UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 For the Quarter ended August 1, 2009
 Commission File Number 0-19517
 THE BON-TON STORES, INC.
 2801 East Market Street
 York, Pennsylvania 17402
  Incorporated in Pennsylvania
    
    IRS No. 23-2835229
 
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller 
reporting company)
    
    Smaller reporting company o
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##### 



PART I: FINANCIAL INFORMATION
 ITEM 1.
    
    FINANCIAL STATEMENTS
 THE BON-TON STORES, INC.
CONSOLIDATED BALANCE SHEETS
 (In thousands except share and per share data)
    
    August 1,
    
    
    January 31,(Unaudited)
    
    2009
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    15,591
    
    
    $
    19,719Merchandise inventories
    
    
    675,321
    
    
    
    666,081Prepaid expenses and other current assets
    
    
    80,408
    
    
    
    113,441Total current assets
    
    
    771,320
    
    
    
    799,241Property, fixtures and equipment at cost, net of accumulated depreciation and amortization
of $551,261 and $498,556 at August 1, 2009 and January 31, 2009, respectively
    
    
    793,591
    
    
    
    832,763Deferred income taxes
    
    
    9,662
    
    
    
    9,994Intangible assets, net of accumulated amortization of $34,991 and $30,611 at August 1, 2009
and January 31, 2009, respectively
    
    
    143,548
    
    
    
    148,171Other long-term assets
    
    
    27,695
    
    
    
    31,152Total assets
    
    $
    1,745,816
    
    
    $
    1,821,321Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    178,318
    
    
    $
    143,423Accrued payroll and benefits
    
    
    29,311
    
    
    
    36,116Accrued expenses
    
    
    164,597
    
    
    
    179,073Current maturities of long-term debt
    
    
    6,283
    
    
    
    6,072Current maturities of obligations under capital leases
    
    
    4,272
    
    
    
    2,730Deferred income taxes
    
    
    10,247
    
    
    
    7,328Income taxes payable
    
    
    384
    
    
    
    62Total current liabilities
    
    
    393,412
    
    
    
    374,804Long-term debt, less current maturities
    
    
    1,065,332
    
    
    
    1,083,449Obligations under capital leases, less current maturities
    
    
    66,534
    
    
    
    65,319Other long-term liabilities
    
    
    162,723
    
    
    
    163,572Total liabilities
    
    
    1,688,001
    
    
    
    1,687,144Contingencies (Note 11)Shareholders equity:Preferred Stock  authorized 5,000,000 shares at $0.01 par value; no shares issued
    
    
    
    
    
    
    Common Stock  authorized 40,000,000 shares at $0.01 par value; issued shares of
15,949,652 and 14,880,173 at August 1, 2009 and January 31, 2009, respectively
    
    
    159
    
    
    
    149Class A Common Stock  authorized 20,000,000 shares at $0.01 par value; issued and
outstanding shares of 2,951,490 at August 1, 2009 and January 31, 2009
    
    
    30
    
    
    
    30Treasury stock, at cost - 337,800 shares at August 1, 2009 and January 31, 2009
    
    
    (1,387
    )
    
    
    (1,387
    )Additional paid-in-capital
    
    
    146,915
    
    
    
    144,577Accumulated other comprehensive loss
    
    
    (57,971
    )
    
    
    (59,464
    )(Accumulated deficit) retained earnings
    
    
    (29,931
    )
    
    
    50,272Total shareholders equity
    
    
    57,815
    
    
    
    134,177Total liabilities and shareholders equity
    
    $
    1,745,816
    
    
    $
    1,821,321
   2




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##### 



THE BON-TON STORES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
 THIRTEEN
    
    
    TWENTY-SIXWEEKS ENDED
    
    
    WEEKS ENDED(In thousands except share and per share data)
    
    August 1,
    
    
    August 2,
    
    
    August 1,
    
    
    August 2,(Unaudited)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    $
    609,228
    
    
    $
    673,384
    
    
    $
    1,253,759
    
    
    $
    1,373,632Other income
    
    
    16,076
    
    
    
    21,513
    
    
    
    34,468
    
    
    
    44,288625,304
    
    
    
    694,897
    
    
    
    1,288,227
    
    
    
    1,417,920Costs and expenses:Costs of merchandise sold
    
    
    383,097
    
    
    
    431,962
    
    
    
    803,463
    
    
    
    894,462Selling, general and administrative
    
    
    222,923
    
    
    
    246,394
    
    
    
    459,750
    
    
    
    502,168Depreciation and amortization
    
    
    28,696
    
    
    
    29,892
    
    
    
    56,794
    
    
    
    58,910Amortization of lease-related interests
    
    
    1,217
    
    
    
    1,206
    
    
    
    2,444
    
    
    
    2,414Goodwill impairment
    
    
    
    
    
    
    17,767
    
    
    
    
    
    
    
    17,767Loss from operations
    
    
    (10,629
    )
    
    
    (32,324
    )
    
    
    (34,224
    )
    
    
    (57,801
    )Interest expense, net
    
    
    23,194
    
    
    
    24,376
    
    
    
    46,120
    
    
    
    48,738Loss before income taxes
    
    
    (33,823
    )
    
    
    (56,700
    )
    
    
    (80,344
    )
    
    
    (106,539
    )Income tax provision (benefit)
    
    
    939
    
    
    
    (22,874
    )
    
    
    (141
    )
    
    
    (38,650
    )Net loss
    
    $
    (34,762
    )
    
    $
    (33,826
    )
    
    $
    (80,203
    )
    
    $
    (67,889
    )Per share amounts Basic:Net loss
    
    $
    (2.04
    )
    
    $
    (2.01
    )
    
    $
    (4.72
    )
    
    $
    (4.04
    )Basic weighted average shares outstanding
    
    
    17,006,401
    
    
    
    16,796,187
    
    
    
    16,997,170
    
    
    
