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Stage Stores, Inc.$2.94($.20)(6.37%)

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 Stage Stores Reports Record Fourth Quarter EPS of $1.36; Comparable Sales Increase of 6.4%; Full Year Earnings Per Share From Continuing Operations of $1.18; Full Year Comparable Sales Increase of 1.4%
   Tuesday, March 03, 2015 6:00:11 AM ET

Stage Stores, Inc. (SSI ) today reported financial results for the fourth quarter and fiscal year ended January 31, 2015.

Michael Glazer, President and Chief Executive Officer, stated, "We ended the year with strong sales growth and record earnings in the fourth quarter. We achieved a 6.4% comparable sales gain and saw 30% growth in our direct-to-consumer business. Our merchandise margins expanded significantly, inventories ended in terrific shape from both a level and content perspective, and our fourth quarter profitability grew 35%."

Mr. Glazer added, "We plan to build upon our success with several key priorities for 2015, including driving improved store productivity, expanding our omni-channel capabilities and direct-to-consumer sales, upgrading our store base through remodels, and building a service culture focused on our customers. As we execute on these initiatives we believe we can drive long term earnings growth and shareholder value."

Fourth Quarter Reported Results

Sales increased 6.6% to $524.9 million compared to $492.5 million in the prior year period. Comparable sales increased 6.4%. Three stores opened and four stores closed during the quarter. Net income from continuing operations was $43.8 million or $1.36 per diluted share.

Full Year Reported Results

Sales increased 1.8% to $1,639 million compared to $1,609 million in the prior year period. Comparable sales increased 1.4%. Eighteen stores opened and twelve stores closed during the year. Net income from continuing operations was $37.9 million or $1.18 per diluted share.

2015 Guidance

Sales are expected to be in a range of $1,640-$1,675 million, assuming a flat to 2% increase in comparable sales. The Company plans to open two stores and close 10-20 stores.

Earnings per diluted share are expected to be in a range of $1.20- $1.28.

Weighted average diluted shares for the year are expected to be 32.7 million. The effective tax rate is estimated to be 37.6%.

Capital expenditures net of construction allowances from landlords for 2015 are expected to be $75 million, compared to $65 million in 2014.

Conference Call / Webcast Information

The Company will hold a conference call today at 8:30 a.m. Eastern Time to discuss its 2014 fourth quarter and fiscal year results. Interested parties may participate in the Company’s conference call by dialing 703-639-1178. 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, March 13, 2015.

About Stage Stores

Stage Stores, Inc. operates 853 specialty department stores located in 40 states under the BEALLS, GOODY’S, PALAIS ROYAL, PEEBLES and STAGE nameplates and a direct-to-consumer channel. The Company’s stores, which operate primarily in small and mid-sized towns and communities, offer moderately priced, nationally recognized brand name and private label apparel, accessories, cosmetics, footwear and home goods for the entire family. The Company’s direct-to-consumer channel includes its e-commerce website and Send program. Its e-commerce website features assortments of merchandise similar to that found in its stores, as well as products available exclusively online. The Send program allows customers in the stores to have merchandise shipped directly to their homes if the merchandise is not available in the local store. For more information about Stage Stores, visit the Company’s website at www.stagestoresinc.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.

 
                                                                                                                                        Stage Stores, Inc.
                                                                                                                          Condensed Consolidated Statements of Operations
                                                                                                                          (in thousands, except earnings per share data)
                                                                                                                                            (Unaudited)
 
                                                                                                                                                                  Three Months Ended
                                                                                           -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              January 31, 2015                                                                           February 1, 2014
                                                                                           --------------------------------------------------------------------------------------                     --------------------------------------------------------------------------------------------
                                                                                                                 Amount                        % to Sales (a)                         Amount                        % to Sales (a)
                                                                                           --------------------------------------------------                     ----------------------------------- --------------------------------------------------                     ---------------------
                                                                                                                                                                                                                                                                              
