Cato 2013 Annual Meeting Highlights
CHARLOTTE, N.C., May 24, 2013 /PRNewswire/ -- The Cato Corporation (NYSE: CATO) held its Annual Shareholders' Meeting on Thursday, May 23, 2013 at its corporate offices in Charlotte, NC.
John Cato, Chairman, President, and Chief Executive Officer, commented on the Company's performance in 2012, the second best year in its history. However, due to the difficult economic times in 2012, the Company saw both net income and earnings per diluted share decline 5% from the record prior year. Cato continued to reward its long-term shareholders by accelerating the full 2013 dividend of $1.00 per share into 2012 and also paid a special dividend of an additional $1.00 a share at the same time for a total of $2.98 per share. In all, the Company returned more than $87 million to shareholders in 2012.
Mr. Cato noted that many of Cato's customers are still feeling the effects of high gas and food prices and slow job growth. Combined with higher payroll taxes, their budgets continue to be squeezed. The Company continues to expect that 2013 will again be very challenging. In discussing growth plans for the current year, the Company expects to open 65 new stores for the year including 40 Cato, 15 Versona Accessories, and 10 It's Fashion stores.
Mr. Cato commented on the Company's cash position stating, "We believe our cash balance provides many advantages and provides us a solid foundation. As has long been our practice, we utilize our cash to internally fund new concepts and store development, meet infrastructure needs and provide additional value to long-term shareholders through dividends and share repurchases. In this volatile environment, it will give us the flexibility to continue to grow our business for the long-term."
Mr. Cato also discussed infrastructure investments the Company is making to accommodate and support its growth. The projects include the addition of 60,000 square feet of office space to our existing 75,000 square foot building to accommodate growth, now and in the future. Mr. Cato commented, "We are also in the process of reviewing alternatives to our distribution facilities. In this process, we bought just under 300 acres of land that was in bankruptcy in South Carolina, located right over the state line, about 10 minutes away from here. And, on Monday, we were approved to purchase the adjacent 32 acre Knight's Stadium property from York County." Mr. Cato continued, "This long-term investment will provide the flexibility for expanding our facilities to support our growing company." Mr. Cato also discussed the Company's plans to start an E-commerce program. He stated, "We're approaching it a little differently than others by keeping all functions in-house, including a new photography studio, fulfillment center and call center." The Company will use the current Distribution Center facility to accommodate the fulfillment process and anticipates being online and operational by the 4th quarter.
In a meeting of the Board of Directors prior to the Annual Meeting, the Board declared a regular quarterly dividend of $0.05 per share. The Board of Directors previously accelerated the full year 2013 dividend of $1.00 to December 28, 2012. The $0.05 dividend, or $0.20 on an annualized basis, when coupled with the $1.00 dividend accelerated into December 2012 for a total annualized rate of $1.20 per share, represents an annualized yield of 4.9%.
During the Annual Meeting, shareholders re-elected D. Harding Stowe and Edward I. Weisiger, Jr. to three-year terms ending in 2016. Shareholders also approved a new Incentive Compensation plan, a new Employee Stock Purchase plan and ratified the selection of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for fiscal 2013.
The Cato Corporation is a leading specialty retailer of value-priced fashion apparel and accessories operating three concepts, "Cato", "Versona" and "It's Fashion". The Company's Cato stores offer exclusive merchandise with fashion and quality comparable to mall specialty stores at low prices every day. Versona is a unique fashion destination offering accessories and apparel including jewelry, handbags and shoes at exceptional prices every day. It's Fashion offers fashion with a focus on the latest trendy styles for the entire family at low prices every day. Additional information on The Cato Corporation is available at www.catocorp.com.
Statements in this press release not historical in nature including, without limitation, statements regarding the Company's expected financial results, including the Company's dividend, possible share repurchases and expected store openings, are considered "forward-looking" within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations that are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contemplated by the forward-looking statements. Such factors include, but are not limited to, the following: general economic conditions; competitive factors and pricing pressures; the Company's ability to predict fashion trends; consumer apparel buying patterns; adverse weather conditions and inventory risks due to shifts in market demand. Additional information concerning these and other important factors can be found in Item 1A. "Risk Factors" of the Company's most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. The Company does not undertake to publicly update or revise the forward-looking statements even if experience or future changes make it clear that the projected results expressed or implied therein will not be realized. The Company is not responsible for any changes made to this press release by wire or Internet services.
SOURCE The Cato Corporation