Stein Mart 2014 Annual Report Download
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Annual Report 2014
OUR ROOTS ARE IMPORTANT
In 1905, a young Russian immigrant arrived in Greenville, Mississippi.
To support himself, he carried a heavy pack of household goods to rural homes throughout the Delta.
;^VNLULYH[PVUZHUKZ[VYLZSH[LY:[LPU4HY[PZZ[PSSVɈLYPUN(TLYPJHUMHTPSPLZ\UWHYHSSLSLKMHZOPVUHUK]HS\L
2015 USA TODAY 10Best Readers’ Choice
WE NEVER FORGET...
TWO GENERATIONS AGO,
THIS COMPANY WAS A PACK
ON SOMEONE’S BACK
Courtesy of the Mississippi
+LWHY[TLU[VM(YJOP]LZ/PZ[VY`
Voted America’s Best Department Store
Table of contents
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Page 1
...arrived in Greenville, Mississippi. To support himself, he carried a heavy pack of household goods to rural homes throughout the Delta. ;^VNLULYH[PVUZHUK Z[VYLZSH[LY:[LPU4HY[PZZ[PSSVɈLYPUN(TLYPJHUMHTPSPLZ\UWHYHSSLSLKMHZOPVUHUK]HS\L Voted America's Best Department Store 2015 USA... -
Page 2
... focused on growing our sales to leverage operating expenses and increase earnings. We are determined to improve every year and are very JVUÄKLU[PUV\YHIPSP[`[VTHRL[OPZOHWWLU6\YWYVK\J[P]P[`JHUHUK^PSSPTWYV]L Stein Mart: The Best Department Store In closing, the year was capped off by... -
Page 3
...Commission file number 0-20052 [ ] STEIN MART, INC. (Exact name of registrant as specified in its charter) Florida (State or other jurisdiction of incorporation or organization) 64-0466198 (I.R.S. Employer Identification Number) 1200 Riverplace Blvd., Jacksonville, Florida (Address of principal... -
Page 4
... the CompanyÂ's management and on information currently available to such management. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to publicly update or revise its forward-looking statements in light of new information or future events... -
Page 5
... women and men, as well as accessories, shoes and home fashions, all offered at prices competitive with off-price retail chains. Begun in the early 1900Â's as a single store in Greenville, Mississippi, we operated 270 stores in 30 states and an Internet store as of January 31, 2015. Stein Mart, Inc... -
Page 6
... information for customers regarding store locations, brands, products and selected sales promotion activity. Visitors to our website may apply for our credit card, sign up to be Preferred Customers, sign up for email notifications, and purchase gift cards. Internet sales in 2014, 2013 and 2012... -
Page 7
... customer service more comparable to upscale retailers and (iv) competitive price levels. DISTRIBUTION Our logistics network (Â"supply chainÂ") consists of consolidation centers (Â"CCÂ'sÂ") located in the Atlanta, Los Angeles and New Jersey areas, and store distribution centers (Â"SDCÂ'sÂ") located... -
Page 8
... their price points. Certain department stores and certain of our vendors have opened outlet stores which offer merchandise at prices that are competitive with ours. Many of our competitors have significant Internet sales. While we maintain an Internet site, our Internet sales currently comprise... -
Page 9
...course of business, we collect, process and retain sensitive and confidential customer and employee information and we process customer credit card and check information. In addition, we accept and transmit credit card applications through our retail locations. We also rely on commercially available... -
Page 10
...the technology utilized in such transactions, are determined and controlled by the credit card industry. Recent breaches of security measures at major retailers have resulted in the theft and dissemination of the confidential information of millions of customers throughout the United States. Despite... -
Page 11
...Stores State Number of Stores Alabama Arizona Arkansas California Colorado Florida Georgia Illinois Indiana Kansas Kentucky Louisiana Massachusetts Michigan Mississippi 8 10 2 23 3 43 13 4 7 2 2 8 1 1 6 Missouri Nevada New Jersey New Mexico New York North Carolina Ohio Oklahoma Pennsylvania South... -
Page 12
... and information. The request is focused on our restatement of 2012 and prior financial statements and our 2013 change in auditors. We are cooperating fully with the SEC in this matter. We have recognized $4.1 million and $1.9 million of expenses related to the SEC investigation during 2014 and 2013... -
Page 13
...was invested at the beginning of the five year period in Stein Mart, Inc. stock and in each of the indices shown and assumes reinvestment of any dividends. 1/30/2010 1/29/2011 1/28/2012 2/2/2013 2/1/2014 1/31/2015 Stein Mart, Inc. NASDAQ Composite S&P 500 Apparel Retail $100.00 100.00 100.00... -
Page 14
...a better department or specialty store at prices comparable to off-price retail chains. Our focused assortment of merchandise features current season moderate to better fashion apparel for women and men, as well as accessories, shoes and home fashions. 2014 Highlights Comparable store sales for 2014... -
Page 15
... table sets forth each line item of the Consolidated Statements of Income expressed as a percentage of net sales: 2014 2013 2012 Net sales Cost of merchandise sold Gross profit Selling, general and administrative expenses Operating income Interest expense, net Income before income taxes Income... -
Page 16
