##### Table of Contents



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 October 30, 2010
 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 o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 Yes o No þ




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TABLE OF CONTENTS  PART I: FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEETSCONSOLIDATED STATEMENTS OF OPERATIONSCONSOLIDATED STATEMENTS OF CASH FLOWSCONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITYITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 4. CONTROLS AND PROCEDURESPART II: OTHER INFORMATIONITEM 6. EXHIBITSSIGNATURESExhibit 31.1Exhibit 31.2Exhibit 32.1    Table of Contents  
 PART I: FINANCIAL INFORMATION
 
 ITEM 1.
    
    FINANCIAL STATEMENTS
 THE BON-TON STORES, INC.
 
 CONSOLIDATED BALANCE SHEETS
 (In thousands except share and per share data)
    
    October 30,
    
    
    January 30,(Unaudited)
    
    2010
    
    
    2010AssetsCurrent assets:Cash and cash equivalents
    
    $
    18,366
    
    
    $
    18,922Merchandise inventories
    
    
    920,600
    
    
    
    659,399Prepaid expenses and other current assets
    
    
    74,482
    
    
    
    87,690Total current assets
    
    
    1,013,448
    
    
    
    766,011Property, fixtures and equipment at cost, net of accumulated depreciation and amortization
of $663,077 and $594,020 at October 30, 2010 and January 30, 2010, respectively
    
    
    717,943
    
    
    
    756,618Deferred income taxes
    
    
    12,673
    
    
    
    13,303Intangible assets, net of accumulated amortization of $44,741 and $38,477 at October 30, 2010
and January 30, 2010, respectively
    
    
    132,251
    
    
    
    138,794Other long-term assets
    
    
    38,371
    
    
    
    47,281Total assets
    
    $
    1,914,686
    
    
    $
    1,722,007Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    348,533
    
    
    $
    163,671Accrued payroll and benefits
    
    
    43,542
    
    
    
    48,297Accrued expenses
    
    
    156,104
    
    
    
    160,737Current maturities of long-term debt
    
    
    7,857
    
    
    
    7,509Current maturities of obligations under capital leases
    
    
    5,725
    
    
    
    5,044Deferred income taxes
    
    
    15,371
    
    
    
    14,820Income taxes payable
    
    
    193
    
    
    
    Total current liabilities
    
    
    577,325
    
    
    
    400,078Long-term debt, less current maturities
    
    
    1,033,662
    
    
    
    951,315Obligations under capital leases, less current maturities
    
    
    62,504
    
    
    
    65,405Other long-term liabilities
    
    
    155,639
    
    
    
    163,453Total liabilities
    
    
    1,829,130
    
    
    
    1,580,251Commitments and contingenciesShareholders 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
16,449,569 and 15,942,348 at October 30, 2010 and January 30, 2010, respectively
    
    
    164
    
    
    
    159Class A Common Stock  authorized 20,000,000 shares at $0.01 par value; issued
and outstanding shares of 2,951,490 at October 30, 2010 and January 30, 2010
    
    
    30
    
    
    
    30Treasury stock, at cost  337,800 shares at October 30, 2010 and January 30, 2010
    
    
    (1,387
    )
    
    
    (1,387
    )Additional paid-in-capital
    
    
    151,132
    
    
    
    149,649Accumulated other comprehensive loss
    
    
    (47,054
    )
    
    
    (52,912
    )(Accumulated deficit) retained earnings
    
    
    (17,329
    )
    
    
    46,217Total shareholders equity
    
    
    85,556
    
    
    
    141,756Total liabilities and shareholders equity
    
    $
    1,914,686
    
    
    $
    1,722,007
   2




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THE BON-TON STORES, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 THIRTEEN
    
    
    THIRTY-NINEWEEKS ENDED
    
    
    WEEKS ENDED(In thousands except per share data)
    
    October 30,
    
    
    October 31,
    
    
    October 30,
    
    
    October 31,(Unaudited)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Net sales
    
    $
    700,514
    
    
    $
    703,946
    
    
    $
    1,970,483
    
    
    $
    1,957,705Other income
    
    
    16,423
    
    
    
    18,667
    
    
    
    44,285
    
    
    
    53,135716,937
    
    
    
    722,613
    
    
    
    2,014,768
    
    
    
    2,010,840Costs and expenses:Costs of merchandise sold
    
    
    432,852
    
    
    
    439,029
    
    
    
    1,224,343
    
    
    
    1,242,492Selling, general and administrative
    
    
    235,422
    
    
    
    234,798
    
    
    
    687,498
    
    
    
    694,548Depreciation and amortization
    
    
    24,798
    
    
    
    28,016
    
    
    
    77,538
    
    
    
    84,810Amortization of lease-related interests
    
    
    1,131
    
    
    
    1,216
    
    
    
    3,424
    
    
    
    3,660Income (loss) from operations
    
    
    22,734
    
    
    
    19,554
    
    
    
    21,965
    
    
    
    (14,670
    )Interest expense, net
    
    
    28,347
    
    
    
    23,201
    
    
    
    85,037
    
    
    
    69,321Loss before income taxes
    
    
    (5,613
    )
    
    
    (3,647
    )
    
    
    (63,072
    )
    
    
    (83,991
    )Income tax provision
    
    
    661
    
    
    
    506
    
    
    
    474
    
    
    
    365Net loss
    
    $
    (6,274
    )
    
    $
    (4,153
    )
    
    $
    (63,546
    )
    
    $
    (84,356
    )Per share amounts Basic:Net loss
    
    $
    (0.36
    )
    
    $
    (0.24
    )
    
    $
    (3.60
    )
    
    $
    (4.96
    )Diluted:Net loss
    
    $
    (0.36
    )
    
    $
    (0.24
    )
    
    $
    (3.60
    )
    
    $
    (4.96
    )
   3




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##### Table of Contents



THE BON-TON STORES, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 THIRTY-NINEWEEKS ENDED(In thousands)
    
    October 30,
    
    
    October 31,(Unaudited)
    