    16,786,887Diluted:Net loss
    
    $
    (2.04
    )
    
    $
    (2.01
    )
    
    $
    (4.72
    )
    
    $
    (4.04
    )Diluted weighted average shares outstanding
    
    
    17,006,401
    
    
    
    16,796,187
    
    
    
    16,997,170
    
    
    
    16,786,887
   3




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##### 



THE BON-TON STORES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
 TWENTY-SIXWEEKS ENDED(In thousands)
    
    August 1,
    
    
    August 2,(Unaudited)
    
    2009
    
    
    2008Cash flows from operating activities:Net loss
    
    $
    (80,203
    )
    
    $
    (67,889
    )Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization
    
    
    56,794
    
    
    
    58,910Amortization of lease-related interests
    
    
    2,444
    
    
    
    2,414Goodwill impairment
    
    
    
    
    
    
    17,767Share-based compensation expense
    
    
    2,348
    
    
    
    2,692Loss on sale of property, fixtures and equipment
    
    
    115
    
    
    
    644Amortization of deferred financing costs
    
    
    2,021
    
    
    
    2,074Amortization of deferred gain on sale of proprietary credit card portfolio
    
    
    (1,207
    )
    
    
    (1,207
    )Deferred income taxes
    
    
    3,251
    
    
    
    (4,889
    )Changes in operating assets and liabilities:(Increase) decrease in merchandise inventories
    
    
    (9,240
    )
    
    
    44,099Decrease (increase) in prepaid expenses and other current assets
    
    
    33,033
    
    
    
    (43,252
    )Decrease in other long-term assets
    
    
    1,435
    
    
    
    3,409Increase in accounts payable
    
    
    39,513
    
    
    
    21,593Decrease in accrued payroll and benefits and accrued expenses
    
    
    (18,637
    )
    
    
    (16,061
    )Increase (decrease) in income taxes payable
    
    
    322
    
    
    
    (899
    )Increase in other long-term liabilities
    
    
    2,821
    
    
    
    8,146Net cash provided by operating activities
    
    
    34,810
    
    
    
    27,551Cash flows from investing activities:Capital expenditures
    
    
    (12,976
    )
    
    
    (52,759
    )Proceeds from sale of property, fixtures and equipment
    
    
    67
    
    
    
    83Net cash used in investing activities
    
    
    (12,909
    )
    
    
    (52,676
    )Cash flows from financing activities:Payments on long-term debt and capital lease obligations
    
    
    (336,157
    )
    
    
    (346,697
    )Proceeds from issuance of long-term debt
    
    
    316,406
    
    
    
    381,530Cash dividends paid
    
    
    (866
    )
    
    
    (1,733
    )Deferred financing costs paid
    
    
    
    
    
    
    (266
    )Decrease in bank overdraft balances
    
    
    (5,412
    )
    
    
    (10,867
    )Net cash (used in) provided by financing activities
    
    
    (26,029
    )
    
    
    21,967Net decrease in cash and cash equivalents
    
    
    (4,128
    )
    
    
    (3,158
    )Cash and cash equivalents at beginning of period
    
    
    19,719
    
    
    
    21,238Cash and cash equivalents at end of period
    
    $
    15,591
    
    
    $
    18,080
   4




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##### 



THE BON-TON STORES, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
 AccumulatedOther
    
    
    (AccumulatedClass A
    
    
    
    
    
    
    Additional
    
    
    Compre-
    
    
    Deficit)(In thousands)
    
    Common
    
    
    Common
    
    
    Treasury
    
    
    Paid-in
    
    
    hensive
    
    
    Retained(Unaudited)
    
    Stock
    
    
    Stock
    
    
    Stock
    
    
    Capital
    
    
    Loss
    
    
    Earnings
    
    
    TotalBALANCE AT JANUARY 31, 2009
    
    $
    149
    
    
    $
    30
    
    
    $
    (1,387
    )
    
    $
    144,577
    
    
    $
    (59,464
    )
    
    $
    50,272
    
    
    $
    134,177Comprehensive loss (Note 12):Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (80,203
    )
    
    
    (80,203
    )Pension and postretirement benefit plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,393
    
    
    
    
    
    
    
    2,393Change in fair value of cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (900
    )
    
    
    
    
    
    
    (900
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (78,710
    )Share-based compensation expense
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    2,338
    
    
    
    
    
    
    
    
    
    
    
    2,348BALANCE AT AUGUST 1, 2009
    
    $
    159
    
    
    $
    30
    
    
    $
    (1,387
    )
    
    $
    146,915
    
    
    $
    (57,971
    )
    
    $
    (29,931
    )
    
    $
    57,815
   5




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##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 1. BASIS OF PRESENTATION
      Recently Issued Accounting Standards
   6




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
   2. PER-SHARE AMOUNTS
    3. FAIR VALUE OF FINANCIAL INSTRUMENTS
   7




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##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
    SignificantQuoted Prices
    
    
    Other
    
    
    Significantin Active
    
    
    Observable
    
    
    UnobservableTotal Carrying
    
    
    Markets
    
    
    Inputs
    
    
    InputsValue
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)August 1, 2009
    
    $
    6,608
    
    
    $
    
    
    
    $
    6,608
    
    
    $
    January 31, 2009
    
    $
    5,708
    
    
    $
    
    
    
    $
    5,708
    
    
    $
    
   4. INTEREST RATE DERIVATIVES
   8




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##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
     Interest rate swaps (notional amount)
    
    $100,000Range of fixed pay rates
    
    5.48%  5.49%
  Balance Sheet Location
    
    Derivative Assets
    
    
    Derivative LiabilitiesOther Long-Term Liabilities
    
    $
    
    
    
    $
    6,608
  9




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##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
  Amount ofAmount of Loss
    
