8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

May 18, 2017

(Date of Report, Date of Earliest Event Reported)

Stage Stores, Inc.

(Exact Name of Registrant as Specified in Charter)

1-14035

(Commission File Number)

NEVADA (State or Other Jurisdiction of Incorporation)	91-1826900 (I.R.S. Employer Identification No.)
2425 West Loop South, Houston, Texas (Address of Principal Executive Offices)	77027 (Zip Code)

(800) 579-2302

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02Results of Operations and Financial Condition

On May 18, 2017, Stage Stores, Inc. (“we,” “our” or “registrant”) issued a news release reporting our unaudited financial results for the first quarter of fiscal 2017.

The news release included “non-GAAP financial measures,” as that term is defined by Rule 101 of Regulation G (17 CFR Part 244) and Item 10 of Regulation S-K (17 CFR Part 229). Specifically, the following non-GAAP financial measures were included: (i) adjusted net loss; (ii) adjusted loss per diluted share; and (iii) adjusted selling, general and administrative expenses. The non-GAAP financial measures exclude from the most directly comparable financial measure calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) after-tax charges related to (i) the acquisition of select assets of Gordmans Stores, Inc. and its subsidiaries and strategic store closures of approximately $4.0 million, or $0.15 per diluted share for the first quarter of fiscal 2017; and (ii) the consolidation our corporate headquarters, severance charges associated with a workforce reduction, and strategic store closures of approximately $0.4 million, or $0.01 per diluted share, for the first of fiscal 2016. Adjusted 2017 guidance excludes after-tax charges associated with the Gordmans acquisition, store closures and other strategic initiatives totaling approximately $0.18 per diluted share. The news release posted in the Investor Relations section of our website contains a presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and a reconciliation of the difference between the non-GAAP financial measures and the most directly comparable financial measures calculated and presented in accordance with GAAP. We believe this supplemental financial information enhances an investor’s understanding of our financial performance as it excludes those items which impact comparability of operating trends.  The non-GAAP financial information should not be considered in isolation or viewed as a substitute for net income, cash flow from operations or other measures of performance as defined by GAAP.  Moreover, non-GAAP financial information as reported by us is not necessarily comparable to other similarly titled measures of other companies due to the potential inconsistencies in the method of presentation and items considered.

Attached as Exhibit 99 to this Form 8-K is a copy of the news release, including information concerning forward-looking statements and factors that may affect our future results. The information in Exhibit 99 shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference to such filing. By furnishing the information in this Form 8-K and the attached exhibit, we are making no admission as to the materiality of any information in this Form 8-K or the exhibit.

Item 8.01    Other Events.

In our news release issued on May 18, 2017, we also announced that our Board of Directors declared a quarterly cash dividend of $0.05 per share on our common stock, payable on June 14, 2017 to shareholders of record at the close of business on May 30, 2017.

Item 9.01Financial Statements and Exhibits

(d)Exhibits

99 Stage Stores, Inc. news release dated May 18, 2017.

SIGNATURES

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, hereunto duly authorized.

	STAGE STORES, INC.
Date: May 23, 2017	/s/ Oded Shein
	Oded Shein
	Executive Vice President,
	Chief Financial Officer and Treasurer

EX-99

Exhibit 99

NEWS RELEASE

CONTACT:

Randi Sonenshein

Senior Vice President, Finance and Strategy

713-331-4967

(rsonenshein@stagestores.com)

Stage Stores Reports First Quarter Results and

Declares Quarterly Cash Dividend

Company Enters Off-Price Segment with Strategic Gordmans Acquisition

HOUSTON, TX, May 18, 2017 - Stage Stores, Inc. (NYSE: SSI) today reported financial results for the first quarter ended April 29, 2017. For the first quarter, the net loss was $19.0 million, or a $0.70 loss per diluted share. On an adjusted basis, first quarter net loss was $15.0 million, or $0.55 per diluted share, compared to an adjusted loss of $0.56 in the first quarter of 2016.

