuanttoASC740,theCompany
isrequiredtoconsiderallitems(includingitemsrecordedinothercomprehensiveincome)indeterminingtheamountoftaxbenefitthatresultsfromalossfrom
continuingoperationsandthatshouldbeallocatedtocontinuingoperations.Asaresult,theCompanyrecordedtaxbenefitsonthelossesfromcontinuing
operationsforthefirstquarterineachof2016and2015,whichareexactlyoffsetbyincometaxexpenseonother
12
THEBON-TONSTORES,INC.
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS
(Inthousands,exceptshareandpersharedata)
comprehensiveincome.Inaddition,thenetincometaxbenefitsinclude$453and$450ofexpenserecordedinthefirstquarterineachof2016and2015,
respectively,forrecognitionofdeferredtaxliabilitiesassociatedwithindefinite-livedassets.
9.CONTINGENCIES
TheCompanyispartytolegalproceedingsandclaimsthatariseduringtheordinarycourseofbusiness.Intheopinionofmanagement,theultimate
outcomeofanysuchlitigationandclaimswillnothaveamaterialadverseeffectontheCompanysfinancialposition,resultsofoperationsorliquidity.
10.COMPREHENSIVELOSS
AccumulatedothercomprehensivelossiscomprisedofthenetactuariallossassociatedwiththePensionPlansandPostretirementBenefitPlan.Other
comprehensiveincomeiscomprisedentirelyoftheamortizationofthenetactuarialloss(gain)associatedwiththePensionPlansandPostretirementBenefitPlan.
Thechangesrecognizedwithinothercomprehensiveincomereflectincometaxexpenseof$597and$609forthefirstquarterineachof2016and2015,
respectively(seeNote8).
Thebefore-taxamountofamortizationofnetactuarialloss(gain)(seeNote7)wasrecordedwithinselling,generalandadministrativeexpense.
11.CONDENSEDCONSOLIDATINGFINANCIALINFORMATION
CertaindebtobligationsoftheCompany,whichconstitutedebtobligationsofTheBon-TonDepartmentStores,Inc.(theIssuer),areguaranteedbythe
Parentandbyeachofitssubsidiaries,otherthantheIssuer,thatisanobligorundertheCompanysSecondAmendedandRestatedLoanandSecurityAgreement
(theSecondAmendedRevolvingCreditFacility).SeparatefinancialstatementsoftheParent,theIssuerandsuchsubsidiaryguarantorsarenotpresented
becausetheguaranteesbytheParentandeach100%ownedsubsidiaryguarantorarejointandseveral,fullandunconditional,exceptforcertaincustomary
limitationswhichareapplicableonlytoasubsidiaryguarantor.Thesecustomarylimitationsincludereleasesofaguarantee(1)ifthesubsidiaryguarantorno
longerguaranteesotherindebtednessoftheIssuer;(2)ifthereisasaleorotherdispositionofthecapitalstockofasubsidiaryguarantorandifsuchsalecomplies
withthecovenantregardingassetsales;and(3)ifthesubsidiaryguarantorisproperlydesignatedasanunrestrictedsubsidiary.
ThecondensedconsolidatingfinancialinformationfortheParent,theIssuerandtheguarantorsubsidiariesasofApril30,2016,May2,2015and
January30,2016andforthefirstquarterineachof2016and2015aspresentedbelowhasbeenpreparedfromthebooksandrecordsmaintainedbytheParent,the
Issuerandtheguarantorsubsidiaries.Thecondensedfinancialinformationmaynotnecessarilybeindicativeoftheresultsofoperationsorfinancialpositionhad
theguarantorsubsidiariesoperatedasindependententities.Certainintercompanyrevenuesandexpensesincludedinthesubsidiaryrecordsareeliminatedin
consolidation.Asaresultofthisactivity,anamountdueto/duefromaffiliateswillexistatanytime.
OnJanuary15,2016,theCompanyandcertainothersubsidiariesasborrowersorobligors(collectively,theObligors)enteredintoaConsentandThird
AmendmenttotheSecondAmendedRevolvingCreditFacility,whichamongotherchanges,providedforthejoindersofthespecialpurposeentities(SPEs)that
hadpreviouslyparticipatedintheCompanysmortgageloanfacilityasObligorsundertheSecondAmendedRevolvingCreditFacility,andasRestricted
Subsidiariesandguarantorsundertheindenturesforboththe105/8%secondlienseniorsecurednotesdue2017andthe8.00%secondlienseniorsecurednotes
due2021.TheSPEsandtheirassetswerethenaddedtothesecondliensecurityagreement.Forcomparativepurposes,thecondensedconsolidatingfinancial
informationaspresentedbelowhasbeenretrospectivelyadjustedasiftheactivitydescribedaboveoccurredatthebeginningofeachperiodpresented.
13
THEBON-TONSTORES,INC.
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS
(Inthousands,exceptshareandpersharedata)
TheBon-TonStores,Inc.
CondensedConsolidatingBalanceSheet
April30,2016
Assets
Currentassets:
Cashandcashequivalents
Merchandiseinventories
Prepaidexpensesandothercurrentassets
Totalcurrentassets
Property,fixturesandequipmentatcost,net
Intangibleassets,net
Investmentinandadvancestoaffiliates
Otherlong-termassets
Totalassets
LiabilitiesandShareholders(Deficit)Equity
Currentliabilities:
Accountspayable
Accruedpayrollandbenefits
Accruedexpenses
Currentmaturitiesoflong-termdebtandobligations
undercapitalleases
Totalcurrentliabilities
Long-termdebtandobligationsundercapitalleases,less
currentmaturities
Otherlong-termliabilities
Totalliabilities
Shareholders(deficit)equity
Totalliabilitiesandshareholders(deficit)equity
Parent
Guarantor
Subsidiaries
Issuer
Consolidating
Eliminations
Company
Consolidated
(1,260)
(1,259)
(180)
159,818
22,309
146,585
4,082
80,477
(180)
5,529
334,241
(1,259)
(1,259)
937,882
137,104
1,328,930
(6,030)
1,322,900
52,243
55,639
188,359
824,437
1,012,796
(3,266)
(3,446)
(818,407)
(821,853)
990,125
189,477
1,513,843
(1,259)
1,512,584
14
1,447
253,944
4,250
72,145
159,818
18,059
74,620
7,807
712,113
72,246
792,166
623,086
80,619
16,713
1,512,584
(180)
(180)
(818,407)
(3,266)
(821,853)
4,800
256,685
4,411
265,896
311,941
60,317
373,687
955
1,012,796
3,006
455,428
68,015
526,449
311,145
20,302
445,980
19,024
1,322,900
THEBON-TONSTORES,INC.
