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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended Commission File Number
February 3, 2001 0-19517
THE BON-TON STORES, INC.
2801 EAST MARKET STREET
YORK, PENNSYLVANIA, 17402
(717) 757-7660
INCORPORATED IN PENNSYLVANIA IRS NO. 23-2835229
---------------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01 par value
The Registrant 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 and
has been subject to such filing requirements for the past 90 days.
Disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
contained in Registrant's proxy statement incorporated by reference in Part III
of this Form 10-K.
As of April 5, 2001, the aggregate market value of the voting stock held
by non-affiliates of the Registrant was approximately $20,545,154, based upon
the closing price of $2.53 per share on April 5, 2001.*
As of April 5, 2001, there were 12,218,804 shares of Common Stock, $.01
par value, and 2,989,853 shares of Class A Common Stock, $.01 par value,
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part II - Portions of our 2000 Annual Report to security holders ("Annual
Report").
Part III - Portions of the Proxy Statement for the 2001 Annual Meeting of
Shareholders ("Proxy Statement").
- -------------------------------------
* Calculated by excluding all shares that may be deemed to be beneficially owned
by executive officers and directors of the Registrant, without conceding that
all such persons are "affiliates" of the Registrant for purposes of the federal
securities laws.
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References to a year in this Form 10-K refer to The Bon-Ton's fiscal year,
which is the 52 or 53 week period ending on the Saturday nearer January 31 of
the following calendar year (e.g. a reference to 2000 is a reference to the
fiscal year ended February 3, 2001.)
PART I
ITEM 1. BUSINESS
GENERAL
The Bon-Ton Stores, Inc., together with its subsidiaries, is the successor
to S. Grumbacher & Son, a family business founded in 1898, and operates quality
fashion department stores offering moderate and better apparel, home
furnishings, cosmetics, accessories and shoes. In many of its markets, The
Bon-Ton is the primary destination for branded fashion merchandise such as
Calvin Klein, Liz Claiborne, Nautica, Ralph Lauren and Tommy Hilfiger. We
presently operate 73 stores in secondary markets - 36 stores in Pennsylvania, 26
in New York, three stores in each of New Jersey and Maryland and one store in
each of Connecticut, New Hampshire, Massachusetts, Vermont and West Virginia.
Our strategy focuses on being the premier fashion apparel retailer in markets
that demand, but often have limited access to, better branded merchandise.
The Bon-Ton's executive offices are located at 2801 East Market Street,
York, Pennsylvania.
MERCHANDISING
The Bon-Ton stores offer moderate and better fashion apparel, home
furnishings, cosmetics, accessories, shoes and other items. Sales of apparel
constituted 62% of sales in 2000. The following chart illustrates sales by
product category for 2000, 1999 and 1998.
MERCHANDISE CATEGORY 2000 1999 1998
-------------------- ---- ---- ----
Women's clothing 27.6% 27.2% 27.7%
Men's clothing 18.0 18.0 18.7
Home 13.5 13.6 12.9
Cosmetics 10.9 10.5 9.9
Accessories 7.9 7.8 7.5
Children's clothing 6.9 7.1 7.2
Shoes 5.3 5.8 5.6
Intimate apparel 5.2 5.2 5.1
Junior's clothing 4.7 4.8 5.4
------ ------ ------
Total 100.0% 100.0% 100.0%
====== ====== ======
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We carry a number of highly recognized brand names, including Calvin
Klein, Cole Haan, Estee Lauder, Jones New York, Kenneth Cole, Liz
Claiborne, Nautica, Nine West, Ralph Lauren and Tommy Hilfiger, and within these
brands choose collections which balance fashion, price and selection.
We depend on our relationships with our key vendors and our ability to
purchase branded merchandise from them at competitive prices. If we lose the
support of these vendors, it could have a material adverse effect on The
Bon-Ton.
Complementing branded merchandise, our private brand merchandise provides
fashion at competitive pricing under names such as Andrea Viccaro, Jenny
Buchanan, Stuart Hughes and Zigg's. We view this private brand merchandise as a
strategic addition to our strong array of highly recognized, quality national
brands and as an opportunity to increase brand exclusiveness, customer loyalty
and competitive differentiation. Private brand merchandise represented
approximately 13% of 2000 total sales.
Our business, like that of most retailers, is subject to seasonal
fluctuations, with the major portion of sales and income realized during the
latter half of each year, which includes the back-to-school and holiday seasons.
MARKETING
We attract customers by offering services such as free gift wrap and
special order capability. In addition, through our "Certified Value" program, we
maintain everyday value prices on staple items such as turtlenecks, T-shirts,
shorts and denim within major product groups.
