EX-99 2 ex99_q2errel.htm EXHIBIT Exhibit 99 Q2 ER


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;
11% Increase in Adjusted EPS
                        
HOUSTON, TX, August 22, 2013 -- Stage Stores, Inc. (NYSE: SSI) today reported financial results for the second fiscal quarter ended August 3, 2013.

Total sales for the quarter increased 3.6% to $395 million from $382 million in the prior year quarter ended July 28, 2012. Comparable store sales increased 1.7%. The Company noted that its men's, children's, junior's, cosmetics and footwear categories all had comparable store sales increases for the quarter that exceeded the Company average. Geographically, the Company's best performing regions were the Southwest and South Central.

The Company reported record adjusted earnings for the second quarter, excluding one-time items, of $0.41 per diluted share. This compares to earnings of $0.37 per diluted share, last year. The Company noted that adjusted earnings per share were up 11% over last year.

“After a slow start to the quarter, sales improved as the weather normalized,” said Michael Glazer, President and Chief Executive Officer. “We ended the quarter with a nice surge from the start of the back-to-school shopping period. We are pleased with our sales performance and record adjusted earnings for the quarter. However, an elevated promotional environment and shortfall in sales at the South Hill stores prevented our earnings from being even higher. While the operational components of the consolidation have been completed, the alignment of merchandise assortments in the stores is taking longer than expected. We are confident that our South Hill stores sales will steadily improve during the fall season as our assortments become more congruent throughout all stores."





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Stage Stores Reports Record
Second Quarter Earnings
Page - 2


For the first six months of the fiscal year, the Company reported total sales of $774 million and a 1.2% comparable store sales increase. Adjusted earnings, excluding one-time items, were $0.39 per diluted share.

Mr. Glazer concluded, “Based on the heightened promotional environment and the overall retail market weakness, it's prudent to adjust our sales and earnings guidance. We are now forecasting comparable store sales for the second half of the year to be flat to up 2.0%. As a result of our lower sales assumption, we are also revising our adjusted earnings outlook for the year to $1.30 to $1.40 per diluted share.”

Reported Earnings and One-Time Items
Including one-time items, the Company reported earnings for the second quarter of $9.6 million, or $0.29 per diluted share. One-time items, which total approximately $6.5 million, or $0.12 per share, are associated with the consolidation of the Company's South Hill, Virginia operations into its Houston headquarters. Of the $6.5 million, $4.4 million is included in gross profit and $2.1 million is included in SG&A expenses. For the first six months of the fiscal year, the Company reported earnings of $2.8 million, or $0.08 per diluted share, this year compared to $11.2 million, or $0.36 per diluted share, last year. One-time items total approximately $16.2 million, or $0.31 per share, this year versus approximately $3.0 million, or $0.06 per share, last year.

FY 2013 Guidance
The Company revised its comparable store sales guidance range for the full year to an increase of 0.6% to 1.6%, which assumes comps of zero to 2.0% for the second half of the year. The Company also revised its adjusted EPS guidance range for the year, excluding one-time items, to $1.30 - $1.40 from $1.45 - $1.55 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 $21.7 million, or $0.41 per diluted share, for the year.

 
 
FY 2013 OUTLOOK
 
FY 2012
Sales ($mm)
 
$1,672
—
$1,690

$1,646
 
 
 
 
 
 
 
Same Store sales
 
+0.6%
—
+1.6%
 
+5.7%
 
 
 
 
 
 
 
Adjusted EPS
 
$1.30
—
$1.40
 
$1.33
 
 
 
 
 
 
 
Diluted Shares (m)
 
33,600
 
31,600

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Stage Stores Reports Record
Second Quarter Earnings
Page - 3


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 703-639-1414. 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 30, 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 comparable store sales outlook for the second half of the fiscal year. 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 Income
(in thousands, except per share data)
(Unaudited)

 
Thirteen Weeks Ended
 
August 3, 2013
 
July 28, 2012
 
Amount
 
% to Sales (1)
 