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS
(Inthousands,exceptshareandpersharedata)
TheBon-TonStores,Inc.
CondensedConsolidatingBalanceSheet
May2,2015
Assets
Currentassets:
Cashandcashequivalents
Merchandiseinventories
Prepaidexpensesandothercurrentassets
Totalcurrentassets
Property,fixturesandequipmentatcost,net
Intangibleassets,net
Investmentinandadvancestoaffiliates
Otherlong-termassets
Totalassets
LiabilitiesandShareholdersEquity
Currentliabilities:
Accountspayable
Accruedpayrollandbenefits
Accruedexpenses
Currentmaturitiesoflong-termdebtandobligations
undercapitalleases
Totalcurrentliabilities
Long-termdebtandobligationsundercapitalleases,less
currentmaturities
Otherlong-termliabilities
Totalliabilities
Shareholdersequity
Totalliabilitiesandshareholdersequity
Parent
Guarantor
Subsidiaries
Issuer
Consolidating
Eliminations
Company
Consolidated
54,442
54,443
(506)
197,789
21,116
152,598
(506)
213,419
584,922
54,443
54,443
695,713
150,210
1,142,284
52,621
1,194,905
38,564
46,339
373,970
756,898
1,130,868
(506)
(809,519)
(810,025)
734,277
196,549
1,515,748
54,443
1,570,191
15
212,948
289,067
471
296,361
3,937
72,182
197,789
17,179
80,922
8,711
738,231
77,834
824,776
642,268
88,538
14,609
1,570,191
(506)
(506)
(809,519)
(810,025)
5,456
268,258
11,660
285,374
366,885
64,656
413,542
411
1,130,868
3,254
469,973
66,680
539,907
275,383
23,882
341,535
14,198
1,194,905
THEBON-TONSTORES,INC.
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS
(Inthousands,exceptshareandpersharedata)
TheBon-TonStores,Inc.
CondensedConsolidatingBalanceSheet
January30,2016
Assets
Currentassets:
Cashandcashequivalents
Merchandiseinventories
Prepaidexpensesandothercurrentassets
Totalcurrentassets
Property,fixturesandequipmentatcost,net
Intangibleassets,net
Investmentinandadvancestoaffiliates
Otherlong-termassets
Totalassets
LiabilitiesandShareholdersEquity
Currentliabilities:
Accountspayable
Accruedpayrollandbenefits
Accruedexpenses
Currentmaturitiesoflong-termdebtandobligations
undercapitalleases
Totalcurrentliabilities
Long-termdebtandobligationsundercapitalleases,less
currentmaturities
Otherlong-termliabilities
Totalliabilities
Shareholdersequity
Totalliabilitiesandshareholdersequity
Parent
Guarantor
Subsidiaries
Issuer
Consolidating
Eliminations
Company
Consolidated
34,915
34,916
(180)
162,831
28,527
147,378
(180)
5,394
344,130
34,916
34,916
929,377
138,810
1,325,953
30,917
1,356,870
53,292
53,412
193,248
824,850
1,018,098
(3,311)
(3,491)
(855,767)
(859,258)
982,669
188,911
1,515,710
34,916
1,550,626
16
3,999
86,544
1,395
257,766
5,373
77,172
162,831
23,154
70,386
6,879
711,699
97,254
815,832
635,334
82,062
17,398
1,550,626
(180)
(180)
(855,767)
(3,311)
(859,258)
4,056
244,437
9,088
257,581
315,598
61,098
382,958
863
1,018,098
2,822
467,262
88,346
558,430
319,736
20,964
437,894
19,846
1,356,870
THEBON-TONSTORES,INC.
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS
(Inthousands,exceptshareandpersharedata)
TheBon-TonStores,Inc.
CondensedConsolidatingStatementofOperations
ThirteenWeeksEndedApril30,2016
Netsales
Otherincome
(37,962)
(37,962)
(144)
(37,818)
(12,483)
38,140
7,367
38,140
(91)
38,231
(15,086)
(37,962)
(144)
(37,818)
390,913
216,185
23,194
1,007
(22,876)
12,009
(1,022)
(178)
235
(413)
474
(178)
(21,431)
(37,962)
(144)
(37,818)
591,007
17,416
608,423
(5,116)
5,116
152,324
88,183
10,292
539
(11,165)
Company
Consolidated
238,589
133,118
12,902
468
(16,827)
Consolidating
Eliminations
233,511
6,662
240,173
357,496
10,754
368,250
Guarantor
Subsidiaries
Issuer
Costsandexpenses:
Costsofmerchandisesold
Selling,generalandadministrative
Depreciationandamortization
Amortizationoflease-relatedinterests
Lossfromoperations
Otherincome(expense):
Intercompanyincome
Equityinlossesofsubsidiaries
Interestexpense,net
Lossbeforeincometaxes
Incometax(benefit)provision
Netloss
Parent
TheBon-TonStores,Inc.
CondensedConsolidatingStatementofComprehensiveLoss
ThirteenWeeksEndedApril30,2016
Netloss
Othercomprehensiveincome,netoftax:
Pensionandpostretirementbenefitplans
Comprehensiveloss
Parent
(37,818)
Guarantor
Subsidiaries
Issuer
(37,818)
Consolidating
Eliminations
(413)
Company
Consolidated
38,231
(37,818)
867
(36,951)
867
(36,951)
867
(36,951)
(413)
(867)
37,364
17
THEBON-TONSTORES,INC.
