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Stein Mart, Inc. Reports 3Q and Year-To-Date 2009 Financial Results
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| SMRT | 8.09 | +0.19 |
JACKSONVILLE, Fla., Nov. 19 /PRNewswire-FirstCall/ -- Stein Mart, Inc. (Nasdaq: SMRT - News) today announced financial results for its third quarter and first nine months ended October 31, 2009.
Third Quarter of 2009
For the third quarter of 2009, the Company's net earnings were $3.2 million or $0.07 per diluted share as compared to a net loss of $(14.1) million or $(0.34) per diluted share in 2008. Net sales decreased 9.6 percent to $270.2 million for the third quarter of 2009 from $298.8 million for the third quarter of 2008. Comparable store sales for the third quarter of 2009 decreased 6.2 percent from the same period a year ago.
Gross profit increased to $69.6 million or 25.8 percent of sales in the third quarter of 2009 compared to $67.5 million or 22.6 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 $73.3 million or 27.1 percent of sales as compared to $93.5 million or 31.3 percent of sales during the same period last year. The $20.2 million decrease in SG&A resulted primarily from reduced operating expenses in the stores and in the corporate office, as well as lower advertising, store closing and depreciation expense.
During the third quarter, we reversed a portion of our valuation allowance for deferred tax assets as a result of a tax accounting method change and decreased our estimated annual effective tax rate due to changes in book/tax differences which resulted in favorable adjustments. If these favorable tax adjustments had not been recorded during this period, third quarter and year-to-date 2009 earnings would have been $2.5 million ($0.05 per diluted share) lower.
First Nine Months of 2009
For the first nine months of 2009, the Company's net earnings were $20.8 million or $0.47 per diluted share as compared to a net loss of $(15.1) million or $(0.37) per diluted share for the same 2008 period. Net sales decreased 8.9 percent to $877.3 million for the nine months ended October 31, 2009 from $962.6 million for the same nine months in 2008. Comparable store sales for the first nine months of the year decreased 6.3 percent from the 2008 period to the 2009 period.
Gross profit increased to $241.9 million or 27.6 percent of sales in the first nine months of 2009 compared to $239.3 million or 24.9 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 $227.4 million or 25.9 percent of sales as compared to $277.6 million or 28.8 percent of sales during the same period last year. The $50.2 million decrease in SG&A resulted primarily from reduced operating expenses in the stores and in the corporate office, as well as lower advertising, store closing and depreciation expense.
"We are pleased to report a profitable quarter despite continued challenging sales trends," noted David H. Stovall, Jr., president and chief executive officer, "Our bottom line continues to benefit from lowered overall inventory levels, less clearance, reduced markdowns and lowered expenses."
"Our challenge remains improving top line sales in a time when the customer appears determined to reduce her purchases," Stovall continued. "We enter the holiday selling season focused on enticing the customer with fashion-right merchandise at compelling prices, special promotions, and a great in-store experience. Our plan in this highly competitive retail environment is to maximize our opportunities for the holiday selling season and to end the season with clean inventory, and positioned for an optimal start to 2010."
Store network update
One new store opened and four stores were closed during the third quarter, resulting in 267 stores in operation at October 31, 2009 as compared to 279 at the same time last year. We have completed our store closing/opening activity for 2009.
