Form 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended May 2, 2009 |
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OR |
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition
period from ____________ to ____________ |
Commission file number 1-31340
THE CATO CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
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56-0484485 |
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(State or other jurisdiction
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(I.R.S. Employer |
of incorporation or organization)
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Identification No.) |
8100 Denmark Road, Charlotte, North Carolina 28273-5975
(Address of principal executive offices)
(Zip Code)
(704) 554-8510
(Registrants telephone number, including area code)
Not Applicable
(Former
name, former address and former fiscal year, if changed since last report)
Indicate by check mark 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 o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files).
Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
(Check one):
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Large accelerated filer ¨
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Accelerated filer þ
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Non-accelerated filer ¨
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Smaller reporting company ¨ |
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(Do not check if a smaller reporting company) |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
Yes o No x
As of May 19, 2009, there were 27,783,568 shares of Class A common stock and 1,743,525
shares of Class B common stock outstanding.
THE CATO CORPORATION
FORM 10-Q
Quarter Ended May 2, 2009
Table of Contents
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE CATO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
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Three Months Ended |
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May 2, |
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May 3, |
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2009 |
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2008 |
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(Unaudited) |
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(Unaudited) |
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(Dollars in thousands, |
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except per share data) |
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REVENUES |
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Retail sales |
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$ |
238,055 |
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$ |
225,791 |
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Other income (principally finance charges, late fees and
layaway charges) |
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2,972 |
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3,037 |
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Total revenues |
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241,027 |
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228,828 |
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COSTS AND EXPENSES, NET |
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Cost of goods sold (exclusive of depreciation shown below) |
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141,913 |
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141,620 |
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Selling, general and administrative (exclusive of depreciation
shown below) |
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64,644 |
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56,317 |
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Depreciation |
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5,544 |
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5,610 |
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Interest and other income |
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(1,060 |
) |
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(1,901 |
) |
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211,041 |
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201,646 |
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Income before income taxes |
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29,986 |
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27,182 |
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Income tax expense |
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11,173 |
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10,329 |
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Net income |
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$ |
18,813 |
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$ |
16,853 |
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Basic earnings per share |
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$ |
0.64 |
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$ |
0.57 |
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Diluted earnings per share |
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$ |
0.64 |
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$ |
0.57 |
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Dividends per share |
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$ |
.165 |
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$ |
.165 |
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Comprehensive income: |
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Net income |
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$ |
18,813 |
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$ |
16,853 |
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Unrealized (losses) on available-for-sale securities, net
of deferred income tax benefit |
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(26 |
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(236 |
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Net comprehensive income |
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$ |
18,787 |
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$ |
16,617 |
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See notes to condensed consolidated financial statements.
2
THE CATO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
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May 2, |
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May 3, |
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January 31, |
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2009 |
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2008 |
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2009 |
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(Unaudited) |
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(Unaudited) |
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(Dollars in thousands) |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
42,006 |
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$ |
42,091 |
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$ |
42,262 |
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Short-term investments |
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115,696 |
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76,101 |
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93,452 |
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Restricted cash |
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9,016 |
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9,037 |
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9,089 |
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Accounts receivable, net of allowance for doubtful accounts of $3,328,
$3,192 and $3,723 at May 2, 2009, May 3, 2008, and January 31,
2009, respectively |
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42,518 |
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45,570 |
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44,136 |
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Merchandise inventories |
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114,339 |
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113,227 |
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112,290 |
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Deferred income taxes |
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6,406 |
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6,837 |
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6,403 |
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Prepaid expenses |
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7,530 |
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7,659 |
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7,737 |
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Total Current Assets |
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337,511 |
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300,522 |
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315,369 |
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Property and equipment net |
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114,096 |
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122,936 |
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116,262 |
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Other assets |
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7,228 |
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4,548 |
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3,722 |
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Total Assets |
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$ |
458,835 |
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$ |
428,006 |
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$ |
435,353 |
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Current Liabilities: |
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Accounts payable |
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$ |
95,644 |
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$ |
92,041 |
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$ |
102,971 |
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Accrued expenses |
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33,901 |
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29,755 |
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29,946 |
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Accrued bonus and benefits |
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8,888 |
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4,278 |
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6,307 |
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Accrued income taxes |
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22,067 |
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17,900 |
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11,506 |
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Total Current Liabilities |
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160,500 |
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143,974 |
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150,730 |
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Deferred income taxes |
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2,528 |
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1,707 |
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2,528 |
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Other noncurrent liabilities (primarily deferred rent) |
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19,325 |
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22,399 |
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20,282 |
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Commitments and contingencies |
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-- |
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Stockholders Equity: |
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Preferred stock, $100 par value per share, 100,000 shares authorized,
none issued |
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Class A common stock, $.033 par value per share, 50,000,000
shares authorized; issued 36,443,898 shares, 36,258,360 shares and
36,303,922 shares at May 2, 2009, May 3, 2008 and
January 31, 2009, respectively |
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1,215 |
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1,209 |
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1,210 |
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Convertible Class B common stock, $.033 par value per share,
15,000,000 shares authorized; issued 1,743,525 shares
at May 2, 2009, May 3, 2008 and January 31, 2009 |
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58 |
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58 |
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58 |
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Additional paid-in capital |
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62,325 |
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59,462 |
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61,608 |
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Retained earnings |
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368,306 |
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352,098 |
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354,333 |
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Accumulated other comprehensive income |
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387 |
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473 |
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413 |
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432,291 |
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413,300 |
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417,622 |
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Less Class A common stock in treasury, at cost (8,660,333 shares,
8,461,615 shares and 8,660,333 shares at May 2, 2009, May 3, 2008
and January 31, 2009, respectively) |
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(155,809 |
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(153,374 |
) |
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(155,809 |
) |
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Total Stockholders Equity |
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276,482 |
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259,926 |
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261,813 |
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Total Liabilities and Stockholders Equity |
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$ |
458,835 |
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$ |
428,006 |
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$ |
435,353 |
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See notes to condensed consolidated financial statements.
