Dillard’s, Inc. Reports First Quarter Results

  Dillard’s, Inc. Reports First Quarter Results

    Reports Record First Quarter Earnings per Share of $2.56 versus $2.50

Business Wire

LITTLE ROCK, Ark. -- May 15, 2014

Dillard’s, Inc. (NYSE: DDS) (the “Company” or “Dillard’s”) announced operating
results for the thirteen weeks ended May 3, 2014. This release contains
certain forward-looking statements. Please refer to the Company’s cautionary
statements regarding forward-looking information included below under
“Forward-Looking Information.”

Summary of the Company’s First Quarter Performance

  *A 2% increase in comparable store sales
  *Diluted earnings per share of $2.56 versus $2.50
  *Cash flow from operations of $161.9 million versus $136.9 million
  *Share repurchase of $65.9 million (0.7 million shares) of Class A Common
    Stock

Dillard’s Chief Executive Officer, William Dillard, II, stated, “We reported
record earnings per share of $2.56 compared to $2.50. Our 2% comparable store
sales increase marks our 15^th consecutive quarter of positive sales.
Additionally, we executed $65.9 million of share buyback as a result of our
strong cash flow.”

First Quarter Results

Dillard’s reported net income for the 13-week period ended May 3, 2014 of
$111.7 million ($2.56 per share) compared to net income of $117.2 million
($2.50 per share) for the 13 weeks ended May 4, 2013.

Included in net income for the prior year 13-week period ended May 4, 2013 is
a net after-tax credit totaling $4.4 million ($0.09 per share) comprised of
the following three items:

  *A $7.6 million after tax gain ($0.16 per share) related to the sale of an
    investment
  *A $1.0 million after tax credit ($0.02 per share) related to a pension
    adjustment
  *After-tax asset impairment and store closing charges of $4.2 million
    ($0.09 per share)

Net Sales – 13 Weeks

Total merchandise sales for the 13-week period ended May 3, 2014 were $1.539
billion and $1.530 billion for the 13-week period ended May 4, 2013. Total
merchandise sales increased 1%, and sales in comparable stores increased 2%
for the first quarter.

Sales trends for the first quarter were strongest in the men’s apparel and
accessories category and the juniors’ and children’s apparel category followed
by ladies’ accessories and lingerie. Sales were weakest in home and furniture.
Sales trends were strongest in the Central region, followed by the Eastern and
Western regions, respectively.

Net sales (which include the operations of the Company’s construction
business, CDI Contractors, LLC (“CDI”)) for the 13 weeks ended May 3, 2014
were $1.551 billion and $1.549 billion for the 13 weeks ended May 4, 2013.

Gross Margin/Inventory

Gross margin from retail operations (which excludes CDI) decreased 14 basis
points of sales for the 13 weeks ended May 3, 2014 compared to the 13 weeks
ended May 4, 2013. The decline resulted primarily from increased markdowns
compared to the prior year first quarter. Inventory increased 1% at May 3,
2014 compared to May 4, 2013.

Consolidated gross margin remained unchanged as a percentage of sales at 39.5%
for the 13 weeks ended May 3, 2014 and May 4, 2013.

Selling, General & Administrative Expenses

Selling, general and administrative expenses (“operating expenses”) were
$393.7 million and $390.2 million for the 13 weeks ended May 3, 2014 and May
4, 2013, respectively, increasing 19 basis points of sales. Increased selling
payroll was partially offset by decreased advertising expense during the
quarter. Included in operating expenses for the prior year first quarter is a
$1.5 million pretax credit ($1.0 million after tax of $0.02 per share) related
to a pension adjustment.

Share Repurchase

During the quarter ended May 3, 2014, the Company repurchased $65.9 million
(0.7 million shares) of Class A Common Stock at an average price of $89.34 per
share under the Company’s share repurchase plans. Remaining authorization
under the share repurchase program at May 3, 2014 was $224.5 million.

