-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P67VA8VKYAorost3Ggn8sJBdw0x9PStNySXiDqelIa/Lev//lChu8emwUiPONvZ1 DHxN4Vwzt+RxG/dXWEnNiQ== 0000895447-02-000018.txt : 20021217 0000895447-02-000018.hdr.sgml : 20021217 20021216174616 ACCESSION NUMBER: 0000895447-02-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20021102 FILED AS OF DATE: 20021217 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHOE CARNIVAL INC CENTRAL INDEX KEY: 0000895447 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-SHOE STORES [5661] IRS NUMBER: 351736614 STATE OF INCORPORATION: IN FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-21360 FILM NUMBER: 02859286 BUSINESS ADDRESS: STREET 1: 8233 BAUMGART ROAD CITY: EVANSVILLE STATE: IN ZIP: 47725 BUSINESS PHONE: 8128674039 MAIL ADDRESS: STREET 1: 8233 BAUMGART RD CITY: EVANSVILLE STATE: IN ZIP: 47725 10-Q 1 scvl3rdqtrq2002.txt 3RD QUARTER 2002 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 2, 2002 ------------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------------ --------------------------- Commission File Number: 0-21360 --------------------------------------------------------- Shoe Carnival, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Indiana 35-1736614 - -------------------------------------------------------------------------------- (State or other jurisdiction (IRS Employer Identification Number) of incorporation or organization) 8233 Baumgart Road, Evansville, Indiana 47725 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (812) 867-6471 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) NOT APPLICABLE - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X ] No [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [X ] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $.01 par value, 12,600,323 shares outstanding as of December 11, 2002. SHOE CARNIVAL, INC. INDEX TO FORM 10-Q Page ---- Part I Financial Information Item 1. Financial Statements (Unaudited) Condensed Consolidated Balance Sheets..................... 3 Condensed Consolidated Statements of Income............... 4 Condensed Consolidated Statement of Shareholders' Equity.. 5 Condensed Consolidated Statements of Cash Flows........... 6 Notes to Condensed Consolidated Financial Statements...... 7 Item 2. Management's Discussion and Analysis................. 8-11 Item 3. Quantitative and Qualitative Disclosures About Market Risks................................... 11 Item 4. Controls and Procedures.............................. 11 Part II Other Information Item 6. Exhibits and Reports on Form 8-K..................... 12 Signature..................................................... 13 Certifications................................................ 14-15 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SHOE CARNIVAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited
November 2, February 2, November 3, 2002 2002 2001 ----------- ----------- ----------- (In thousands) ASSETS Current Assets: Cash and cash equivalents........... $ 3,969 $ 5,459 $ 3,207 Accounts receivable................. 2,577 1,298 1,660 Merchandise inventories............. 147,909 135,648 137,289 Deferred income tax benefit......... 385 449 703 Other............................... 2,040 1,816 2,055 -------- -------- -------- Total Current Assets................... 156,880 144,670 144,914 Property and equipment-net............. 63,601 57,249 59,349 -------- -------- -------- Total Assets........................... $220,481 $201,919 $204,263 ======== ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable.................... $ 42,794 $ 42,108 $ 33,242 Accrued and other liabilities....... 12,640 10,452 10,675 Current portion of long-term debt... 482 834 945 -------- -------- -------- Total Current Liabilities.............. 55,916 53,394 44,862 Long-term debt......................... 25,438 27,672 41,176 Deferred lease incentives.............. 5,002 4,197 4,126 Deferred income taxes.................. 4,467 4,223 4,191 Other.................................. 611 331 275 -------- -------- -------- Total Liabilities...................... 91,434 89,817 94,630 -------- -------- -------- Shareholders' Equity: Common stock, $.01 par value, 50,000 shares authorized, 13,363 shares issued and outstanding at November 2, 2002, February 2, 2002 and November 3, 2001............... 134 134 134 Additional paid-in capital.......... 65,427 64,752 64,524 Retained earnings................... 68,422 54,251 53,093 Treasury stock, at cost, 765, 1,000 and 1,149 shares at November 2, 2002, February 2, 2002 and November 3, 2001.......... (4,936) (7,035) (8,118) -------- -------- -------- Total Shareholders' Equity............. 129,047 112,102 109,633 -------- -------- -------- Total Liabilities and Shareholders' Equity.................. $220,481 $201,919 $204,263 ======== ======== ========
See Notes to Condensed Consolidated Financial Statements 3 SHOE CARNIVAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME Unaudited
