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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to _________________.
Commission file number 1-6140
DILLARD'S, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 71-0388071
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
1600 CANTRELL ROAD, LITTLE ROCK, ARKANSAS 72201
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (501) 376-5200
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class Name of each exchange on which registered
Class A Common Stock New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by checkmark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes X No
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment
to this Form 10-K. [X]
State the aggregate market value of the voting stock held by non-affiliates
of the Registrant as of March 31, 1997: $3,744,035,235
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock as of March 31, 1998:
Class A Common Stock, $.01 par value 103,630,436
Class B Common Stock, $.01 par value 4,016,929
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Stockholders Report for the fiscal
year ended January 31, 1998 (the "Report") are incorporated
by reference into Parts I and II.
Portions of the Proxy Statement for the Annual Meeting of
Stockholders to be held May 16, 1998 (the "Proxy Statement")
are incorporated by reference into Part III.
The Company cautions that any forward-looking statements (as
such term is defined in the Private Securities Litigation
Reform Act of 1995) contained in this report or made by
management of the Company involve risks and uncertainties
and are subject to change based on various important
factors. The following factors, among others, could affect
the Company's financial performance and could cause actual
results for 1998 and beyond to differ materially from those
expressed or implied in any such forward-looking statements:
economic and weather conditions in the regions in which the
Company's stores are located and their effect on the buying
patterns of the Company's customers, changes in consumer
spending patterns and debt levels, trends in personal
bankruptcies and the impact of competitive market forces.
PART I
ITEM 1. BUSINESS.
General
Dillard's, Inc. ("Company" or "Registrant") is an
outgrowth of a department store originally founded in
1938 by William Dillard. The Company was incorporated
in Delaware in 1964. The Company operates retail
department stores located primarily in the southwest,
southeast and midwest.
The department store business is highly competitive.
The Company has several competitors on a national and
regional level as well as numerous competitors on a
local level. Many factors enter into competition for
the consumer's patronage, including price, quality,
style, service, product mix, convenience and credit
availability. The Company's earnings depend to a
significant extent on the results of operations for the
last quarter of its fiscal year. Due to holiday buying
patterns, sales for that period average approximately
one-third of annual sales.
For additional information with respect to the
Registrant's business, reference is made to information
contained on page 12, under the heading "Dillard's
Locations," page 14 under the headings "Net Sales,"
"Net Income," "Total Assets" and "Number of Employees -
Average," and page 32 of the Report, which information
is incorporated herein by reference.
Executive Officers of the Registrant
The following table lists the names and ages of all
Executive Officers of the Registrant, the nature of any
family relationship between them, and all positions and
offices with the Registrant presently held by each
person named. All of the Executive Officers listed
below have been in managerial positions with the
Registrant for more than five years, except for Paul J.
Schroeder, Jr.. Mr. Schroeder has been employed by the
Registrant as Vice President since January, 1998.
Prior to that employment, he was a Partner in St. Louis
based, international law firm Bryan Cave, LLP
specializing in labor and employment law.
Name Age Position and Office Family Relationships
William Dillard 83 Chairman of the Board; Father of William
Chief Executive Officer Dillard II, Drue
Corbusier, Alex
Dillard and Mike
Dillard
William Dillard II 53 Director; President Son of
& Chief Operating Officer William Dillard
Alex Dillard 48 Director; Executive Son of
Vice President William Dillard
Mike Dillard 46 Director; Executive Son of
Vice President William Dillard
H. Gene Baker 59 Vice President None
Joseph P. Brennan 53 Vice President None
G. Kent Burnett 53 Vice President None
Drue Corbusier 51 Director; Vice President Daughter of
William Dillard
David M. Doub 51 Vice President None
John A. Franzke 66 Vice President None
James I. Freeman 48 Director; Senior Vice None
President; Chief Financial
Officer
Randal L. Hankins 47 Vice President None
T. R. Gastman 68 Vice President None
Paul J. Schroeder, Jr. 50 Vice President None
ITEM 2. PROPERTIES.
All of the Registrant's stores are owned or leased from a
wholly-owned subsidiary or from third parties. The
Registrant's third-party store leases typically provide for
rental payments based upon a percentage of net sales with a
guaranteed minimum annual rent, while the lease terms between
the Registrant and its wholly-owned subsidiary vary. In
general, the Company pays the cost of insurance, maintenance
and any increase in real estate taxes related to these leases.