3
THE CATO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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Three Months Ended |
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May 2, |
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May 3, |
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2009 |
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2008 |
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(Unaudited) |
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(Unaudited) |
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(Dollars in thousands) |
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OPERATING ACTIVITIES |
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Net income |
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$ |
18,813 |
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$ |
16,853 |
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Adjustments to reconcile net income to net cash provided by
operating activities: |
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Depreciation |
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5,544 |
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5,610 |
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Provision for doubtful accounts |
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924 |
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767 |
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Share-based compensation |
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426 |
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515 |
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Excess tax benefits from share-based compensation |
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(26 |
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(13 |
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Loss on disposal of property and equipment |
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149 |
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290 |
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Changes in operating assets and liabilities which provided
(used) cash: |
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Accounts receivable |
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694 |
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(1,055 |
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Merchandise inventories |
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(2,049 |
) |
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5,452 |
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Prepaid and other assets |
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(3,299 |
) |
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|
100 |
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Accrued income taxes |
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10,587 |
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9,985 |
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Accounts payable, accrued expenses and other liabilities |
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(1,740 |
) |
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(15,213 |
) |
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Net cash provided by operating activities |
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30,023 |
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23,291 |
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INVESTING ACTIVITIES |
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Expenditures for property and equipment |
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(3,533 |
) |
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(5,647 |
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Purchases of short-term investments |
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(36,590 |
) |
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(45,536 |
) |
Sales of short-term investments |
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14,316 |
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53,075 |
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Change in restricted cash |
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73 |
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Net cash provided by (used in) investing activities |
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(25,734 |
) |
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1,892 |
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FINANCING ACTIVITIES |
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Change in cash overdrafts included in accounts payable |
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(100 |
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Dividends paid |
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(4,849 |
) |
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(4,849 |
) |
Proceeds from employee stock purchase plan |
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178 |
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213 |
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Excess tax benefits from share-based compensation |
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26 |
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13 |
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Proceeds from stock options exercised |
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100 |
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48 |
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Net cash used in financing activities |
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(4,545 |
) |
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(4,675 |
) |
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Net increase (decrease) in cash and cash equivalents |
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(256 |
) |
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20,508 |
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Cash and cash equivalents at beginning of period |
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42,262 |
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21,583 |
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Cash and cash equivalents at end of period |
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$ |
42,006 |
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$ |
42,091 |
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See notes to condensed consolidated financial statements.
4
THE CATO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE THREE MONTHS ENDED MAY 2, 2009 AND MAY 3, 2008
NOTE 1 GENERAL:
The condensed consolidated financial statements have been prepared from the accounting records of
The Cato Corporation and its wholly-owned subsidiaries (the Company), and all amounts shown as of
and for the periods ended May 2, 2009 and May 3, 2008 are unaudited. In the opinion of management,
all adjustments considered necessary for a fair presentation have been included. All such
adjustments are of a normal, recurring nature unless otherwise noted. The results of the interim
period may not be indicative of the results expected for the entire year.
The interim financial statements should be read in conjunction with the consolidated financial
statements and notes thereto, included in the Companys Annual Report on Form 10-K for the fiscal
year ended January 31, 2009.
The year-end condensed consolidated balance sheet data presented for fiscal year ended January 31,
2009 was derived from audited financial statements, but does not include all disclosures required
by accounting principles generally accepted in the United States of America.
Cash equivalents consist of highly liquid investments with original maturities of three months or
less. Investments with original maturities beyond three months are classified as short-term
investments. The fair values of short-term investments are based on quoted market prices.
Short-term investments are classified as available-for-sale. As they are available for current
operations, they are classified in the Condensed Consolidated Balance Sheets as current assets.
Available-for-sale securities are carried at fair value, with unrealized gains and temporary
losses, net of income taxes, reported as a component of accumulated other comprehensive income.
Other than temporary declines in fair value of investments are recorded as a reduction in the cost
of the investments in the accompanying Condensed Consolidated Balance Sheets and a reduction of
interest and other income in the accompanying Condensed Consolidated Statements of Income and
Comprehensive Income. The cost of debt securities is adjusted for amortization of premiums and
accretion of discounts to maturity. The amortization of premiums, accretion of discounts and
realized gains and losses are included in Interest and other income.
Merchandise inventories are stated at the lower of cost (first-in, first-out method) or market as
determined by the retail inventory method.
On May 20, 2009, the Board of Directors maintained the quarterly dividend at $.165 per share or an
annualized rate of $.66 per share.
Prior year basic and diluted weighted shares and earnings per share have been adjusted based on
FASB issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment
Transactions are Participating Securities. The impact to diluted and basic earnings per share for
the prior year quarter due to the adoption of this FSP was $0.01.
5
THE CATO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE THREE MONTHS ENDED MAY 2, 2009 AND MAY 3, 2008
NOTE 2 EARNINGS PER SHARE:
FASB No. 128, Earnings Per Share, requires dual presentation of basic EPS and diluted EPS on the
face of all income statements for all entities with complex capital structures. The Company has
presented one basic EPS and one diluted EPS amount for all common shares in the accompanying
Condensed Consolidated Statement of Income. While the Companys articles of incorporation provide
the right for the Board of Directors to declare dividends on Class A shares without declaration of
commensurate dividends on Class B shares, the Company has historically paid the same dividends to
both Class A and Class B shareholders and the Board of Directors has resolved to continue this
practice. Accordingly, the Companys allocation of income for purposes of EPS computation is the
same for Class A and Class B shares and the EPS amounts reported herein are applicable to both
Class A and Class B shares.
