Stage Stores, Inc. (NYSE: SSI) today reported financial results for the
first quarter ended May 3, 2014.
Total sales from continuing operations for the first quarter were $372
million. Comparable store sales for the quarter decreased 0.2%. The
Company noted that its cosmetics, children’s, misses sportswear and
footwear categories all had comparable store sales increases for the
quarter. Geographically, the Northwest, Southwest and Southeast regions
all outperformed.
The Company reported a loss for the quarter from continuing operations
of $12.0 million, or $0.38 per share. Results from continuing operations
exclude the sale of the Steele’s division that was completed on March 7,
2014.
Commenting on the Company’s first quarter results, Michael Glazer,
President and Chief Executive Officer, stated, “Comparable store sales
were flat in a volatile first quarter, marked by a highly promotional
retail environment and unseasonable weather. Our results were also
impacted by our sales mix for the quarter, which was heavily weighted
with clearance goods. While this hurt our gross margin, we feel very
good about our inventory content heading into the rest of the year.”
Reported Results
Including discontinued operations, the Company reported a net loss for
this year’s first quarter of $18.8 million, or $0.60 per share. For last
year’s first quarter, including discontinued operations and one-time
items, the Company reported a net loss of $6.9 million, or $0.21 per
share. One-time items recorded in the prior year were associated with
the consolidation of the Company’s South Hill, Virginia operations into
its Houston headquarters and totaled approximately $9.7 million, or
$0.19 per share.
Full Year 2014 Guidance
The Company is maintaining its comparable store sales guidance range for
the year of flat to up 2%, as well as its EPS guidance range from
continuing operations of $1.25 to $1.35.
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FY 2014 OUTLOOK*
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FY 2013*
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Sales ($mm)
|
|
$1,640
|
-
|
$1670
|
|
$1,610
|
|
|
|
|
|
|
|
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EPS
|
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$1.25
|
-
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$1.35
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$1.22**
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|
|
|
|
|
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Diluted Shares (m)
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32,300
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32,311
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*From continuing operations.
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**Adjusted to exclude one-time items.
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Store Activity
The Company reported that it opened seven new stores and closed two
stores during the first quarter. Bealls stores were opened in Truth or
Consequences, NM and Carson City and Fallon, NV; Goody’s stores were
opened in Beaver Dam, KY and Sylacauga, AL; and Peebles stores were
opened in Wadsworth, OH and Waynesburg, PA. The Company also installed
13 Estee Lauder and 13 Clinique counters during the quarter.
Conference Call Information
The Company will hold a conference call today at 8:30 a.m. Eastern Time
to discuss its first quarter results. Interested parties can participate
in the Company’s conference call by dialing 703-639-1319. 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, May 30, 2014.
About Stage Stores
Stage Stores, Inc. operates primarily in small and mid-sized towns and
communities. Its stores, which operate under the Bealls, Goody’s, Palais
Royal, Peebles and Stage names, offer moderately priced, nationally
recognized brand name apparel, accessories, cosmetics and footwear for
the entire family. The Company currently operates 853 stores in 40
states. The Company also has an eCommerce website. For more information
about Stage Stores, visit the Company’s web site at www.stagestoresinc.com.
Caution Concerning Forward-Looking Statements
This document contains “forward-looking statements”. Forward-looking
statements reflect our expectations regarding future events and
operating performance and often contain words such as "believe",
"expect", "may", "will", "should", "could", "anticipate", "plan" or
similar words. In this document, forward-looking statements include
comments regarding the Company’s sales, comparable store sales, EPS and
diluted share count outlooks for the 2014 fiscal year. Forward-looking
statements are subject to a number of risks and uncertainties which
could cause actual results to differ materially from those anticipated
by the forward-looking statements. These risks and uncertainties
include, but are not limited to, those described in our Annual Report on
Form 10-K as filed with the Securities and Exchange Commission (the
"SEC") on April 2, 2014, and other factors as may periodically be
described in our other filings with the SEC. Forward-looking statements
speak only as of the date of this document. We do not undertake to
update our forward-looking statements.
(Tables to Follow)
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Stage Stores, Inc.