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS
(Inthousands,exceptshareandpersharedata)
TheBon-TonStores,Inc.
CondensedConsolidatingStatementofOperations
ThirteenWeeksEndedMay2,2015
Netsales
Otherincome
(34,233)
(34,233)
(159)
(34,074)
(11,814)
37,790
4,411
37,790
(77)
37,867
(15,190)
(34,233)
(159)
(34,074)
404,465
218,686
22,033
1,101
(19,043)
11,364
(4,185)
(3,557)
236
(3,793)
450
(3,557)
(15,416)
(34,233)
(159)
(34,074)
610,938
16,304
627,242
(7,403)
7,403
165,353
91,258
10,825
606
(10,736)
Company
Consolidated
239,112
134,831
11,208
495
(15,710)
Consolidating
Eliminations
250,472
6,834
257,306
360,466
9,470
369,936
Guarantor
Subsidiaries
Issuer
Costsandexpenses:
Costsofmerchandisesold
Selling,generalandadministrative
Depreciationandamortization
Amortizationoflease-relatedinterests
Lossfromoperations
Otherincome(expense):
Intercompanyincome
Equityinlossesofsubsidiaries
Interestexpense,net
Lossbeforeincometaxes
Incometax(benefit)provision
Netloss
Parent
TheBon-TonStores,Inc.
CondensedConsolidatingStatementofComprehensiveLoss
ThirteenWeeksEndedMay2,2015
Netloss
Othercomprehensiveincome,netoftax:
Pensionandpostretirementbenefitplans
Comprehensiveloss
Parent
(34,074)
Guarantor
Subsidiaries
Issuer
(34,074)
Consolidating
Eliminations
(3,793)
Company
Consolidated
37,867
(34,074)
982
(33,092)
982
(33,092)
982
(33,092)
(3,793)
(982)
36,885
18
THEBON-TONSTORES,INC.
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS
(Inthousands,exceptshareandpersharedata)
TheBon-TonStores,Inc.
CondensedConsolidatingStatementofCashFlows
ThirteenWeeksEndedApril30,2016
Netcashprovidedbyoperatingactivities
Cashflowsfrominvestingactivities:
Capitalexpenditures
Proceedsfromsaleofproperty,fixturesandequipment
Netcashusedininvestingactivities
Cashflowsfromfinancingactivities:
Paymentsonlong-termdebtandcapitallease
obligations
Proceedsfromissuanceoflong-termdebt
Deferredfinancingcostspaid
Restrictedsharesforfeitedinlieuofpayrolltaxes
Decreaseinbookoverdraftbalances
Netcash(usedin)providedbyfinancingactivities
Netincreaseincashandcashequivalents
Cashandcashequivalentsatbeginningofperiod
Cashandcashequivalentsatendofperiod
120
(120)
(120)
19
(144,117)
151,461
(495)
(120)
(5,460)
1,269
928
6,879
7,807
12,278
(12,626)
7
(12,619)
(968)
(968)
744
4,056
4,800
Company
Consolidated
6,839
(143,149)
151,461
(495)
(5,460)
2,357
184
2,822
3,006
(5,127)
(5,127)
Consolidating
Eliminations
5,319
(7,499)
7
(7,492)
Guarantor
Subsidiaries
Issuer
Parent
THEBON-TONSTORES,INC.
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS
(Inthousands,exceptshareandpersharedata)
TheBon-TonStores,Inc.
CondensedConsolidatingStatementofCashFlows
ThirteenWeeksEndedMay2,2015
Netcashprovidedby(usedin)operatingactivities
Parent
1,390
Guarantor
Subsidiaries
Issuer
(25,585)
Consolidating
Eliminations
9,208
Company
Consolidated
(2,843)
(17,830)
Cashflowsfrominvestingactivities:
Capitalexpenditures
(20,402)
(4,046)
(24,448)
Intercompanyinvestingactivity
(454)
(176)
630
Netcashusedininvestingactivities
(454)
(20,578)
(4,046)
630
(24,448)
Cashflowsfromfinancingactivities:
Paymentsonlong-termdebtandcapitalleaseobligations
(135,973)
(3,027)
(139,000)
Proceedsfromissuanceoflong-termdebt
187,611
187,611
Intercompanyfinancingactivity
(991)
(1,222)
2,213
Cashdividendspaid
(991)
(991)
Restrictedsharesforfeitedinlieuofpayrolltaxes
(399)
(399)
Proceedsfromstockoptionsexercised
454
454
Decreaseinbookoverdraftbalances
(5,439)
(5,439)
Netcash(usedin)providedbyfinancingactivities
(936)
45,208
(4,249)
2,213
42,236
Net(decrease)increaseincashandcashequivalents
(955)
913
(42)
Cashandcashequivalentsatbeginningofperiod
1
4,209
4,543
8,753
Cashandcashequivalentsatendofperiod
$
1
$
3,254
$
5,456
$
$
8,711
12.SUBSEQUENTEVENT
OnJune1,2016,theCompanyenteredintoanAgreementofPurchaseandSale(PSA)forasale-leasebacktransactionwithanunrelatedparty.Under
thePSA,theCompanyagreedtosellthreeretaildepartmentstorepropertiesforatleast$44,935andleasethembackforaperiodof20yearswiththreeoptional
10-yearrenewalterms.Thebasicrentpayableinconnectionwiththeleasewillbe$3,932,subjecttoadjustmentforincreasesintheConsumerPriceIndex.The
closingofthistransactionissubjecttoaduediligencereviewbythepurchaser.
20
ITEM2.
MANAGEMENTSDISCUSSIONANDANALYSISOFFINANCIALCONDITIONANDRESULTSOFOPERATIONS
Forpurposesofthefollowingdiscussion,referencestothefirstquarterof2016andthefirstquarterof2015aretothe13weeksendedApril30,2016
andMay2,2015,respectively.Referencestofiscal2016aretothe52-weekperiodendingJanuary28,2017;referencestofiscal2015aretothe52-week
periodendedJanuary30,2016.ReferencestotheCompany,we,us,andourrefertoTheBon-TonStores,Inc.anditssubsidiaries.