Our advertising and promotional programs are conducted through newspaper
advertisements, direct mail and, to a lesser extent, local television and radio.
We maintain an in-house advertising group that produces substantially all our
print advertising.
The effectiveness of our direct mail efforts has been greatly enhanced
through database management systems. By accurately identifying the predictors of
response to direct mail pieces, we have the ability to rank, score and select
customers with event-specific information.
MANAGEMENT INFORMATION AND CONTROL SYSTEM
We are in the process of enhancing our management information and control
system in order to expedite the flow of merchandise through the distribution
centers. We believe this will provide improved productivity, lower labor costs
and better in-stock availability.
We also continue to modernize our in-store systems. A new Point-of-Sale
System will be piloted in 2001 followed by a rollout, including an updated gift
registry system, to all stores. This technology upgrade will simplify associate
training, improve inventory management and enhance our customers' shopping
experience.
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CUSTOMER CREDIT
Our customers may pay for their purchases with The Bon-Ton proprietary
credit card, Visa, Mastercard, cash or check.
The Bon-Ton credit card holders generally constitute our most loyal and
active customers; during 2000, the average dollar amount for proprietary credit
card purchases substantially exceeded the average dollar amount for cash
purchases. We believe our credit card is a particularly productive tool for
customer segmentation and target marketing.
The following table summarizes the percentage of total sales generated by
payment type:
TYPE OF PAYMENT
2000 1999 1998
---- ---- ----
Bon-Ton credit card 48% 47% 48%
Visa, Mastercard, American Express* 26 25 23
Cash or check 26 28 29
--- --- ---
Total 100% 100% 100%
=== === ===
* The Company ceased accepting American Express during 1998.
During 2000, we issued 276,000 Bon-Ton credit cards for newly opened
accounts.
Sales on The Bon-Ton's proprietary credit card represent a significant
portion of our business. Deterioration in the quality of these accounts
receivable because customers fail to pay on time or at all, or any adverse
changes in laws regulating the granting or servicing of credit, could have a
material adverse effect on our business and financial condition.
COMPETITION
We face competition for customers from traditional department stores such
as those operated by J.C. Penney Company, Inc., Federated Department Stores
Inc., The May Department Stores Company, Kohl's Corporation and Sears, Roebuck
and Co., from regional department stores such as Boscov's Department Store,
Inc., and from specialty stores and catalogue and internet retailers. In a
number of our markets, we compete with national department store chains which
are better established, and in other markets we face potential competition from
national chains that have not yet entered such markets. In all markets, we
generally compete for customers with department stores offering moderately
priced goods. Many of our competitors have substantially greater financial and
other resources than The Bon-Ton, and some of our competitors have greater
leverage with vendors, which may allow such competitors to obtain merchandise
more easily or on better terms. In several of our markets, we compete with
department stores which have a larger store or a better location in the market.
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We believe we compare favorably with our competitors with respect to
quality, depth and breadth of merchandise, prices for comparable quality
merchandise, customer service and store environment. We also believe our
knowledge of secondary markets, developed over many years of operation, gives us
a competitive advantage as we focus on secondary markets as our primary area of
operation.
ASSOCIATES
As of February 3, 2001, we had approximately 3,700 full-time and 5,300
part-time associates. We also employ additional part-time associates during peak
periods. None of our associates are represented by a labor union. We believe
that our relationship with our associates is good.
EXECUTIVE OFFICERS
The Executive Officers of the Company are:
NAME AGE POSITION
- ---- --- --------
Tim Grumbacher 61 Chairman of the Board and Chief Executive Officer
Michael L. Gleim 58 Vice Chairman and Chief Operating Officer and
Director
Frank Tworecke 54 Vice Chairman and Chief Merchandising Officer and
Director
James H. Baireuther 54 Executive Vice President and Chief Financial Officer
Lynn C. Derry 45 Senior Vice President - General Merchandise Manager
H. Stephen Evans 51 Senior Vice President - Real Estate, Legal and
Governmental Affairs
John S. Farrell 55 Senior Vice President - Stores
Robert A. Geisenberger 40 Senior Vice President - General Merchandise Manager
William T. Harmon 46 Senior Vice President - Sales Promotion and Marketing
Gary Kellman 58 Senior Vice President - General Merchandise Manager
Patrick J. McIntyre 56 Senior Vice President - Chief Information Officer
Jeffrey D. Moore 34 Senior Vice President - General Merchandise Manager
Ryan J. Sattler 56 Senior Vice President - Human Resources and
Operations
Stephanie Stough 49 Senior Vice President - Merchandise Planning and
Control
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Mr. Tworecke joined the Company in November 1999 as Vice Chairman and
Chief Merchandising Officer and a Director. From January 1996 until November
1999, he was President and Chief Operating Officer of Jos. A. Bank Clothiers,
and from August 1994 to December 1995, he was President of Merry- Go-Round
Enterprises, Inc.
