May 19, 2005 For more information:
Susan Datz Edelman
FOR IMMEDIATE RELEASE Director, Stockholder Relations
- --------------------- (904) 346-1506
sedelman@steinmart.com
STEIN MART, INC. REPORTS 1Q '05 RESULTS; INITIATES CASH DIVIDEND
JACKSONVILLE, FL - Stein Mart, Inc. (Nasdaq: SMRT) today announced financial
results for its first quarter ended April 30, 2005 and that its Board of
Directors has approved the payment of a $0.25 annual cash dividend on Stein Mart
common stock.
First quarter results
For the first quarter of 2005, the Company earned $16.8 million, a 46 percent
increase over net income of $11.5 million in the first quarter of 2004. On a
diluted per share basis, the Company earned $0.38 in the first quarter of 2005
compared to $0.27 in the same quarter last year.
Net sales for the first quarter were $380.7 million, a 4.7 percent increase over
the $363.6 million in net sales for the first quarter of 2004. Comparable store
sales increased 3.2 percent from the first quarter of 2004 to the first quarter
of 2005.
Gross profit increased to $111.7 million, or 29.3 percent of net sales in the
first quarter of 2005 compared to $98.7 million, or 27.2 percent of net sales in
the same period of 2004. Gross profit was favorably impacted primarily by
increased mark-up and decreased markdowns.
Selling, general and administrative (SG&A) expenses were $89.0 million or 23.4
percent of net sales as compared to $83.5 million or 23.0 percent of net sales
during the prior year's first quarter. SG&A expenses included store closing
charges of $1.3 million in this year's first quarter and $0.4 million in last
year's first quarter. The SG&A rate was also slightly higher due to increased
advertising and pre-opening expenses.
"First quarter sales were driven by continued strength in ladies' apparel and
accessories, and menswear, and by higher-than-expected full-priced selling,"
commented Michael D. Fisher, president and chief executive officer. "We believe
our first quarter performance validates our continued focus on improved
productivity which, in turn, produces substantially greater profit on a more
normalized sales increase."
As anticipated, inventories were up at the end of the first quarter because of
certain planned buys as well as some opportunistic purchases. Management intends
to enter the fall selling season with slightly more inventory than last year in
order to take advantage of certain selling opportunities.
Expectations for second quarter
Comparable store sales for the second quarter ending July 30 are expected to
increase in the low, single-digit range, resulting in diluted earnings per share
of $0.20 - $0.22. In 2004, comparable store sales for the second quarter
increased 10.3 percent and produced net income of $0.13 per diluted share.
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Directors authorize cash dividend
The Stein Mart Board of Directors has declared an initial annual cash dividend
of $0.25 per share, to be paid quarterly. The first dividend payment of $0.0625
per share will be payable on June 24, 2005 to shareholders of record at the
close of business on June 10, 2005.
"The decision to initiate a cash dividend underscores the Board's commitment to
improve shareholder value," commented Jay Stein, chairman of the board. "Given
the Company's solid financial performance, the Board believes adding a dividend
as well as continuing our ongoing store network expansion and share repurchase
programs will return the most value to our shareholders."
Store network update
During the first quarter of 2005, Stein Mart opened two new stores (Orlando, FL
and Beaufort, SC) and closed five stores, for a quarter-end store count of 258.
Two additional stores (Ocean, NJ and Boynton Beach, FL) opened this month.
The Company has revised its opening/closing plans for 2005. Due to external
issues including certain construction delays, management now expects that a
total of 8-9 new stores, including one relocation, will open this year, with
some stores that were originally planned for 2005 expected to open in 2006. A
total of seven stores will close in 2005.
First quarter conference call
The Company will host a conference call with management to discuss these results
at 10:30 a.m. Eastern Time today (May 19) and may be accessed by all interested
parties at www.steinmart.com.
About Stein Mart
Stein Mart's 260 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 New York, Stein
Mart's focused assortment of merchandise features moderate to designer
brand-name apparel for women, men and young children, 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, but are not
limited to, on-going competition from other retailers, availability of new store
sites at acceptable lease terms, ability to successfully implement strategies to
exit or improve under-performing stores, changing preferences in apparel,
changes in consumer spending due to current events and/or general economic
conditions, the effectiveness of new advertising, marketing and promotional
strategies, adequate sources of merchandise at acceptable prices and the other
risks and uncertainties described in the Company's filings with the Securities
and Exchange Commission.
###
Additional information about Stein Mart, Inc. can be found at www.steinmart.com.
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<Caption>
Stein Mart, Inc.
