SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 30, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________to_________________. Commission file number 1-6140 DILLARD'S, INC. (Exact name of registrant as specified in its charter) DELAWARE 71-0388071 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification Number) 1600 CANTRELL ROAD, LITTLE ROCK, ARKANSAS 72201 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (501)376-5200 Securities registered pursuant to Section 12(b) of the Act: Title of each Class Name of each exchange on which registered Class A Common Stock New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by checkmark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X ] State the aggregate market value of the voting stock held by non-affiliates of the Registrant as of March 31, 1999: $2,458,357,247 Indicate the number of shares outstanding of each of the Registrant's classes of common stock as of March 31, 1999: Class A Common Stock, $.01 par value 102,906,719 Class B Common Stock, $.01 par value 4,016,929
DOCUMENTS INCORPORATED BY REFERENCE Portions of the Annual Stockholders Report for the fiscal year ended January 30, 1999 (the "Report") are incorporated by reference into Parts I and II. Portions of the Proxy Statement for the Annual Meeting of Stockholders to be held May 15, 1999 (the "Proxy Statement") are incorporated by reference into Part III.
The Company cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this report or made by management of the Company involve risks and uncertainties and are subject to change based on various important factors. The following factors, among others, could affect the Company's financial performance and could cause actual results for 1999 and beyond to differ materially from those expressed or implied in any such forward- looking statements: economic and weather conditions in the regions in which the Company's stores are located and their effect on the buying patterns of the Company's customers, changes in consumer spending patterns and debt levels, trends in personal bankruptcies and the impact of competitive market forces. PART I ITEM 1. BUSINESS. General Dillard's, Inc. ("Company" or "Registrant") is an outgrowth of a department store originally founded in 1938 by William Dillard. The Company was incorporated in Delaware in 1964. The Company operates retail department stores located primarily in the southwest, southeast and midwest. The department store business is highly competitive. The Company has several competitors on a national and regional level as well as numerous competitors on a local level. Many factors enter into competition for the consumer's patronage, including price, quality, style, service, product mix, convenience and credit availability. The Company's earnings depend to a significant extent on the results of operations for the last quarter of its fiscal year. Due to holiday buying patterns, sales for that period average approximately one-third of annual sales. For additional information with respect to the Registrant's business, reference is made to information contained on page 12 under the headings "Net Sales," "Net Income," "Total Assets" and "Number of Employees - Average," and page 32 of the Report, which information is incorporated herein by reference. Executive Officers of the Registrant The following table lists the names and ages of all Executive Officers of the Registrant, the nature of any family relationship between them, and all positions and offices with the Registrant presently held by each person named. All of the Executive Officers listed below have been in managerial positions with the Registrant for more than five years, except for Robin Sanderford, Paul J. Schroeder, Jr. and Charles Unfried. Mr. Sanderford has been employed by the Registrant as Vice President since August 1998. From 1995 throught 1998, Mr. Sanderford was the President of the Southeast Division for Mercantile Stores, Company, Inc.("Mercantile"). From 1993 through 1995, he served as Vice President & director of real estate and long range planning for Mercantile. Mr. Schroeder has been employed by the Registrant as Vice President since January 1998. Prior to that employment, he was a Partner in St. Louis based, international law firm Bryan Cave, LLP specializing in labor and employment law. Mr. Unfried has been employed by the Registrant as Vice President since August 1998. Prior to 1998, Mr. Unfried was President of Mercantile Credit Services and and Mercantile Stores National Bank, both subsidiaries of Mercantile.
