Stage Stores Announces Second Quarter Results and Provides Earnings Projections for Second Half of Fiscal Year.HOUSTON Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; -- Stage Stores, Inc. (Nasdaq: STGS STGS Space Telescope Ground System STGS Status of Ground Station ):
--Second Quarter Sales Increase to Record $309.4 Million--
--Reports Earnings of $0.33 Per Diluted Share--
Stage Stores, Inc. (Nasdaq: STGS) today reported that total sales for the second quarter ended July July: see month. 30, 2005 increased 10.5% to a record $309.4 million from $279.9 million for the prior year second quarter ended July 31, 2004. The increase was driven by the Company's comparable store sales increase for the quarter of 7.0% and sales from new stores. Net income increased 20.4% during the second quarter, rising to $6.5 million from $5.4 million last year, and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of increased 22.2% to $0.33 from $0.27 in the prior year period. Jim Scarborough Scarborough, town (1991 pop. 36,665) and district, North Yorkshire, NE England, on the North Sea. The town, primarily a resort, is also an important conference and retirement center. The area was recognized at an early time for its strategic location. , Chairman, President and Chief Executive Officer, commented, "This was a quarter filled with significant achievements and important milestones. We achieved record sales for the second quarter, driven by our strong 7.0% comparable store sales increase, as our customers responded positively to our spring and summer merchandise MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain assortments. We enjoyed strong sales performances across a broad range of product categories, with three merchandise categories, namely women's special sizes (+20.9%), accessories (+16.9%) and misses sportswear (+10.8%), achieving double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. comparable store sales growth for the quarter. Additionally, our comparable store sales performance at our Peebles Peebles, town, Scotland Peebles (pē`bəlz), town (1991 pop. 6,750), Scottish Borders, S Scotland, at the confluence of Eddleston Water and the Tweed River. It is a mountain resort and a farm market with woolen mills. stores once again exceeded our Company average for the quarter, demonstrating that our initiatives to improve the sales productivity in these stores continue to yield favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. results." Mr. Scarborough continued, "During the quarter, we announced a 3-for-2 stock split, payable on August 19, 2005, and instituted a new $30 million Stock Repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. Program. We also had a changing of the guard in our Peebles merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. organization. In conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the retirement of Ron Noun 1. Ron - a Chadic language spoken in northern Nigeria Bokkos, Daffo West Chadic - a group of Chadic languages spoken in northern Nigeria; Hausa in the most important member Palmore, we have promoted two exceptionally talented individuals, John Bower John Bower (born 1941) was an American nordic combined skier who competed in the 1960s and later went on to become a coach of the American nordic skiing team for the 1976 and 1980 Winter Olympic team. and Wendy Morgan Wendy Morgan is a Deputy in the States of Guernsey, the parliament of the Bailiwick of Guernsey in the Channel Islands. Wendy Morgan was elected in 2004 and represents the electoral district of St. Peter Port North. , who will continue to build upon the success of our Peebles merchandising team." Total sales for the six-month period ended July 30, 2005 increased 8.8% to $619.5 million from $569.5 million last year. Comparable store sales increased 5.9% versus an increase of 0.6% for the prior year. The Company noted that last year's comparable store sales results were negatively impacted by a calendar shift in the Texas sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. holiday weekend, which moved this significant event from the second quarter in 2003 to the third quarter in 2004. Net income for the period was $27.0 million, or $1.36 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $23.9 million, or $1.17 per diluted share, for the same period last year. For the six-month period, diluted earnings per share have grown by 16.2%. Mr. Scarborough concluded, "We are also very pleased with our solid performance during the first half of the year, as our comparable store sales increased 5.9%, and our diluted earnings per share increased 16.2%. Looking ahead, our merchants have done an outstanding job of putting together great merchandise assortments for back-to-school and the upcoming fall season, and we are upbeat about our prospects for the second half of the year." Store Activity The Company reported that it opened seven new stores during the second quarter, including one Bealls Bealls is the name of two unrelated United States retail chains:
novel of young love. [Am. Lit.: Booth Tarkington Seventeen in Magill I, 882] See : Adolescence . The Company also reported that it closed one Stage store and one Palais Royal This article is about the palace and garden in Paris. For the U.S. retail store with the same name, see Palais Royal (store). The Palais Royal is a palace and garden located near the Ier arrondissement of Paris. store during the period. The Company further reported that it relocated re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. two stores and remodeled three stores during the quarter. The Company added that it currently anticipates opening twenty-one twenty-one: see blackjack. new stores during the second half of the year, with the majority of the stores opening in the third quarter. Fiscal 2005 - Third Quarter, Fourth Quarter and Full Year Outlook Fiscal 2005 - 3rd Quarter: For the third quarter ending October October: see month. 29, 2005, the Company currently anticipates reporting revenues in the range of $298 to $304 million, with the expectation of a comparable store sales increase in the low single digits. Net income is currently projected to be in the range of $9.3 to $10.1 million, or earnings of $0.47 to $0.51 per diluted share. This outlook compares to earnings of $8.9 million, or $0.46 per diluted share, for the prior year third quarter. In projecting diluted earnings per share for the fiscal 2005 third quarter, the Company used an estimated diluted share count of 19.9 million shares. Fiscal 2005 - 4th Quarter: For the fourth quarter ending January January: see month. 28, 2006, the Company currently anticipates reporting revenues in the range of $409 to $417 million, with the expectation of a comparable store sales increase in the low single digits. Net income is currently projected to be in the range of $19.6 to $20.6 million, or earnings of $0.99 to $1.04 per diluted share. This outlook compares to earnings of $18.6 million, or $0.94 per diluted share, for the prior year fourth quarter. In projecting diluted earnings per share for the fiscal 2005 fourth quarter, the Company used an estimated diluted share count of 19.8 million shares. Fiscal 2005 - Full Year: Updating its outlook for the 2005 fiscal year ending January 28, 2006, the Company currently anticipates reporting revenues in the range of $1.327 to $1.341 billion, with the expectation of a comparable store sales increase in the upper low single digits. Net income is currently projected to be in the range of $55.9 to $57.7 million, or earnings of $2.81 to $2.90 per diluted share. This outlook compares to earnings of $51.4 million, or $2.58 per diluted share, for the 2004 fiscal year. In projecting diluted earnings per share for the 2005 fiscal year, the Company used an estimated diluted share count of 19.9 million shares. In comparing this year's net income forecast to last year's actual results, the Company noted that its 2005 projections include non-recurring costs expected to be incurred in connection with the closure of its Knoxville, Tennessee “Knoxville” redirects here. For other uses, see Knoxville (disambiguation). Founded in 1786, Knoxville is the third-largest city in the state of Tennessee, behind Memphis and Nashville, and is the county seat of Knox CountyGR6. distribution center, which is anticipated to occur in the fourth quarter, as well as expenses associated with improvements being made to its South Hill, Virginia South Hill is a town in Mecklenburg County, Virginia, United States. As of the 2000 census, the town population was 4,403. Located on major Interstate and national highways, it has a small hospital (serving patients from several rural counties), a tobacco market, and many small distribution center and merchandising system. The Company currently estimates that these expenses will total, after tax, approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.5 million, or $0.07 to $0.08 per diluted share, split $0.01 in each of the first three quarters of the year, and $0.04 to $0.05 in the fourth quarter. 