Conference Call
A conference call for institutional analysts to discuss these results will be held at 10 a.m. ET today, Thursday, November 19, 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 November 27, 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)
October January November
31, 2009 31, 2009 1, 2008
-------- -------- -------
ASSETS
Current assets:
Cash and cash equivalents $59,219 $88,903 $64,834
Trade and other receivables 10,000 9,011 7,754
Inventories 253,658 207,139 306,030
Income taxes receivable - 24,439 18,482
Prepaid expenses and other
current assets 13,806 12,089 14,553
------ ------ ------
Total current assets 336,683 341,581 411,653
Property and equipment, net 76,624 86,321 105,629
Other assets 16,622 21,988 29,368
------ ------ ------
Total assets $429,929 $449,890 $546,650
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $118,479 $55,683 $100,019
Accrued liabilities 79,963 79,794 77,438
Income taxes payable 226 - -
--- --- ---
Total current liabilities 198,668 135,477 177,457
Notes payable to banks - 100,000 100,000
Other liabilities 20,146 28,063 28,926
------ ------ ------
Total liabilities 218,814 263,540 306,383
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;
42,843,900, 42,655,544 and 42,332,941
shares issued and outstanding,
respectively 428 427 423
Additional paid-in capital 13,963 9,986 8,514
Retained earnings 195,961 175,152 231,330
Accumulated other comprehensive income 763 785 -
--- --- ---
Total stockholders' equity 211,115 186,350 240,267
------- ------- -------
Total liabilities and stockholders'
equity $429,929 $449,890 $546,650
-------- -------- --------
Stein Mart, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
13 Weeks 13 Weeks 39 Weeks 39 Weeks
Ended Ended Ended Ended
October November October November
31, 2009 1, 2008 31, 2009 1, 2008
-------- ------- -------- -------
Net sales $270,209 $298,815 $877,280 $962,566
Cost of merchandise sold 200,608 231,351 635,400 723,234
------- ------- ------- -------
Gross profit 69,601 67,464 241,880 239,332
Selling, general and
administrative expenses 73,330 93,525 227,406 277,587
Other income, net 4,887 4,954 14,194 16,257
----- ----- ------ ------
Income (loss) from operations 1,158 (21,107) 28,668 (21,998)
Interest income (expense), net 10 (519) (248) (1,091)
--- ----- ----- ------
Income (loss) before income
taxes 1,168 (21,626) 28,420 (23,089)
Income tax benefit (provision) 2,031 7,508 (7,611) 7,966
----- ----- ------ -----
Net income (loss) $3,199 $(14,118) $20,809 $(15,123)
------ -------- ------- --------
Net income (loss) per share:
Basic $0.07 $(0.34) $0.49 $(0.37)
----- ------ ----- ------
Diluted $0.07 $(0.34) $0.47 $(0.37)
----- ------ ----- ------
Weighted-average shares
outstanding:
Basic 41,883 41,410 41,780 41,323
------ ------ ------ ------
Diluted 44,251 41,410 43,344 41,323
------ ------ ------ ------
Stein Mart, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
39 Weeks 39 Weeks
Ended Ended
October November
31, 2009 1, 2008
-------- -------
Cash flows from operating activities:
Net income (loss) $20,809 $(15,123)
Adjustments to reconcile net
income (loss) to net cash
provided by (used in) operating
activities:
Depreciation and amortization 14,476 19,027
Impairment of property and
other assets 726 475
Change in valuation allowance
for deferred tax assets (5,781) -
Deferred income taxes 6,067 (584)
Store closing charges 1,675 3,810
Share-based compensation 3,024 2,836
Tax benefit from equity issuances 255 -
Excess tax benefits from
share-based compensation (198) -
Changes in assets and liabilities:
Trade and other receivables (989) 4,618
Inventories (46,519) (43,534)
Income taxes receivable 24,439 (4,379)
Prepaid expenses and other
current assets (1,717) (690)
Other assets 3,368 1,898
Accounts payable 62,796 22,895
Accrued liabilities 683 872
Income taxes payable 226 -
Other liabilities (8,522) (1,906)
------ ------
Net cash provided by (used in)
operating activities 74,818 (9,785)
------ ------
Cash flows from investing activities:
Capital expenditures (5,399) (13,924)
------ -------
Net cash used in investing
activities (5,399) (13,924)
------ -------
Cash flows from financing activities:
Borrowings under notes payable to banks 57,250 625,860
Repayments of notes payable to banks (157,250) (552,993)
Excess tax benefits from
share-based compensation 198 -
Proceeds from exercise of stock options 691 -
Proceeds from employee stock
purchase plan 96 548
Repurchase of common stock (88) (17)
--- ---
Net cash (used in) provided by
financing activities (99,103) 73,398
------- ------
Net (decrease) increase in
cash and cash equivalents (29,684) 49,689
Cash and cash equivalents at
beginning of year 88,903 15,145
------ ------
Cash and cash equivalents at
end of period $59,219 $64,834
------- -------
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