Exhibit 99.1
8233 Baumgart Road | Contact Mark L. Lemond |
Evansville, IN 47725 | President and Chief Executive Officer |
www.shoecarnival.com | or W. Kerry Jackson |
(812) 867-4034 | Executive Vice President, Chief Financial Officer |
| and Treasurer |
FOR IMMEDIATE RELEASE | |
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SHOE CARNIVAL REPORTS RECORD FIRST QUARTER 2006 RESULTS;
NET INCOME INCREASES 25 PERCENT |
First Quarter Results
Evansville, Indiana, May 18, 2006 - Shoe Carnival, Inc. (Nasdaq: SCVL) a leading retailer of value-priced footwear and accessories, today announced record sales and earnings for the first quarter ended April 29, 2006. Net earnings for the 13-week first quarter increased 25 percent to $7.4 million as compared with net earnings of $5.9 million in the first quarter ended April 30, 2005. Diluted earnings per share increased 20 percent to $0.54 per share compared with $0.45 per share last year. Included in this year’s diluted earnings per share are expenses related to stock-based compensation of $0.03 per share.
Net sales for the first quarter increased 4.8 percent to a first quarter record of $168.5 million from $160.7 million last year. Comparable store sales increased 4.1 percent for the 13-week period.
The gross profit margin for the first quarter of 2006 increased to 30.5 percent from 29.6 percent in the first quarter of 2005. Selling, general and administrative expenses for the first quarter, as a percentage of sales, decreased to 23.5 percent from 23.6 percent in last year’s first quarter. For the first quarter, stock-based compensation of $663,000, or 0.4 percent of sales, was included in selling, general and administrative expenses. There was no stock-based compensation expense for the first quarter of last year.
Speaking on the results for the quarter, Mark Lemond, chief executive officer and president said, “We continued our success through the first fiscal quarter of 2006 with a 25 percent increase in net income. Our customers responded well to our improved product assortment, especially in our dress and casual categories. The result was a 4.1 percent increase in our comparable store sales for the quarter. This increase comes on top of the 5.5 percent comparable stores sales increase we achieved in the first quarter of 2005. The increase in our gross margins, along with our leveraging of expenses, led to a full percentage point increase in our operating margin from 6.0 percent to 7.0 percent.”
2006 EPS Outlook
Earnings per diluted share in the second quarter of fiscal 2006 are expected to range from $0.23 to $0.25. This assumes a comparable store sales increase of 2 or 3 percent.
For the full year of 2006, we continue to expect diluted earnings per share to range from $1.65 to $1.75.
Store Growth
Currently, the Company expects to open between 13 to 15 stores in fiscal 2006 and close five stores. No stores were opened or closed in the first quarter. In the second quarter, the company expects to open three stores and close two stores.
Conference Call
Today, at 2:00 p.m. Eastern time, the Company will host a conference call to discuss the first 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.
Record Date and Date of Annual Shareholder Meeting
The date set for the Annual Meeting of Shareholders is June 12, 2006 for shareholders of record as of April 21, 2006.