Amount
 
% to Sales (1)
 
 
 
 
 
 
 
 
Net sales
$
395,331

 
100.0
%
 
$
381,624

 
100.0
%
Cost of sales and related buying, occupancy and distribution expenses
279,862

 
70.8
%
 
266,450

 
69.8
%
Gross profit
115,469

 
29.2
%
 
115,174

 
30.2
%
Selling, general and administrative expenses
99,323

 
25.1
%
 
94,747

 
24.8
%
Store opening costs
122

 
—
%
 
583

 
0.2
%
Interest expense
708

 
0.2
%
 
951

 
0.2
%
Income before income tax
15,316

 
3.9
%
 
18,893

 
5.0
%
Income tax expense
5,709

 
1.4
%
 
7,231

 
1.9
%
Net income
$
9,607

 
2.4
%
 
$
11,662

 
3.1
%
 
 
 
 
 
 
 
 
Basic and diluted earnings per share data:
 
 
 
 
 
 
 
Basic earnings per share
$
0.29

 
 
 
$
0.37

 
 
Basic weighted average shares outstanding
32,762

 
 
 
31,010

 
 
 
 
 
 
 
 
 
 
Diluted earnings per share
$
0.29

 
 
 
$
0.37

 
 
Diluted weighted average shares outstanding
33,073

 
 
 
31,225

 
 
 
 
 
 
 
 
 
 
(1) Percentages may not foot due to rounding.
 
 
 
 
 
 














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

 
Twenty-Six Weeks Ended
 
August 3, 2013
 
July 28, 2012
 
Amount
 
% to Sales (1)
 
Amount
 
% to Sales (1)
 
 
 
 
 
 
 
 
Net sales
$
773,968

 
100.0
%
 
$
747,318

 
100.0
%
Cost of sales and related buying, occupancy and distribution expenses
568,283

 
73.4
%
 
538,305

 
72.0
%
Gross profit
205,685

 
26.6
%
 
209,013

 
28.0
%
Selling, general and administrative expenses
198,927

 
25.7
%
 
187,487

 
25.1
%
Store opening costs
1,094

 
0.1
%
 
1,528

 
0.2
%
Interest expense
1,294

 
0.2
%
 
1,782

 
0.2
%
Income before income tax
4,370

 
0.6
%
 
18,216

 
2.4
%
Income tax expense
1,619

 
0.2
%
 
6,972

 
0.9
%
Net income
$
2,751

 
0.4
%
 
$
11,244

 
1.5
%
 
 
 
 
 
 
 
 
Basic and diluted earnings per share data:
 
 
 
 
 
 
 
Basic earnings per share
$
0.08

 
 
 
$
0.36

 
 
Basic weighted average shares outstanding
32,534

 
 
 
30,773

 
 
 
 
 
 
 
 
 
 
Diluted earnings per share
$
0.08

 
 
 
$
0.36

 
 
Diluted weighted average shares outstanding
32,908

 
 
 
30,988

 
 
 
 
 
 
 
 
 
 
(1) Percentages may not foot due to rounding.
 
 
 
 
 
 
 







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

 
August 3, 2013
 
February 2, 2013
ASSETS
 
 
 
Cash and cash equivalents
$
34,146

 
$
17,937

Merchandise inventories, net
442,250

 
413,928

Prepaid expenses and other current assets
43,743

 
35,467

Total current assets
520,139

 
467,332

 
 
 
 
Property, equipment and leasehold improvements, net
289,769

 
290,701

Intangible asset
14,910

 
14,910

Other non-current assets, net
25,399

 
21,928

Total assets
$
850,217

 
$
794,871

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 

 
 

Accounts payable
$
142,825

 
$
110,826

Accrued expenses and other current liabilities
66,672

 
97,246

Total current liabilities
209,497

 
208,072

 
 
 
 
Long-term debt obligations
56,240

 
11,585

Other long-term liabilities
110,290

 
110,344

Total liabilities
376,027

 
330,001

 
 
