Exhibit 99.1
8233 Baumgart Road | Contact Mark L. Lemond |
FOR IMMEDIATE RELEASE |
|
SHOE CARNIVAL REPORTS RECORD THIRD QUARTER 2005 EARNINGS;
NET INCOME INCREASES 46.3 PERCENT
Evansville, Indiana, November 17, 2005 - Shoe Carnival, Inc. (Nasdaq: SCVL) a leading retailer of value-priced footwear and accessories, today announced record sales and earnings for the third quarter ended October 29, 2005. Net income for the third quarter of fiscal 2005 increased 46.3 percent to $7.2 million compared with net income of $4.9 million in the third quarter of fiscal 2004. Diluted earnings per share increased 39.5 percent to $0.53 per share from $0.38 per share last year.
Net sales for the third quarter of 2005 increased 12.3 percent to a record $182.7 million from $162.7 million last year. Comparable store sales increased by 8.3 percent for the 13-week period.
Gross profit margin for the third quarter of 2005 increased to 29.5 percent from 29.1 percent last year. Selling, general and administrative expenses, as a percentage of sales, decreased to 23.1 percent from 24.1 percent in the third quarter of 2004.
Mark Lemond, president and chief executive officer stated, “Thanks to a record breaking 21.2 percent comparable store sales increase in October, we posted the highest earnings ever in the Company’s history. This broke the record set in the first quarter of this year. With two record breaking quarters in 2005, we’re obviously pleased with the results so far this year.”
“In the third quarter, each of our major product categories posted a comparable store sales increase. Importantly, we continue to make great progress in our initiative of strengthening our women’s dress and casual business. In fact, the largest quarterly comparable store sales increases came from women’s dress shoes and women’s boots, both of which were up 40 percent.”
“I want to commend our associates for the tremendous job they have done in dealing with the devastation and consequent relief efforts resulting from the hurricanes in Florida and along the Gulf Coast. Part of the success we had as a company in the third quarter was attributable to the strength and perseverance of our associates in these difficult times.”
Net income for the first nine months of 2005 was $15.8 million, or $1.18 per diluted share, compared with net income of $11.3 million, or $0.87 per diluted share, last year. Net sales increased 10.3 percent to $492.1 million for the first nine months from sales of $446.3 million last year. Comparable store sales increased 5.5 percent for the nine-month period. Gross profit margin for the first nine months of 2005 increased to 29.1 percent from 28.7 percent last year. Selling, general and administrative expenses, as a percentage of sales, decreased to 23.8 percent in the first nine months of 2005 from 24.4 percent last year.
Shoe Carnival now anticipates an increase in comparable store sales for the fourth quarter of 3 to 5 percent. Diluted earnings per share are expected to be between $0.13 and $0.15 for the fourth quarter compared to $0.09 for the fourth quarter of 2004. Diluted earnings per share for the full year of 2005 are anticipated to be between $1.31 and $1.33.
Store Growth
During the first nine months of 2005, 14 new stores were opened and four were closed. Two stores were opened in the third quarter, and an additional store has opened in the fourth quarter. The Company closed three stores in the third quarter and expects to close four stores during the last quarter of this year, two of which will be closed in the last week of the fiscal year. In 2006, the Company plans to open 15 new stores and close four.
The two stores opened during the third quarter included locations in:
City |
| Market/Stores |
| ||
Sioux City, IA |
| Sioux City/1 |
Chesapeake, VA |
| Norfolk/4 |
Conference Call
Today, at 2:00 p.m. Eastern time, the Company will host a conference call to discuss the third quarter results. The public can listen to the live webcast of the call by visiting Shoe Carnival’s Investor Relations page at www.shoecarnival.com. While the question-and-answer session will be available to all listeners, questions from the audience will be limited to institutional analysts and investors. A replay of the webcast will be available on our website beginning approximately two hours after the conclusion of the conference call and will be archived for one year.
Cautionary Statement Regarding Forward-Looking Information
This press release contains forward-looking statements that involve a number of risks and uncertainties. A number of factors could cause our actual results, performance, achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, but are not limited to: general economic conditions in the areas of the United States in which our stores are
located; changes in the overall retail environment and more specifically in the apparel and footwear retail sectors; the potential impact of national and international security concerns on the retail environment; changes in our relationships with key suppliers; the impact of competition and pricing; changes in weather patterns, consumer buying trends and our ability to identify and respond to emerging fashion trends; the impact of hurricanes on our stores, as well as on consumer confidence and purchasing in general; risks associated with the seasonality of the retail industry; the availability of desirable store locations at acceptable lease terms and our ability to open new stores in a timely and profitable manner; higher than anticipated costs associated with the closing of underperforming stores; the inability of manufacturers to deliver products in a timely manner; changes in the political and economic environments in the People’s Republic of China, a major manufacturer of footwear; and the continued favorable trade relations between the United States and China and other countries which are the major manufacturers of footwear.
