STAGE STORES INC - FORM 8-K - EX-99 - EXHIBIT - November 21, 2013

Attached files

file filename
8-K - 8-K - STAGE STORES INCform8k_q3errel.htm


Exhibit 99

NEWS RELEASE

CONTACT:                    
Bob Aronson                    
Vice President, Investor Relations            
800-579-2302                
(baronson@stagestores.com)

                        
FOR IMMEDIATE RELEASE

Stage Stores Reports Third Quarter Results
                        
HOUSTON, TX, November 21, 2013 -- Stage Stores, Inc. (NYSE: SSI) today reported financial results for the third fiscal quarter ended November 2, 2013.

Total sales for the quarter decreased 2.8% to $360 million from $371 million in the prior year quarter ended October 27, 2012. Comparable store sales decreased 4.6%. The Company noted that cosmetics, accessories and footwear were its best performing categories during the quarter. Geographically, the South Central and Northeast regions performed better than the Company average.

The Company reported an adjusted net loss for the third quarter, excluding one-time items, of $0.26 per share. This compares to an adjusted net loss of $0.25 per share last year.

“We were pleased with our strong gross profit rate for the quarter, which resulted in an adjusted net loss per share that was in-line with last year,” said Michael Glazer, President and Chief Executive Officer. “Our comparable store sales improved sequentially each month during the quarter, but significantly lower clearance sales versus last year led to an overall comp decline. Excluding clearance sales from both years, our comparable store sales were positive for the quarter.

“With regard to the consolidation, the merchandise assortments in our former South Hill division stores are now essentially aligned with the rest of the chain. As a result, the comparable store sales gap that we saw in the second quarter between these stores and our Houston division stores closed materially during the third quarter.”

Mr. Glazer continued, “As part of our ongoing efforts to become more productive and improve our profitability, we implemented an expense reduction program in early November. These cost cutting measures, which included the elimination of approximately 50 corporate positions, are estimated to save $5 million annually.


--more--
   





Stage Stores Reports
Third Quarter Results
Page - 2


“Looking ahead, we have strong marketing campaigns and in-store initiatives planned for the fourth quarter, including holiday offers that are even more exciting and compelling than last year. Our stores will be open on Thanksgiving night from 6:00 p.m. to 1:00 a.m. for our biggest ever Thanksgiving event, and will then reopen at 6:00 a.m. on Black Friday with continued door busters, deals and prizes.

“While we feel good about our holiday plans, given the current challenging sales environment for apparel retailers, we are projecting comparable store sales for the fourth quarter to be in a range of down 2% to flat. We are also projecting adjusted earnings for the year of between $1.20 and $1.30 per diluted share,” Mr. Glazer concluded.

Reported Earnings
Including one-time items, the Company reported a net loss for the third quarter of $11.0 million, or $0.34 per share, this year compared to a net loss of $8.9 million, or $0.28 per share, last year. One-time items recorded in this year’s third quarter, which total approximately $4.4 million, or $0.08 per share, are associated with the consolidation of the Company’s South Hill, Virginia operations into its Houston headquarters. One-time items recorded in last year’s third quarter, which total approximately $1.4 million, or $0.03 per share, are also associated with the South Hill consolidation. For the first three quarters of the fiscal year, the Company reported a net loss of $8.2 million, or $0.25 per share, this year compared to earnings of $2.4 million, or $0.08 per diluted share, last year. One-time items total approximately $20.5 million, or $0.39 per share, this year versus approximately $4.4 million, or $0.09 per share, last year.

FY 2013 Guidance
The Company revised its comparable store sales guidance range for the full year to (1.1)% - (0.5)%, which assumes comps of between (2.0)% and flat for the fourth quarter. The Company also revised its adjusted EPS guidance range for the year, excluding one-time items, to $1.20 - $1.30 from $1.30 - $1.40 previously. The one-time items are associated with the consolidation of the Company’s South Hill operations into its Houston headquarters and are estimated to be approximately $22.3 million, or $0.43 per diluted share, for the year.