Thirteen Thirteen Thirty-nine Thirty-nine Weeks Ended Weeks Ended Weeks Ended Weeks Ended November 2, November 3, November 2, November 3, 2002 2001 2002 2001 ----------- ----------- ----------- ------------ (In thousands, except per share data) Net sales............. $137,703 $124,778 $391,713 $355,950 Cost of sales (including buying, distribution and occupancy costs).. 97,238 87,965 276,405 251,927 -------- -------- -------- -------- Gross profit.......... 40,465 36,813 115,308 104,023 Selling, general and administrative expenses............. 32,376 28,932 92,010 83,844 -------- -------- -------- -------- Operating income...... 8,089 7,881 23,298 20,179 Interest expense, net......... 161 480 625 1,911 -------- -------- -------- -------- Income before income taxes......... 7,928 7,401 22,673 18,268 Income taxes.......... 2,973 2,776 8,502 6,851 -------- -------- -------- -------- Net income............ $ 4,955 $ 4,625 $ 14,171 $ 11,417 ======== ======== ======== ======== Net income per share: Basic............ $ .39 $ .38 $ 1.13 $ .95 ======== ======== ======== ======== Diluted.......... $ .38 $ .37 $ 1.09 $ .92 ======== ======== ======== ======== Average shares outstanding: Basic............ 12,595 12,195 12,545 12,077 ======== ======== ======== ======== Diluted.......... 12,967 12,513 12,982 12,431 ======== ======== ======== ========
See Notes to Condensed Consolidated Financial Statements 4 SHOE CARNIVAL, INC. CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY Unaudited Add'l Common Stock Paid-In Retained Treasury Issued Treasury Amount Capital Earnings Stock Total ------ -------- ------ ------- -------- -------- ------- (In thousands) Balance at February 2, 2002.... 13,363 (1,000) $ 134 $64,752 $54,251 $(7,035) $112,102 Exercise of stock options........... 226 675 1,967 2,642 Employee stock purchase plan purchases........ 9 132 132 Net income.......... 14,171 14,171 ------ ------ ------ ------- ------- ------- -------- Balance at November 2, 2002.... 13,363 (765) $ 134 $65,427 $68,422 $(4,936) $129,047 ====== ====== ====== ======= ======= ======= ======== See Notes to Condensed Consolidated Financial Statements 5 SHOE CARNIVAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited
Thirty-nine Thirty-nine Weeks Ended Weeks Ended November 2, 2002 November 3, 2001 ---------------- ---------------- (In thousands) Cash flows from operating activities: Net income................................ $ 14,171 $ 11,417 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization........... 9,164 8,291 Loss on retirement of assets............ 128 127 Deferred income taxes................... 308 (171) Other................................... (72) (151) Changes in operating assets and liabilities: Merchandise inventories............... (12,261) (14,254) Accounts receivable................... (1,061) (594) Accounts payable and accrued liabilities.......................... 2,865 3,007 Other (209) (637) --------- --------- Net cash provided by operating activities.... 13,033 7,035 --------- --------- Cash flows from investing activities: Purchases of property and equipment......... (15,799) (9,476) Lease incentives............................ 1,135 831 --------- --------- Net cash used in investing activities........ (14,664) (8,645) Cash flows from financing activities: Borrowings under line of credit............. 193,675 338,350 Payments on line of credit.................. (195,600) (337,975) Payments on capital lease obligations....... (708) (688) Proceeds from issuance of stock............. 2,774 1,903 --------- --------- Net cash provided by financing activities.... 141 1,590 --------- --------- Net decrease in cash and cash equivalents.... (1,490) (20) Cash and cash equivalents at beginning of period................................... 5,459 3,227 --------- --------- Cash and cash equivalents at end of period... $ 3,969 $ 3,207 ========= ========= Supplemental disclosures of cash flow information: Cash paid during period for interest....... $ 765 $ 2,151 Cash paid during period for income taxes... $ 6,731 $ 5,499 Supplemental disclosure of noncash investing activities: Capital lease obligations incurred......... $ 47 $ 423
See Notes to Condensed Consolidated Financial Statements 6 SHOE CARNIVAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Unaudited Note 1 - Basis of Presentation In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments necessary to present fairly the financial position of the Company and the results of its operations and its cash flows for the periods presented. Certain information and disclosures normally included in notes to financial statements have been condensed or omitted according to the rules and regulations of the Securities and Exchange Commission, although the Company believes that the disclosures are adequate to make the information presented not misleading. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. It is suggested that these financial statements be read in conjunction with the financial statements and financial notes thereto included in the Company's 2001 Annual Report. Note 2 - New Accounting Pronoucements In July 2001, the Financial Accounting Standards Board (the "FASB"), issued SFAS No. 143, "Accounting for Asset Retirement Obligations". SFAS No. 143 provides accounting requirements for retirement obligations associated with tangible long-lived assets. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. Management does not believe that the adoption of SFAS No. 143 will have a significant impact on the Company's consolidated financial statements. Effective February 4, 2002 the Company adopted SFAS No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets". SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The adoption of SFAS No. 144 has not had a significant impact on the financial position or results from operations of the Company. In April 2002, the FASB issued SFAS No. 145 "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections". SFAS No. 145 primarily affects the reporting requirements and classification of gains and losses from the extinguishment of debt, rescinds the transitional accounting requirements for intangible assets of motor carriers, and requires that certain lease modifications with economic effects similar to sale-leaseback transactions be accounted for in the same manner as sale-leaseback transactions. SFAS No. 145 is effective for financial statements issued after April 2002, with the exception of the provisions affecting the accounting for lease transactions, which should be applied for transactions entered into after May 15, 2002, and the provisions affecting classification of gains and losses from the extinguishment of debt, which should be applied in fiscal years beginning after May 15, 2002. Management has determined that the adoption of SFAS No. 145 will have no impact on the Company's consolidated financial statements. In June 2002, the FASB issued SFAS 146, Accounting for Costs Associated with Exit or Disposal Activities, which addresses accounting for restructuring and similar costs. SFAS 146 supersedes previous accounting guidance, principally Emerging Issues Task Force Issue No. 94-3. The Company will adopt the provisions of SFAS 146 for restructuring activities initiated after December 31, 2002. SFAS 146 requires that the liability for costs associated with an exit or disposal activity be recognized when the liability is incurred. Under Issue 94-3, a liability for an exit cost was recognized at the date of the Company's commitment to an exit plan. SFAS 146 also establishes that the liability should initially be measured and recorded at fair value. Accordingly, SFAS 146 may affect the timing of recognizing future restructuring costs as well as the amounts recognized. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations
Number of Stores Store Square Footage Comparable ----------------------------- -------------------- Store Sales Beginning End of Net End of Increase/ Quarter Ended Of Period Opened Closed Period Change Period Decrease - ------------- --------- ------ ------ ------ ------ ------ ----------- May 4, 2002... 182 6 0 188 71,000 2,175,000 1.1% August 3, 2002........ 188 9 0 197 112,000 2,287,000 (0.5%) November 2, 2002........ 197 10 0 207 114,000 2,401,000 1.3% First Three Quarters.... 182 25 0 207 297,000 2,401,000 0.7% May 5, 2001.. 165 3 0 168 26,000 1,937,000 2.3% August 4, 2001....... 168 10 0 178 123,000 2,060,000 2.1% November 3, 2001....... 178 5 0 183 54,000 2,114,000 2.5% First Three Quarters... 165 18 0 183 203,000 2,114,000 2.1%
The following table sets forth the Company's results of operations expressed as a percentage of net sales for the periods indicated:
Thirteen Thirteen Thirty-nine Thirty-nine Weeks Ended Weeks Ended Weeks Ended Weeks Ended November 2, November 3, November 2, November 3, 2002 2001 2002 2001 ----------- ----------- ----------- ----------- Net sales........ 100.0% 100.0% 100.0% 100.0% Cost of sales (including buying, distribution and occupancy costs).......... 70.6 70.5 70.6 70.8 ------ ------ ------ ------ Gross profit..... 29.4 29.5 29.4 29.2 Selling, general and administra- tive expenses... 23.5 23.2 23.5 23.6 ------ ------ ------ ------ Operating income.......... 5.9 6.3 5.9 5.6 Interest expense-net..... .1 .4 .1 .5 ------ ------ ------ ------ Income before income taxes.... 5.8 5.9 5.8 5.1 Income taxes..... 2.2 2.2 2.2 1.9 ------ ------ ------ ------ Net income....... 3.6% 3.7% 3.6% 3.2% ====== ====== ====== ======
Net Sales Net sales increased $12.9 million to $137.7 million in the third quarter of 2002, a 10.4% increase over net sales of $124.8 million in the comparable prior year period. The increase was attributable to a 1.3% comparable store sales increase and the sales generated by the 36 new stores opened since August 2001 (net of one store closed). Adult athletic and men's non-athletic product were largely responsible for the increase in comparable store sales. 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Net sales increased $35.8 million to $391.7 million in the first nine months of 2002, a 10% increase over net sales of $356.0 million in the comparable prior year period. The increase was attributable to a 0.7% comparable store sales increase and the sales generated by the 43 new stores opened since January 2000 (net of one store closed). Gross Profit Gross profit increased $3.7 million to $40.5 million in the third quarter of 2002, a 9.9% increase over gross profit of $36.8 million in the comparable prior year period. The Company's gross profit margin was 29.4% compared with 29.5% last year. As a percentage of sales, the merchandise gross profit margin was the same as last year while buying, distribution and occupancy costs increased 0.1%. Gross profit increased $11.3 million to $115.3 million in the first nine months of 2002, a 10.8% increase over gross profit of $104.0 million in the comparable prior year period. The Company's gross profit margin increased to 29.4% from 29.2% last year. As a percentage of sales, the merchandise gross profit margin increased 0.3% from last year and buying, distribution and occupancy costs increased 0.1%. Selling, General and Administrative Expenses Selling, general and administrative expenses increased $3.4 million to $32.4 million in the third quarter of 2002 from $28.9 million in the comparable prior year period. As a percentage of sales, these expenses increased to 23.5% from 23.2% due to higher new store pre-opening costs. During the third quarter of 2002, the Company