In addition, these forward-looking statements necessarily depend upon assumptions, estimates and dates that may be incorrect or imprecise and involve known and unknown risks, uncertainties and other factors. Accordingly, any forward-looking statements included in this press release do not purport to be predictions of future events or circumstances and may not be realized. Forward-looking statements can be identified by, among other things, the use of forward-looking terms such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “pro forma,” “anticipates,” “intends” or the negative of any of these terms, or comparable terminology, or by discussions of strategy or intentions. Given these uncertainties, we caution investors not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We disclaim any obligation to update any of these factors or to publicly announce any revisions to the forward-looking statements contained in this press release to reflect future events or developments.
Shoe Carnival is a chain of 266 footwear stores located in the Midwest, South and Southeast. Combining value pricing with an entertaining store format, Shoe Carnival is a leading retailer of name brand and private label footwear for the entire family. Headquartered in Evansville, IN, Shoe Carnival trades on the Nasdaq Stock Market under the symbol SCVL. Shoe Carnival’s press releases and annual report are available on the Company’s website at www.shoecarnival.com.
Financial Tables Follow
###
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share)
(Unaudited)
|
| Thirteen |
| Thirteen |
| Thirty-nine |
| Thirty-nine |
| ||||
|
|
|
|
|
| ||||||||
Net sales |
| $ | 182,697 |
| $ | 162,716 |
| $ | 492,068 |
| $ | 446,308 |
|
Cost of sales (including buying, distribution and occupancy costs) |
|
| 128,815 |
|
| 115,421 |
|
| 349,089 |
|
| 318,394 |
|
|
|
|
|
|
| ||||||||
Gross profit |
|
| 53,882 |
|
| 47,295 |
|
| 142,979 |
|
| 127,914 |
|
Selling, general and administrative expenses |
|
| 42,180 |
|
| 39,150 |
|
| 117,024 |
|
| 108,811 |
|
|
|
|
|
|
| ||||||||
Operating income |
|
| 11,702 |
|
| 8,145 |
|
| 25,955 |
|
| 19,103 |
|
Interest expense-net |
|
| 100 |
|
| 135 |
|
| 361 |
|
| 508 |
|
|
|
|
|
|
| ||||||||
Income before income taxes |
|
| 11,602 |
|
| 8,010 |
|
| 25,594 |
|
| 18,595 |
|
Income tax expense |
|
| 4,452 |
|
| 3,124 |
|
| 9,819 |
|
| 7,252 |
|
|
|
|
|
|
| ||||||||
Net income |
| $ | 7,150 |
| $ | 4,886 |
| $ | 15,775 |
| $ | 11,343 |
|
|
|
|
|
|
| ||||||||
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | .54 |
| $ | .38 |
| $ | 1.21 |
| $ | .89 |
|
|
|
|
|
|
| ||||||||
Diluted |
| $ | .53 |
| $ | .38 |
| $ | 1.18 |
| $ | .87 |
|
|
|
|
|
|
| ||||||||
Average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| 13,229 |
|
| 12,831 |
|
| 13,088 |
|
| 12,812 |
|
|
|
|
|
|
| ||||||||
Diluted |
|
| 13,455 |
|
| 13,008 |
|
| 13,410 |
|
| 13,053 |
|
|
|
|
|
|
|
1 Prior periods have been restated to correct the Company’s lease accounting as set forth in Note 3 of our 2004 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on April 14, 2005. |
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
|
| October 29, |
| January 29, |
| October 30, |
| |||
|
|
|
|
| ||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 5,729 |
| $ | 4,889 |
| $ | 3,789 |
|
Accounts receivable |
|
| 2,078 |
|
| 992 |
|
| 2,152 |
|
Merchandise inventories |
|
| 178,650 |
|
| 180,590 |
|
| 172,375 |
|
