Net Sales of $1.44B; Comparable Sales of (26)%, In Line
with Expectations Announced on August
31st
GAAP and Adjusted Gross Margin of 27.7%
Reflecting 260bps of Accelerated Inventory Clearance Activity vs.
Q2'21
Double-Digit Improvement in Inventory to
Net Sales Gap vs. Q1'22
Current Liquidity of Approximately
$0.85 Billion
Recently Launched At-The-Market Offering
Program to Provide Incremental Flexibility
UNION,
N.J., Sept. 29, 2022 /PRNewswire/ -- Bed Bath
& Beyond Inc. (Nasdaq: BBBY) today reported financial results
for the second quarter of fiscal 2022 ended August 27,
2022.
|
Reported
(GAAP)
|
|
Adjusted2
|
($ in millions,
except per share data)
|
Three months
ended
|
|
Three months
ended
|
|
August 27,
2022
|
August 28,
2021
|
Diff
|
|
August 27,
2022
|
August 28,
2021
|
Diff
|
Net
Sales
|
$1,437
|
$1,985
|
(28) %
|
|
$1,437
|
$1,985
|
(28) %
|
Comparable1 Sales
|
|
|
|
|
|
|
(26) %
|
Gross
Margin
|
27.7 %
|
30.3 %
|
-260bps
|
|
27.7 %
|
34.0 %
|
-630bps
|
|
|
|
|
|
|
|
|
SG&A
Margin
|
44.2 %
|
32.9 %
|
1,130bps
|
|
44.2 %
|
33.0 %
|
1,120bps
|
Net (Loss)
Income
|
($366)
|
($73)
|
($293)
|
|
($256)
|
$4
|
($260)
|
Adjusted2
EBITDA
|
|
|
|
|
($168)
|
$85
|
($253)
|
Adjusted2
EBITDA Margin
|
|
|
|
|
(11.7) %
|
4.3 %
|
-1,600bps
|
EPS -
Diluted
|
($4.59)
|
($0.72)
|
($3.87)
|
|
($3.22)
|
$0.04
|
($3.26)
|
Sue Gove, Director & Interim
CEO of Bed Bath & Beyond said, "Our results for the second
quarter came in as previously expected and announced. While our
sales and profit results do not yet reflect the strategic and
financial actions we have initiated to change our performance, they
do demonstrate sequential progress in several key areas. In the
first quarter, we experienced a significant dislocation between
sales and inventory that we began to address immediately during the
second quarter. Aggressive inventory optimization actions,
including accelerated markdowns and strategic promotions, led to
double digit improvement in this gap. Working with our supplier
partners has also been an important focus area and our payables are
considerably healthier than in the prior quarter as evident on our
balance sheet.
Ms. Gove continued, "Although still very early, we are seeing
signs of continued progress as merchandising and inventory changes
begin. For example, we have seen positive sales trends where
in-stock positions and visual merchandising have improved. Our
Welcome Rewards loyalty program also continues to gain momentum
with membership expanding by more than 1.3 million since the end of
August, for a total of 6.4 million members since launching this
summer. Enrolled members represent more frequent purchases and
higher transaction values across all three banners. Our buybuy BABY
business continues to hold market share relative to other mass
market retailers in today's highly competitive environment. We are
enhancing our capabilities while leveraging Welcome Rewards, such
as the relaunch of our Baby registry business later this fiscal
year, increasing the effectiveness of marketing investments, and
realizing the strategic shift of our merchandise assortment which
had minimal impact in this quarter, all targeted to drive customers
and top-line growth."
"We have worked quickly to deploy strategic and financial
changes swiftly to increase cash through business growth and
lowering our cost structure by approximately $250 million in the second half of fiscal 2022,
or an expected $500 million on an
annualized basis. We are confident that our current liquidity will
enable the necessary changes we are implementing. I want to thank
our teams for their proven dedication and resilience during this
extraordinary and important time for our organization. We are more
focused than ever on demonstrating improvement in the coming
quarters. Regaining market share and enhancing liquidity are
our top priorities."