At fiscal year end there were 270 stores in operation with
gross square footage of 43,300,000. The Company owned or
leased from a wholly-owned subsidiary a total of 204 stores
with 33,200,000 square feet. The Company leased 66 stores
from third parties which totalled 10,100,000 square feet. For
additional information with respect to the Registrant's
properties and leases, reference is made to information
contained on page 12 under the heading "Dillard's Locations,"
and Notes 3, 9 and 10, "Notes to Consolidated Financial
Statements," on pages 25, 26, 29 and 30 of the Report, which
information is incorporated herein by reference.
ITEM 3. LEGAL PROCEEDINGS.
The Company has no material legal proceedings pending against it.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
With respect to the market for the Company's common stock,
market prices, and dividends, reference is made to information
contained page 33 of the Report, which information is
incorporated herein by reference. As of March 31, 1998, there
were 5,527 record holders of the Company's Class A Common
Stock and 10 record holders of the Company's Class B Common
Stock.
ITEM 6. SELECTED FINANCIAL DATA.
Reference is made to information under the heading "Table of
Selected Financial Data" on pages 14 and 15 of the Report,
which information is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Reference is made to information under the heading
"Management's Discussion and Analysis of Financial Condition
and Results of Operation" on pages 16 through 18 of the
Report, which information is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Reference is made to information under the heading
"Quantitative and Qualitative Disclosures About Market Risk" on
page 18 of the Report, which information is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Reference is made to the consolidated financial statements and
notes thereto included on pages 19 through 31 of the Report,
which are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
A. Directors of the Registrant.
Information regarding directors of the Registrant is
incorporated herein by reference to the information on
pages 5 through 7 under the heading "Nominees for
Election as Directors" and page 12 under the heading
"Section 16(a) Beneficial Ownership Reporting
Compliance" in the Proxy Statement.
B. Executive Officers of the Registrant.
Information regarding executive officers of the
Registrant is incorporated herein by reference to Item 1
of this report under the heading "Executive Officers of
the Registrant." Reference additionally is made to the
information under the heading "Section 16(a) Beneficial
Ownership Reporting Compliance" on page 12 in the Proxy
Statement, which information is incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION.
Information regarding executive compensation and compensation
of directors is incorporated herein by reference to the
information beginning on page 8 under the heading
"Compensation of Directors and Executive Officers" and
concluding on page 10 under the heading "Compensation
Committee Interlocks and Insider Participation" in the Proxy
Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Information regarding security ownership of certain beneficial
owners and management is incorporated herein by reference to
the information on page 4 under the heading "Principal Holders
of Voting Securities" and page 5 under the heading "Nominees
for Election as Directors" and continuing through footnote 15
on page 7 in the Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding certain relationships and related
transactions is incorporated herein by reference to the
information on page 12 under the heading "Certain
Relationships and Transactions" in the Proxy Statement and to
the information regarding Mr. Davis on page 10 under the
heading "Compensation Committee Interlocks and Insider
Participation" in the Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K.
(a)(1) Financial Statements
The following consolidated financial statements of the Registrant
and its consolidated subsidiaries included in the Report are
incorporated herein by reference to Item 8 of this report:
Consolidated Balance Sheets - January 31, 1998 and February 1, 1997
Consolidated Statements of Income - Fiscal years ended January 31, 1998,
February 1, 1997 and February 3, 1996
Consolidated Statements of Stockholders' Equity - Fiscal years ended
January 31, 1998, February 1, 1997 and February 3, 1996
Consolidated Statements of Cash Flows - Fiscal years ended
January 31, 1998, February 1,1997 and February 3, 1996
Notes to Consolidated Financial Statements - Fiscal years ended
January 31, 1998, February 1, 1997 and February 3, 1996
(a)(2) Financial Statement Schedules
The following consolidated financial statement schedule of the
Registrant and its consolidated subsidiaries is filed pursuant to
Item 14(d) (this schedule appears immediately following the
signature page):
Schedule II - Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission
are not required under the related instructions or are
inapplicable, and therefore have been omitted.
