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 May 2, 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
    
    Smaller reporting company o(Do not check if a
smaller reporting company)
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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)
    
    May 2,
    
    
    January 31,(Unaudited)
    
    2009
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    18,379
    
    
    $
    19,719Merchandise inventories
    
    
    691,403
    
    
    
    666,081Prepaid expenses and other current assets
    
    
    108,041
    
    
    
    113,441Total current assets
    
    
    817,823
    
    
    
    799,241Property, fixtures and equipment at cost, net of accumulated depreciation and
amortization of $523,914 and $498,556 at May 2, 2009 and January 31, 2009, respectively
    
    
    814,662
    
    
    
    832,763Deferred income taxes
    
    
    6,871
    
    
    
    9,994Intangible assets, net of accumulated amortization of $32,691 and $30,611 at
May 2, 2009 and January 31, 2009, respectively
    
    
    145,848
    
    
    
    148,171Other long-term assets
    
    
    25,819
    
    
    
    31,152Total assets
    
    $
    1,811,023
    
    
    $
    1,821,321Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    173,490
    
    
    $
    143,423Accrued payroll and benefits
    
    
    31,625
    
    
    
    36,116Accrued expenses
    
    
    153,804
    
    
    
    179,073Current maturities of long-term debt
    
    
    6,211
    
    
    
    6,072Current maturities of obligations under capital leases
    
    
    4,193
    
    
    
    2,730Deferred income taxes
    
    
    7,240
    
    
    
    7,328Income taxes payable
    
    
    166
    
    
    
    62Total current liabilities
    
    
    376,729
    
    
    
    374,804Long-term debt, less current maturities
    
    
    1,113,781
    
    
    
    1,083,449Obligations under capital leases, less current maturities
    
    
    67,632
    
    
    
    65,319Other long-term liabilities
    
    
    162,663
    
    
    
    163,572Total liabilities
    
    
    1,720,805
    
    
    
    1,687,144Contingencies (Note 10)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 15,931,071 and 14,880,173 at May 2, 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 May 2, 2009 and January 31, 2009
    
    
    30
    
    
    
    30Treasury stock, at cost - 337,800 shares at May 2, 2009 and January 31, 2009
    
    
    (1,387
    )
    
    
    (1,387
    )Additional paid-in-capital
    
    
    145,684
    
    
    
    144,577Accumulated other comprehensive loss
    
    
    (59,099
    )
    
    
    (59,464
    )Retained earnings
    
    
    4,831
    
    
    
    50,272Total shareholders equity
    
    
    90,218
    
    
    
    134,177Total liabilities and shareholders equity
    
    $
    1,811,023
    
    
    $
    1,821,321
   2




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##### 



THE BON-TON STORES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
 THIRTEENWEEKS ENDED(In thousands except share and per share data)
    
    May 2,
    
    
    May 3,(Unaudited)
    
    2009
    
    
    2008Net sales
    
    $
    644,531
    
    
    $
    700,248Other income
    
    
    18,392
    
    
    
    22,775662,923
    
    
    
    723,023Costs and expenses:Costs of merchandise sold
    
    
    420,366
    
    
    
    462,500Selling, general and administrative
    
    
    236,827
    
    
    
    255,774Depreciation and amortization
    
    
    28,098
    
    
    
    29,018Amortization of lease-related interests
    
    
    1,227
    
    
    
    1,208Loss from operations
    
    
    (23,595
    )
    
    
    (25,477
    )Interest expense, net
    
    
    22,926
    
    
    
    24,362Loss before income taxes
    
    
    (46,521
    )
    
    
    (49,839
    )Income tax benefit
    
    
    (1,080
    )
    
    
    (15,776
    )Net loss
    
    $
    (45,441
    )
    
    $
    (34,063
    )Per share
amounts Basic:Net loss
    
    $
    (2.67
    )
    
    $
    (2.03
    )Basic weighted average shares outstanding
    
    
    16,987,939
    
    
    
    16,777,587Diluted:Net loss
    
    $
    (2.67
    )
    
    $
    (2.03
    )Diluted weighted average shares outstanding
    
    
    16,987,939
    
    
    
    16,777,587
   3




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##### 



THE BON-TON STORES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
 THIRTEENWEEKS ENDED(In thousands)
    
    May 2,
    
    
    May 3,(Unaudited)
    