Mr. Baireuther was elected Senior Vice President and Chief Financial
Officer in June 1996 and appointed Executive Vice President and Chief Financial
Officer in January 2000. From September 1994 until June 1996, he was Senior Vice
President - Chief Financial Officer at DAC Vision, a manufacturer and
distributor of optical supplies. From 1989 to 1994, he was Executive Vice
President - Chief Financial Officer for Eye Care Centers of America, a retail
optical superstore chain and wholly-owned subsidiary of Sears. From 1969 to
1989, Mr. Baireuther held a variety of positions with Sears, Roebuck and Co.
including Director of Mergers and Acquisitions, Manager of Corporate Financial
Analysis and Controller.
Ms. Derry was appointed Senior Vice President - General Merchandise
Manager in February 2001. For more than five years prior to that time, Ms. Derry
was a Divisional Merchandise Manager for The Bon-Ton.
Mr. Farrell was appointed Senior Vice President in June 2000. For more
than five years prior to that time, Mr. Farrell was Vice President - Stores for
The Bon-Ton.
Mr. Geisenberger was appointed Senior Vice President - General Merchandise
Manager in July 2000. For more than five years prior to that time, Mr.
Geisenberger was a Divisional Merchandise Manager for The Bon-Ton.
Mr. Harmon joined the Company as Senior Vice President - Sales Promotion,
Marketing and Strategic Planning in June 1997. From 1989 to 1997, Mr. Harmon was
with The May Company, serving as Senior Vice President - Merchandise Planning of
Foley's from November 1994 to June 1997, Vice President - Merchandise Planning
of Foley's from December 1992 to October 1994, and Vice President - Assistant to
the President of Filene's from June 1989 to December 1992. Prior to that, he was
employed by McKinsey & Company for seven years.
Mr. Kellman became Senior Vice President - General Merchandise Manager in
August 1999. From November 1996 to April 1999, he was Executive Vice President
of Today's Man, Inc., and from March 1989 to June 1996 he was Senior Vice
President - Merchandising at Lord & Taylor.
Mr. McIntyre joined The Bon-Ton as Senior Vice President - Chief
Information Officer in June 1997. From 1988 to June 1997, Mr. McIntyre was
Senior Vice President - Chief Information Officer for the Cato Corporation, a
women's specialty retailer. Prior to that, he held similar positions with the
Higbee Company and Burdine's Department Store.
Mr. Moore was appointed Senior Vice President - General Merchandise
Manager in February 2001. He joined the Company as Vice President - Divisional
Merchandise Manager in July 1998. From July 1990 to 1998, Mr. Moore was with
Lord & Taylor, most recently as the divisional merchandise manager for men's
clothing and furnishings.
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Messrs. Grumbacher, Gleim, Evans, Sattler and Ms. Stough have been
executive officers of The Bon-Ton for more than five years.
CAUTIONARY STATEMENTS RELATING TO FORWARD-LOOKING INFORMATION
The Company and its representatives may, from time to time, make written
or verbal forward-looking statements. Those statements relate to developments,
results, conditions or other events the Company expects or anticipates will
occur in the future. Without limiting the foregoing, those statements may relate
to future revenues, earnings, store openings, market conditions and the
competitive environment. Forward-looking statements are based on management's
then-current views and assumptions and, as a result, are subject to risks and
uncertainties that could cause actual results to differ materially from those
projected.
All forward-looking statements are qualified by the following which
contain several of the important factors that could cause actual results to
differ materially from those predicted by the forward-looking statements:
Competitive, Sales, and Gross Margin Pressures
Our retail business is highly competitive. We compete for customers,
employees, locations, products, services and other important items necessary for
the successful operation of our businesses with local, regional and national
retailers. Those competitors, some of which have greater financial and other
resources than those of the Company, include department stores, specialty
apparel stores, outlet stores, discount stores, general and mass merchandisers,
mail-order and electronic commerce retailers, and other forms of retail
commerce. Changes in the pricing and other practices of those competitors may
affect our expected results by decreasing our sales or gross margin percentage.