Q2 Highlights
• Net Sales of $1,437M declined (28)%, reflecting a
Comparable1 Sales decline of (26)% and (2)% related
to the impact from fleet optimization activity
° Bed Bath & Beyond banner
Comparable1 Sales decline of (28)%; reflecting legacy
merchandise assortment, out of stocks, and continued trends in
customer traffic
° buybuy BABY maintaining market share
while Comparable1 Sales decreased by high-teens
percentage compared to growth of high-teens percentage in the year
ago period
• Launch of Welcome Rewards during the quarter
with membership of 6.3 million, reflecting approximately 30%
increase in new members
• GAAP Gross Margin of 27.7%;
Adjusted2 Gross Margin of 27.7%
° Adjusted2 Gross
Margin reflects 260bps of negative impact from accelerated
inventory clearance activity at the Bed Bath & Beyond banner,
leading to double-digit improvement in Inventory to Net Sales
versus last quarter
° Adjusted2 Gross
Margin also includes 100bps of transient supply chain-related port
fees which the Company expects to recede by fiscal year-end
° Excluding the aforementioned 360bps
of accelerated and transient costs, Q2
Adjusted2 Gross Margin would have been 31.3%
• Cash Flow from Operations of approximately
$(198.9) million and Capital
Expenditures of approximately $(121.6)
million resulting in Free Cash Flow of approximately
$(320.5) million.
• Liquidity of approximately $0.85 billion as of fiscal September, reflecting
recently expanded $1.13 billion ABL
facility and new $375.0 million
"first-in-last-out" loan ("FILO loan")
• At-the-Market ("ATM") Offering Program
recently launched with approximately three million shares of twelve
million authorized shares sold for proceeds of approximately
$30 million
Fiscal 2022 Second Quarter Results
(ending August 27, 2022)
Net sales of $1,437M declined
(28)%, reflecting a Comparable1 Sales decline of
(26)% and (2)% related to the impact from fleet optimization
activity.
• By channel,
Comparable1 Sales declined (28)% in Stores and
(22)% in Digital versus the fiscal 2021 second quarter.
• Bed Bath & Beyond banner
Comparable1 Sales decreased (28)% compared to the
prior year period. Results exclude the impact from the Company's
previously announced store fleet optimization program, which began
in the second half of fiscal 2020.
• buybuy BABY banner
Comparable1 Sales decreased in the high-teens
compared to growth of high-teens percentage during the fiscal 2021
second quarter.
GAAP and Adjusted Gross Margin was 27.7% for the quarter.
Adjusted2 Gross Margin of 27.7% included a 260 basis
point negative impact compared to last year from accelerated
clearance activity as the Company works aggressively to right-size
inventory levels commensurate with sales. Port-related transient
supply chain costs also impacted Adjusted2 Gross Margin
by 100 basis points versus the year ago period. Excluding the
aforementioned 360 basis points of accelerated and transient costs,
Q2 Adjusted2 Gross Margin would have been
31.3%.
SG&A expense on both a GAAP and Adjusted2 basis
remain at lower levels compared to the prior year period, primarily
due to cost reductions and lower rent and occupancy expenses on a
lower store base following the Company's fleet optimization
program. SG&A Margin for the quarter increased on a GAAP and
Adjusted2 basis versus last year due to lower Net Sales.
These results do not reflect significant cost optimization plans
that began following the Company's Business & Strategic Update
on August 31, 2022. Significant
SG&A actions include a 20% reduction in force across corporate
and supply chain, in addition to decreases in indirect spending
throughout the organization.
Adjusted2 EBITDA for the period was ($168) million reflecting lower Net Sales and
lower Adjusted2 Gross Margin.
Net Loss per diluted share of $(4.59) for the quarter reflected approximately
$1.38 of special items for the
quarter. Excluding special items, Adjusted2 Net Loss per
diluted share was $(3.22).
Special items during the second quarter included restructuring
costs driven by severance charges related to the departure of
certain executive officers and the aforementioned reduction in
force.
For the fiscal 2022 second quarter, the Company reported
operating cash flow of approximately $(198.9) million. Investing cash flow of
$(121.6) million was primarily driven
by planned capital expenditures in connection with store remodels,
new openings (related to buybuy BABY), maintenance and investments
in technology. The Company has paused its new store and remodel
programs for the remainder of fiscal 2022 which is expected to
reduce its fiscal 2022 planned capital expenditures by
approximately $150 million from a
prior expectation of approximately $400
million.
Cash, cash equivalents, restricted cash and investments totaled
approximately $0.2 billion and Total
Liquidity3 was approximately $0.5
billion as of the fiscal 2022 second quarter, including
the Company's prior $1.0 billion
asset-backed revolving credit facility less borrowings of
$550 million and approximately
$136.4 million in letters of
credit.