    2010
    
    
    2009Cash flows from operating activities:Net loss
    
    $
    (63,546
    )
    
    $
    (84,356
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    77,538
    
    
    
    84,810Amortization of lease-related interests
    
    
    3,424
    
    
    
    3,660Share-based compensation expense
    
    
    5,570
    
    
    
    3,485Loss on sale of property, fixtures and equipment
    
    
    208
    
    
    
    103Reclassification of other comprehensive loss
    
    
    5,858
    
    
    
    7,085Amortization of deferred financing costs
    
    
    6,959
    
    
    
    3,054Amortization of deferred gain on sale of proprietary credit card portfolio
    
    
    (1,811
    )
    
    
    (1,810
    )Deferred income taxes
    
    
    1,181
    
    
    
    3,458Changes in operating assets and liabilities:Increase in merchandise inventories
    
    
    (261,201
    )
    
    
    (234,588
    )Decrease in prepaid expenses and other current assets
    
    
    13,208
    
    
    
    41,726Decrease in other long-term assets
    
    
    2,669
    
    
    
    1,786Increase in accounts payable
    
    
    177,341
    
    
    
    152,945Decrease in accrued payroll and benefits and accrued expenses
    
    
    (10,577
    )
    
    
    (24,101
    )Increase in income taxes payable
    
    
    193
    
    
    
    122(Decrease) increase in other long-term liabilities
    
    
    (4
    )
    
    
    593Net cash used in operating activities
    
    
    (42,990
    )
    
    
    (42,028
    )Cash flows from investing activities:Capital expenditures
    
    
    (36,048
    )
    
    
    (22,210
    )Proceeds from sale of property, fixtures and equipment
    
    
    77
    
    
    
    86Net cash used in investing activities
    
    
    (35,971
    )
    
    
    (22,124
    )Cash flows from financing activities:Payments on long-term debt and capital lease obligations
    
    
    (433,534
    )
    
    
    (476,142
    )Proceeds from issuance of long-term debt
    
    
    512,285
    
    
    
    539,531Cash dividends paid
    
    
    
    
    
    
    (866
    )Restricted shares forfeited in lieu of payroll taxes
    
    
    (4,082
    )
    
    
    Deferred financing costs paid
    
    
    (717
    )
    
    
    (322
    )Increase (decrease) in bank overdraft balances
    
    
    4,453
    
    
    
    (2,107
    )Net cash provided by financing activities
    
    
    78,405
    
    
    
    60,094Net decrease in cash and cash equivalents
    
    
    (556
    )
    
    
    (4,058
    )Cash and cash equivalents at beginning of period
    
    
    18,922
    
    
    
    19,719Cash and cash equivalents at end of period
    
    $
    18,366
    
    
    $
    15,661
   4




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##### Table of Contents



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 30, 2010
    
    $
    159
    
    
    $
    30
    
    
    $
    (1,387
    )
    
    $
    149,649
    
    
    $
    (52,912
    )
    
    $
    46,217
    
    
    $
    141,756Comprehensive loss (Note 11):Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (63,546
    )
    
    
    (63,546
    )Pension and postretirement benefit plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,910
    
    
    
    
    
    
    
    2,910Cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,948
    
    
    
    
    
    
    
    2,948Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57,688
    )Restricted shares forfeited in lieu of payroll taxes
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    (4,078
    )
    
    
    
    
    
    
    
    
    
    
    (4,082
    )Share-based compensation expense
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    5,561
    
    
    
    
    
    
    
    
    
    
    
    5,570BALANCE AT OCTOBER 30, 2010
    
    $
    164
    
    
    $
    30
    
    
    $
    (1,387
    )
    
    $
    151,132
    
    
    $
    (47,054
    )
    
    $
    (17,329
    )
    
    $
    85,556
   5




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##### Table of Contents



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




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THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 Recently Issued Accounting Standards
 Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair
Value Measurements
 2. PER-SHARE AMOUNTS
  THIRTEEN
    
    
    THIRTY-NINEWEEKS ENDED
    
    
    WEEKS ENDEDOctober 30,
    
    
    October 31,
    
    
    October 30,
    
    
    October 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Basic Loss Per Common ShareNet loss
    
    $
    (6,274
    )
    
    $
    (4,153
    )
    
    $
    (63,546
    )
    
    $
    (84,356
    )Less: Income allocated to participating securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss available to common shareholders
    
    $
    (6,274
    )
    
    $
    (4,153
    )
    
    $
    (63,546
    )
    
    $
    (84,356
    )Weighted average common shares outstanding
    
    
    17,627,630
    
    
    
    17,008,132
    
    
    
    17,646,088
    
    
    
    17,000,824Basic loss per common share
    
    $
    (0.36
    )
    
    $
    (0.24
    )
    
    $
    (3.60
    )
    
    $
    (4.96
    )Diluted Loss Per Common ShareNet loss
    
    $
    (6,274
    )
    
    $
    (4,153
    )
    
    $
    (63,546
    )
    
    $
    (84,356
    )Less: Income allocated to participating securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss available to common shareholders
    
    $
    (6,274
    )
    
    $
    (4,153
    )
    
    $
    (63,546
    )
    
    $
    (84,356
    )Weighted average common shares outstanding
    
    
    17,627,630
    
    
    
    17,008,132
    
    
    
    17,646,088
    
    
    
    17,000,824Common shares issuable  stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted average common shares outstanding
assuming dilution
    
    
    17,627,630
    
    
    
    17,008,132
    
    
    
    17,646,088
    
    
    
    17,000,824Diluted loss per common share
    
    $
    (0.36
    )
    
    $
    (0.24
    )
    
    $
    (3.60
    )
    
    $
    (4.96
    )
   7




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##### Table of Contents



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
  3. FAIR VALUE MEASUREMENTS
 Fair Value Measurements and Disclosures
   SignificantQuoted Prices
    
    
    Other
    
    
    Significantin Active
    
    
    Observable
    
    
    UnobservableTotal Carrying
    
    
    Markets
    
    
    Inputs
    
    
    InputsValue
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)October 30, 2010
    