opened ten stores as compared with five stores in the third quarter of 2001. Total new store pre-opening costs in the third quarter of 2002 were $870,000, or 0.6% of sales, as compared to $342,000, or 0.3% of sales, for the third quarter of 2001. Selling, general and administrative expenses increased $8.2 million to $92.0 million in the first nine months of 2002 from $83.8 million in the comparable prior year period. As a percentage of sales, these expenses decreased to 23.5% from 23.6% last year. Total new store pre-opening costs for the first nine months of 2002 were $2.0 million or 0.5% of sales, as compared to $1.2 million or 0.3% of sales, for the first nine months of 2001. Twenty-five stores were opened in the first nine months of 2002 and 18 stores were opened in the first nine months of 2001. Interest Expense The decrease in net interest expense in the third quarter and the first nine months of 2002 as compared with the third quarter and the first nine months of 2001 resulted from substantially lower average borrowings and a lower effective interest rate. Income Taxes The effective income tax rate was 37.5% for the third quarter and the first nine months of 2002 and for the same time periods in 2001. The effective income tax rate differed from the statutory federal rates due primarily to state and local income taxes, net of the federal tax benefit. 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Liquidity and Capital Resources The Company's primary sources of funds are cash flows from operations and borrowings under its revolving credit facility. For the first nine months of 2002, net cash generated by operating activities was $13.0 million compared to an increase of cash of $7.0 million for the first nine months of last year. Excluding changes in operating assets and liabilities, cash provided by operating activities was $23.7 million in the first nine months of 2002 versus $19.5 million in the comparable prior year period. Merchandise inventories increased $10.6 million to $147.9 million at November 2, 2002 from $137.3 million at November 3, 2001. During 2002, our key merchandise strategy is centered on lowering merchandise inventory levels of seasonal fashion product in order to increase the overall gross profit margin. Leaner inventories in seasonal fashion product, particularly in the women's non-athletic category, are expected to reduce the exposure to markdowns. While the number of stores in operation at the end of the third quarter of 2002 increased 13.1% compared with the end of the third quarter of 2001, merchandise inventories only increased 7.7%. This resulted in a decrease in merchandise inventories on a per-store basis of 4.8%. Merchandise inventories on a per-store basis at year-end are expected to decrease between 5% and 8% from last year's levels. Working capital increased to $101.0 million at November 2, 2002 from $100.1 million at November 3, 2001 and the current ratio was 2.8 to 1 at November 2, 2002 as compared with 3.2 to 1 at November 3, 2001. Long-term debt as a percentage of total capital was 16.5% at November 2, 2002, compared to 27.3% at November 3, 2001. Capital expenditures, net of lease incentives of $1.1 million, were $14.7 million in the first nine months of 2002. Of these expenditures, approximately $9.7 million was incurred for new stores. Computer hardware and software purchases totaled $2.7 million, including $1.8 million incurred for the purchase of point-of-sale software. Additional conveyors and technology for our distribution center were purchased for $600,000. All other capital additions totaled $1.7 million. The Company opened 25 stores in the first nine months of 2002, thereby completing its planned store expansion program for the year. Six stores were opened in the first quarter, nine in the second quarter and ten in the third quarter. During the first nine months of 2001, 18 stores were opened. Three stores were opened in the first quarter, ten in the second quarter and five in the third quarter. One store was closed in the fourth quarter of 2001. No stores have been closed in 2002. The Company expects to open 40 stores in 2003. Capital expenditures for 2003 are expected to be approximately $17 million to $18 million, of which $13 to $14 million will be expended for new stores. The actual amount of the Company's cash requirements for capital expenditures depends in part on the number of new stores opened, the amount of lease incentives, if any, received from landlords and the number of stores remodeled. The opening of new stores will be dependent upon, among other things, the availability of desirable locations, the negotiation of acceptable lease terms and general economic and business conditions affecting consumer spending in areas the Company targets for expansion. The Company's current new store prototype utilizes between 8,000 and 15,000 square feet depending upon, among other factors, the location of the store and the population base the store is expected to service. Capital expenditures for new stores, net of lease incentives, are expected to average approximately $320,000 in 2003. The average inventory investment in a new store is expected to range from $450,000 to $750,000, depending on the size and sales expectation of the store and the timing of the new store opening. New store pre-opening expenses, such as advertising, salaries, supplies and utilities, are expected to average approximately $75,000 per store in 2003. The Company's credit facility provides for up to $70 million in cash advances and letters of credit. Borrowings under the revolving credit line are based on eligible inventory. Borrowings and letters of credit outstanding under this facility at November 2, 2002 were $25.1 million and $2.1 million, respectively. The Company anticipates that its existing cash and cash flow from operations, supplemented by borrowings under the credit facility, will be sufficient to fund its planned expansion and other operating cash requirements for at least the next 12 months. 