... for 2014 was negatively impacted by permanent differences which relate primarily to non-recurring non-deductible expenses. The effective tax rate for 2013 reflects a benefit for a change in our state tax effective rate. 2013 Compared to 2012 Net Sales. The following table provides net sales for... -
Page 17
..., new store openings and to maintain existing stores. Historically, our working capital needs are lowest after our heavy spring selling in March and April and holiday selling in late December and early January. They are highest as we begin paying for our heavy spring, fall, and holiday receipts... -
Page 18
... 2013 and 2014. Cash provided by operating activities for fiscal 2012 includes a positive working capital impact from lengthening vendor payment terms implemented in 2011. Cash used in investing activities Net cash used in investing activities included $40.2 million for capital expenditures. Capital... -
Page 19
... 2014, 2013 and 2012, we recorded $1.0 million, $0.1 million and $1.0 million, respectively, in store closing charges. Insurance Reserves. We use a combination of insurance and self-insurance for various risks including workersÂ' compensation, general liability and associate-related health care... -
Page 20
... DISCLOSURE As disclosed in the CompanyÂ's current report on Form 8-K filed with the SEC on July 10, 2013, the Company changed its independent registered public accountants effective July 10, 2013. ITEM 9A. Controls and Procedures (a) Evaluation of Disclosure Controls and Procedures Under the... -
Page 21
... access and more timely communication of employee changes. The improved policies and procedures provide reasonable assurance to management that access to sensitive inventory data is restricted to appropriate personnel. The design and operating effectiveness of the new controls was tested during 2014... -
Page 22
... AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this item is incorporated herein by reference to the disclosure found in the Proxy Statement for our June 23, 2015 Annual Meeting of Shareholders. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required... -
Page 23
... are required to make the statements in this report not misleading. Additional information about the Company may be found elsewhere in this report and the CompanyÂ's other public files, which are available without charge through the SECÂ's website at http://www.sec.gov. Unless otherwise indicated... -
Page 24
... of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. STEIN MART, INC. Date: April 2, 2015 By: /s/ Jay Stein Jay Stein Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Exchange... -
Page 25
... balance sheets of Stein Mart, Inc. and subsidiaries as of January 31, 2015 and February 1, 2014, and the related consolidated statements of operations, comprehensive income, shareholdersÂ' equity, and cash flows for each of the years in the two-year period ended January 31, 2015, and our report... -
Page 26
Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders Stein Mart, Inc.: We have audited the accompanying consolidated balance sheets of Stein Mart, Inc. and subsidiaries as of January 31, 2015 and February 1, 2014, and the related consolidated statements of... -
Page 27
... flows of Stein Mart, Inc. and its subsidiaries for the year ended February 2, 2013, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion... -
Page 28
Stein Mart, Inc. Consolidated Balance Sheets (In thousands, except for share and per share data) January 31, 2015 February 1, 2014 ASSETS Current assets: Cash and cash equivalents Inventories Prepaid expenses and other current assets Total current assets Property and equipment, net Other assets ... -
Page 29
Stein Mart, Inc. Consolidated Statements of Income (In thousands, except for per share amounts) Year Ended January 31, 2015 Year Ended February 1, 2014 Year Ended February 2, 2013 Net sales Cost of merchandise sold Gross profit Selling, general and administrative expenses Operating income Interest ... -
Page 30
Stein Mart, Inc. Consolidated Statements of Comprehensive Income (In thousands) Year Ended January 31, 2015 Year Ended February 1, 2014 Year Ended February 2, 2013 Net income Other comprehensive income, net of tax: Change in post-retirement benefit obligations (See Note 7): Other comprehensive (... -
Page 31
... payment related to the net share settlement of equity awards Common shares issued under employee stock purchase plan Reacquired shares Issuance of restricted stock, net Share-based compensation Tax benefit from equity issuances Cash dividends paid ($0.15 per share) Balance at February 1, 2014... -
Page 32
Stein Mart, Inc. Consolidated Statements of Cash Flows (In thousands) Year Ended January 31, 2015 Year Ended February 1, 2014 Year Ended February 2, 2013 Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation ... -
Page 33
...2015 we operated a chain of 270 retail stores in 30 states and an Internet store that offers the fashion merchandise, service and presentation of a better department or specialty store at prices competitive with off-price retail chains. As used herein, the terms Â"weÂ", Â"ourÂ", Â"usÂ", Â"Stein Mart... -
Page 34
... in 2014, 2013, and 2012 includes changes in postretirement benefits. See Note 7 for further discussion. Revenue Recognition. Revenue from sales of our merchandise is recognized at the time of sale, net of any returns, discounts and percentage-off coupons. The CompanyÂ's e-commerce operation records... -
