UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Form 10-Q
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[X] |
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Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the quarterly period ended August 2, 2003 |
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or |
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[ ] |
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the transition period from ____________________ to ____________________ |
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Commission File Number: |
0-21360 |
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Shoe Carnival, Inc. |
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(Exact name of registrant as specified in its charter) |
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Indiana |
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35-1736614 |
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(State or other jurisdiction of |
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(IRS Employer Identification Number) |
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8233 Baumgart Road |
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47725 |
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(Address of principal executive offices) |
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(Zip code) |
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(812) 867-6471 |
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(Registrant's telephone number, including area code) |
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NOT APPLICABLE |
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(Former name, former address and former fiscal year, if changed since last report) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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[X] |
Yes |
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[ ] |
No |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
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[X] |
Yes |
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[ ] |
No |
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Common Stock, $.01 par value, 12,689,188 shares outstanding as of September 12, 2003
SHOE CARNIVAL, INC.
INDEX TO FORM 10-Q
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Page |
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Part I |
Financial Information |
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Item 1. |
Financial Statements (Unaudited) |
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Condensed Consolidated Balance Sheets |
3 |
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Condensed Consolidated Statements of Income |
4 |
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Condensed Consolidated Statement of Shareholders' Equity |
5 |
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Condensed Consolidated Statements of Cash Flows |
6 |
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Notes to Condensed Consolidated Financial Statements |
7 - 8 |
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Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
9 - 13 |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
13 |
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Item 4. |
Controls and Procedures |
13 |
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Part II |
Other Information |
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Item 4. |
Submission of Matters to Vote of Security Holders |
14 |
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Item 6. |
Exhibits and Reports on Form 8-K |
14 |
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Signature |
15 |
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SHOE CARNIVAL, INC.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
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August 2, |
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February 1, |
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August 3, |
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(In thousands) |
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2003 |
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2003 |
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2002 |
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Unaudited |
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Unaudited |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
10,190 |
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$ |
5,782 |
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$ |
6,316 |
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Accounts receivable |
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1,772 |
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1,134 |
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954 |
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Merchandise inventories |
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171,979 |
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146,091 |
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146,615 |
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Deferred income tax benefit |
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909 |
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901 |
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316 |
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Other |
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3,388 |
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1,890 |
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3,275 |
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Total Current Assets |
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188,238 |
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155,798 |
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157,476 |
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Property and equipment-net |
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67,701 |
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63,477 |
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62,016 |
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Total Assets |
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$ |
255,939 |
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$ |
219,275 |
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$ |
219,492 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current Liabilities: |
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Accounts payable |
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$ |
63,906 |
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$ |
49,847 |
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$ |
49,432 |
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Accrued and other liabilities |
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10,806 |
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9,276 |
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10,728 |
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Current portion of long-term debt |
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298 |
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427 |
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586 |
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Total Current Liabilities |
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75,010 |
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59,550 |
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60,746 |
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Long-term debt |
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27,949 |
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15,503 |
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23,447 |
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Deferred lease incentives |
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6,992 |
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5,262 |
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4,513 |
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Accrued rent |
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2,623 |
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2,458 |
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2,242 |
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Deferred income taxes |
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4,440 |
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4,971 |
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4,041 |
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Other |
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927 |
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640 |
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511 |
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Total Liabilities |
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117,941 |
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88,384 |
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95,500 |
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Shareholders' Equity: |
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Common stock, $.01 par value, 50,000 |
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shares authorized, 13,363 shares |
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issued at August 2, 2003, February 1, 2003 |
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and August 3, 2002 |
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134 |
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134 |
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134 |
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Additional paid-in capital |
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66,001 |
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65,828 |
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65,407 |
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Retained earnings |
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76,712 |
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70,091 |
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63,467 |
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Treasury stock, at cost 701, 746 and 773 shares at |
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August 2, 2003, February 1, 2003 and August 3, 2002 |
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(4,849 |
) |
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(5,162 |
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(5,016 |
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Total Shareholders' Equity |
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137,998 |
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130,891 |
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123,992 |
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Total Liabilities and Shareholders' Equity |
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$ |
255,939 |
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$ |
219,275 |
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$ |
219,492 |
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See notes to condensed consolidated financial statements.