Basic EPS is computed as net income less earnings allocated to non-vested equity awards divided by
the weighted average number of common shares outstanding for the period. Diluted EPS reflects the
potential dilution that could occur from common shares issuable through stock options and the
Employee Stock Purchase Plan.
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Three Months Ended |
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|
|
May 2, |
|
|
May 3, |
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|
2009 |
|
|
2008 |
|
|
|
(Dollars in thousands, except per share data) |
|
Basic earnings per share: |
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|
|
|
|
|
Net earnings |
|
$ |
18,813 |
|
|
$ |
16,853 |
|
Earnings allocated to non-vested equity awards |
|
|
(271 |
) |
|
|
(168 |
) |
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Net earnings available to common stockholders |
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$ |
18,542 |
|
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$ |
16,685 |
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Basic weighted-average common shares outstanding |
|
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28,954,367 |
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|
29,095,913 |
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|
|
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|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.64 |
|
|
$ |
0.57 |
|
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|
|
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Diluted earnings per share: |
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Net earnings |
|
$ |
18,813 |
|
|
$ |
16,853 |
|
Earnings allocated to non-vested equity awards |
|
|
(271 |
) |
|
|
(168 |
) |
|
|
|
|
|
|
|
Net earnings available to common stockholders |
|
$ |
18,542 |
|
|
$ |
16,685 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted-average common shares outstanding |
|
|
28,954,367 |
|
|
|
29,095,913 |
|
Dilutive effect of stock options |
|
|
17,085 |
|
|
|
17,310 |
|
|
|
|
|
|
|
|
Diluted weighted avg. shares outstanding |
|
|
28,971,452 |
|
|
|
29,113,223 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
$ |
0.64 |
|
|
$ |
0.57 |
|
|
|
|
|
|
|
|
NOTE 3 SUPPLEMENTAL CASH FLOW INFORMATION:
Income tax payments, net of refunds received, for the three months ended May 2, 2009 and May 3,
2008 were $136,000 and $339,000, respectively.
6
THE CATO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE THREE MONTHS ENDED MAY 2, 2009 AND MAY 3, 2008
NOTE 4 FINANCING ARRANGEMENTS:
As of May 2, 2009, the Company had an unsecured revolving credit agreement of $35 million. Net of
the Companys standby letter of credit for payments to the current general liability and workers
compensation insurance processor, the revolving credit agreement provided for borrowings of up to
$34.3 million. The revolving credit agreement is committed until August 2010. The credit
agreement contains various financial covenants and limitations, including the maintenance of
specific financial ratios with which the Company was in compliance as of May 2, 2009. There were
no borrowings outstanding under this credit facility during the first three months ended May 2,
2009 or May 3, 2008, or the fiscal year ended January 31, 2009. Interest on any borrowings is
based on LIBOR which was 0.41% at May 2, 2009.
At May 2, 2009 and May 3, 2008, the Company had approximately $4,045,000 and $4,968,000,
respectively, of outstanding irrevocable letters of credit relating to purchase commitments.
NOTE 5 REPORTABLE SEGMENT INFORMATION:
The Company has two reportable segments: retail and credit. The Company operated its womens
fashion specialty retail stores in 31 states at May 2, 2009, principally in the southeastern United
States. The Company offers its own credit card to its customers and all related credit
authorizations, payment processing, and collection efforts are performed by a separate subsidiary
of the Company.
The following schedule summarizes certain segment information (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
May 2, 2009 |
|
Retail |
|
|
Credit |
|
|
Total |
|
Revenues |
|
$ |
238,608 |
|
|
$ |
2,419 |
|
|
$ |
241,027 |
|
Depreciation |
|
|
5,544 |
|
|
|
|
|
|
|
5,544 |
|
Interest and other income |
|
|
(1,060 |
) |
|
|
|
|
|
|
(1,060 |
) |
Income before taxes |
|
|
29,370 |
|
|
|
616 |
|
|
|
29,986 |
|
Total assets |
|
|
384,459 |
|
|
|
74,376 |
|
|
|
458,835 |
|
Capital expenditures |
|
|
3,533 |
|
|
|
|
|
|
|
3,533 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
May 3, 2008 |
|
Retail |
|
|
Credit |
|
|
Total |
|
Revenues |
|
$ |
226,310 |
|
|
$ |
2,518 |
|
|
$ |
228,828 |
|
Depreciation |
|
|
5,600 |
|
|
|
10 |
|
|
|
5,610 |
|
Interest and other income |
|
|
(1,901 |
) |
|
|
|
|
|
|
(1,901 |
) |
Income before taxes |
|
|
26,319 |
|
|
|
863 |
|
|
|
27,182 |
|
Total assets |
|
|
357,696 |
|
|
|
70,310 |
|
|
|
428,006 |
|
Capital expenditures |
|
|
5,647 |
|
|
|
|
|
|
|
5,647 |
|
The Company evaluates performance based on income before taxes. The Company does not allocate
certain corporate expenses or income taxes to the credit segment.