Customer Trends
It is difficult to predict what merchandise consumers will want. A
substantial part of our business is dependent on our ability to make the correct
trend decisions for a wide variety of goods and services. Failure to accurately
predict constantly changing consumer tastes, preferences, spending patterns and
other lifestyle decisions could adversely affect short-term results and
long-term relationships with our customers.
Credit Operations
Sales of merchandise and services are facilitated by the Company's credit
card operations. These credit card operations also generate additional revenue
from fees related to extending credit. Our ability to extend credit to our
customers depends on many factors including compliance with federal and state
laws which may change from time to time. In addition, changes in credit card
use, payment patterns and default rates may result from a variety of economic,
legal, social and other factors that we cannot control or predict with
certainty. Changes that adversely affect our ability to extend credit and
collect payments could negatively affect our results and financial condition.
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General Economic Conditions
General economic factors that are beyond our control influence the
Company's forecasts and directly affect performance. These factors include
interest rates, recession, inflation, deflation, consumer credit availability,
consumer debt levels, tax rates and policy, unemployment trends and other
matters that influence consumer confidence and spending. Increasing volatility
in financial markets may cause these factors to change with a greater degree of
frequency and magnitude. Increases in interest rates may increase our financing
costs.
Product Sourcing
The products we sell are sourced from a wide variety of domestic and
international vendors. Our ability to find qualified vendors and access products
in a timely and efficient manner is a significant challenge which is typically
even more difficult with respect to goods sourced outside of the United States.
Trade restrictions, tariffs, currency exchange rates, transport capacity and
costs, and other factors significant to this trade are beyond our control and
could affect our business.
Advertising and Marketing Programs
The Company spends extensively on advertising and marketing. Our business
depends on high customer traffic in our stores and effective marketing. If our
advertising and marketing efforts are not effective, this could negatively
affect our results.
Inventory Control
The Company's merchants focus on inventory levels and balance these levels
with plans and trends. Excess inventories could result in significant markdowns,
which could adversely affect our results.
Cost Containment
The Company's performance depends on appropriate management of its expense
structure, including its selling, general and administrative costs. The Company
is continuously focused on reducing expenses as a percent of sales. The
Company's failure to meet its expense budget or to appropriately reduce expenses
during a weak sales season could adversely affect our results.
Other Factors
Other factors that could cause actual results to differ materially from
those predicted include: weather, changes in the availability or cost of
capital, the availability of suitable new store locations on acceptable terms,
shifts in the seasonality of shopping patterns, work interruptions, the effect
of excess retail capacity in our markets, material acquisitions or dispositions,
or adverse results in material litigation.
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The foregoing list of important factors is not exclusive, and the Company
does not undertake to revise any forward-looking statement to reflect events or
circumstances that occur after the date the statement is made.
ITEM 2. PROPERTIES.
Our stores, which all operate under "The Bon-Ton" name, vary in size from
approximately 33,000 to 160,000 square feet.
The following table sets forth the number of stores at the beginning and
end of each of the last five years:
Fiscal Year 2000 1999 1998 1997 1996
- ----------- ---- ---- ---- ---- ----
Number of stores:
Beginning of year 72 65 64 64 68
Additions 1 7 2 0 1
Closings 0 0 (1) 0 (5)
--- --- --- --- ---
End of year 73 72 65 64 64
We plan to maintain our growth by expanding and upgrading existing stores
and by opening new stores. In addition, we will consider acquisitions of
department store companies or their real estate assets if and when such
opportunities arise. Our market positioning strategy has been to locate new
stores or acquire existing companies or their stores in secondary markets
generally within or contiguous to existing areas of operations.
In November 2000, we opened stores in Newburgh, New York (61,800 square
feet) and in Scranton, Pennsylvania (102,500 square feet). The Scranton store
replaced a smaller store (57,600 square feet) in that market. We also expanded
our store in Frederick, Maryland by 19,800 square feet.