Net sales                                                                                                     $ 524,886                                             100.0 %                                              $ 492,537                                                100.0 %
Cost of sales and related buying, occupancy and distribution expenses                        353,527                           67.4 %                             344,545                              70.0 %
                                                                                           -------------------- ------- --------------------                      ------- ------                      -------------------- ------- --------------------                      ---------- ---------
Gross profit                                                                                                    171,359                                              32.6 %                                                147,992                                                 30.0 %
Selling, general and administrative expenses                                                                     99,802                                              19.0 %                                                 98,237                                                 19.9 %
Store opening costs                                                                                                 458                                               0.1 %                                                    450                                                  0.1 %
Interest expense                                                                                 709                            0.1 %                                 732                               0.1 %
                                                                                           -------------------- ------- --------------------                      ------- ------                      -------------------- ------- --------------------                      ---------- ---------
Income before income tax                                                                                         70,390                                              13.4 %                                                 48,573                                                  9.9 %
Income tax expense                                                                            26,576                            5.1 %                              18,428                               3.7 %
                                                                                           -------------------- ------- --------------------                      ------- ------                      -------------------- ------- --------------------                      ---------- ---------
Income from continuing operations                                                                                43,814                                               8.3 %                                                 30,145                                                  6.1 %
Loss from discontinued operations, net of tax benefit of $94 and                                 (94 )                                             0.0 %                              (5,283 )                                               -1.1 %
$3,214, respectively
                                                                                           -------------------- ------- --------------------                      ------- ------                      -------------------- ------- --------------------                      ---------- ---------
Net income                                                                                                    $  43,720                            8.3 %                                              $  24,862                               5.0 %
                                                                                           ==================== ======= ====================                      ======= ======                      ==================== ======= ====================                      ========== =========
                                                                                                                                                                                                                                                                              
Basic earnings (loss) per share data:
   Continuing operations                                                                                      $    1.37                                                                                                  $    0.95
   Discontinued operations                                                                         -                                                                (0.17 )
                                                                                           -------------------- ------- --------------------                                                          -------------------- ------- --------------------
   Basic earnings per share (b)                                                                               $    1.37                                                                               $    0.79  
                                                                                           ==================== ======= ====================                                                          ==================== ======= ====================
   Basic weighted average shares outstanding                                                  31,657                                                               31,215  
                                                                                           ==================== ======= ====================                                                          ==================== ======= ====================
                                                                                                                                                                                                                                                                              
Diluted earnings (loss) per share data:
   Continuing operations                                                                                      $    1.36                                                                                                  $    0.95
   Discontinued operations                                                                         -                                                                (0.17 )
                                                                                           -------------------- ------- --------------------                                                          -------------------- ------- --------------------
   Diluted earnings per share (b)                                                                             $    1.36                                                                               $    0.78  
                                                                                           ==================== ======= ====================                                                          ==================== ======= ====================
   Diluted weighted average shares outstanding                                                31,740                                                               31,438  
                                                                                           ==================== ======= ====================                                                          ==================== ======= ====================
                                                                                                                                                                                                                                                                              
(a) Percentages may not foot due to rounding.
(b) EPS may not foot due to rounding
 
                                                                                                                                          Stage Stores, Inc.
                                                                                                                            Condensed Consolidated Statements of Operations
                                                                                                                            (in thousands, except earnings per share data)
                                                                                                                                              (Unaudited)
 
                                                                                                                                                                    Twelve Months Ended
                                                                                           -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               January 31, 2015                                                                             February 1, 2014
                                                                                           ----------------------------------------------------------------------------------------                     ----------------------------------------------------------------------------------------------
                                                                                                                  Amount                         % to Sales (a)                          Amount                         % to Sales (a)
                                                                                           ----------------------------------------------------                     ----------------------------------- ----------------------------------------------------                     ---------------------
                                                                                                                                                                                                                                                                                  
