JACKSONVILLE, Fla., May 17, 2012 (GLOBE NEWSWIRE) -- Stein Mart, Inc. (Nasdaq:SMRT) today announced financial results for the first quarter ended April 28, 2012.
Overview of Results
Net income for the first quarter was $11.8 million or $0.27 per diluted share compared to net income of $15.9 million or $0.35 per diluted share in 2011. Net income as adjusted for the first quarter of 2011 was $14.7 million or $0.32 per diluted share. See discussion of other income below for explanation of "as adjusted" amounts for 2011.
Sales for the first quarter of 2012 of $303.4 million were flat to last year's first quarter sales of $303.5 million. Comparable store sales decreased 0.4 percent. Beginning in the fourth quarter last year, the Company began reducing coupons to return to an every-day price value model. Approximately 22 percent of first quarter 2012 sales were associated with coupons compared to 33 percent in the first quarter of 2011. The reduction in sales with coupons was predominantly on regular-price merchandise, which was 43 percent lower in the first quarter of 2012 compared to the first quarter of 2011.
"It is very important for us to reinforce the value of our merchandise at their regular prices," said Jay Stein, Interim Chief Executive Officer. "We have made substantial progress on this initiative during the first quarter with only a minimal impact to our comparable store sales. I feel encouraged given the reduction in coupon-associated sales. We are establishing a much healthier sales and gross margin base from which to grow in the future."
Operational Highlights
Gross profit for the first quarter decreased to $87.2 million or 28.8 percent of sales from $89.9 million or 29.6 percent of sales in 2011. The decrease in the gross profit rate was the result of lower mark-on and slightly higher occupancy and buying costs, offset by lower markdowns. Mark-on and markdowns were lower due to the Company selectively lowering prices on certain merchandise and decreasing coupons in accordance with its new pricing strategy.
Selling, general and administrative expenses decreased to $71.3 million for the first quarter of 2012 from $71.9 million in 2011.
Other income was $4.5 million for the first quarter of 2012 compared to $8.3 million in 2011. First quarter 2011 includes a pretax gain of $2.0 million ($1.2 million after tax or $0.03 per diluted share) to correct an error in a liability for credit card rewards. "As adjusted" results exclude the impact of this gain. Other income for the first quarter of 2012 decreased $1.8 million from other income as adjusted of $6.3 million for 2011 due to lower income from the new credit card agreement and the magazine program which is being discontinued.
The effective tax rate of 41.9 percent for the first quarter of 2012 increased from 39.3 percent in 2011 due to the unfavorable impact of certain expense items that are not deductible for tax purposes.
Balance Sheet Highlights
The Company maintained a strong balance sheet with $116.7 million in cash at the end of the first quarter compared to $94.2 million at the end of the first quarter of 2011. Inventories were $267.0 million at the end of the first quarter compared to $258.8 million at the end of the first quarter last year.
Share buyback
During the first quarter of 2012 the Company repurchased 347,000 shares at a cost of $2.2 million. The Company has approximately 1.1 million shares remaining on the current repurchase authorization.
Store network
The Company operated 263 Stein Mart stores at the end of the first quarter of 2012 and 262 stores at the end of the first quarter last year. During the quarter, two new stores were opened, one store was relocated and one store was closed. The Company expects to open four new stores, relocate four stores and close four stores during the second half of 2012.
Filing of Form 10-Q
Reported results are preliminary and not final until the filing of Form 10-Q for the fiscal quarter ended April 28, 2012 with the SEC, and therefore remain subject to adjustment.
Conference Call
A conference call for investment analysts to discuss the Company's first quarter results will be held at 10 a.m. ET today, Thursday, May 17, 2012. The call may be heard on the investor relations portion of the Company's website at http://ir.steinmart.com. A replay of the conference call will be available on the website through June 1, 2012.
Investor Presentation
Stein Mart's first quarter 2012 investor presentation has been posted to the investor relations portion of the Company's website at http://ir.steinmart.com.
About Stein Mart
Stein Mart stores offer the fashion merchandise, service and presentation of a better department or specialty store, at prices competitive with off-price retail chains. Currently with locations from California to Massachusetts, Stein Mart's focused assortment of merchandise features current season, moderate to better fashion apparel for women and men, as well as accessories, shoes and home fashions.