    2009
    
    
    2008Cash flows from operating activities:Net loss
    
    $
    (45,441
    )
    
    $
    (34,063
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    28,098
    
    
    
    29,018Amortization of lease-related interests
    
    
    1,227
    
    
    
    1,208Share-based compensation expense
    
    
    1,117
    
    
    
    1,627Loss on sale of property, fixtures and equipment
    
    
    65
    
    
    
    138Amortization of deferred financing costs
    
    
    1,022
    
    
    
    1,033Amortization of deferred gain on sale of proprietary credit card portfolio
    
    
    (603
    )
    
    
    (603
    )Deferred income taxes
    
    
    3,035
    
    
    
    (1,467
    )Changes in operating assets and liabilitiesIncrease in merchandise inventories
    
    
    (25,322
    )
    
    
    (19,492
    )Decrease (increase) in prepaid expenses and other current assets
    
    
    5,401
    
    
    
    (8,414
    )Decrease in other long-term assets
    
    
    4,311
    
    
    
    1,524Increase in accounts payable
    
    
    32,122
    
    
    
    15,745Decrease in accrued payroll and benefits and accrued expenses
    
    
    (24,340
    )
    
    
    (19,168
    )Increase (decrease) in income taxes payable
    
    
    104
    
    
    
    (899
    )Increase in other long-term liabilities
    
    
    545
    
    
    
    1,747Net cash used in operating activities
    
    
    (18,659
    )
    
    
    (32,066
    )Cash flows from investing activities:Capital expenditures
    
    
    (6,146
    )
    
    
    (25,538
    )Proceeds from sale of property, fixtures and equipment
    
    
    56
    
    
    
    39Net cash used in investing activities
    
    
    (6,090
    )
    
    
    (25,499
    )Cash flows from financing activities:Payments on long-term debt and capital lease obligations
    
    
    (154,662
    )
    
    
    (151,692
    )Proceeds from issuance of long-term debt
    
    
    184,308
    
    
    
    214,305Cash dividends paid
    
    
    (866
    )
    
    
    (866
    )Deferred financing costs paid
    
    
    
    
    
    
    (261
    )Decrease in bank overdraft balances
    
    
    (5,371
    )
    
    
    (6,400
    )Net cash provided by financing activities
    
    
    23,409
    
    
    
    55,086Net decrease in cash and cash equivalents
    
    
    (1,340
    )
    
    
    (2,479
    )Cash and cash equivalents at beginning of period
    
    
    19,719
    
    
    
    21,238Cash and cash equivalents at end of period
    
    $
    18,379
    
    
    $
    18,759
   4




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##### 



THE BON-TON STORES, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
 AccumulatedOtherClass A
    
    
    
    
    
    
    Additional
    
    
    Compre-(In thousands except per share data)
    
    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 11):Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45,441
    )
    
    
    (45,441
    )Pension and postretirement benefit plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,196
    
    
    
    
    
    
    
    1,196Change in fair value of cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (831
    )
    
    
    
    
    
    
    (831
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45,076
    )Share-based compensation expense
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    1,107
    
    
    
    
    
    
    
    
    
    
    
    1,117BALANCE AT MAY 2, 2009
    
    $
    159
    
    
    $
    30
    
    
    $
    (1,387
    )
    
    $
    145,684
    
    
    $
    (59,099
    )
    
    $
    4,831
    
    
    $
    90,218
   5




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##### 



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




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##### 



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




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##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per share data)
  SignificantQuoted Prices
    
    
    Other
    
    
    SignificantTotal Carrying
    
    
    in Active
    
    
    Observable
    
    
    UnobservableValue at
    
    
    Markets
    
    
    Inputs
    
    
    InputsMay 2, 2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Interest rate swap liability
    
    $
    6,539
    
    
    $
    
    
    
    $
    6,539
    
    
    $
    
 SignificantTotal Carrying
    
    
    
    
    
    
    Other
    
    
    SignificantValue at
    
    
    Quoted Prices
    
    
    Observable
    
    
    UnobservableJanuary 31,
    
    
    in Active Markets
    
    
    Inputs
    
    
    Inputs2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Interest rate swap liability
    
    $
    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 and per 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
    
    $
    
    
    
    $
    6,539
  Location of Loss
    
    
    Amount of Loss
    
    
    
    
    