Name Age Position and Office Family Relationships William Dillard, II 54 Director; Chief Executive Son of Officer William Dillard Alex Dillard 49 Director; President Son of William Dillard Mike Dillard 47 Director; Executive Son of Vice President William Dillard H. Gene Baker 60 Vice President None Joseph P. Brennan 54 Vice President None G. Kent Burnett 54 Vice President None Drue Corbusier 52 Director; Executive Daughter of Vice President William Dillard David M. Doub 52 Vice President None James I. Freeman 49 Director; Senior Vice None President; Chief Financial Officer Randal L. Hankins 48 Vice President None T. R. Gastman 69 Vice President None Robin Sanderford 52 Vice President None Paul J. Schroeder, Jr. 50 Vice President None Burt Squires 49 Vice President None Charles Unfried 52 Vice President None ITEM 2. PROPERTIES. All of the Registrant's stores are owned or leased from a wholly- owned subsidiary or from third parties. The Registrant's third- party store leases typically provide for rental payments based upon a percentage of net sales with a guaranteed minimum annual rent, while the lease terms between the Registrant and its wholly-owned subsidiary vary. In general, the Company pays the cost of insurance, maintenance and any increase in real estate taxes related to these leases. At fiscal year end there were 335 stores in operation with gross square footage of 55 million. The Company owned or leased from a wholly owned subsidiary a total of 243 stores with 39 million square feet. The Company leased 92 stores from third parties, which totaled 16 million square feet. For additional information with respect to the Registrant's properties and leases, reference is made to information contained in Notes 2, 14 and 12, "Notes to Consolidated Financial Statements," on pages 25, 26 and 30 of the Report, which information is incorporated herein by reference.
ITEM 3. LEGAL PROCEEDINGS. The Company has no material legal proceedings pending against it. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. With respect to the market for the Company's common stock, market prices, and dividends, reference is made to information contained on page 33 of the Report, which information is incorporated herein by reference. As of March 31, 1999, there were 5,281 record holders of the Company's Class A Common Stock and 10 record holders of the Company's Class B Common Stock. ITEM 6. SELECTED FINANCIAL DATA. Reference is made to information under the heading "Table of Selected Financial Data" on pages 12 and 13 of the Report, which information is incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Reference is made to information under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operation" on pages 14 through 17 of the Report, which information is incorporated herein by reference. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Reference is made to information under the heading "Quantitative and Qualitative Disclosures About Market Risk" on page 16 of the Report which information is incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. Reference is made to the consolidated financial statements and notes thereto included on pages 19 through 31 of the Report, which are incorporated herein by reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.
PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. A. Directors of the Registrant. Information regarding directors of the Registrant is incorporated herein by reference to the information on pages 5 through 7 under the heading "Nominees for Election as Directors" and page 14 under the heading "Section 16(a) Beneficial Ownership Reporting Compliance" in the Proxy Statement. B. Executive Officers of the Registrant. Information regarding executive officers of the Registrant is incorporated herein by reference to Item 1 of this report under the heading "Executive Officers of the Registrant." Reference additionally is made to the information under the heading "Section 16(a) Beneficial Ownership Reporting Compliance" on page 14 in the Proxy Statement, which information is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION. Information regarding executive compensation and compensation of directors is incorporated herein by reference to the information beginning on page 8 under the heading "Compensation of Directors and Executive Officers" and concluding on page 11 under the heading "Compensation Committee Interlocks and Insider Participation" in the Proxy Statement. