Stein Mart, Inc. Reports Fourth Quarter and Fiscal 2013 Results

Stein Mart, Inc. Reports Fourth Quarter and Fiscal 2013 Results

2013 Diluted EPS is $0.57, or $0.73 as adjusted, +40% over adjusted last year

Highlights

-- Adjusted diluted earnings per share of $0.73 compared to $0.52 in 2012 (see
Note 1).

-- Comparable store sales increased 3.7 percent for the year; 3.1 percent for
the fourth quarter.

-- 2014 store plans currently include 10 new and 6 relocated stores.

JACKSONVILLE, Fla., March 13, 2014 (GLOBE NEWSWIRE) -- Stein Mart, Inc.
(Nasdaq:SMRT) today announced financial results for the fourth quarter and
fiscal year ended February 1, 2014.

Overview of Results

To provide a more meaningful measure of financial results, certain amounts in
this release have been adjusted for items which impacted the 2013 and 2012
fourth quarters and fiscal years. These items are detailed in the non-GAAP
reconciliation table in Note 1 and discussed throughout this release. The
non-GAAP financial measures are provided in addition to, and not as an
alternative to, the reported results prepared in accordance with GAAP.

Net income for the fourth quarter was $7.4 million or $0.16 per diluted share
compared to net income of $13.5 million or $0.30 per diluted share in 2012.
Fourth quarter adjusted net income was $13.1 million or $0.29 per diluted
share compared to adjusted net income of $12.3 million or $0.28 per diluted
share in 2012 (see Note 1).

For the year, net income was $25.6 million or $0.57 per diluted share compared
to $25.0 million or $0.57 per diluted share in 2012. Adjusted net income was
$32.8 million or $0.73 per diluted share compared to adjusted net income of
$22.9 million or $0.52 per diluted in 2012 (see Note 1).

Adjusted earnings before interest, income taxes, depreciation and amortization
("EBITDA") for the year increased $19.6 million to $80.3 million, compared to
adjusted EBITDA of $60.7 million in 2012 (see Note 2).

Comments on Results

"I am very pleased with our exceptional results this year. We improved our
business in 2013 through a number of key initiatives, including enhancing our
merchandise and brands, launching our online store, more effective marketing,
taking our supply chain distribution centers in-house and growing our credit
card program," said Jay Stein, Chief Executive Officer. "For 2014, we will
continue to build upon these achievements, while initiating our most
aggressive store opening plan in more than ten years with 16 new and relocated
stores, to even better serve our customers and grow returns for our
investors."

Net Sales

Comparable store sales for the 13-week fourth quarter ended February 1, 2014
increased 3.1 percent over the 13-week fourth quarter ended February 2, 2013.
Note that last year's total sales include $15.8 million for the 53^rd week.
Total sales for the 13-week fourth quarter ended February 1, 2014 were $360.8
million compared to total sales for the 14-week fourth quarter ended February
2, 2013 of $368.6 million.

Comparable store sales for the 52-week year ended February 1, 2014 increased
3.7 percent over the 52-week year ended February 2, 2013. Total sales for the
52-week year ended February 1, 2014 were $1.26 billion compared to $1.23
billion for the 53-week year ended February 2, 2013.

Gross Profit

Gross profit for the fourth quarter was $111.3 million or 30.9 percent of
sales. Excluding the $10.0 million impact of the accounting estimate change
(see below), gross profit for the fourth quarter was $101.3 million or 28.1
percent of sales. This compares to $106.3 million or 28.8 percent of sales in
2012. The decrease in the adjusted gross profit rate was primarily the result
of higher markdowns offset by higher markup. Markdown levels were slightly
higher this year compared to last year when fourth quarter sales exceeded
plan. Other items that lowered the fourth quarter gross profit rate this year
were the positive impact of last year's 53^rd week on 2012 results and this
year's greater home division sales which have slightly lower margins.


Gross profit for the year was $367.4 million or 29.1 percent of
sales.Excluding the $10.0 million accounting estimate change (see below),
gross profit for the year was $357.4 million or 28.3 percent of sales compared
to $342.6 million or 27.8 percent of sales in 2012.The year's higher gross
profit rate was primarily the result of higher markup.