    Amount ofReclassified from
    
    
    Reclassified from
    
    
    Location of Loss
    
    
    LossAmount of Loss
    
    AOCI to the
    
    
    AOCI to the
    
    
    Recognized in the
    
    
    Recognized inRecognized in
    
    Statement of
    
    
    Statement of
    
    
    Statement of
    
    
    the StatementOCI
    
    Operations
    
    
    Operations
    
    
    Operations
    
    
    of Operations(effective portion)
    

(effective portion)
    
    
    (effective portion)
    
    
    (ineffective portion)
    
    
    (ineffective portion)$1,925
    
    Interest Expense, Net
    
    $
    1,094
    
    
    Interest Expense, Net
    
    $
    
  9




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##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per share data)
  5. SUPPLEMENTAL BALANCE SHEET INFORMATION
  May 2,
    
    
    January 31,2009
    
    
    2009Prepaid expenses
    
    $
    36,042
    
    
    $
    32,822Other receivables
    
    
    38,055
    
    
    
    49,473Income tax receivables
    
    
    33,944
    
    
    
    31,146Total
    
    $
    108,041
    
    
    $
    113,441
 6. SUPPLEMENTAL CASH FLOW INFORMATION
  THIRTEENWEEKS ENDEDMay 2,
    
    
    May 3,2009
    
    
    2008Supplemental disclosure of cash flow information:Interest paid, net of amounts capitalized
    
    $
    36,629
    
    
    $
    36,754Income taxes paid, net of refunds
    
    
    176
    
    
    
    4,760Non-cash investing activities:Decrease in accrued property, fixtures and equipment
included in accounts payable and accrued expenses
    
    $
    (1,241
    )
    
    $
    (2,088
    )Assets acquired under capital leases
    
    
    4,602
    
    
    
    
  10




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##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per share data)
 7. EXIT OR DISPOSAL ACTIVITIES
  Termination
    
    
    OtherBenefits
    
    
    Costs
    
    
    TotalBalance as of January 31, 2009
    
    $
    2,324
    
    
    $
    70
    
    
    $
    2,394Provision
    
    
    1,641
    
    
    
    
    
    
    
    1,641Payments
    
    
    (3,845
    )
    
    
    
    
    
    
    (3,845
    )Balance as of May 2, 2009
    
    $
    120
    
    
    $
    70
    
    
    $
    190
   8. EMPLOYEE DEFINED AND POSTRETIREMENT BENEFIT PLANS
  THIRTEENWEEKS ENDEDMay 2,
    
    
    May 3,2009
    
    
    2008Service cost
    
    $
    
    
    
    $
    39Interest cost
    
    
    2,822
    
    
    
    2,935Expected return on plan assets
    
    
    (1,765
    )
    
    
    (3,076
    )Recognition of prior service cost
    
    
    
    
    
    
    1Recognition of net actuarial loss
    
    
    1,219
    
    
    
    126Net periodic benefit expense
    
    $
    2,276
    
    
    $
    25
    11




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##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per share data)
 9. INCOME TAXES
   10. CONTINGENCIES
   11. COMPREHENSIVE LOSS
  THIRTEENWEEKS ENDEDMay 2,
    
    
    May 3,2009
    
    
    2008Net loss
    
    $
    (45,441
    )
    
    $
    (34,063
    )Other comprehensive income (loss):Amortization of pension and postretirement benefit plans
    
    
    1,196
    
    
    
    80Cash flow hedge derivative (loss) income
    
    
    (831
    )
    
    
    936Comprehensive loss
    
    $
    (45,076
    )
    
    $
    (33,047
    )
  12. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES
   12




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##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per share data)
   13




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##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per share data)
 The Bon-Ton Stores, Inc.
 Condensed Consolidating Balance Sheet
 May 2, 2009
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    1
    
    
    $
    7,831
    
    
    $
    10,547
    
    
    $
    
    
    
    $
    
    
    
    $
    18,379Merchandise inventories
    
    
    
    
    
    
    338,262
    
    
    
    353,141
    
    
    
    
    
    
    
    
    
    
    
    691,403Prepaid expenses and other current assets
    
    
    
    
    
    
    82,966
    
    
    
    23,739
    
    
    
    1,842
    
    
    
    (506
    )
    
    
    108,041Total current assets
    
    
    1
    
    
    
    429,059
    
    
    
    387,427
    
    
    
    1,842
    
    
    
    (506
    )
    