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Condensed Consolidated Statements of Operations
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(in thousands, except earnings per share)
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(Unaudited)
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|
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|
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|
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Thirteen Weeks Ended
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May 3, 2014
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May 4, 2013
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|
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Amount
|
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% to Sales (1)
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Amount
|
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% to Sales (1)
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|
|
|
|
|
|
|
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|
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Net sales
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$
|
372,040
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|
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100.0
|
%
|
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$
|
372,103
|
|
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100.0
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%
|
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Cost of sales and related buying, occupancy and distribution expenses
|
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294,099
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79.1
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%
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282,474
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75.9
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%
|
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Gross profit
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|
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77,941
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20.9
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%
|
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89,629
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24.1
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%
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Selling, general and administrative expenses
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96,054
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25.8
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%
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97,947
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26.3
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%
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Store opening costs
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|
|
808
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0.2
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%
|
|
|
975
|
|
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0.3
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%
|
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Interest expense
|
|
|
724
|
|
|
0.2
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%
|
|
|
586
|
|
|
0.2
|
%
|
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Income before income tax
|
|
|
(19,645
|
)
|
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-5.3
|
%
|
|
|
(9,879
|
)
|
|
-2.7
|
%
|
|
Income tax benefit
|
|
|
(7,599
|
)
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-2.0
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%
|
|
|
(3,691
|
)
|
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-1.0
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%
|
|
Loss from continuing operations
|
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$
|
(12,046
|
)
|
|
-3.2
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%
|
|
$
|
(6,188
|
)
|
|
-1.7
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%
|
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Loss from discontinued operations, net of tax benefit of $4,257 and
$398, respectively
|
|
$
|
(6,748
|
)
|
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-1.8
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%
|
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$
|
(668
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)
|
|
-0.2
|
%
|
|
Net loss
|
|
$
|
(18,794
|
)
|
|
-5.1
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%
|
|
$
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(6,856
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)
|
|
-1.8
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%
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|
|
|
|
|
|
|
|
|
|
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Basic loss per share data:
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|
|
|
|
|
|
|
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Continuing operations
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$
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(0.38
|
)
|
|
|
|
$
|
(0.19
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)
|
|
|
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Discontinued operations
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$
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(0.22
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)
|
|
|
|
$
|
(0.02
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)
|
|
|
|
Basic loss per share
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|
$
|
(0.60
|
)
|
|
|
|
$
|
(0.21
|
)
|
|
|
|
Basic weighted average shares outstanding
|
|
|
31,492
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|
|
|
|
|
32,306
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|
|
|
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|
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Diluted loss per share data:
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|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.38
|
)
|
|
|
|
$
|
(0.19
|
)
|
|
|
|
Discontinued operations
|
|
$
|
(0.22
|
)
|
|
|
|
$
|
(0.02
|
)
|
|
|
|
Diluted loss per share
|
|
$
|
(0.60
|
)
|
|
|
|
$
|
(0.21
|
)
|
|
|
|
Diluted weighted average shares outstanding
|
|
|
31,492
|
|
|
|
|
|
32,306
|
|
|
|
|
|
|
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|
|
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(1) Percentages may not foot due to rounding.
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Stage Stores, Inc.
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Condensed Consolidated Balance Sheets
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(in thousands, except par value)
|
|
(Unaudited)
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|
May 3, 2014
|
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May 4, 2013
|
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|
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ASSETS
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|
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Cash and cash equivalents
|
|
$ 24,361
|
|
$ 14,762
|
|
Merchandise inventories, net
|
|
449,547
|
|
434,407
|
|
Prepaid expenses and other current assets
|
|
47,526
|
|
40,082
|
|
Total current assets
|
|
521,434
|
|
489,251
|
|
|
|
|
|
|
|
Property, equipment and leasehold improvements, net
|
|
281,936
|
|
282,534
|
|
Intangible asset
|
|
14,910
|
|
14,910
|
|
Other non-current assets, net
|
|
25,166
|
|
24,142
|
|
Total assets
|
|
$ 843,446
|
|
$ 810,837
|
|
|
|
|
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|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Accounts payable
|
|
$ 147,651
|
|
$ 125,707
|
|
Accrued expenses and other current liabilities
|
|
68,658
|
|
69,549
|
|
Total current liabilities
|
|
216,309
|
|
195,256
|
|
|
|
|
|
|
|
Long-term debt obligations
|
|
90,208
|
|
60,871
|
|
Other long-term liabilities
|
|
100,170
|
|
100,266
|
|
Total liabilities
|
|
406,687
|
|
356,393
|
|
|
|
|
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|
|
Commitments and contingencies
|
|
-
|
|
-
|
|
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|
Common stock, par value $0.01, 100,000 shares authorized, 31,721
and 31,222 shares issued, respectively
|
|
317
|
|
312
|
|
Additional paid-in capital
|
|
389,327
|
|
384,295
|
|
Less treasury stock - at cost, 0 and 0 shares, respectively
|
|
(1,005)
|
|
(967)
|
|
Accumulated other comprehensive loss
|
|
(4,554)
|
|
(4,616)
|
|
Retained earnings
|
|
52,674
|
|
75,420
|
|
Total stockholders' equity
|
|
436,759
|
|
454,444
|
|
Total liabilities and stockholders' equity
|
|
$ 843,446
|
|
$ 810,837
|
|
|
|
|
|
|
|
|
|
Stage Stores, Inc.