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Seasonality The Company's quarterly results of operations have fluctuated and are expected to continue to fluctuate in the future primarily as a result of seasonal variances and the timing of sales and costs associated with opening new stores. Non-capital expenditures, such as advertising and payroll, incurred prior to opening a new store are charged to expense as incurred. Therefore, the Company's results of operations may be adversely affected in any quarter in which the Company incurs pre-opening expenses related to the opening of new stores. The Company has three distinct selling periods: Easter, back-to-school and Christmas. Factors That May Effect Future Results This report on Form 10-Q contains certain forward looking statements that involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are the following: general economic conditions in the areas of the United States in which the Company's stores are located; changes in the overall retail environment and more specifically in the apparel and footwear retail sectors; the potential impact of national and international security concerns on the retail environment; the impact of competition and pricing; changes in weather patterns, consumer buying trends and the ability of the Company to identify and respond to emerging fashion trends; risks associated with the seasonality of the retail industry; the availability of desirable store locations at acceptable lease terms and the ability of the Company to open new stores in a timely manner; higher than anticipated costs associated with the closing of underperforming stores; the inability of manufacturers to deliver products in a timely manner; and changes in the political and economic environments in the People's Republic of China, a major manufacturer of footwear, and the continued favorable trade relationships between China and the United States. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to market risk in that the interest payable under the Company's Credit Agreement is based on variable interest rates and therefore is affected by changes in market rates. The Company does not use interest rate derivative instruments to manage exposure to changes in market interest rates. A 1% change in the weighted average interest rate charged under the Credit Agreement would have resulted in interest expense fluctuating by approximately $149,000 for the first nine months of 2002 and $307,000 for the first nine months of 2001. ITEM 4. CONTROLS AND PROCEDURES The Chief Executive Officer and the Chief Financial Officer of the Company have concluded, based on their evaluation as of a date within 90 days prior to the date of the filing of this Form 10-Q, that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company's management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of such evaluation. 11 SHOE CARNIVAL, INC. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 99.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 99.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended November 2, 2002. 12 SHOE CARNIVAL, INC. SIGNATURE 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 thereunto duly authorized. Date: December 12, 2002 SHOE CARNIVAL, INC. (Registrant) By: /s/ W. Kerry Jackson -------------------- W. Kerry Jackson Senior Vice President and Chief Financial Officer 13 SHOE CARNIVAL, INC. CERTIFICATIONS I, Mark L. Lemond, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Shoe Carnival, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c. presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: December 12, 2002 By: /s/ Mark L. Lemond ------------------- Mark L. Lemond President and Chief Executive Officer 14 SHOE CARNIVAL, INC. CERTIFICATIONS I, W. Kerry Jackson, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Shoe Carnival, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c. presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and; 6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: December 12, 2002 By: /s/ W. Kerry Jackson -------------------- W. Kerry Jackson Senior Vice President and Chief Financial Officer 15 EX-99 2 scvlq3exhibit99-2.txt CFO CERTIFICATION Exhibit 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Shoe Carnival, Inc. (the "Company") on Form 10-Q for the period ending November 2, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, W. Kerry Jackson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ W. Kerry Jackson - -------------------- Chief Financial Officer December 12, 2002 EX-99 3 scvlq3exhibit99-1.txt CEO CERTIFICATION Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Shoe Carnival, Inc. (the "Company") on Form 10-Q for the period ending November 2, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Mark L. Lemond, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Mark L. Lemond - ------------------ President and Chief Executive Officer December 12, 2002 -----END PRIVACY-ENHANCED MESSAGE-----