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JACKSONVILLE, Fla., Aug. 16, 2012 (GLOBE NEWSWIRE) -- Stein Mart, Inc. (Nasdaq:SMRT) today announced financial results for the second quarter ended July 28, 2012. Overview of Results
Net income for the second quarter was $0.7 million or $0.02 per diluted share compared to net income of $1.3 million or $0.03 per diluted share in 2011. For the first six months, net income was $12.6 million or $0.29 per diluted share compared to $17.2 million or $0.38 per diluted share in the same period in 2011. The first six months of 2011 include a first quarter gain of $2.0 million, or $1.2 million after tax and $0.03 per share (see discussion of other income below).
Comparable store sales increased 1.6 percent for the second quarter, while total sales increased 2.3 percent to $276.4 million. For the first six months, comparable store sales increased 0.5 percent, while total sales increased 1.1 percent to $579.8 million.
"We are very pleased with our comparable store sales increase for the second quarter," said Jay Stein, Interim Chief Executive Officer. "The increased sales and improved merchandise margin rate reflect proper execution of our merchandising strategy to reinforce the value of our every-day prices." Operational Highlights
Gross profit for the second quarter increased to $68.0 million or 24.6 percent of sales from $65.4 million or 24.2 percent of sales in 2011 due to increased sales and an increase in the gross profit rate. The increase in the gross profit rate was the result of lower markdowns, offset by lower initial markup and slightly higher occupancy and buying costs. Markdowns and initial markup were lower due to the Company decreasing coupons and selectively lowering prices on certain merchandise in accordance with its new pricing strategy.
Selling, general and administrative expenses ("SG&A") were $72.6 million for the second quarter of 2012. This includes a $1.8 million charge to expense certain software related costs incorrectly capitalized in prior periods and software no longer in use. Excluding this charge, SG&A was $70.8 million or 25.6 percent of sales for the second quarter of 2012 compared to $68.2 million or 25.2 percent of sales in 2011. The increase in SG&A for the second quarter is primarily due to higher depreciation, legal, medical and store payroll expenses.
Other income was $5.9 million for the second quarter of 2012 compared to $5.1 million for the second quarter of 2011. The $0.8 million increase in other income includes $2.1 million higher breakage income due to reductions in obligations for unused gift and merchandise return card balances offset by lower income from the new credit card agreement and discontinuing our magazine program.
For the first six months of 2012, gross profit was $155.2 million compared to $155.3 million in 2011 due to increased sales and a slightly lower gross profit rate. SG&A was $144.0 million for the first six months of 2012 compared to $140.1 million in 2011. The first six months of 2012 includes the second quarter $1.8 million expense discussed above.
Other income was $10.4 million for the first six months of 2012 compared to $13.5 million in 2011. The first six months of 2012 include the second quarter $2.1 million higher breakage income discussed above. The first six months of 2011 include a first quarter gain of $2.0 million for a prior period adjustment to a liability for credit card rewards. Other income for the first six months decreased primarily due to lower income from the new credit card agreement and the magazine program.
The effective tax rate for the first six months of 2012 increased to 41.9 percent from 39.5 percent for the first six months of 2011 due to the unfavorable impact of certain expense items not deductible for tax purposes. Balance Sheet Highlights
The Company maintained a strong balance sheet with $94.1 million in cash at the end of the second quarter compared to $101.1 million at the end of the second quarter of 2011. Inventories were $243.8 million at the end of the second quarter compared to $228.0 million at the end of the second quarter last year. Share buyback
During the second quarter of 2012 the Company repurchased 43,000 shares at a cost of $0.3 million. The Company has approximately 1.1 million shares remaining on the current repurchase authorization. Store network
The Company operated 263 stores at the end of the second quarter of 2012 and 260 stores at the end of the second quarter last year. No new stores were opened or existing stores closed during the second quarter. The Company expects to open four new stores, relocate three stores and close four stores during the second half of 2012. Fall 2012 Outlook
"We expect that great product offerings and execution of our new merchandising strategy will continue to yield positive sales results," commented Stein. "As we begin our third quarter, we are replacing our August 12-hour sale with two smaller product-focused events to address a significant portion of these sales more profitably. While this may diminish our top line somewhat for August, we feel this will improve results going forward. The positive impact of our 12-hour sales has clearly lessened over the last several years as we increased their number. We also plan to eliminate our February 12-hour sale in 2013 as we continue to assess the impact of these events."