Overview
General
TheCompany,aPennsylvaniacorporation,isoneofthelargestregionaldepartmentstoreoperatorsintheUnitedStates,offeringabroadassortmentof
brand-namefashionapparelandaccessoriesforwomen,menandchildren.Ourmerchandiseofferingsalsoincludecosmetics,homefurnishingsandothergoods.
Wecurrentlyoperate267stores,includingninefurnituregalleriesandfourclearancecenters,in26statesintheNortheast,MidwestandupperGreatPlainsunder
theBon-Ton,Bergners,BostonStore,Carsons,Elder-Beerman,HerbergersandYounkersnameplates,encompassingatotalofapproximately25millionsquare
feet.
WeoperateinthedepartmentstoresegmentoftheU.S.retailindustry,ahighlycompetitiveenvironment.Thedepartmentstoreindustrycontinuesto
evolveinresponsetocompetitiveretailformatsmassmerchandisers,nationalchainretailers,specialtyretailersandonlineretailersandtheexpansionofmobile
technologyandsocialmedia.
PerformanceSummaryandFiscal2016Guidance
Ongoingheadwindsintheretailenvironment,unfavorableweatherandasoftEasterallpressuredourtop-lineperformanceduringthefirstquarterof
2016.Wesawaslightdecreaseinmerchandisemarginandreducedinventorylevelsby4.0%onaretailcomparablestorebasisdespitethesalespressure,aswe
maintaineddisciplinedinventorymanagement.Inaddition,wemovedforwardwithourcostsavingsinitiativeswhilecontinuingtocarefullymanageexpenses.
Ourrevenuesintheperiodbenefitedfromastrongperformanceinouromnichannelbusiness.Webelievethatthisincreaseisprimarilyduetofurther
enhancingourbrandpositioningandevolvingourmerchandiseoffering.Additionally,werealizedcontinuedgrowthinthepenetrationofproprietarycreditcard
salestototalsaleswhich,at54.9%inthefirstquarterof2016,exceededthatoftheprioryearby400basispoints.Ourrecentlyre-launchedcreditcardhelpedus
reconnectwithlapsedcustomersandfurtherourconnectionwithourloyalcorecustomers.Weintendtocontinuetoenhanceouronlineplatformsandwilladd
moremobilefriendlyaccesstoourYourRewardscreditcardcustomerloyaltyprogrambenefits.
Whilewedonotexpecttheheadwindsintheretailenvironmenttoease,webelievethatanumberofinitiativeswehaveunderwaywilldriveincremental
salesinthesecondhalfoftheyear.Weremainontracktoachieve$35millioningrossexpensesavingsasaresultofnon-customerfacingcostreductionsinrent
expense,payroll,taxesandbenefits.Wealsoanticipateincreasedcostsinadvertising,realestatetaxes,insurance,pensionandwages,notablyduetominimum
wagelawsandmeritincreases.Basedonthis,weareanticipatingnetsavingsrangingfrom$21millionto$24millionfrom2015expenseslevels.Webelieve
theseexpensesavings,whichwillbenefitSG&Aexpenseandgrossmargin,combinedwithlowercapitalspendingandinventorylevels,willpositivelyimpactour
fiscal2016cashflow.
OnJune1,2016,weenteredintoanAgreementofPurchaseandSale(PSA)forasale-leasebacktransactionwithanunrelatedparty.UnderthePSA,we
agreedtosellthreeretaildepartmentstorepropertiesforatleast$44.9millionandleasethembackforaperiodof20yearswiththreeoptional10-yearrenewal
terms.Thebasicrentpayableinconnectionwiththeleasewillbe$3.9million,subjecttoadjustmentforincreasesintheConsumerPriceIndex.Theclosingofthis
transactionissubjecttoaduediligencereviewbythepurchaser.
21
Giventhechallengingretailenvironmentandcontinueddeclinesinmalltraffictrends,onMay19,2016,werevisedourfiscal2016guidance.Weexpect
lossperdilutedshareinarangeof$0.95to$1.45.
Assumptionsreflectedinourfull-yearguidanceincludethefollowing:
Acomparablestoresalesperformancerangingfromflattoadecreaseof1%;
Agrossmarginraterangingfroma30-to50-basis-pointincreasefromthefiscal2015rateof34.7%;
AnSG&Aexpenseraterangingfroma40-to60-basis-pointdecreasefromthefiscal2015rateof33.3%;
Capitalexpendituresnottoexceed$40million,netofexternalcontributions;and
Anestimated20millionweightedaveragedilutedsharesoutstanding.
Results of Operations
ThefollowingtablesummarizeschangesinselectedoperatingindicatorsoftheCompany,illustratingtherelationshipofvariousincomeandexpense
itemstonetsalesfortherespectiveperiodspresented(componentsmaynotaddorsubtracttototalsduetorounding):
Netsales
Otherincome
Costsandexpenses:
Costsofmerchandisesold
Selling,generalandadministrative
Depreciationandamortization
Amortizationoflease-relatedinterests
Lossfromoperations
Interestexpense,net
Lossbeforeincometaxes
Incometaxbenefit
Netloss
THIRTEEN
WEEKSENDED
April30,
May2,
2016
2015
100.0%
2.9
102.9
100.0%
2.7
102.7
66.1
36.6
3.9
0.2
(3.9)
2.6
(6.4)
(6.4)%
66.2
35.8
3.6
0.2
(3.1)
2.5
(5.6)
(5.6)%
FirstQuarterof2016ComparedwithFirstQuarterof2015
Netsales:Netsalesinthefirstquarterof2016were$591.0million,comparedwith$610.9millioninthefirstquarterof2015,reflectingadecreaseof
3.3%.Comparablestoresalesdecreased2.9%intheperiodduetothechallengedretailenvironmentandcontinueddeclineinmalltraffictrends.