Deferred income tax benefit |
|
| 828 |
|
| 0 |
|
| 0 |
|
Other |
|
| 2,748 |
|
| 1,982 |
|
| 2,076 |
|
|
|
|
|
| ||||||
Total Current Assets |
|
| 190,033 |
|
| 188,453 |
|
| 180,392 |
|
Property and equipment-net |
|
| 69,071 |
|
| 68,452 |
|
| 69,683 |
|
|
|
|
|
| ||||||
Total Assets |
| $ | 259,104 |
| $ | 256,905 |
| $ | 250,075 |
|
|
|
|
|
| ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
|
|
Accounts payable |
| $ | 39,423 |
| $ | 62,291 |
| $ | 39,096 |
|
Accrued and other liabilities |
|
| 12,673 |
|
| 10,198 |
|
| 9,709 |
|
Deferred income tax |
|
| 0 |
|
| 413 |
|
| 725 |
|
Current portion of long-term debt |
|
| 1 |
|
| 56 |
|
| 94 |
|
|
|
|
|
| ||||||
Total Current Liabilities |
|
| 52,097 |
|
| 72,958 |
|
| 49,624 |
|
Long-term debt |
|
| 12,000 |
|
| 7,300 |
|
| 24,201 |
|
Deferred lease incentives |
|
| 6,667 |
|
| 6,613 |
|
| 6,705 |
|
Accrued rent |
|
| 6,746 |
|
| 6,977 |
|
| 6,839 |
|
Deferred income taxes |
|
| 2,377 |
|
| 4,487 |
|
| 5,616 |
|
Other |
|
| 2,045 |
|
| 1,651 |
|
| 1,535 |
|
|
|
|
|
| ||||||
Total Liabilities |
|
| 81,932 |
|
| 99,986 |
|
| 94,520 |
|
Total Shareholders’ Equity |
|
| 177,172 |
|
| 156,919 |
|
| 155,555 |
|
|
|
|
|
| ||||||
Total Liabilities and Shareholders’ Equity |
| $ | 259,104 |
| $ | 256,905 |
| $ | 250,075 |
|
|
|
|
|
|
1 Prior periods have been restated to correct the Company’s lease accounting as set forth in Note 3 of our 2004 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on April 14, 2005. |
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
| Thirty-nine |
| Thirty-nine |
| ||
|
|
|
| ||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
Net income |
| $ | 15,775 |
| $ | 11,343 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
| 11,154 |
|
| 10,828 |
|
Stock option income tax benefit |
|
| 1,086 |
|
| 708 |
|
Loss on retirement of assets |
|
| 413 |
|
| 341 |
|
Deferred income taxes |
|
| (3,351 | ) |
| 1,745 |
|
Lease incentives |
|
| 874 |
|
| 529 |
|
Other |
|
| (470 | ) |
| (60 | ) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
|
| (1,240 | ) |
| (1,606 | ) |
Merchandise inventories |
|
| 1,940 |
|
| (7,265 | ) |
Accounts payable and accrued liabilities |
|
| (20,393 | ) |
| (12,584 | ) |
Other |
|
| (766 | ) |
| 4,677 |
|
|
|
|
| ||||
Net cash provided by operating activities |
|
| 5,022 |
|
| 8,656 |
|
|
|
|
| ||||
Cash flows from investing activities: |
|
|
|
|
|
|
|
Purchases of property and equipment |
|
| (12,256 | ) |
| (11,620 | ) |
Other |
|
| 223 |
|
| 59 |
|
|
|
|
| ||||
Net cash used in investing activities |
|
| (12,033 | ) |
| (11,561 | ) |
|
|
|
| ||||
Cash flows from financing activities: |
|
|
|
|
|
|
|
Borrowings under line of credit |
|
| 219,000 |
|
| 282,055 |
|
Payments on line of credit |
|
| (214,300 | ) |
| (279,755 | ) |
Payments on long-term debt |
|
| (55 | ) |
| (183 | ) |
Proceeds from issuance of stock |
|
| 3,206 |
|
| 506 |
|
|
|
|
| ||||
Net cash provided by financing activities |
|
| 7,851 |
|
| 2,623 |
|
|
|
|
| ||||
Net increase (decrease) in cash and cash equivalents |
|
| 840 |
|
| (282 | ) |
Cash and cash equivalents at beginning of period |
|
| 4,889 |
|
| 4,071 |
|
|
|
|
| ||||
Cash and Cash Equivalents at End of Period |
| $ | 5,729 |
| $ | 3,789 |
|
|
|
|
|
1 Prior periods have been restated to correct the Company’s lease accounting as set forth in Note 3 of our 2004 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on April 14, 2005. |