    
    Location of
    
    LossAmount of
    
    
    Location of Loss
    
    Reclassified
    
    
    Loss
    
    RecognizedLoss
    
    
    Reclassified from
    
    from AOCI to
    
    
    Recognized in
    
    in theRecognized
    
    
    AOCI to the
    
    the Statement
    
    
    the Statement
    
    Statement ofin OCI
    
    
    Statement of
    
    of Operations
    
    
    of Operations
    
    Operations(effective
    
    
    Operations
    
    (effective
    
    
    (ineffective
    
    (ineffectiveportion)
    
    
    (effective portion)
    
    portion)
    
    
    portion)
    
    portion)Second Quarter of 2009
    
    $
    1,201
    
    
    Interest Expense, Net
    
    $
    1,132
    
    
    Interest Expense, Net
    
    $
    26 Weeks Ended August 1, 2009
    
    $
    3,126
    
    
    Interest Expense, Net
    
    $
    2,226
    
    
    Interest Expense, Net
    
    $
    
  5. SUPPLEMENTAL BALANCE SHEET INFORMATION
  August 1,
    
    
    January 31,2009
    
    
    2009Prepaid expenses
    
    $
    38,664
    
    
    $
    32,822Other receivables
    
    
    40,482
    
    
    
    49,473Income tax receivables
    
    
    1,262
    
    
    
    31,146Total
    
    $
    80,408
    
    
    $
    113,441
  10




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##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 6. SUPPLEMENTAL CASH FLOW INFORMATION
  TWENTY-SIXWEEKS ENDEDAugust 1,
    
    
    August 2,2009
    
    
    2008Cash paid for:Interest, net of amounts capitalized
    
    $
    44,340
    
    
    $
    47,429Income taxes, net of refunds received
    
    
    (32,538
    )
    
    
    5,626Non-cash investing activities:(Decrease) increase in accrued property, fixtures and equipment
included in accounts payable and accrued expenses
    
    $
    (982
    )
    
    $
    545Assets acquired under capital leases
    
    
    4,602
    
    
    
    
 7. EXIT OR DISPOSAL ACTIVITIES
  Termination
    
    
    OtherBenefits
    
    
    Costs
    
    
    TotalBalance as of January 31, 2009
    
    $
    2,324
    
    
    $
    70
    
    
    $
    2,394Provisions:Thirteen weeks ended May 2, 2009
    
    
    1,641
    
    
    
    
    
    
    
    1,641Thirteen weeks ended August 1, 2009
    
    
    294
    
    
    
    
    
    
    
    294Payments:Thirteen weeks ended May 2, 2009
    
    
    (3,845
    )
    
    
    
    
    
    
    (3,845
    )Thirteen weeks ended August 1, 2009
    
    
    (283
    )
    
    
    (70
    )
    
    
    (353
    )Balance as of August 1, 2009
    
    $
    131
    
    
    $
    
    
    
    $
    131
    11




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##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 8. EMPLOYEE DEFINED AND POSTRETIREMENT BENEFIT PLANS
  THIRTEEN
    
    
    TWENTY-SIXWEEKS ENDED
    
    
    WEEKS ENDEDAugust 1,
    
    
    August 2,
    
    
    August 1,
    
    
    August 2,2009
    
    
    2008
    
    
    2009
    
    
    2008Service cost
    
    $
    
    
    
    $
    39
    
    
    $
    
    
    
    $
    78Interest cost
    
    
    2,820
    
    
    
    2,935
    
    
    
    5,642
    
    
    
    5,870Expected return on plan assets
    
    
    (1,765
    )
    
    
    (3,075
    )
    
    
    (3,530
    )
    
    
    (6,151
    )Recognition of prior service cost
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    2Recognition of net actuarial loss
    
    
    1,219
    
    
    
    126
    
    
    
    2,438
    
    
    
    252Net periodic benefit expense
    
    $
    2,274
    
    
    $
    26
    
    
    $
    4,550
    
    
    $
    51
   9. INCOME TAXES
     12




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##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 10. GOODWILL IMPAIRMENT
  11. CONTINGENCIES
   12. COMPREHENSIVE LOSS
  THIRTEEN
    
    
    TWENTY-SIXWEEKS ENDED
    
    
    WEEKS ENDEDAugust 1,
    
    
    August 2,
    
    
    August 1,
    
    
    August 2,2009
    
    
    2008
    
    
    2009
    
    
    2008Net loss
    
    $
    (34,762
    )
    
    $
    (33,826
    )
    
    $
    (80,203
    )
    
    $
    (67,889
    )Other comprehensive income (loss):Amortization of pension and
postretirement benefit plans
    
    
    1,197
    
    
    
    79
    
    
    
    2,393
    
    
    
    159Cash flow hedge derivative (loss) income
    
    
    (69
    )
    
    
    605
    
    
    
    (900
    )
    
    
    1,541Comprehensive loss
    
    $
    (33,634
    )
    
    $
    (33,142
    )
    
    $
    (78,710
    )
    
    $
    (66,189
    )
   13




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##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 13. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES
    14




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Balance Sheet
August 1, 2009
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    1
    
    
    $
    7,814
    
    
    $
    7,776
    
    
    $
    
    
    
    $
    
    
    
    $
    15,591Merchandise inventories
    
    
    
    
    
    
    352,919
    
    
    
    322,402
    
    
    
    
    
    
    
    
    
    
    
    675,321Prepaid expenses and other current assets
    
    
    
    
    
    
    67,308
    
    
    
    11,826
    
    
    
    1,953
    
    
    
    (679
    )
    
    
    80,408Total current assets
    
    
    1
    
    
    
    428,041
    
    
    
    342,004
    
    
    
    1,953
    
    
    
    (679
    )
    
    
    771,320Property, fixtures and equipment at cost, net
    
    
    
    
    
    
    244,785
    
    
    
    253,242
    
    
    
    295,564
    
    
    
    
    
    
    