The Company expects the following to influence its earnings for fall 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 July 28, 2012 with the SEC, and therefore remain subject to adjustment. Conference Call
A conference call for investment analysts to discuss the Company's second quarter results will be held at 10 a.m. ET today, Thursday, August 16, 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 August 31, 2012. Investor Presentation
Stein Mart's second 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:
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)
July 28, 2012
January 28, 2012
July 30, 2011 ASSETS
Current assets:
Cash and cash equivalents $94,126
$94,053
$101,139
Inventories 243,828
220,775
227,959
Prepaid expenses and other current assets 29,135
36,838
28,227
Total current assets 367,089
351,666
357,325
Property and equipment, net 109,124
104,141
89,492
Other assets 17,490
17,409
13,966
Total assets $493,703
$473,216
$460,783 LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $115,543
$106,063
$105,131
Accrued expenses and other current liabilities 67,911
72,731
65,304
Total current liabilities 183,454
178,794
170,435
Other liabilities 38,939
35,084
23,893
Total liabilities 222,393
213,878
194,328
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; 43,718,348, 43,588,821 and 44,791,876 shares issued and outstanding, respectively 437
436
448
Additional paid-in capital 14,626
15,268
23,110
Retained earnings 257,615
245,053
242,441
Accumulated other comprehensive (loss) income (1,368)
(1,419)
456
Total shareholders' equity 271,310
259,338
266,455
Total liabilities and shareholders' equity $493,703
$473,216
$460,783
Stein Mart, Inc. Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except per share amounts)
13 Weeks Ended
July 28, 2012
13 Weeks Ended
July 30, 2011 26 Weeks Ended
July 28, 2012
26 Weeks Ended
July 30,2011
Net sales $276,396
$270,167 $579,788
$573,713
Cost of merchandise sold 208,395
204,796 424,558
418,422
Gross profit 68,001
65,371 155,230
155,291
Selling, general and administrative expenses 72,629
68,180 143,978
140,116
Other income, net 5,909
5,141 10,447
13,457
Operating income 1,281
2,332 21,699
28,632
Interest expense, net 43
82 89
167
Income before income taxes 1,238
2,250 21,610
28,465
Provision for income taxes 508
934 9,048
11,249
Net income $730
$1,316 $12,562
$17,216
Net income per share:
Basic $0.02
$0.03 $0.29
$0.38
Diluted $0.02
$0.03 $0.29
$0.38
Weighted-average shares outstanding:
Basic 42,586
44,095 42,649
43,973
Diluted 42,715
44,415 42,734
44,300
Stein Mart, Inc. Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(In thousands)
13 Weeks Ended
July 28, 2012
13 Weeks Ended
July 30, 2011 26 Weeks Ended
July 28, 2012
26 Weeks Ended
July 30,2011
Net income $730
$1,316 $12,562
$17,216
Other comprehensive income, net of tax:
Change in post-retirement benefit obligations 42
-- 51
--
Comprehensive income $772
$1,316 $12,613
$17,216
Stein Mart, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
26 Weeks Ended
July 28, 2012
26 Weeks Ended
July 30, 2011 Cash flows from operating activities:
Net income $12,562
$17,216
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 10,139
8,891
Share-based compensation 2,122
1,934
Loss on disposals of property and equipment 220
--
Store closing charges 199
120
Deferred income taxes 5,127
4,728
Tax deficiency from equity issuances (655)
(49)
Excess tax benefits from share-based compensation (51)
(294)
Other non-cash items 1,732
--
Changes in assets and liabilities:
Inventories (23,053)
4,336
Prepaid expenses and other current assets 7,186
(1,986)
Other assets (81)
(100)
Accounts payable 9,480
9,586
Accrued expenses and other current liabilities (4,473)
(9,041)
Other liabilities 807
72
Net cash provided by operating activities 21,261
35,413 Cash flows from investing activities:
Net acquisition of property and equipment (16,249)
(14,842)
Net cash used in investing activities (16,249)
(14,842) Cash flows from financing activities:
Capital lease payments (2,882)
--
Excess tax benefits from share-based compensation 51
294
Proceeds from exercise of stock options and other 413
2,500
Repurchase of common stock (2,521)
(2,397)
Net cash (used in) provided by financing activities (4,939)
397
Net increase in cash and cash equivalents 73
20,968
Cash and cash equivalents at beginning of year 94,053
80,171
Cash and cash equivalents at end of period $94,126
$101,139 CONTACT: For more information:
Linda Tasseff
Director, Investor Relations
(904) 858-2639
ltasseff@steinmart.com