Selling, general and administrative expenses


Selling, general and administrative ("SG&A") expenses for the fourth quarter
were $100.6 million.Excluding the $15.0 million impact of the accounting
estimate change (see below), SG&A expenses for the fourth quarter were $85.6
million or 23.7 percent of sales compared to $89.1 million or 24.2 percent of
sales in 2012.

SG&A expenses for the year were $326.5 million.Excluding the $15.0 million
accounting estimate change (see below), SG&A expenses were $311.5 million or
24.7 percent of sales compared to $306.4 million or 24.9 percent of sales in
2012.The $5.1 million increase in 2013 SG&A expenses from 2012 is the result
of items presented in the non-GAAP reconciliation table (see Note 1), higher
compensation costs and higher depreciation expense, somewhat offset by lower
healthcare costs due to favorable claims experience.

Accounting Estimate Change

During the fourth quarter of 2013, we refined our estimation of the buying and
distribution costs allocated to inventories. This change lowered the
percentage of expenses allocated to inventory purchases.The decrease in
inventories resulted in a $5.0 million pretax non-cash charge ($3.1 million
after-tax or $0.07 per diluted share), comprised of a $15.0 million increase
in SG&A expenses and a $10.0 million increase in gross profit.

For 2014 and future periods, the lower cost allocation percentage will
similarly impact both the beginning and ending inventory amounts.The lower
allocation of expenses from SG&A will be offset by higher gross profit. The
only expected meaningful impact to earnings will result from changes in
inventory levels, as it has in the past.

Income Tax Provision

The effective tax rate for fiscal year 2013 was 37.0 percent compared to 30.5
percent for 2012.The lower 2012 tax rate was the result of a $2.5 million tax
benefit recorded in the fourth quarter resulting from the tax impact of the
deductibility in 2012 of previously non-deductible financial statement
accruals relating to the elimination of post-retirement life insurance
benefits ($0.05 per diluted share).

Balance Sheet Highlights

Cash at year end 2013 was $66.9 million compared to $67.2 million at the end
of 2012.The 2013 balance reflects the payment of three quarterly dividends
($0.05 per share) totaling $6.7 million during 2013 and capital expenditures
of $37.5 million.Capital expenditures in 2013 compare to $45.4 million in
2012, which included a greater investment in information systems, including a
new merchandise information system.

Inventories of $261.5 million at the end of 2013 were 7.5 percent higher than
the $243.3 million at the end of last year. Giving impact to the $5.0 million
decrease from our accounting estimate change (see Note 1) inventories
increased 9.5 percent.The increase in inventories is due to higher Home
amounts to support our new programs and higher sales, higher in-transit
amounts for early February receipts, inventories related to our new online
store and an additional brick-and-mortar store this year end.

Store Network

The Company ended the year with 264 stores, compared to 263 at the end of
2012.Four new stores were opened, three were closed and four were relocated
in 2013.

2014 Plans

For 2014, we expect sales increases to leverage against our efficient expense
structure to continue driving earnings, particularly as we add stores.

We expect the following factors to influence our business in 2014:

-- Current 2014 plans are to open 10 stores, relocate six stores to better
locations in their respective markets and close two stores.

  *Three stores will open this spring – one in March and two in May.
  *Seven stores will open this fall – six in October and one in November.
  *The two closings were completed in February.

-- The gross profit rate is expected to be slightly less than the reported
2013 rate of 29.1 percent.

-- SG&A expenses are expected to increase approximately $10 million from the
$326.5 million reported in 2013 and include the following items:

  *SG&A is expected to be approximately $5 million higher as a result of new
    and relocated stores, including higher pre-opening costs.
  *Depreciation will increase by approximately $2 million.
  *Ecommerce is expected to incur a loss of approximately $2 million in 2014.

--The effective tax rate for the year is estimated to be approximately 39.0
percent.

-- Capital expenditures for 2014 are expected to be approximately $38 million,
including $13 million for information systems, $13 million for existing stores
and $12 million for new and relocated stores.

Filing of Form 10-K

Reported results are preliminary and not final until the filing of our Form
10-K for the fiscal year ended February 1, 2014 with the Securities and
Exchange Commission ("SEC"), and therefore remain subject to adjustment.

