OREANDA-NEWS. Stein Mart, Inc. (NASDAQ:SMRT) today announced that it is revising its preliminary financial results for the first quarter ended April 30, 2016 previously released on May 19, 2016. The revision, which increases selling, general and administrative (SG&A) expenses by $675,000, was required to record additional accruals for actual and anticipated legal settlements. Subsequent to the previous release but prior to the filing of our Form 10-Q for the first quarter ended April 30, 2016, new facts developed on these existing matters which resulted in the adjustment.

As a result of this revision, SG&A expenses for the first quarter of 2016 now include $1.4 million of expense for actual and anticipated legal settlements. The financial statements and EBITDA table (see Note 1) included in this release reflect the changes described above.

Our Form 10-Q for the fiscal quarter ended April 30, 2016 will be filed with the Securities and Exchange Commission (SEC) today.

About Stein Mart
Stein Mart stores offer the fashion merchandise, service and presentation of a better department or specialty store, at prices competitive with off-price retail chains. With 283 locations from California to Massachusetts, as well as steinmart.com, Stein Mart’s focused assortment of merchandise features current season, moderate to better fashion apparel for women and men, as well as accessories, shoes and home fashions.  For more information, please visit www.steinmart.com.

Cautionary Statement Regarding Forward-Looking Statements                                
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 economic conditions, competition in the retail industry, changes in consumer preferences and fashion trends, ability to implement our strategic plans to sustain profitable growth, effectiveness of advertising and marketing, capital availability and debt levels, ability to negotiate acceptable lease terms with current and potential landlords, ability to successfully implement strategies to exit under-performing stores, extreme and/or unseasonable weather conditions, adequate sources of merchandise at acceptable prices, dependence on certain key personnel and ability to attract and retain qualified employees, impacts of seasonality, increases in the cost of compensation and employee benefits, disruption of the Company’s distribution process, dependence on imported merchandise, information technology failures, data security breaches, single supplier for shoe department, single provider for ecommerce website, acts of terrorism, ability to adapt to new regulatory compliance and disclosure obligations,  material weaknesses in internal control over financial reporting and other risks and uncertainties described in the Company’s filings with the SEC.

SMRT-F

Additional information about Stein Mart, Inc. can be found at www.steinmart.com

Stein Mart, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)
       
    13 Weeks Ended 13 Weeks Ended
    April 30, 2016 May 2, 2015
       
Net sales   $ 355,712   $ 353,521  
Cost of merchandise sold     246,820     245,141  
Gross profit     108,892     108,380  
Selling, general and administrative expenses     86,474     85,622  
Operating income     22,418     22,758  
Interest expense, net     966     686  
Income before income taxes     21,452     22,072  
Income tax expense     8,141     8,508  
Net income   $ 13,311   $ 13,564  
       
Net income per share:      
Basic   $ 0.29   $ 0.30  
Diluted   $ 0.29   $ 0.29  
       
Weighted-average shares outstanding:      
Basic     45,595     44,612  
Diluted     46,275     45,766  
       

 

Stein Mart, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except for share and per share data)
       
  April 30, 2016   January 30, 2016   May 2, 2015
ASSETS                      
Current assets:                      
Cash and cash equivalents $   16,317     $   11,830     $   17,190  
Inventories     316,897         293,608         302,781  
Prepaid expenses and other current assets     22,676         18,586         24,586  
Total current assets     355,890         324,024         344,557  
Property and equipment, net     166,261         162,954         149,254  
Other assets     30,141         29,247         31,026  
Total assets $   552,292     $   516,225     $   524,837  
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable $   152,807     $   105,569     $   164,092  
Current portion of debt     10,000         10,000         6,667  
Accrued expenses and other current liabilities     75,385         71,571         67,219  
Total current liabilities     238,192         187,140         237,978  
Long-term debt     138,960         180,150         145,777  
Deferred rent     41,667         41,146         33,654  
Other liabilities     45,738         31,472         36,677  
Total liabilities     464,557         439,908         454,086  
COMMITMENTS AND CONTINGENCIES      
Shareholders’ equity:      
Preferred stock - $.01 par value; 1,000,000 shares      
authorized; no shares issued or outstanding      
Common stock - $.01 par value; 100,000,000 shares      
authorized; 46,372,908, 45,814,583 and 45,395,851      
shares issued and outstanding, respectively     464         458         454  
Additional paid-in capital     44,370         42,801         37,476  
Retained earnings     43,175         33,337         33,249  
Accumulated other comprehensive loss      (274 )       (279 )       (428 )
Total shareholders’ equity     87,735         76,317         70,751  
Total liabilities and shareholders’ equity $   552,292     $   516,225     $   524,837  
       

NOTE TO PRESS RELEASE

Note 1 – EBITDA:
As used in this release, EBITDA is defined as earnings before interest, income taxes, depreciation and amortization.  EBITDA is not a measure of financial performance under generally accepted accounting principles (GAAP).  However, we present EBITDA in this release because we consider it to be an important supplemental measure of our performance and because it is frequently used by analysts, investors and others to evaluate the performance of companies.  EBITDA is not calculated in the same manner by all companies. EBITDA should be used as a supplement to results of operations and cash flows as reported under GAAP and should not be considered to be a more meaningful measure than, or an alternative to, measures of operating performance as determined in accordance with GAAP.        

Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Unaudited (in thousands)
    13 Weeks 13 Weeks
    Ended Ended
      April 30, 2016     May 2, 2015
Net income $ 13,311   $ 13,564
Add back amounts for computation of EBITDA:          
Interest expense, net   966     686
Income tax expense   8,141     8,508
Depreciation and amortization   7,660     7,223
EBITDA   30,078     29,981
Adjustments:    
Expense related to legal settlements   1,425     84
E-commerce losses   1,052     501
Store closing and impairment charges   1     55
Pre-opening costs   1,126     344
Total adjustments   3,604     984
Adjusted EBITDA $ 33,682   $ 30,965