    $
    3,520
    
    
    $
    
    
    
    $
    3,520
    
    
    $
    January 30, 2010
    
    $
    6,319
    
    
    $
    
    
    
    $
    6,319
    
    
    $
    
  4. INTEREST RATE DERIVATIVES
 . Derivatives and Hedging
   8




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##### Table of Contents



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
   October 30,
    
    
    October 31,2010
    
    
    2009Fixed swaps (notional amount)
    
    $
    100,000
    
    
    $
    100,000Range of pay rate
    
    
    5.48%-5.49
    %
    
    
    5.48%-5.49
    %
   Balance Sheet Location
    
    Derivative Assets
    
    
    Derivative LiabilitiesOctober 30, 2010
    
    Accrued Expenses
    
    $
    
    
    
    $
    3,520January 30, 2010
    
    Other Long-Term Liabilities
    
    $
    
    
    
    $
    6,319
  9




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##### Table of Contents



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
  Amount of
    
    Location of
    
    
    Amount ofLoss
    
    Loss
    
    
    LossAmount of
    
    Location of Loss
    
    
    Reclassified
    
    Recognized
    
    
    RecognizedLoss
    
    Reclassified from
    
    
    from AOCI to
    
    in the
    
    
    in theRecognized
    
    AOCI to the
    
    
    the Statement
    
    Statement of
    
    
    Statement ofin OCI
    
    Statement of
    
    
    of Operations
    
    Operations
    
    
    Operations(effective
    
    Operations
    
    
    (effective
    
    (ineffective
    
    
    (ineffectiveportion)
    
    (effective portion)
    
    
    portion)
    
    portion)
    
    
    portion)13 Weeks Ended October 31, 2009

    $
    1,515
    
    Interest Expense, Net
    
    
    $
    1,270
    
    Interest Expense, Net
    
    
    $
    39 Weeks Ended
October 31, 2009

    $
    4,641
    
    Interest Expense, Net
    
    
    $
    3,496
    
    Interest Expense, Net
    
    
    $
    
  Amount of
    
    
    
    
    Amount ofLocation of Loss
    
    Loss
    
    
    Location of
    
    LossReclassified from
    
    Reclassified
    
    
    Loss
    
    RecognizedAOCI to the
    
    from AOCI to
    
    
    Recognized in
    
    in theStatement of
    
    the Statement
    
    
    the Statement
    
    Statement ofOperations
    
    of Operations
    
    
    of Operations
    
    Operations13 Weeks Ended
October 30, 2010
    
    Interest Expense, Net
    
    $
    982
    
    
    Interest Expense, Net
    
    $
    24539 Weeks Ended
October 30, 2010
    
    Interest Expense, Net
    
    $
    2,948
    
    
    Interest Expense, Net
    
    $
    1,088
  5. SUPPLEMENTAL BALANCE SHEET INFORMATION
  October 30,
    
    
    January 30,2010
    
    
    2010Prepaid expenses
    
    $
    39,046
    
    
    $
    30,778Other receivables
    
    
    34,236
    
    
    
    48,624Income tax receivables
    
    
    1,200
    
    
    
    8,288Total
    
    $
    74,482
    
    
    $
    87,690
  10




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##### Table of Contents



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 6. SUPPLEMENTAL CASH FLOW INFORMATION
  THIRTY-NINEWEEKS ENDEDOctober 30,
    
    
    October 31,2010
    
    
    2009Cash paid for:Interest, net of amounts capitalized
    
    $
    91,140
    
    
    $
    79,452Income taxes, net of refunds received
    
    
    (6,598
    )
    
    
    (32,088
    )Non-cash investing activities:Decrease in accrued property, fixtures and equipment
included in accounts payable and accrued expenses
    
    $
    (285
    )
    
    $
    (194
    )Assets acquired under capital leases
    
    
    1,724
    
    
    
    6,546
 7. EXIT OR DISPOSAL ACTIVITIES
  Termination
    
    
    OtherBenefits
    
    
    Costs
    
    
    TotalBalance as of January 30, 2010
    
    $
    1,688
    
    
    $
    
    
    
    $
    1,688Provisions:Thirteen weeks ended May 1, 2010
    
    
    473
    
    
    
    
    
    
    
    473Thirteen weeks ended July 31, 2010
    
    
    11
    
    
    
    279
    
    
    
    290Thirteen weeks ended October 30, 2010
    
    
    374
    
    
    
    
    
    
    
    374Payments:Thirteen weeks ended May 1, 2010
    
    
    (1,980
    )
    
    
    
    
    
    
    (1,980
    )Thirteen weeks ended July 31, 2010
    
    
    (160
    )
    
    
    
    
    
    
    (160
    )Thirteen weeks ended October 30, 2010
    
    
    (177
    )
    
    
    (259
    )
    
    
    (436
    )Balance as of October 30, 2010
    
    $
    229
    
    
    $
    20
    
    
    $
    249
   11




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##### Table of Contents



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 8. EMPLOYEE DEFINED AND POSTRETIREMENT BENEFIT PLANS
  THIRTEEN
    
    
    THIRTY-NINEWEEKS ENDED
    
    
    WEEKS ENDEDOctober 30,
    
    
    October 31,
    
    
    October 30,
    
    
    October 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Interest cost
    
    $
    2,543
    
    
    $
    2,822
    
    
    $
    7,629
    
    
    $
    8,464Expected return on plan assets
    
    
    (1,977
    )
    
    
    (1,764
    )
    
    
    (5,931
    )
    
    
    (5,294
    )Recognition of net actuarial loss
    
    
    970
    
    
    
    1,219
    
    
    
    2,910
    
    
    
    3,657Net periodic benefit expense
    
    $
    1,536
    
    
    $
    2,277
    
    
    $
    4,608
    
    
    $
    6,827
   9. INCOME TAXES
 Income Taxes
    12




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THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 10. CONTINGENCIES
   11. COMPREHENSIVE LOSS
  THIRTEEN
    