Total shares outstanding (Class A and Class B Common Stock) at May 3, 2014 and
May 4, 2013 were 43.2 million and 46.3 million, respectively.

Store Information

At May 3, 2014, the Company operated 278 Dillard’s locations and 18 clearance
centers spanning 29 states and an Internet store at www.dillards.com. Total
square footage at May 3, 2014 was 50.5 million.




Dillard's, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In Millions, Except Per Share Data)
                                                                
                                 13 Weeks Ended          13 Weeks Ended
                                 May 3, 2014             May 4, 2013
                                             % of                    % of
                                 Amount      Net Sales   Amount      Net Sales
Net sales                        $ 1,551.3   100.0  %    $ 1,549.1   100.0  %
Service charges and other         37.2      2.4    %     40.3      2.6    %
income
                                   1,588.5   102.4  %      1,589.4   102.6  %
                                                                     
Cost of sales                      939.2     60.5   %      937.8     60.5   %
Selling, general and               393.7     25.4   %      390.2     25.2   %
administrative expenses
Depreciation and amortization      61.9      4.0    %      65.1      4.2    %
Rentals                            5.8       0.4    %      5.6       0.4    %
Interest and debt expense, net     15.8      1.0    %      16.3      1.1    %
Gain on disposal of assets         0.4       0.0    %      12.3      0.8    %
Asset impairment and store        -         0.0    %     6.5       0.4    %
closing charges
Income before income taxes and
income on and equity in losses     172.5     11.1   %      180.2     11.6   %
of joint ventures
Income taxes                       61.0                    63.4
Income on and equity in losses    0.2       0.0    %     0.4       0.0    %
of joint ventures
Net income                       $ 111.7     7.2    %    $ 117.2     7.6    %
                                                                     
Basic earnings per share         $ 2.56                  $ 2.50
Diluted earnings per share       $ 2.56                  $ 2.50
                                                                     
Basic weighted average shares      43.7                    46.9
Diluted weighted average           43.7                    46.9
shares




Dillard's, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(In Millions, Except Per Share Data)
                                                                  
                                                         May 3,      May 4,
                                                         2014        2013
Assets
Current Assets:
Cash and cash equivalents                                $ 312.1     $ 156.0
Accounts receivable                                        19.2        27.8
Merchandise inventories                                    1,564.4     1,544.1
Other current assets                                      47.0       47.4
Total current assets                                       1,942.7     1,775.3
                                                                     
Property and equipment, net                                2,096.0     2,228.1
Other assets                                               254.9       257.8
                                                                    
Total Assets                                             $ 4,293.6   $ 4,261.2
                                                                     
Liabilities and Stockholders' Equity
Current Liabilities:
Trade accounts payable and accrued expenses              $ 820.8     $ 847.6
Current portion of long-term debt and capital leases       0.8         1.3
Federal and state income taxes including current          169.4      140.8
deferred taxes
Total current liabilities                                  991.0       989.7
                                                                     
Long-term debt and capital leases                          621.3       622.1
Other liabilities                                          230.1       226.3
Deferred income taxes                                      215.4       247.7
Subordinated debentures                                    200.0       200.0
Stockholders' equity                                       2,035.8     1,975.4
                                                                    
Total liabilities and stockholders' equity               $ 4,293.6   $ 4,261.2




Dillard's, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In Millions)