Thebestperformingmerchandisecategoriesinthefirstquarterof2016wereSoftHome,HardHome(bothincludedinHome)andMensSportswear
(includedinMensApparel).SoftHomebenefitedfromnotablesalesincreasesinbeddingandlinensaswellasadditionalpromotionalevents.SalesinHard
Homegrewasaresultofimprovedperformanceinbasichousewares,cookwareandluggage.MensSportswearprimarilybenefitedfromstrategicexpansionof
nationalbrandstoadditionaldoors.
MerchandisecategoriesthatwerechallengedintheperiodincludedAccessories,MensFurnishings(includedinMensApparel)andBetterSportswear
(includedinWomensApparel).Despitegrowthincertainbrandsandproductcategories,coldweatherandpoorperformingmerchandisehamperedsalesin
22
Accessories.MensFurnishingssalesdeclinedduetounfavorableweathertrends.BetterSportswearwasimpactedbyunfavorablesalesincertainbrandsand
productassortments;weintendtocontinuedirectinginventoryinvestmenttobrandsthatareperformingwell.
Otherincome:Otherincome,whichincludesincomefromrevenuesreceivedunderourcreditcardprogramagreement,miscellaneousrevenue
departmentsandgiftandmerchandisereturncardbreakage,was$17.4millioninthefirstquarterof2016ascomparedwith$16.3millioninthefirstquarterof
2015.Theincreaseprimarilyreflectsincreasedrevenuesfromourproprietarycreditcardoperations.
Costsandexpenses:Grossmargininthefirstquarterof2016decreased$6.4millionto$200.1millionascomparedwith$206.5millioninthe
comparableprioryearperiod,primarilyduetothedecreasedsalesvolumeinthecurrentperiod.Grossmarginasapercentageofnetsalesincreased6basispoints
to33.9%inthefirstquarterof2016from33.8%inthecomparableprioryearperiod.Thisrateincreasewasprimarilyduetoreductionsindeliveryexpensewhich
werepartiallyoffsetbyhigherdistributioncentercostsforouromnichanneloperations.
SG&Aexpenseinthefirstquarterof2016decreased$2.5millionto$216.2millionascomparedwith$218.7millioninthefirstquarterof2015.This
reductionwaslargelyduetodecreasedstoreexpenses,partiallyoffsetbyincreasedadvertisingexpensesandmedicalclaims.Thecurrentperiodexpenserate,
36.6%ofnetsales,increased78basispointsfromthatoftheprioryearperiodasaresultofthedecreasedsalesvolumeintheperiod.
Depreciationandamortizationexpenseandamortizationoflease-relatedinterestsincreased$1.1millionto$24.2millioninthefirstquarterof2016from
$23.1millioninthefirstquarterof2015.
Interestexpense,net:Netinterestexpensewas$15.1millioninthefirstquarterof2016ascomparedwith$15.2millioninthefirstquarterof2015.
The$0.1milliondecreaseprimarilyreflectsareducedweightedaverageinterestrate,partiallyoffsetbyhigherborrowinglevels.
Incometaxbenefit:Theeffectiveincometaxrateinthefirstquarterineachof2016and2015largelyreflectsourvaluationallowancepositionagainst
allnetdeferredtaxassets.The$0.1millionincometaxbenefitinthefirstquarterof2016includesa$0.6millionbenefitfromthelossoncontinuingoperations
whichwaspartiallyoffsetbytherecognitionofdeferredtaxliabilitiesassociatedwithindefinite-livedassets.The$0.2millionincometaxbenefitinthefirst
quarterof2015includesa$0.6millionbenefitfromthelossoncontinuingoperationswhichwaspartiallyoffsetbytherecognitionofdeferredtaxliabilities
associatedwithindefinite-livedassets.
Seasonality
Ourbusiness,likethatofmostretailers,issubjecttoseasonalfluctuations,withthemajorportionofsalesandincomerealizedduringthesecondhalfof
eachfiscalyear,whichincludestheholidayseason.Duetothefixednatureofcertaincosts,SG&Aexpenseistypicallyhigherasapercentageofnetsalesduring
thefirsthalfofeachfiscalyear.Wetypicallyfinanceworkingcapitalincreasesinthesecondhalfofeachfiscalyearthroughadditionalborrowingsunderour
$830.0millionseniorsecuredSecondAmendedandRestatedLoanandSecurityAgreement(theSecondAmendedRevolvingCreditFacility)thatexpireson
December12,2018(seeLiquidityandCapitalResources,below,forfurtherdiscussion).
Becauseoftheseasonalityofourbusiness,resultsforanyquarterarenotnecessarilyindicativeofresultsthatmaybeachievedforafullfiscalyear.
AtApril30,2016,wehad$7.8millionincashandcashequivalentsand$244.0millionavailableunderourSecondAmendedRevolvingCreditFacility
(beforetakingintoaccounttheminimumborrowingavailabilitycovenantundersuchfacility).Excessavailabilitywas$368.3millionasofthecomparableprior
yearperiod.Theunfavorableexcessavailabilitycomparisonprimarilyreflectsincreaseddirectborrowingstosupportouroperationsand,inpart,torepayour
mortgagefacilityduringfiscal2015.
23
Typically,cashflowsfromoperationsareimpactedbytheeffectonsalesof(1)consumerconfidence,(2)weatherinthegeographicmarketsservedbythe
Company,(3)generaleconomicconditionsand(4)competitiveconditionsexistingintheretailindustry.Adownturninanysinglefactororacombinationof
factorscouldhaveamaterialadverseimpactuponourabilitytogeneratesufficientcashflowstooperateourbusiness.Whilethecurrenteconomicuncertainty
affectsourassessmentofshort-termliquidity,weconsiderourresources(including,butnotlimitedto,cashflowsfromoperationssupplementedbyborrowings
undertheSecondAmendedRevolvingCreditFacility)adequatetosatisfyourcashneedsforatleastthenext12months.