Conference Call

A conference call for investment analysts to discuss the Company's fourth
quarter and fiscal year 2013 results will be held at 10 a.m. EDT on March 13,
2014.The call may be heard on the investor relations portion of the Company's
website at http://ir.steinmart.com.A replay of the conference call will be
available on the website through March 31, 2014.

Investor Presentation

Stein Mart's fiscal 2013 investor presentation has been posted to the investor
relations portion of the Company's website at http://ir.steinmart.com.

About Stein Mart

Stein Mart stores offer the fashion merchandise, service and presentation of a
better department or specialty store, at prices competitive with off-price
retail chains.Currently with locations from California to Massachusetts,
Stein Mart's focused assortment of merchandise features current season,
moderate to better fashion apparel for women and men, as well as accessories,
shoes and home fashions.

Cautionary Statement Regarding Forward-Looking Statements

Except for historical information contained herein, the statements in this
release may be forward-looking, and are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. The
Company does not assume any obligation to update or revise any forward-looking
statements even if experience or future changes make it clear that projected
results expressed or implied will not be realized.Forward-looking statements
involve known and unknown risks and uncertainties that may cause Stein Mart's
actual results in future periods to differ materially from forecasted or
expected results.Those risks include, without limitation:

-- consumer sensitivity to economic conditions

-- competition in the retail industry

-- changes in consumer preferences and fashion trends

-- ability to negotiate acceptable lease terms with current and potential
landlords

-- ability to successfully implement strategies to exit under-performing
stores

-- extreme and/or unseasonable weather conditions

-- adequate sources of merchandise at acceptable prices

-- dependence on certain key personnel and ability to attract and retain
qualified employees

-- increases in the cost of employee benefits

-- disruption of the Company's distribution process

-- information technology failures

-- data security breaches

-- acts of terrorism

-- material weaknesses in internal control over financial reporting

-- ability to adapt to new regulatory compliance and disclosure obligations

-- other risks and uncertainties described in the Company's filings with the
Securities and Exchange Commission.

SMRT-F

        Additional information about Stein Mart, Inc. can be found at
                              www.steinmart.com.

Stein Mart, Inc.
Consolidated Balance Sheets
(In thousands, except for share and per share data)
                                                            
                                            February 1, 2014 February 2, 2013
ASSETS                                                       
Current assets:                                              
Cash and cash equivalents                    $66,854        $67,233
Inventories                                  261,517         243,345
Prepaid expenses and other current assets    28,800          22,855
Total current assets                         357,171         333,433
Property and equipment, net                  139,673         131,570
Other assets                                 27,414          26,706
Total assets                                 $524,258       $491,709
LIABILITIES AND SHAREHOLDERS' EQUITY                         
Current liabilities:                                         
Accounts payable                             $131,338       $130,972
Accrued expenses and other current           64,875          66,109
liabilities
Total current liabilities                    196,213         197,081
Other liabilities                            63,644          60,594
Total liabilities                            259,857         257,675
COMMITMENTS AND CONTINGENCIES                                
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; 44,551,676 and 43,808,485 446             438
shares issued and outstanding, respectively
Additional paid-in capital                   28,745          17,491
Retained earnings                            235,471         216,574
Accumulated other comprehensive loss         (261)           (469)
Total shareholders' equity                   264,401         234,034
Total liabilities and shareholders' equity   $524,258       $491,709


Stein Mart, Inc.
Consolidated Statements of Income
(In thousands, except for per share amounts)
                                                              
                            13 Weeks    14 Weeks    Year Ended   Year Ended
                             Ended       Ended
                            February 1, February 2, February 1,  February 2,
                             2014        2013        2014         2013
Net sales                    $360,785  $368,557  $1,263,571 $1,232,366
Cost of merchandise sold     249,458    262,300    896,218     889,736
Gross profit                 111,327    106,257    367,353     342,630
Selling, general and         100,611    89,101     326,520     306,407
administrative expenses
Operating income             10,716     17,156     40,833      36,223
Interest expense, net        68         55         265         225
Income before income taxes   10,648     17,101     40,568      35,998
Income tax provision         3,227      3,554      15,013      10,971
Net income                   $7,421    $13,547   $25,555    $25,027
                                                              
Net income per share:                                          
Basic                        $0.17     $0.31     $0.58      $0.57
Diluted                      $0.16     $0.30     $0.57      $0.57
                                                              