    793,591Deferred income taxes
    
    
    
    
    
    
    1,713
    
    
    
    7,949
    
    
    
    
    
    
    
    
    
    
    
    9,662Intangible assets, net
    
    
    
    
    
    
    61,649
    
    
    
    81,899
    
    
    
    
    
    
    
    
    
    
    
    143,548Investment in and advances to (from) affiliates
    
    
    57,814
    
    
    
    524,006
    
    
    
    61,597
    
    
    
    315
    
    
    
    (643,732
    )
    
    
    Other long-term assets
    
    
    
    
    
    
    18,680
    
    
    
    4,429
    
    
    
    4,586
    
    
    
    
    
    
    
    27,695Total assets
    
    $
    57,815
    
    
    $
    1,278,874
    
    
    $
    751,120
    
    
    $
    302,418
    
    
    $
    (644,411
    )
    
    $
    1,745,816Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    
    
    
    $
    178,318
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    178,318Accrued payroll and benefits
    
    
    
    
    
    
    21,667
    
    
    
    7,644
    
    
    
    
    
    
    
    
    
    
    
    29,311Accrued expenses
    
    
    
    
    
    
    89,276
    
    
    
    74,559
    
    
    
    1,441
    
    
    
    (679
    )
    
    
    164,597Current maturities of long-term debt and obligations
under capital leases
    
    
    
    
    
    
    1,951
    
    
    
    2,321
    
    
    
    6,283
    
    
    
    
    
    
    
    10,555Deferred income taxes
    
    
    
    
    
    
    2,199
    
    
    
    8,048
    
    
    
    
    
    
    
    
    
    
    
    10,247Income taxes payable
    
    
    
    
    
    
    230
    
    
    
    154
    
    
    
    
    
    
    
    
    
    
    
    384Total current liabilities
    
    
    
    
    
    
    293,641
    
    
    
    92,726
    
    
    
    7,724
    
    
    
    (679
    )
    
    
    393,412Long-term debt and obligations under capital leases,
less current maturities
    
    
    
    
    
    
    826,558
    
    
    
    56,177
    
    
    
    249,131
    
    
    
    
    
    
    
    1,131,866Other long-term liabilities
    
    
    
    
    
    
    122,221
    
    
    
    39,269
    
    
    
    1,233
    
    
    
    
    
    
    
    162,723Total liabilities
    
    
    
    
    
    
    1,242,420
    
    
    
    188,172
    
    
    
    258,088
    
    
    
    (679
    )
    
    
    1,688,001Shareholders equity
    
    
    57,815
    
    
    
    36,454
    
    
    
    562,948
    
    
    
    44,330
    
    
    
    (643,732
    )
    
    
    57,815Total liabilities and shareholders equity
    
    $
    57,815
    
    
    $
    1,278,874
    
    
    $
    751,120
    
    
    $
    302,418
    
    
    $
    (644,411
    )
    
    $
    1,745,816
  15




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Balance Sheet
January 31, 2009
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    1
    
    
    $
    10,769
    
    
    $
    8,949
    
    
    $
    
    
    
    $
    
    
    
    $
    19,719Merchandise inventories
    
    
    
    
    
    
    329,808
    
    
    
    336,273
    
    
    
    
    
    
    
    
    
    
    
    666,081Prepaid expenses and other current assets
    
    
    
    
    
    
    91,644
    
    
    
    21,797
    
    
    
    606
    
    
    
    (606
    )
    
    
    113,441Total current assets
    
    
    1
    
    
    
    432,221
    
    
    
    367,019
    
    
    
    606
    
    
    
    (606
    )
    
    
    799,241Property, fixtures and equipment at cost, net
    
    
    
    
    
    
    261,922
    
    
    
    269,357
    
    
    
    301,484
    
    
    
    
    
    
    
    832,763Deferred income taxes
    
    
    
    
    
    
    5,214
    
    
    
    4,780
    
    
    
    
    
    
    
    
    
    
    
    9,994Intangible assets, net
    
    
    
    
    
    
    63,981
    
    
    
    84,190
    
    
    
    
    
    
    
    
    
    
    
    148,171Investment in and advances to (from) affiliates
    
    
    135,042
    
    
    
    558,968
    
    
    
    58,476
    
    
    
    317
    
    
    
    (752,803
    )
    
    
    Other long-term assets
    
    
    
    
    
    
    19,729
    
    
    
    6,714
    
    
    
    4,709
    
    
    
    
    
    
    
    31,152Total assets
    
    $
    135,043
    
    
    $
    1,342,035
    
    
    $
    790,536
    
    
    $
    307,116
    
    
    $
    (753,409
    )
    
    $
    1,821,321Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    
    
    
    $
    143,423
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    143,423Accrued payroll and benefits
    
    
    
    
    
    
    24,676
    
    
    
    11,440
    
    
    
    
    
    
    
    
    
    
    
    36,116Accrued expenses
    
    
    866
    
    
    
    93,342
    
    
    
    84,921
    
    
    
    1,416
    
    
    
    (1,472
    )
    
    
    179,073Current maturities of long-term debt and obligations
under capital leases
    
    
    
    
    
    
    495
    
    
    
    2,236
    
    
    
    6,071
    
    
    
    
    
    
    
    8,802Deferred income taxes
    
    
    
    
    
    
    2,548
    
    
    
    4,780
    
    
    
    
    
    
    
    
    
    
    
    7,328Income taxes payable
    
    
    
    
    
    
    16
    
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    62Total current liabilities
    
    
    866
    
    
    
    264,500
    
    
    
    103,423
    
    
    
    7,487
    
    
    
    (1,472
    )
    
    
    374,804Long-term debt and obligations under capital leases,
less current maturities
    
    
    
    
    
    
    839,020
    
    
    
    57,358
    
    
    
    252,390
    
    
    
    
    
    
    
    1,148,768Other long-term liabilities
    
    
    