3-for-2 Stock Split The Company stated that its previously announced stock split would be paid tomorrow, August 19, 2005. As such, effective August 22, 2005, the Company's stock price as quoted on Nasdaq will be adjusted for the split, and the Company will begin issuing financial information and earnings guidance on a post-split basis. Conference Call Information The Company will host a conference call today at 8:30 a.m. Eastern Time to discuss the second quarter's results as well as its outlook for the second half of the 2005 fiscal year. All interested parties can listen to a live webcast of the Company's conference call by logging on to the Company's web site at www.stagestores.com and then clicking on Investor Relations Investor relations The process by which the corporation communicates with its investors. , then Webcasts, then the webcast link. A replay of the conference call will be available online at each web site until midnight on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , August 26, 2005. About Stage Stores Stage Stores, Inc. brings nationally recognized brand name apparel, accessories, cosmetics cosmetics, preparations externally applied to change or enhance the beauty of skin, hair, nails, lips, and eyes. The use of body paint for ornamental and religious purposes has been common among primitive peoples from prehistoric times (see body-marking). and footwear Footwear consists of garments worn on the feet. It is worn for a variety of reasons, including protection against the environment, hygiene and adornment. Usually, socks and other hosiery are worn between the feet and the footwear, except for sandals and flip flops (thongs). for the entire family to small and mid-size towns and communities through 545 stores located in 30 states. The Company operates under the Bealls, Palais Royal and Stage names This list of stage names lists performers alphabetically according to surname (assumed or genuine) and their nickname. Individuals who have dropped their last name and substituted their middle name as their last name are listed. throughout the South Central states, and under the Peebles name throughout the Mid-Atlantic Adj. 1. mid-Atlantic - of a region of the United States generally including Delaware; Maryland; Virginia; and usually New York; Pennsylvania; New Jersey; "mid-Atlantic states" middle Atlantic , Southeastern south·east n. 1. Abbr. SE The direction or point on the mariner's compass halfway between due south and due east, or 135° east of due north. 2. An area or region lying in the southeast. 3. and Midwestern Mid·west or Middle West A region of the north-central United States around the Great Lakes and the upper Mississippi Valley. It is generally considered to include Ohio, Indiana, Illinois, Michigan, Wisconsin, Minnesota, Iowa, Missouri, Kansas, and states. For more information about Stage Stores, visit the Company's web site at www.stagestores.com. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement This news release contains "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including comments regarding the Company's store opening plans for the second half of the 2005 fiscal year, as well as the Company's outlook and expectations for the third quarter of the 2005 fiscal year, the fourth quarter of the 2005 fiscal year and for the entire 2005 fiscal year. The Company intends forward looking terminology The terminology used in the computer and telecommunications field adds tremendous confusion not only for the lay person, but for the technicians themselves. What many do not realize is that terms are made up by anybody and everybody in a nonchalant, casual manner without any regard or such as "believes", "expects", "may", "will", "should", "could", "anticipates", "plans" or similar expressions to identify forward-looking statements. Such statements are subject to certain risks and uncertainties which could cause the Company's actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, those described in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. as filed with the Securities and Exchange Commission (the "SEC") on April 28, 2005, in the Company's Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. as filed with the SEC and other factors as may periodically be described in other Company filings with the SEC. (Tables to Follow)
Stage Stores, Inc.
Condensed Consolidated Statements of Income
(in thousands, except earnings per share)
(unaudited)
Thirteen Weeks Ended
---------------------------------
July 30, 2005 July 31, 2004
---------------- ----------------
% to % to
Sales Sales
Amount (1) Amount (1)
--------- ------ --------- ------
Net sales $309,430 100.0% $279,872 100.0%
Cost of sales and related buying,
occupancy and distribution expenses 226,661 73.3% 207,210 74.0%
--------- ------ --------- ------
Gross profit 82,769 26.7% 72,662 26.0%
Selling, general and administrative
expenses 71,047 23.0% 63,359 22.6%
Store pre-opening costs 739 0.2% 155 0.1%
Interest expense 645 0.2% 581 0.2%
--------- ------ --------- ------
Income before income tax 10,338 3.3% 8,567 3.1%
Income tax expense 3,825 1.2% 3,170 1.1%
--------- ------ --------- ------
Net income $6,513 2.1% $5,397 1.9%
========= ====== ========= ======
(1) Percentages may not foot due to rounding.
Basic and diluted earnings per share data:
Basic earnings per share $0.36 $0.30
========= =========
Basic weighted average shares
outstanding 18,150 18,194
========= =========
Diluted earnings per share $0.33 $0.27
========= =========
Diluted weighted average shares
outstanding 19,869 20,016
========= =========
Stage Stores, Inc.