Weighted-average shares                                        
outstanding:
Basic                        43,367     42,688     43,053      42,639
Diluted                      44,220     43,004     43,778      42,828


Stein Mart, Inc.
Consolidated Statements of Comprehensive Income
(In thousands)
                                                               
                              13 Weeks    14 Weeks    Year Ended  Year Ended
                               Ended       Ended
                              February 1, February 2, February 1, February 2,
                               2014        2013        2014        2013
                                                               
                                                               
Net income                     $7,421    $13,547   $25,555   $25,027
Other comprehensive income,                                     
net of tax:
Change in post-retirement      201        873        208        950
benefit obligations
Comprehensive income           $7,622    $14,420   $25,763   $25,977


Stein Mart, Inc.
Consolidated Statements of Cash Flows
(In thousands)
                                                            
                                            Year Ended       Year Ended
                                            February 1, 2014 February 2, 2013
                                                            
Cash flows from operating activities:                        
Net income                                   $25,555        $25,027
Adjustments to reconcile net income to net                   
cash provided by operating activities:
Depreciation and amortization                27,752          23,911
Share-based compensation                     7,291           6,203
Store closing (benefit) charges              (50)            996
Impairment of property and other assets      2,210           523
Loss on disposal of property and equipment   701             1,324
Deferred income taxes                        (666)           2,916
Tax benefit (deficiency) from equity         429             (510)
issuances
Excess tax benefits from share-based         (1,134)         (640)
compensation
Changes in assets and liabilities:                           
Inventories                                  (18,172)        (24,513)
Prepaid expenses and other current assets    (4,182)         11,836
Other assets                                 (708)           (4,137)
Accounts payable                             210             24,909
Accrued expenses and other current           (246)           450
liabilities
Other liabilities                            2,316           3,044
Net cash provided by operating activities    41,306          71,339
Cash flows from investing activities:                        
Capital expenditures                         (37,506)        (45,426)
Cash used in investing activities            (37,506)        (45,426)
Cash flows from financing activities:                        
Cash dividends paid                          (6,658)         (43,839)
Capital lease payments                       (2,197)         (6,066)
Excess tax benefits from share-based         1,134           640
compensation
Proceeds from exercise of stock options and  4,633           471
other
Repurchase of common stock                   (1,091)         (3,939)
Net cash used in financing activities        (4,179)         (52,733)
Net decrease in cash and cash equivalents    (379)           (26,820)
Cash and cash equivalents at beginning of    67,233          94,053
year
Cash and cash equivalents at end of year     $66,854        $67,233

NOTES TO PRESS RELEASE

Note 1 - Adjusted Results

We report our consolidated financial results in accordance with generally
accepted accounting principles ("GAAP").However, to supplement these
consolidated financial results, management believes that certain non-GAAP
operating results, which exclude those items detailed below, may provide a
more meaningful measure on which to compare our results of operations between
periods.We believe these non-GAAP results provide useful information to both
management and investors by excluding certain items that impact comparability
of the results.See reconciliation below.

Stein Mart, Inc.
Reconciliation of Operating and Net Income and Diluted EPS (GAAP Basis) to
Adjusted Operating and Net Income and Diluted EPS (Non-GAAP Basis)
Unaudited
(in thousands, except for share data)
                                                                 
                   13 Weeks Ended February 1,    14 Weeks Ended February 2,
                    2014                          2013
                   Operating  NetIncome Diluted Operating NetIncome Diluted
                    Income                EPS     Income               EPS
GAAP Basis          $10,716  $7,421   $0.16 $17,156 $13,547  $0.30
Adjustments:                                                      
Change in estimate
for allocated       5,000      3,100      0.07    --      --       --
merchandise buying
costs (1)
Store closing and
asset impairment    2,282      1,415      0.03    885       544        0.01
charges (2)
Investigation and   765        474        0.01    4,038     2,483      0.06
related fees (3)
Supply chain and
ecommerce start-up  1,142      708        0.02    --      --       --
costs (4)
53rd week impact    --       --       --    (2,890)   (1,777)    (0.04)
(6)
Tax benefit from
elimination of      --       --       --    --      (2,461)    (0.05)
post-retirement
benefit (7)
Total adjustments   9,189      5,697      0.13    2,033     (1,211)    (0.02)
Adjusted/Non-GAAP   $19,905  $13,118  $0.29 $19,189 $12,336  $0.28
Basis
                                                                 