    
    
    
    123,351
    
    
    
    39,032
    
    
    
    1,189
    
    
    
    
    
    
    
    163,572Total liabilities
    
    
    866
    
    
    
    1,226,871
    
    
    
    199,813
    
    
    
    261,066
    
    
    
    (1,472
    )
    
    
    1,687,144Shareholders equity
    
    
    134,177
    
    
    
    115,164
    
    
    
    590,723
    
    
    
    46,050
    
    
    
    (751,937
    )
    
    
    134,177Total liabilities and shareholders equity
    
    $
    135,043
    
    
    $
    1,342,035
    
    
    $
    790,536
    
    
    $
    307,116
    
    
    $
    (753,409
    )
    
    $
    1,821,321
  16




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
Thirteen Weeks Ended August 1, 2009
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    262,320
    
    
    $
    346,908
    
    
    $
    
    
    
    $
    
    
    
    $
    609,228Other income
    
    
    
    
    
    
    10,018
    
    
    
    6,058
    
    
    
    
    
    
    
    
    
    
    
    16,076
    
    
    
    272,338
    
    
    
    352,966
    
    
    
    
    
    
    
    
    
    
    
    625,304Costs and expenses:Costs of merchandise sold
    
    
    
    
    
    
    165,536
    
    
    
    217,561
    
    
    
    
    
    
    
    
    
    
    
    383,097Selling, general and administrative
    
    
    
    
    
    
    101,167
    
    
    
    130,435
    
    
    
    23
    
    
    
    (8,702
    )
    
    
    222,923Depreciation and amortization
    
    
    
    
    
    
    11,528
    
    
    
    14,241
    
    
    
    2,927
    
    
    
    
    
    
    
    28,696Amortization of lease-related interests
    
    
    
    
    
    
    699
    
    
    
    518
    
    
    
    
    
    
    
    
    
    
    
    1,217Loss from operations
    
    
    
    
    
    
    (6,592
    )
    
    
    (9,789
    )
    
    
    (2,950
    )
    
    
    8,702
    
    
    
    (10,629
    )Other income (expense):Intercompany rental and royalty income
    
    
    
    
    
    
    
    
    
    
    1,586
    
    
    
    7,116
    
    
    
    (8,702
    )
    
    
    Equity in losses of subsidiaries
    
    
    (33,823
    )
    
    
    (9,351
    )
    
    
    
    
    
    
    
    
    
    
    43,174
    
    
    
    Interest expense, net
    
    
    
    
    
    
    (17,880
    )
    
    
    (1,117
    )
    
    
    (4,197
    )
    
    
    
    
    
    
    (23,194
    )Loss before income taxes
    
    
    (33,823
    )
    
    
    (33,823
    )
    
    
    (9,320
    )
    
    
    (31
    )
    
    
    43,174
    
    
    
    (33,823
    )Income tax provision
    
    
    939
    
    
    
    939
    
    
    
    643
    
    
    
    
    
    
    
    (1,582
    )
    
    
    939Net loss
    
    $
    (34,762
    )
    
    $
    (34,762
    )
    
    $
    (9,963
    )
    
    $
    (31
    )
    
    $
    44,756
    
    
    $
    (34,762
    )
  17




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
Thirteen Weeks Ended August 2, 2008
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    286,720
    
    
    $
    386,664
    
    
    $
    
    
    
    $
    
    
    
    $
    673,384Other income
    
    
    
    
    
    
    9,065
    
    
    
    12,448
    
    
    
    
    
    
    
    
    
    
    
    21,513
    
    
    
    295,785
    
    
    
    399,112
    
    
    
    
    
    
    
    
    
    
    
    694,897Costs and expenses:Costs of merchandise sold
    
    
    
    
    
    
    184,479
    
    
    
    247,483
    
    
    
    
    
    
    
    
    
    
    
    431,962Selling, general and administrative
    
    
    
    
    
    
    111,637
    
    
    
    143,591
    
    
    
    20
    
    
    
    (8,854
    )
    
    
    246,394Depreciation and amortization
    
    
    
    
    
    
    14,111
    
    
    
    12,844
    
    
    
    2,937
    
    
    
    
    
    
    
    29,892Amortization of lease-related interests
    
    
    
    
    
    
    750
    
    
    
    456
    
    
    
    
    
    
    
    
    
    
    
    1,206Goodwill impairment
    
    
    
    
    
    
    8,488
    
    
    
    9,279
    
    
    
    
    
    
    
    
    
    
    
    17,767Loss from operations
    
    
    
    
    
    
    (23,680
    )
    
    
    (14,541
    )
    
    
    (2,957
    )
    
    
    8,854
    
    
    
    (32,324
    )Other income (expense):Intercompany rental and royalty income
    
    
    
    
    
    
    
    
    
    
    1,739
    
    
    
    7,115
    
    
    
    (8,854
    )
    
    
    Equity in losses of subsidiaries
    
    
    (56,700
    )
    
    
    (15,282
    )
    
    
    
    
    
    
    
    
    
    
    71,982
    
    
    
    Interest expense, net
    
    
    
    
    
    
    (17,738
    )
    
    
    (2,343
    )
    
    
    (4,295
    )
    
    
    
    
    
    
    (24,376
    )Loss before income taxes
    
    
    (56,700
    )
    
    
    (56,700
    )
    
    
    (15,145
    )
    
    
    (137
    )
    
    
    71,982
    
    
    
    (56,700
    )Income tax benefit
    
    
    (22,874
    )
    
    
    (22,874
    )
    
    
    (6,319
    )
    
    
    
    
    
    
    29,193
    
    
    
    (22,874
    )Net loss
    
    $
    (33,826
    )
    
    $
    (33,826
    )
    
    $
    (8,826
    )
    
    $
    (137
    )
    