--more--












Stage Stores Reports
Third Quarter Results
Page - 3


 
 
FY 2013 OUTLOOK
 
FY 2012
Sales ($mm)


$1,643
—
$1,653

$1,646
 
 
 
 
 
 
 
Same Store sales
 
(1.1)%
—
(0.5)%
 
+5.7%
 
 
 
 
 
 
 
Adjusted EPS
 
$1.20
—
$1.30
 
$1.33
 
 
 
 
 
 
 
Diluted Shares (m)
 
32,760
 
31,600

 
Store Activity
The Company reported that it opened 12 new traditional stores during the third quarter, which consisted of 7 Goody’s and 5 Peebles branded stores. On November 14th, the Company opened an additional 6 traditional stores (2 Bealls, 3 Goody’s and 1 Peebles) and 1 Steele’s off-price store. These 19 new store openings, which brought the total number of stores opened during the year to 29, completed the Company’s 2013 store opening program.

Conference Call Information
The Company will hold a conference call today at 8:30 a.m. Eastern Time to discuss its third quarter results. Interested parties can participate in the Company’s conference call by dialing 703-639-1118. Alternatively, interested parties can listen to a live webcast of the conference call by logging on to the Company's web site at www.stagestoresinc.com and then clicking on Investor Relations, then Webcasts and then the webcast link. A replay of the conference call will be available online until midnight on Friday, November 29, 2013.

About Stage Stores
Stage Stores, Inc. operates primarily in small and mid-sized towns and communities. Its stores, which operate under the Bealls, Goody’s, Palais Royal, Peebles, Stage and Steele’s names, offer moderately priced, nationally recognized brand name apparel, accessories, cosmetics and footwear for the entire family. The Company currently operates 889 stores in 40 states. The Company also has an eCommerce website. For more information about Stage Stores, visit the Company’s web site at www.stagestoresinc.com.






--more--




Stage Stores Reports
Third Quarter Results
Page - 4


Caution Concerning Forward-Looking Statements
This document contains “forward-looking statements”. Forward-looking statements reflect our expectations regarding future events and operating performance and often contain words such as "believe", "expect", "may", "will", "should", "could", "anticipate", "plan" or similar words. In this document, forward-looking statements include comments regarding the Company’s comparable store sales outlook for the fiscal 2013 fourth quarter. Forward-looking statements also include comments regarding the Company’s sales, comparable store sales, adjusted EPS and diluted share count outlooks for the 2013 fiscal year. Forward-looking statements are subject to a number of risks and uncertainties which could cause 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 our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (the "SEC") on April 3, 2013, and other factors as may periodically be described in our other filings with the SEC. Forward-looking statements speak only as of the date of this document. We do not undertake to update our forward-looking statements.

(Tables to Follow)






Stage Stores, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)

 
Thirteen Weeks Ended
 
November 2, 2013
 
October 27, 2012
 
Amount
 
% to Sales (1)
 
Amount
 
% to Sales (1)
 
 
 
 
 
 
 
 
Net sales
$
360,177

 
100.0
 %
 
$
370,583

 
100.0
 %
Cost of sales and related buying, occupancy and distribution expenses
277,085

 
76.9
 %
 
290,719

 
78.4
 %
Gross profit
83,092

 
23.1
 %
 
79,864

 
21.6
 %
Selling, general and administrative expenses
98,636

 
27.4
 %
 
92,472

 
25.0
 %
Store opening costs
1,379

 
0.4
 %
 
1,629

 
0.4
 %
Interest expense
718

 
0.2
 %
 
568

 
0.2
 %
Loss before income tax
(17,641
)
 
(4.9
)%
 
(14,805
)
 
(4.0
)%
Income tax benefit
(6,670
)
 
(1.9
)%
 
(5,947
)
 
(1.6
)%
Net loss
$
(10,971
)
 
(3.0
)%
 
$
(8,858
)
 