                   52 Weeks Ended February 1,    53 Weeks Ended February 2,
                    2014                          2013
                   Operating  NetIncome Diluted Operating NetIncome Diluted
                    Income                EPS     Income               EPS
GAAP Basis          $40,833  $25,555  $0.57 $36,223 $25,027  $0.57
Adjustments:                                                      
Change in estimate
for allocated       5,000      3,100      0.07    --      --       --
merchandise buying
costs (1)
Store closing and
asset impairment    2,352      1,458      0.03    1,563     961        0.02
charges (2)
Investigation and   1,921      1,191      0.03    4,038     2,484      0.05
related fees (3)
Supply chain and
ecommerce start-up  2,472      1,533      0.03    --      --       --
costs (4)
Gift card breakage  --       --       --    (2,100)   (1,292)    (0.03)
income (5)
53rd week impact    --       --       --    (2,890)   (1,777)    (0.04)
(6)
Tax benefit from
elimination of      --       --       --    --      (2,461)    (0.05)
post-retirement
benefit (7)
Total adjustments   11,745     7,282      0.16    611       (2,085)    (0.05)
Adjusted/Non-GAAP   $52,578  $32,837  $0.73 $36,834 $22,942  $0.52
Basis
                                                                 
(1) Change in estimation of buying and distribution costs allocated to
inventories lowered the percentage of expenses allocated to inventories.The
decrease in inventories resulted in a $5.0 million pretax non-cash charge,
comprised of a $15.0 million increase in SG&A expenses and a $10.0 million
increase in gross profit.
                                                                 
(2) Includes accrued future lease payments to be incurred after store
closings, write-off of assets in closing stores and write-off of certain
information technology assets that were replaced.
                                                                 
(3) Professional fees related to our financial restatement and related SEC
investigation.
                                                                 
(4) Start-up costs for the transition of our Supply Chain operations from
third-party operated to Company-operated and the net loss from start-up of our
ecommerce business launched in September 2013.
                                                                 
(5) Breakage income on unused gift and merchandise return cards as a result of
changes in breakage assumptions during the second quarter of 2012.
                                                                 
(6) The results of the 53rd week in fiscal 2012 for which sales were $15.8
million.
                                                                 
(7) Tax benefit resulting from the tax impact of the deductibility of
previously non-deductible financial statement accruals related to the
elimination of post-retirement life insurance benefits.

Note 2 - EBITDA

As used in this release, EBITDA is defined as earnings before interest, income
taxes, depreciation and amortization.EBITDA is not a measure of financial
performance under generally accepted accounting principles ("GAAP").However,
we present EBITDA in this release because we consider it to be an important
supplemental measure of our performance and because it is frequently used by
analysts, investors and others to evaluate the performance of
companies.EBITDA is not calculated in the same manner by all
companies.EBITDA should be used as a supplement to results of operations and
cash flows as reported under GAAP and should not be considered to be a more
meaningful measure than, or an alternative to, measures of operating
performance as determined in accordance with GAAP. Below is a reconciliation
of Net income to EBITDA and Adjusted EBITDA for the years ended February 1,
2014 and February 2, 2013.

                                                    52 Weeks     53 Weeks
                                                    Ended        Ended
                                                    Feb. 1, 2014 Feb. 2, 2013
Net income                                           $25,555      $25,027
Add back amounts for computation of EBITDA:                      
Interest expense, net                                265          225
Income tax expense                                   15,013       10,971
Depreciation and amortization                        27,752       23,911
EBITDA                                               68,585       60,134
Adjustments (see Note 1):                                        
Change in estimate for allocated merchandise buying  5,000        --
costs
Store closing and asset impairment charges           2,352        1,563
Investigation and related fees                       1,921        4,038
Supply chain and ecommerce start-up costs            2,472        --
Gift card breakage income                            --           (2,100)
53rd week impact                                     --           (2,890)
Total adjustments                                    11,745       611
Adjusted EBITDA                                      $80,330      $60,745

CONTACT: For more information:
         Linda L. Tasseff
         Director, Investor Relations
         (904) 858-2639
         ltasseff@steinmart.com

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