Condensed Consolidated Statements of Income
(in thousands, except earnings per share)
(unaudited)
Twenty-Six Weeks Ended
---------------------------------
July 30, 2005 July 31, 2004
---------------- ----------------
% to % to
Sales Sales
Amount (1) Amount (1)
--------- ------ --------- ------
Net sales $619,490 100.0% $569,530 100.0%
Cost of sales and related buying,
occupancy and distribution expenses 432,559 69.8% 400,404 70.3%
--------- ------ --------- ------
Gross profit 186,931 30.2% 169,126 29.7%
Selling, general and administrative
expenses 141,211 22.8% 129,672 22.8%
Store pre-opening costs 1,694 0.3% 496 0.1%
Interest expense, net of interest
income of $128 and $13, respectively 1,113 0.2% 1,057 0.2%
--------- ------ --------- ------
Income before income tax 42,913 6.9% 37,901 6.7%
Income tax expense 15,878 2.6% 14,023 2.5%
--------- ------ --------- ------
Net income $27,035 4.4% $23,878 4.2%
========= ====== ========= ======
(1) Percentages may not foot due to rounding.
Basic and diluted earnings per share data:
Basic earnings per share $1.48 $1.29
========= =========
Basic weighted average shares
outstanding 18,230 18,559
========= =========
Diluted earnings per share $1.36 $1.17
========= =========
Diluted weighted average shares
outstanding 19,890 20,381
========= =========
Stage Stores, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par values)
(unaudited)
July 30, January
2005 29, 2005
--------- ---------
ASSETS
------
Cash and cash equivalents $15,649 $40,455
Merchandise inventories, net 323,133 281,588
Current deferred taxes 23,672 24,031
Prepaid expenses and other current assets 26,638 22,278
--------- ---------
Total current assets 389,092 368,352
Property, equipment and leasehold improvements,
net 230,996 212,179
Goodwill 79,353 79,353
Intangible asset 14,910 14,910
Other non-current assets, net 13,874 12,205
--------- ---------
Total assets $728,225 $686,999
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Accounts payable $98,271 $74,957
Income taxes payable 2,796 11,024
Current portion of debt obligations 69 130
Accrued expenses and other current liabilities 58,233 57,080
--------- ---------
Total current liabilities 159,369 143,191
Debt obligations 5,018 3,048
Deferred taxes 10,323 11,527
Other long-term liabilities 53,683 47,960
--------- ---------
Total liabilities 228,393 205,726
--------- ---------
Commitments and contingencies
Common stock, par value $0.01, 50,000 shares
authorized, 21,642 and 21,405 shares issued,
respectively 216 214
Additional paid-in capital 402,951 396,336
Less treasury stock - at cost, 3,458 and 3,083
shares, respectively (109,921) (94,828)
Minimum pension liability adjustment (451) (451)
Retained earnings 207,037 180,002
--------- ---------
Stockholders' equity 499,832 481,273
--------- ---------
Total liabilities and stockholders' equity $728,225 $686,999
========= =========
Stage Stores, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Twenty- Twenty-
Six Six
Weeks Weeks
Ended Ended
-------- --------
July 30, July 31,
2005 2004
-------- --------
Cash flows from operating activities:
Net income $27,035 $23,878
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 19,493 17,414
Deferred income taxes (845) 1,834
Amortization of debt issue costs 223 223
Provision for bad debts - 311
Deferred stock compensation 347 115
Proceeds from sale of proprietary credit card
portfolio, net - 34,764
Construction allowances received from landlords 6,303 979
Changes in operating assets and liabilities:
Decrease in accounts receivable and retained interest
in receivables sold - 3,537
Increase in merchandise inventories (41,545) (27,301)
(Increase) decrease in other assets (6,323) 4,996
Increase in accounts payable and other liabilities 15,659 2,726
-------- --------
Total adjustments (6,688) 39,598
-------- --------
Net cash provided by operating activities 20,347 63,476
-------- --------
Cash flows from investing activities:
Additions to property, equipment and leasehold
improvements (38,239) (15,251)
-------- --------
Net cash used in investing activities (38,239) (15,251)
-------- --------
Cash flows from financing activities:
Proceeds from (payments on):
Revolving credit facility, net 2,000 7,790
Repurchases of common stock (15,093) (57,060)
Debt obligations (91) (782)
Exercise of stock options 6,270 4,461
-------- --------
Net cash used in financing activities (6,914) (45,591)
-------- --------
Net increase (decrease) in cash and cash equivalents (24,806) 2,634
Cash and cash equivalents:
Beginning of period 40,455 14,733
-------- --------
End of period $15,649 $17,367
======== ========
Supplemental disclosures:
Interest paid $906 $716
======== ========
Income taxes paid $22,640 $3,176
======== ========
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