7
THE CATO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE THREE MONTHS ENDED MAY 2, 2009 AND MAY 3, 2008
NOTE 5 REPORTABLE SEGMENT INFORMATION (CONTINUED):
The following schedule summarizes the direct expenses of the credit segment which are reflected in
selling, general and administrative expenses (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
May 2, |
|
|
May 3, |
|
|
|
2009 |
|
|
2008 |
|
Bad debt expense |
|
$ |
924 |
|
|
$ |
767 |
|
Payroll |
|
|
249 |
|
|
|
253 |
|
Postage |
|
|
245 |
|
|
|
273 |
|
Other expenses |
|
|
375 |
|
|
|
352 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses |
|
$ |
1,793 |
|
|
$ |
1,645 |
|
|
|
|
|
|
|
|
NOTE 6 STOCK BASED COMPENSATION:
As of May 2, 2009, the Company had three long-term compensation plans pursuant to which stock-based
compensation was outstanding or could be granted. The Companys 1987 Non-Qualified Stock Option
Plan authorized 5,850,000 shares for the granting of options to officers and key employees. The
1999 Incentive Compensation Plan and 2004 Amended and Restated Incentive Compensation Plan
authorized 1,500,000 and 1,350,000 shares, respectively, for the granting of various forms of
equity-based awards, including restricted stock and stock options to officers and key employees.
The 1999 Plan has expired as to the ability to grant new awards.
The following table presents the number of options and shares of restricted stock initially
authorized and available for grant under each of the plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1987 |
|
|
1999 |
|
|
2004 |
|
|
|
|
|
|
Plan |
|
|
Plan |
|
|
Plan |
|
|
Total |
|
Options and/or restricted stock initially authorized |
|
|
5,850,000 |
|
|
|
1,500,000 |
|
|
|
1,350,000 |
|
|
|
8,700,000 |
|
Options and/or restricted stock available for grant: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31, 2009 |
|
|
18,627 |
|
|
|
|
|
|
|
868,078 |
|
|
|
886,705 |
|
May 2, 2009 |
|
|
18,627 |
|
|
|
|
|
|
|
749,490 |
|
|
|
768,117 |
|
Stock option awards outstanding under the Companys current plans were granted at exercise prices
which were equal to the market value of the Companys stock on the date of grant, vest over five
years and expire no later than ten years after the grant date.
8
THE CATO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE THREE MONTHS ENDED MAY 2, 2009 AND MAY 3, 2008
NOTE 6 STOCK BASED COMPENSATION (CONTINUED):
The following is a summary of the changes in stock options outstanding during the three months
ended May 2, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
Average |
|
|
|
|
|
|
|
|
|
|
Average |
|
|
Remaining |
|
|
Aggregate |
|
|
|
|
|
|
|
Exercise |
|
|
Contractual |
|
|
Intrinsic |
|
|
|
Shares |
|
|
Price |
|
|
Term |
|
|
Value (a) |
|
Options outstanding at January 31, 2009 |
|
|
107,950 |
|
|
$ |
12.72 |
|
|
4.07 years |
|
$ |
124,527 |
|
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited or expired |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised |
|
|
9,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at May 2, 2009 |
|
|
98,675 |
|
|
$ |
12.90 |
|
|
3.92 years |
|
$ |
346,618 |
|
Vested and exercisable at May 2, 2009 |
|
|
87,425 |
|
|
$ |
12.61 |
|
|
3.56 years |
|
$ |
332,333 |
|
|
|
|
(a) |
|
The intrinsic value of a stock option is the amount by which the market value of the underlying
stock exceeds the exercise price of the option. |
No options were granted in fiscal 2008 or the first quarter of fiscal 2009.
As of May 2, 2009, there was approximately $38,876 of total unrecognized compensation cost related
to nonvested options, which is expected to be recognized over a remaining weighted-average vesting
period of 0.34 years. The total intrinsic value of options exercised during the first quarter ended
May 2, 2009 was approximately $72,646.
The Company recognized share-based compensation expense for nonvested options of $40,000 and
$23,000 for the first quarter ended May 2, 2009 and May 3, 2008, respectively. These expenses are
classified as a component of selling, general and administrative expenses.
SFAS No. 123R requires the benefits of tax deductions in excess of the compensation cost recognized
for those options (excess tax benefits) to be classified as financing cash flows. For the three
months ended May 2, 2009 and May 3, 2008, the Company reported $26,000 and $13,000 of excess tax
benefits as a financing cash inflow in addition to $279,000 and $261,000 in cash proceeds received
from the exercise of stock options and Employee Stock Purchase Plan purchases, respectively.
The Companys Employee Stock Purchase Plan allows eligible full-time employees to purchase a
limited number of shares of the Companys Class A Common Stock during each semi-annual offering
period at a 15% discount through payroll deductions. During the three months ended May 2, 2009 and
May 3, 2008, the Company sold 12,113 shares and 16,628 shares to employees at an average discount
of $2.60 and $2.13 per share, respectively, under the Employee Stock Purchase Plan. The
compensation expense recognized for the 15% discount given under the Employee Stock Purchase Plan
was approximately $31,000 and $35,000 for the three months ended May 2, 2009 and May 3, 2008,
respectively.
9
THE CATO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE THREE MONTHS ENDED MAY 2, 2009 AND MAY 3, 2008
NOTE 6 STOCK BASED COMPENSATION (CONTINUED):
In accordance with SFAS No. 123R, the fair value of current restricted stock awards is estimated on
the date of grant based on the market price of the Companys stock and is amortized to compensation
expense on a straight-line basis over the related vesting periods. As of May 2, 2009 and May 3,
2008, there was $4,703,272 and $6,721,625 of total unrecognized compensation cost related to
nonvested restricted stock awards, which have a remaining weighted-average vesting period of 2.7
years and 3.7 years, respectively. The total fair value of the shares recognized as compensation
expense during the first quarter ended May 2, 2009 and May 3, 2008 was $329,000 and $438,000,
respectively.
