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Jay Stein
Jax Daily Record Tuesday, Feb. 10, 201512:00 PM EST

Stein Mart giving shareholders a cash windfall

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by: Mark Basch Contributing Writer

Stein Mart Inc. last week announced a special dividend that will give shareholders more cash in one fell swoop than they had received in total in its previous 23 years as a public company.

The Jacksonville-based fashion retailer declared a one-time dividend of $5 a share. Stein Mart, which went public in 1992, has previously paid a total of about $4 in cash dividends over the years.

“Today’s announcement of a $5 special dividend reflects our continued generation of strong cash flows and favorable access to the credit markets which allow us to return value to our shareholders,” CEO Jay Stein said in a news release Wednesday.

“Even after this special dividend, we will have ample capital capacity to make long-term investments in our business, such as our accelerated store expansion,” he said.

With about 45 million shares outstanding, it will cost about $225 million to pay the dividend, which Stein Mart is funding with cash and an extended credit facility from Wells Fargo Bank.

The company had $65 million in cash on its balance sheet at the end of the third quarter. With the $250 million credit facility, it expects to carry between $150 million and $200 million in debt this year. Stein Mart said its interest expenses will be about $3.5 million to $4 million.

Stein Mart’s stock jumped as much as $2.35 to $16.55 Thursday morning after the late Wednesday announcement, its highest level since the last recession was beginning in 2007.

Stein Mart had begun paying quarterly cash dividends in 2006 but suspended the dividend in late 2007 as the recession affected business. It did pay special dividends of 50 cents in 2010 and $1 in 2012 as conditions improved, but it didn’t resume a regular quarterly dividend until 2013.

It currently pays a quarterly dividend of 7.5 cents a share and said it intends to continue those regular payments.

Stein Mart on Thursday reported another strong sales month in January, the last month of its fiscal year.

Total sales rose 8.3 percent in the four weeks ended Jan. 31 to $69.7 million and comparable-store sales (sales at stores open for more than one year) rose 6.6 percent.

“Sales continued to build throughout the quarter, particularly as we did not have a repeat of last year’s severe weather events,” Stein said in Thursday’s news release.

For all of fiscal 2014, total sales rose 4.3 percent to $1.3 billion and comparable-store sales rose 3.3 percent.

Stein Mart ended the fiscal year with 270 stores in operation.

FIS also increasing dividends

It’s a more modest increase than at Stein Mart, but Fidelity National Information Services Inc., or FIS, also announced more cash for shareholders.

Before its earnings report last week, FIS said it is increasing its quarterly dividend by 2 cents a share to 26 cents.

FIS is also increasing earnings. The company reported adjusted fourth-quarter earnings rose by 12 cents to 87 cents a share, matching the forecast of analysts surveyed by Thomson Financial.

“We finished the year on a strong footing with continued sales success across all markets, a robust pipeline and good visibility heading into 2015,” said new Chief Executive Officer Gary Norcross in the company’s conference call with analysts Thursday.

Norcross was promoted to CEO after the retirement of Frank Martire on Jan. 1.

After growing adjusted earnings by 10 percent to $3.10 for all of 2014, FIS is forecasting earnings from continuing operations to grow by 9 percent to 13 percent this year to $3.37 to $3.49 a share.

“We are confident that we will again deliver on our full year guidance. This is based on our proven ability to execute and meet our stated financial commitments, revenue visibility from deals sold in 2014, our sales pipeline and our continued focus on managing our cost structure,” Chief Financial Officer James Woodall said in the conference call.

Jacksonville-based FIS provides technology services for financial institutions worldwide. Woodall said foreign currency exchange rates will be a “headwind” for the company’s earnings this year.

“Excluding the impact of currency, our 2015 EPS growth would be 11 percent to 15 percent,” he said.

After growing revenue by 6 percent to $6.4 billion in 2014, FIS is projecting revenue growth of 5 percent to 7 percent this year.

Robert W. Baird analyst David Koning said in a research note that he is maintaining a “neutral” rating on FIS’ stock, which fell by 48 cents to $64.01 Thursday after the earnings report.

“We continue to view risk/reward as generally balanced after 2015 guidance was generally in line with Street expectations,” Koning said.

“We would likely get more aggressive if it drifts around $60,” he said.

Atlantic Coast Financial finishes profitable year

Atlantic Coast Financial Corp. finished 2014 the way it began — with a profit.

The Jacksonville-based savings bank had lost money for six straight years before reporting a profit in the first quarter last year, and it continued to record profits in every quarter.

Atlantic Coast Financial last week reported fourth-quarter earnings of $443,000, or 3 cents a share. For all of 2014, the savings bank earned $1.3 million, or 9 cents a share.

“With an attractive lending pipeline at year’s end and other exciting opportunities for revenue growth ahead, we believe we are well positioned to extend into 2015 the success we have achieved during the past year,” CEO John Stephens said in a news release.

“Overall, we believe Atlantic Coast is on track with its turnaround as evidenced by continued asset mix shifting, loan growth, stable credit quality, and hiring of additional staff,” FBR Capital Markets analyst Scott Valentin said in a research note.

Valentin, the only analyst covering Atlantic Coast Financial, maintains an “outperform” rating on its stock.

International Baler increases earnings

International Baler Corp. reported earnings rose 5 percent in the fiscal year ended Oct. 31 to $714,419, or 14 cents a share, according to its annual report filed with the Securities and Exchange Commission.

Sales for the Jacksonville-based company rose 23 percent to $19.8 million.

The company manufactures baling equipment used to compress various materials into bales for easier handling.

International Baler said in its annual report that its increased sales last year resulted from higher shipments of synthetic rubber balers and auto-tie balers.

Vulcan stock jumps on strong quarter

Vulcan Materials Co.’s stock jumped to its highest level in six years Thursday after reporting fourth-quarter earnings quadrupled to 29 cents a share.

The results for the Birmingham, Ala.-based construction materials company, which operates mainly across the Southern U.S., bode well for the construction market this year.

“Vulcan-served markets continue to show favorable above-average growth, with Vulcan markets growing faster than U.S. markets as a whole. Although aggregates demand remains well below normal levels, this steady and gradual improvement is a further indication of construction activity recovery,” CEO Tom Hill said in a news release.

Vulcan said Florida was one of seven states that saw increases of 14 percent in shipments over the fourth quarter of 2013.

Much of Vulcan’s Florida operations were formerly owned by Jacksonville-based Florida Rock Industries Inc., which Vulcan acquired in 2007.

Before becoming CEO of the company, Hill spent time in Jacksonville as head of the Florida operations, after Vulcan bought Florida Rock.

Strong quarter for Gannett’s TV stations

As Gannett Co. Inc. prepares to split up its broadcasting and newspaper businesses, its broadcasting portfolio of 46 television stations, including WTLV TV-12 and WJXX TV-25 in Jacksonville, continues to grow revenue.

Gannett last week reported fourth-quarter revenue in the broadcasting division, adjusted for acquisitions, rose 25 percent to $495.3 million. The company said political ads helped increase revenue.

Meanwhile, the publishing division, which includes USA Today and 81 daily U.S. newspapers, saw revenue fall by 6.2 percent to $885.5 million.

Gannett’s digital division, which includes Internet businesses CareerBuilder and Cars.com, grew revenue by 9.7 percent. The digital segment will stay with the broadcasting division when the company splits up.

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