As announced on August 31, 2022,
the Company secured more than $500.0
million of new financing, including a newly expanded
$1.130 billion asset-backed
revolving credit facility and a new $375.0 million FILO facility. Current
liquidity is $0.85 billion, after
repayments and borrowings that have occurred subsequent to the
fiscal 2022 second quarter. Additionally, the Company's 12
million share ATM program has launched. Program-to-date, the
Company has sold approximately three million shares for
approximately $30 million. Proceeds
from the Company's ATM are expected to be used to advance strategic
financial objectives.
The Company is considering liability management transactions
with particular focus on the 2024 bonds. Transactions could be
launched in the third quarter and could include offers to exchange
our current debt for new longer tenured debt or equity at exchange
ratios related to the then-current value of the current debt.
However, the transactions could take other forms or might not be
launched at all.
Fiscal 2022 Outlook
Commentary
As previously announced with the Company's Business and
Strategic Update on August 31, 2022,
the Company is maintaining the following outlook parameters for
fiscal 2022:
• Comparable1 Sales decline in
the 20% range driven by improvements in the second half of fiscal
2022 versus the first half of fiscal 2022
• Adjusted2 SG&A expense
approximately $250 million below last
year, reflecting cost optimization actions occurring in the second
half of fiscal 2022
• Capital Expenditures of approximately
$250 million versus the Company's
original plans of approximately $400
million previously planned for fiscal 2022
Based on these guidance parameters, as well as ongoing working
capital management and the timing of SG&A savings, planned
reductions in capital expenditures and future store closures, the
Company anticipates breakeven operating cash flow by the end of
fiscal 2022.
The Company will provide further commentary and context for its
fiscal 2022 outlook during its conference call as well as in its
investor presentation available on the investor relations section
of the Company's website at
http://bedbathandbeyond.gcs-web.com/investor-relations.
Fiscal 2022 Second Quarter
Conference Call and Investor Presentation
Bed Bath & Beyond Inc.'s fiscal 2022 second quarter
conference call with analysts and investors will be held today at
8:15am EDT and may be accessed by
dialing 1-404-400-0571, or if international, 1-866-374-5140, using
conference ID number 63266542#. A live audio webcast of the
conference call, along with the earnings press release, investor
presentation and supplemental financial disclosures, will also be
available on the investor relations section of the Company's
website at http://bedbathandbeyond.gcs-web.com/investor-relations.
The webcast will be available for replay after the call.
The Company has also made available an Investor Presentation on
the investor relations section of the Company's website at
http://bedbathandbeyond.gcs-web.com/events-and-presentations.
(1)
|
Comparable Sales
reflects the year-over-year change in sales from the Company's
retail channels, including stores and digital, that have been
operating for twelve full months following the opening period
(typically six to eight weeks). Comparable Sales excludes the
impact of the Company's store network optimization
program.
|
|
|
(2)
|
Adjusted items refer to
comparable sales as well as financial measures that are derived
from measures calculated in accordance with GAAP, which have been
adjusted to exclude certain items. Adjusted Gross Margin, Adjusted
SG&A, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EPS
- Diluted are non-GAAP financial measures. For more
information about non-GAAP financial measures, see "Non-GAAP
Information" below.
|
|
|
(3)
|
Total Liquidity
includes cash & investments and availability under the
Company's asset-based revolving credit facility.
|
About the Company
Bed Bath & Beyond Inc. and subsidiaries (the "Company") is
an omnichannel retailer that makes it easy for our customers to
feel at home. The Company sells a wide assortment of merchandise in
the Home, Baby, Beauty and Wellness markets. Additionally,
the Company is a partner in a joint venture which operates retail
stores in Mexico under the name
Bed Bath & Beyond.
The Company operates websites at bedbathandbeyond.com,
bedbathandbeyond.ca, buybuybaby.com, buybuybaby.ca,
harmondiscount.com, and facevalues.com. As of August 27, 2022, the Company had a total of 955
stores, including 768 Bed Bath & Beyond stores in all 50
states, the District of Columbia,
Puerto Rico and Canada, 137 buybuy BABY stores and 50 stores
under the names Harmon, Harmon Face Values or Face Values. During
the fiscal 2022 second quarter, the Company opened 2 buybuy
BABY stores. Additionally during the fiscal 2022 second quarter,
the Company closed 2 stores including 1 Bed Bath & Beyond
stores and 1 Harmon store. The joint venture to which the Company
is a partner operates 12 stores in Mexico under the name Bed Bath &
Beyond.
