EX-99 3 ex99_q2errel.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 Record Second Quarter Earnings; EPS Grows 28%; Company Raises 2012 Guidance

HOUSTON, TX, August 16, 2012 -- Stage Stores, Inc. (NYSE: SSI) today reported net income for the second quarter ended July 28, 2012 of $11.7 million, or $0.37 per diluted share.  This compares to earnings of $0.29 per diluted share last year.

Diluted earnings per share for the first six months of the fiscal year, which include one-time charges of approximately $0.06 per share recorded in the first quarter associated with the resignation of the Company’s former Chief Executive Officer, were $0.36 compared to $0.27 in the same period last year.  Excluding the one-time charges, diluted earnings per share increased 56% to $0.42.

As previously reported by the Company, sales for the second quarter were $382 million as compared to sales of $353 million last year.  Comparable store sales for the second quarter increased 5.4%.  For the first six months of the fiscal year, the Company reported total sales of $747 million and a comparable store sales increase of 4.0%.

Michael Glazer, President and Chief Executive Officer, commented, “We are very pleased with our second quarter results.  Driven by our 5.4% same store sales increase and improvements in merchandise margins, EPS increased 28%.  Strong full-price sales and lower markdowns resulted in higher average prices, and benefited both sales and merchandise margins in the quarter.”

Mr. Glazer concluded, “Heading into the back half of the year, we are encouraged by the momentum behind the business and the initiatives underway to bring even more excitement and appeal to our merchandise, stores and marketing.  We are also very pleased with our new Private Label Credit Card Plan Agreement, which we executed last week and which extends our partnership with Alliance Data for another nine years.  We look forward to collaborating with them to enhance our private label credit card program, strengthen the relationship with our customers and profitably grow sales.”


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Stage Stores Reports Record
Second Quarter Earnings
Page - 2


Updated Full Year 2012 Guidance
Based on its performance for the first half of the year, the Company raised its comparable store sales and EPS guidance ranges for the full year.  The Company expects that comparable store sales for the year will be in a range of 2.5% to 3.5%. EPS, excluding the $0.06 one-time charge, is projected to be between $1.15 and $1.25 versus $1.08 to $1.20 previously.  The Company noted that, compared to last year’s EPS of $0.92, the current outlook represents a year-over-year increase of 25% to 36%.
 
 


   
FY 2012 OUTLOOK
  
FY 2011
Sales ($mm)
  
$1,605
-
$1,620
  
$1,512
             
Diluted EPS
  
$1.15
-
$1.25
  
$0.92
             
Diluted Shares (m)
  
31,685
  
33,278

 
 
Conference Call Information
The Company will hold a conference call today at 8:30 a.m. Eastern Time to discuss its second quarter results.  Interested parties can participate in the Company’s conference call by dialing 703-639-1307.  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, August 31, 2012.

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 operates 834 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.






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Stage Stores Reports Record
Second Quarter Earnings
Page - 3


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 expectations for sales, comparable store sales, EPS and diluted share count for the 2012 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 March 28, 2012, 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 Income
(in thousands, except per share data)
(Unaudited)
                         
   
Thirteen Weeks Ended
  
   
July 28, 2012
    
July 30, 2011
  
   
Amount
    
% to Sales (1)
    
Amount
    
% to Sales (1)
  
                         
Net sales
   $ 381,624       100.0 %   $ 352,832       100.0 %
Cost of sales and related buying, occupancy and distribution expenses
     266,450       69.8 %     248,975       70.6 %
Gross profit
     115,174       30.2 %     103,857       29.4 %
Selling, general and administrative expenses
     94,747       24.8 %     86,075       24.4 %
Store opening costs
     583       0.2 %     906       0.3 %
Interest expense, net of income of $0 and $2, respectively
     951       0.2 %     885       0.3 %
Income before income tax
     18,893       5.0 %     15,991       4.5 %
Income tax expense
     7,231       1.9 %     5,978       1.7 %
Net income
   $ 11,662       3.1 %   $ 10,013       2.8 %
                                 
Basic and diluted earnings per share data:
                                
Basic earnings per share
   $ 0.37             $ 0.29          
Basic weighted average shares outstanding
     31,010               34,236          
                                 
Diluted earnings per share
   $ 0.37             $ 0.29          
Diluted weighted average shares outstanding
     31,225               34,635          
                                 
                                 
                                 
(1) Percentages may not foot due to rounding.
                                