    
    THIRTY-NINEWEEKS ENDED
    
    
    WEEKS ENDEDOctober 30,
    
    
    October 31,
    
    
    October 30,
    
    
    October 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Net loss
    
    $
    (6,274
    )
    
    $
    (4,153
    )
    
    $
    (63,546
    )
    
    $
    (84,356
    )Other comprehensive income (loss):Amortization of pension and postretirement benefit plans
    
    
    970
    
    
    
    1,196
    
    
    
    2,910
    
    
    
    3,589Cash flow hedge derivative income (loss)
    
    
    982
    
    
    
    (245
    )
    
    
    2,948
    
    
    
    (1,145
    )Comprehensive loss
    
    $
    (4,322
    )
    
    $
    (3,202
    )
    
    $
    (57,688
    )
    
    $
    (81,912
    )
  12. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES
    13




---



##### Table of Contents



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Balance Sheet
October 30, 2010
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    1
    
    
    $
    10,346
    
    
    $
    8,019
    
    
    $
    
    
    
    $
    
    
    
    $
    18,366Merchandise inventories
    
    
    
    
    
    
    465,806
    
    
    
    454,794
    
    
    
    
    
    
    
    
    
    
    
    920,600Prepaid expenses and other current assets
    
    
    
    
    
    
    61,910
    
    
    
    12,406
    
    
    
    700
    
    
    
    (534
    )
    
    
    74,482Total current assets
    
    
    1
    
    
    
    538,062
    
    
    
    475,219
    
    
    
    700
    
    
    
    (534
    )
    
    
    1,013,448Property, fixtures and equipment at cost, net
    
    
    
    
    
    
    202,733
    
    
    
    233,995
    
    
    
    281,215
    
    
    
    
    
    
    
    717,943Deferred income taxes
    
    
    
    
    
    
    4,805
    
    
    
    7,868
    
    
    
    
    
    
    
    
    
    
    
    12,673Intangible assets, net
    
    
    
    
    
    
    56,041
    
    
    
    76,210
    
    
    
    
    
    
    
    
    
    
    
    132,251Investment in and advances to affiliates
    
    
    85,555
    
    
    
    603,969
    
    
    
    26,820
    
    
    
    316
    
    
    
    (716,660
    )
    
    
    Other long-term assets
    
    
    
    
    
    
    32,370
    
    
    
    1,793
    
    
    
    4,208
    
    
    
    
    
    
    
    38,371Total assets
    
    $
    85,556
    
    
    $
    1,437,980
    
    
    $
    821,905
    
    
    $
    286,439
    
    
    $
    (717,194
    )
    
    $
    1,914,686Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    
    
    
    $
    348,533
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    348,533Accrued payroll and benefits
    
    
    
    
    
    
    33,027
    
    
    
    10,515
    
    
    
    
    
    
    
    
    
    
    
    43,542Accrued expenses
    
    
    
    
    
    
    72,656
    
    
    
    82,671
    
    
    
    1,311
    
    
    
    (534
    )
    
    
    156,104Current maturities of long-term debt and obligations
under capital leases
    
    
    
    
    
    
    4,177
    
    
    
    2,548
    
    
    
    6,857
    
    
    
    
    
    
    
    13,582Deferred income taxes
    
    
    
    
    
    
    6,667
    
    
    
    8,704
    
    
    
    
    
    
    
    
    
    
    
    15,371Income taxes payable
    
    
    
    
    
    
    119
    
    
    
    74
    
    
    
    
    
    
    
    
    
    
    
    193Total current liabilities
    
    
    
    
    
    
    465,179
    
    
    
    104,512
    
    
    
    8,168
    
    
    
    (534
    )
    
    
    577,325Long-term debt and obligations under capital leases,
less current maturities
    
    
    
    
    
    
    802,484
    
    
    
    53,020
    
    
    
    240,662
    
    
    
    
    
    
    
    1,096,166Other long-term liabilities
    
    
    
    
    
    
    110,344
    
    
    
    43,945
    
    
    
    1,350
    
    
    
    
    
    
    
    155,639Total liabilities
    
    
    
    
    
    
    1,378,007
    
    
    
    201,477
    
    
    
    250,180
    
    
    
    (534
    )
    
    
    1,829,130Shareholders equity
    
    
    85,556
    
    
    
    59,973
    
    
    
    620,428
    
    
    
    36,259
    
    
    
    (716,660
    )
    
    
    85,556Total liabilities and shareholders equity
    
    $
    85,556
    
    
    $
    1,437,980
    
    
    $
    821,905
    
    
    $
    286,439
    
    
    $
    (717,194
    )
    
    $
    1,914,686
  14




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##### Table of Contents



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 30, 2010
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    1
    
    
    $
    9,962
    
    
    $
    8,959
    
    
    $
    
    
    
    $
    
    
    
    $
    18,922Merchandise inventories
    
    
    
    
    
    
    339,616
    
    
    
    319,783
    
    
    
    
    
    
    
    
    
    
    
    659,399Prepaid expenses and other current assets
    
    
    
    
    
    
    73,640
    
    
    
    11,549
    
    
    
    3,035
    
    
    
    (534
    )
    
    
    87,690Total current assets
    
    
    1
    
    
    
    423,218
    
    
    
    340,291
    
    
    
    3,035
    
    
    
    (534
    )
    
    
    766,011Property, fixtures and equipment at cost, net
    
    
    
    
    
    
    226,915
    
    
    
    239,850
    
    
    
    289,853
    
    
    
    
    
    
    
    756,618Deferred income taxes
    
    
    
    
    
    
    4,277
    
    
    
    9,026
    
    
    
    
    
    
    
    
    
    
    
    13,303Intangible assets, net
    
    
    
    
    
    
    59,332
    
    
    
    79,462
    
    
    
    
    
    
    
    
    
    
    
    138,794Investment in and advances to (from) affiliates
    
    
    141,755
    
    
    
    489,259
    
    
    
    153,717
    
    
    
    316
    
    
    
    (785,047
    )
    
