Current Report
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
August 20, 2009
(Date of Report; Date of Earliest Event Reported)
STEIN MART, INC.
(Exact Name of Registrant as Specified in its Charter)
| Florida | 0-20052 | 64-0466198 | ||
|
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
1200 Riverplace Blvd., Jacksonville, Florida 32207
(Address of Principal Executive Offices Including Zip Code)
(904) 346-1500
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
On August 20, 2009, Stein Mart, Inc. issued a press release, a copy of which is attached as Exhibit 99.1, that includes financial results for the quarterly period and six months ended August 1, 2009.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
(d) Exhibits
99.1 Press Release dated August 20, 2009.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| STEIN MART, INC. | ||||
| (Registrant) | ||||
| Date: August 25, 2009 | By: |
/s/ Gregory W. Kleffner |
||
| Gregory W. Kleffner | ||||
| Senior Vice President, Finance and Chief Financial Officer | ||||
EXHIBIT INDEX
99.1 Press Release dated August 20, 2009.
Exhibit 99.1
1200 RIVERPLACE BOULEVARD • JACKSONVILLE, FL 32207-1809 • (904) 346-1500
| August 20, 2009 | For more information: | |
| Susan Datz Edelman | ||
| FOR IMMEDIATE RELEASE | Director, Stockholder Relations | |
| (904) 346-1506 | ||
| sedelman@steinmart.com |
STEIN MART, INC. REPORTS 2Q AND FIRST HALF 2009 FINANCIAL RESULTS
JACKSONVILLE, FL – Stein Mart, Inc. (Nasdaq: SMRT) today announced financial results for its second quarter and first half ended August 1, 2009.
Second Quarter of 2009
For the 13-week second quarter of 2009, the Company’s net earnings were $1.5 million or $0.04 per share as compared to a net loss of $(8.0) million or $(0.19) per share in 2008. Net sales decreased 7.7 percent to $287.5 million for the 13 weeks ended August 1, 2009 from $311.6 million for the 13 weeks ended August 2, 2008. Comparable store sales for the 13 weeks ended August 1, 2009 decreased 4.5 percent from the same period a year ago.
Gross profit increased to $75.4 million or 26.2 percent of sales in the second quarter of 2009 compared to $74.1 million or 23.8 percent of sales in the same period last year. The gross profit rate increased primarily from increased markup and decreased markdowns, somewhat offset by a higher occupancy expense rate due to lack of sales leverage.
Selling, general and administrative (SG&A) expenses were $74.2 million or 25.8 percent of sales as compared to $92.5 million or 29.7 percent of sales during the same period last year. The $18.3 million decrease in SG&A resulted primarily from reduced operating expenses in the stores and in the corporate office, and reduced advertising and lower depreciation expense.
First Half of 2009
For the first half of 2009, the Company’s net earnings were $17.6 million or $0.41 per share as compared to a net loss of $(1.0) million or $(0.02) per share for the same 2008 period. Net sales decreased 8.5 percent to $607.1 million for the 26 weeks ended August 1, 2009 from $663.8 million for the same 26 weeks in 2008. Comparable store sales for the first six months of the year decreased 6.3 percent from the 2008 period to the 2009 period.
Gross profit increased to $172.3 million or 28.4 percent of sales in the first half of 2009 compared to $171.9 million or 25.9 percent of sales in the same period last year. The gross profit rate increased primarily from increased markup and decreased markdowns, somewhat offset by higher occupancy expense rate due to lack of sales leverage.
SG&A expenses were $154.1 million or 25.4 percent of sales as compared to $184.1 million or 27.7 percent of sales during the same period last year. The $30.0 million decrease in SG&A resulted primarily from reduced operating expenses in the stores and in the corporate office, and reduced advertising and lower depreciation expense.
We changed from using the discrete period method to determine the effective tax rate in the first quarter to a more normalized rate of 35.4 percent for the first six months of 2009 that was calculated using the estimated annual tax rate. If the estimated annual rate had been able to be used for both the first and second quarters of 2009, second quarter earnings would have been $2.1 million or $0.05 per share higher with an offsetting decrease in the first quarter.
David H. Stovall, Jr., president and chief executive officer, commented, “By keeping inventory and expenses tightly controlled, we were able to improve margins and profitability for both the quarter and the first six months, despite negative comparable store sales trends. These efforts also further strengthened our balance sheet, with no borrowings in the quarter and $45 million in cash and cash equivalents at quarter end.”
Stovall continued, “We must continue to make progress against a protracted negative sales trend with limited visibility for the foreseeable future. Although the customer is still very cautious, response to our updated merchandise offering and new marketing strategy is encouraging. We plan to build on these efforts this fall, while maintaining rigorous control over expenses and inventory levels.”
Store network update
No new stores were opened and five stores were closed during the second quarter. So far in 2009, one store has opened and seven stores have closed, resulting in 270 stores in operation at August 1, 2009 as compared to 283 at the same time last year.
The Company expects to open one store and close four existing locations in the next three months, resulting in 267 stores at the end of fiscal 2009 compared to 276 stores at the end of fiscal 2008.
Conference Call
A conference call for institutional analysts to discuss these results will be held at 10 a.m. ET today, Thursday, August 20, 2009. The call may be heard on the investor relations portion of the Company’s website at http://ir.steinmart.com . A replay of the conference call will be available on the website through August 28, 2009.