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. Information regarding security ownership of certain beneficial owners and management is incorporated herein by reference to the information on page 4 under the heading "Principal Holders of Voting Securities" and page 4 under the heading "Nominees for Election as Directors" and continuing through footnote 16 on page 7 in the Proxy Statement. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information regarding certain relationships and related transactions is incorporated herein by reference to the information on page 14 under the heading "Certain Relationships and Transactions" in the Proxy Statement and to the information regarding Mr. Davis on page 11 under the heading "Compensation Committee Interlocks and Insider Participation" in the Proxy Statement. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (a)(1)Financial Statements The following consolidated financial statements of the Registrant and its consolidated subsidiaries included in the Report are incorporated herein by reference in Item 8 of this report. Consolidated Balance Sheets - January 30, 1999 and January 31, 1998 Consolidated Statements of Income - Fiscal years ended January 30, 1999, January 31, 1998 and February 1, 1997 Consolidated Statements of Stockholders; Equity - Fiscal years ended January 30, 1999, January 31, 1998 and February 1, 1997 Consolidated Statements of Cash Flows - Fiscal years ended January 30, 1999, January 31, 1998 and February 1, 1997 Notes to Consolidated Financial Statements - Fiscal years ended January 30, 1999, January 31, 1998 and February 1, 1997 (a)(2)Financial Statement Schedules
The following consolidated financial statement schedule of the Registrant and its consolidated subsidiaries is filed pursuant to Item 14(d) (this schedule appears immediately following the signature page): Schedule II - Valuation and Qualifying Accounts All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted. (a)(3)Exhibits and Management Compensatory Plans Exhibits The following exhibits are filed pursuant to Item 14(c): Number Description * 3(a) Restated Certificate of Incorporation (Exhibit 3 to Form 10-Q for the quarter ended August 1, 1992 in 1-6140) * 3(b) By-Laws as currently in effect. (Exhibit 3(b) to Form 10-K for the fiscal year ended January 30, 1993 in 1-6140) * 4(a) Indenture between the Registrant and Chemical Bank, Trustee, dated as of October 1, 1985 (Exhibit (4) in 2-85556) * 4(b) Indenture between the Registrant and Chemical Bank, Trustee, dated as of October 1, 1986 (Exhibit (4) in 33-8859) * 4(c) Indenture between Registrant and Chemical Bank, Trustee, dated as of April 15, 1987 (Exhibit 4.3 in 33-13534) * 4(d) Indenture between Registrant and Chemical Bank, Trustee, dated as of May 15, 1988, as supplemented (Exhibit 4 in 33- 21671, Exhibit 4.2 in 33-25114 and Exhibit 4(c) to Current Report on Form 8-K dated September 26, 1990 in 1-6140) * 4(e) Indenture between Dillard Investment Co., Inc. and Chemical Bank, Trustee, dated as of April 15, 1987, as supplemented (Exhibit 4.1 in 33-13535 and Exhibit 4.2 in 33- 25113) *10(a) Retirement Contract of William Dillard dated March 8, 1997 10(b) 1998 Incentive and Nonqualified Stock Option Plan *10(c) Corporate Officers Non-Qualified Pension Plan (Exhibit 10(c) to Form 10-K for the fiscal year ended January 29, 1994 in 1- 6140) *10(d) Senior Management Cash Bonus Plan (Exhibit 10(d) to Form 10-K for the fiscal year ended January 28, 1995 in 1-6140) 12 Statement Re: Computation of Ratio of Earnings to Fixed Charges 13 Incorporated portions of the Annual Stockholders Report for the fiscal year ended January 30, 1999 21 Subsidiaries of the Registrant 23 Consent of Independent Auditors ____________ * Incorporated herein by reference as indicated.
Management Compensatory Plans Listed below are the management contracts and compensatory plans which are required to be filed as exhibits pursuant to Item 14(c): Retirement Contract of William Dillard dated March 8, 1997 1998 Incentive and Nonqualified Stock Option Plan Corporate Officers Non-Qualified Pension Plan Senior Management Cash Bonus Plan (b) Reports on Form 8-K filed during the fourth quarter: None (c) Exhibits See the response to Item 14(a)(3). (d) Financial statement schedules See the response to Item 14(a)(2).
