DSW Inc. (DSW) filed Quarterly Report for the period ended 2009-10-31.
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 $1.05 billion; its shares were traded at around $23.72 with a P/E ratio of 29.7 and P/S ratio of 0.7.
Highlight of Business Operations:
Net Working Capital. Net working capital increased $66.6 million to $362.3 million as of October 31, 2009 from $295.7 million at January 31, 2009, primarily due to an increase in cash provided by operations. At October 31, 2009 and January 31, 2009, the current ratio was 2.5 and 2.9, respectively.
Operating Cash Flows. For the nine months ended October 31, 2009, our net cash provided by operations was $128.2 million, compared to $58.8 million for the nine months ended November 1, 2008. The increase in cash provided by operations was primarily a result of the increase in operating income and changes in working capital.
Investing Cash Flows. For the nine months ended October 31, 2009, our net cash used in investing activities was $87.1 million compared to $75.1 million for the nine months ended November 1, 2008. The increase in net cash used in investing activities was a result of a net increase of purchase and sale activity of available-for-sale securities partially offset by a reduction in capital expenditures. During the nine months ended October 31, 2009, we incurred $16.8 million in capital expenditures. Of this incurred amount, we incurred $7.7 million related to stores, $4.7 million related to supply chain projects and warehouses and $4.4 million related to information technology and infrastructure.
We expect to spend approximately $25 million for capital expenditures in fiscal 2009. We opened nine stores and relocated one store in the first nine months of fiscal 2009. During fiscal 2009, the average investment required to open a typical new DSW store was approximately $1.4 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 $0.7 million and new store advertising and other new store expenses typically accounted for $0.2 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 one of 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 cha
Richard Snow of Snow Capital Management, L.P., Bruce Kovner of Caxton Associates, Chuck Royce of ROYCE & ASSOCIATES, Chuck Royce of ROYCE & ASSOCIATES.