About Stein Mart
Stein Mart stores offer the fashion merchandise, service and presentation of a better department or specialty store, at prices up to 60 percent off department and specialty store original prices, every day. 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:
| • |
consumer sensitivity to general economic conditions including continued uncertainty in the financial and credit markets |
| • |
the effectiveness of advertising , marketing and promotional strategies |
| • |
intense competition from other retailers |
| • |
changing preferences in apparel |
| • |
access to additional capital at favorable terms, if required |
| • |
ability to successfully negotiate advantageous lease terms with current landlords |
| • |
unanticipated weather conditions and unseasonable weather |
| • |
adequate sources of merchandise at acceptable prices |
| • |
the Company’s ability to attract and retain qualified employees |
| • |
seasonality, including the importance of the holiday selling season |
| • |
disruption of the Company’s distribution system |
| • |
acts of terrorism |
| • |
fluctuation in results could negatively impact stock price |
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
Stein Mart, Inc.
Consolidated Balance Sheets
(Unaudited)
(In thousands, except for share data)
Stein Mart, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
|
13 Weeks Ended
August 1, 2009 |
13 Weeks Ended
August 2, 2008 |
26 Weeks Ended
August 1, 2009 |
26 Weeks Ended
August 2, 2008 |
|||||||||||||
|
Net sales |
$ | 287,501 | $ | 311,628 | $ | 607,071 | $ | 663,751 | ||||||||
|
Cost of merchandise sold |
212,052 | 237,506 | 434,792 | 491,883 | ||||||||||||
|
Gross profit |
75,449 | 74,122 | 172,279 | 171,868 | ||||||||||||
|
Selling, general and administrative expenses |
74,220 | 92,523 | 154,076 | 184,062 | ||||||||||||
|
Other income, net |
4,310 | 5,373 | 9,307 | 11,303 | ||||||||||||
|
Income (loss) from operations |
5,539 | (13,028 | ) | 27,510 | (891 | ) | ||||||||||
|
Interest income (expense), net |
21 | (205 | ) | (258 | ) | (572 | ) | |||||||||
|
Income (loss) before income taxes |
5,560 | (13,233 | ) | 27,252 | (1,463 | ) | ||||||||||
|
Income tax (provision) benefit |
(4,036 | ) | 5,230 | (9,642 | ) | 458 | ||||||||||
|
Net income (loss) |
$ | 1,524 | $ | (8,003 | ) | $ | 17,610 | $ | (1,005 | ) | ||||||
|
Net income (loss) per share: |
||||||||||||||||
|
Basic |
$ | 0.04 | $ | (0.19 | ) | $ | 0.41 | $ | (0.02 | ) | ||||||
|
Diluted |
$ | 0.04 | $ | (0.19 | ) | $ | 0.41 | $ | (0.02 | ) | ||||||
|
Weighted-average shares outstanding: |
||||||||||||||||
|
Basic |
42,702 | 42,249 | 42,689 | 42,126 | ||||||||||||
|
Diluted |
43,363 | 42,249 | 43,127 | 42,126 | ||||||||||||
Stein Mart, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
|
26 Weeks Ended
August 1, 2009 |
26 Weeks Ended
August 2, 2008 |
|||||||
|
Cash flows from operating activities: |
||||||||
|
Net income (loss) |
$ | 17,610 | $ | (1,005 | ) | |||
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
|
Depreciation and amortization |
9,717 | 12,690 | ||||||
|
Impairment of property and other assets |
726 | 328 | ||||||
|
Change in valuation allowance for deferred tax assets |
(2,729 | ) | — | |||||
|
Deferred income taxes |
3,015 | (841 | ) | |||||
|
Store closing charges |
1,072 | 1,153 | ||||||
|
Share-based compensation |
1,805 | 2,480 | ||||||
|
Tax benefit from equity issuances |
62 | — | ||||||
|
Excess tax benefits from share-based compensation |
(54 | ) | (3 | ) | ||||
|
Changes in assets and liabilities: |
||||||||
|
Trade and other receivables |
(4,029 | ) | 4,089 | |||||
|
Inventories |
22,273 | 13,596 | ||||||
|
Income taxes receivable |
16,116 | 3,344 | ||||||
|
Prepaid expenses and other current assets |
(1,219 | ) | (1,100 | ) | ||||
|
Other assets |
3,616 | (632 | ) | |||||
|
Accounts payable |
2,345 | (23,244 | ) | |||||
|
Accrued liabilities |
(3,835 | ) | (2,625 | ) | ||||
|
Other liabilities |
(7,661 | ) | 465 | |||||
|
Net cash provided by operating activities |
58,830 | 8,695 | ||||||
|
Cash flows from investing activities: |
||||||||
|
Capital expenditures |
(2,943 | ) | (9,900 | ) | ||||
|
Net cash used in investing activities |
(2,943 | ) | (9,900 | ) | ||||
|
Cash flows from financing activities: |
||||||||
|
Borrowings under notes payable to banks |
57,134 | 399,746 | ||||||
|
Repayments of notes payable to banks |
(157,134 | ) | (395,921 | ) | ||||
|
Excess tax benefits from share-based compensation |
54 | 3 | ||||||
|
Proceeds from exercise of stock options |
127 | — | ||||||
|
Proceeds from employee stock purchase plan |
96 | 548 | ||||||
|
Repurchase of common stock |
(31 | ) | (4 | ) | ||||
|
Net cash (used in) provided by financing activities |
(99,754 | ) | 4,372 | |||||
|
Net (decrease) increase in cash and cash equivalents |
(43,867 | ) | 3,167 | |||||
|
Cash and cash equivalents at beginning of year |
88,903 | 15,145 | ||||||
|
Cash and cash equivalents at end of period |
$ | 45,036 | $ | 18,312 | ||||