(2.4
)%
 
 
 
 
 
 
 
 
Basic and diluted loss per share data:
 
 
 
 
 
 
 
Basic loss per share
$
(0.34
)
 
 
 
$
(0.28
)
 
 
Basic weighted average shares outstanding
31,854

 
 
 
31,558

 
 
 
 
 
 
 
 
 
 
Diluted loss per share
$
(0.34
)
 
 
 
$
(0.28
)
 
 
Diluted weighted average shares outstanding
31,854

 
 
 
31,558

 
 
 
 
 
 
 
 
 
 
(1) Percentages may not foot due to rounding.
 
 
 
 
 
 














Stage Stores, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)

 
Thirty-Nine Weeks Ended
 
November 2, 2013
 
October 27, 2012
 
Amount
 
% to Sales (1)
 
Amount
 
% to Sales (1)
 
 
 
 
 
 
 
 
Net sales
$
1,134,145

 
100.0
 %
 
$
1,117,901

 
100.0
%
Cost of sales and related buying, occupancy and distribution expenses
845,368

 
74.5
 %
 
829,024

 
74.2
%
Gross profit
288,777

 
25.5
 %
 
288,877

 
25.8
%
Selling, general and administrative expenses
297,563

 
26.2
 %
 
279,959

 
25.0
%
Store opening costs
2,473

 
0.2
 %
 
3,157

 
0.3
%
Interest expense
2,012

 
0.2
 %
 
2,350

 
0.2
%
Income (loss) before income tax
(13,271
)
 
(1.2
)%
 
3,411

 
0.3
%
Income tax expense (benefit)
(5,051
)
 
(0.4
)%
 
1,025

 
0.1
%
Net income (loss)
$
(8,220
)
 
(0.7
)%
 
$
2,386

 
0.2
%
 
 
 
 
 
 
 
 
Basic and diluted earnings (loss) per share data:
 
 
 
 
 
 
 
Basic earnings (loss) per share
$
(0.25
)
 
 
 
$
0.08

 
 
Basic weighted average shares outstanding
32,307

 
 
 
31,035

 
 
 
 
 
 
 
 
 
 
Diluted earnings (loss) per share
$
(0.25
)
 
 
 
$
0.08

 
 
Diluted weighted average shares outstanding
32,307

 
 
 
31,301

 
 
 
 
 
 
 
 
 
 
(1) Percentages may not foot due to rounding.
 
 
 
 
 
 
 







Stage Stores, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par value)
(Unaudited)

 
November 2, 2013
 
February 2, 2013
ASSETS
 
 
 
Cash and cash equivalents
$
23,717

 
$
17,937

Merchandise inventories, net
551,550

 
413,928

Prepaid expenses and other current assets
45,040

 
35,467

Total current assets
620,307

 
467,332

 
 
 
 
Property, equipment and leasehold improvements, net
294,595

 
290,701

Intangible asset
14,910

 
14,910

Other non-current assets, net
26,994

 
21,928

Total assets
$
956,806

 
$
794,871

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 

 
 

Accounts payable
$
208,202

 
$
110,826

Accrued expenses and other current liabilities
63,816

 
97,246

Total current liabilities
272,018

 
208,072

 
 
 
 
Long-term debt obligations
142,548

 
11,585

Other long-term liabilities
111,700

 
110,344

Total liabilities
526,266

 
330,001

 
 
 
 
Commitments and contingencies
—

 
—

 
 
 
 
Common stock, par value $0.01, 100,000 shares authorized, 32,835 and 32,014 shares issued, respectively
328

 
320

Additional paid-in capital
393,326

 
376,615

Less treasury stock - at cost, 1,626 and 0 shares, respectively
(32,304
)
 
(701
)
Accumulated other comprehensive loss
(5,851
)
 