The following summary shows the changes in the shares of restricted stock outstanding during the
three months ended May 2, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average |
|
|
|
Number of |
|
|
Grant Date Fair |
|
|
|
Shares |
|
|
Value Per Share |
|
Restricted stock awards at January 31, 2009 |
|
|
439,921 |
|
|
$ |
20.46 |
|
Granted |
|
|
157,525 |
|
|
|
18.90 |
|
Vested |
|
|
(55,247 |
) |
|
|
22.89 |
|
Forfeited or expired |
|
|
(38,937 |
) |
|
|
20.43 |
|
|
|
|
|
|
|
|
|
Restricted stock awards at May 2, 2009 |
|
|
503,262 |
|
|
$ |
19.76 |
|
NOTE 7 INCOME TAXES:
For the quarter ended May 2, 2009, the Companys effective tax rate was 37.3%. During the next 12
months, various state and local taxing authorities statutes of limitations will expire and certain
state examinations may close which could result in a potential reduction of unrecognized tax
benefits of up to $2.0 million.
NOTE 8 FAIR VALUE MEASUREMENTS
In September 2006, the FASB issued SFAS 157, Fair Value Measurements. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosure of fair value measurements.
Applicable provisions of SFAS 157 were adopted by the Company effective February 3, 2008. In
February 2008, the FASB issued FASB Staff Position 157-2, Effective date of FASB Statement No. 157,
which delayed for one year the effective date of SFAS 157 for non-financial assets and
non-financial liabilities, except for items that are recognized or disclosed at fair value in the
financial statements on a recurring basis. The Companys adoption of FASB Staff Position 157-2 was
immaterial.
10
THE CATO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE THREE MONTHS ENDED MAY 2, 2009 AND MAY 3, 2008
NOTE 8 FAIR VALUE MEASUREMENTS (CONTINUED):
The following table sets forth information regarding the Companys financial assets that are
measured at fair value (in thousands) as of May 2, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using |
|
Description |
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short term investments |
|
|
115,696 |
|
|
|
115,696 |
|
|
|
|
|
|
|
|
|
Other Assets |
|
|
5,699 |
|
|
|
322 |
|
|
|
5,377 |
|
|
|
|
|
The following table sets forth information regarding the Companys financial assets that are
measured at fair value (in thousands) as of January 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using |
|
Description |
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short term investments |
|
|
93,452 |
|
|
|
90,002 |
|
|
|
3,450 |
|
|
|
|
|
Other Assets |
|
|
2,258 |
|
|
|
303 |
|
|
|
1,955 |
|
|
|
|
|
The Companys investment portfolio was primarily invested in tax exempt variable rate demand notes
and governmental debt securities held in managed funds. These securities are classified as
available-for-sale as they are highly liquid and are recorded on the balance sheet at estimated
fair value, with unrealized gains and temporary losses reported net of taxes as accumulated other
comprehensive income. Additionally, as of May 2, 2009, the Company had $1.9 million invested in
privately managed investment funds and $0.3 million of other miscellaneous equities which are
reported within other noncurrent assets in the Consolidated Balance Sheets.
As of May 2, 2009, the Company held $75.6 million in variable rate demand notes (VRDN) and
auction rate securities (ARS) issued by tax exempt municipal authorities and agencies and rated A
or better. The underlying securities have contractual maturities which generally range from six to
thirty-one years. The VRDN and ARS are recorded at estimated fair value and classified as
available-for-sale. Of the $75.6 million in VRDN and ARS, a single ARS of $3.5 million failed its
last auction as of May 2, 2009. Due to the continuing failure of the remaining ARS at auction and
because the issuer has yet to call the security, the Company has classified the failed ARS as a
long-term investment in Other Assets.
11
THE CATO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE THREE MONTHS ENDED MAY 2, 2009 AND MAY 3, 2008
NOTE 8 FAIR VALUE MEASUREMENTS (CONTINUED):
The Company classified the failed ARS security as a Level 2 item under SFAS 157 since it was not
trading within ARS auctions and there is not an actively quoted market price for this security.
Additionally, the Company valued the failed ARS investment at par using a number of market based
inputs to estimate the fair value, including: (i) the underlying credit quality of the issuer and
insurer and the probability of default of the issue; (ii) the Companys experience and observations
with ARS investments that were similar in many material aspects such as credit quality, yield,
coupon or term to the remaining failed security; (iii) the present value of future principal and
interest payments discounted at rates reflecting current market conditions, reflecting the
Companys determination that the effects on the ARS estimated fair value of the increased interest
being paid by the non-auctioning bond, as offset by a liquidity/risk
value reduction, would render the fair value materially the same as the carrying value (par); (iv) the timing of expected future
cash flows; and (v) the likelihood of repurchase at par for the security.
NOTE 9 RECENT ACCOUNTING PRONOUNCEMENTS:
In June 2008, the FASB issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Share
Based Payment Transactions Are Participating Securities. EITF 03-6-1 requires that unvested
share-based payments that contain nonforfeitable rights to dividends are participating securities
and they shall be included in the computation of EPS pursuant to the two class method. EITF 03-6-1
is effective for fiscal years beginning after December 15, 2008. The impact to diluted and basic
earnings per share for the prior year quarter due to the adoption of this FSP was $0.01.
