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Stein Mart, Inc. Reports 2012 Results, Completion Of Restatement And Plans For 2013

The net effect of the adjustments on the Consolidated Statement of Income was to increase Net income by $0.1 million for the year ended January 28, 2012 as follows:

Increase (decrease) in Net Income 2011
Inventory markdowns  $ 655
Leasehold improvement costs  1,937
Compensated absences  (134)
Other  (2,283)
Total adjustments before tax  175
Income tax expense from adjustments  72
Increase in Net income  $ 103

The adjustments in "Other" in 2011 relate primarily to the correction of a previously recorded out of period adjustment related to credit card reward income breakage of $2.0 million.

The following tables present the effect of the aforementioned reclassifications and adjustments on our Consolidated Balance Sheet as of January 28, 2012 and our Statements of Income and Cash Flows for the fiscal year ended January 28, 2012 on GAAP basis and indicate the category of the adjustments by reference to the above descriptions of the errors for which we made corrections. 

Consolidated Balance Sheet

  As of January 28, 2012
  As Previously   Description of  
  Reported Adjustments Adjustments As Restated
ASSETS        
Current assets:        
Cash and cash equivalents  $ 94,053  $ --    $ 94,053
Inventories  220,775  (1,943) (1) 218,832
Prepaid expenses and other current assets  36,838  (2,699) (2)(6)(7) 34,139
Total current assets  351,666  (4,642)   347,024
Property and equipment, net  104,141  5,849 (2)(7) 109,990
Other assets  17,409  5,160 (2)(6) 22,569
Total assets  $ 473,216  $ 6,367    $ 479,583
LIABILITIES AND SHAREHOLDERS' EQUITY        
Current liabilities:        
Accounts payable  $ 106,063  $ --    $ 106,063
Accrued expenses and other current liabilities  72,731  (4,668) (3)(6)  68,063
Total current liabilities  178,794  (4,668)    174,126
Other liabilities  35,084  20,702 (2)(6)  55,786
Total liabilities  213,878  16,034    229,912
Shareholders' equity:        
Preferred stock -- $.01 par value; 1,000,000 shares authorized; no shares issued or outstanding        
Common stock -- $.01 par value; 100,000,000 shares authorized; 43,588,821 shares issued and outstanding  436  --    436
Additional paid-in capital  15,268  --    15,268
Retained earnings  245,053  (9,667) (1)(2)(3)(7)  235,386
Accumulated other comprehensive loss  (1,419)  --    (1,419)
Total shareholders' equity  259,338  (9,667)    249,671
Total liabilities and shareholders' equity  $ 473,216  $ 6,367    $ 479,583

Consolidated Statement of Income

  Year Ended January 28, 2012
  As Previously     Description of  
  Reported Reclassifications Adjustments Adjustments As Restated
Net sales  $ 1,160,367  $ --  $ 17,584 (4)(5)  $ 1,177,951
Cost of merchandise sold  863,003  --  (4,668) (1)(2)(5)  858,335
Gross profit  297,364  --  22,252    319,616
Selling, general and administrative expenses  289,114  (11,273)  9,343 (2)(3)(4)(7)  287,184
Other income, net  24,007  (11,273)  (12,734) (4)  --
Operating income  32,257  --  175    32,432
Interest expense, net  286  --  --    286
Income before income taxes  31,971  --  175    32,146
Income tax expense  12,143  --  72 (1)(2)(3)(7)  12,215
Net income  $ 19,828  $ --  $ 103    $ 19,931
           
Net income per share:          
Basic  $ 0.44  $ --   $ 0.01    $ 0.45
Diluted  $ 0.44  $ --   $ --     $ 0.44