The following table provides certain information regarding our store
properties:
APPROXIMATE
SQUARE YEAR OPENED
MARKET LOCATION FOOTAGE OR ACQUIRED
------ -------- ------- -----------
PENNSYLVANIA
Allentown South Mall 101,800 1994
Bethlehem Westgate Mall 102,000 1994
Bloomsburg Columbia Mall 46,100 1988
Butler Clearview Mall 100,800 1982
Carlisle Carlisle Plaza Mall 59,900 1977
Chambersburg Chambersburg Mall 55,600 1985
Doylestown Doylestown Shopping Center 55,500 1994
Easton Palmer Park Mall 115,100 1994
Greensburg Westmoreland Mall 100,000 1987
Hanover North Hanover Mall 67,600 1971
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APPROXIMATE
SQUARE YEAR OPENED
MARKET LOCATION FOOTAGE OR ACQUIRED
------ -------- ------- -----------
Harrisburg Capital City Commons 141,200 1987
Colonial Park Shopping Center 136,500 1987
Indiana Indiana Mall 60,400 1979
Johnstown The Galleria 80,900 1992
Lancaster Park City Center 144,800 1992
Lebanon Lebanon Plaza Mall 53,700 1994
Lewistown Central Business District 46,700 1972
Oil City Cranberry Mall 45,200 1982
Pottstown Coventry Mall 88,300 1999
Pottsville Schuylkill Mall 61,100 1987
Quakertown Richland Mall 88,100 1994
Reading Berkshire Mall 159,400 1987
Scranton The Mall at Steamtown 102,500 2000
State College Nittany Mall 70,200 1994
Stroudsburg Stroud Mall 87,000 1994
Sunbury Susquehanna Valley Mall 90,000 1978
Trexlertown Trexler Mall 54,000 1994
Uniontown Uniontown Mall 71,000 1976
Warren Warren Mall 50,000 1980
Washington Crown Washington Center 78,100 1987
Williamsport Lycoming Mall 60,900 1986
Wilkes-Barre Midway Shopping Center 66,000 1987
Wyoming Valley Mall 159,500 1987
York York Galleria 132,000 1989
Queensgate Shopping Center 85,100 1962
West Manchester Mall 80,200 1981
NEW YORK
Binghamton Oakdale Mall 80,000 1981
Buffalo Northtown Plaza 100,800 1994
Walden Galleria 150,000 1994
Eastern Hills Mall 151,200 1994
McKinley Mall 97,200 1994
Sheridan/Delaware Plaza 124,100 1994
Southgate Plaza 100,500 1994
Elmira Arnot Mall 74,800 1995
Glens Falls Aviation Mall 80,300 1999
Ithaca Pyramid Mall 52,400 1991
Jamestown Chautauqua Mall 59,900 1998
Lockport Lockport Mall 82,000 1994
Massena St. Lawrence Centre 51,000 1994
Newburgh Newburgh Mall 61,800 2000
Niagara Falls Summit Park Mall 88,100 1994
Olean Olean Mall 73,000 1994
Rochester Greece Ridge Center 144,600 1996
The Marketplace Mall 100,000 1995
Irondequoit Mall 102,600 1995
Eastview Mall 120,600 1995
Saratoga Springs Wilton Mall 71,700 1993
Syracuse Carousel Center 80,000 1994
Camillus Mall 64,700 1994
Great Northern Mall 98,400 1994
Shoppingtown Mall 70,100 1994
Watertown Salmon Run Mall 50,200 1992
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APPROXIMATE
SQUARE YEAR OPENED
MARKET LOCATION FOOTAGE OR ACQUIRED
------ -------- ------- -----------
MARYLAND
Cumberland Country Club Mall 60,900 1981
Frederick Frederick Towne Mall 97,700 1972
Hagerstown Valley Mall 126,000 1974
NEW JERSEY
Brick Brick Plaza 53,500 1999
Phillipsburg Phillipsburg Mall 65,000 1994
Red Bank Central Business District 33,300 1999
WEST VIRGINIA
Martinsburg Martinsburg Mall 65,800 1994
CONNECTICUT
Hamden Hamden Mart 58,900 1999
MASSACHUSETTS
Westfield Westfield Shops 50,600 1998
NEW HAMPSHIRE
Concord Steeplegate Mall 87,700 1999
VERMONT
S. Burlington University Mall 60,000 1999
We lease 65 of our stores and own eight stores, two of which are
subject to ground leases. We lease a total of 178,600 square feet for our
executive and administrative offices in York, Pennsylvania, lease our 143,700
square foot distribution center in York, Pennsylvania, and lease our 326,000
square foot distribution center in Allentown, Pennsylvania.
ITEM 3. LEGAL PROCEEDINGS.
We are a party to legal proceedings and claims which arise during
the ordinary course of business. We do not expect the ultimate outcome of all
such litigation and claims to have a material adverse effect on our financial
position or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Common Stock is traded on the Nasdaq Stock Market (symbol: BONT).