Consolidated Balance Sheets
(In thousands)
April 30, January 29, May 1,
2005 2005 2004
-------------- -------------- --------------
ASSETS (Unaudited) (Unaudited)
Current assets:
Cash and cash equivalents $ 25,147 $ 20,250 $ 29,954
Short-term investments 62,000 72,475 13,950
Trade and other receivables 4,157 5,852 4,230
Inventories 302,892 277,164 288,176
Prepaid expenses and other current assets 13,798 13,010 14,037
-------------- -------------- --------------
Total current assets 407,994 388,751 350,347
Property and equipment, net 75,678 71,048 70,426
Other assets 14,777 14,781 14,162
-------------- -------------- --------------
Total assets $498,449 $474,580 $434,935
============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $107,030 $ 99,163 $103,525
Accrued liabilities 66,446 73,257 63,680
Income taxes payable 6,842 5,089 7,587
-------------- -------------- --------------
Total current liabilities 180,318 177,509 174,792
Other liabilities 21,755 20,561 19,655
-------------- -------------- --------------
Total liabilities 202,073 198,070 194,447
COMMITMENTS AND CONTINGENCIES
Stockholders' equity:
Preferred stock - $.01 par value; 1,000,000 shares
authorized; no shares outstanding
Common stock - $.01 par value; 100,000,000 shares
authorized; 43,222,966; 42,880,031 and 42,059,262
shares issued and outstanding, respectively 432 429 421
Paid-in capital 19,016 14,340 4,461
Unearned compensation (2,210) (603) (280)
Retained earnings 279,138 262,344 235,886
-------------- -------------- --------------
Total stockholders' equity 296,376 276,510 240,488
-------------- -------------- --------------
Total liabilities and stockholders' equity $498,449 $474,580 $434,935
============== ============== ==============
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<Caption>
Stein Mart, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands except per share amounts)
For The 13 Weeks Ended
---------------------------------
April 30, May 1,
2005 2004
-------------- --------------
Net sales $380,654 $363,608
Cost of merchandise sold 268,959 264,870
-------------- --------------
Gross Profit 111,695 98,738
Selling, general and administrative expenses 88,968 83,537
Other income, net 3,966 3,634
-------------- --------------
Income from operations 26,693 18,835
Interest income 394 -
Interest expense - 39
-------------- --------------
Income from continuing operations before income taxes 27,087 18,796
Provision for income taxes 10,293 7,142
-------------- --------------
Income from continuing operations 16,794 11,654
Loss from discontinued operations, net of tax benefit - (139)
-------------- --------------
Net income $ 16,794 $ 11,515
============== ==============
Basic income per share:
Continuing operations $0.39 $0.27
Discontinued operations - -
-------------- --------------
Total $0.39 $0.27
============== ==============
Diluted income per share:
Continuing operations $0.38 $0.27
Discontinued operations - -
-------------- --------------
Total $0.38 $0.27
============== ==============
Weighted-average shares outstanding - Basic 42,905 42,000
============== ==============
Weighted-average shares outstanding -Diluted 44,202 42,461
============== ==============
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<Caption>
Stein Mart, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
For The 13 Weeks Ended
---------------------------------
April 30, May 1,
2005 2004
-------------- --------------
Cash flows from operating activities:
Net income $ 16,794 $ 11,515
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 4,510 4,342
Store closing charges 498 180
Deferred income taxes 501 (159)
Restricted stock compensation 137 10
Tax benefit from exercise of stock options 1,710 199
Changes in assets and liabilities:
Trade and other receivables 1,695 (3)
Inventories (25,728) (4,797)
Prepaid expenses and other current assets (873) (113)
Other assets (110) 915
Accounts payable 7,867 38,407
Accrued liabilities (7,269) 3,039
Income taxes payable 1,753 7,587
Other liabilities 580 (1,603)
-------------- --------------
Net cash provided by operating activities 2,065 59,519
-------------- --------------
Cash flows from investing activities:
Capital expenditures (8,868) (3,704)
Purchases of short-term investments (550,800) (61,950)
Sales of short-term investments 561,275 48,000
-------------- --------------
Net cash provided by (used in) investing activities 1,607 (17,654)
-------------- --------------
Cash flows from financing activities:
Net payments under notes payable to banks - (24,962)
Proceeds from exercise of stock options 5,381 1,086
Purchase of common stock (4,156) -
-------------- --------------
Net cash provided by (used in) financing activities 1,225 (23,876)
-------------- --------------
Net increase in cash and cash equivalents 4,897 17,989
Cash and cash equivalents at beginning of year 20,250 11,965
-------------- --------------
Cash and cash equivalents at end of period $ 25,147 $ 29,954
============== ==============
Supplemental disclosures of cash flow information:
Income taxes paid $ 6,452 $ 281
Interest paid - 65
</Table>
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