    $
    42,789
    
    
    $
    (33,826
    )
  18




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
Twenty-Six Weeks Ended August 1, 2009
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    540,735
    
    
    $
    713,024
    
    
    $
    
    
    
    $
    
    
    
    $
    1,253,759Other income
    
    
    
    
    
    
    17,477
    
    
    
    16,991
    
    
    
    
    
    
    
    
    
    
    
    34,468
    
    
    
    558,212
    
    
    
    730,015
    
    
    
    
    
    
    
    
    
    
    
    1,288,227Costs and expenses:Costs of merchandise sold
    
    
    
    
    
    
    347,195
    
    
    
    456,268
    
    
    
    
    
    
    
    
    
    
    
    803,463Selling, general and administrative
    
    
    
    
    
    
    209,099
    
    
    
    268,060
    
    
    
    45
    
    
    
    (17,454
    )
    
    
    459,750Depreciation and amortization
    
    
    
    
    
    
    22,789
    
    
    
    28,085
    
    
    
    5,920
    
    
    
    
    
    
    
    56,794Amortization of lease-related interests
    
    
    
    
    
    
    1,408
    
    
    
    1,036
    
    
    
    
    
    
    
    
    
    
    
    2,444Loss from operations
    
    
    
    
    
    
    (22,279
    )
    
    
    (23,434
    )
    
    
    (5,965
    )
    
    
    17,454
    
    
    
    (34,224
    )Other income (expense):Intercompany rental and royalty income
    
    
    
    
    
    
    
    
    
    
    3,151
    
    
    
    14,303
    
    
    
    (17,454
    )
    
    
    Equity in losses of subsidiaries
    
    
    (80,344
    )
    
    
    (22,599
    )
    
    
    
    
    
    
    
    
    
    
    102,943
    
    
    
    Interest expense, net
    
    
    
    
    
    
    (35,466
    )
    
    
    (2,235
    )
    
    
    (8,419
    )
    
    
    
    
    
    
    (46,120
    )Loss before income taxes
    
    
    (80,344
    )
    
    
    (80,344
    )
    
    
    (22,518
    )
    
    
    (81
    )
    
    
    102,943
    
    
    
    (80,344
    )Income tax (benefit) provision
    
    
    (141
    )
    
    
    (141
    )
    
    
    812
    
    
    
    
    
    
    
    (671
    )
    
    
    (141
    )Net loss
    
    $
    (80,203
    )
    
    $
    (80,203
    )
    
    $
    (23,330
    )
    
    $
    (81
    )
    
    $
    103,614
    
    
    $
    (80,203
    )
  19




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
Twenty-Six Weeks Ended August 2, 2008
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    584,616
    
    
    $
    789,016
    
    
    $
    
    
    
    $
    
    
    
    $
    1,373,632Other income
    
    
    
    
    
    
    19,079
    
    
    
    25,209
    
    
    
    
    
    
    
    
    
    
    
    44,288
    
    
    
    603,695
    
    
    
    814,225
    
    
    
    
    
    
    
    
    
    
    
    1,417,920Costs and expenses:Costs of merchandise sold
    
    
    
    
    
    
    380,849
    
    
    
    513,613
    
    
    
    
    
    
    
    
    
    
    
    894,462Selling, general and administrative
    
    
    
    
    
    
    230,128
    
    
    
    289,715
    
    
    
    41
    
    
    
    (17,716
    )
    
    
    502,168Depreciation and amortization
    
    
    
    
    
    
    27,248
    
    
    
    25,788
    
    
    
    5,874
    
    
    
    
    
    
    
    58,910Amortization of lease-related interests
    
    
    
    
    
    
    1,505
    
    
    
    909
    
    
    
    
    
    
    
    
    
    
    
    2,414Goodwill impairment
    
    
    
    
    
    
    8,488
    
    
    
    9,279
    
    
    
    
    
    
    
    
    
    
    
    17,767Loss from operations
    
    
    
    
    
    
    (44,523
    )
    
    
    (25,079
    )
    
    
    (5,915
    )
    
    
    17,716
    
    
    
    (57,801
    )Other income (expense):Intercompany rental and royalty income
    
    
    
    
    
    
    
    
    
    
    3,486
    
    
    
    14,230
    
    
    
    (17,716
    )
    
    
    Equity in losses of subsidiaries
    
    
    (106,539
    )
    
    
    (26,135
    )
    
    
    
    
    
    
    
    
    
    
    132,674
    
    
    
    Interest expense, net
    
    
    
    
    
    
    (35,881
    )
    
    
    (4,241
    )
    
    
    (8,616
    )
    
    
    
    
    
    
    (48,738
    )Loss before income taxes
    
    
    (106,539
    )
    
    
    (106,539
    )
    
    
    (25,834
    )
    
    
    (301
    )
    
    
    132,674
    
    
    
    (106,539
    )Income tax benefit
    
    
    (38,650
    )
    
    
    (38,650
    )
    
    
    (10,974
    )
    
    
    
    
    
    
    49,624
    
    
    
    (38,650
    )Net loss
    
    $
    (67,889
    )
    
    $
    (67,889
    )
    
    $
    (14,860
    )
    
    $
    (301
    )
    
    $
    83,050
    
    
    $
    (67,889
    )
  20




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Cash Flows
Twenty-Six Weeks Ended August 1, 2009
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:
    
    $
    866
    
    
    $
    30,755
    
    
    $
    6,349
    
    
    $
    4,685
    
    
    $
    (7,845
    )
    
    $
    34,810Cash flows from investing activities:Capital expenditures
    
    
    
    
    
    
    (10,952
    )
    
    
    (2,024
    )
    
    
    
    
    
    
    
    
    
    
    (12,976
    )Intercompany Investing activity
    
    
    
    
    
    
    (896
    )
    
    
    
    
    
    
    
    
    
    
    896
    
    
    
    Proceeds from sale of property, fixtures
and equipment
    
    
    