(a)(3) Exhibits and Management Compensatory Plans
Exhibits
The following exhibits are filed pursuant to Item 14(c):
Number Description
* 3(a) Restated Certificate of Incorporation (Exhibit 3 to Form
10-Q for the quarter ended August 1, 1992 in 1-6140)
* 3(b) By-Laws as currently in effect. (Exhibit 3(b) to Form 10-K
for the fiscal year ended January 30, 1993 in 1-6140)
* 4(a) Indenture between the Registrant and Chemical Bank,
Trustee, dated as of October 1, 1985 (Exhibit (4) in 2-85556)
* 4(b) Indenture between the Registrant and Chemical Bank,
Trustee, dated as of October 1, 1986 (Exhibit (4) in 33-8859)
* 4(c) Indenture between Registrant and Chemical Bank, Trustee,
dated as of April 15, 1987 (Exhibit 4.3 in 33-13534)
* 4(d) Indenture between Registrant and Chemical Bank, Trustee,
dated as of May 15, 1988, as supplemented (Exhibit 4 in
33-21671, Exhibit 4.2 in 33-25114 and Exhibit 4(c) to
Current Report on Form 8-K dated September 26, 1990 in 1-6140)
* 4(e) Indenture between Dillard Investment Co., Inc. and
Chemical Bank, Trustee, dated as of April 15, 1987, as
supplemented (Exhibit 4.1 in 33-13535 and Exhibit 4.2 in
33-25113)
*10(a) Retirement Contract of William Dillard dated March 8,
1997 (Exhibit 10(a) to Form 10-K for the fiscal year
ended February 1, 1997 in 1-6140)
*10(b) 1990 Incentive and Nonqualified Stock Option Plan
(Exhibit 10(b) to Form 10-K for the fiscal year ended
January 30, 1993 in 1-6140)
*10(c) Corporate Officers Non-Qualified Pension Plan (Exhibit
10(c) to Form 10-K for the fiscal year ended January 29,
1994 in 1-6140)
*10(d) Senior Management Cash Bonus Plan (Exhibit 10(d) to Form
10-K for the fiscal year ended January 28, 1995 in 1-6140)
12 Statement Re: Computation of Ratio of Earnings to Fixed
Charges
13 Incorporated portions of the Annual Stockholders Report
for the fiscal year ended January 31, 1998
21 Subsidiaries of the Registrant
23 Consent of Independent Auditors
____________
* Incorporated herein by reference as indicated.
Management Compensatory Plans
Listed below are the management contracts and compensatory plans
which are required to be filed as exhibits pursuant to Item 14(c):
Retirement Contract of William Dillard dated March 8, 1997
1990 Incentive and Nonqualified Stock Option Plan
Corporate Officers Non-Qualified Pension Plan
Senior Management Cash Bonus Plan
(b) Reports on Form 8-K filed during the fourth quarter:
The Company filed a report on January 9, 1998 relating to the
issuance of $100 million aggregate principal amount of 6 5/8%
Notes maturing on January 15, 2018.
(c) Exhibits
See the response to Item 14(a)(3).
(d) Financial statement schedules
See the response to Item 14(a)(2).
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dillard's, Inc.
Registrant
April 24, 1998 /s/ James I. Freeman
Date James I. Freeman, Senior Vice President and
Chief Financial Officer
(Principal Financial & Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacity and on the date
indicated.
/s/ William Dillard /s/ Drue Corbusier
William Dillard Drue Corbusier
Chairman and Chief Executive Vice President and Director
Officer (Principal Executive
Officer)
/s/ Calvin N. Clyde, Jr. /s/ Robert C. Connor
Calvin N. Clyde, Jr. Robert C. Connor
Director Director
/s/ Will D. Davis /s/ Alex Dillard
Will D. Davis Alex Dillard
Director Executive Vice President
and Director
/s/ Mike Dillard /s/ William Dillard II
Mike Dillard William Dillard II
Executive Vice President and President and Chief Operating
Director Officer and Director
/s/ James I. Freeman /s/ William H. Sutton
James I. Freeman William H. Sutton
Senior Vice President and Chief Director
Financial Officer and Director
/s/ John Paul Hammerschmidt /s/ William B. Harrison, Jr.
John Paul Hammerschmidt William B. Harrison, Jr.