Net sales                                                                                                     $ 1,638,569                                             100.0 %                                              $ 1,609,481                                                100.0 %
Cost of sales and related buying, occupancy and distribution expenses                        1,188,763                           72.5 %                             1,172,995                              72.9 %
                                                                                           -------------------- --------- --------------------                      ------- ------                      -------------------- --------- --------------------                      ---------- ---------
Gross profit                                                                                                      449,806                                              27.5 %                                                  436,486                                                 27.1 %
Selling, general and administrative expenses                                                                      383,616                                              23.4 %                                                  390,224                                                 24.2 %
Store opening costs                                                                                                 2,488                                               0.2 %                                                    2,902                                                  0.2 %
Interest expense                                                                                 3,002                            0.2 %                                 2,744                               0.2 %
                                                                                           -------------------- --------- --------------------                      ------- ------                      -------------------- --------- --------------------                      ---------- ---------
Income before income tax                                                                                           60,700                                               3.7 %                                                   40,616                                                  2.5 %
Income tax expense                                                                              22,847                            1.4 %                                15,400                               1.0 %
                                                                                           -------------------- --------- --------------------                      ------- ------                      -------------------- --------- --------------------                      ---------- ---------
Income from continuing operations                                                                                  37,853                                               2.3 %                                                   25,216                                                  1.6 %
Loss from discontinued operations, net of tax benefit of $4,228 and                             (7,003 )                                            -0.4 %                                (8,574 )                                               -0.5 %
$5,237, respectively
                                                                                           -------------------- --------- --------------------                      ------- ------                      -------------------- --------- --------------------                      ---------- ---------
Net income                                                                                                    $    30,850                            1.9 %                                              $    16,642                               1.0 %
                                                                                           ==================== ========= ====================                      ======= ======                      ==================== ========= ====================                      ========== =========
                                                                                                                                                                                                                                                                                  
Basic earnings (loss) per share data:
   Continuing operations                                                                                      $      1.18                                                                                                  $      0.78
   Discontinued operations                                                                       (0.22 )                                                                                   (0.27 )
                                                                                           -------------------- --------- --------------------                                                          -------------------- --------- --------------------
   Basic earnings per share (b)                                                                               $      0.96                                                                               $      0.51  
                                                                                           ==================== ========= ====================                                                          ==================== ========= ====================
   Basic weighted average shares outstanding                                                    31,675                                                                 32,034  
                                                                                           ==================== ========= ====================                                                          ==================== ========= ====================
                                                                                                                                                                                                                                                                                  
Diluted earnings (loss) per share data:
   Continuing operations                                                                                      $      1.18                                                                                                  $      0.77
   Discontinued operations                                                                       (0.22 )                                                                                   (0.26 )
                                                                                           -------------------- --------- --------------------                                                          -------------------- --------- --------------------
   Diluted earnings per share (b)                                                                             $      0.96                                                                               $      0.51  
                                                                                           ==================== ========= ====================                                                          ==================== ========= ====================
   Diluted weighted average shares outstanding                                                  31,763                                                                 32,311  
                                                                                           ==================== ========= ====================                                                          ==================== ========= ====================
                                                                                                                                                                                                                                                                                  
(a) Percentages may not foot due to rounding.
(b) EPS may not foot due to rounding
 
                                                                                            Stage Stores, Inc.
                                                                                   Condensed Consolidated Balance Sheets
                                                                                     (in thousands, except par value)
                                                                                                (Unaudited)
 
                                                            January 31, 2015                                    February 1, 2014
                                                                                 -----------------------------------------------                        -----------------------------------------------
                                                                                                                                                         
                           ASSETS
-----------------------------------------------------------
Cash and cash equivalents                                                                           $  17,165                                                              $  14,762
Merchandise inventories, net                                                                          441,452                                                                434,407
Prepaid expenses and other current assets                                           45,444                           40,082  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------
   Total current assets                                                                               504,061                                                                489,251
                                                                                                                                                         