                                                      13 Weeks    13 Weeks
                                                       Ended        Ended
                                                       May 3,       May 4,
                                                       2014         2013
Operating activities:
Net income                                             $ 111.7      $ 117.2
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of property and            62.3         65.6
deferred financing cost
Gain on disposal of assets                               (0.4   )     (12.3  )
Asset impairment and store closing charges               -            6.5
Changes in operating assets and liabilities:
Decrease in accounts receivable                          11.7         3.7
Increase in merchandise inventories                      (219.0 )     (249.5 )
Increase in other current assets                         (0.2   )     (5.6   )
Decrease in other assets                                 1.1          2.2
Increase in trade accounts payable and accrued           177.3        187.9
expenses and other liabilities
Increase in income taxes payable                        17.4       21.2   
Net cash provided by operating activities               161.9      136.9  
Investing activities:
Purchases of property and equipment                      (22.8  )     (7.3   )
Proceeds from disposal of assets                        4.6        17.5   
Net cash (used in) provided by investing activities     (18.2  )    10.2   
Financing activities:
Principle payments on long-term debt and capital         (0.2   )     (0.5   )
lease obligations
Purchase of treasury stock                               (65.9  )     (114.7 )
Cash dividends paid                                     (2.6   )    -      
Net cash used in financing activities                   (68.7  )    (115.2 )
Increase in cash and cash equivalents                    75.0         31.9
Cash and cash equivalents, beginning of period          237.1      124.1  
Cash and cash equivalents, end of period               $ 312.1     $ 156.0  
Non-cash transactions:
Accrued capital expenditures                           $ 15.0       $ 1.3




Estimates for 2014

The Company is providing the following estimates for certain financial
statement items for the fiscal year ending January 31, 2015 based upon current
conditions. Actual results may differ significantly from these estimates as
conditions and factors change – See “Forward-Looking Information.”

                                2014        2013
                                 Estimated     Actual
Depreciation and amortization    $   255       $  255
Rentals                              26           27
Interest and debt expense, net       61           65
Capital expenditures                 150          95



Forward-Looking Information

The foregoing contains certain “forward-looking statements” within the
definition of federal securities laws. The following are or may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995: statements including (a) words such as “may,”
“will,” “could,” “believe,” “expect,” “future,” “potential,” “anticipate,”
“intend,” “plan,” “estimate,” “continue,” or the negative or other variations
thereof, and (b) statements regarding matters that are not historical facts.
The Company cautions that forward-looking statements contained in this report
are based on estimates, projections, beliefs and assumptions of management and
information available to management at the time of such statements and are not
guarantees of future performance. The Company disclaims any obligation to
update or revise any forward-looking statements based on the occurrence of
future events, the receipt of new information, or otherwise. Forward-looking
statements of the Company involve risks and uncertainties and are subject to
change based on various important factors. Actual future performance, outcomes
and results may differ materially from those expressed in forward-looking
statements made by the Company and its management as a result of a number of
risks, uncertainties and assumptions. Representative examples of those factors
include (without limitation) general retail industry conditions and
macro-economic conditions; economic and weather conditions for regions in
which the Company’s stores are located and the effect of these factors on the
buying patterns of the Company’s customers, including the effect of changes in
prices and availability of oil and natural gas; the availability of consumer
credit; the impact of competitive pressures in the department store industry
and other retail channels including specialty, off-price, discount and
Internet retailers; changes in consumer spending patterns, debt levels and
their ability to meet credit obligations; changes in legislation, affecting
such matters as the cost of employee benefits or credit card income; adequate
and stable availability and pricing of materials, production facilities and
labor from which the Company sources its merchandise; changes in operating
expenses, including employee wages, commission structures and related
benefits; system failures or data security breaches; possible future
acquisitions of store properties from other department store operators; the
continued availability of financing in amounts and at the terms necessary to
support the Company’s future business; fluctuations in LIBOR and other base
borrowing rates; potential disruption from terrorist activity and the effect
on ongoing consumer confidence; epidemic, pandemic or other public health
issues; potential disruption of international trade and supply chain
efficiencies; world conflict and the possible impact on consumer spending
patterns and other economic and demographic changes of similar or dissimilar
nature. The Company’s filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for the fiscal year ended February 1,
2014, contain other information on factors that may affect financial results
or cause actual results to differ materially from forward-looking statements.

Contact:

Dillard’s, Inc.
Julie Johnson Bull, 501-376-5965
 
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