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
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Thirteen |
Thirteen |
Twenty-six |
Twenty-six |
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Weeks Ended |
Weeks Ended |
Weeks Ended |
Weeks Ended |
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(In thousands, except per share data) |
August 2, 2003 |
August 3, 2002 |
August 2, 2003 |
August 3, 2002 |
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Net sales |
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$ |
134,463 |
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$ |
124,626 |
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$ |
271,313 |
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$ |
254,010 |
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Cost of sales (including buying, |
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distribution and occupancy costs) |
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97,512 |
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88,865 |
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193,481 |
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179,167 |
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Gross profit |
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36,951 |
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35,761 |
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77,832 |
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74,843 |
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Selling, general and administrative |
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Expenses |
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34,309 |
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29,873 |
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66,896 |
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59,634 |
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Operating income |
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2,642 |
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5,888 |
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10,936 |
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15,209 |
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Interest expense-net |
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176 |
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200 |
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342 |
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464 |
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Income before income taxes |
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2,466 |
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5,688 |
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10,594 |
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14,745 |
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Income tax expense |
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925 |
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2,133 |
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3,973 |
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5,529 |
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Net income |
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$ |
1,541 |
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$ |
3,555 |
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$ |
6,621 |
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$ |
9,216 |
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Net income per share: |
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Basic |
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$ |
.12 |
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$ |
.28 |
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$ |
.52 |
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$ |
.74 |
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Diluted |
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$ |
.12 |
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$ |
.27 |
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$ |
.51 |
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$ |
.71 |
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Average shares outstanding: |
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Basic |
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12,652 |
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12,566 |
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12,638 |
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12,518 |
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Diluted |
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13,018 |
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13,065 |
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12,989 |
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12,995 |
See notes to condensed consolidated financial statements.
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Unaudited
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Additional |
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Common Stock |
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Paid-In |
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Retained |
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Treasury |
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(In thousands) |
Issued |
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Treasury |
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Amount |
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Capital |
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Earnings |
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Stock |
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Total |
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Balance at February 1, 2003 |
13,363 |
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(746 |
) |
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$ |
134 |
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$ |
65,828 |
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$ |
70,091 |
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$ |
(5,162 |
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$ |
130,891 |
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Exercise of stock options |
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37 |
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128 |
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260 |
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388 |
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Employee stock purchase |
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plan purchases |
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8 |
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45 |
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53 |
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98 |
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Net income |
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6,621 |
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6,621 |
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Balance at August 2, 2003 |
13,363 |
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(701 |
) |
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$ |
134 |
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$ |
66,001 |
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$ |
76,712 |
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$ |
(4,849 |
) |
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$ |
137,998 |
See notes to condensed consolidated financial statements.
