EX-99 2 ex99_q1errel.htm STAGE STORES, INC., FORM 8K, EX 99
Exhibit 99

NEWS RELEASE

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

 
FOR IMMEDIATE RELEASE

Stage Stores Reports First Quarter Results; Reaffirms Full Year Sales and Earnings Guidance

HOUSTON, TX, May 17, 2013 -- Stage Stores, Inc. (NYSE: SSI) today reported financial results for the first fiscal quarter ended May 4, 2013.

Total sales for the quarter increased 3.5% to $379 million from $366 million in the prior year first quarter ended April 28, 2012.  Comparable store sales for the quarter increased 0.7%.  The Company noted that its best performing categories were accessories and home & gifts.  Geographically, the Southwest was the best performing region for the quarter.

The Company reported an adjusted loss for the quarter, excluding one-time items, of $0.8 million, or $0.02 per share.  This compares to adjusted earnings, excluding one-time items, of $1.4 million, or $0.05 per diluted share, for the prior year first quarter.

Commenting on the Company's first quarter results, Michael Glazer, President and Chief Executive Officer, stated, "The unseasonably cool weather in March and April, particularly when compared to last year's warm spring, strongly impacted our sales performance.  We managed our inventory aggressively and ended the quarter in a clean inventory position.  We feel good about our merchandise assortments going into the second quarter.

"From an operational standpoint, we made excellent progress on a number of our key initiatives during the quarter.  Most importantly, our South Hill consolidation remained on track for a midyear completion.  We strongly believe that the consolidation will increase our productivity, create synergies, enhance our purchasing power, provide for a consistent message to our customers and accelerate sales growth.  In addition, we opened 10 new stores, and started the roll-out of our new prototype fixture packages in our top 40 doors.


--more--
Stage Stores Reports
First Quarter Results
Page – 2
"Looking ahead, we remain optimistic about our prospects for the remainder of the year.  We believe sales in the second quarter will benefit from pent-up demand for seasonal merchandise as temperatures normalize.  In addition, our accelerated first quarter clearance cadence, similar to last year's third quarter, should have a positive impact on our gross margins for the second quarter.  Overall, we feel extremely positive about the initiatives that we have underway to drive top-line and bottom-line growth.  As such, we are maintaining our comparable store sales and adjusted EPS guidance for the year.  As another testament to our confidence in delivering future earnings growth, last month we announced a 25% increase in our quarterly dividend rate.  This significant increase demonstrates our commitment to create value for our shareholders through increasing shareholder distributions," Mr. Glazer concluded.

Reported Earnings and One-Time Items
Including one-time items, the Company reported a net loss for the quarter of $6.9 million, or $0.21 per share, this year compared to a net loss of $0.4 million, or $0.01 per share, last year.  One-time items recorded in the first quarter of 2013, which total approximately $9.7 million, or $0.19 per share, are associated with the consolidation of the Company's South Hill, Virginia operations into its Houston headquarters.  Of the $9.7 million, $2.8 million is included in gross profit and $6.9 million is included in SG&A expenses.  One-time items recorded in the first quarter of 2012, which total approximately $3.0 million, or $0.06 per share, are associated with the resignation of the Company's former Chief Executive Officer in March 2012.

Full Year 2013 Guidance
The Company is maintaining its comparable store sales guidance for the year of an increase of 2% to 4%.  The Company is also maintaining its adjusted EPS guidance, excluding one-time items, of $1.45 to $1.55.  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 $16 million, or $0.30 per diluted share, for the year.

   
FY 2013 OUTLOOK
  
FY 2012
Sales ($mm)
  
$1,698
-
$1,730
  
$1,646
             
Adjusted EPS
  
$1.45
-
$1.55
  
$1.33
             
Diluted Shares (m)
  
33,500
  
31,600
 
 
--more--
Stage Stores Reports
First Quarter Results
Page – 3
Store Activity
The Company reported that it opened ten new stores and closed two stores during the first quarter.  Bealls stores were opened in Canon City, CO, Presidio, TX and Winnemucca, NV; Goody's stores were opened in Starke, FL, Macon, GA, Corinth, MS and Havelock and Williamston, NC; and Peebles stores were opened in Houghton Lake, MI and Tunkhannock, PA.