In April 2009, the FASB issued FASB Staff Position No. 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly (FSP 157-4). FSP 157-4 provides guidance on (1)
estimating the fair value of an asset or liability when the volume and level of activity for the
asset or liability have significantly decreased and (2) identifying transactions that are not
orderly. FSP 157-4 is effective for interim and annual periods ending after June 15, 2009. The
Company is in the process of evaluating the impact of FSP 157-4, but does not expect it to have a
material impact on the Companys consolidated financial statements.
In April 2009, the FASB issued FASB Staff Position No. 115-2 and FAS 124-2, Recognition and
Presentation of Other-Than-Temporary Impairments (FSP 115-2). FASP 115-2 amends the
other-than-temporary impairment guidance for debt securities to make the guidance more operational
and to improve the presentation and disclosure of other-than-temporary impairments on debt and
equity securities. FSP 115-2 is effective for interim and annual periods ending after June 15,
2009. The Company is in the process of evaluating the impact of FSP 115-2, but does not expect it
to have a material impact on the Companys consolidated financial statements.
12
THE CATO CORPORATION
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FORWARD LOOKING INFORMATION:
The following information should be read along with the Unaudited Condensed Consolidated Financial
Statements, including the accompanying Notes appearing in this report. Any of the following are
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended: (1) statements in this
Form 10-Q that reflect projections or expectations of our future financial or economic performance;
(2) statements that are not historical information; (3) statements of our beliefs, intentions,
plans and objectives for future operations, including those contained in Managements Discussion
and Analysis of Financial Condition and Results of Operations; (4) statements relating to our
operations or activities for fiscal 2009 and beyond, including, but not limited to, statements
regarding expected amounts of capital expenditures and store openings, relocations, remodelings and
closures; and (5) statements relating to our future contingencies. When possible, we have attempted
to identify forward-looking statements by using words such as expects, anticipates,
approximates, believes, estimates, hopes, intends, may, plans, should and
variations of such words and similar expressions. We can give no assurance that actual results or
events will not differ materially from those expressed or implied in any such forward-looking
statements. Forward-looking statements included in this report are based on information available
to us as of the filing date of this report, but subject to known and unknown risks, uncertainties
and other factors that could cause actual results to differ materially from those contemplated by
the forward-looking statements. Such factors include, but are not limited to, the following:
general economic conditions including, but not limited to, the continuation or worsening of (i)
the current adverse or recessionary conditions affecting the U.S. and global economies and consumer
spending and (ii) the adverse conditions in the U.S. and global credit markets; uncertainties
regarding the impact of any governmental responses to the foregoing adverse economic and credit
market conditions; competitive factors and pricing pressures; our ability to predict fashion
trends; consumer apparel buying patterns; adverse weather conditions; inventory risks due to shifts
in market demand; and other factors discussed under Risk Factors in Part I, Item 1A of our annual
report on Form 10-K for the fiscal year ended January 31, 2009 (fiscal 2008), as amended or
supplemented, and in other reports we file with or furnish to the SEC from time to time. We do not
undertake, and expressly decline, any obligation to update any such forward-looking information
contained in this report, whether as a result of new information, future events, or otherwise.
13
THE CATO CORPORATION
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
CRITICAL ACCOUNTING POLICIES:
The Companys accounting policies are more fully described in Note 1 to the consolidated financial
statements included in the Companys Annual Report on Form 10-K. As disclosed in Note 1 of Notes to
Consolidated Financial Statements, the preparation of the Companys financial statements in
conformity with generally accepted accounting principles requires management to make estimates and
assumptions about future events that affect the amounts reported in the financial statements and
accompanying notes. Future events and their effects cannot be determined with absolute certainty.
Therefore, the determination of estimates requires the exercise of judgment. Actual results
inevitably will differ from those estimates, and such differences may be material to the financial
statements. The most significant accounting estimates inherent in the preparation of the Companys
financial statements include the allowance for doubtful accounts receivable, reserves relating to
workers compensation, general and auto insurance liabilities, reserves for inventory markdowns,
calculation of asset impairment, shrinkage accrual and reserves for uncertain tax positions.
The Companys critical accounting policies and estimates are discussed with the Audit Committee.
RESULTS OF OPERATIONS:
The following table sets forth, for the periods indicated, certain items in the Companys unaudited
Condensed Consolidated Statements of Income and Comprehensive Income as a percentage of total
retail sales:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
May 2, |
|
|
May 3, |
|
|
|
2009 |
|
|
2008 |
|
Total retail sales |
|
|
100.0 |
% |
|
|
100.0 |
% |
Other income |
|
|
1.3 |
|
|
|
1.3 |
|
Total revenues |
|
|
101.3 |
|
|
|
101.3 |
|
Cost of goods sold |
|
|
59.6 |
|
|
|
62.7 |
|
Selling, general and administrative |
|
|
27.2 |
|
|
|
24.9 |
|
Depreciation |
|
|
2.3 |
|
|
|
2.5 |
|
Interest and other income |
|
|
(0.4 |
) |
|
|
(0.8 |
) |
Income before income taxes |
|
|
12.6 |
|
|
|
12.1 |
|
Net income |
|
|
7.9 |
|
|
|
7.5 |
|
Comparison of First Quarter of 2009 with 2008
Total retail sales for the first quarter were $238.1 million compared to last years first quarter
sales of $225.8 million, a 5.4% increase. Same-store sales increased 3.0% in the first quarter of
fiscal 2009 compared to the first quarter of fiscal 2008. Total revenues, comprised of retail
sales and other income (principally, finance charges and late fees on customer accounts receivable
and layaway fees), were $241.0 million for the first quarter ended May 2, 2009 compared to $228.8
14
THE CATO CORPORATION
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED):
million for the first quarter ended May 3, 2008. The Company operated 1,285 stores at May 2, 2009
compared to 1,326 stores at the end of last years first quarter. In the first quarter of fiscal
2009, the Company opened 8 stores and closed 4 stores. The Company expects to open approximately
46 stores, relocate 2 stores and close approximately 39 stores in fiscal 2009.