    
    Other long-term assets
    
    
    
    
    
    
    38,561
    
    
    
    4,263
    
    
    
    4,457
    
    
    
    
    
    
    
    47,281Total assets
    
    $
    141,756
    
    
    $
    1,241,562
    
    
    $
    826,609
    
    
    $
    297,661
    
    
    $
    (785,581
    )
    
    $
    1,722,007Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    
    
    
    $
    163,671
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    163,671Accrued payroll and benefits
    
    
    
    
    
    
    40,632
    
    
    
    7,665
    
    
    
    
    
    
    
    
    
    
    
    48,297Accrued expenses
    
    
    
    
    
    
    73,953
    
    
    
    85,979
    
    
    
    1,339
    
    
    
    (534
    )
    
    
    160,737Current maturities of long-term debt and obligations
under capital leases
    
    
    
    
    
    
    3,635
    
    
    
    2,409
    
    
    
    6,509
    
    
    
    
    
    
    
    12,553Deferred income taxes
    
    
    
    
    
    
    5,650
    
    
    
    9,170
    
    
    
    
    
    
    
    
    
    
    
    14,820Total current liabilities
    
    
    
    
    
    
    287,541
    
    
    
    105,223
    
    
    
    7,848
    
    
    
    (534
    )
    
    
    400,078Long-term debt and obligations under capital leases,
less current maturities
    
    
    
    
    
    
    715,891
    
    
    
    54,948
    
    
    
    245,881
    
    
    
    
    
    
    
    1,016,720Other long-term liabilities
    
    
    
    
    
    
    120,469
    
    
    
    41,706
    
    
    
    1,278
    
    
    
    
    
    
    
    163,453Total liabilities
    
    
    
    
    
    
    1,123,901
    
    
    
    201,877
    
    
    
    255,007
    
    
    
    (534
    )
    
    
    1,580,251Shareholders equity
    
    
    141,756
    
    
    
    117,661
    
    
    
    624,732
    
    
    
    42,654
    
    
    
    (785,047
    )
    
    
    141,756Total liabilities and shareholders equity
    
    $
    141,756
    
    
    $
    1,241,562
    
    
    $
    826,609
    
    
    $
    297,661
    
    
    $
    (785,581
    )
    
    $
    1,722,007
  15




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##### Table of Contents



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 October 30, 2010
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    303,955
    
    
    $
    396,559
    
    
    $
    
    
    
    $
    
    
    
    $
    700,514Other income
    
    
    
    
    
    
    6,803
    
    
    
    9,620
    
    
    
    
    
    
    
    
    
    
    
    16,423
    
    
    
    310,758
    
    
    
    406,179
    
    
    
    
    
    
    
    
    
    
    
    716,937Costs and expenses:Costs of merchandise sold
    
    
    
    
    
    
    187,748
    
    
    
    245,104
    
    
    
    
    
    
    
    
    
    
    
    432,852Selling, general and administrative
    
    
    
    
    
    
    107,908
    
    
    
    136,273
    
    
    
    24
    
    
    
    (8,783
    )
    
    
    235,422Depreciation and amortization
    
    
    
    
    
    
    9,662
    
    
    
    12,342
    
    
    
    2,794
    
    
    
    
    
    
    
    24,798Amortization of lease-related interests
    
    
    
    
    
    
    647
    
    
    
    484
    
    
    
    
    
    
    
    
    
    
    
    1,131Income (loss) from operations
    
    
    
    
    
    
    4,793
    
    
    
    11,976
    
    
    
    (2,818
    )
    
    
    8,783
    
    
    
    22,734Other income (expense):Intercompany rental and royalty income
    
    
    
    
    
    
    
    
    
    
    1,740
    
    
    
    7,043
    
    
    
    (8,783
    )
    
    
    Equity in (losses) earnings of subsidiaries
    
    
    (5,613
    )
    
    
    10,127
    
    
    
    
    
    
    
    
    
    
    
    (4,514
    )
    
    
    Interest expense, net
    
    
    
    
    
    
    (20,533
    )
    
    
    (3,750
    )
    
    
    (4,064
    )
    
    
    
    
    
    
    (28,347
    )(Loss) income before income taxes
    
    
    (5,613
    )
    
    
    (5,613
    )
    
    
    9,966
    
    
    
    161
    
    
    
    (4,514
    )
    
    
    (5,613
    )Income tax provision
    
    
    661
    
    
    
    661
    
    
    
    330
    
    
    
    
    
    
    
    (991
    )
    
    
    661Net (loss) income
    
    $
    (6,274
    )
    
    $
    (6,274
    )
    
    $
    9,636
    
    
    $
    161
    
    
    $
    (3,523
    )
    
    $
    (6,274
    )
  16




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##### Table of Contents



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 October 31, 2009
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    307,443
    
    
    $
    396,503
    
    
    $
    
    
    
    $
    
    
    
    $
    703,946Other income
    
    
    
    
    
    
    7,780
    
    
    
    10,887
    
    
    
    
    
    
    
    
    
    
    
    18,667
    
    
    
    315,223
    
    
    
    407,390
    
    
    
    
    
    
    
    
    
    
    
    722,613Costs and expenses:Costs of merchandise sold
    
    
    
    
    
    
    192,046
    
    
    
    246,983
    
    
    
    
    
    
    
    
    
    
    
    439,029Selling, general and administrative
    
    
    
    
    
    
    106,786
    
    
    
    136,826
    
    
    
    22
    
    
    
    (8,836
    )
    
    
    234,798Depreciation and amortization
    
    
    
    
    
    
    11,222
    
    
    
    13,924
    
    
    
    2,870
    
    
    
    
    
    
    
    28,016Amortization of lease-related interests
    
    
    
    
    
    
    698
    
    
    
    518
    
    
    
    
    
    
    
    
    
    
    
    1,216Income (loss) from operations
    
    
    
    
    
    
    4,471
    
    
    
    9,139
    
    
    
    (2,892
    )
    
    
    8,836
    
    
    
    19,554Other income (expense):Intercompany rental and royalty income
    
    
    
