Gordmans Stores, Inc. Announces Third Quarter 2012 Results

OMAHA, NE--(Marketwire - Nov 28, 2012) -  Gordmans Stores, Inc. ( NASDAQ : GMAN ), an Omaha-based apparel and home décor retailer, today announced results for its third quarter (thirteen weeks) and nine month period (thirty-nine weeks) ended October 27, 2012.

Third Quarter Highlights

  • Net sales increased 8.7% to $143.1 million compared to $131.6 million in the third quarter of fiscal 2011.
  • Two new stores were opened in the Denver MSA.
  • Diluted earnings per share were $0.21, which exceeded revised guidance.

Nine Month Highlights

  • Net sales increased 10.6% to $405.2 million compared to $366.3 million for the nine months ended October 29, 2011.
  • Comparable store sales increased 1.1% over the first three quarters of fiscal 2011.
  • Gross profit margin increased 20 basis points over the same period last year to 46.0%.
  • Net income increased 4.2% to $15.6 million compared to $15.0 million in the first nine months of fiscal 2011.

"Our total sales increase of 9% for the third quarter of 2012 was attributable to nine stores that we opened throughout the first nine months of the year, expanding our store base by 12%. We entered 4 new markets: Salt Lake City and Ogden, UT; Boise, ID; and Indianapolis, IN, as well as opened additional stores in Minneapolis and Denver," commented Jeff Gordman, President and Chief Executive Officer. "While our third quarter comparable store sales were slightly lower than last year, we were encouraged by the mid-single digit increase in our average sale for this timeframe and the growth in our women's and children's apparel areas. Moreover, we have a number of new initiatives in place to drive our operating performance going forward."

Third Quarter Financial Results
Net sales for the thirteen weeks ended October 27, 2012 increased 8.7% to $143.1 million from $131.6 million for the same period last year, while comparable store sales fell by 1.4%. Gross profit increased 8.5% to $64.3 million, or 44.9% of net sales, from $59.2 million, or 45.0% of net sales, in the third quarter of fiscal 2011. Selling, general and administrative expenses were $57.8 million, or 40.4% of net sales, compared to $51.4 million, or 39.1% of net sales, in the third quarter of fiscal 2011. Net income for the third quarter of fiscal 2012 was $4.0 million, or $0.21 per diluted share (based on 19.4 million weighted average shares outstanding), compared to net income of $4.7 million, or $0.25 per diluted share (based on 19.3 million weighted average shares outstanding) in the third quarter of fiscal 2011.

Nine Month Financial Results
Net sales for the thirty-nine weeks ended October 27, 2012 increased 10.6% to $405.2 million from $366.3 million for the same period last year, and comparable store sales increased by 1.1%. Gross profit increased by 11.2% to $186.5 million, or 46.0% of net sales, from $167.7 million, or 45.8% of net sales, in the prior year. Selling, general and administrative costs were $161.1 million, or 39.8% of net sales, compared to $143.1 million, or 39.1% of net sales, in the prior year. Net income increased by 4.2% to $15.6 million, or $0.80 per diluted share (based on 19.4 million weighted average shares outstanding), compared to net income of $15.0 million, or $0.77 per diluted share (based on 19.4 million weighted average shares outstanding) in the first thirty-nine weeks of fiscal 2011.

Outlook
Total sales for the fourth quarter, a fourteen week quarter compared to the thirteen week fourth quarter of fiscal 2011, are projected to be between $213 million and $215 million, reflecting sales at comparable stores that are equal to last year. The Company projects diluted earnings per share to be in the range of $0.58 to $0.61 per share (based on 19.5 million weighted average shares outstanding), compared with $0.53 in the prior year period.

For the fiscal year ending February 2, 2013, a fifty-three week fiscal year compared to fifty-two week fiscal year 2011, the Company currently expects net sales to be between $618 million and $620 million and diluted earnings per share to be in the range of $1.39 to $1.42 (based on 19.4 million weighted average shares outstanding). 

Conference Call Information
A conference call to discuss third quarter financial results is scheduled for today, November 28, 2012 at 4:30 p.m. Eastern Time. The conference call will be webcast live at http://investor.gordmans.com/events.cfm. A replay of this call will be available within two hours of the conclusion of the call and will remain on the website for one year.