    
    817,823Property, fixtures and equipment at cost, net
    
    
    
    
    
    
    254,578
    
    
    
    261,593
    
    
    
    298,491
    
    
    
    
    
    
    
    814,662Deferred income taxes
    
    
    
    
    
    
    2,199
    
    
    
    4,672
    
    
    
    
    
    
    
    
    
    
    
    6,871Intangible assets, net
    
    
    
    
    
    
    62,808
    
    
    
    83,040
    
    
    
    
    
    
    
    
    
    
    
    145,848Investment in and advances to (from) affiliates
    
    
    90,217
    
    
    
    578,291
    
    
    
    21,111
    
    
    
    316
    
    
    
    (689,935
    )
    
    
    Other long-term assets
    
    
    
    
    
    
    18,314
    
    
    
    5,068
    
    
    
    2,437
    
    
    
    
    
    
    
    25,819Total assets
    
    $
    90,218
    
    
    $
    1,345,249
    
    
    $
    762,911
    
    
    $
    303,086
    
    
    $
    (690,441
    )
    
    $
    1,811,023Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    
    
    
    $
    173,490
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    173,490Accrued payroll and benefits
    
    
    
    
    
    
    22,069
    
    
    
    9,556
    
    
    
    
    
    
    
    
    
    
    
    31,625Accrued expenses
    
    
    
    
    
    
    78,428
    
    
    
    75,797
    
    
    
    85
    
    
    
    (506
    )
    
    
    153,804Current maturities of long-term debt and obligations
under capital leases
    
    
    
    
    
    
    1,915
    
    
    
    2,278
    
    
    
    6,211
    
    
    
    
    
    
    
    10,404Deferred income taxes
    
    
    
    
    
    
    2,518
    
    
    
    4,722
    
    
    
    
    
    
    
    
    
    
    
    7,240Income taxes payable
    
    
    
    
    
    
    100
    
    
    
    66
    
    
    
    
    
    
    
    
    
    
    
    166Total current liabilities
    
    
    
    
    
    
    278,520
    
    
    
    92,419
    
    
    
    6,296
    
    
    
    (506
    )
    
    
    376,729Long-term debt and obligations under capital leases,
less current maturities
    
    
    
    
    
    
    874,438
    
    
    
    56,772
    
    
    
    250,203
    
    
    
    
    
    
    
    1,181,413Other long-term liabilities
    
    
    
    
    
    
    122,202
    
    
    
    39,250
    
    
    
    1,211
    
    
    
    
    
    
    
    162,663Total liabilities
    
    
    
    
    
    
    1,275,160
    
    
    
    188,441
    
    
    
    257,710
    
    
    
    (506
    )
    
    
    1,720,805Shareholders equity
    
    
    90,218
    
    
    
    70,089
    
    
    
    574,470
    
    
    
    45,376
    
    
    
    (689,935
    )
    
    
    90,218Total liabilities and shareholders equity
    
    $
    90,218
    
    
    $
    1,345,249
    
    
    $
    762,911
    
    
    $
    303,086
    
    
    $
    (690,441
    )
    
    $
    1,811,023
  14




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per 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
  15




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per share data)
 The Bon-Ton Stores, Inc.
 Condensed Consolidating Statement of Operations
 Thirteen Weeks Ended May 2, 2009
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    278,415
    
    
    $
    366,116
    
    
    $
    
    
    
    $
    
    
    
    $
    644,531Other income
    
    
    
    
    
    
    7,459
    
    
    
    10,933
    
    
    
    
    
    
    
    
    
    
    
    18,392
    
    
    
    285,874
    
    
    
    377,049
    
    
    
    
    
    
    
    
    
    
    
    662,923Costs and expenses:Costs of merchandise sold
    
    
    
    
    
    
    181,659
    
    
    
    238,707
    
    
    
    
    
    
    
    
    
    
    
    420,366Selling, general and administrative
    
    
    
    
    
    
    107,932
    
    
    
    137,625
    
    
    
    22
    
    
    
    (8,752
    )
    
    
    236,827Depreciation and amortization
    
    
    
    
    
    
    11,261
    
    
    
    13,844
    
    
    
    2,993
    
    
    
    
    
    
    
    28,098Amortization of lease-related interests
    
    
    
    
    
    
    709
    
    
    
    518
    
    
    
    
    
    
    
    
    
    
    
