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JACKSONVILLE, Fla., May 18, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- Stein Mart, Inc. (Nasdaq: SMRT) today announced financial results for its first quarter ended April 29, 2006.
For the first quarter of 2006, the Company earned $7.6 million or $0.17 per diluted share as compared to net income of $16.8 million or $0.38 per diluted share in the first quarter of 2005. Net sales for the first quarter of 2006 were $364.8 million, down 4.2 percent from the $380.7 million in sales for the first quarter of 2005. Comparable store sales decreased 5.1 percent from the first quarter of 2005 to the first quarter of 2006.
Gross profit decreased to $97.6 million or 26.7 percent of net sales in the first quarter of 2006 compared to $111.7 million or 29.3 percent of net sales in the same period of 2005. Gross profit was negatively impacted by increased markdowns taken to keep inventories current and lack of occupancy cost leverage, somewhat offset by improved mark-up.
Selling, general and administrative (SG&A) expenses were $90.5 million or 24.8 percent of net sales as compared to $89.0 million or 23.4 percent of net sales during the prior year's first quarter. The SG&A rate was higher due to a lack of leverage on negative comparable store sales.
"As projected, first quarter was difficult as we sought to unify our fashion assortment and fully install our new Home area merchandise," said Michael D. Fisher, president and chief executive officer of Stein Mart, Inc. "While we made sequential progress through the quarter, ending with slightly positive comparable store sales for April, greater markdowns were necessary to bring inventories to appropriate seasonal levels."
Store Network Update
During the first quarter, Stein Mart opened three new stores: a seventh location in the Chicago area, a new market entry in Queens, NY and a new store in Aiken, SC. Two stores were closed. As of April 29, 2006, the Company operated 263 stores compared to 258 at this time last year.
Going forward, the Company expects to open 13 new stores and close four, for a total of 16 openings and six closings in 2006. Two stores are expected to close in the second quarter; seven openings and two closings are planned for the third quarter; and six openings are scheduled in the fourth quarter. At year-end, the Company expects to operate 272 stores.
Guidance
For the second quarter ending July 29, 2006, management expects comparable store sales to increase 1 - 2 percent, which would result in earnings per share of $0.25-$0.27 as compared to $0.26 per share for the same period last year. Due to the shortfall in the first quarter of 2006, management now anticipates comparable store sales will increase 1 - 2 percent for the year and earnings will be in line with last year's $1.15 per share.
Quarterly Dividend Declared
The Stein Mart board of directors declared a quarterly dividend of $0.0625 per common share payable on June 23, 2006 to stockholders of record at the close of business on June 9, 2006.
Conference Call with Management
Management will discuss this information and answer questions from analysts in a conference call today (May 18, 2006) at 10:30 a.m. ET. The call may be heard on the investor relations portion of Stein Mart's website at http://ir.steinmart.com , and a recording of the call will remain on the website until the end of the month.
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 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, without limitation:
* changing preferences in apparel
* changes in consumer spending due to current events and/or general
economic conditions
* availability of new store sites at acceptable lease terms
* unanticipated weather conditions and unseasonable weather
* the effectiveness of advertising, marketing and promotional strategies
* on-going competition from other retailers
* adequate sources of merchandise at acceptable prices
* the Company's ability to attract and retain qualified employees to
support planned growth,
* ability to successfully implement strategies to exit or improve under-
performing stores
* disruption of the Company's distribution system
* acts of terrorism
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
(Unaudited)
(In thousands)
April 29, January 28, April 30,
2006 2006 2005
ASSETS
Current assets:
Cash and cash equivalents $33,553 $20,200 $25,147
Short-term investments 25,000 104,935 62,000
Trade and other receivables 11,510 11,121 9,685
Inventories 287,627 265,788 302,892
Prepaid expenses and other current assets 15,615 13,672 13,798
Total current assets 373,305 415,716 413,522
Property and equipment, net 95,156 87,106 75,678
Other assets 16,791 17,023 14,777
Total assets $485,252 $519,845 $503,977
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $125,213 $88,408 $107,030
Accrued liabilities 73,603 80,337 71,974
Income taxes payable 2,294 5,453 6,842
Total current liabilities 201,110 174,198 185,846
Other liabilities 21,833 21,908 21,755
Total liabilities 222,943 196,106 207,601
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;
43,587,650; 43,516,372 and
43,222,966 shares issued and
outstanding, respectively 436 435 432
Additional paid-in capital 23,392 21,967 19,016
Unearned compensation (6,002) (3,704) (2,210)
Retained earnings 244,483 305,041 279,138
Total stockholders' equity 262,309 323,739 296,376
Total liabilities and stockholders'
equity $485,252 $519,845 $503,977
Stein Mart, Inc.
Consolidated Statements of Income
(Unaudited)
(In thousands except per share amounts)
13 Weeks 13 Weeks
Ended Ended
April 29, April 30,
2006 2005
Net sales $364,831 $380,654
Cost of merchandise sold 267,245 268,959
Gross profit 97,586 111,695
Selling, general and administrative expenses 90,536 88,968
Other income, net 4,153 3,966
Income from operations 11,203 26,693
Interest income, net 891 394
Income before income taxes 12,094 27,087
Provision for income taxes 4,535 10,293
Net income $7,559 $16,794
Net income per share:
Basic $0.17 $0.39
Diluted $0.17 $0.38
Weighted-average shares outstanding:
Basic 43,228 42,905
Diluted 44,074 44,202
Stein Mart, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
13 Weeks 13 Weeks
Ended Ended
April 29, April 30,
2006 2005
Cash flows from operating activities:
Net income $7,559 $16,794
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 6,029 4,510
Store closing charges 331 498
Deferred income taxes (714) 501
Stock-based compensation 891 137
Changes in assets and liabilities:
Trade and other receivables (389) 1,695
Inventories (21,839) (25,728)
Prepaid expenses and other
current assets (1,943) (873)
Other assets (225) (110)
Accounts payable 36,805 7,867
Accrued liabilities (7,294) (7,269)
Income taxes payable (3,159) 1,753
Other liabilities 227 580
Net cash provided by operating activities 16,279 355
Cash flows from investing activities:
Capital expenditures (12,981) (8,868)
Purchases of short-term investments (463,750) (550,800)
Sales of short-term investments 543,685 561,275
Net cash provided by investing activities 66,954 1,607
Cash flows from financing activities:
Cash dividends paid (68,117) --
Excess tax benefits from stock-based compensation 180 1,710
Proceeds from exercise of stock options 1,542 5,381
Repurchase of common stock (3,485) (4,156)
Net cash (used in) provided by financing
activities (69,880) 2,935
Net increase in cash and cash equivalents 13,353 4,897
Cash and cash equivalents at beginning of year 20,200 20,250
Cash and cash equivalents at end of year $33,553 $25,147
Supplemental disclosures of cash flow information:
Income taxes paid $8,211 $6,452
SMRT-F
SOURCE Stein Mart, Inc.
Susan Datz Edelman, Director, Stockholder Relations, Stein Mart, +1-904-346-1506, or sedelman@steinmart.com
http://www.prnewswire.com
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