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JACKSONVILLE, Fla., Aug 20, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Stein Mart, Inc. (Nasdaq: SMRT) today announced financial results for its second quarter and first half ended August 1, 2009.
Second Quarter of 2009
For the 13-week second quarter of 2009, the Company's net earnings were $1.5 million or $0.04 per share as compared to a net loss of $(8.0) million or $(0.19) per share in 2008. Net sales decreased 7.7 percent to $287.5 million for the 13 weeks ended August 1, 2009 from $311.6 million for the 13 weeks ended August 2, 2008. Comparable store sales for the 13 weeks ended August 1, 2009 decreased 4.5 percent from the same period a year ago.
Gross profit increased to $75.4 million or 26.2 percent of sales in the second quarter of 2009 compared to $74.1 million or 23.8 percent of sales in the same period last year. The gross profit rate increased primarily from increased markup and decreased markdowns, somewhat offset by a higher occupancy expense rate due to lack of sales leverage.
Selling, general and administrative (SG&A) expenses were $74.2 million or 25.8 percent of sales as compared to $92.5 million or 29.7 percent of sales during the same period last year. The $18.3 million decrease in SG&A resulted primarily from reduced operating expenses in the stores and in the corporate office, and reduced advertising and lower depreciation expense.
First Half of 2009
For the first half of 2009, the Company's net earnings were $17.6 million or $0.41 per share as compared to a net loss of $(1.0) million or $(0.02) per share for the same 2008 period. Net sales decreased 8.5 percent to $607.1 million for the 26 weeks ended August 1, 2009 from $663.8 million for the same 26 weeks in 2008. Comparable store sales for the first six months of the year decreased 6.3 percent from the 2008 period to the 2009 period.
Gross profit increased to $172.3 million or 28.4 percent of sales in the first half of 2009 compared to $171.9 million or 25.9 percent of sales in the same period last year. The gross profit rate increased primarily from increased markup and decreased markdowns, somewhat offset by higher occupancy expense rate due to lack of sales leverage.
SG&A expenses were $154.1 million or 25.4 percent of sales as compared to $184.1 million or 27.7 percent of sales during the same period last year. The $30.0 million decrease in SG&A resulted primarily from reduced operating expenses in the stores and in the corporate office, and reduced advertising and lower depreciation expense.
We changed from using the discrete period method to determine the effective tax rate in the first quarter to a more normalized rate of 35.4 percent for the first six months of 2009 that was calculated using the estimated annual tax rate. If the estimated annual rate had been able to be used for both the first and second quarters of 2009, second quarter earnings would have been $2.1 million or $0.05 per share higher with an offsetting decrease in the first quarter.
David H. Stovall, Jr., president and chief executive officer, commented, "By keeping inventory and expenses tightly controlled, we were able to improve margins and profitability for both the quarter and the first six months, despite negative comparable store sales trends. These efforts also further strengthened our balance sheet, with no borrowings in the quarter and $45 million in cash and cash equivalents at quarter end."
Stovall continued, "We must continue to make progress against a protracted negative sales trend with limited visibility for the foreseeable future. Although the customer is still very cautious, response to our updated merchandise offering and new marketing strategy is encouraging. We plan to build on these efforts this fall, while maintaining rigorous control over expenses and inventory levels."
Store network update
No new stores were opened and five stores were closed during the second quarter. So far in 2009, one store has opened and seven stores have closed, resulting in 270 stores in operation at August 1, 2009 as compared to 283 at the same time last year.
The Company expects to open one store and close four existing locations in the next three months, resulting in 267 stores at the end of fiscal 2009 compared to 276 stores at the end of fiscal 2008.
Conference Call
A conference call for institutional analysts to discuss these results will be held at 10 a.m. ET today, Thursday, August 20, 2009. 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 August 28, 2009.
About Stein Mart
Stein Mart stores offer the fashion merchandise, service and presentation of a better department or specialty store, at prices up to 60 percent off department and specialty store original prices, every day. 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, 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, without limitation:
-- consumer sensitivity to general economic conditions including continued
uncertainty in the financial and credit markets
-- the effectiveness of advertising, marketing and promotional strategies
-- intense competition from other retailers
-- changing preferences in apparel
-- access to additional capital at favorable terms, if required
-- ability to successfully negotiate advantageous lease terms with current
landlords
-- unanticipated weather conditions and unseasonable weather
-- adequate sources of merchandise at acceptable prices
-- the Company's ability to attract and retain qualified employees
-- seasonality, including the importance of the holiday selling season
-- disruption of the Company's distribution system
-- acts of terrorism
-- fluctuation in results could negatively impact stock price
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.
