DSW Inc. (DSW) filed Quarterly Report for the period ended 2009-08-01.
DSW is a specialty branded footwear retailer operating DSW stores and also supplies under supply arrangements to related retailers and to other non-related retailers in the United States. Dsw Inc. has a market cap of $622 million; its shares were traded at around $14.13 with a P/E ratio of 28.3 and P/S ratio of 0.5.
Highlight of Business Operations:
Net Working Capital. Net working capital increased $33.1 million to $328.8 million as of August 1, 2009 from $295.7 million at January 31, 2009, primarily due to the increase of short term investments from operating cash flows. The increase is also a result of the increase in inventory related to the fall season. At August 1, 2009 and January 31, 2009, the current ratio was 3.0 and 2.9, respectively.
Operating Cash Flows. For the six months ended August 1, 2009, our net cash provided by operations was $36.4 million, compared to $37.5 million for the three months ended August 2, 2008.
Investing Cash Flows. For the six months ended August 1, 2009, our net cash used in investing activities was $51.9 million compared to $41.6 million for the six months ended August 2, 2008. The increase in net cash used in investing activities is a result of a decrease in maturities and sales of available-for-sale securities partially offset by a decrease in capital expenditures. During the six months ended August 1, 2009, we incurred $13.1 million in capital expenditures. Of this incurred amount, we incurred $5.9 million related to stores, $2.8 million related to supply chain projects and warehouses and $4.4 million related to information technology equipment upgrades and new systems.
We expect to spend approximately $30 million for capital expenditures in fiscal 2009. We will open nine stores in fiscal 2009. During fiscal 2008, the average investment required to open a typical new DSW store was approximately $1.6 million, prior to construction and tenant allowances. Of this amount, gross inventory typically accounted for $0.5 million, fixtures and leasehold improvements typically accounted for $1.0 million and pre-opening advertising and other pre-opening expenses typically accounted for $0.1 million. Our future capital expenditures will depend heavily on the number of new stores we open, the number of existing stores we remodel, our information technology and system investments and the timing of these expenditures.
$150 Million Secured Revolving Credit Facility. We have a $150 million secured revolving credit facility that expires July 5, 2010. Under this facility, we and our subsidiaries are named as co-borrowers. Our facility has borrowing base restrictions and provides for borrowings at variable interest rates based on LIBOR, the prime rate and the Federal Funds effective rate, plus a margin. Our obligations under this credit facility are secured by a lien on substantially all of our and our subsidiarys personal property and a pledge of our shares of DSW Shoe Warehouse. In addition, our secured revolving credit facility contains usual and customary restrictive covenants relating to our management and the operation of our business. These covenants, among other things, restrict our ability to grant liens on our assets, incur additional indebtedness, open or close stores, pay cash dividends and redeem our stock, enter into transactions with affiliates and merge or consolidate with another entity. In addition, if at any time we utilize over 90% of our borrowing capacity under this facility, we must comply with a fixed charge coverage ratio test set forth in the facility documents. At August 1, 2009 and January 31, 2009, $129.8 million and $132.3 million, respectively, were available under the $150 million secured revolving credit facility and no direct borrowings were outstanding.Richard Snow of Snow Capital Management, L.P..