Non-GAAP Information
This press release contains certain non-GAAP information,
including adjusted earnings before interest, income taxes,
depreciation and amortization ("EBITDA"), adjusted EBITDA margin,
adjusted gross margin, adjusted SG&A, and adjusted net earnings
per diluted share. Non-GAAP information is intended to provide
visibility into the Company's core operations and excludes special
items, including non-cash impairment charges related to certain
store-level assets and tradenames, loss on sale of businesses, loss
on the extinguishment of debt, charges recorded in connection with
the restructuring and transformation initiatives, which includes
accelerated markdowns and inventory reserves related to the planned
assortment transition to Owned Brands and costs associated with
store closures related to the Company's fleet optimization and the
income tax impact of these items. The Company's definition and
calculation of non-GAAP measures may differ from that of other
companies. Non-GAAP financial measures should be viewed in addition
to, and not as an alternative for, the Company's reported GAAP
financial results. For a reconciliation to the most directly
comparable US GAAP measures and certain information relating to the
Company's use of non-GAAP financial measures, see "Non-GAAP
Financial Measures" below.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of Section 21 E of the Securities Exchange Act of 1934
including, but not limited to, our progress and anticipated
progress towards our long-term objectives, as well as more
generally the status of our future liquidity and financial
condition and our outlook for our 2022 fiscal third quarter, 2022
fiscal fourth quarter and 2022 fiscal year. Many of these
forward-looking statements can be identified by use of words such
as may, will, expect, anticipate, approximate, estimate, assume,
continue, model, project, plan, goal, preliminary, and similar
words and phrases, although the absence of those words does not
necessarily mean that statements are not forward-looking. Our
actual results and future financial condition may differ materially
from those expressed in any such forward-looking statements as a
result of many factors. Such factors include, without limitation:
general economic conditions including the recent supply chain
disruptions, labor shortages, wage pressures, rising inflation and
the ongoing military conflict between Russia and Ukraine; challenges related to our
relationships with our suppliers, including the failure of our
suppliers to supply us with the necessary volume and type of
products; the impact of cost-saving measures; our inability to
generate sufficient cash to service all of our indebtedness or our
ability to access additional capital; our inability to complete our
expected credit financings; changes to our credit rating or the
terms on which vendors or others will provide us credit; the impact
of strategic changes, including the reaction of customers to such
changes; a challenging overall macroeconomic environment and a
highly competitive retailing environment; risks associated with the
ongoing COVID-19 pandemic and the governmental responses to it,
including its impacts across our businesses on demand and
operations, as well as on the operations of our suppliers and other
business partners, and the effectiveness of our and governmental
actions taken in response to these risks; changing consumer
preferences, spending habits and demographics; demographics and
other macroeconomic factors that may impact the level of spending
for the types of merchandise sold by us; challenges in executing
our omni-channel and transformation strategy, including our ability
to establish and profitably maintain the appropriate mix of digital
and physical presence in the markets we serve; our ability to
successfully execute our store fleet optimization strategies,
including our ability to achieve anticipated cost savings and to
not exceed anticipated costs; our ability to execute on any
additional strategic transactions and realize the benefits of any
acquisitions, partnerships, investments or divestitures;
disruptions to our information technology systems, including but
not limited to security breaches of systems protecting consumer and
employee information or other types of cybercrimes or cybersecurity
attacks; damage to our reputation in any aspect of our operations;
the cost of labor, merchandise, logistical costs and other costs
and expenses; potential supply chain disruption due to trade
restrictions or otherwise, and other factors such as natural
disasters, pandemics, including the COVID-19 pandemic, political
instability, labor disturbances, product recalls, financial or
operational instability of suppliers or carriers, and other items;
inflation and the related increases in costs of materials, labor
and other costs; inefficient management of relationships and
dependencies on third-party service providers; our ability to
attract and retain qualified employees in all areas of the
organization; unusual weather patterns and natural disasters,
including the impact of climate change; uncertainty and disruptions
in financial markets; volatility in the price of our common stock
and its effect, and the effect of other factors, including the
COVID-19 pandemic, on our capital allocation strategy; changes to
statutory, regulatory and other legal requirements or deemed
noncompliance with such requirements; changes to accounting rules,
regulations and tax laws, or new interpretations of existing
accounting standards or tax laws; new, or developments in existing,
litigation, claims or assessments; and a failure of our business
partners to adhere to appropriate laws, regulations or standards.
Except as required by law, we do not undertake any obligation to
update our forward-looking statements.
BED BATH &
BEYOND INC.