Consolidated Balance Sheets
(Unaudited)
(In thousands, except for share data)
August 1, January 31, August 2,
2009 2009 2008
------ ------ ------
ASSETS
Current assets:
Cash and cash equivalents $45,036 $88,903 $18,312
Trade and other receivables 13,040 9,011 8,283
Inventories 184,866 207,139 248,900
Income taxes receivable 8,323 24,439 10,759
Prepaid expenses and other current assets 13,308 12,089 14,680
------ ------ ------
Total current assets 264,573 341,581 300,934
Property and equipment, net 78,835 86,321 107,911
Other assets 17,645 21,988 33,184
------ ------ ------
Total assets $361,053 $449,890 $442,029
-------- -------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $58,028 $55,683 $53,880
Accrued liabilities 76,329 79,794 73,760
------ ------ ------
Total current liabilities 134,357 135,477 127,640
Notes payable to banks - 100,000 30,958
Other liabilities 20,692 28,063 29,329
------ ------ ------
Total liabilities 155,049 263,540 187,927
COMMITMENTS AND CONTINGENCIES
Stockholders' 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; 42,775,961,
42,655,544 and 42,390,969 shares issued
and outstanding, respectively 428 427 424
Additional paid-in capital 12,044 9,986 8,230
Retained earnings 192,762 175,152 245,448
Accumulated other comprehensive income 770 785 -
------ ------ ------
Total stockholders' equity 206,004 186,350 254,102
------- ------- -------
Total liabilities and stockholders'
equity $361,053 $449,890 $442,029
-------- -------- --------
Stein Mart, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
13 13 26 26
Weeks Weeks Weeks Weeks
Ended Ended Ended Ended
August 1, August 2, August 1, August 2,
2009 2008 2009 2008
------ ------ ------ ------
Net sales $287,501 $311,628 $607,071 $663,751
Cost of merchandise sold 212,052 237,506 434,792 491,883
------- ------- ------- -------
Gross profit 75,449 74,122 172,279 171,868
Selling, general and administrative
expenses 74,220 92,523 154,076 184,062
Other income, net 4,310 5,373 9,307 11,303
----- ----- ----- ------
Income (loss) from operations 5,539 (13,028) 27,510 (891)
Interest income (expense), net 21 (205) (258) (572)
----- ----- ----- -----
Income (loss) before income taxes 5,560 (13,233) 27,252 (1,463)
Income tax (provision) benefit (4,036) 5,230 (9,642) 458
------ ----- ------ -----
Net income (loss) $1,524 $(8,003) $17,610 $(1,005)
------ ------- ------- -------
Net income (loss) per share:
Basic $0.04 $(0.19) $0.41 $(0.02)
----- ------ ----- ------
Diluted $0.04 $(0.19) $0.41 $(0.02)
----- ------ ----- ------
Weighted-average shares outstanding:
Basic 42,702 42,249 42,689 42,126
------ ------ ------ ------
Diluted 43,363 42,249 43,127 42,126
------ ------ ------ ------
Stein Mart, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
26 26
Weeks Ended Weeks Ended
August 1, August 2,
2009 2008
------ ------
Cash flows from operating activities:
Net income (loss) $17,610 $(1,005)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization 9,717 12,690
Impairment of property and other assets 726 328
Change in valuation allowance for
deferred tax assets (2,729) -
Deferred income taxes 3,015 (841)
Store closing charges 1,072 1,153
Share-based compensation 1,805 2,480
Tax benefit from equity issuances 62 -
Excess tax benefits from share-based
compensation (54) (3)
Changes in assets and liabilities:
Trade and other receivables (4,029) 4,089
Inventories 22,273 13,596
Income taxes receivable 16,116 3,344
Prepaid expenses and other current assets (1,219) (1,100)
Other assets 3,616 (632)
Accounts payable 2,345 (23,244)
Accrued liabilities (3,835) (2,625)
Other liabilities (7,661) 465
------ -----
Net cash provided by operating activities 58,830 8,695
------ -----
Cash flows from investing activities:
Capital expenditures (2,943) (9,900)
------ ------
Net cash used in investing activities (2,943) (9,900)
------ ------
Cash flows from financing activities:
Borrowings under notes payable to banks 57,134 399,746
Repayments of notes payable to banks (157,134) (395,921)
Excess tax benefits from share-based
compensation 54 3
Proceeds from exercise of stock options 127 -
Proceeds from employee stock purchase plan 96 548
Repurchase of common stock (31) (4)
----- -----
Net cash (used in) provided by financing
activities (99,754) 4,372
------- ------
Net (decrease) increase in cash and cash
equivalents (43,867) 3,167
Cash and cash equivalents at beginning of year 88,903 15,145
------ ------
Cash and cash equivalents at end of period $45,036 $18,312
------- -------
SOURCE Stein Mart, Inc.
http://www.steinmart.com
Copyright (C) 2009 PR Newswire. All rights reserved