    1,227Loss from operations
    
    
    
    
    
    
    (15,687
    )
    
    
    (13,645
    )
    
    
    (3,015
    )
    
    
    8,752
    
    
    
    (23,595
    )Other income (expense):Intercompany rental and royalty income
    
    
    
    
    
    
    
    
    
    
    1,565
    
    
    
    7,187
    
    
    
    (8,752
    )
    
    
    Equity in losses of subsidiaries
    
    
    (46,521
    )
    
    
    (13,248
    )
    
    
    
    
    
    
    
    
    
    
    59,769
    
    
    
    Interest expense, net
    
    
    
    
    
    
    (17,586
    )
    
    
    (1,118
    )
    
    
    (4,222
    )
    
    
    
    
    
    
    (22,926
    )Loss before income taxes
    
    
    (46,521
    )
    
    
    (46,521
    )
    
    
    (13,198
    )
    
    
    (50
    )
    
    
    59,769
    
    
    
    (46,521
    )Income tax (benefit) provision
    
    
    (1,080
    )
    
    
    (1,080
    )
    
    
    169
    
    
    
    
    
    
    
    911
    
    
    
    (1,080
    )Net loss
    
    $
    (45,441
    )
    
    $
    (45,441
    )
    
    $
    (13,367
    )
    
    $
    (50
    )
    
    $
    58,858
    
    
    $
    (45,441
    )
  16




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per share data)
 The Bon-Ton Stores, Inc.
 Condensed Consolidating Statement of Operations
 Thirteen Weeks Ended May 3, 2008
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    297,896
    
    
    $
    402,352
    
    
    $
    
    
    
    $
    
    
    
    $
    700,248Other income
    
    
    
    
    
    
    10,014
    
    
    
    12,761
    
    
    
    
    
    
    
    
    
    
    
    22,775
    
    
    
    307,910
    
    
    
    415,113
    
    
    
    
    
    
    
    
    
    
    
    723,023Costs and expenses:Costs of merchandise sold
    
    
    
    
    
    
    196,370
    
    
    
    266,130
    
    
    
    
    
    
    
    
    
    
    
    462,500Selling, general and administrative
    
    
    
    
    
    
    118,491
    
    
    
    146,124
    
    
    
    21
    
    
    
    (8,862
    )
    
    
    255,774Depreciation and amortization
    
    
    
    
    
    
    13,137
    
    
    
    12,944
    
    
    
    2,937
    
    
    
    
    
    
    
    29,018Amortization of lease-related interests
    
    
    
    
    
    
    755
    
    
    
    453
    
    
    
    
    
    
    
    
    
    
    
    1,208Loss from operations
    
    
    
    
    
    
    (20,843
    )
    
    
    (10,538
    )
    
    
    (2,958
    )
    
    
    8,862
    
    
    
    (25,477
    )Other income (expense):Intercompany rental and royalty income
    
    
    
    
    
    
    
    
    
    
    1,747
    
    
    
    7,115
    
    
    
    (8,862
    )
    
    
    Equity in losses of subsidiaries
    
    
    (49,839
    )
    
    
    (10,853
    )
    
    
    
    
    
    
    
    
    
    
    60,692
    
    
    
    Interest expense, net
    
    
    
    
    
    
    (18,143
    )
    
    
    (1,898
    )
    
    
    (4,321
    )
    
    
    
    
    
    
    (24,362
    )Loss before income taxes
    
    
    (49,839
    )
    
    
    (49,839
    )
    
    
    (10,689
    )
    
    
    (164
    )
    
    
    60,692
    
    
    
    (49,839
    )Income tax benefit
    
    
    (15,776
    )
    
    
    (15,776
    )
    
    
    (4,655
    )
    
    
    
    
    
    
    20,431
    
    
    
    (15,776
    )Net loss
    
    $
    (34,063
    )
    
    $
    (34,063
    )
    
    $
    (6,034
    )
    
    $
    (164
    )
    
    $
    40,261
    
    
    $
    (34,063
    )
  17




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per share data)
 The Bon-Ton Stores, Inc.
 Condensed Consolidating Statement of Cash Flows
 Thirteen Weeks Ended May 2, 2009
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities
    
    $
    866
    
    
    $
    (22,892
    )
    
    $
    5,884
    
    
    $
    2,672
    
    
    $
    (5,189
    )
    