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 or other natural disasters 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 under-performing 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 261 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)
| | Thirteen
Weeks Ended
April 29, 2006 | | Thirteen
Weeks Ended
April 30, 2005 | |
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Net sales | | $ | 168,469 | | $ | 160,713 | |
Cost of sales (including buying, distribution and occupancy costs) | | | 117,019 | | | 113,074 | |
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Gross profit | | | 51,450 | | | 47,639 | |
Selling, general and administrative expenses | | | 39,634 | | | 37,864 | |
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Operating income | | | 11,816 | | | 9,775 | |
Interest income | | | (208 | ) | | (11 | ) |
Interest expense | | | 32 | | | 144 | |
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Income before income taxes | | | 11,992 | | | 9,642 | |
Income tax expense | | | 4,592 | | | 3,721 | |
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Net income | | $ | 7,400 | | $ | 5,921 | |
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Net income per share: | | | | | | | |
Basic | | $ | .56 | | $ | .46 | |
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Diluted | | $ | .54 | | $ | .45 | |
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Average shares outstanding: | | | | | | | |
Basic | | | 13,247 | | | 12,923 | |
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Diluted | | | 13,656 | | | 13,255 | |
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SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| | April 29,
2006 | | January 28,
2006 | | April 30,
2005 | |
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ASSETS | | | | | | | | | | |
Current Assets: | | | | | | | | | | |
Cash and cash equivalents | | $ | 31,958 | | $ | 20,304 | | $ | 4,317 | |
Accounts receivable | | | 1,202 | | | 286 | | | 714 | |
Merchandise inventories | | | 174,388 | | | 183,993 | | | 176,265 | |
Deferred income tax benefit | | | 1,135 | | | 1,075 | | | 0 | |
Other | | | 3,673 | | | 2,327 | | | 2,842 | |
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Total Current Assets | | | 212,356 | | | 207,985 | | | 184,138 | |
Property and equipment-net | | | 58,319 | | | 66,848 | | | 67,356 | |
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Total Assets | | $ | 270,675 | | $ | 274,833 | | $ | 251,494 | |
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LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | |
Accounts payable | | $ | 49,313 | | $ | 64,756 | | $ | 42,387 | |
Accrued and other liabilities | | | 14,035 | | | 11,451 | | | 12,316 | |
Deferred income tax | | | 0 | | | 0 | | | 48 | |
Current portion of long-term debt | | | 0 | | | 0 | | | 27 | |
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Total Current Liabilities | | | 63,348 | | | 76,207 | | | 54,778 | |
Long-term debt | | | 0 | | | 0 | | | 13,500 | |
Deferred lease incentives | | | 5,978 | | | 6,399 | | | 6,627 | |
Accrued rent | | | 6,421 | | | 6,658 | | | 6,955 | |
Deferred income taxes | | | 1,833 | | | 2,151 | | | 3,893 | |
Deferred compensation | | | 2,525 | | | 2,263 | | | 1,735 | |
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Total Liabilities | | | 80,105 | | | 93,678 | | | 87,488 | |
Total Shareholders’ Equity | | | 190,570 | | | 181,155 | | | 164,006 | |
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Total Liabilities and Shareholders’ Equity | | $ | 270,675 | | $ | 274,833 | | $ | 251,494 | |
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SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| | Thirteen
Weeks Ended
April 29, 2006 | | Thirteen
Weeks Ended
April 30, 2005 | |
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Cash flows from operating activities: | | | | | | | |
Net income | | $ | 7,400 | | $ | 5,921 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | | | | | | | |
Depreciation and amortization | | | 3,567 | | | 3,650 | |
Stock option income tax benefit | | | 0 | | | 244 | |
Stock-based compensation | | | 663 | | | 0 | |
Loss on retirement of assets | | | 86 | | | 76 | |
Deferred income taxes | | | (378 | ) | | (959 | ) |
Lease incentives | | | 0 | | | 258 | |
Other | | | (396 | ) | | (182 | ) |
Changes in operating assets and liabilities: | | | | | | | |
Accounts receivable | | | (916 | ) | | 125 | |
Merchandise inventories | | | 9,605 | | | 4,325 | |
Accounts payable and accrued liabilities | | | (17,505 | ) | | (20,436 | ) |
Other | | | 3,390 | | | 1,789 | |
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Net cash provided by (used in) operating activities | | | 5,516 | | | (5,189 | ) |
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Cash flows from investing activities: | | | | | | | |
Purchases of property and equipment | | | (2,214 | ) | | (2,686 | ) |
Proceeds from sale of property and equipment | | | 7,200 | | | 57 | |
Other | | | 2 | | | 153 | |
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Net cash provided by (used in) investing activities | | | 4,988 | | | (2,476 | ) |
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Cash flows from financing activities: | | | | | | | |
Borrowings under line of credit | | | 0 | | | 77,900 | |
Payments on line of credit | | | 0 | | | (71,700 | ) |
Payments on long-term debt | | | 0 | | | (29 | ) |
Proceeds from issuance of stock | | | 1,130 | | | 922 | |
Excess tax benefits from stock-based compensation | | | 261 | | | 0 | |
Common stock repurchased | | | (241 | ) | | 0 | |
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Net cash provided by financing activities | | | 1,150 | | | 7,093 | |
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Net increase (decrease) in cash and cash equivalents | | | 11,654 | | | (572 | ) |
Cash and cash equivalents at beginning of period | | | 20,304 | | | 4,889 | |
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Cash and Cash Equivalents at End of Period | | $ | 31,958 | | $ | 4,317 | |
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