“We are pleased to have improved adjusted earnings to last year. Our team has worked hard to increase merchandise margins by nearly 170 basis points, control inventories which were down 6% excluding Gordmans, and grow our direct-to-consumer business in the first quarter. After a challenging February in which we saw negative double digit comps, we began to gain momentum and our business improved significantly during the combined March and April period,” said Michael Glazer, President and Chief Executive Officer. “While we expect retail headwinds to continue in the near term, we believe that our selective acquisition of prime Gordmans’ assets allows us to diversify with an off-price business model. We expect the acquisition to add scale to our business and be meaningfully accretive to our earnings in 2018.”

As part of its commitment to make strategic investments in the recently acquired Gordmans off-price business and its existing operations, the Company also announced that its Board of Directors declared a reduced quarterly cash dividend of $0.05 per share on the Company’s common stock ($0.20 annually), payable on June 14, 2017 to shareholders of record at the close of business on May 30, 2017.

Mr. Glazer continued, “We plan to make strategic investments in the Gordmans business as well as our existing Stage business to increase store productivity, enhance our merchandise assortment and marketing programs, and drive growth in the Stage omnichannel business. We believe the dividend adjustment was the appropriate action as we reallocate resources to invest in our operations, increase liquidity, and create financial flexibility to support our long-term plans.”

First Quarter Reported Results

For the first quarter, comparable sales decreased 9.6%. Total sales decreased 7.3% to $308.6 million, as compared to $332.8 million in the prior year. Net loss was $19.0 million, or $0.70 per diluted share, versus a net loss of $0.57 per diluted share for the prior year.

On an adjusted basis, net loss was $15.0 million, or $0.55 per diluted share, versus an adjusted loss of $0.56 per diluted share in the prior year. Adjusted first quarter 2017 results exclude after-tax charges primarily associated with the Gordmans acquisition of approximately $4.0 million, or $0.15 per diluted share. The prior year’s adjusted first quarter results exclude after-tax charges associated with store closures of approximately $0.4 million, or $0.01 per diluted share.

2017 Guidance

The Company expects sales, inclusive of the Gordmans business, to be in a range of $1,565 to $1,620 million, assuming comparable sales for the existing Stage business in a range of -4% to -8%. Total sales include the impact of a 53^rd week, while comparable sales reflect a 52-week period.

Adjusted loss per diluted share is expected to be between $0.95 and $1.55, inclusive of the Gordmans business. Adjusted 2017 guidance excludes after-tax charges associated with the Gordmans acquisition, store closures and other strategic initiatives totaling approximately $0.18 per diluted share. Weighted average shares for the year are expected to be approximately 27.5 million. The effective tax rate is projected to be between 32% and 35%.

Capital expenditures in 2017, net of construction allowances from landlords, are expected to be $40 million, compared to $67 million in 2016.

Conference Call / Webcast Information

The Company will hold a conference call today at 8:30 a.m. Eastern Time to discuss its results. Interested parties may participate in the Company’s conference call by dialing 844-415-6993. Alternatively, interested parties may listen to a live webcast of the conference call through the Investor Relations section of the Company’s website (corporate.stage.com) under the “Webcasts” caption. A replay of the conference call will be available online until midnight on Friday, June 2, 2017.

About Stage Stores

Stage Stores, Inc. is a leading retailer of trend-right, name-brand values for apparel, accessories, cosmetics, footwear and home goods.  The Company operates in 42 states through approximately 800 BEALLS, GOODY'S, PALAIS ROYAL, PEEBLES and STAGE specialty department stores and approximately 50 GORDMANS off-price stores, as well as an e-commerce website at www.stage.com.  For more information about Stage Stores, visit the Company’s website at corporate.stage.com.

Use of Adjusted (Non-GAAP) Financial Measures

The Company reports its financial results in accordance with generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures help to facilitate comparisons of Company operating performance across periods. This release includes non-GAAP financial measures identified as “adjusted” results. A reconciliation of all non-GAAP financial measures to the most comparable GAAP financial measures is provided in a table included with this release.