AND SUBSIDIARIES Consolidated Statements of
Operations (in thousands, except per share
data) (unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
August 27,
2022
|
|
August 28,
2021
|
|
August 27,
2022
|
|
August 28,
2021
|
Net sales
|
$
1,437,018
|
|
$ 1,984,696
|
|
$
2,900,436
|
|
$ 3,938,508
|
|
|
|
|
|
|
|
|
Cost of
sales
|
1,038,756
|
|
1,383,627
|
|
2,152,862
|
|
2,703,745
|
|
|
|
|
|
|
|
|
Gross profit
|
398,262
|
|
601,069
|
|
747,574
|
|
1,234,763
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
634,877
|
|
652,972
|
|
1,272,385
|
|
1,311,734
|
|
|
|
|
|
|
|
|
Impairments
|
55,518
|
|
7,584
|
|
82,217
|
|
16,713
|
|
|
|
|
|
|
|
|
Restructuring and
transformation initiative expenses
|
54,069
|
|
24,495
|
|
78,332
|
|
58,181
|
|
|
|
|
|
|
|
|
Loss on sale of
businesses
|
—
|
|
132
|
|
—
|
|
4,121
|
|
|
|
|
|
|
|
|
Operating loss
|
(346,202)
|
|
(84,114)
|
|
(685,360)
|
|
(155,986)
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
18,603
|
|
16,121
|
|
35,051
|
|
32,121
|
|
|
|
|
|
|
|
|
Loss on extinguishment
of debt
|
—
|
|
111
|
|
—
|
|
376
|
|
|
|
|
|
|
|
|
Loss
before provision (benefit) for income taxes
|
(364,805)
|
|
(100,346)
|
|
(720,411)
|
|
(188,483)
|
|
|
|
|
|
|
|
|
Provision (benefit) for
income taxes
|
1,354
|
|
(27,131)
|
|
3,414
|
|
(64,394)
|
|
|
|
|
|
|
|
|
Net loss
|
$
(366,159)
|
|
$
(73,215)
|
|
$
(723,825)
|
|
$
(124,089)
|
|
|
|
|
|
|
|
|
Net loss per share -
Basic
|
$
(4.59)
|
|
$
(0.72)
|
|
$
(9.09)
|
|
$
(1.19)
|
Net loss per share -
Diluted
|
$
(4.59)
|
|
$
(0.72)
|
|
$
(9.09)
|
|
$
(1.19)
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding - Basic
|
79,706
|
|
101,951
|
|
79,659
|
|
104,361
|
Weighted average shares
outstanding - Diluted
|
79,706
|
|
101,951
|
|
79,659
|
|
104,361
|
Non-GAAP Financial
Measures
The following table reconciles non-GAAP financial measures
presented in this press release or that may be presented on the
Company's second quarter conference call with analysts and
investors. The Company believes that these non-GAAP financial
measures provide management, analysts, investors and other users of
the Company's financial information with meaningful supplemental
information regarding the performance of the Company's business.
These non-GAAP financial measures should not be considered superior
to, but in addition to other financial measures prepared by the
Company in accordance with GAAP, including comparisons of
year-to-year results. The Company's method of determining these
non-GAAP financial measures may be different from other companies'
methods and, therefore, may not be comparable to those used by
other companies. As such, the Company does not recommend the sole
use of these non-GAAP measure to assess its financial and earnings
performance. For reasons noted above, the Company is presenting
certain non-GAAP financial measures for its fiscal 2022
second quarter. In order for investors to be able to more
readily compare the Company's performance across periods, the
Company has included comparable reconciliations for the 2021 period
in the reconciliation tables below. The Company is not providing a
reconciliation of its guidance with respect to Adjusted EBITDA and
Adjusted SG&A because the Company is unable to provide this
reconciliation without unreasonable effort due to the uncertainty
and inherent difficulty of predicting the occurrence, the financial
impact, and the periods in which the adjustments may be recognized.
For the same reasons, the Company is unable to address the probable
significance of the unavailable information, which could be
material to future results.
