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JACKSONVILLE, Fla., May 19 /PRNewswire-FirstCall/ -- Stein Mart, Inc. (Nasdaq: SMRT) today announced financial results for its first quarter ended April 30, 2005 and that its Board of Directors has approved the payment of a $0.25 annual cash dividend on Stein Mart common stock.
First quarter results
For the first quarter of 2005, the Company earned $16.8 million, a 46 percent increase over net income of $11.5 million in the first quarter of 2004. On a diluted per share basis, the Company earned $0.38 in the first quarter of 2005 compared to $0.27 in the same quarter last year.
Net sales for the first quarter were $380.7 million, a 4.7 percent increase over the $363.6 million in net sales for the first quarter of 2004. Comparable store sales increased 3.2 percent from the first quarter of 2004 to the first quarter of 2005.
Gross profit increased to $111.7 million, or 29.3 percent of net sales in the first quarter of 2005 compared to $98.7 million, or 27.2 percent of net sales in the same period of 2004. Gross profit was favorably impacted primarily by increased mark-up and decreased markdowns.
Selling, general and administrative (SG&A) expenses were $89.0 million or 23.4 percent of net sales as compared to $83.5 million or 23.0 percent of net sales during the prior year's first quarter. SG&A expenses included store closing charges of $1.3 million in this year's first quarter and $0.4 million in last year's first quarter. The SG&A rate was also slightly higher due to increased advertising and pre-opening expenses.
"First quarter sales were driven by continued strength in ladies' apparel and accessories, and menswear, and by higher-than-expected full-priced selling," commented Michael D. Fisher, president and chief executive officer. "We believe our first quarter performance validates our continued focus on improved productivity which, in turn, produces substantially greater profit on a more normalized sales increase."
As anticipated, inventories were up at the end of the first quarter because of certain planned buys as well as some opportunistic purchases. Management intends to enter the fall selling season with slightly more inventory than last year in order to take advantage of certain selling opportunities.
Expectations for second quarter
Comparable store sales for the second quarter ending July 30 are expected to increase in the low, single-digit range, resulting in diluted earnings per share of $0.20 - $0.22. In 2004, comparable store sales for the second quarter increased 10.3 percent and produced net income of $0.13 per diluted share.
Directors authorize cash dividend
The Stein Mart Board of Directors has declared an initial annual cash dividend of $0.25 per share, to be paid quarterly. The first dividend payment of $0.0625 per share will be payable on June 24, 2005 to shareholders of record at the close of business on June 10, 2005.
"The decision to initiate a cash dividend underscores the Board's commitment to improve shareholder value," commented Jay Stein, chairman of the board. "Given the Company's solid financial performance, the Board believes adding a dividend as well as continuing our ongoing store network expansion and share repurchase programs will return the most value to our shareholders."
Store network update
During the first quarter of 2005, Stein Mart opened two new stores (Orlando, FL and Beaufort, SC) and closed five stores, for a quarter-end store count of 258. Two additional stores (Ocean, NJ and Boynton Beach, FL) opened this month.
The Company has revised its opening/closing plans for 2005. Due to external issues including certain construction delays, management now expects that a total of 8-9 new stores, including one relocation, will open this year, with some stores that were originally planned for 2005 expected to open in 2006. A total of seven stores will close in 2005.
First quarter conference call
The Company will host a conference call with management to discuss these results at 10:30 a.m. Eastern Time today (May 19) and may be accessed by all interested parties at http://www.steinmart.com .
About Stein Mart
Stein Mart's 260 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, ongoing 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)
April 30, January 29, May 1,
2005 2005 2004
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $25,147 $20,250 $29,954
Short-term investments 62,000 72,475 13,950
Trade and other receivables 4,157 5,852 4,230
Inventories 302,892 277,164 288,176
Prepaid expenses and other current
assets 13,798 13,010 14,037
Total current assets 407,994 388,751 350,347
Property and equipment, net 75,678 71,048 70,426
Other assets 14,777 14,781 14,162
Total assets $498,449 $474,580 $434,935
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $107,030 $99,163 $103,525
Accrued liabilities 66,446 73,257 63,680
Income taxes payable 6,842 5,089 7,587
Total current liabilities 180,318 177,509 174,792
Other liabilities 21,755 20,561 19,655
Total liabilities 202,073 198,070 194,447
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;
43,222,966; 42,880,031 and
42,059,262 shares issued and
outstanding, respectively 432 429 421
Paid-in capital 19,016 14,340 4,461
Unearned compensation (2,210) (603) (280)
Retained earnings 279,138 262,344 235,886
Total stockholders' equity 296,376 276,510 240,488
Total liabilities and
stockholders' equity $498,449 $474,580 $434,935
Stein Mart, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands except per share amounts)
For The 13 Weeks
Ended
April 30, May 1,
2005 2004
Net sales $380,654 $363,608
Cost of merchandise sold 268,959 264,870
Gross Profit 111,695 98,738
Selling, general and administrative expenses 88,968 83,537
Other income, net 3,966 3,634
Income from operations 26,693 18,835
Interest income 394 --
Interest expense -- 39
Income from continuing operations before
income taxes 27,087 18,796
Provision for income taxes 10,293 7,142
Income from continuing operations 16,794 11,654
Loss from discontinued operations, net of
tax benefit -- (139)
Net income $16,794 $11,515
Basic income per share:
Continuing operations $0.39 $0.27
Discontinued operations -- --
Total $0.39 $0.27
Diluted income per share:
Continuing operations $0.38 $0.27
Discontinued operations -- --
Total $0.38 $0.27
Weighted-average shares outstanding - Basic 42,905 42,000
Weighted-average shares outstanding - Diluted 44,202 42,461
Stein Mart, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
For The 13 Weeks
Ended
April 30, May 1,
2005 2004
Cash flows from operating activities:
Net income $16,794 $11,515
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 4,510 4,342
Store closing charges 498 180
Deferred income taxes 501 (159)
Restricted stock compensation 137 10
Tax benefit from exercise of stock options 1,710 199
Changes in assets and liabilities:
Trade and other receivables 1,695 (3)
Inventories (25,728) (4,797)
Prepaid expenses and other current assets (873) (113)
Other assets (110) 915
Accounts payable 7,867 38,407
Accrued liabilities (7,269) 3,039
Income taxes payable 1,753 7,587
Other liabilities 580 (1,603)
Net cash provided by operating activities 2,065 59,519
Cash flows from investing activities:
Capital expenditures (8,868) (3,704)
Purchases of short-term investments (550,800) (61,950)
Sales of short-term investments 561,275 48,000
Net cash provided by (used in) investing
activities 1,607 (17,654)
Cash flows from financing activities:
Net payments under notes payable to banks -- (24,962)
Proceeds from exercise of stock options 5,381 1,086
Purchase of common stock (4,156) --
Net cash provided by (used in) financing
activities 1,225 (23,876)
Net increase in cash and cash equivalents 4,897 17,989
Cash and cash equivalents at beginning of year 20,250 11,965
Cash and cash equivalents at end of period $25,147 $29,954
Supplemental disclosures of cash flow
information:
Income taxes paid $6,452 $281
Interest paid -- 65SOURCE: Stein Mart, Inc.
CONTACT: Susan Datz Edelman, Director, Stockholder Relations of Stein Mart, Inc., +1-904-346-1506, or sedelman@steinmart.com
Web site: http://www.steinmart.com