Credit revenue of $2.4 million represented 1.0% of total revenues in the first quarter of fiscal
2009, compared to 2008 credit revenue of $2.5 million or 1.1% of total revenues. The slight
reduction in actual credit revenue was due to lower finance charge and late fee income from lower
sales under the Companys proprietary credit card. Credit revenue is comprised of interest earned
on the Companys private label credit card portfolio and related fee income. Related expenses
include principally bad debt expense, payroll, postage and other administrative expenses and
totaled $1.8 million in the first quarter of 2009 compared to last years first quarter expenses of
$1.6 million. The increase in costs was principally due to an increase in bad debt expense.
Other income in total, as included in total revenues, was flat at $3.0 million for the first
quarter of fiscal 2009 and the prior years comparable first quarter. Finance charges and late fee
income remained lower and were offset by an increase in layaway charges.
Cost of goods sold was $141.9 million, or 59.6% of retail sales for the first quarter of fiscal
2009, compared to $141.6 million, or 62.7% of retail sales in the first quarter of fiscal 2008.
The overall decrease in cost of goods sold as a percent of retail sales for the first quarter of
fiscal 2009 resulted primarily from lower markdowns and lower occupancy costs. The decrease in
markdowns was primarily attributable to tight inventory management and higher sell-throughs of
regular priced merchandise. Cost of goods sold includes merchandise costs, net of discounts and
allowances, buying costs, distribution costs, occupancy costs, freight and inventory shrinkage.
Net merchandise costs and in-bound freight are capitalized as inventory costs. Buying and
distribution costs include payroll, payroll-related costs and operating expenses for the buying
departments and distribution center. Occupancy expenses include rent, real estate taxes,
insurance, common area maintenance, utilities and maintenance for stores and distribution
facilities. Total gross margin dollars (retail sales less cost of goods sold) increased by 14.1%
to $96.1 million for the first quarter of fiscal 2009 compared to $84.2 million in the first
quarter of fiscal 2008. Gross margin as presented may not be comparable to those of other
entities.
Selling, general and administrative expenses (SG&A) primarily include corporate and store
payroll, related payroll taxes and benefits, insurance, supplies, advertising, bank and credit card
processing fees and bad debts. SG&A expenses were $64.6 million, or 27.2% of retail sales for the
first quarter of fiscal 2009, compared to $56.3 million, or 24.9% of retail sales in the first
quarter of fiscal 2008. SG&A expenses as a percentage of retail sales increased 230 basis points
15
THE CATO CORPORATION
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED):
for the first quarter of fiscal 2009 as compared to the prior year primarily because of an increase
in incentive based compensation expenses, legal reserves and closed store expenses. The overall
dollar increase in SG&A expenses for the first quarter of fiscal 2009 resulted primarily from
increased incentive based compensation expenses, payroll and legal reserve expenses.
Depreciation expense was $5.5 million, or 2.3% of retail sales for the first quarter of fiscal
2009, compared to $5.6 million, or 2.5% of retail sales in the first quarter of fiscal 2008.
Interest and other income decreased to $1.1 million, or 0.4% of retail sales for the first quarter
of fiscal 2009, compared to $1.9 million, or 0.8% of retail sales for the first quarter of fiscal
2008 primarily due to lower interest rates.
Income tax expense was $11.2 million or 4.7% of retail sales for the first quarter of fiscal 2009,
compared to $10.3 million, or 4.6% of retail sales for the first quarter of fiscal 2008. The first
quarter increase resulted from higher pre-tax income offset by a lower effective tax rate. The
effective income tax rate for the first quarter of fiscal 2009 was 37.3% compared to 38.0% for the
first quarter of fiscal 2008.
LIQUIDITY, CAPITAL RESOURCES AND MARKET RISK:
The Company has consistently maintained a strong liquidity position. Cash provided by operating
activities during the first three months of fiscal 2009 was $30.0 million as compared to $23.3
million in the first three months of fiscal 2008. These amounts enable the Company to fund its
regular operating needs, capital expenditure program, cash dividend payments and share repurchases.
In addition, the Company maintains $35 million of unsecured revolving credit facilities for
short-term financing of seasonal cash needs. There were no outstanding borrowings on these
facilities at May 2, 2009.
Cash provided by operating activities for the first three months of fiscal 2009 was primarily
generated by earnings adjusted for depreciation and changes in working capital. The increase of
$6.7 million for the first three months of fiscal 2009 as compared to the first three months of
fiscal 2008 was primarily due to an increase in net income, accounts payable, accrued expenses and
other liabilities, partially offset by higher inventory.
The Company believes that its cash, cash equivalents and short-term investments, together with cash
flows from operations and borrowings available under its revolving credit agreement, will be
adequate to fund the Companys dividends, share repurchases, other operating requirements and
expected capital expenditures for fiscal 2009 and for the foreseeable future.
16
THE CATO CORPORATION
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY, CAPITAL RESOURCES AND MARKET RISK (CONTINUED):
At May 2, 2009, the Company had working capital of $177.0 million compared to $156.5 million at May
3, 2008. Additionally, the Company had $2.3 million invested in privately managed investment funds
at May 2, 2009, which are included in other assets on the Condensed Consolidated Balance Sheets.
At May 2, 2009, the Company had an unsecured revolving credit agreement, which provides for
borrowings of up to $34.3 million. The revolving credit agreement is committed until August 2010.