Non-GAAP
Reconciliation (in thousands, except per share
data) (unaudited)
|
|
|
|
Three Months Ended
August 27, 2022
|
|
|
|
|
Excluding
|
|
|
|
|
Reported
|
|
Loss on Sale of
Businesses
|
|
Loss on
extinguishment of debt
|
|
Restructuring and
Transformation Expenses
|
|
Impairments
charges
|
|
Total income tax
impact
|
|
Total
Impact
|
|
Adjusted
|
Gross Profit
|
|
$ 398,262
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
398,262
|
Gross
margin
|
|
27.7 %
|
|
— %
|
|
— %
|
|
— %
|
|
— %
|
|
— %
|
|
— %
|
|
27.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
transformation initiative expenses
|
|
54,069
|
|
—
|
|
—
|
|
(54,069)
|
|
—
|
|
—
|
|
(54,069)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings before
provision (benefit) for income taxes
|
|
(364,805)
|
|
—
|
|
—
|
|
54,229
|
|
55,518
|
|
—
|
|
109,747
|
|
(255,058)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for
income taxes
|
|
1,354
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,354
|
Effective tax
rate
|
|
(0.4) %
|
|
|
|
|
|
|
|
|
|
(0.1) %
|
|
(0.1) %
|
|
(0.5) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
(366,159)
|
|
$
—
|
|
$
—
|
|
$
54,229
|
|
$
55,518
|
|
$
—
|
|
$
109,747
|
|
$
(256,412)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share -
Diluted
|
|
$
(4.59)
|
|
|
|
|
|
|
|
|
|
|
|
$
1.38
|
|
$
(3.22)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding- Basic
|
|
79,706
|
|
|
|
|
|
|
|
|
|
|
|
79,706
|
|
79,706
|
Weighted average shares
outstanding- Diluted
|
|
79,706
|
(1)
|
|
|
|
|
|
|
|
|
|
|
79,706
|
|
79,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income (loss) to EBITDA and Adjusted EBITDA
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
(366,159)
|
|
$
—
|
|
$
—
|
|
$
54,229
|
|
$
55,518
|
|
$
—
|
|
$
109,747
|
|
$
(256,412)
|
Depreciation and
amortization
|
|
70,991
|
|
—
|
|
—
|
|
(2,057)
|
|
—
|
|
—
|
|
(2,057)
|
|
68,934
|
Interest
expense
|
|
18,603
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
18,603
|
Provision (benefit) for
income taxes
|
|
1,354
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,354
|
EBITDA
|
|
$
(275,211)
|
|
$
—
|
|
$
—
|
|
$
52,172
|
|
$
55,518
|
|
$
—
|
|
$
107,690
|
|
$
(167,521)
|
EBITDA as % of net
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11.7) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) If a company is in
a net loss position, then for earnings per share purposes, diluted
weighted average shares outstanding are equivalent to basic
weighted average shares outstanding.
|
|
|
Three Months Ended
August 28, 2021
|
|
|
|
|
Excluding
|
|
|
|
|
Reported
|
|
Loss on Sale of
Businesses
|
|
Loss on
extinguishment of debt
|
|
Restructuring and
Transformation Expenses
|
|
Impairment
charges
|
|
(Gain) loss on sale
of property
|
|
Total income tax
impact
|
|
Total
Impact
|
|
Adjusted
|
Gross Profit
|
|
$ 601,069
|
|
$
—
|
|
$
—
|
|
$
73,679
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
73,679
|
|
$
674,748
|
Gross
margin
|
|
30.3 %
|
|
— %
|
|
— %
|
|
3.7 %
|
|
— %
|
|
— %
|
|
— %
|
|
3.7 %
|
|
34.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
transformation initiative expenses
|
|
24,495
|
|
—
|
|
—
|
|
(24,495)
|
|
—
|
|
—
|
|
—
|
|
(24,495)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings before
(benefit) provision for income taxes
|
|
(100,346)
|
|
132
|
|
111
|
|
98,174
|
|
7,584
|
|
(1,339)
|
|
—
|
|
104,662
|
|
4,316
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Benefit) provision for
income taxes
|
|
(27,131)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
27,751
|
|
27,751
|
|
620
|
Effective tax
rate
|
|
27.0 %
|
|
|
|
|
|
|
|
|
|
|
|
(12.6) %
|
|
(12.6) %
|
|
14.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$ (73,215)
|
|
$
132
|
|
$
111
|
|
$
98,174
|
|
$
7,584
|
|
$
(1,339)
|
|
$
(27,751)
|
|
$
76,911
|
|
$
3,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) earnings per
share - Diluted
|
|
$
(0.72)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
0.76
|
|
$
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding- Basic
|
|
101,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101,951
|
|
101,951
|
Weighted average shares
outstanding- Diluted
|
|
101,951
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
101,951
|
|
104,037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net (Loss) Income to EBITDA and Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
(73,215)
|
|
$
132
|
|
$
111
|
|
$
98,174
|
|
$
7,584
|
|
$
(1,339)
|
|
$ (27,751)
|
|
$
76,911
|
|
$
3,696
|
Depreciation and
amortization
|
|
70,112
|
|
—
|
|
—
|
|
(5,924)
|
|
—
|
|
—
|
|
—
|
|
(5,924)
|
|
64,188
|
Loss on extinguishment
of debt
|
|
111
|
|
—
|
|
(111)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(111)
|
|
—
|
Interest
expense
|
|
16,121
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
16,121
|
(Benefit) provision for
income taxes
|
|
(27,131)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
27,751
|
|
27,751
|
|
620
|
EBITDA
|
|
$
(14,002)
|
|
$
132
|
|
$
—
|
|
$
92,250
|
|
$
7,584
|
|
$
(1,339)
|
|
$
—
|
|
$
98,627
|
|
$
84,625
|
EBITDA as % of net
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) If a company is in
a net loss position, then for earnings per share purposes, diluted
weighted average shares outstanding are equivalent to basic
weighted average shares outstanding.
