8233 Baumgart Road Contact Mark L. Lemond
Evansville, Indiana 47725 President and Chief Executive Officer
www.shoecarnival.com or W. Kerry Jackson
(812) 867-4034 Sr. Vice President, Chief Financial Officer
and Treasurer
FOR IMMEDIATE RELEASE
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SHOE CARNIVAL REPORTS RESULTS FOR FIRST QUARTER 2003
Evansville, Indiana, May 15, 2003 - Shoe Carnival, Inc. (Nasdaq: SCVL)
a leading retailer of value-priced footwear and accessories, today announced
sales and earnings for the first quarter ended May 3, 2003. Net earnings for the
13-week first quarter decreased 10 percent to $5.1 million as compared with net
earnings of $5.7 million in the first quarter ended May 4, 2002. Diluted
earnings per share decreased 11 percent to $.39 per share from $.44 per share
last year.
Net sales for the first quarter increased 5.8 percent to $136.9 million
from $129.4 million last year. Comparable store sales decreased 5.5 percent for
the 13-week period.
The gross profit margin for the first quarter of 2003 decreased to 29.9
percent from 30.2 percent in the first quarter of 2002. Included in gross profit
is a gain of $175,000, or 0.1 percent of sales, attributable to an insurance
settlement for inventory damaged by a tornado in September 2002. Selling,
general and administrative expenses for the first quarter, as a percentage of
sales, increased to 23.8 percent from 23.0 percent in last year's first quarter.
New store pre-opening costs incurred in the first quarter were $772,000 or 0.6
percent of sales, compared with $432,000 or 0.3 percent of sales last year. The
Company opened 13 new stores in the first quarter of 2003 versus opening six
stores in the first quarter of 2002. SG&A expenses are net of a gain of $89,000
from an insurance settlement for fixed assets damaged by a tornado.
Interest expense declined to $166,000 in the first quarter from
$264,000 last year due to lower average borrowings and a lower effective
interest rate. The effective income tax rate for the first quarter of 2003 and
2002 was 37.5 percent.
Commenting on the results, Mark Lemond, president and chief executive
officer said, "We believe that the combination of a continued weak economy, the
conflict in Iraq and abnormal weather patterns during the spring selling season
resulted in lower customer traffic. Our business strategy over the past five
quarters has focused on strict cost controls and reduced inventory levels. While
sales and earnings fell short of our original expectations for the first
quarter, we effectively managed our inventories and ended the quarter with
inventories down 1.2 percent on a per-store basis."
The Company ended the first quarter with 220 stores. Eleven stores are
expected to open in the second quarter and approximately 16 stores are expected
to open in the second half of 2003. After closing four stores in the latter half
of the year, the Company expects to end fiscal 2003 with approximately 243
stores.
Mr. Lemond concluded, "Due to the continuing challenges at retail, we
believe it is prudent to be cautious in our outlook for the second quarter and
we will manage our inventories and expenses accordingly. We now expect second
quarter earnings to be in the range of $.27 to $.31 per diluted share."
The 13 stores opened during the first quarter included locations in:
City Market/Stores
---------------------- ------------------
Denver, CO Denver/1
Fort Collins, CO Fort Collins/1
Jupiter, FL West Palm Beach/2
Conyers, GA Atlanta/9
Morton Grove, IL Chicago/15
Slidell, LA New Orleans/3
Jefferson City, MO Jefferson City/1
Lima, OH Lima/2
Niles, OH Youngstown/2
Houston, TX Houston/1
Green Bay, WI Green Bay/1
West Bend, WI Milwaukee/3
Clarksburg, WV Clarksburg/1
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
for two weeks beginning approximately two hours after the conclusion of the
conference call.
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; 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 manner; higher than
anticipated costs associated with the closing of underperforming stores; the
inability of manufacturers to deliver products in a timely manner; and changes
in the trade relationship between the United States and 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 221 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)
13 Weeks Ended
May 3, May 4,
2003 2002
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Net sales $ 136,850 $ 129,384
Cost of sales (including buying,
distribution and occupancy costs) 95,969 90,302
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Gross profit 40,881 39,082
Selling, general and administrative
expenses 32,587 29,761
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Operating income 8,294 9,321
Interest expense 166 264
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Income before income taxes 8,128 9,057
Income taxes 3,048 3,396
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Net income $ 5,080 $ 5,661
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Net income per share:
Basic $ .40 $ .45
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Diluted $ .39 $ .44
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Average shares outstanding:
Basic 12,625 12,471
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Diluted 12,962 12,932
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SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
ASSETS
May 3, February 1, May 4,
2003 2003 2002
----------- ----------- -----------
Current Assets:
Cash and cash equivalents $ 4,140 $ 5,782 $ 3,616
Accounts receivable 2,236 1,134 1,392
Merchandise inventories 150,063 146,091 129,783
Deferred income tax benefit 1,197 901 483
Other 1,405 1,890 1,584
----------- ----------- -----------
Total Current Assets 159,041 155,798 136,858
Property and equipment-net 66,956 63,477 59,607
----------- ----------- -----------
TOTAL ASSETS $ 225,997 $ 219,275 $ 196,465
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 43,736 $ 49,847 $ 37,787
Accrued and other liabilities 12,771 9,276 11,033
Current portion of long-term debt 360 427 725
----------- ----------- -----------
Total Current Liabilities 56,867 59,550 49,545
Long-term debt 18,559 15,503 16,269
Deferred lease incentives 6,270 5,262 4,096
Accrued rent 2,536 2,458 2,144
Deferred income taxes 4,740 4,971 4,078
Other 798 640 439
----------- ----------- -----------
TOTAL LIABILITIES 89,770 88,384 76,571
SHAREHOLDERS' EQUITY 136,227 130,891 119,894
----------- ----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 225,997 $ 219,275 $ 196,465
=========== =========== ===========
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Thirteen Thirteen
Weeks Ended Weeks Ended
May 3, 2003 May 4, 2002
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Cash Flows From Operating Activities
Net income $ 5,080 $ 5,661
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 3,335 2,882
(Gain) loss on retirement of assets (60) 6
Deferred income taxes (527) (179)
Other 151 99
Changes in operating assets and liabilities:
Accounts receivable (1,003) (94)
Merchandise inventories (3,972) 5,866
Accounts payable and accrued liabilities (2,627) (1,688)
Other 506 231
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Net cash provided by operating activities 883 12,784
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Cash Flows From Investing Activities
Purchases of property and equipment (6,862) (5,198)
Lease incentives 1,093 0
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Net cash used in investing activities (5,769) (5,198)
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Cash Flows From Financing Activities
Net borrowings (payments) under line of credit 3,125 (11,300)
Payments on long-term debt (137) (260)
Proceeds from issuance of stock 256 2,131
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Net cash provided by (used in) financing activities 3,244 (9,429)
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Net decrease in cash and cash equivalents (1,642) (1,843)
Cash and cash equivalents at beginning of period 5,782 5,459
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Cash and Cash Equivalents at end of period $ 4,140 $ 3,616
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