OurprimarysourcesofworkingcapitalarecashflowsfromoperationsandborrowingsunderourSecondAmendedRevolvingCreditFacility,which
providesforupto$830.0millioninborrowings(limitedbyamountsavailablepursuanttoaborrowingbasecalculation).Ourbusinessfollowsaseasonalpattern;
workingcapitalfluctuateswithseasonalvariations,reachingitshighestlevelinOctoberorNovembertofundthepurchaseofmerchandiseinventoriespriortothe
holidayseason.Theseasonalityofourbusinesshistoricallyprovidesgreatestcashflowfromoperationsduringtheholidayseason,withfiscalfourthquarternet
salesgeneratingthestrongestprofitsofourfiscalyear.Asholidaysalessignificantlyreduceinventorylevels,thisreduction,combinedwithnetincome,
historicallyprovidesuswithstrongcashflowfromoperationsattheendofourfiscalyear.
Cashprovidedby(usedin)ouroperating,investingandfinancingactivitiesissummarizedasfollows:
(Dollarsinmillions)
THIRTEEN
WEEKSENDED
April30,
May2,
2016
2015
Operatingactivities
$
12.3
$
(17.8)
Investingactivities
(12.6)
(24.4)
Financingactivities
1.3
42.2
Netcashprovidedbyoperatingactivitieswas$12.3millioninthefirstquarterof2016,whilenetcashusedinoperatingactivitiestotaled$17.8millionin
thefirstquarterof2015.Theincreaseincashflowprimarilyreflectsa$26.0millionfavorablechangeincashflowfromworkingcapital.Theimprovementincash
flowfromworkingcapitalwaslargelyduetofavorablefluctuationsof$9.4millionincashflowsfromprepaidexpensesandothercurrentassetsand$8.2millionin
cashflowsfromaccountspayable.Inaddition,cashflowsfromlong-termliabilitieschangedfavorablyby$6.6million.
Netcashusedininvestingactivitieswas$12.6millionand$24.4millioninthefirstquartersof2016and2015,respectively,reflectingaplanneddecrease
incapitalexpenditures.Capitalexpenditurestotaled$12.6millionand$24.4millioninthefirstquarterineachof2016and2015,respectively;theseexpenditures
donotreflectreductionsforexternalcontributions(primarilyleaseholdimprovementandfixtureallowancesreceivedfromlandlordsorvendors)of$7.5million
and$0.8millioninthefirstquarterineachof2016and2015,respectively.Weanticipateourfiscal2016capitalexpenditureswillnotexceed$67.3million
(excludingexternalcontributionsof$27.3million,reducinganticipatednetcapitalinvestmentsto$40.0million).
Netcashprovidedbyfinancingactivitieswas$1.3millionand$42.2millioninthefirstquartersof2016and2015,respectively,reflectingalower
revolverincreaseinthefirstquarterof2016.Thelowerrevolverincreasewasprimarilyduetoreducedcapitalexpendituresandthefavorablechangeinworking
capital.
Asidefromplannedcapitalexpenditures,theCompanysprimarycashrequirementswillbetoservicedebtandfinanceworkingcapitalincreasesduring
peaksellingseasons.
24
Critical Accounting Policies and Estimates
ThepreparationoffinancialstatementsinconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesrequiresustomakeestimatesand
assumptionsthataffectreportedamountsanddisclosureofcontingentassetsandliabilities.Therehavebeennosignificantchangesinthecriticalaccounting
policiesandestimatesdescribedinourAnnualReportonForm10-KfortheyearendedJanuary30,2016.
RecentlyadoptedaccountingstandardsarediscussedinNote1totheConsolidatedFinancialStatements.
Forward-Looking Statements
Certaininformationincludedinthisreport(aswellasothercommunicationsmadeortobemadebytheCompany)andothermaterialsfiledortobefiled
bytheCompanywiththeSecuritiesandExchangeCommissioncontainstatementsthatareforward-lookingwithinthemeaningofthePrivateSecuritiesLitigation
ReformActof1995.Suchforward-lookingstatements,whichmaybeidentifiedbywordsorphrasessuchasmay,could,would,will,plan,expect,
believe,anticipate,estimate,project,intend,lookforwardtoorothersimilarexpressions,includingtheCompanysfiscal2016guidanceand
statementsregardingenhancementstoouronlineandmobileplatforms,anticipatedexpensesavings,futurecashflows,inventorymanagementinitiativesand
projectedcapitalexpenditures,involveimportantrisksanduncertaintiesthatcouldsignificantlyaffectresultsinthefutureand,accordingly,suchresultsmaydiffer
fromthoseexpressedinanyforward-lookingstatementsmadebyoronbehalfoftheCompany.Factorsthatcouldcausesuchdifferencesinclude,butarenot
limitedto,risksrelatedtoretailbusinessesgenerally;asignificantandprolongeddeteriorationofgeneraleconomicconditionswhichcouldnegativelyimpactthe
Company,includingthepotentialwrite-downofthecurrentvaluationofintangibleassetsanddeferredtaxes;risksrelatedtotheCompanysproprietarycreditcard
program;potentialincreasesinpensionobligations;consumerspendingpatterns,debtlevels,andtheavailabilityandcostofconsumercredit;additional
competitionfromexistingandnewcompetitorsorchangesinthecompetitiveenvironment;inflation;deflation;changesinthecostsoffuelandotherenergyand
transportationcosts;weatherconditionsthatcouldnegativelyimpactsales;uncertaintiesassociatedwithexpandingorremodelingexistingstores;theabilityto
attractandretainqualifiedmanagement;thedependenceuponrelationshipswithvendorsandtheirfactors;adatasecuritybreachorsystemfailure;theabilityto
reduceorcontrolSG&Aexpenses,includinginitiativestoreduceexpensesandimproveefficiency;operationaldisruptions;unsuccessfulmarketinginitiatives;the
abilitytoexpandcapacityandimproveefficiencythroughtheCompanysneweCommercefulfillmentcenter;changesin,orthefailuretosuccessfullyimplement,
ourkeystrategies,includinginitiativestoimproveourmerchandising,marketingandoperations;adverseoutcomesinlitigation;theincurrenceofunplanned
capitalexpenditures;theabilitytoobtainfinancingforworkingcapital,capitalexpendituresandgeneralcorporatepurposes;theimpactofregulatoryrequirements
includingtheHealthCareReformActandtheDodd-FrankWallStreetReformandConsumerProtectionAct;theinabilityorlimitationsontheCompanysability
tofavorablyadjustthevaluationallowanceondeferredtaxassets;andthefinancialconditionofmalloperators.AdditionalfactorsthatcouldcausetheCompanys
actualresultstodifferfromthosecontainedintheseforward-lookingstatementsarediscussedingreaterdetailunderItem1AoftheCompanysAnnualReporton
Form10-Kforfiscal2015filedwiththeSecuritiesandExchangeCommission.