    
    
    
    
    
    
    
    1,793
    
    
    
    7,043
    
    
    
    (8,836
    )
    
    
    Equity in (losses) earnings of subsidiaries
    
    
    (3,647
    )
    
    
    9,725
    
    
    
    
    
    
    
    
    
    
    
    (6,078
    )
    
    
    Interest expense, net
    
    
    
    
    
    
    (17,843
    )
    
    
    (1,187
    )
    
    
    (4,171
    )
    
    
    
    
    
    
    (23,201
    )(Loss) income before income taxes
    
    
    (3,647
    )
    
    
    (3,647
    )
    
    
    9,745
    
    
    
    (20
    )
    
    
    (6,078
    )
    
    
    (3,647
    )Income tax provision
    
    
    506
    
    
    
    506
    
    
    
    153
    
    
    
    
    
    
    
    (659
    )
    
    
    506Net (loss) income
    
    $
    (4,153
    )
    
    $
    (4,153
    )
    
    $
    9,592
    
    
    $
    (20
    )
    
    $
    (5,419
    )
    
    $
    (4,153
    )
  17




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##### Table of Contents



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
Thirty-Nine Weeks Ended October 30, 2010
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    855,121
    
    
    $
    1,115,362
    
    
    $
    
    
    
    $
    
    
    
    $
    1,970,483Other income
    
    
    
    
    
    
    18,126
    
    
    
    26,159
    
    
    
    
    
    
    
    
    
    
    
    44,285
    
    
    
    873,247
    
    
    
    1,141,521
    
    
    
    
    
    
    
    
    
    
    
    2,014,768Costs and expenses:Costs of merchandise sold
    
    
    
    
    
    
    530,153
    
    
    
    694,190
    
    
    
    
    
    
    
    
    
    
    
    1,224,343Selling, general and administrative
    
    
    
    
    
    
    314,970
    
    
    
    398,774
    
    
    
    73
    
    
    
    (26,319
    )
    
    
    687,498Depreciation and amortization
    
    
    
    
    
    
    30,509
    
    
    
    38,391
    
    
    
    8,638
    
    
    
    
    
    
    
    77,538Amortization of lease-related interests
    
    
    
    
    
    
    1,970
    
    
    
    1,454
    
    
    
    
    
    
    
    
    
    
    
    3,424(Loss) income from operations
    
    
    
    
    
    
    (4,355
    )
    
    
    8,712
    
    
    
    (8,711
    )
    
    
    26,319
    
    
    
    21,965Other income (expense):Intercompany rental and royalty income
    
    
    
    
    
    
    
    
    
    
    4,973
    
    
    
    21,346
    
    
    
    (26,319
    )
    
    
    Equity in (losses) earnings of subsidiaries
    
    
    (63,072
    )
    
    
    3,037
    
    
    
    
    
    
    
    
    
    
    
    60,035
    
    
    
    Interest expense, net
    
    
    
    
    
    
    (61,754
    )
    
    
    (11,001
    )
    
    
    (12,282
    )
    
    
    
    
    
    
    (85,037
    )(Loss) income before income taxes
    
    
    (63,072
    )
    
    
    (63,072
    )
    
    
    2,684
    
    
    
    353
    
    
    
    60,035
    
    
    
    (63,072
    )Income tax provision
    
    
    474
    
    
    
    474
    
    
    
    984
    
    
    
    
    
    
    
    (1,458
    )
    
    
    474Net (loss) income
    
    $
    (63,546
    )
    
    $
    (63,546
    )
    
    $
    1,700
    
    
    $
    353
    
    
    $
    61,493
    
    
    $
    (63,546
    )
  18




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##### Table of Contents



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
Thirty-Nine Weeks Ended October 31, 2009
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    848,178
    
    
    $
    1,109,527
    
    
    $
    
    
    
    $
    
    
    
    $
    1,957,705Other income
    
    
    
    
    
    
    25,257
    
    
    
    27,878
    
    
    
    
    
    
    
    
    
    
    
    53,135
    
    
    
    873,435
    
    
    
    1,137,405
    
    
    
    
    
    
    
    
    
    
    
    2,010,840Costs and expenses:Costs of merchandise sold
    
    
    
    
    
    
    539,241
    
    
    
    703,251
    
    
    
    
    
    
    
    
    
    
    
    1,242,492Selling, general and administrative
    
    
    
    
    
    
    315,885
    
    
    
    404,886
    
    
    
    67
    
    
    
    (26,290
    )
    
    
    694,548Depreciation and amortization
    
    
    
    
    
    
    34,011
    
    
    
    42,009
    
    
    
    8,790
    
    
    
    
    
    
    
    84,810Amortization of lease-related interests
    
    
    
    
    
    
    2,106
    
    
    
    1,554
    
    
    
    
    
    
    
    
    
    
    
    3,660Loss from operations
    
    
    
    
    
    
    (17,808
    )
    
    
    (14,295
    )
    
    
    (8,857
    )
    
    
    26,290
    
    
    
    (14,670
    )Other income (expense):Intercompany rental and royalty income
    
    
    
    
    
    
    
    
    
    
    4,944
    
    
    
    21,346
    
    
    
    (26,290
    )
    
    
    Equity in losses of subsidiaries
    
    
    (83,991
    )
    
    
    (12,874
    )
    
    
    
    
    
    
    
    
    
    
    96,865
    
    
    
    Interest expense, net
    
    
    
    
    
    
    (53,309
    )
    
    
    (3,422
    )
    
    
    (12,590
    )
    
    
    
    
    
    
    (69,321
    )Loss before income taxes
    
    
    (83,991
    )
    
    
    (83,991
    )
    
    
    (12,773
    )
    
    
    (101
    )
    
    
    96,865
    
    
    
    (83,991
    )Income tax provision
    
    
    365
    
    
    
    365
    
    
    
    965
    
    
    
    
    
    
    
    (1,330
    )
    
    
    365Net loss
    
    $
    (84,356
    )
    
    $
    (84,356
    )
    