There is no established public trading market for the Class A Common Stock. The
Class A Common Stock is convertible on a share for share basis into Common
Stock. The following table sets forth the high and low sales price of the Common
Stock as furnished by Nasdaq:
2000 1999
----------------- --------------------
High Low High Low
---- --- ---- ---
1st Quarter $4.000 $2.281 $8.125 $4.500
2nd Quarter 2.875 1.750 6.719 5.438
3rd Quarter 2.438 1.688 5.688 3.625
4th Quarter 3.500 1.688 6.375 3.438
On April 5, 2001, there were approximately 332 shareholders of record of
Common Stock and five shareholders of record of Class A Common Stock.
We have not paid cash dividends since our initial public offering in
September 1991 and do not anticipate paying any cash dividends in the
foreseeable future. The Company intends to retain its earnings, if any, for the
operation and expansion of the business. The payment and rate of future
dividends, if any, are subject to the discretion of the Board of Directors and
will depend upon earnings, financial condition, capital requirements,
contractual restrictions under current indebtedness and other factors. Our
revolving credit agreement contains restrictions on our ability to pay dividends
and make other distributions.
ITEM 6. SELECTED FINANCIAL DATA.
Item 6 is hereby incorporated by reference to the material under "Selected
Consolidated Financial and Operating Data" on page 22 of our Annual Report,
attached hereto as Exhibit 13.1.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Item 7 is hereby incorporated by reference to the material under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 23 through 27 of our Annual Report, attached hereto as
Exhibit 13.2.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Item 7A is hereby incorporated by reference to the material under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 23 through 27 of our Annual Report, attached hereto as
Exhibit 13.2.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Item 8 is hereby incorporated by reference to the Report of Independent
Public Accountants, Consolidated Financial Statements and Notes thereto on pages
28 through 45 of our Annual Report, attached hereto as Exhibit 13.3.
ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information regarding executive officers is included in Part I under
the heading Executive Officers. The remainder of the information called for by
this Item will be contained in our Proxy Statement and is hereby incorporated by
reference thereto.
ITEM 11. EXECUTIVE COMPENSATION.
The information called for by this Item will be contained in our Proxy
Statement and is hereby incorporated by reference thereto (other than the
information called for by Items 402(k) and (l) of Regulation S-K, which is not
incorporated herein by reference).
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information called for by this Item will be contained in our Proxy
Statement and is hereby incorporated by reference thereto.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information called for by this Item will be contained in our Proxy
Statement and is hereby incorporated by reference thereto.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as part of this report:
1. Consolidated Financial Statements -- See Item 8 above.
2. Consolidated Financial Statement Schedules -- See the Index to
Consolidated Financial Statement Schedules on page F-1.
3. The Securities and Exchange Commission allows us to "incorporate by
reference" information into this Form 10-K, which means we can
disclose important information by referring to another document
filed with the Commission. The following are exhibits to this Form
10-K and, if incorporated by reference, we have indicated the
document previously filed with the Commission in which the exhibit
was included.
EXHIBIT
NO. DESCRIPTION DOCUMENT IF INCORPORATED BY REFERENCE
------- ----------- -------------------------------------
3.1 Articles of Incorporation Exhibit 3.1 to the Report on Form
8-B, File No. 0-19517 ("Form 8-B")
3.2 Bylaws Exhibit 3.2 to Form 8-B
10.1 Shareholder's Agreement by and among Exhibit 10.3 to Amendment No. 2 to
the Company and the shareholders the Registration Statement on Form
named therein S-1, File No. 33-42142 ("1991 Form S-1")
* 10.2 (a) Employment Agreement with Heywood Exhibit 99 to the Report on Form 8-K
Wilansky dated March 26, 1998
* (b) The Bon-Ton Stores, Inc. Supplemental Exhibit 10.2(b) to the Registration
Executive Retirement Plan for Heywood Statement on Form S-1, File No.