25
ITEM3.QUANTITATIVEANDQUALITATIVEDISCLOSURESABOUTMARKETRISK
Therewerenomaterialchangesinourexposures,riskmanagementstrategies,orhedgingpositionssinceJanuary30,2016.Forfurtherinformation,refer
toItem7Aofourfiscal2015AnnualReportonForm10-K.
ITEM4.CONTROLSANDPROCEDURES
EvaluationofDisclosureControlsandProcedures
Wemaintaindisclosurecontrolsandproceduresthataredesignedtoensurethatinformationrequiredtobedisclosedinreportsfiledpursuanttothe
SecuritiesExchangeActof1934,asamended(theExchangeAct),isrecorded,processed,summarizedandreportedwithinthetimeperiodsspecifiedinthe
SecuritiesandExchangeCommissionsrulesandforms,andthatsuchinformationisaccumulatedandcommunicatedtomanagement,includingourChief
ExecutiveOfficerandChiefFinancialOfficer,asappropriate,toallowtimelydecisionsregardingrequireddisclosure.Ourmanagement,includingourChief
ExecutiveOfficerandChiefFinancialOfficer,evaluatedtheeffectivenessofourdisclosurecontrolsandprocedures(asdefinedinRules13a-15(e)and15d15(e)oftheExchangeAct)asoftheendoftheperiodcoveredbythisreportand,basedonthisevaluation,concludedthatourdisclosurecontrolsandprocedures
areeffective.
ChangesinInternalControloverFinancialReporting
TherewerenochangestoourinternalcontrolsoverfinancialreportingthatoccurredduringthethirteenweeksendedApril30,2016thathavematerially
affected,orarereasonablylikelytomateriallyaffect,ourinternalcontroloverfinancialreporting.
26
PARTII:OTHERINFORMATION
ITEM6.EXHIBITS
(a)ThefollowingexhibitsarefiledpursuanttotherequirementsofItem601ofRegulationS-K:
10.1
AgreementofPurchaseandSalebetweenUnitedTrustFundLimitedPartnership,asPurchaser,andBonstoresRealtyOne,LLCandBonstores
RealtyTwo,LLC,asSeller(incorporatedbyreferencetoExhibit10.1totheCurrentReportonForm8-KfiledonJune1,2016)
31.1
CertificationofKathrynBufano
31.2
CertificationofNancyA.Walsh
32.1*
CertificationPursuanttoRules13a-14(b)and15d-14(b)oftheSecuritiesExchangeActof1934
101.INS
XBRLInstanceDocument
101.SCH
XBRLTaxonomyExtensionSchemaDocument
101.CAL
XBRLTaxonomyExtensionCalculationLinkbaseDocument
101.DEF
XBRLTaxonomyExtensionDefinitionLinkbaseDocument
101.LAB
XBRLTaxonomyExtensionLabelLinkbaseDocument
101.PRE
XBRLTaxonomyExtensionPresentationLinkbaseDocument
*Furnishedherewith.
27
SIGNATURES
PursuanttotherequirementsoftheSecuritiesExchangeActof1934,theRegistranthasdulycausedthisreporttobesignedonitsbehalfbythe
undersignedthereuntodulyauthorized.
THEBON-TONSTORES,INC.
DATE:
June8,2016
BY:
/s/KathrynBufano
KathrynBufano
Presidentand
ChiefExecutiveOfficer
(PrincipalExecutiveOfficer)
DATE:
June8,2016
BY:
/s/NancyA.Walsh
NancyA.Walsh
ExecutiveVicePresident
ChiefFinancialOfficer
(PrincipalFinancialOfficer)
DATE:
June8,2016
BY:
/s/MichaelW.Webb
MichaelW.Webb
SeniorVicePresident
ChiefAccountingOfficer
(PrincipalAccountingOfficer)
28
EXHIBIT31.1
CERTIFICATIONOFKATHRYNBUFANO
I,KathrynBufano,certifythat:
1)IhavereviewedthisQuarterlyReportonForm10-QofTheBon-TonStores,Inc.;
2)Basedonmyknowledge,thisreportdoesnotcontainanyuntruestatementofamaterialfactoromittostateamaterialfactnecessarytomakethestatements
made,inlightofthecircumstancesunderwhichsuchstatementsweremade,notmisleadingwithrespecttotheperiodcoveredbythisreport;
3)Basedonmyknowledge,thefinancialstatements,andotherfinancialinformationincludedinthisreport,fairlypresentinallmaterialrespectsthefinancial
condition,resultsofoperationsandcashflowsoftheregistrantasof,andfor,theperiodspresentedinthisreport;
4)Theregistrantsothercertifyingofficer(s)andIareresponsibleforestablishingandmaintainingdisclosurecontrolsandprocedures(asdefinedinExchangeAct
Rules13a-15(e)and15d-15(e))andinternalcontroloverfinancialreporting(asdefinedinExchangeActRules13a-15(f)and15d-15(f))fortheregistrantand
have:
a) Designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsandprocedurestobedesignedunderoursupervision,toensurethat
materialinformationrelatingtotheregistrant,includingitsconsolidatedsubsidiaries,ismadeknowntousbyotherswithinthoseentities,particularlyduring
theperiodinwhichthisreportisbeingprepared;
b) Designedsuchinternalcontroloverfinancialreporting,orcausedsuchinternalcontroloverfinancialreportingtobedesignedunderoursupervision,to
providereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordance
withgenerallyacceptedaccountingprinciples;
c) Evaluatedtheeffectivenessoftheregistrantsdisclosurecontrolsandproceduresandpresentedinthisreportourconclusionsabouttheeffectivenessofthe
disclosurecontrolsandprocedures,asoftheendoftheperiodcoveredbythisreportbasedonsuchevaluation;and
d) Disclosedinthisreportanychangeintheregistrantsinternalcontroloverfinancialreportingthatoccurredduringtheregistrantsmostrecentfiscalquarter
(theregistrantsfourthfiscalquarterinthecaseofanannualreport)thathasmateriallyaffected,orisreasonablylikelytomateriallyaffect,theregistrants
internalcontroloverfinancialreporting;and
5)Theregistrantsothercertifyingofficer(s)andIhavedisclosed,basedonourmostrecentevaluationofinternalcontroloverfinancialreporting,tothe
registrantsauditorsandtheauditcommitteeoftheregistrantsboardofdirectors(orpersonsperformingtheequivalentfunctions):
a) Allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancialreportingwhicharereasonablylikelyto
adverselyaffecttheregistrantsabilitytorecord,process,summarizeandreportfinancialinformation;and
b) Anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohaveasignificantroleintheregistrantsinternalcontrolover
financialreporting.