 
 
 

Stage Stores, Inc.
Condensed Consolidated Statements of Income
(in thousands, except earnings per share)
(Unaudited)
                         
   
Twenty-Six Weeks Ended
  
   
July 28, 2012
    
July 30, 2011
  
   
Amount
    
% to Sales (1)
    
Amount
    
% to Sales (1)
  
                         
Net sales
   $ 747,318       100.0 %   $ 699,315       100.0 %
Cost of sales and related buying, occupancy and distribution expenses
     538,305       72.0 %     510,238       73.0 %
Gross profit
     209,013       28.0 %     189,077       27.0 %
Selling, general and administrative expenses
     187,487       25.1 %     169,677       24.3 %
Store opening costs
     1,528       0.2 %     3,640       0.5 %
Interest expense, net of income of $0 and $24, respectively
     1,782       0.2 %     1,791       0.3 %
Income before income tax
     18,216       2.4 %     13,969       2.0 %
Income tax expense
     6,972       0.9 %     4,417       0.6 %
Net income
   $ 11,244       1.5 %   $ 9,552       1.4 %
                                 
Basic and diluted earnings per share data:
                                
Basic earnings per share
   $ 0.36             $ 0.27          
Basic weighted average shares outstanding
     30,773               35,258          
                                 
Diluted earnings per share
   $ 0.36             $ 0.27          
Diluted weighted average shares outstanding
     30,988               35,725          
                                 
                                 
                                 
(1) Percentages may not foot due to rounding.
                                

 
 
 

Stage Stores, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par value)
(Unaudited)
             
   
July 28, 2012
    
January 28, 2012
  
             
ASSETS
            
Cash and cash equivalents
   $ 22,627     $ 18,621  
Merchandise inventories, net
     396,545       347,944  
Prepaid expenses and other current assets
     27,425       33,434  
     Total current assets
     446,597       399,999  
                 
Property, equipment and leasehold improvements, net
     292,816       300,717  
Intangible asset
     14,910       14,910  
Other non-current assets, net
     20,954       19,713  
     Total assets
   $ 775,277     $ 735,339  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                
Accounts payable
   $ 129,936     $ 106,022  
Current portion of debt obligations
     710       13,782  
Accrued expenses and other current liabilities
     72,318       66,495  
     Total current liabilities
     202,964       186,299  
                 
Long-term debt obligations
     46,696       35,721  
Other long-term liabilities
     97,170       100,613  
     Total liabilities
     346,830       322,633  
                 
Commitments and contingencies
                
                 
Common stock, par value $0.01, 100,000 shares authorized,
                
     31,230 and 30,444 shares issued, respectively
     312       304  
Additional paid-in capital
     359,400       349,366  
Less treasury stock - at cost, 4 and 0 shares, respectively
     (950 )     (835 )
Accumulated other comprehensive loss
     (4,620 )     (4,748 )
Retained earnings
     74,305       68,619  
     Total stockholders' equity
     428,447       412,706  
     Total liabilities and stockholders' equity
   $ 775,277     $ 735,339  

 
 
 

Stage Stores, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
             
   
Twenty-Six Weeks Ended
  
   
July 28, 2012
    
July 30, 2011
  
Cash flows from operating activities:
            
     Net income
   $ 11,244     $ 9,552  
           
     Adjustments to reconcile net loss to net cash provided by operating activities:
          
          Depreciation, amortization, and impairment of long-lived assets
     30,262       30,853  
          Loss on retirements of property and equipment
     -       136  
          Deferred income taxes
     449       79  
          Tax (deficiency) benefit from stock-based compensation
     (893 )     749  
          Stock-based compensation expense
     3,436       4,079  
          Amortization of debt issuance costs
     288       155  
          Excess tax benefits from stock-based compensation
     (550 )     (1,181 )
          Deferred compensation obligation
     54       89  
          Amortization of employee benefit related costs
     206       79  
     Construction allowances from landlords
     1,377       2,102  
     Changes in operating assets and liabilities:
                
          Increase in merchandise inventories
     (48,601 )     (32,124 )
          Decrease in other assets
     4,414       420  
          Increase (decrease) in accounts payable and other liabilities
     24,716       (1,402 )
               Total adjustments
     15,158       4,034  
          Net cash provided by operating activities
     26,402       13,586  
                 
Cash flows from investing activities:
                
     Additions to property, equipment and leasehold improvements
     (22,621 )     (22,103 )
     Proceeds from retirements of property and equipment
     -       93  
          Net cash used in investing activities
     (22,621 )     (22,010 )
                 
Cash flows from financing activities:
                
     Proceeds from revolving credit facility borrowings
     190,405       51,700  
     Payments of revolving credit facility borrowings
     (174,175 )     (23,700 )
     Payments of long-term debt obligations
     (18,327 )     (6,647 )
     Payments of debt issuance costs
     -       (1,097 )
     Repurchases of common stock
     (516 )     (74,558 )
     Proceeds from exercise of stock awards
     7,846       6,956  
     Excess tax benefits from stock-based compensation
     550       1,181  
     Cash dividends paid
     (5,558 )     (5,408 )
          Net cash used in financing activities
     225       (51,573 )
Net increase (decrease) in cash and cash equivalents
     4,006       (59,997 )
                 
Cash and cash equivalents:
                
     Beginning of period
     18,621       89,349  
     End of period
   $ 22,627     $ 29,352