Conference Call Information
The Company will hold a conference call today at 8:30 a.m. Eastern Time to discuss its first quarter results.  Interested parties can participate in the Company's conference call by dialing 703-639-1180.  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, May 31, 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 872 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.

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 sales, comparable store sales, 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 Loss
  
(in thousands, except per share data)
  
(Unaudited)
  
 
  
   
   
   
 
 
  
Thirteen Weeks Ended
  
 
  
May 4, 2013
    
April 28, 2012
  
 
  
Amount
    
% to Sales (1)
    
Amount
    
% to Sales (1)
  
 
  
   
   
   
 
Net sales
  
$
378,637
      
100.0
%
  
$
365,694
      
100.0
%
Cost of sales and related buying, occupancy and distribution expenses
    
288,421
      
76.2
%
    
271,855
      
74.3
%
Gross profit
    
90,216
      
23.8
%
    
93,839
      
25.7
%
Selling, general and administrative expenses
    
99,604
      
26.3
%
    
92,740
      
25.4
%
Store opening costs
    
972
      
0.3
%
    
945
      
0.3
%
Interest expense, net of income of $0 and $0, respectively
    
586
      
0.2
%
    
831
      
0.2
%
Loss before income tax
    
(10,946
)
    
-2.9
%
    
(677
)
    
-0.2
%
Income tax benefit
    
(4,090
)
    
-1.1
%
    
(259
)
    
-0.1
%
Net loss
  
$
(6,856
)
    
-1.8
%
  
$
(418
)
    
-0.1
%
 
                                
Basic and diluted loss per share data:
                                
Basic loss per share
  
$
(0.21
)
          
$
(0.01
)
        
Basic weighted average shares outstanding
    
32,306
              
30,536
          
 
                                
Diluted loss per share
  
$
(0.21
)
          
$
(0.01
)
        
Diluted weighted average shares outstanding
    
32,306
              
30,536
          
 
                                
 
                                
 
                                
(1) Percentages may not foot due to rounding.
                                


 

Stage Stores, Inc.
  
Condensed Consolidated Balance Sheets
  
(in thousands, except par value)
  
(Unaudited)
  
 
  
   
 
 
  
May 4, 2013
    
February 2, 2013
  
 
  
   
 
ASSETS
  
   
 
Cash and cash equivalents
  
$
26,598
    
$
17,937
  
Merchandise inventories, net
    
452,633
      
413,928
  
Prepaid expenses and other current assets
    
40,384
      
35,467
  
Total current assets
    
519,615
      
467,332
  
 
                
Property, equipment and leasehold improvements, net
    
293,021
      
290,701
  
Intangible asset
    
14,910
      
14,910
  
Other non-current assets, net
    
24,436
      
21,928
  
Total assets
  
$
851,982
    
$
794,871
  
 
                
LIABILITIES AND STOCKHOLDERS' EQUITY
                
Accounts payable
  
$
140,801
    
$
110,826
  
Accrued expenses and other current liabilities
    
68,319
      
97,246
  
Total current liabilities
    
209,120
      
208,072
  
 
                
Long-term debt obligations
    
66,027
      
11,585
  
Other long-term liabilities
    
111,005
      
110,344
  
Total liabilities
    
386,152
      
330,001
  
 
                
Commitments and contingencies
                
 
                
Common stock, par value $0.01, 100,000 shares authorized,
                
32,713 and 32,014 shares issued, respectively
    
327
      
320
  
Additional paid-in capital
    
387,740
      
376,615
  
Less treasury stock - at cost, 0 and 0 shares, respectively
    
(859
)
    
(701
)
Accumulated other comprehensive loss
    
(6,040
)
    
(6,135
)
Retained earnings
    
84,662
      
94,771
  
Total stockholders' equity
    
465,830
      
464,870
  
Total liabilities and stockholders' equity
  
$
851,982
    
$
794,871
  
 
 
 
Stage Stores, Inc.
  
