BonTon Stores Inc. (BONT, Financial) filed Quarterly Report for the period ended 2008-11-01.
The Bon-Ton Stores Inc. together with its subsidiaries operates quality fashion department stores. The company's strategy focuses on being the premier fashion retailer in smaller markets that demand but often have limited access to better branded merchandise. In many of its markets The Bon-Ton is the primary destination for branded fashion merchandise from top designers such as Calvin Klein Liz Claiborne Nautica Ralph Lauren and Tommy Hilfiger. BonTon Stores Inc. has a market cap of $21.06 million; its shares were traded at around $1.3 with and P/S ratio of 0.01. The dividend yield of BonTon Stores Inc. stocks is 16.81%. BonTon Stores Inc. had an annual average earning growth of 11.3% over the past 10 years.
Costs and expenses: Gross margin in 2008 was $737.3 million as compared with $788.3 million in 2007, reflecting a decrease of $51.0 million. The decrease in gross margin dollars is due to the decreased sales volume in the period and the reduction in the gross margin rate. Gross margin as a percentage of net sales decreased 0.3 percentage point to 35.1% in the current year from 35.4% last year, primarily due to an increased net markdown rate.
Interest expense, net: Net interest expense was $73.4 million, or 3.5% of net sales, in 2008 as compared with $82.3 million, or 3.7% of net sales, in 2007. The $8.9 million decrease principally reflects decreased borrowing levels and reduced interest rates in 2008, as well as $1.0 million of prior year expense incurred for the early extinguishment of debt.
Capital expenditures for 2008, which do not reflect landlord contributions of approximately $14.7 million, totaled $76.6 million. Capital expenditures for fiscal 2008, reduced by landlord contributions, are planned at approximately $70.0 million. Included in these planned amounts are expenditures relating to the opening of two new stores, expansions of two stores and renovation of an existing store as well as expenditures relating to information systems.
Our net deferred tax assets were $106.1 million and $104.9 million at November 1, 2008 and February 2, 2008, respectively. In assessing the realizability of the deferred tax assets, we considered whether it was more likely than not that the deferred tax assets, or a portion thereof, will be realized. As part of our assessment, we evaluated and weighted the various components of positive and negative evidence as prescribed by SFAS No. 109, Accounting for Income Taxes (SFAS No. 109) including, among others, the scheduled reversal of deferred tax liabilities, projected future taxable income and limitations pursuant to Section 382 of the Internal Revenue Code, and loss carry-back capacity. As a result, we concluded that a valuation allowance against a portion of the net deferred tax assets was appropriate. Valuation allowances of $8.7 million and $14.3 million were recorded at November 1, 2008 and February 2, 2008, respectively.
Net intangible assets totaled $158.6 million and $165.9 million at November 1, 2008 and February 2, 2008, respectively. Our intangible assets at November 1, 2008 are principally comprised of $79.0 million of lease interests that relate to below-market-rate leases and $79.6 million associated with trade names, private label brand names and customer lists. The lease-related interests and the portion of private label brand names subject to amortization are being amortized using a straight-line method. The customer lists are being amortized using a declining-balance method. At November 1, 2008, trade names and private label brand names of $62.2 million have been deemed as having indefinite lives.
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More on BONT:
Gurus buys and sells of BONT
10-year financial history of BONT.
Insider buys/sells of BONT.
The Bon-Ton Stores Inc. together with its subsidiaries operates quality fashion department stores. The company's strategy focuses on being the premier fashion retailer in smaller markets that demand but often have limited access to better branded merchandise. In many of its markets The Bon-Ton is the primary destination for branded fashion merchandise from top designers such as Calvin Klein Liz Claiborne Nautica Ralph Lauren and Tommy Hilfiger. BonTon Stores Inc. has a market cap of $21.06 million; its shares were traded at around $1.3 with and P/S ratio of 0.01. The dividend yield of BonTon Stores Inc. stocks is 16.81%. BonTon Stores Inc. had an annual average earning growth of 11.3% over the past 10 years.
Highlight of Business Operations:
Costs and expenses: Gross margin in the third quarter of 2008 decreased $13.9 million to $258.1 million, as compared with $272.0 million in the comparable prior year period. The decrease in gross margin dollars is attributable to decreased sales volume. Gross margin as a percentage of net sales increased 0.8 percentage point to 35.6% in the third quarter of 2008 from 34.8% in the same period last year, primarily due to a decreased net markdown rate on reduced levels of inventory, improved aging of inventory and reduced distribution costs.Costs and expenses: Gross margin in 2008 was $737.3 million as compared with $788.3 million in 2007, reflecting a decrease of $51.0 million. The decrease in gross margin dollars is due to the decreased sales volume in the period and the reduction in the gross margin rate. Gross margin as a percentage of net sales decreased 0.3 percentage point to 35.1% in the current year from 35.4% last year, primarily due to an increased net markdown rate.
Interest expense, net: Net interest expense was $73.4 million, or 3.5% of net sales, in 2008 as compared with $82.3 million, or 3.7% of net sales, in 2007. The $8.9 million decrease principally reflects decreased borrowing levels and reduced interest rates in 2008, as well as $1.0 million of prior year expense incurred for the early extinguishment of debt.
Capital expenditures for 2008, which do not reflect landlord contributions of approximately $14.7 million, totaled $76.6 million. Capital expenditures for fiscal 2008, reduced by landlord contributions, are planned at approximately $70.0 million. Included in these planned amounts are expenditures relating to the opening of two new stores, expansions of two stores and renovation of an existing store as well as expenditures relating to information systems.
Our net deferred tax assets were $106.1 million and $104.9 million at November 1, 2008 and February 2, 2008, respectively. In assessing the realizability of the deferred tax assets, we considered whether it was more likely than not that the deferred tax assets, or a portion thereof, will be realized. As part of our assessment, we evaluated and weighted the various components of positive and negative evidence as prescribed by SFAS No. 109, Accounting for Income Taxes (SFAS No. 109) including, among others, the scheduled reversal of deferred tax liabilities, projected future taxable income and limitations pursuant to Section 382 of the Internal Revenue Code, and loss carry-back capacity. As a result, we concluded that a valuation allowance against a portion of the net deferred tax assets was appropriate. Valuation allowances of $8.7 million and $14.3 million were recorded at November 1, 2008 and February 2, 2008, respectively.
Net intangible assets totaled $158.6 million and $165.9 million at November 1, 2008 and February 2, 2008, respectively. Our intangible assets at November 1, 2008 are principally comprised of $79.0 million of lease interests that relate to below-market-rate leases and $79.6 million associated with trade names, private label brand names and customer lists. The lease-related interests and the portion of private label brand names subject to amortization are being amortized using a straight-line method. The customer lists are being amortized using a declining-balance method. At November 1, 2008, trade names and private label brand names of $62.2 million have been deemed as having indefinite lives.
Read the The complete Report
More on BONT:
Gurus buys and sells of BONT
10-year financial history of BONT.
Insider buys/sells of BONT.