Page 35
...the credit card rewards program, which provides for an incentive to cardholders in the form of reward certificates upon the cumulative purchase of an established amount. Stein Mart cardholders also receive special promotional offers and advance notice of in-store sales events. In 2014, 2013 and 2012... -
Page 36
... merchandise costs, net of vendor discounts and allowances; freight; inventory shrinkage; store occupancy costs (including rent, common area maintenance, real estate taxes, utilities and maintenance); payroll, benefits and travel costs directly associated with buying inventory; and costs related... -
Page 37
.... In 2014, store assets with a carrying value of $1.5 million were written down to their fair value of $0. In 2013, store and information technology assets with a carrying value of $1.2 million and $1.0 million were written down to their fair value of $0 and $0, respectively. In 2012, store assets... -
Page 38
.... Annual store rent is generally comprised of a fixed minimum amount plus a contingent amount based on a percentage of sales in excess of specified levels. Most store leases also require additional payments covering real estate taxes, common area costs and insurance. Rent expense is as follows: 2014... -
Page 39
... 31, 2015, the Company had net operating losses (Â"NOLÂ") carryforwards for state income tax purposes of $3.6 million that will begin to expire in 2016. Deferred tax assets (liabilities) are reflected on the Consolidated Balance Sheets as follows: January 31, 2015 February 1, 2014 Current deferred... -
Page 40
... related to UTBs as of January 31, 2015 and February 1, 2014 was also insignificant. UTBs decreased in 2014, 2013 and 2012 due to tax positions taken and lapse of statute of limitations. We are currently open to audit under the statute of limitations by the Internal Revenue Service for the tax years... -
Page 41
... executive split-dollar life insurance benefit which provides officers, key executives and director-level employees with preretirement life insurance benefits based upon three to five times the current annual compensation. Effective December 31, 2012, active employees and substantially all retirees... -
Page 42
...7.50 6.82 6.5 years $ 6.2 years $ 5,498 3,785 The aggregate intrinsic value in the table above represents the excess of our closing stock price on January 31, 2015 ($13.76 per share) over the exercise price, multiplied by the applicable number of in-the-money options. This amount changes based on... -
Page 43
STEIN MART, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, except per share amounts) The fair value of each stock option granted during 2014, 2013 and 2012 was estimated at the date of grant using the Black-Scholes options pricing model with the following weighted-... -
Page 44
... Statements of Income. The following tables show the activity in the store closing reserve: LeaseRelated Severance and Other Total Balance at January 28, 2012 Charges Payments Balance at February 2, 2013 Charges Payments Balance at February 1, 2014 Charges Payments Balance at January 31, 2015... -
Page 45
... Incentive Plans related to his role as general counsel to the Company. We leased three locations in 2014, 2013 and 2012 from a company for which one of our former directors is Chairman and Chief Executive Officer. This former director did not stand for reelection at the June 2014 annual meeting. We... -
Page 46
... CompanyÂ's former $100 million senior secured revolving credit facility which was set to mature on February 28, 2017. Borrowings under the Credit Facilities were initially used for a special dividend, but subsequently may be used for working capital, capital expenditures and other general corporate... -
Page 47
... Share Award for Non-Employee Directors, pursuant to Stein Mart, Inc. 2001 Omnibus Plan, incorporated by reference to the CompanyÂ's Form 10-K for the fiscal year ended February 1, 2014 Profit Sharing Plan, incorporated by reference to the CompanyÂ's Form S-1 Registration Statement No. 33-46322 PPO... -
Page 48
... Employment Agreement, dated September 15, 2013, between Stein Mart, Inc. and David H. Hawkins, incorporated by reference to the CompanyÂ's Form 10-K for the fiscal year ended February 1, 2014 Second Amended and Restated Credit Agreement dated February 3, 2015, by and among Stein Mart, Inc., as lead... -
Page 49
... Officer Pursuant to 18 U.S.C. Section 1350 (filed herein) Interactive data files from Stein Mart, Inc.Â's Annual Report on Form 10-K for the year ended January 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements... -
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Page 51
...and Sales Promotion Richard A. Schart Supply Chain Senior Vice Presidents, Stein Mart Buying Corp. Jane Dever General Merchandising Manager, Home Roseann McLean Planning and Allocation Kathy Pickering General Merchandise Manager, RTW Corporate Headquarters 1200 Riverplace Boulevard Jacksonville, FL... -
Page 52
OUR FUTURE IS BASED ON THE SAME VALUES AS OUR PAST :[VYL :JV[[ZKHSL(YPaVUH Voted America's Best Department Store 1200 Riverplace Boulevard | Jacksonville, FL 32207 www.steinmart.com