Condensed Consolidated Statements of Cash Flows
  
(in thousands)
  
(Unaudited)
  
 
  
   
 
 
  
Thirteen Weeks Ended
  
 
  
May 4, 2013
    
April 28, 2012
  
 
  
   
 
Cash flows from operating activities:
  
   
 
Net loss
  
$
(6,856
)
  
$
(418
)
Adjustments to reconcile net loss to net cash provided by operating activities:
                
Depreciation and amortization
    
15,047
      
15,036
  
Loss on retirements of property and equipment
    
186
      
-
  
Deferred income taxes
    
(428
)
    
(20
)
Tax benefit (deficiency) from stock-based compensation
    
1,597
      
(482
)
Stock-based compensation expense
    
1,979
      
1,325
  
Amortization of debt issuance costs
    
64
      
95
  
Excess tax benefits from stock-based compensation
    
(1,792
)
    
(126
)
Deferred compensation obligation
    
158
      
20
  
Amortization of employee benefit related costs
    
153
      
103
  
Construction allowances from landlords
    
968
      
596
  
Changes in operating assets and liabilities:
                
Increase in merchandise inventories
    
(38,705
)
    
(50,143
)
(Increase) decrease in other assets
    
(7,525
)
    
11,145
  
Increase in accounts payable and other liabilities
    
375
      
35,935
  
Total adjustments
    
(27,923
)
    
13,484
  
Net cash (used in) provided by operating activities
    
(34,779
)
    
13,066
  
 
                
Cash flows from investing activities:
                
Additions to property, equipment and leasehold improvements
    
(16,809
)
    
(9,780
)
Net cash used in investing activities
    
(16,809
)
    
(9,780
)
 
                
Cash flows from financing activities:
                
Proceeds from revolving credit facility borrowings
    
103,125
      
82,600
  
Payments of revolving credit facility borrowings
    
(48,475
)
    
(78,525
)
Payments of long-term debt obligations
    
(180
)
    
(3,498
)
Repurchases of common stock
    
(2,088
)
    
(478
)
Proceeds from exercise of equity awards
    
9,328
      
2,359
  
Excess tax benefits from stock-based compensation
    
1,792
      
126
  
Cash dividends paid
    
(3,253
)
    
(2,726
)
Net cash provided by (used in) financing activities
    
60,249
      
(142
)
Net increase in cash and cash equivalents
    
8,661
      
3,144
  
 
                
Cash and cash equivalents:
                
Beginning of period
    
17,937
      
18,621
  
End of period
  
$
26,598
    
$
21,765
  
 
                

 
 

Stage Stores, Inc.
  
Reconciliation of Non-GAAP Financial Measures
  
(in millions, except earnings per share)
  
(Unaudited)
  
 
  
   
 
 
  
Thirteen Weeks Ended
  
 
  
May 4, 2013
    
April 28, 2012
  
 
  
   
 
Net income (loss):
  
   
 
On a U.S. GAAP basis
  
$
(6.9
)
  
$
(0.4
)
South Hill consolidation related charges, net of tax of $3.6
    
6.1
      
-
  
Former Chief Executive Officer resignation related charges, net of tax of $1.2
    
-
      
1.8
  
On a non-U.S. GAAP basis
  
$
(0.8
)
  
$
1.4
  
 
                
Diluted earnings (loss) per share:
                
On a U.S. GAAP basis
  
$
(0.21
)
  
$
(0.01
)
South Hill consolidation related charges
    
0.19
      
-
  
Former Chief Executive Officer resignation related charges
    
- 
      
0.06
  
On a non-U.S. GAAP basis
  
$
(0.02
)
  
$
0.05