 
 
Commitments and contingencies
—

 
—

 
 
 
 
Common stock, par value $0.01, 100,000 shares authorized,
32,809 and 32,014 shares issued, respectively
328

 
320

Additional paid-in capital
390,589

 
376,615

Less treasury stock - at cost, 0 and 0 shares, respectively
(898
)
 
(701
)
Accumulated other comprehensive loss
(5,946
)
 
(6,135
)
Retained earnings
90,117

 
94,771

Total stockholders' equity
474,190

 
464,870

Total liabilities and stockholders' equity
$
850,217

 
$
794,871

















Stage Stores, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
 
Twenty-Six Weeks Ended
 
August 3, 2013
 
July 28, 2012
Cash flows from operating activities:

 

Net income
$
2,751

 
$
11,244

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

 
 

Depreciation and amortization and impairment of long-lived assets
30,664

 
30,262

Loss on retirements of property and equipment
261

 
—

Deferred income taxes
70

 
449

Tax benefit (deficiency) from stock-based compensation
1,779

 
(893
)
Stock-based compensation expense
4,025

 
3,436

Amortization of debt issuance costs
129

 
288

Excess tax benefits from stock-based compensation
(1,998
)
 
(550
)
Deferred compensation obligation
197

 
54

Amortization of employee benefit related costs
305

 
206

Construction allowances from landlords
1,418

 
1,377

Changes in operating assets and liabilities:
 

 
 

Increase in merchandise inventories
(28,322
)
 
(48,601
)
(Increase) decrease in other assets
(11,889
)
 
4,414

(Decrease) increase in accounts payable and other liabilities
(344
)
 
24,716

Total adjustments
(3,705
)
 
15,158

Net cash (used in) provided by operating activities
(954
)
 
26,402

 
 
 
 
Cash flows from investing activities:
 

 
 

Additions to property, equipment and leasehold improvements
(29,937
)
 
(22,621
)
Proceeds from disposal of assets
11

 
—

Net cash used in investing activities
(29,926
)
 
(22,621
)
 
 
 
 
Cash flows from financing activities:
 

 
 

Proceeds from revolving credit facility borrowings
214,725

 
190,405

Payments of revolving credit facility borrowings
(169,650
)
 
(174,175
)
Payments of long-term debt obligations
(363
)
 
(18,327
)
Repurchases of common stock
—

 
(61
)
Payments for stock related compensation
(2,165
)
 
(455
)
Proceeds from exercise of stock awards
9,949

 
7,846

Excess tax benefits from stock-based compensation
1,998

 
550

Cash dividends paid
(7,405
)
 
(5,558
)
Net cash provided by financing activities
47,089

 
225

Net increase in cash and cash equivalents
16,209

 
4,006

 
 
 
 
Cash and cash equivalents:
 

 
 

Beginning of period
17,937

 
18,621

End of period
$
34,146

 
$
22,627






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

 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
August 3, 2013
 
July 28,
2012
 
August 3, 2013
 
July 28,
2012
Net income:

 

 

 

On a U.S. GAAP basis
$
9,607

 
$
11,662

 
$
2,751

 
$
11,244

South Hill consolidation related charges, net of tax of $2,367 and $5,983, respectively
4,104

 
—

 
10,166

 
—

Former Chief Executive Officer resignation related charges, net of tax of $1,148
—

 
—

 
—

 
1,852

On a non-U.S. GAAP basis
$
13,711

 
$
11,662

 
$
12,917

 
$
13,096

Diluted earnings per share:
 

 
 

 
 

 
 

On a U.S. GAAP basis
$
0.29

 
$
0.37

 
$
0.08

 
$
0.36

South Hill consolidation related charges
0.12

 
—

 
0.31

 
—

Former Chief Executive Officer resignation related charges
—

 
—

 
—

 
0.06

On a non-U.S. GAAP basis
$
0.41

 
$
0.37

 
$
0.39

 
$
0.42