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JACKSONVILLE, Fla., Aug. 18 /PRNewswire-FirstCall/ -- Stein Mart, Inc. (Nasdaq: SMRT) today announced financial results for its second quarter and first half ended July 30, 2005.
Second quarter results
For the second quarter of 2005, the Company earned $11.6 million or $0.26 per diluted share as compared to net income of $5.7 million or $0.13 per diluted share in the second quarter of 2004. Net sales for the second quarter were $337.1 million, a 5.1 percent increase over the $320.6 million in net sales for the second quarter of 2004. Comparable store sales increased 3.0 percent from the second quarter of 2004 to the second quarter of 2005. Gross profit increased to $96.3 million, or 28.6 percent of net sales in the second quarter of 2005 compared to $83.9 million, or 26.2 percent of net sales in the same period of 2004. Gross profit was favorably impacted by improved mark-up and decreased markdowns. Selling, general and administrative (SG&A) expenses were $81.5 million or 24.2 percent of net sales as compared to $78.4 million or 24.5 percent of net sales during the prior year's second quarter. The improvement in the SG&A rate was due to better store expense productivity.
First half results
For the first six months of 2005, the Company earned $28.4 million or $0.64 per diluted share, as compared to $17.2 million or $0.40 per diluted share in the first half of 2004. Net sales for the first half of 2005 were $717.7 million, a 4.9 percent increase over the $684.2 million in net sales during the same period last year. Comparable stores sales increased 3.1 percent from the first six months of 2004 to the first six months of 2005. Gross profit increased to $208.0 million, or 29.0 percent of net sales in the first half of 2005 compared to $182.7 million or 26.7 percent of net sales during the same period of 2004. The improvement in the gross profit rate was due to improved mark-up and decreased markdowns. Selling, general and administrative costs were $170.5 million as compared to $161.9 million, approximately flat at 23.8 percent of sales during the same period in both years.
"We experienced strong, regular-price selling of our fashion assortments throughout the spring/summer season and continue to enjoy early success with our transition and fall assortment, due to the continual flow of fresh merchandise into the stores," commented Michael D. Fisher, president and chief executive officer. "Customers have also responded favorably to our accelerated clearance cycle, resulting in inventories that are basically flat to last year at the end of the quarter."
Fisher continued, "We are very pleased that we produced such strong earnings growth on a more normalized comparable store sales increase, and believe that this further validates the strategic direction which we have been implementing over the past several years."
Expectations for third quarter
Comparable store sales for the third quarter ending October 29, 2005 are expected to increase in the mid-single-digit range, resulting in diluted earnings per share of $0.03-$0.05. In 2004, comparable store sales for the third quarter increased 6.6 percent and produced a net loss of $(0.05) per diluted share.
Store network update
During the second quarter of 2005, Stein Mart opened two new stores (Ocean, NJ and Boynton Beach, FL) and closed one store. For the year, the Company has opened four stores and closed six, for a quarter-end store count of 259.
The Company plans to open four additional stores in the fall season for a total of eight new stores, including one relocation that will take place next month. A new store in the Chicago suburb of Kildeer opens today. In the fourth quarter, the Company will close the final store in this year's planned closure of seven stores. At year-end, the Company expects to operate 261 stores. For 2006, the Company expects to open approximately 20 new stores around the country.
Second quarter conference call
The Company will host a conference call with management to discuss these results at 11:00 a.m. Eastern Time today (August 18) and may be accessed by all interested parties at http://www.steinmart.com .
About Stein Mart
Stein Mart's 259 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 New York, Stein Mart's focused assortment of merchandise features moderate to designer brand-name apparel for women, men and young children, as well as accessories, gifts, linens and shoes.
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, but are not limited to, on-going competition from other retailers, availability of new store sites at acceptable lease terms, ability to successfully implement strategies to exit or improve under-performing stores, changing preferences in apparel, changes in consumer spending due to current events and/or general economic conditions, the effectiveness of new advertising, marketing and promotional strategies, adequate sources of merchandise at acceptable prices and the other risks and uncertainties described in the Company's filings with the Securities and Exchange Commission.
Additional information about Stein Mart, Inc. can be found at http://www.steinmart.com .
Stein Mart, Inc.