The credit agreement contains various financial covenants and limitations, including the
maintenance of specific financial ratios with which the Company was in compliance as of May 2,
2009. There were no borrowings outstanding under these credit facilities during the first quarter
ended May 2, 2009 or the fiscal year ended January 31, 2009.
At May 2, 2009 and May 3, 2008, the Company had approximately $4.0 million and $5.0 million,
respectively, of outstanding irrevocable letters of credit relating to purchase commitments. In
addition, the Company has a standby letter of credit for payments to the current general liability
and workers compensation insurance processor.
Expenditures for property and equipment totaled $3.5 million in the first quarter of fiscal 2009,
compared to $5.6 million in last years first fiscal quarter. The expenditures for the first three
months of 2009 were primarily for the development of 8 new stores and additional investments in new
technology. In fiscal 2009, the Company is planning to invest approximately $16.8 million for
capital expenditures. This includes expenditures to open 46 new stores and relocate 2 stores.
Net cash used for investing activities totaled $25.7 million in the first quarter of fiscal 2009
compared to $1.9 million provided in the comparable period of 2008. The decrease was due primarily
to decreased sales of short-term investments.
On May 20, 2009, the Board of Directors maintained the quarterly dividend at $.165 per share or an
annualized rate of $.66 per share.
The Companys Board of Directors authorized an increase in the Companys share repurchase program
of 2,000,000 and 500,000 on August 30, 2007 and February 26, 2009, respectively. There is no
specified expiration on any of these repurchase authorizations. At May 2, 2009, 695,942 shares
remain available for repurchase in open authorizations. No shares were repurchased in the first
three months of fiscal 2009.
The Company does not use derivative financial instruments.
17
THE CATO CORPORATION
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY, CAPITAL RESOURCES AND MARKET RISK (CONTINUED):
At May 2, 2009, the Companys investment portfolio was primarily invested in tax exempt variable
rate demand notes and governmental securities held in managed funds. These securities are
classified as available-for-sale as they are highly liquid and are recorded on the balance sheet at
fair value, with unrealized gains and temporary losses reported net of taxes as accumulated other
comprehensive income. Other than temporary declines in fair value of investments are recorded as a
reduction in the cost of investments in the accompanying Condensed Consolidated Balance Sheets.
18
THE CATO CORPORATION
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK:
The Company is subject to market rate risk from exposure to changes in interest rates based on its
financing, investing and cash management activities, but the Company does not believe such exposure
is material.
ITEM 4. CONTROLS AND PROCEDURES:
We carried out an evaluation, with the participation of our principal executive officer and
principal financial officer, of the effectiveness of our disclosure controls and procedures as of
May 2, 2009. Based on this evaluation, our principal executive officer and principal financial
officer concluded that, as of May 2, 2009, our disclosure controls and procedures, as defined in
Rule 13a-15(e) under the Securities Exchange Act of 1934 (the Exchange Act), were effective to
ensure that information we are required to disclose in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported within the time periods specified in
the Securities and Exchange Commissions rules and forms and that such information is accumulated
and communicated to our management, including our principal executive officer and principal
financial officer, as appropriate to allow timely decisions regarding required disclosure.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING:
No change in the Companys internal control over financial reporting (as defined in Exchange Act
Rule 13a-15(f)) has occurred during the Companys fiscal quarter ended May 2, 2009 that has
materially affected, or is reasonably likely to materially affect, the Companys internal control
over financial reporting.
19
PART II OTHER INFORMATION
THE CATO CORPORATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable
ITEM 1A. RISK FACTORS
In addition to the other information in this report, you should carefully consider the factors
discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for our fiscal year
ended January 31, 2009. These risks could materially affect our business, financial condition or
future results; however, they are not the only risks we face. Additional risks and uncertainties
not currently known to us or that we currently deem to be immaterial may also materially adversely
affect our business, financial condition or results of operations.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
ITEM 5. OTHER INFORMATION
Not Applicable
ITEM 6. EXHIBITS
|
|
|
Exhibit No. |
|
Item |
|
|
|
3.1
|
|
Registrants Restated Certificate of Incorporation dated March
6, 1987, incorporated by reference to Exhibit 4.1 to Form S-8
of the Registrant filed February 7, 2000 (SEC File No.
333-96283). |
|
|
|
3.2
|
|
Registrants By Laws, incorporated by reference to Exhibit
99.2 to Form 8-K of the Registrant filed December 10,
2007. |
|
|
|
4.1
|
|
Rights Agreement dated December 18, 2003, incorporated by
reference to Exhibit 4.1 to Form 8-A12G of the Registrant
filed December 22, 2003 and as amended in Form 8-A12B/A filed
January 6, 2004. |
20
PART II OTHER INFORMATION
THE CATO CORPORATION
ITEM 6. EXHIBITS (CONTINUED)
|
|
|
|
|
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer. |
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer. |
|
|
|
32.1
|
|
Section 1350 Certification of Chief Executive Officer. |
|
|
|
32.2
|
|
Section 1350 Certification of Chief Financial Officer. |
21
PART II OTHER INFORMATION
THE CATO CORPORATION
Pursuant
to the requirements 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.
|
|
|
|
|
|
THE CATO CORPORATION |
|
|
|
|
|
June 10, 2009
|
|
/s/ John P. D. Cato |
|
|
|
|
|
Date
|
|
John P. D. Cato
Chairman, President and
Chief Executive Officer |
|
|
|
|
|
June 10, 2009
|
|
/s/ John R. Howe |
|
|
|
|
|
Date
|
|
John R. Howe
Executive Vice President
Chief Financial Officer |
|
22