|
BED BATH &
BEYOND INC.
AND SUBSIDIARIES Condensed Consolidated
Balance Sheets (in thousands, except per share
data)
|
|
|
August 27,
2022
|
|
February 26,
2022
|
|
August 28,
2021
|
|
(unaudited)
|
|
|
|
(unaudited)
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash
and cash equivalents
|
$
135,270
|
|
$
439,496
|
|
$
970,592
|
Short term investment securities
|
—
|
|
—
|
|
29,999
|
Merchandise inventories
|
1,576,270
|
|
1,725,410
|
|
1,590,669
|
Prepaid expenses and other current assets
|
192,615
|
|
198,248
|
|
510,109
|
Total
current assets
|
1,904,155
|
|
2,363,154
|
|
3,101,369
|
Long-term investment
securities
|
20,228
|
|
19,212
|
|
19,459
|
Property and equipment,
net
|
1,121,203
|
|
1,027,387
|
|
918,462
|
Operating lease
assets
|
1,469,076
|
|
1,562,857
|
|
1,668,621
|
Other assets
|
151,977
|
|
157,962
|
|
359,612
|
Total
assets
|
$
4,666,639
|
|
$
5,130,572
|
|
$
6,067,523
|
|
|
|
|
|
|
Liabilities and
Shareholders' (Deficit) Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable
|
$
783,681
|
|
$
872,445
|
|
$
991,502
|
Accrued expenses and other current liabilities
|
394,268
|
|
529,371
|
|
514,404
|
Merchandise credit and gift card liabilities
|
328,089
|
|
326,465
|
|
311,013
|
Current operating lease liabilities
|
322,430
|
|
346,506
|
|
349,847
|
Current income taxes payable
|
—
|
|
—
|
|
—
|
Total
current liabilities
|
1,828,468
|
|
2,074,787
|
|
2,166,766
|
Other
liabilities
|
114,259
|
|
102,438
|
|
74,831
|
Operating lease
liabilities
|
1,479,456
|
|
1,508,002
|
|
1,609,912
|
Income taxes
payable
|
92,146
|
|
91,424
|
|
102,192
|
Long-term
debt
|
1,729,964
|
|
1,179,776
|
|
1,179,588
|
Total
liabilities
|
5,244,293
|
|
4,956,427
|
|
5,133,289
|
|
|
|
|
|
|
Shareholders' (deficit)
equity:
|
|
|
|
|
|
Preferred stock -
$0.01 par value; authorized - 1,000 shares; no shares issued or
outstanding
|
—
|
|
—
|
|
—
|
Common stock - $0.01
par value; authorized - 900,000 shares; issued 345,053, 344,146 and
343,596, respectively; outstanding 80,363, 81,979 and 101,060
shares, respectively
|
3,450
|
|
3,441
|
|
3,436
|
Additional paid-in
capital
|
2,253,039
|
|
2,235,894
|
|
2,218,400
|
Retained
earnings
|
8,942,368
|
|
9,666,091
|
|
10,101,522
|
Treasury stock, at
cost; 264,691, 262,167 and 242,536 shares, respectively
|
(11,728,514)
|
|
(11,685,267)
|
|
(11,335,845)
|
Accumulated other
comprehensive loss
|
(47,997)
|
|
(46,014)
|
|
(53,279)
|
|
|
|
|
|
|
Total
shareholders' (deficit) equity
|
(577,654)
|
|
174,145
|
|
934,234
|
|
|
|
|
|
|
Total
liabilities and shareholders' (deficit) equity
|
$
4,666,639
|
|
$
5,130,572
|
|
$
6,067,523
|
BED BATH &
BEYOND INC.
