- Published: 21 May 2009
- Written by Editor
Stein Mart, Inc. Reports 1Q'09 Financial Results
Stein Mart, Inc. (Nasdaq: SMRT) today announced financial results for its first quarter ended May 2, 2009.
First quarter results
For the first quarter of 2009, the Company earned $16.1 million or $0.38 per diluted share as compared to $7.0 million or $0.17 per diluted share in 2008. As previously reported, net sales for the first quarter decreased 9.2 percent to $319.6 million from $352.1 million the previous year and comparable store sales decreased 8.0 percent from the first quarter of 2008.
Gross profit decreased to $96.8 million from $97.7 million in 2008. As a percent of net sales, gross profit increased to 30.3 percent from 27.8 percent in the same period last year. The increase in the gross profit rate resulted from increased markup and decreased markdowns, slightly offset by higher occupancy costs.
Selling, general and administrative (SG&A) expenses were $79.9 million or 25.0 percent of net sales as compared to $91.5 million or 26.0 percent of net sales during the same period last year. The $11.7 million decrease in SG&A resulted primarily from reduced payroll expense in stores and in the corporate office, and from lower depreciation expense.
The effective tax rate for the first quarter of 2009 was 25.8% compared to 40.5% last year. The lower rate in the current quarter resulted from the reversal of a portion of the valuation allowance for deferred tax assets using the discrete period method.
"Despite a very difficult sales environment, first quarter earnings improved due to tightly controlled inventories that enhanced merchandise margins, and significant expense reductions; these initiatives produced a positive cash flow of $32 million and allowed us to end the period debt free," commented David H. Stovall, Jr., president and chief executive officer of Stein Mart, Inc. "While our conservative outlook regarding the macro environment persists, we believe our re-focused brand strategy and the new marketing initiatives are beginning to gain traction, and will be key to our long-term success."
Store network
During the first quarter of 2009, a new store opened in Houston, Texas and two existing locations in Atlanta closed. At May 2, 2009, there were 275 stores in operation as compared to 284 stores at the same time last year.
Conference Call
Management will hold a conference call for investment analysts at 10 a.m. ET this morning to discuss these results. The call may be heard on the investor relations portion of the Company's website at http://ir.steinmart.com. A replay of the presentation will be available on the website until May 29, 2008.
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)
May 2, January 31, May 3,
2009 2009 2008
ASSETS
Current assets:
Cash and cash equivalents $19,409 $88,903 $22,473
Trade and other receivables 8,604 9,011 11,493
Inventories 209,573 207,139 280,573
Income taxes receivable 16,895 24,439 10,060
Prepaid expenses and other current assets 13,174 12,089 15,309
Total current assets 267,655 341,581 339,908
Property and equipment, net 83,042 86,321 109,948
Other assets 17,225 21,988 33,535
Total assets $367,922 $449,890 $483,391
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $63,085 $55,683 $80,392
Accrued liabilities 77,967 79,794 73,774
Total current liabilities 141,052 135,477 154,166
Notes payable to banks - 100,000 40,000
Other liabilities 23,637 28,063 28,864
Total liabilities 164,689 263,540 223,030
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; 42,656,332, 42,655,544
and 42,078,878 shares issued and
outstanding, respectively 427 427 421
Additional paid-in capital 10,791 9,986 6,489
Retained earnings 191,238 175,152 253,451
Accumulated other comprehensive income 777 785 -
Total stockholders' equity 203,233 186,350 260,361
Total liabilities and stockholders'
equity $367,922 $449,890 $483,391
Stein Mart, Inc.
Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)
13 Weeks Ended 13 Weeks Ended
May 2, 2009 May 3, 2008
Net sales $319,570 $352,123
Cost of merchandise sold 222,740 254,377
Gross profit 96,830 97,746
Selling, general and administrative expenses 79,856 91,539
Other income, net 4,997 5,930
Income from operations 21,971 12,137
Interest expense, net 279 367
Income before income taxes 21,692 11,770
Provision for income taxes 5,606 4,772
Net income $16,086 $6,998
Net income per share:
Basic $0.38 $0.17
Diluted $0.38 $0.17
Weighted-average shares outstanding:
Basic 42,676 42,003
Diluted 42,892 42,034
Stein Mart, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
13 Weeks Ended 13 Weeks Ended
May 2, 2009 May 3, 2008
Cash flows from operating activities:
Net income $16,086 $6,998
Adjustments to reconcile net income to
net cash provided by (used in) operating
activities:
Depreciation and amortization 4,939 6,497
Change in valuation allowance for
deferred tax assets (2,839) -
Deferred income taxes 3,125 271
Store closing charges 248 111
Share-based compensation 806 1,258
Changes in assets and liabilities:
Trade and other receivables 407 879
Inventories (2,434) (18,077)
Income taxes receivable 7,544 4,043
Prepaid expenses and other current
assets (1,085) (1,729)
Other assets 4,087 (1,327)
Accounts payable 7,402 3,268
Accrued liabilities (1,874) (2,547)
Other liabilities (4,284) 264
Net cash provided by (used in) operating
activities 32,128 (91)
Cash flows from investing activities:
Capital expenditures (1,621) (5,448)
Net cash used in investing activities (1,621) (5,448)
Cash flows from financing activities:
Borrowings under notes payable to banks 57,047 242,212
Repayments of notes payable to banks (157,047) (229,345)
Repurchase of common stock (1) -
Net cash (used in) provided by financing
activities (100,001) 12,867
Net (decrease) increase in cash and cash
equivalents (69,494) 7,328
Cash and cash equivalents at beginning of year 88,903 15,145
Cash and cash equivalents at end of period $19,409 $22,473