Caution Concerning Forward-Looking Statements

Certain statements in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and such statements are intended to qualify for the protection of the safe harbor provided by the Act. The words “anticipate,” “estimate,” “expect,” “objective,” “goal,” “project,” “intend,” “plan,” “believe,” “will,” “should,” “may,” “target,” “forecast,” “guidance,” “outlook” and similar expressions generally identify forward-looking statements. Similarly, descriptions of the Company’s objectives, strategies, plans, goals or targets are also forward-looking statements. Forward-looking statements relate to the expectations of management as to future occurrences and trends, including statements expressing optimism or pessimism about future operating results or events and projected sales, earnings, capital expenditures and business strategy. Forward-looking statements are based upon a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Forward-looking statements are based upon management’s then-current views and assumptions regarding future events and operating performance. Although management believes the expectations expressed in forward-looking statements are based on reasonable assumptions within the bounds of its knowledge, forward-looking statements involve risks, uncertainties and other factors which may materially affect the Company’s business, financial condition, results of operations or liquidity.

Forward-looking statements are not guarantees of future performance and actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including, but not limited to, economic conditions, cost and availability of goods, inability to successfully execute strategic initiatives, competitive pressures, economic pressures on the Company and its customers, freight costs, the risks discussed in the Risk Factors section of the Company’s most recent Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”), and other factors discussed from time to time in the Company’s other SEC filings. This release should be read in conjunction with such filings, and you should consider all of such risks, uncertainties and other factors carefully in evaluating forward-looking statements.

You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date thereof. The Company undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures the Company makes on related subjects in its public announcements and SEC filings.

(Tables to Follow)

Stage Stores, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)

	Three Months Ended
	April 29, 2017					April 30, 2016
	Amount			% to Sales (a)		Amount			% to Sales (a)
Net sales	$	308,607		100.0	%	$	332,750		100.0	%
Cost of sales and related buying, occupancy and distribution expenses	246,389			79.8	%	265,763			79.9	%
Gross profit	62,218			20.2	%	66,987			20.1	%
Selling, general and administrative expenses	88,509			28.7	%	90,144			27.1	%
Interest expense	1,586			0.5	%	1,029			0.3	%
Loss before income tax	(27,877		)	(9.0	)%	(24,186		)	(7.3	)%
Income tax benefit	(8,890		)	(2.9	)%	(8,726		)	(2.6	)%
Net loss	$	(18,987	)	(6.2	)%	$	(15,460	)	(4.6	)%
Basic loss per share data:
Basic loss per share	$	(0.70	)			$	(0.57	)
Basic weighted average shares outstanding	27,268					26,932
Diluted loss per share data:
Diluted loss per share	$	(0.70	)			$	(0.57	)
Diluted weighted average shares outstanding	27,268					26,932
(a)Percentages may not foot due to rounding.

Stage Stores, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except par value)

(Unaudited)

	April 29, 2017			January 28, 2017
ASSETS
Cash and cash equivalents	$	21,688		$	13,803
Merchandise inventories, net	477,189			409,384
Prepaid expenses and other current assets	46,054			41,574
Total current assets	544,931			464,761
Property, equipment and leasehold improvements, net	277,285			284,110
Intangible assets	15,235			15,235
Other non-current assets, net	24,164			22,883
Total assets	$	861,615		$	786,989
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	137,289		$	101,985
Accrued expenses and other current liabilities	71,897			66,685
Total current liabilities	209,186			168,670
Long-term debt obligations	219,756			163,749
Other long-term liabilities	73,610			74,410
Total liabilities	502,552			406,829
Commitments and contingencies
Common stock, par value $0.01, 100,000 shares authorized, 32,611 and 32,340 shares issued, respectively	326			323
Additional paid-in capital	412,548			410,504
Treasury stock, at cost, 5,175 shares, respectively	(43,347		)	(43,286		)
Accumulated other comprehensive loss	(5,517		)	(5,648		)
Retained (deficit) earnings	(4,947		)	18,267
Total stockholders' equity	359,063			380,160
Total liabilities and stockholders' equity	$	861,615		$	786,989