Director Director
/s/ Jackson T. Stephens /s/ John H. Johnson
Jackson T. Stephens John H. Johnson
Director Director
/s/ E. Ray Kemp
E. Ray Kemp
Director
April 24, 1998
Date
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of Dillard's, Inc.
Little Rock, Arkansas
We have audited the consolidated financial statements of Dillard's, Inc. and
subsidiaries as of January 31, 1998 and February 1, 1997, and for each of the
three years in the period ended January 31, 1998, and have issued our report
thereon dated February 23, 1998; such consolidated financial statements and
report (which report includes an explanatory paragraph relating to a change
in accounting for the impairment of long-lived assets and for long-lived
assets to be disposed of) are included in your 1997 Annual Report to
Stockholders and are incorporated herein by reference. Our audits also
included the consolidated financial statement schedule of Dillard's, Inc. and
subsidiaries, listed in Item 14. This consolidated financial statement
schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In our opinion,
such consolidated financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly in all material respects the information set forth therein.
DELOITTE & TOUCHE LLP
New York, New York
February 23, 1998
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
DILLARD'S, INC. AND SUBSIDIARIES
(DOLLAR AMOUNTS IN THOUSANDS)
COL. A COL. B COL. C COL.D COL. E COL. F
ADDITIONS
BALANCE CHARGED TO CHARGED TO BALANCE
AT BEGINNING COST AND OTHER ACCOUNTS DEDUCTIONS - AT END
DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE OF PERIOD
Allowance for losses on accounts
receivable:
Year ended
January 31, 1998: $24,169 55,816 52,176 (2) $27,809
Year ended
February 1, 1997: $19,528 66,629 23 (1) 62,011 (2) $24,169
Year ended
February 3, 1996: $15,307 52,522 708 (1) 49,009 (2) $19,528
(1) Represents the allowance for losses on accounts acquired.
(2) Accounts written off and charged to allowance for losses on accounts
receivable (net of recoveries).
EXHIBIT INDEX
Number Description
* 3(a) Restated Certificate of Incorporation
(Exhibit 3 to Form 10-Q for the quarter
ended August 1, 1992 in 1-6140)
* 3(b) By-Laws as currently in effect (Exhibit 3(b) to Form
10-K for the fiscal year ended January 30, 1993, in 1-6140)
* 4(a) Indenture between the Registrant and
Chemical Bank, Trustee, dated as of
October 1, 1985 (Exhibit (4) in 2-85556)
* 4(b) Indenture between the Registrant and
Chemical Bank, Trustee, dated as of
October 1, 1986 (Exhibit (4) in 33-8859)
* 4(c) Indenture between Registrant and
Chemical Bank, Trustee, dated as of
April 15, 1987 (Exhibit 4.3 in 33-13534)
* 4(d) Indenture between Registrant and
Chemical Bank, Trustee, dated as of
May 15, 1988, as supplemented (Exhibit
4 in 33-21671, Exhibit 4.2 in 33-25114
and Exhibit 4(c) to Current Report on
Form 8-K dated September 26, 1990 in 1-6140)
* 4(e) Indenture between Dillard Investment
Co., Inc. and Chemical Bank, Trustee,
dated as of April 15, 1987, as
supplemented (Exhibit 4.1 in 33-13535
and Exhibit 4.2 in 33-25113)
*10(a) Retirement Contract of William Dillard
dated March 8,1997 (Exhibit 10(a) to
Form 10-K for the fiscal year ended
February 1, 1997 in 1-6140)
*10(b) 1990 Incentive and Nonqualified Stock
Option Plan (Exhibit 10(b) to Form 10-K
for the fiscal year ended January 30, 1993 in 1-6140)
*10(c) Corporate Officers Non-Qualified Pension Plan
(Exhibit 10(c) to Form 10-K for the fiscal year
ended January 29, 1994 in 1-6140)
*10(d) Senior Management Cash Bonus Plan (Exhibit 10(d)
to Form 10-K for the fiscal year ended January 28, 1995
in 1-6140)
12 Statement Re: Computation of Ratio of
Earnings to Fixed Charges
13 Incorporated portions of the Annual
Stockholders Report for the fiscal year
ended January 31, 1998
21 Subsidiaries of the Registrant
23 Consent of Independent Auditors
__________________
* Incorporated herein by reference as indicated.