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Stein Mart growing amid unresolved financial issues


JACKSONVILLE, Fla. — Department store retailer Stein Mart remains in non-compliance with NASDAQ listing requirements for failing to file its most recent quarterly report, but the company appears to be doing fine otherwise.

The company opened seven news stores this fall which pushed its store count to 263 units and also recently declared a $1 a share special dividend in conjunction with the release of November sales results which saw comps increase by 7.1%. The company was lapping a prior year 4.6% decline, but the figure was still respectable with all merchandise categories said to be in positive territory. At the time, interim CEO Jay Stein commented that, “our goal was to generate positive comp sales during the holiday selling season and we are off to a terrific start. The results were clearly a culmination of great merchandise, great marketing and proper execution at all levels. The special dividend reflects our continued generation of strong cash flows and provides a way to return value to our shareholders. After payment of the dividend, the company will continue its strong financial position that is more than adequate to meet our capital needs for the foreseeable future."

Now the company needs to resolve some unsettled issue with regulatory authorities relating to its financial reports. It received a notice of non-compliance from NASDAQ on December 7 for failure to file its more recent quarterly report. The company has previously said that due to errors identified in its previously issued financial statements, it is in the process of restating results for the past three fiscal years and its quarterly results for the first and second quarter of this year.

The off-price fashion retailer is also evaluating the control implications related to the restatement. Until the restatement process and the control evaluations are complete, the company said it is unable to complete its third quarter financial statements and file its required paperwork for the quarter ended October 27.

According to Stein Mart, on November 15, NASDAQ granted the company an exception to file its quarterly report for the second quarter ended July 28 on or before March 5, 2013. As a result, the NASDAQ letter states that any additional exception to allow Stein Mart to regain compliance with all delinquent filings will be limited to a maximum 180 days from the due date of the second quarter paperwork, or March 5, 2013. The notification of non-compliance has no immediate effect on the listing or trading of the company's common stock on the NASDAQ global market.

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