Wilansky 333-48811 ("1998 Form S-1")
* (c) The Bon-Ton Stores, Inc. Five Year Exhibit 10.2(c) to 1998 Form S-1
Cash Bonus Plan for Heywood Wilansky
* (d) The Bon-Ton Stores, Inc. Performance Exhibit 4 to the Registration
Based Stock Incentive Plan for Statement on Form S-8, File
Heywood Wilansky No. 333-58591
* (e) First Amendment to Employment Exhibit 10.1 to the Quarterly Report
Agreement with Heywood Wilansky on Form 10-Q for the quarter ended
April 29, 2000 ("4/29/00 10-Q")
* (f) 2000 Performance-Based Compensation Exhibit 10.2 to the 4/29/00 10-Q
Plan for Heywood Wilansky
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* (g) Separation Agreement and General Exhibit 10.3 to the Quarterly Report
Release between The Bon-Ton Stores, on Form 10-Q for the quarter ended
Inc. and Heywood Wilansky. July 29, 2000 ("7/29/00 10-Q")
* 10.3 (a) Employment Agreement with Michael L. Exhibit 10.4 to Form 8-B
Gleim
* (b) First Amendment to Employment Exhibit 10.1 to the Quarterly Report
Agreement with Michael L. Gleim on Form 10-Q for the quarter ended
October 31, 1998
* (c) Second Amendment to Employment Exhibit 10.3(c) to the Annual Report
Agreement with Michael L. Gleim on Form 10-K for the fiscal year
ended January 29, 2000 ("1999 Form
10-K")
* 10.4 Employment Agreement with Frank Exhibit 10.2 to the Quarterly Report
Tworecke on Form 10-Q for the quarter ended
October 30, 1999
* 10.5 Form of severance agreement with Exhibit 10.14 to Form 8-B
certain executive officers
* 10.6 Supplemental Retirement Plan for Exhibit 10.6 to the 1999 Form 10-K
James H. Baireuther
* 10.7 (a) Amended and Restated 1991 Stock Exhibit 4.1 to the Registration
Option and Restricted Stock Plan Statement on Form S-8, File No.
333-36633
* (b) Phantom Equity Replacement Stock Exhibit 10.18 to 1991 Form S-1
Option Plan
10.8 Purchase Agreement among the Company,
M. Thomas Grumbacher and MBM Land
Associates Limited Partnership, for
the land underlying each of the York
Galleria store and the York
distribution center
10.9 (a) Sublease of Oil City, Pennsylvania Exhibit 10.16 to 1991 Form S-1
store between the Company and M.
Thomas Grumbacher
(b) First Amendment to Oil City, Exhibit 10.22 to Amendment No. 1 to
Pennsylvania sublease 1991 Form S-1
(c) Corporate Guarantee with respect to Exhibit 10.26 to Amendment No. 1 to
Oil City, Pennsylvania lease 1991 Form S-1
* 10.10 The Company's Profit Exhibit 10.24 to the Annual Report on
Sharing/Retirement Savings Plan, Form 10-K for the fiscal year ended
amended and restated as of July 1, January 28, 1995
1994
10.11 (a) Amended and Restated Receivables Exhibit 10.16(a) to Amendment No. 2
Purchase Agreement dated as of to 1998 Form S-1
January 12, 1995 among The Bon-Ton
Receivables Corp., The Bon-Ton
Receivables Partnership, L.P., Falcon
Asset Securitization Corporation, The
First National Bank of Chicago, and
the other financial institutions
party thereto
15
16
(b) Amendment dated as of June 30, 1995 Exhibit 10.16(b) to Amendment No. 1
to Amended and Restated Receivables to 1998 Form S-1
Purchase Agreement
(c) Amendment dated as of October 29, Exhibit 10.1 to the Quarterly Report
1999 to Amended and Restated on Form 10-Q for the quarter ended
Receivables Purchase Agreement October 30, 1999
* 10.12 Management Incentive Plan and Exhibit 10.13 to the Annual Report on
Addendum to Management Incentive Plan Form 10-K for the fiscal year ended
February 1, 1997 ("1996 Form 10-K")
* 10.13 The Bon-Ton Stores, Inc. Long-Term Exhibit 10.14 to 1996 Form 10-K
Incentive Plan For Principals
* 10.14 The Bon-Ton Stores, Inc. 2000 Stock Exhibit 10.2 to the 7/29/00 10-Q
Incentive Plan
10.15 (a) Credit Agreement dated as of April Exhibit 10.1 to the Quarterly Report
15, 1997 among the Company, Adam, on Form 10-Q for the quarter ended
Meldrum & Anderson Co., Inc., and The May 3, 1997
Bon-Ton Stores of Lancaster, Inc.,
the Other Credit Parties Signatory
thereto, the Lenders Signatory
thereto from time to time, the First
National Bank of Boston and General
Electric Capital Corporation
(b) First Amendment to Credit Agreement Exhibit 10.3(b) to 1998 Form S-1
(c) Second Amendment to Credit Agreement Exhibit 10.3(c) to 1998 Form S-1
(d) Third Amendment to Credit Agreement Exhibit 10.3(d) to 1998 Form S-1
(e) Fourth Amendment to Credit Agreement Exhibit 10.2 to the Quarterly Report
on Form 10-Q for the quarter ended
October 31, 1998
(f) Fifth Amendment to Credit Agreement Exhibit 10.14(f) to the Annual Report
on Form 10-K for the fiscal year ended
January 30, 1999
(g) Sixth Amendment to Credit Agreement Exhibit 10.5(g) to the 1999 Form 10-K
(h) Seventh Amendment to Credit Agreement Exhibit 10.1 to the 7/29/00 10-Q
13.1 Page 22 of the Annual Report.
13.2 Pages 23 through 27 of the Annual
Report.