Stage Stores, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Three Months Ended
	April 29, 2017			April 30, 2016
Cash flows from operating activities:
Net loss	$	(18,987	)	$	(15,460	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization of long-lived assets	16,377			17,787
Loss (gain) on retirements of property, equipment and leasehold improvements	(452		)	53
Deferred income taxes	(1,117		)	(697		)
Tax deficiency from stock-based compensation	—			(2,793		)
Stock-based compensation expense	2,182			2,809
Amortization of debt issuance costs	72			55
Deferred compensation obligation	61			51
Amortization of employee benefit related costs	211			153
Construction allowances from landlords	998			4,341
Other changes in operating assets and liabilities:
Increase in merchandise inventories	(33,106		)	(46,267		)
Decrease (increase) in other assets	(6,086		)	4,325
Increase in accounts payable and other liabilities	39,534			43,706
Net cash provided by (used in) operating activities	(313		)	8,063
Cash flows from investing activities:
Additions to property, equipment and leasehold improvements	(7,359		)	(33,232		)
Proceeds from insurance and disposal of assets	1,223			1,053
Business acquisition	(33,843		)	—
Net cash used in investing activities	(39,979		)	(32,179		)
Cash flows from financing activities:
Proceeds from revolving credit facility borrowings	153,311			138,876
Payments of revolving credit facility borrowings	(96,559		)	(107,615		)
Proceeds from long-term debt obligation	—			5,830
Payments of long-term debt obligations	(4,083		)	(2,047		)
Payments of debt issuance costs	(8		)	—
Payments for stock related compensation	(257		)	(585		)
Cash dividends paid	(4,227		)	(4,106		)
Net cash provided by financing activities	48,177			30,353
Net increase in cash and cash equivalents	7,885			6,237
Cash and cash equivalents:
Beginning of period	13,803			16,487
End of period	$	21,688		$	22,724

Stage Stores, Inc.

Reconciliation of Non-GAAP Financial Measures

(in thousands, except earnings per share)

(Unaudited)

	Three Months Ended
	April 29, 2017			April 30, 2016
Net loss (GAAP)	$	(18,987	)	$	(15,460	)
Business acquisition costs (pretax)	6,275			—
Store closures and other strategic initiatives (pretax)	156			439
Consolidation of corporate headquarters and severance charges associated with workforce reduction (pretax)	—			110
Income tax impact	$	(2,447	)	$	(198	)
Adjusted loss (non-GAAP)	$	(15,003	)	$	(15,109	)
Diluted loss per share (GAAP)	$	(0.70	)	$	(0.57	)
Business acquisition costs (pretax)	0.23			—
Store closures and other strategic initiatives (pretax)	0.01			0.02
Consolidation of corporate headquarters and severance charges associated with workforce reduction (pretax)	—			—
Income tax impact	(0.09		)	(0.01		)
Adjusted diluted loss per share (non-GAAP)	$	(0.55	)	$	(0.56	)

	Three Months Ended
	April 29, 2017			April 30, 2016
Selling, general and administrative expenses (GAAP)	$	88,509		$	90,144
Business acquisition costs	(6,275		)	—
Store closures and other strategic initiatives	(156		)	(439		)
Consolidation of corporate headquarters and severance charges associated with workforce reduction	—			(110		)
Adjusted selling, general and administrative expenses (non-GAAP)	$	82,078		$	89,595

	2017 Guidance Range
	Low			High
Diluted loss per share (GAAP)	$	(1.73	)	$	(1.13	)
Business acquisition costs, store closures and other strategic initiatives (net of tax)	0.18			0.18
Adjusted diluted loss per share (non-GAAP)	$	(1.55	)	$	(0.95	)