AND SUBSIDIARIES Consolidated Statements of
Cash Flows (in thousands,
unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
August 27,
2022
|
|
August 28,
2021
|
|
August 27,
2022
|
|
August 28,
2021
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
Net
loss
|
$
(366,159)
|
|
$
(73,215)
|
|
$
(723,825)
|
|
$
(124,089)
|
Adjustments to
reconcile net loss to net cash (used in) provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
70,991
|
|
70,112
|
|
142,094
|
|
138,390
|
Impairments
|
55,518
|
|
7,584
|
|
82,217
|
|
16,713
|
Stock-based compensation
|
9,311
|
|
10,075
|
|
16,434
|
|
17,993
|
Deferred income taxes
|
2,299
|
|
(26,803)
|
|
—
|
|
(48,938)
|
Loss
on sale of businesses
|
—
|
|
132
|
|
—
|
|
4,121
|
Loss
on debt extinguishment
|
—
|
|
111
|
|
—
|
|
376
|
Other
|
377
|
|
(3,176)
|
|
967
|
|
(5,373)
|
Decrease (increase) in assets:
|
|
|
|
|
|
|
|
Merchandise inventories
|
181,486
|
|
(31,070)
|
|
146,729
|
|
82,296
|
Other
current assets
|
(7,560)
|
|
3,659
|
|
411
|
|
82,203
|
Other
assets
|
24
|
|
(293)
|
|
(82)
|
|
(225)
|
(Decrease) increase in liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
(33,804)
|
|
111,691
|
|
(81,401)
|
|
9,490
|
Accrued
expenses and other current liabilities
|
(98,854)
|
|
12,667
|
|
(136,892)
|
|
(116,660)
|
Merchandise credit and gift card liabilities
|
3,103
|
|
1,878
|
|
1,927
|
|
(1,543)
|
Income
taxes payable
|
2,097
|
|
(767)
|
|
793
|
|
(490)
|
Operating
lease assets and liabilities, net
|
(14,663)
|
|
(4,869)
|
|
(27,759)
|
|
(1,744)
|
Other
liabilities
|
(3,040)
|
|
(2,937)
|
|
(4,038)
|
|
(6,482)
|
Net cash (used
in) provided by operating activities
|
(198,874)
|
|
74,779
|
|
(582,425)
|
|
46,038
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
Purchases of held-to-maturity investment securities
|
—
|
|
—
|
|
—
|
|
(29,997)
|
Net
proceeds from sale of property
|
—
|
|
5,000
|
|
—
|
|
5,000
|
Capital expenditures
|
(121,648)
|
|
(75,954)
|
|
(226,500)
|
|
(149,475)
|
Net cash used in
investing activities
|
(121,648)
|
|
(70,954)
|
|
(226,500)
|
|
(174,472)
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
Borrowing of long-term debt
|
350,000
|
|
—
|
|
550,000
|
|
—
|
Repayments of long-term debt
|
—
|
|
(3,182)
|
|
—
|
|
(11,355)
|
Repayments of finance leases
|
(809)
|
|
—
|
|
(809)
|
|
—
|
Repurchase of common stock, including fees
|
(219)
|
|
(101,316)
|
|
(43,247)
|
|
(240,011)
|
Payment of dividends
|
(45)
|
|
(80)
|
|
(316)
|
|
(640)
|
Payment of deferred financing fees
|
—
|
|
(3,443)
|
|
—
|
|
(3,443)
|
Net cash
provided by (used in) financing activities
|
348,927
|
|
(108,021)
|
|
505,628
|
|
(255,449)
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash, cash equivalents and restricted
cash
|
(620)
|
|
(4,628)
|
|
(871)
|
|
1,489
|
|
|
|
|
|
|
|
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
27,785
|
|
(108,824)
|
|
(304,168)
|
|
(382,394)
|
|
|
|
|
|
|
|
|
Cash, cash equivalents
and restricted cash:
|
|
|
|
|
|
|
|
Beginning of
period
|
138,931
|
|
1,133,654
|
|
470,884
|
|
1,407,224
|
End of
period
|
$
166,716
|
|
$
1,024,830
|
|
$
166,716
|
|
$
1,024,830
|
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SOURCE Bed Bath & Beyond