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Syms Corp. Reports Operating Results (10-Q)

January 06, 2011 | About:
10qk

10qk

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Syms Corp. (SYMS) filed Quarterly Report for the period ended 2010-11-27.

Syms Corp. has a market cap of $104.3 million; its shares were traded at around $7.215 with a P/E ratio of 16.8 and P/S ratio of 0.3. SYMS is in the portfolios of Irving Kahn of Kahn Brothers & Company Inc., Michael Price of MFP Investors LLC, Steven Cohen of SAC Capital Advisors, Jean-Marie Eveillard of First Eagle Investment Management, LLC.

Highlight of Business Operations:

Net sales decreased by $14.4 million or 11% to $120.7 million during the thirteen weeks ended November 27, 2010. Sales were $135.2 million in the prior year period. Comparable store sales decreased 6% in the thirteen weeks ended November 27, 2010, causing $8.2 million of the sales decrease. Comparable store sales in the prior year period decreased 10%. The Company s comparable store sales computation only includes stores that have been owned and operated by the Company for a period of at least twelve months. In addition, the Company has closed 6 stores in the past year that had contributed $8.4 million of sales in the thirteen weeks ended November 28, 2009. Partially offsetting these store closings, was $2.4 million of sales from a new store opened during the thirteen weeks ended November 27, 2010. During the thirteen weeks ended November 27, 2010, one store opened and one store closed.

Occupancy costs (net) were $14.8 million or 12.3% of net sales for the thirteen weeks ended November 27, 2010 as compared to $14.1 million or 10.5% of net sales for the thirteen weeks ended November 28, 2009. The increase in occupancy costs was due to the opening of one new store and occupancy increases in several stores, partially offset by the closing of several stores. Included as a reduction of net occupancy cost is rental income from third parties on real estate holdings incidental to the Company s retail operations. For the thirteen week period ended November 27, 2010 and November 28, 2009, rental income was $594,000 and $582,000, respectively.

Net sales increased by $82.4 million or 31% to $344.3 million during the thirty-nine weeks ended November 27, 2010. Sales were $261.9 million in the comparable period last year. This increase was primarily the result of having a full nine months of sales in 2010 from the Filene s stores which were acquired in mid-June 2009. This contributed $91.3 million of the sales increase. Comparable store sales increased 3% and contributed $7.1 million of the sales increase in the thirty-nine weeks ended November 27, 2010. Comparable store sales in the prior year period decreased 18%. The Company s comparable store sales computation only includes stores that have been owned and operated by the Company for a period of at least twelve months. In addition, the Company opened one store during the thirty-nine week period ended November 27, 2010 which contributed $2.4 million of the sales increase. Partially offsetting the above sales increases was the loss of $18.4 million of sales resulting from the closing of 8 stores during the current and past fiscal years. During the thirty-nine weeks ended November 27, 2010, one store opened and three stores closed.

Occupancy costs (net) were $44.5 million or 12.9% of net sales for the thirty-nine weeks ended November 27, 2010 as compared to $30.2 million or 11.5% of net sales for the thirty-nine weeks ended November 28, 2009 with the increase primarily related to the Filene s acquisition. Included as a reduction of net occupancy cost is rental income from third parties on real estate holdings incidental to the Company s retail operations. For the thirty-nine week period ended November 27, 2010 and November 28, 2009, rental income was $1,674,000 and $1,763,000, respectively.

Net cash used by investing activities was $7.7 million for the thirty-nine weeks ended November 27, 2010, comprised of capital expenditures for property and equipment of $14.1 million, partially offset by the proceeds from the sale of land, building and other assets of two former store locations. Net cash used by investing activities for the thirty-nine weeks ended November 28, 2009 was $48.9 million, comprised of $38.9 million for the purchase of Filene s and $10.0 million for capital expenditures for property and equipment.

The Company had an unsecured $40 million, revolving credit facility with Israel Discount Bank (“IDB”) through June 4, 2009, the agreement for which contained various financial covenants and ratio requirements. There were no borrowings under this facility during its term and the Company was in compliance with its covenants during the period in which this facility was available. Effective June 5, 2009 the Company revised this facility to a secured $40 million, revolving credit facility with the same bank and in connection with the acquisition of Filene s, borrowed $24.0 million under this facility. On August 27, 2009 the Company entered into a $75 million, secured, revolving credit facility with Bank of America which replaced the IDB facility, and expires on August 27, 2012. In connection with the new Bank of America facility, the Company incurred and capitalized approximately $1.1 million of deferred financing costs, which are being amortized over the term of the agreement. This facility calculates availability to borrow utilizing a formula which considers accounts receivable, inventory and certain real estate and bears interest at various rates depending on availability under formula. As of November 27, 2010, the interest rate on the facility was Prime +2.25% or LIBOR +3.25%. The Company was in compliance in all respects with the Bank of America facility at November 27, 2010. As of November 27, 2010, approximately $43.0 million was outstanding under this facility. Each of the Company s loan facilities have had sub-limits for letters of credit, which when utilized, reduce availability under the facility. At November 27, 2010 and November 28, 2009 the Company had outstanding letters of credit of $8.0 million and $6.0 million, respectively.

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