Property, equipment and leasehold improvements, net                                                   285,450                                                                282,534
Intangible asset                                                                                       14,910                                                                 14,910
Other non-current assets, net                                                       20,256                           24,142  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------
   Total assets                                                                                     $ 824,677                                           $ 810,837  
                                                                                 ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                         
            LIABILITIES AND STOCKHOLDERS’ EQUITY
-----------------------------------------------------------
Accounts payable                                                                                    $ 121,778                                                              $ 125,707
Income taxes payable                                                                                   12,284                                                                  5,345
Accrued expenses and other current liabilities                                      70,720                           64,204  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------
   Total current liabilities                                                                          204,782                                                                195,256
                                                                                                                                                         
Long-term debt obligations                                                                             45,673                                                                 60,871
Deferred taxes                                                                                         20,474                                                                 15,644
Other long-term liabilities                                                         77,818                           84,622  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------
   Total liabilities                                                               348,747                          356,393  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                         
Commitments and contingencies                                                                               -                                                                      -
                                                                                                                                                         
Common stock, par value $0.01, 100,000 shares authorized,
31,632 and 31,222 shares issued, respectively                                                             316                                                                    312
Additional paid-in capital                                                                            395,395                                                                384,295
Less treasury stock - at cost, 0 and 0 shares, respectively                                              (600 )                                                                 (967 )
Accumulated other comprehensive loss                                                                   (6,874 )                                                               (4,616 )
Retained earnings                                                                   87,693                           75,420  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------
   Total stockholders’ equity                                                      475,930                          454,444  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------
   Total liabilities and stockholders’ equity                                                       $ 824,677                                           $ 810,837  
                                                                                 ==================== ======= ====================                      ==================== ======= ====================
 
                                                                                                     Stage Stores, Inc.
                                                                                       Condensed Consolidated Statements of Cash Flows
                                                                                                       (in thousands)
                                                                                                         (Unaudited)
 
                                                                                                                                  Twelve Months Ended
                                                                                                 ---------------------------------------------------------------------------------------------------------------------------
                                                                                                                  January 31, 2015                                     February 1, 2014
                                                                                                 ---------------------------------------------------                     ---------------------------------------------------
Cash flows from operating activities:
   Net income                                                                                                       $   30,850                                                              $   16,642
   Adjustments to reconcile net income to net cash provided by
   operating activities:
      Depreciation, amortization and impairment of long-lived assets                                                    63,447                                                                  69,925
      Loss on retirements of property, equipment and leasehold improvements                                                110                                                                     860
      Deferred income taxes                                                                                              4,519                                                                    (808 )
      Tax benefit from stock-based compensation                                                                             64                                                                   1,761
      Stock-based compensation expense                                                                                   9,664                                                                   8,417
      Amortization of debt issuance costs                                                                                  275                                                                     279
      Excess tax benefits from stock-based compensation                                                                   (852 )                                                                (2,076 )
      Deferred compensation obligation                                                                                    (367 )                                                                   266
      Amortization of employee benefit related costs                                                                       399                                                                     610
   Construction allowances from landlords                                                                                5,538                                                                   4,162
   Changes in operating assets and liabilities:
      Increase in merchandise inventories                                                                               (7,045 )                                                               (20,479 )
      Increase in other assets                                                                                          (1,737 )                                                                (6,375 )
      Decrease in accounts payable and other liabilities                                             (2,651 )                                            (26,657 )
                                                                                                 -------------------- -------- --------------------                      -------------------- -------- --------------------
      Net cash provided by operating activities                                                     102,214                            46,527  
                                                                                                 -------------------- -------- --------------------                      -------------------- -------- --------------------
                                                                                                                                                                          
Cash flows from investing activities:
   Additions to property, equipment and leasehold improvements                                                         (70,580 )                                                               (61,263 )
   Proceeds from disposal of assets                                                                   2,946                                27  
                                                                                                 -------------------- -------- --------------------                      -------------------- -------- --------------------
      Net cash used in investing activities                                                         (67,634 )                                            (61,236 )
                                                                                                 -------------------- -------- --------------------                      -------------------- -------- --------------------
                                                                                                                                                                          