    $
    (13,738
    )
    
    $
    (101
    )
    
    $
    98,195
    
    
    $
    (84,356
    )
  19




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##### Table of Contents



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
Thirty-Nine Weeks Ended October 30, 2010
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:
    
    $
    4,082
    
    
    $
    (71,404
    )
    
    $
    25,495
    
    
    $
    11,617
    
    
    $
    (12,780
    )
    
    $
    (42,990
    )Cash flows from investing activities:Capital expenditures
    
    
    
    
    
    
    (17,376
    )
    
    
    (18,672
    )
    
    
    
    
    
    
    
    
    
    
    (36,048
    )Intercompany Investing activity
    
    
    
    
    
    
    (29
    )
    
    
    
    
    
    
    
    
    
    
    29
    
    
    
    Proceeds from sale of property, fixtures
and equipment
    
    
    
    
    
    
    46
    
    
    
    31
    
    
    
    
    
    
    
    
    
    
    
    77Net cash used in investing activities
    
    
    
    
    
    
    (17,359
    )
    
    
    (18,641
    )
    
    
    
    
    
    
    29
    
    
    
    (35,971
    )Cash flows from financing activities:Payments on long-term debt and capital
lease obligations
    
    
    
    
    
    
    (426,874
    )
    
    
    (1,790
    )
    
    
    (4,870
    )
    
    
    
    
    
    
    (433,534
    )Proceeds from issuance of long-term debt
    
    
    
    
    
    
    512,285
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    512,285Deferred financing costs paid
    
    
    
    
    
    
    (717
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (717
    )Intercompany financing activity
    
    
    
    
    
    
    
    
    
    
    (6,004
    )
    
    
    (6,747
    )
    
    
    12,751
    
    
    
    Restricted shares forfeited in lieu of payroll taxes
    
    
    (4,082
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,082
    )Increase in bank overdraft balances
    
    
    
    
    
    
    4,453
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,453Net cash (used in) provided by financing activities
    
    
    (4,082
    )
    
    
    89,147
    
    
    
    (7,794
    )
    
    
    (11,617
    )
    
    
    12,751
    
    
    
    78,405Net increase (decrease) in cash and cash
equivalents
    
    
    
    
    
    
    384
    
    
    
    (940
    )
    
    
    
    
    
    
    
    
    
    
    (556
    )Cash and cash equivalents at beginning
of period
    
    
    1
    
    
    
    9,962
    
    
    
    8,959
    
    
    
    
    
    
    
    
    
    
    
    18,922Cash and cash equivalents at end of period
    
    $
    1
    
    
    $
    10,346
    
    
    $
    8,019
    
    
    $
    
    
    
    $
    
    
    
    $
    18,366
  20




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##### Table of Contents



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
Thirty-Nine Weeks Ended October 31, 2009
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:
    
    $
    866
    
    
    $
    (51,174
    )
    
    $
    12,323
    
    
    $
    7,079
    
    
    $
    (11,122
    )
    
    $
    (42,028
    )Cash flows from investing activities:Capital expenditures
    
    
    
    
    
    
    (16,131
    )
    
    
    (6,079
    )
    
    
    
    
    
    
    
    
    
    
    (22,210
    )Intercompany Investing activity
    
    
    
    
    
    
    (1,713
    )
    
    
    
    
    
    
    
    
    
    
    1,713
    
    
    
    Proceeds from sale of property, fixtures
and equipment
    
    
    
    
    
    
    24
    
    
    
    62
    
    
    
    
    
    
    
    
    
    
    
    86Net cash used in investing activities
    
    
    
    
    
    
    (17,820
    )
    
    
    (6,017
    )
    
    
    
    
    
    
    1,713
    
    
    
    (22,124
    )Cash flows from financing activities:Payments on long-term debt and capital
lease obligations
    
    
    
    
    
    
    (469,935
    )
    
    
    (1,661
    )
    
    
    (4,546
    )
    
    
    
    
    
    
    (476,142
    )Proceeds from issuance of long-term debt
    
    
    
    
    
    
    539,531
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    539,531Intercompany financing activity
    
    
    
    
    
    
    (866
    )
    
    
    (6,010
    )
    
    
    (2,533
    )
    
    
    9,409
    
    
    
    Cash dividends paid
    
    
    (866
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (866
    )Deferred financing costs paid
    
    
    
    
    
    
    (322
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (322
    )Decrease in bank overdraft balances
    
    
    
    
    
    
    (2,107
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,107
    )Net cash (used in) provided by financing activities
    
    
    (866
    )
    
    
    66,301
    
    
    
    (7,671
    )
    
    
    (7,079
    )
    
    
    9,409
    
    
    
    60,094Net decrease in cash and cash
equivalents
    
    
    
    
    
    
    (2,693
    )
    
    
    (1,365
    )
    
    
    
    
    
    
    
    
    
    
    (4,058
    )Cash and cash equivalents at beginning
of period
    
    
    1
    
    
    
    10,769
    
    
    
    8,949
    
    
    
    
    
    
    
    
    
    
    
    19,719Cash and cash equivalents at end of period
    
    $
    1
    
    
    $
    8,076
    
    
    $
    7,584
    
    
    $
    
    
    
    $
    
    
    
    $
    15,661
 13. AMENDMENTS TO CREDIT CARD PROGRAM AGREEMENT
    21




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##### Table of Contents



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 increase in the range of 1.0% to 1.5%;
    
    a gross margin rate of 37.7%, an improvement over the fiscal 2009 rate of 37.1%;
    
    a reduction of $15.0 million to $20.0 million in our selling, general and administrative
(SG&A) expenses; and
    
    an effective tax rate of 0%.
  22




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##### Table of Contents



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 Results of Operations
  THIRTEEN
    
    
    THIRTY-NINEWEEKS ENDED
    
    
    WEEKS ENDEDOctober 30,
    
    
    October 31,
    
    
    October 30,
    
    
    October 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Other income
    
    
    2.3
    
    
    
    2.7
    
    
    
    2.2
    
    
    