DATE:June8,2016
By:
/s/KathrynBufano
KathrynBufano
PresidentandChiefExecutiveOfficer
EXHIBIT31.2
CERTIFICATIONOFNANCYA.WALSH
I,NancyA.Walsh,certifythat:
1)IhavereviewedthisQuarterlyReportonForm10-QofTheBon-TonStores,Inc.;
2)Basedonmyknowledge,thisreportdoesnotcontainanyuntruestatementofamaterialfactoromittostateamaterialfactnecessarytomakethestatements
made,inlightofthecircumstancesunderwhichsuchstatementsweremade,notmisleadingwithrespecttotheperiodcoveredbythisreport;
3)Basedonmyknowledge,thefinancialstatements,andotherfinancialinformationincludedinthisreport,fairlypresentinallmaterialrespectsthefinancial
condition,resultsofoperationsandcashflowsoftheregistrantasof,andfor,theperiodspresentedinthisreport;
4)Theregistrantsothercertifyingofficer(s)andIareresponsibleforestablishingandmaintainingdisclosurecontrolsandprocedures(asdefinedinExchangeAct
Rules13a-15(e)and15d-15(e))andinternalcontroloverfinancialreporting(asdefinedinExchangeActRules13a-15(f)and15d-15(f))fortheregistrantand
have:
a) Designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsandprocedurestobedesignedunderoursupervision,toensurethat
materialinformationrelatingtotheregistrant,includingitsconsolidatedsubsidiaries,ismadeknowntousbyotherswithinthoseentities,particularlyduring
theperiodinwhichthisreportisbeingprepared;
b) Designedsuchinternalcontroloverfinancialreporting,orcausedsuchinternalcontroloverfinancialreportingtobedesignedunderoursupervision,to
providereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordance
withgenerallyacceptedaccountingprinciples;
c) Evaluatedtheeffectivenessoftheregistrantsdisclosurecontrolsandproceduresandpresentedinthisreportourconclusionsabouttheeffectivenessofthe
disclosurecontrolsandprocedures,asoftheendoftheperiodcoveredbythisreportbasedonsuchevaluation;and
d) Disclosedinthisreportanychangeintheregistrantsinternalcontroloverfinancialreportingthatoccurredduringtheregistrantsmostrecentfiscalquarter
(theregistrantsfourthfiscalquarterinthecaseofanannualreport)thathasmateriallyaffected,orisreasonablylikelytomateriallyaffect,theregistrants
internalcontroloverfinancialreporting;and
5)Theregistrantsothercertifyingofficer(s)andIhavedisclosed,basedonourmostrecentevaluationofinternalcontroloverfinancialreporting,tothe
registrantsauditorsandtheauditcommitteeoftheregistrantsboardofdirectors(orpersonsperformingtheequivalentfunctions):
a) Allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancialreportingwhicharereasonablylikelyto
adverselyaffecttheregistrantsabilitytorecord,process,summarizeandreportfinancialinformation;and
b) Anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohaveasignificantroleintheregistrantsinternalcontrolover
financialreporting.
DATE:June8,2016
By:
/s/NancyA.Walsh
NancyA.Walsh
ExecutiveVicePresident
ChiefFinancialOfficer
(PrincipalFinancialOfficer)
Exhibit32.1
CERTIFICATIONPURSUANTTO
18U.S.C.SECTION1350
ASADOPTEDPURSUANTTO
SECTION906OFTHESARBANES-OXLEYACTOF2002
InconnectionwiththeQuarterlyReportofTheBon-TonStores,Inc.onForm10-QfortheperiodendedApril30,2016,asfiledwiththeSecuritiesand
ExchangeCommission(theReport),eachoftheundersignedofficersofTheBon-TonStores,Inc.,certifiespursuantto18U.S.C.Section1350,that,tohis/her
respectiveknowledge:
1) TheReportfullycomplieswiththerequirementsofsection13(a)or15(d)oftheSecuritiesExchangeActof1934;and
2) TheinformationcontainedintheReportfairlypresents,inallmaterialrespects,thefinancialconditionandresultsofoperationsofTheBon-TonStores,Inc.
DATE:June8,2016
By:
/s/KathrynBufano
KathrynBufano
PresidentandChiefExecutiveOfficer
By:
/s/NancyA.Walsh
NancyA.Walsh
ExecutiveVicePresident
ChiefFinancialOfficer
AsignedoriginalofthiswrittenstatementhasbeenprovidedtoTheBon-TonStores,Inc.andwillberetainedbyTheBon-TonStores,Inc.andfurnishedtothe
SecuritiesandExchangeCommissionoritsstaffuponrequest.