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dillard's, Inc. Registrant /s/ James I. Freeman Date April 30,1999 James I. Freeman, Senior Vice President and Chief Financial Officer (Principal Financial & Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacity and on the date indicated. /s/William Dillard /s/Drue Corbusier William Dillard Drue Corbusier Chairman Executive Vice President and Director /s/Calvin N. Clyde, Jr. /s/Robert C. Connor Calvin N. Clyde, Jr. Robert C. Connor Director Director /s/Will D. Davis /s/Alex Dillard Will D. Davis Alex Dillard Director President and Director /s/Mike Dillard /s/William Dillard, II Mike Dillard William Dillard, II Executive Vice President and Chief Executive Officer Director and Director (Principal Executive Officer) /s/James I. Freeman /s/William H. Sutton James I. Freeman William H. Sutton Senior Vice President and Chief Director Financial Officer and Director /s/John Paul Hammerschmidt /s/William B. Harrison, Jr. John Paul Hammerschmidt William B. Harrison, Jr. Director Director /s/Jackson T. Stephens /s/John H. Johnson Jackson T. Stephens John H. Johnson Director Director /s/E. Ray Kemp E. Ray Kemp Director Date April 30,1999
INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholders of Dillard's, Inc. Little Rock, Arkansas We have audited the consolidated financial statements of Dillard's, Inc. and subsidiaries (the "Company") as of January 30, 1999 and January 31, 1998, and for each of the three years in the period ended January 30, 1999, and have issued our report thereon dated March 15, 1999; such consolidated financial statements and report are included in your 1998 Annual Report to Stockholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of Dillard's, Inc. and subsidiaries, listed in Item 14. This consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as whole, presents fairly in all material respects the information set forth therein. DELOITTE & TOUCHE LLP New York, New York March 15, 1999
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS DILLARD'S, INC. AND SUBSIDIARIES (DOLLAR AMOUNTS IN THOUSANDS) <TABLE> COL. A COL. B COL. C COL.D COL. E COL. F ADDITIONS BALANCE CHARGED TO CHARGED TO BALANCE AT BEGINNING COST AND OTHER ACCOUNTS DEDUCTIONS - AT END DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE OF PERIOD <C> <C> <C> <C> <C> <C> <C> <C> Allowance for losses on accounts receivable: Year ended January 30, 1999: $27,809 62,766 17,854 (1) 70,942 (2) $37,487 Year ended January 31, 1998: $24,169 55,816 52,176 (2) $27,809 Year ended February 1, 1997: $19,528 66,629 23 (1) 62,011 (2) $24,169 </TABLE> (1) Represents the allowance for losses on accounts acquired. (2) Accounts written off and charged to allowance for losses on accounts receivable (net of recoveries).
EXHIBIT INDEX Number Description * 3(a) Restated Certificate of Incorporation (Exhibit 3 to Form 10-Q for the quarter ended August 1, 1992 in 1-6140) * 3(b) By-Laws as currently in effect (Exhibit 3(b) to Form 10-K for the fiscal year ended January 30, 1993, in 1-6140) * 4(a) Indenture between the Registrant and Chemical Bank, Trustee, dated as of October 1, 1985 (Exhibit (4) in 2-85556) * 4(b) Indenture between the Registrant and Chemical Bank, Trustee, dated as of October 1, 1986 (Exhibit (4) in 33-8859) * 4(c) Indenture between Registrant and Chemical Bank, Trustee, dated as of April 15, 1987 (Exhibit 4.3 in 33-13534) * 4(d) Indenture between Registrant and Chemical Bank, Trustee, dated as of May 15, 1988, as supplemented (Exhibit 4 in 33-21671, Exhibit 4.2 in 33-25114 and Exhibit 4(c) to Current Report on Form 8-K dated September 26, 1990 in 1-6140) * 4(e) Indenture between Dillard Investment Co., Inc. and Chemical Bank, Trustee, dated as of April 15, 1987, as supplemented (Exhibit 4.1 in 33-13535 and Exhibit 4.2 in 33-25113) *10(a) Retirement Contract of William Dillard dated March 8,1997 10(b) 1998 Incentive and Nonqualified Stock Option Plan *10(c) Corporate Officers Non-Qualified Pension Plan (Exhibit 10(c) to Form 10-K for the fiscal year ended January 29, 1994 in 1-6140) *10(d) Senior Management Cash Bonus Plan (Exhibit 10(d) to Form 10-K for the fiscal year ended January 28, 1995 in 1-6140) 12 Statement Re: Computation of Ratio of Earnings to Fixed Charges 13 Incorporated portions of the Annual Stockholders Report for the fiscal year ended January 30, 1999 21 Subsidiaries of the Registrant 23 Consent of Independent Auditors __________________ * Incorporated herein by reference as indicated.