    2.7102.3
    
    
    
    102.7
    
    
    
    102.2
    
    
    
    102.7Costs and expenses:Costs of merchandise sold
    
    
    61.8
    
    
    
    62.4
    
    
    
    62.1
    
    
    
    63.5Selling, general and administrative
    
    
    33.6
    
    
    
    33.4
    
    
    
    34.9
    
    
    
    35.5Depreciation and amortization
    
    
    3.5
    
    
    
    4.0
    
    
    
    3.9
    
    
    
    4.3Amortization of lease-related interests
    
    
    0.2
    
    
    
    0.2
    
    
    
    0.2
    
    
    
    0.2Income (loss) from operations
    
    
    3.2
    
    
    
    2.8
    
    
    
    1.1
    
    
    
    (0.7
    )Interest expense, net
    
    
    4.0
    
    
    
    3.3
    
    
    
    4.3
    
    
    
    3.5Loss before income taxes
    
    
    (0.8
    )
    
    
    (0.5
    )
    
    
    (3.2
    )
    
    
    (4.3
    )Income tax provision
    
    
    0.1
    
    
    
    0.1
    
    
    
    
    
    
    
    Net loss
    
    
    (0.9
    )%
    
    
    (0.6
    )%
    
    
    (3.2
    )%
    
    
    (4.3
    )%
 Third Quarter of 2010 Compared with Third Quarter of 2009
 Net sales
   Other income
 Costs and expenses
  23




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##### Table of Contents



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
   Income from operations
 Interest expense, net
 Income tax provision
 Net loss
 2010 Compared with 2009
 Net sales
  Other income
  24




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##### Table of Contents



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 Costs and expenses .
   Income (loss) from operations
 Interest expense, net
 Income tax provision
 Net loss
 Non-GAAP Financial Measure EBITDA
  THIRTEEN
    
    
    THIRTY-NINEWEEKS ENDED
    
    
    WEEKS ENDED(In thousands)
    
    October 30,
    
    
    October 31,
    
    
    October 30,
    
    
    October 31,(Unaudited)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009EBITDA
    
    $
    48,663
    
    
    $
    48,786
    
    
    $
    102,927
    
    
    $
    73,800
  25




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##### Table of Contents



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
   THIRTEEN
    
    
    THIRTY-NINEWEEKS ENDED
    
    
    WEEKS ENDED(In thousands)
    
    October 30,
    
    
    October 31,
    
    
    October 30,
    
    
    October 31,(Unaudited)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Net loss
    
    $
    (6,274
    )
    
    $
    (4,153
    )
    
    $
    (63,546
    )
    
    $
    (84,356
    )Adjustments:Income tax provision
    
    
    661
    
    
    
    506
    
    
    
    474
    
    
    
    365Interest expense, net
    
    
    28,347
    
    
    
    23,201
    
    
    
    85,037
    
    
    
    69,321Depreciation and amortization
    
    
    24,798
    
    
    
    28,016
    
    
    
    77,538
    
    
    
    84,810Amortization of lease-related interests
    
    
    1,131
    
    
    
    1,216
    
    
    
    3,424
    
    
    
    3,660EBITDA
    
    $
    48,663
    
    
    $
    48,786
    
    
    $
    102,927
    
    
    $
    73,800
 Seasonality
   Liquidity and Capital Resources
   26




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##### Table of Contents



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
   October 30,
    
    
    October 31,(Dollars in millions)
    
    2010
    
    
    2009Working capital
    
    $
    436.1
    
    
    $
    482.1Current ratio
    
    
    1.76:1
    
    
    
    1.95:1Debt to total capitalization (1)
    
    
    0.93:1
    
    
    
    0.96:1Unused availability under lines of credit (2)
    
    $
    461.6
    
    
    $
    245.6
 (1)
    
    Debt includes obligations under capital leases. Total capitalization includes
shareholders equity and debt.(2)
    
    Subject to a minimum borrowing availability covenant of $75.0 million.    THIRTY-NINEWEEKS ENDEDOctober 30,
    
    
    October 31,(Dollars in millions)
    
    2010
    
    
    2009Operating activities
    
    $
    (43.0
    )
    
    $
    (42.0
    )Investing activities
    
    
    (36.0
    )
    
    
    (22.1
    )Financing activities
    
    
    78.4
    
    
    
    60.1
  27




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##### Table of Contents



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
    Critical Accounting Policies
   Inventory Valuation
   28




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##### Table of Contents



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
    Vendor Allowances
    29




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##### Table of Contents



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




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##### Table of Contents



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
  
    
    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.
   Intangible Assets
     31




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##### Table of Contents



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




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##### Table of Contents



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 Forward-Looking Statements
   33




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##### Table of Contents



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
   34




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##### Table of Contents



THE BON-TON STORES, INC.
 
 PART II: OTHER INFORMATION
 
 ITEM 6.
    
    EXHIBITS
  Exhibit
    
    Description
    
    Document Location10.1
    
    
    Fifth Amendment to the Credit Card Program Agreement
    
    Exhibit 10.1 to the Current Report on Form 8-K filed on September 7, 201010.2
    
    
    Amendment No. 1 to The Bon-Ton Stores, Inc. 2009 Omnibus Incentive Plan
    
    Exhibit 10.1 to the Current Report on Form 8-K filed on November 24, 2010 (11/24/10 Form 8-K)10.3
    
    
    Form of Restricted Stock Agreement  Performance Shares
    
    Exhibit 10.2 to the 11/24/10 Form 8-K10.4
    
    
    Amendment to The Bon-Ton Stores, Inc. Cash Bonus Plan
    
    Exhibit 10.3 to the 11/24/10 Form 8-K31.1
    
    
    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:      December 9, 2010
    BY:
    /s/  Byron L. BergrenByron L. BergrenPresident and
Chief Executive OfficerDATE:      December 9, 2010
    BY:
    /s/  Keith E. PlowmanKeith E. PlowmanExecutive Vice President,
Chief Financial Officer and
Principal Accounting Officer  35