(6,135
)
Retained earnings
75,041

 
94,771

Total stockholders' equity
430,540

 
464,870

Total liabilities and stockholders' equity
$
956,806

 
$
794,871

















Stage Stores, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
 
Thirty-Nine Weeks Ended
 
November 2, 2013
 
October 27, 2012
Cash flows from operating activities:

 

Net income (loss)
$
(8,220
)
 
$
2,386

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:


 
 

Depreciation and amortization and impairment of long-lived assets
46,052

 
44,894

Loss on retirements of property and equipment
257

 
—

Deferred income taxes
(847
)
 
(98
)
Tax benefit (deficiency) from stock-based compensation
1,798

 
(1,391
)
Stock-based compensation expense
6,580

 
5,459

Amortization of debt issuance costs
204

 
353

Excess tax benefits from stock-based compensation
(2,041
)
 
(851
)
Deferred compensation obligation
236

 
92

Amortization of employee benefit related costs
458

 
310

Construction allowances from landlords
4,162

 
4,133

Changes in operating assets and liabilities:
 

 
 

Increase in merchandise inventories
(137,622
)
 
(162,871
)
(Increase) decrease in other assets
(14,733
)
 
10,262

Increase in accounts payable and other liabilities
58,248

 
157,379

Total adjustments
(37,248
)
 
57,671

Net cash (used in) provided by operating activities
(45,468
)
 
60,057

 
 
 
 
Cash flows from investing activities:
 

 
 

Additions to property, equipment and leasehold improvements
(46,717
)
 
(35,610
)
Proceeds from disposal of assets
11

 
—

Net cash used in investing activities
(46,706
)
 
(35,610
)
 
 
 
 
Cash flows from financing activities:
 

 
 

Proceeds from revolving credit facility borrowings
382,510

 
262,620

Payments of revolving credit facility borrowings
(250,910
)
 
(259,620
)
Payments of long-term debt obligations
(551
)
 
(18,499
)
Payments of debt issuance costs
(128
)
 
—

Repurchases of common stock
(31,367
)
 
(61
)
Payments for stock related compensation
(2,257
)
 
(522
)
Proceeds from exercise of stock awards
10,126

 
18,336

Excess tax benefits from stock-based compensation
2,041

 
851

Cash dividends paid
(11,510
)
 
(8,753
)
Net cash provided by (used in) financing activities
97,954

 
(5,648
)
Net increase in cash and cash equivalents
5,780

 
18,799

 
 
 
 
Cash and cash equivalents:
 

 
 

Beginning of period
17,937

 
18,621

End of period
$
23,717

 
$
37,420






Stage Stores, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands, except earnings per share)
(Unaudited)

 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
November 2, 2013
 
October 27,
2012
 
November 2, 2013
 
October 27,
2012
 
Net income (loss):

 

 

 
 
 
On a U.S. GAAP basis
$
(10,971
)
 
$
(8,858
)
 
$
(8,220
)
 
$
2,386

 
South Hill consolidation related charges, net of tax of $1,832, $503, $7,815 and $503, respectively
2,552

 
866

 
12,718

 
866

 
Former Chief Executive Officer resignation related charges, net of tax of $1,103
—

 
—

 
—

 
1,897

 
On a non-U.S. GAAP basis
$
(8,419
)
 
$
(7,992
)
 
$
4,498

 
$
5,149

 
Diluted earnings (loss) per share:
 

 
 

 
 

 
 

 
On a U.S. GAAP basis
$
(0.34
)
 
$
(0.28
)
 
$
(0.25
)
 
$
0.08

 
South Hill consolidation related charges
0.08

 
0.03

 
0.39

 
0.03

 
Former Chief Executive Officer resignation related charges
—

 
—

 
—

 
0.06

 
On a non-U.S. GAAP basis
$
(0.26
)
 
$
(0.25
)
 
$
0.14

 
$
0.16

(1)
 
 
 
 
 
 
 
 
 
(1) EPS does not foot due to rounding.
 
 
 
 
 
 
 
 


























Stock widget

Investing forum

STAGE STORES INC Reports