Consolidated Statement of Cash Flows

  Year Ended January 28, 2012
  As Previously   Description of  
  Reported Adjustments Adjustments As Restated
Cash flows from operating activities:        
Net income  $ 19,828  $ 103 (1)(2)(3)(7)  $ 19,931
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization  18,937  (323) (2)(7)  18,614
Share-based compensation  3,821  --    3,821
Store closing charges  793  --    793
Impairment of property and other assets  1,166  --    1,166
Loss on disposal of property and equipment -- 77 (7)  77
Deferred income taxes 12,766 (519) (1)(2)(3)(7)  12,247
Tax deficiency from equity issuances (437) --    (437)
Excess tax benefits from share-based compensation (375) --    (375)
Changes in assets and liabilities:        
Inventories 11,520 (656) (1)  10,864
Prepaid expenses and other current assets (12,173) (813) (2)(6)(7)  (12,986)
Other assets (3,796) 281 (2)(7)  (3,515)
Accounts payable 10,518 --    10,518
Accrued expenses and other current liabilities (4,857) 1,339 (3)(6)  (3,518)
Other liabilities 1,857 5,527 (2)(6)  7,384
Net cash provided by operating activities 59,568 5,016    64,584
Cash flows from investing activities:        
Acquisition of property and equipment (33,449) (4,563) (2)(7)  (38,012)
Net cash used in investing activities (33,449) (4,563)    (38,012)
Cash flows from financing activities:        
Capital lease payments (3,362) --   (3,362)
Excess tax benefits from share-based compensation  375  --    375
Proceeds from exercise of stock options and other  2,891  --    2,891
Repurchase of common stock  (12,141)  --    (12,141)
Net cash used in financing activities  (12,237)  --    (12,237)
Net increase in cash and cash equivalents  13,882  453 (7)  14,335
Cash and cash equivalents at beginning of year  80,171  (453) (7)  79,718
Cash and cash equivalents at end of year  $ 94,053  $ --    $ 94,053

Consolidated Statement of Income (Non-GAAP)

The table below shows the impact of the restatement on the Statement of Income on a Non-GAAP basis.  This table differs from the preceding GAAP table as it moves adjustments that did not impact net income out of the "Adjustments" column. Management believes that this presentation is important to investors to highlight those adjustments which do not impact income.

  Year Ended January 28, 2012
    Adjustments    
  As Previously Not Impacting    
  Reported Net Income Adjustments As Restated
Net sales  $ 1,160,367  $ 17,584  $ --  $ 1,177,951
         
Cost of merchandise sold  863,003  (1,516)  (3,152)  858,335
Gross profit  297,364  19,100  3,152  319,616
Selling, general and administrative expenses  289,114  (4,907)  2,977  287,184
Other income, net  24,007  (24,007)  --  --
Operating income  32,257  --  175 32,432
Interest expense, net  286  --  --  286
Income before income taxes  31,971  --  175  32,146
Income tax expense  12,143  --  72  12,215
Net income  $ 19,828  $ --  $ 103  $ 19,931
Net income per share:        
Basic $ 0.44  $ --  $ 0.01  $ 0.45
Diluted $ 0.44  $ --  $ -- $ 0.44

Note 3 - SELECTED UNAUDITED QUARTERLY FINANCIAL DATA:

In addition to the restatement of the fiscal 2011 annual period presented above, we also restated our interim financial data for all quarterly periods in fiscal 2011 and the first quarterly period of fiscal 2012.  The following tables present the effect of the corrections on each Unaudited Quarterly Consolidated Statement of Income for the fiscal year ended January 28, 2012 and the quarterly period ended April 28, 2012.  Additional commentary on the results of these restated quarterly periods will be available in the Company's following SEC filings:

  • Form 10-Q/A for the fiscal quarter ended April 28, 2012
  • Form 10-Q for the fiscal quarter ended July 28, 2012
  • Form 10-Q for the fiscal quarter ended October 27, 2012

Quarterly Period Ended April 30, 2011

  13 Weeks Ended April 30, 2011
  As Previously      
  Reported Reclassification Adjustments As Restated
Net sales  $ 303,546  $ --  $ 5,672  $ 309,218
Cost of merchandise sold  213,626  --  1,038  214,664
Gross profit  89,920  --  4,634  94,554
Selling, general and administrative expenses  71,936  (4,534)  4,105  71,507
Other income, net  8,316  (4,534)  (3,782)  --
Operating income  26,300  --  (3,253)  23,047
Interest expense, net  85  --  --  85
Income before income taxes  26,215  --  (3,253)  22,962
Income tax expense  10,315  --  (1,253)  9,062
Net income  $ 15,900  $ --  $ (2,000)  $ 13,900
         