13.3 Pages 28 through 45 of the Annual
Report.
21. Subsidiaries of The Bon-Ton.
23. Consent of Arthur Andersen LLP.
16
17
(b) Reports on Form 8-K filed during the fourth quarter.
None
----------------------------------
* Constitutes a management contract or compensatory plan or arrangement.
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.
THE BON-TON STORES, INC.
Dated: April 16, 2001 By: /s/ Tim Grumbacher
------------------
Tim Grumbacher
Chairman of the Board
Chief Executive Officer
17
18
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 capacities and on the dates indicated.
Signature Capacity Date
--------- -------- ----
/s/ Tim Grumbacher Chairman of the Board April 16, 2001
--------------------------------- and Chief Executive Officer
Tim Grumbacher
/s/ Samuel J. Gerson Director April 16, 2001
---------------------------------
Samuel J. Gerson
/s/ Michael L. Gleim Vice Chairman, Chief April 16, 2001
--------------------------------- Operating Officer
Michael L. Gleim and Director
/s/ Lawrence J. Ring Director April 16, 2001
---------------------------------
Lawrence J. Ring
/s/ Robert C. Siegel Director April 16, 2001
---------------------------------
Robert C. Siegel
/s/ Leon D. Starr Director April 16, 2001
---------------------------------
Leon D. Starr
/s/ Frank Tworecke Vice Chairman, Chief April 16, 2001
--------------------------- Merchandising Officer
Frank Tworecke and Director
/s/ Leon F. Winbigler Director April 16, 2001
---------------------------------
Leon F. Winbigler
/s/ Thomas W. Wolf Director April 16, 2001
---------------------------------
Thomas W. Wolf
/s/ James H. Baireuther Executive Vice President April 16, 2001
--------------------------------- and Chief Financial Officer
James H. Baireuther (principal financial and
accounting officer)
18
19
INDEX TO CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS............................... F-2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS....................... F-3
20
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Bon-Ton Stores, Inc.:
We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements of The Bon-Ton Stores, Inc. included in
this annual report on form 10-K and have issued our report thereon dated March
7, 2001. Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the accompanying
index is the responsibility of the Company's management and is presented for
purposes of complying with the Securities and Exchange Commission's rules and is
not part of the basic financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
/s/ Arthur Andersen LLP
Philadelphia, PA
March 7, 2000
F-2
21
SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS
THE BON-TON STORES, INC. AND SUBSIDIARIES
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- ------- ---------- ---------- --------- ---------- -----------
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS OTHER END OF
CLASSIFICATION OF PERIOD & EXPENSES INCREASE DEDUCTIONS PERIOD
- -------------- ---------- ---------- -------- ---------- ----------
Year ended January 30, 1999:
Allowance for doubtful
accounts................. $1,977,000 $ 8,851,000 (1) $ -- $(7,136,000)(2) $3,692,000
Reserve for store closing.. $5,471,000 $ -- $ -- $(2,663,000)(3) $2,808,000
Year ended January 29, 2000:
Allowance for doubtful
accounts................. $3,692,000 $ 7,038,000 (1) $ -- $(7,563,000)(2) $3,167,000
Reserve for store closing.. $2,808,000 $(2,492,000)(4) $ -- $ (86,000)(3) $ 230,000
Year ended February 3, 2001:
Allowance for doubtful
accounts................. $3,167,000 $ 7,197,000 (1) $ -- $(6,919,000)(2) $3,445,000
Reserve for store closing.. $ 230,000 $ -- $ -- $ (140,000)(3) $ 90,000
____________________
NOTES:
(1) Provision for loss on credit sales.
(2) Uncollectible accounts, written off, net of recoveries.
(3) Store closing expenses, net of monies received from asset liquidation.
(4) Restructuring income, relating to the lease termination as discussed in
Note 16 of the financial statements.
F-3
22
EXHIBIT INDEX
Exhibit Description
- ------- -----------
10.8 Purchase Agreement among the Company, M. Thomas Grumbacher and MBM
Land Associates Limited Partnership.
13.1 Page 22 of the Company's Annual Report.
13.2 Pages 23 through 27 of the Company's Annual Report.
13.3 Pages 28 through 45 of the Company's Annual Report.
21. Subsidiaries of the Registrant
23. Consent of Arthur Andersen LLP