Cash flows from financing activities:
   Proceeds from revolving credit facility borrowings                                                                  457,742                                                                 494,885
   Payments of revolving credit facility borrowings                                                                   (471,227 )                                                              (445,490 )
   Payments of long-term debt obligations                                                                               (2,352 )                                                                  (744 )
   Payments of debt issuance costs                                                                                        (663 )                                                                  (128 )
   Repurchases of common stock                                                                                          (2,755 )                                                               (31,367 )
   Payments for stock related compensation                                                                              (1,844 )                                                                (2,381 )
   Proceeds from exercise of stock awards                                                                                5,040                                                                  10,149
   Excess tax benefits from stock-based compensation                                                                       852                                                                   2,076
   Cash dividends paid                                                                              (16,970 )                                            (15,466 )
                                                                                                 -------------------- -------- --------------------                      -------------------- -------- --------------------
      Net cash provided by (used in) financing activities                                           (32,177 )                                             11,534  
                                                                                                 -------------------- -------- --------------------                      -------------------- -------- --------------------
Net increase (decrease) in cash and cash equivalents                                                                     2,403                                                                  (3,175 )
                                                                                                                                                                          
Cash and cash equivalents:
   Beginning of period                                                                               14,762                            17,937  
                                                                                                 -------------------- -------- --------------------                      -------------------- -------- --------------------
   End of period                                                                                                    $   17,165                                           $   14,762  
                                                                                                 ==================== ======== ====================                      ==================== ======== ====================
 
                                                                                                                 Stage Stores, Inc.
                                                                                                    Reconciliation of Non-GAAP Financial Measures
                                                                                                      (in thousands, except earnings per share)
                                                                                                                     (Unaudited)
 
                                                                                       Three Months Ended                                           Twelve Months Ended
                                                                                        -------------------------------------------------------                                          -----------------------------------------------------------
                                                                                        January 31, 2015   February 1, 2014                                           January 31, 2015     February 1, 2014
                                                                                        ----------------                      ----------------                                           ----------------                      --------------------
                                                                                                                                                                                                                                
Net income (GAAP)                                                                               $ 43,720                              $ 24,862                                                   $ 30,850                                  $ 16,642
Loss from discontinued operations                                                                     94                                 5,283                                                      7,003                                     8,574
                                                                                        ----------------                      ----------------                                           ----------------                      --------------------
Income from continuing operations                                                                 43,814             30,145                                                     37,853                 25,216
South Hill Consolidation related charges, net of tax of $1,170 and                                     -                                 2,052                                                          -                                    14,770
$8,985, respectively
                                                                                        ----------------                      ----------------                                           ----------------                      --------------------
Adjusted earnings (non-GAAP) (a)                                                                $ 43,814                              $ 32,197                                                   $ 37,853                                  $ 39,986
                                                                                        ================                      ================                                           ================                      ====================
                                                                                                                                                                                                                                
Diluted earnings per share (GAAP)                                                                 $ 1.36                                $ 0.78                                                     $ 0.96                                    $ 0.51
Loss from discontinued operations                                                                      -                                  0.17                                                       0.22                                      0.26
                                                                                        ----------------                      ----------------                                           ----------------                      --------------------
Income from continuing operations                                                                   1.36               0.95                                                       1.18                   0.77
South Hill Consolidation related charges                                                               -                                  0.07                                                          -                                      0.45
                                                                                        ----------------                      ----------------                                           ----------------                      --------------------
Adjusted diluted earnings per share (non-GAAP) (a)(b)                                             $ 1.36                                $ 1.01                                                     $ 1.18                                    $ 1.22
                                                                                        ================                      ================                                           ================                      ====================
                                                                                                                                                                                                                                
(a) Fiscal 2014 amounts are not adjusted.
(b) EPS may not foot due to rounding.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20150303005275r1&sid=cmtx6&distro=nx&lang=en

SOURCE: Stage Stores, Inc.

Stage Stores, Inc. 
Bob Aronson, 800-579-2302 
Vice President, Investor Relations 
baronson@stagestores.com


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