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
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Twenty-six |
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Twenty-six |
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Weeks Ended |
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Weeks Ended |
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(In thousands) |
August 2, 2003 |
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August 3, 2002 |
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Cash flows from operating activities: |
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Net income |
$ |
6,621 |
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$ |
9,216 |
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Adjustments to reconcile net income to net |
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cash provided by operating activities: |
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Depreciation and amortization |
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6,808 |
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5,970 |
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Stock option income tax benefit |
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106 |
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|
655 |
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Loss on retirement of assets |
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147 |
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6 |
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Deferred income taxes |
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(539 |
) |
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(49 |
) |
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Other |
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246 |
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169 |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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(854 |
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344 |
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Merchandise inventories |
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(25,888 |
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(10,967 |
) |
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Accounts payable and accrued liabilities |
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15,577 |
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9,652 |
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Other |
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(1,478 |
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(1,459 |
) |
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Net cash provided by operating activities |
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746 |
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13,537 |
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Cash flows from investing activities: |
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Purchases of property and equipment |
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(11,337 |
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(10,693 |
) |
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Lease incentives |
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1,936 |
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|
514 |
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Other |
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367 |
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0 |
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Net cash used in investing activities |
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(9,034) |
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(10,179 |
) |
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Cash flows from financing activities: |
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Net borrowings (payments) under line of credit |
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12,575 |
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(4,000 |
) |
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Payments on capital lease obligations |
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(259 |
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(520 |
) |
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Proceeds from issuance of stock |
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380 |
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2,019 |
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Net cash provided by (used in) financing activities |
|
12,696 |
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(2,501 |
) |
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Net increase in cash and cash equivalents |
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4,408 |
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|
857 |
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Cash and cash equivalents at beginning of period |
|
5,782 |
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5,459 |
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Cash and Cash Equivalents at End of Period |
$ |
10,190 |
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$ |
6,316 |
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Supplemental disclosures of cash flow information: |
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Cash paid during period for interest |
$ |
291 |
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$ |
605 |
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Cash paid during period for income taxes, net of refunds |
$ |
4,961 |
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$ |
5,312 |
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Capital lease obligations incurred |
$ |
0 |
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$ |
47 |
|
See notes to condensed consolidated financial statements.
SHOE CARNIVAL, INC.
Note 1 - Basis of Presentation
In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company and the results of its operations and its cash flows for the periods presented. Certain information and disclosures normally included in notes to consolidated financial statements have been condensed or omitted according to the rules and regulations of the Securities and Exchange Commission, although the Company believes that the disclosures are adequate to make the information presented not misleading. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto contained in the Company's Annual Report on Form 10-K for its fiscal year ended February 1, 2003.
Note 2 - Net Income Per Share
Net income per share of common stock is based on the weighted average number of shares and common share equivalents outstanding during the period. The following table presents a reconciliation of the Company's basic and diluted weighted average common shares outstanding as required by Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share":
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Thirteen |
Thirteen |
Twenty-six |
Twenty-six |
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Weeks Ended |
Weeks Ended |
Weeks Ended |
Weeks Ended |
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(In thousands) |
August 2, 2003 |
August 3, 2002 |
August 2, 2003 |
August 3, 2002 |
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Basic shares |
|
12,652 |
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|
12,566 |
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|
12,638 |
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|
12,518 |
|
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Dilutive effect of stock options |
|
366 |
|
|
499 |
|
|
351 |
|
|
477 |
|
|
Diluted shares |
|
13,018 |
|
|
13,065 |
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|
12,989 |
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|
12,995 |
|
For the quarter ended August 2, 2003 and August 3, 2002, 299,398 and 3,000 options, respectively, were not included in the computation of diluted shares because the options' exercise prices were greater than the average market price for the period. For the six months ended August 2, 2003 and August 3, 2002, 300,424 and 1,714 options, respectively, were not included in the computation of diluted shares because the options' exercise prices were greater than the average market price for the period.
Note 3 - Stock-Based Compensation
SFAS No. 123, "Accounting for Stock-Based Compensation", requires that companies either recognize compensation expense for grants of stock options and other equity instruments based on fair value, or provide pro forma disclosure of net income and net income per share in the notes to the financial statements. At August 2, 2003, the Company had three stock-based compensation plans: the 1993 Stock Option and Incentive Plan, the Outside Directors Stock Option Plan and the 2000 Stock Option and Incentive Plan. The Company accounts for these plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees", and related interpretations. Accordingly, no compensation cost has been recognized under SFAS No. 123 for the Company's employee stock option plans. Had compensation cost for the awards under those plans been determined based on the grant date fair values, consistent with the method required
under SFAS No. 123, the Company's net income and net income per share would have been reduced to the pro forma amounts indicated below:
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Thirteen |
Thirteen |
Twenty-six |
Twenty-six |
||||||||
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|
Weeks Ended |
Weeks Ended |
Weeks Ended |
Weeks Ended |
||||||||
|
(In thousands, except per share data) |
August 2, 2003 |
August 3, 2002 |
August 2, 2003 |
August 3, 2002 |
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