    $
    (18,659
    )Cash flows from investing activities:Capital expenditures
    
    
    
    
    
    
    (5,253
    )
    
    
    (893
    )
    
    
    
    
    
    
    
    
    
    
    (6,146
    )Intercompany investing activity
    
    
    
    
    
    
    (814
    )
    
    
    
    
    
    
    
    
    
    
    814
    
    
    
    Proceeds from sale of property, fixtures
and equipment
    
    
    
    
    
    
    21
    
    
    
    35
    
    
    
    
    
    
    
    
    
    
    
    56Net cash used in investing activities
    
    
    
    
    
    
    (6,046
    )
    
    
    (858
    )
    
    
    
    
    
    
    814
    
    
    
    (6,090
    )Cash flows from financing activities:Payments on long-term debt and capital
lease obligations
    
    
    
    
    
    
    (152,071
    )
    
    
    (543
    )
    
    
    (2,048
    )
    
    
    
    
    
    
    (154,662
    )Proceeds from issuance of long-term debt
    
    
    
    
    
    
    184,308
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    184,308Intercompany financing activity
    
    
    
    
    
    
    (866
    )
    
    
    (2,885
    )
    
    
    (624
    )
    
    
    4,375
    
    
    
    Cash dividends paid
    
    
    (866
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (866
    )Decrease in bank overdraft balances
    
    
    
    
    
    
    (5,371
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,371
    )Net cash (used in) provided by financing activities
    
    
    (866
    )
    
    
    26,000
    
    
    
    (3,428
    )
    
    
    (2,672
    )
    
    
    4,375
    
    
    
    23,409Net (decrease) increase in cash and cash equivalents
    
    
    
    
    
    
    (2,938
    )
    
    
    1,598
    
    
    
    
    
    
    
    
    
    
    
    (1,340
    )Cash and cash equivalents at beginning
of period
    
    
    1
    
    
    
    10,769
    
    
    
    8,949
    
    
    
    
    
    
    
    
    
    
    
    19,719Cash and cash equivalents at end of period
    
    $
    1
    
    
    $
    7,831
    
    
    $
    10,547
    
    
    $
    
    
    
    $
    
    
    
    $
    18,379
  18




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per share data)
 The Bon-Ton Stores, Inc.
 Condensed Consolidating Statement of Cash Flows
 Thirteen Weeks Ended May 3, 2008
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities
    
    $
    866
    
    
    $
    (39,398
    )
    
    $
    9,149
    
    
    $
    2,914
    
    
    $
    (5,597
    )
    
    $
    (32,066
    )Cash flows from investing activities:Capital expenditures
    
    
    
    
    
    
    (18,390
    )
    
    
    (7,148
    )
    
    
    
    
    
    
    
    
    
    
    (25,538
    )Proceeds from sale of property, fixtures
and equipment
    
    
    
    
    
    
    
    
    
    
    39
    
    
    
    
    
    
    
    
    
    
    
    39Net cash used in investing activities
    
    
    
    
    
    
    (18,390
    )
    
    
    (7,109
    )
    
    
    
    
    
    
    
    
    
    
    (25,499
    )Cash flows from financing activities:Payments on long-term debt and capital
lease obligations
    
    
    
    
    
    
    (149,806
    )
    
    
    (443
    )
    
    
    (1,443
    )
    
    
    
    
    
    
    (151,692
    )Proceeds from issuance of long-term debt
    
    
    
    
    
    
    214,305
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    214,305Intercompany financing activity
    
    
    
    
    
    
    (866
    )
    
    
    (3,265
    )
    
    
    (1,466
    )
    
    
    5,597
    
    
    
    Cash dividends paid
    
    
    (866
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (866
    )Deferred financing costs paid
    
    
    
    
    
    
    (256
    )
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    (261
    )Decrease in bank overdraft balances
    
    
    
    
    
    
    (6,400
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,400
    )Net cash (used in) provided by financing activities
    
    
    (866
    )
    
    
    56,977
    
    
    
    (3,708
    )
    
    
    (2,914
    )
    
    
    5,597
    
    
    
    55,086Net decrease in cash and cash equivalents
    
    
    
    
    
    
    (811
    )
    
    
    (1,668
    )
    
    
    
    
    
    
    
    
    
    
    (2,479
    )Cash and cash equivalents at beginning
of period
    
    
    1
    
    
    