About Gordmans Stores, Inc.
Gordmans ( NASDAQ : GMAN ) features a large selection of the latest name brands, fashions and styles at up to 60 percent off department and specialty store prices every day. The wide range of merchandise includes apparel for all ages, accessories, footwear, home décor, gifts, designer fragrances, fashion jewelry, bedding and bath, accent furniture and toys. Founded in 1915, Gordmans operates 83 stores in 18 states. For more information about Gordmans, visit www.gordmans.com

Safe Harbor Statement
Certain statements in this release are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "guidance," "expects," "intends," "projects," "plans," "believes," "estimates," "targets," "anticipates," and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding expected net sales, net income, comparable store sales, diluted earnings per share, and store expansion, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are (1) changes in consumer spending and general economic conditions; (2) our ability to identify and respond to new and changing fashion trends, guest preferences and other related factors; (3) fluctuations in our sales and profitability on a seasonal basis; (4) intense competition from other retailers; (5) our ability to maintain or improve levels of comparable store sales; and (6) our successful implementation of advertising, marketing and promotional strategies.

Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including other risks, relevant factors and uncertainties identified in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the fiscal year ended January 28, 2012, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

 
 
GORDMANS STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in 000's except share data)
           
    October 27,
2012
    January 28,
2012
ASSETS     (Unaudited )      
CURRENT ASSETS:              
  Cash and cash equivalents   $ 32,212     $ 35,413
  Accounts receivable     2,031       1,787
  Landlord receivable     7,883       9,939
  Income taxes receivable     2,742       2,805
  Merchandise inventories     131,151       65,335
  Deferred income taxes     1,919       2,964
  Prepaid expenses and other current assets     3,796       5,239
    Total current assets     181,734       123,482
PROPERTY AND EQUIPMENT, net     45,411       34,507
INTANGIBLE ASSETS, net     2,013       2,078
OTHER ASSETS, net     2,743       2,546
               
TOTAL ASSETS   $ 231,901     $ 162,613
               
               
LIABILITIES AND STOCKHOLDERS' EQUITY              
CURRENT LIABILITIES:              
  Accounts payable   $ 85,723     $ 36,034
  Accrued expenses     25,466       26,464
  Current portion of long-term debt     301       655
               
    Total current liabilities     111,490       63,153
               
NONCURRENT LIABILITIES:              
  Long-term debt, less current portion     --       189
  Deferred rent     19,738       14,914
  Deferred income taxes     6,280       6,604
  Other liabilities     191       30
                 
    Total noncurrent liabilities     26,209       21,737
               
COMMITMENTS AND CONTINGENCIES              
               
STOCKHOLDERS' EQUITY:              
  Preferred stock     --       --
  Common stock     19       19
  Additional paid-in capital     52,216       51,327
  Retained earnings     41,967       26,377
                 
    Total stockholders' equity     94,202       77,723
               
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 231,901     $ 162,613
               
               
               
GORDMANS STORES, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(in 000's except share data)  
                         
    13 Weeks
Ended
October 27,
2012
(Unaudited)
    13 Weeks
Ended
 October 29,
2011
(Unaudited)
    39 Weeks
Ended
October 27,
2012
(Unaudited)
    39 Weeks
Ended
October 29,
2011
(Unaudited)
 
Net sales   $ 143,072     $ 131,629     $ 405,232     $ 366,328  
License fees from leased departments     1,917       1,800       5,474       4,878  
Cost of sales     (80,716 )     (74,196 )     (224,249 )     (203,540 )
Gross profit     64,273       59,233       186,457       167,666  
Selling, general and administrative expenses     (57,763 )     (51,425 )     (161,147 )     (143,072 )
Income from operations     6,510       7,808       25,310       24,594  
Interest expense     (118 )     (148 )     (366 )     (455 )
Income before taxes     6,392       7,660       24,944       24,139  
Income tax expense     (2,397 )     (2,911 )     (9,354 )     (9,173 )
Net income   $ 3,995     $ 4,749     $ 15,590     $ 14,966  
                                 
Basic earnings per share   $ 0.21     $ 0.25     $ 0.81     $ 0.78  
Diluted earnings per share   $ 0.21     $ 0.25     $ 0.80     $ 0.77  
                                 
Basic weighted average shares outstanding     19,188,340       19,070,949       19,139,880       19,109,361  
Diluted weighted average shares outstanding     19,437,988       19,328,278       19,387,080       19,392,178