    
    
    
    23
    
    
    
    44
    
    
    
    
    
    
    
    
    
    
    
    67Net cash used in investing activities
    
    
    
    
    
    
    (11,825
    )
    
    
    (1,980
    )
    
    
    
    
    
    
    896
    
    
    
    (12,909
    )Cash flows from financing activities:Payments on long-term debt and capital
lease obligations
    
    
    
    
    
    
    (332,013
    )
    
    
    (1,097
    )
    
    
    (3,047
    )
    
    
    
    
    
    
    (336,157
    )Proceeds from issuance of long-term debt
    
    
    
    
    
    
    316,406
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    316,406Intercompany financing activity
    
    
    
    
    
    
    (866
    )
    
    
    (4,445
    )
    
    
    (1,638
    )
    
    
    6,949
    
    
    
    Cash dividends paid
    
    
    (866
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (866
    )Decrease in bank overdraft balances
    
    
    
    
    
    
    (5,412
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,412
    )Net cash used in financing activities
    
    
    (866
    )
    
    
    (21,885
    )
    
    
    (5,542
    )
    
    
    (4,685
    )
    
    
    6,949
    
    
    
    (26,029
    )Net decrease in cash and cash
equivalents
    
    
    
    
    
    
    (2,955
    )
    
    
    (1,173
    )
    
    
    
    
    
    
    
    
    
    
    (4,128
    )Cash and cash equivalents at beginning
of period
    
    
    1
    
    
    
    10,769
    
    
    
    8,949
    
    
    
    
    
    
    
    
    
    
    
    19,719Cash and cash equivalents at end of period
    
    $
    1
    
    
    $
    7,814
    
    
    $
    7,776
    
    
    $
    
    
    
    $
    
    
    
    $
    15,591
  21




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Cash Flows
Twenty-Six Weeks Ended August 2, 2008
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:
    
    $
    1,733
    
    
    $
    2,557
    
    
    $
    27,190
    
    
    $
    5,275
    
    
    $
    (9,204
    )
    
    $
    27,551Cash flows from investing activities:Capital expenditures
    
    
    
    
    
    
    (29,588
    )
    
    
    (23,171
    )
    
    
    
    
    
    
    
    
    
    
    (52,759
    )Proceeds from sale of property, fixtures
and equipment
    
    
    
    
    
    
    20
    
    
    
    63
    
    
    
    
    
    
    
    
    
    
    
    83Net cash used in investing activities
    
    
    
    
    
    
    (29,568
    )
    
    
    (23,108
    )
    
    
    
    
    
    
    
    
    
    
    (52,676
    )Cash flows from financing activities:Payments on long-term debt and capital
lease obligations
    
    
    
    
    
    
    (342,980
    )
    
    
    (894
    )
    
    
    (2,823
    )
    
    
    
    
    
    
    (346,697
    )Proceeds from issuance of long-term debt
    
    
    
    
    
    
    381,530
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    381,530Intercompany financing activity
    
    
    
    
    
    
    (1,733
    )
    
    
    (5,025
    )
    
    
    (2,446
    )
    
    
    9,204
    
    
    
    Cash dividends paid
    
    
    (1,733
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,733
    )Deferred financing costs paid
    
    
    
    
    
    
    (260
    )
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    (266
    )Decrease in bank overdraft balances
    
    
    
    
    
    
    (10,867
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,867
    )Net cash (used in) provided by financing activities
    
    
    (1,733
    )
    
    
    25,690
    
    
    
    (5,919
    )
    
    
    (5,275
    )
    
    
    9,204
    
    
    
    21,967Net decrease in cash and cash
equivalents
    
    
    
    
    
    
    (1,321
    )
    
    
    (1,837
    )
    
    
    
    
    
    
    
    
    
    
    (3,158
    )Cash and cash equivalents at beginning
of period
    
    
    1
    
    
    
    9,604
    
    
    
    11,633
    
    
    
    
    
    
    
    
    
    
    
    21,238Cash and cash equivalents at end of period
    
    $
    1
    
    
    $
    8,283
    
    
    $
    9,796
    
    
    $
    
    
    
    $
    
    
    
    $
    18,080
 14. THIRD AMENDMENT TO THE CREDIT CARD PROGRAM AGREEMENT
   22




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##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Overview
    
    
    a comparable store sales decrease in the range of 7.0% to 9.0%;
 
    
    a reduction in other income;
 
    
    a gross margin rate of 36.0%;
 
    
    a reduction of approximately $80.0 million in our selling, general and administrative
(SG&A) expenses; and
 
    
    an effective tax rate of 0%.
  23




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##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Results of Operations
  THIRTEEN
    
    
    TWENTY-SIXWEEKS ENDED
    
    
    WEEKS ENDEDAugust 1,
    
    
    August 2,
    
    
    August 1,
    
    
    August 2,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Other income
    
    
    2.6
    
    
    
    3.2
    
    
    
    2.7
    
    
    
    3.2102.6
    
    
    
    103.2
    
    
    
    102.7
    
    
    
    103.2Costs and expenses:Costs of merchandise sold
    
    
    62.9
    
    
    
    64.1
    
    
    
    64.1
    
    
    
    65.1Selling, general and administrative
    
    
    36.6
    
    
    
    36.6
    
    
    
    36.7
    
    
    
    36.6Depreciation and amortization
    
    
    4.7
    
    
    
    4.4
    
    
    
    4.5
    
    
    
    4.3Amortization of lease-related interests
    
    
    0.2
    
    
    
    0.2
    
    
    
    0.2
    
    
    
    0.2Goodwill impairment
    
    
    
    
    
    
    2.6
    
    
    
    
    
    
    
    1.3Loss from operations
    
    
    (1.7
    )
    
    
    (4.8
    )
    
    
    (2.7
    )
    
    
    (4.2
    )Interest expense, net
    
    
    3.8
    
    
    