Consolidated Balance Sheets
(In thousands)
July 30, January 29, July 31,
2005 2005 2004
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $18,916 $20,250 $20,997
Short-term investments 76,000 72,475 18,100
Trade and other receivables 2,384 5,852 3,398
Inventories 263,122 277,164 265,001
Prepaid taxes 4,185 -- 4,492
Prepaid expenses and other current
assets 16,178 13,010 15,595
Total current assets 380,785 388,751 327,583
Property and equipment, net 77,975 71,048 72,597
Other assets 14,725 14,781 13,994
Total assets $473,485 $474,580 $414,174
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $72,862 $99,163 $82,507
Accrued liabilities 67,344 73,257 63,080
Income taxes payable -- 5,089 --
Total current liabilities 140,206 177,509 145,587
Other liabilities 21,761 20,561 19,648
Total liabilities 161,967 198,070 165,235
COMMITMENTS AND CONTINGENCIES
Stockholders' equity:
Preferred stock - $.01 par value;
1,000,000 shares authorized;
no shares outstanding
Common stock - $.01 par value;
100,000,000 shares authorized;
43,658,910, 42,880,031 and 42,386,629
shares issued and outstanding,
respectively 437 429 424
Paid-in capital 25,782 14,340 7,461
Unearned compensation (2,760) (603) (486)
Retained earnings 288,059 262,344 241,540
Total stockholders' equity 311,518 276,510 248,939
Total liabilities and
stockholders' equity $473,485 $474,580 $414,174
Stein Mart, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
13 Weeks Ended 26 Weeks Ended
July 30, July 31, July 30, July 31,
2005 2004 2005 2004
Net sales $337,065 $320,624 $717,719 $684,232
Cost of merchandise sold 240,809 236,704 509,768 501,574
Gross profit 96,256 83,920 207,951 182,658
Selling, general and
administrative expenses 81,507 78,397 170,475 161,934
Other income, net 3,591 3,533 7,557 7,167
Income from operations 18,340 9,056 45,033 27,891
Interest income 433 73 827 73
Interest expense -- -- -- 39
Income from continuing
operations before
income taxes 18,773 9,129 45,860 27,925
Provision for income taxes 7,134 3,469 17,427 10,611
Income from continuing
operations 11,639 5,660 28,433 17,314
Loss from discontinued
operations, net of tax
benefit -- (6) -- (145)
Net income $11,639 $5,654 $28,433 $17,169
Basic income per share:
Continuing operations $0.27 $0.13 $0.66 $0.41
Discontinued operations -- -- -- --
Total $0.27 $0.13 $0.66 $0.41
Diluted income per share:
Continuing operations $0.26 $0.13 $0.64 $0.41
Discontinued operations -- -- -- (0.01)
Total $0.26 $0.13 $0.64 $0.40
Weighted-average shares
outstanding - Basic 43,299 42,148 43,102 42,074
Weighted-average shares
outstanding - Diluted 44,465 42,878 44,334 42,670
Stein Mart, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
For The 26 Weeks Ended
July 30, July 31,
2005 2004
Cash flows from operating activities:
Net income $28,433 $17,169
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 9,741 9,312
Impairment (recovery) of property and
other assets 195 (245)
Store closing charges 481 231
Deferred income taxes 1,353 34
Restricted stock compensation 307 49
Tax benefit from exercise of
stock options 3,499 665
Changes in assets and liabilities:
Trade and other receivables 3,468 829
Inventories 14,042 18,378
Prepaid taxes (4,185) (4,492)
Prepaid expenses and other
current assets (3,253) (1,394)
Other assets (686) 322
Accounts payable (26,301) 17,389
Accrued liabilities (7,390) 2,515
Income taxes payable (5,089) --
Other liabilities 657 (2,302)
Net cash provided by operating activities 15,272 58,460
Cash flow from investing activities:
Capital expenditures (15,850) (9,744)
Purchases of short-term investments (945,400) (290,100)
Sales of short-term investments 941,875 272,000
Net cash used in investing activities (19,375) (27,844)
Cash flows from financing activities:
Net payments under notes payable to banks -- (24,962)
Dividends paid (2,718) --
Proceeds from exercise of stock options 11,563 2,972
Proceeds from employee stock purchase plan 499 406
Purchase of common stock (6,575) --
Net cash provided by (used in) financing
activities 2,769 (21,584)
Net (decrease) increase in cash and cash
equivalents (1,334) 9,032
Cash and cash equivalents at beginning of year 20,250 11,965
Cash and cash equivalents at end of period $18,916 $20,997
Supplemental disclosures of cash flow
information:
Income taxes paid $21,974 $15,146
Interest paid -- 65SOURCE: Stein Mart, Inc.
CONTACT: Susan Datz Edelman, Director, Stockholder Relations, Stein Mart, +1-904-346-1506, or sedelman@steinmart.com