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(in thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
|
|
May 3, 2014
|
|
May 4, 2013
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net loss
|
|
$
|
(18,794
|
)
|
|
$
|
(6,856
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
Depreciation, amortization and impairment of long-lived assets
|
|
|
15,218
|
|
|
|
15,047
|
|
|
Loss on retirements of property and equipment
|
|
|
677
|
|
|
|
186
|
|
|
Deferred income taxes
|
|
|
(420
|
)
|
|
|
(428
|
)
|
|
Tax benefit from stock-based compensation
|
|
|
280
|
|
|
|
1,597
|
|
|
Stock-based compensation expense
|
|
|
1,626
|
|
|
|
1,979
|
|
|
Amortization of debt issuance costs
|
|
|
75
|
|
|
|
64
|
|
|
Excess tax benefits from stock-based compensation
|
|
|
(815
|
)
|
|
|
(1,792
|
)
|
|
Deferred compensation obligation
|
|
|
38
|
|
|
|
158
|
|
|
Amortization of employee benefit related costs
|
|
|
100
|
|
|
|
153
|
|
|
Construction allowances from landlords
|
|
|
2,425
|
|
|
|
968
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
Increase in merchandise inventories
|
|
|
(15,140
|
)
|
|
|
(38,705
|
)
|
|
Increase in other assets
|
|
|
(8,548
|
)
|
|
|
(7,525
|
)
|
|
Increase in accounts payable and other liabilities
|
|
|
17,156
|
|
|
|
375
|
|
|
Total adjustments
|
|
|
12,672
|
|
|
|
(27,923
|
)
|
|
Net cash used in operating activities
|
|
|
(6,122
|
)
|
|
|
(34,779
|
)
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Additions to property, equipment and leasehold improvements
|
|
|
(14,714
|
)
|
|
|
(16,809
|
)
|
|
Proceeds from disposal of assets
|
|
|
1,397
|
|
|
|
-
|
|
|
Net cash used in investing activities
|
|
|
(13,317
|
)
|
|
|
(16,809
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Proceeds from revolving credit facility borrowings
|
|
|
116,340
|
|
|
|
103,125
|
|
|
Payments of revolving credit facility borrowings
|
|
|
(86,020
|
)
|
|
|
(48,475
|
)
|
|
Payments of long-term debt obligations
|
|
|
(1,200
|
)
|
|
|
(180
|
)
|
|
Payments for stock related compensation
|
|
|
(1,955
|
)
|
|
|
(2,088
|
)
|
|
Proceeds from exercise of stock awards
|
|
|
5,010
|
|
|
|
9,328
|
|
|
Excess tax benefits from stock-based compensation
|
|
|
815
|
|
|
|
1,792
|
|
|
Cash dividends paid
|
|
|
(3,952
|
)
|
|
|
(3,253
|
)
|
|
Net cash provided by financing activities
|
|
|
29,038
|
|
|
|
60,249
|
|
|
Net increase in cash and cash equivalents
|
|
|
9,599
|
|
|
|
8,661
|
|
|
|
|
|
|
|
|
Cash and cash equivalents:
|
|
|
|
|
|
Beginning of period
|
|
|
14,762
|
|
|
|
17,937
|
|
|
End of period
|
|
$
|
24,361
|
|
|
$
|
26,598
|
|
|
|
|
|
|
|
|
|
|
Stage Stores, Inc.
|
|
Reconciliation of Non-GAAP Financial Measures
|
|
(in thousands, except earnings per share)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
|
|
May 3, 2014
|
|
May 4, 2013
|
|
|
|
|
|
|
|
Net loss from continuing operations:
|
|
|
|
|
|
On a U.S. GAAP basis
|
|
$
|
(12,046
|
)
|
|
$
|
(6,188
|
)
|
|
South Hill consolidation related charges, net of tax of $3,616
|
|
|
-
|
|
|
|
6,062
|
|
|
On a non-U.S. GAAP basis
|
|
$
|
(12,046
|
)
|
|
$
|
(126
|
)
|
|
|
|
|
|
|
|
Diluted earnings per share:
|
|
|
|
|
|
On a U.S. GAAP basis
|
|
$
|
(0.38
|
)
|
|
$
|
(0.19
|
)
|
|
South Hill consolidation related charges
|
|
|
-
|
|
|
|
0.19
|
|
|
On a non-U.S. GAAP basis
|
|
$
|
(0.38
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
Copyright Business Wire 2014