    3.6
    
    
    
    3.7
    
    
    
    3.5Loss before income taxes
    
    
    (5.6
    )
    
    
    (8.4
    )
    
    
    (6.4
    )
    
    
    (7.8
    )Income tax provision (benefit)
    
    
    0.2
    
    
    
    (3.4
    )
    
    
    
    
    
    
    (2.8
    )Net loss
    
    
    (5.7
    )%
    
    
    (5.0
    )%
    
    
    (6.4
    )%
    
    
    (4.9
    )%
 Second Quarter of 2009 Compared with Second Quarter of 2008
 Net sales
   Other income
  24




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##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Costs and expenses
    Loss from operations
 Interest expense, net
 Income tax provision (benefit
 Net loss
 2009 Compared with 2008
 Net sales
  25




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##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Other income
 Costs and expenses
    Loss from operations
 Interest expense, net
  26




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Income tax benefit
 Net loss
 Seasonality
   Liquidity and Capital Resources
    27




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  August 1,
    
    
    August 2,(Dollars in millions)
    
    2009
    
    
    2008Working capital
    
    $
    377.9
    
    
    $
    427.4Current ratio
    
    
    1.96:1
    
    
    
    1.97:1Debt to total capitalization (1)
    
    
    0.95:1
    
    
    
    0.80:1Unused availability under lines of credit (2)
    
    $
    173.7
    
    
    $
    238.0
 (1)
    
    Debt includes obligations under capital leases. Total capitalization includes
shareholders equity, debt and obligations under capital leases.(2)
    
    Subject to a minimum borrowing availability covenant of $75.    TWENTY-SIXWEEKS ENDEDAugust 1,
    
    
    August 2,(Dollars in millions)
    
    2009
    
    
    2008Operating activities
    
    $
    34.8
    
    
    $
    27.6Investing activities
    
    
    (12.9
    )
    
    
    (52.7
    )Financing activities
    
    
    (26.0
    )
    
    
    22.0
    28




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   Critical Accounting Policies
   Inventory Valuation
    29




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   Vendor Allowances
   Income Taxes
   30




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    Long-lived Assets
   
    
    Significant underperformance of stores relative to historical or projected future
operating results,
 
    
    Significant changes in the manner of our use of assets or overall business
strategy, and
 
    
    Significant negative industry or economic trends for a sustained period.
  31




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   Intangible Assets
   Insurance Reserve Estimates
  Pension and Supplementary Retirement Plans
    32




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   Recently Issued Accounting Standards
     33




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Forward-Looking Statements
   34




---



##### 



THE BON-TON STORES, INC.
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Market Risk and Financial Instruments
  ITEM 4.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
   35




---



##### 



THE BON-TON STORES, INC.
 PART II: OTHER INFORMATION
 ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  1.
    
    The following individuals were nominated and elected by the votes set forth opposite his or
her name to serve as the directors of the Company:
 Lucinda M. Baier
    
    For:
    
    
    41,099,900Withhold Authority:
    
    
    200,228Byron L. Bergren
    
    For:
    
    
    41,014,208Withhold Authority:
    
    
    285,920Philip M. Browne
    
    For:
    
    
    41,108,489Withhold Authority:
    
    
    191,639Shirley A. Dawe
    
    For:
    
    
    40,439,993Withhold Authority:
    
    
    860,135Marsha M. Everton
    
    For:
    
    
    40,417,140Withhold Authority:
    
    
    882,988Michael L. Gleim
    
    For:
    
    
    40,268,340Withhold Authority:
    
    
    1,031,788M. Thomas Grumbacher
    
    For:
    
    
    41,106,211Withhold Authority:
    
    
    193,917Todd C. McCarty
    
    For:
    
    
    40,442,086Withhold Authority:
    
    
    858,042
 2.
    
    With respect to the proposal to approve The Bon-Ton Stores, Inc. 2009 Omnibus Incentive
Plan, 35,852,433 votes were cast in favor, 1,751,945 votes were cast against and 34,521 votes
abstained.
 3.
    
    With respect to the proposal to ratify the appointment of KPMG LLP as the Companys
independent registered public accounting firm for 2009, 41,215,580 votes were cast in favor,
48,141 votes were cast against and 36,407 votes abstained.
  36




---



##### 



THE BON-TON STORES, INC.
 ITEM 6.
    
    EXHIBITS
  Exhibit
    
    Description
    
    Document Location10.1
    
    
    Third Amendment to the Credit Card
Program Agreement
    
    Incorporated by
reference to Exhibit
10.1 to the Current
Report on Form 8-K
filed on August 10,
200931.1
    
    
    Certification of Byron L. Bergren
    
    Filed herewith.31.2
    
    
    Certification of Keith E. Plowman
    
    Filed herewith.32.1
    
    
    Certification Pursuant to Rules
13a-14(b) and 15d-14(b) of the
Securities Exchange Act of 1934
    
    Furnished herewith.
 SIGNATURES
  THE BON-TON STORES, INC.DATE: September 9, 2009
    
    BY:
    
    /s/ Byron L. Bergren

Byron L. BergrenPresident andChief Executive OfficerDATE: September 9, 2009
    
    BY:
    
    /s/ Keith E. Plowman

Keith E. PlowmanExecutive Vice President,Chief Financial Officer andPrincipal Accounting Officer
  37




---



##### 



EXHIBIT INDEX
 Exhibit
    
    Description
    
    Document Location10.1
    
    
    Third Amendment to the Credit Card Program Agreement
    
    Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on August 10, 200931.1
    
    
    Certification of Byron L. Bergren
    
    Filed herewith.31.2
    
    
    Certification of Keith E. Plowman
    
    Filed herewith.32.1
    
    
    Certification Pursuant to Rules 13a-14(b) and 15d-14(b) of the Securities Exchange Act of 1934
    
    Furnished herewith.