Stein Mart (SMRTQ) 8-K Stein Mart, Inc. Reports 1Q 2010 Financial Results

Exhibit 99.1

1200 RIVERPLACE BOULEVARD • JACKSONVILLE, FL 32207-1809 • (904) 346-1500

May 20, 2010	For more information:
	Susan Datz Edelman
FOR IMMEDIATE RELEASE	Director, Stockholder Relations
	(904) 346-1506
	sedelman@steinmart.com

STEIN MART, INC. REPORTS 1Q 2010 FINANCIAL RESULTS

JACKSONVILLE, FL – Stein Mart, Inc. (Nasdaq: SMRT) today announced financial results for its fiscal first quarter ended May 1, 2010.

First quarter results

For the first quarter of 2010, we earned $14.3 million or $0.32 per diluted share compared to earnings of $16.1 million or $0.38 per diluted share for the first quarter of 2009. On a pre-tax basis, we earned $21.2 million in the first quarter of 2010 compared to $21.7 million for the first quarter of last year. As previously reported, net sales for the first quarter decreased 5.8 percent to $301.0 million from $319.6 million the previous year, and comparable store sales decreased 3.8 percent from the first quarter of 2009.

Gross profit for the first quarter of 2010 decreased to $87.5 million or 29.1 percent of net sales compared to $96.8 million or 30.3 percent of net sales in the same period last year. The decrease in the gross profit rate is a result of margins being enhanced in the first quarter of 2009 by approximately 140 basis points due to an accelerated markdown cadence at the end of fiscal 2008.

Selling, general and administrative (SG&A) expenses for the first quarter of 2010 were $71.6 million or 23.8 percent of net sales compared to $79.9 million or 25.0 percent of net sales for the same period last year. The $8.3 million decrease in SG&A resulted primarily from reduced selling and administrative costs in the stores.

Our tax rate of 32.3 percent for the first quarter of 2010 benefited from the projected annual reduction in our valuation allowance for deferred tax assets. This is the result of net favorable changes in book/tax differences that reduced our deferred tax assets.

“We have produced pre-tax income that is essentially flat to last year, even with negative comparable store sales,” said David H. Stovall, Jr., president and chief executive officer of Stein Mart, Inc. “It’s clear that our efforts to aggressively manage our inventories and reduce expenses are meaningful, and as we gain sales traction, these initiatives will help leverage our operating results.”

At the end of 1Q ‘10, our inventories included approximately $28 million of merchandise in distribution centers that was received earlier than the year ago period as part of our new supply chain network. These planned earlier receipts also increased accounts payable. Excluding the merchandise in distribution centers, our average inventory per store at the end of 1Q ‘10 increased 3.8 percent.

Store network

Three stores were relocated and two existing stores were closed during first quarter, bringing the total number of locations to 265 at quarter-end, compared to 275 at end of the first quarter of 2009.

Conference Call

A conference call for investment analysts to discuss these results will be held at 10 a.m. ET today, Thursday, May 20, 2010. The call may be heard on the investor relations portion of the Company’s website athttp://ir.steinmart.com. A replay of the conference call will be available on the website through May 31, 2010.

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 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:

• continued consumer sensitivity to economic conditions

• on-going competition from other retailers

• changing preferences in apparel

• the effectiveness of advertising,marketing and promotional strategies

• ability to negotiate acceptable lease terms with current landlords

• ability to successfully implement strategies to exit under-performing stores

• unanticipated weather conditions and unseasonable weather

• adequate sources of merchandise at acceptable prices

• the Company’s ability to attract and retain qualified employees

• 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.

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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 1, 2010		January 30, 2010		May 2, 2009
ASSETS
Current assets:
Cash and cash equivalents	$	71,624	$	80,975	$	19,409
Trade and other receivables		7,910		10,178		8,604
Inventories		237,524		218,125		209,573
Income taxes receivable		—		—		16,895
Prepaid expenses and other current assets		12,430		11,112		13,174
Total current assets		329,488		320,390		267,655
Property and equipment, net		73,139		68,415		83,042
Other assets		16,198		15,408		17,225
Total assets	$	418,825	$	404,213	$	367,922
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	82,783	$	80,318	$	63,085
Accrued liabilities		80,363		84,330		77,967
Income taxes payable		4,551		2,961		—
Total current liabilities		167,697		167,609		141,052
Other liabilities		20,444		20,915		23,637
Total liabilities		188,141		188,524		164,689
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; 43,381,693, 42,872,457 and 42,656,332 shares issued and outstanding, respectively		434		429		427
Additional paid-in capital		16,622		15,977		10,791
Retained earnings		213,053		198,705		191,238
Accumulated other comprehensive income		575		578		777
Total stockholders’ equity		230,684		215,689		203,233
Total liabilities and stockholders’ equity	$	418,825	$	404,213	$	367,922

Stein Mart, Inc.

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share amounts)

	13 Weeks Ended May 1, 2010		13 Weeks Ended May 2, 2009
Net sales	$	300,998	$	319,570
Cost of merchandise sold		213,495		222,740
Gross profit		87,503		96,830
Selling, general and administrative expenses		71,598		79,856
Other income, net		5,273		4,997
Income from operations		21,178		21,971
Interest income (expense), net		8		(279	)
Income before income taxes		21,186		21,692
Provision for income taxes		6,838		5,606
Net income	$	14,348	$	16,086
Net income per share:
Basic	$	0.33	$	0.38
Diluted	$	0.32	$	0.38
Weighted-average shares outstanding:
Basic		42,512		41,704
Diluted		43,657		41,920

Stein Mart, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	13 Weeks Ended May 1, 2010			13 Weeks Ended May 2, 2009
Cash flows from operating activities:
Net income	$	14,348		$	16,086
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization		4,336			4,939
Change in valuation allowance for deferred tax assets		(798	)		(2,839	)
Deferred income taxes		798			3,125
Store closing charges		138			248
Share-based compensation		198			806
Tax benefit from equity issuances		2,041			—
Excess tax benefits from share-based compensation		(1,998	)		—
Changes in assets and liabilities:
Trade and other receivables		2,268			407
Inventories		(19,399	)		(2,434	)
Income taxes receivable		—			7,544
Prepaid expenses and other current assets		(1,318	)		(1,085	)
Other assets		(645	)		4,087
Accounts payable		2,465			7,402
Accrued liabilities		(4,334	)		(1,874	)
Income taxes payable		1,590			—
Other liabilities		(579	)		(4,284	)
Net cash (used in) provided by operating activities		(889	)		32,128
Cash flows from investing activities:
Capital expenditures		(8,871	)		(1,621	)
Net cash used in investing activities		(8,871	)		(1,621	)
Cash flows from financing activities:
Borrowings under notes payable to banks		—			57,047
Repayments of notes payable to banks		—			(157,047	)
Excess tax benefits from share-based compensation		1,998			—
Proceeds from exercise of stock options		434			—
Repurchase of common stock for employee withholdings		(2,023	)		(1	)
Net cash provided by (used in) financing activities		409			(100,001	)
Net decrease in cash and cash equivalents		(9,351	)		(69,494	)
Cash and cash equivalents at beginning of year		80,975			88,903
Cash and cash equivalents at end of period	$	71,624		$	19,409