The Stein Mart, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=9827
SAFE HARBOR STATEMENT>>>>>>>Except for historical information contained herein, the statements in this release may be forward-looking, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company does not assume any obligation to update or revise any forward-looking statements even if experience or future changes make it clear that projected results expressed or implied will not be realized. Forward-looking statements involve known and unknown risks and uncertainties that may cause Stein Mart's actual results in future periods to differ materially from forecasted or expected results. Those risks include, without limitation:
- continued consumer sensitivity to economic conditions
- on-going competition from other retailers
- changing preferences in apparel
- the effectiveness of advertising, marketing and promotional strategies
- ability to negotiate acceptable lease terms with current landlords
- ability to successfully implement strategies to exit under-performing stores
- unanticipated weather conditions and unseasonable weather
- adequate sources of merchandise at acceptable prices
- increases in merchandise prices which could impact margins
- the Company's ability to attract and retain qualified employees
- disruption of the Company's distribution system
- failure of information technology
- acts of terrorism and the other risks and uncertainties described in the Company's filings with the Securities and Exchange Commission
SMRT-F
Additional information about Stein Mart, Inc. can be found at www.steinmart.com
| Stein Mart, Inc. | |||
| Condensed Consolidated Balance Sheets | |||
| (Unaudited) | |||
| (In thousands, except for share data) | |||
| April 28, 2012 | January 28, 2012 | April 30, 2011 | |
| ASSETS | |||
| Current assets: | |||
| Cash and cash equivalents | $ 116,723 | $ 94,053 | $ 94,163 |
| Inventories | 267,019 | 220,775 | 258,804 |
| Prepaid expenses and other current assets | 26,895 | 36,838 | 23,250 |
| Total current assets | 410,637 | 351,666 | 376,217 |
| Property and equipment, net | 104,353 | 104,141 | 81,072 |
| Other assets | 17,551 | 17,409 | 14,992 |
| Total assets | $ 532,541 | $ 473,216 | $ 472,281 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||
| Current liabilities: | |||
| Accounts payable | $ 149,650 | $ 106,063 | $ 117,039 |
| Accrued expenses and other current liabilities | 79,499 | 72,731 | 68,194 |
| Total current liabilities | 229,149 | 178,794 | 185,233 |
| Other liabilities | 34,377 | 35,084 | 20,949 |
| Total liabilities | 263,526 | 213,878 | 206,182 |
| COMMITMENTS AND CONTINGENCIES | |||
| Shareholders' equity: | |||
| Preferred stock -- $.01 par value; 1,000,000 shares authorized; no shares issued or outstanding | |||
| Common stock -- $.01 par value; 100,000,000 shares authorized; 43,295,411, 43,588,821 and 44,659,326 shares issued and outstanding, respectively | 433 | 436 | 447 |
| Additional paid-in capital | 13,107 | 15,268 | 24,071 |
| Retained earnings | 256,885 | 245,053 | 241,125 |
| Accumulated other comprehensive (loss) income | (1,410) | (1,419) | 456 |
| Total shareholders' equity | 269,015 | 259,338 | 266,099 |
| Total liabilities and shareholders' equity | $ 532,541 | $ 473,216 | $ 472,281 |
| Stein Mart, Inc. | ||
| Condensed Consolidated Statements of Income | ||
| (Unaudited) | ||
| (In thousands, except per share amounts) | ||
| 13 Weeks Ended | 13 Weeks Ended | |
| April 28, 2012 | April 30, 2011 | |
| Net sales | $ 303,392 | $ 303,546 |
| Cost of merchandise sold | 216,163 | 213,626 |
| Gross profit | 87,229 | 89,920 |
| Selling, general and administrative expenses | 71,349 | 71,936 |
| Other income, net | 4,538 | 8,316 |
| Operating income | 20,418 | 26,300 |
| Interest expense, net | (46) | (85) |
| Income before income taxes | 20,372 | 26,215 |
| Provision for income taxes | 8,540 | 10,315 |
| Net income | $ 11,832 | $ 15,900 |
| Net income per share: | ||
| Basic | $ 0.27 | $ 0.35 |
| Diluted | $ 0.27 | $ 0.35 |
| Weighted-average shares outstanding: | ||
| Basic | 42,712 | 43,851 |
| Diluted | 42,752 | 44,186 |
| Stein Mart, Inc. | ||||
| Condensed Consolidated Statements of Comprehensive Income | ||||
| (Unaudited) | ||||
| (In thousands) | ||||
| 13 Weeks Ended | 13 Weeks Ended | |||
| April 28, 2012 | April 30, 2011 | |||
| Net income | $ 11,832 | $ 15,900 | ||
| Other comprehensive income, net of tax: | ||||
| Actuarial loss | 7 | (2) | ||
| Transition obligation | 2 | 2 | ||
| Comprehensive income | $ 11,841 | $ 15,900 | ||
| Stein Mart, Inc. | ||
| Condensed Consolidated Statements of Cash Flows | ||
| (Unaudited) | ||
| (In thousands) | ||
| 13 Weeks Ended | 13 Weeks Ended | |
| April 28, 2012 | April 30, 2011 | |
| Cash flows from operating activities: | ||
| Net income | $ 11,832 | $ 15,900 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 5,252 | 4,286 |
| Share-based compensation | 729 | 914 |
| Store closing charges | 146 | 143 |
| Deferred income taxes | (127) | 4,595 |
| Tax (deficiency) benefit from equity issuances | (667) | 80 |
| Excess tax benefits from share-based compensation | (33) | (124) |
| Changes in assets and liabilities: | ||
| Inventories | (46,244) | (26,509) |
| Prepaid expenses and other current assets | 9,243 | 1,575 |
| Other assets | (272) | (501) |
| Accounts payable | 43,587 | 21,494 |
| Accrued expenses and other current liabilities | 7,232 | (4,444) |
| Other liabilities | 723 | (71) |
| Net cash provided by operating activities | 31,401 | 17,338 |
| Cash flows from investing activities: | ||
| Net acquisition of property and equipment | (5,123) | (5,424) |
| Net cash used in investing activities | (5,123) | (5,424) |
| Cash flows from financing activities: | ||
| Capital lease payments | (1,415) | -- |
| Excess tax benefits from share-based compensation | 33 | 124 |
| Proceeds from exercise of stock options and other | 13 | 2,009 |
| Repurchase of common stock | (2,239) | (55) |
| Net cash (used in) provided by financing activities | (3,608) | 2,078 |
| Net increase in cash and cash equivalents | 22,670 | 13,992 |
| Cash and cash equivalents at beginning of year | 94,053 | 80,171 |
| Cash and cash equivalents at end of period | $ 116,723 | $ 94,163 |