Net income per share:        
Basic  $ 0.35  $ --   $ (0.04)  $ 0.31
Diluted  $ 0.35  $ --   $ (0.04)  $ 0.31

Quarterly Period Ended July 30, 2011

  13 Weeks Ended July 30, 2011
  As Previously      
  Reported Reclassification Adjustments As Restated
Net sales  $ 270,167  $ --  $ 4,382  $ 274,549
Cost of merchandise sold  204,796  --  (1,164)  203,632
Gross profit  65,371  --  5,546  70,917
Selling, general and administrative expenses  68,265  (2,304)  1,783  67,744
Other income, net  5,141  (2,220)  (2,921)  --
Operating income  2,247  84  842  3,173
Interest (income) expense, net  (3)  84  1  82
Income before income taxes  2,250  --  841  3,091
Income tax expense  934  --  323  1,257
Net income  $ 1,316  $ --  $ 518  $ 1,834
         
Net income per share:        
Basic  $ 0.03  $ --   $ 0.01  $ 0.04
Diluted  $ 0.03  $ --   $ 0.01  $ 0.04

Quarterly Period Ended October 29, 2011

  13 Weeks Ended October 29, 2011
  As Previously      
  Reported Reclassification Adjustments As Restated
Net sales  $ 258,520  $ --  $ 4,712  $ 263,232
Cost of merchandise sold  199,264  --  (2,685)  196,579
Gross profit  59,256  --  7,397  66,653
Selling, general and administrative expenses  71,291  (3,560)  1,959  69,690
Other income, net  6,602  (3,460)  (3,142)  --
Operating loss  (5,433)  100  2,296  (3,037)
Interest (income) expense, net  (16)  100  --  84
Loss before income taxes  (5,417)  --  2,296  (3,121)
Income tax benefit  (2,311)  --  886  (1,425)
Net loss  $ (3,106)  $ --  $ 1,410  $ (1,696)
         
Net income per share:        
Basic  $ (0.07)  $ --   $ 0.03  $ (0.04)
Diluted  $ (0.07)  $ --   $ 0.03  $ (0.04)

Quarterly Period Ended January 28, 2012

  13 Weeks Ended January 28, 2012
  As Previously      
  Reported Reclassification Adjustments As Restated
Net sales  $ 328,134  $ --  $ 2,818  $ 330,952
Cost of merchandise sold  245,317  --  (1,857)  243,460
Gross profit  82,817  --  4,675  87,492
Selling, general and administrative expenses  77,807  (1,059)  1,495  78,243
Other income, net  3,948  (1,059)  (2,889)  --
Operating loss  8,958  --  291  9,249
Interest expense, net  35  --  --  35
Loss before income taxes  8,923  --  291  9,214
Income tax expense  3,205  --  116  3,321
Net loss  $ 5,718  $ --  $ 175  $ 5,893
         
Net income per share:        
Basic  $ 0.13  $ --   $ --   $ 0.13
Diluted  $ 0.13  $ --   $ --   $ 0.13

Quarterly Period Ended April 28, 2012

  13 Weeks Ended April 28, 2012
  As Previously      
  Reported Reclassification Adjustments As Restated
Net sales  $ 303,392  $ --  $ 6,316  $ 309,708
Cost of merchandise sold  216,163  --  1,681  217,844
Gross profit  87,229  --  4,635  91,864
Selling, general and administrative expenses  71,349  (718)  2,276  72,907
Other income, net  4,538  (718)  (3,820)  --
Operating income  20,418  --  (1,461)  18,957
Interest expense, net  46  --  --  46
Income before income taxes  20,372  --  (1,461)  18,911
Income tax expense  8,540  --  (462)  8,078
Net income  $ 11,832  $ --  $ (999)  $ 10,833
         
Net income per share:        
Basic  $ 0.27  $ --   $ (0.02)  $ 0.25
Diluted  $ 0.27  $ --   $ (0.02)  $ 0.25

The following tables present the Unaudited Quarterly Consolidated Statements of Income for the second and third quarters of 2012 including restated unaudited interim financial statements for comparative fiscal 2011 periods.  Additional commentary on the results of these quarterly periods will be available in the Company's Form 10-Qs for the fiscal quarters ended July 28, 2012 and October 27, 2012.

Stock quotes in this article: SMRT 

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