    9,604
    
    
    
    11,633
    
    
    
    
    
    
    
    
    
    
    
    21,238Cash and cash equivalents at end of period
    
    $
    1
    
    
    $
    8,793
    
    
    $
    9,965
    
    
    $
    
    
    
    $
    
    
    
    $
    18,759
  19




---



##### 



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 6.5% to 9.0%;
 
    
    a reduction in other income;
 
    
    a gross margin rate of 35.5% to 36.0%;
 
    
    a reduction of $70.0 million in our selling, general and administrative (SG&A)
expenses; and
 
    
    an effective tax rate of 0%.
  20




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 Results of Operations
  THIRTEENWEEKS ENDEDMay 2,
    
    
    May 3,2009
    
    
    2008Net sales
    
    
    100.0
    %
    
    
    100.0
    %Other income
    
    
    2.9
    
    
    
    3.3102.9
    
    
    
    103.3Costs and expenses:Costs of merchandise sold
    
    
    65.2
    
    
    
    66.0Selling, general and administrative
    
    
    36.7
    
    
    
    36.5Depreciation and amortization
    
    
    4.4
    
    
    
    4.1Amortization of lease-related interests
    
    
    0.2
    
    
    
    0.2Loss from operations
    
    
    (3.7
    )
    
    
    (3.6
    )Interest expense, net
    
    
    3.6
    
    
    
    3.5Loss before income taxes
    
    
    (7.2
    )
    
    
    (7.1
    )Income tax benefit
    
    
    (0.2
    )
    
    
    (2.3
    )Net loss
    
    
    (7.1
    )%
    
    
    (4.9
    )%
 First Quarter of 2009 Compared with First Quarter of 2008
 Net sales
  Other income
 Costs and expenses
   21




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
  Loss from operations
 Interest expense, net
 Income tax benefit
 Net loss
 Seasonality
   Liquidity and Capital Resources
    22




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
  May 2,
    
    
    May 3,(Dollars in millions)
    
    2009
    
    
    2008Working capital
    
    $
    441.1
    
    
    $
    464.3Current ratio
    
    
    2.17:1
    
    
    
    2.07:1Debt to total capitalization (1)
    
    
    0.93:1
    
    
    
    0.79:1Unused availability under lines of credit (2)
    
    $
    164.6
    
    
    $
    273.8
 (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.    THIRTEENWEEKS ENDEDMay 2,
    
    
    May 3,(Dollars in millions)
    
    2009
    
    
    2008Operating activities
    
    $
    (18.7
    )
    
    $
    (32.1
    )Investing activities
    
    
    (6.1
    )
    
    
    (25.5
    )Financing activities
    
    
    23.4
    
    
    
    55.1
   23




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
    Critical Accounting Policies
   Inventory Valuation
    24




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
   Vendor Allowances
    25




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 Income Taxes
     Long-lived Assets
   
    
    Significant under-performance 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.
  26




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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
    27




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##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
   Future Accounting Changes
    28




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##### 



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




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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
   30




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THE BON-TON STORES, INC.
 PART II: OTHER INFORMATION
 ITEM 6. EXHIBITS
  Exhibit
    
    Description
    
    Document Location10.1
    
    
    Fourth Amendment to Employment
Agreement with Byron L. Bergren
    
    Incorporated by
reference to Exhibit
10.1 to the Current
Report on Form 8-K
filed on March 20, 200910.2
    
    
    Restricted Stock Agreement with
Byron L. Bergren
    
    Incorporated by
reference to Exhibit
10.5(e) to the Annual
Report on Form 10-K for
the fiscal year ended
January 31, 2009 (2008
Form 10-K)10.3
    
    

Restricted
Stock Agreement 
Performance Shares with Byron L.
Bergren
    
    Incorporated by
reference to Exhibit
10.5(f) to the 2008
Form 10-K31.1
    
    
    Certification of Byron L. Bergren
    
    Filed herewith31.2
    
    
    Certification of Keith E. Plowman
    
    Filed herewith32.1
    
    
    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: June 10, 2009
    
    BY:
    
    /s/ Byron L. Bergren

Byron L. BergrenPresident andChief Executive OfficerDATE: June 10, 2009
    
    BY:
    
    /s/ Keith E. Plowman

Keith E. PlowmanExecutive Vice President,Chief Financial Officer andPrincipal Accounting Officer
  31