Burlington Stores, Inc. (NYSE: BURL), a nationally recognized
off-price retailer of high-quality, branded apparel at everyday low
prices, today announced its results for the first quarter ended May
4, 2019.
Tom Kingsbury, CEO, stated, “While our first quarter sales
results came in at the low end of our expectations, our disciplined
expense management enabled us to exceed the high end of our
recently updated Adjusted Earnings Per Share guidance.
Although we saw strength in our Children’s Apparel, Baby Depot and
Home businesses, we remain very focused on improving our
underperforming Ladies Apparel business. We were also pleased to be
able to return $123 million to our shareholders through share
repurchases during the first quarter.”
Fiscal 2019 First Quarter Operating
Results (for the 13 week period ended May 4, 2019 compared with the
13 week period ended May 5, 2018):
- Total sales increased 7.3% to $1,629 million,
while comparable store sales increased 0.1%. New and non-comparable
stores contributed an incremental $121 million in sales during the
quarter.
- Gross margin decreased by 20 basis points vs.
last year to 41.0%. Merchandise margins increased 10 basis points,
but were more than offset by a 30 basis point increase in freight
costs. Product sourcing costs, which are included in selling,
general and administrative expenses (SG&A), were 10 basis
points higher as a percentage of sales vs. the Fiscal 2018 first
quarter.
- SG&A increased $49 million to $517 million
for the first quarter of Fiscal 2019. As a result of our
adoption of the new Lease Accounting Standard, favorable lease
costs, initially recorded as a result of purchase accounting that
occurred in 2006, are now included in SG&A. In prior
periods, these costs were included in depreciation and
amortization.
- Adjusted SG&A, defined as SG&A less
product sourcing costs and favorable lease costs, as a percentage
of sales increased 20 basis points to 26.3%. Reductions in
marketing and utilities expense rates were more than offset by
deleverage in occupancy and store payroll expense.
- The effective tax rate decreased 20 basis
points to 17.2%. The adjusted effective tax rate increased 60
basis points to 18.0%.
- Net income decreased 5.8% to $78 million, or
$1.15 per share vs. $1.20 last year, and Adjusted Net Income
decreased 2% to $85 million, or $1.26 per share, vs. $1.26 last
year. This slight decrease in Adjusted Net Income was driven
primarily by higher freight expense and deleverage on fixed
expenses.
- Fully diluted shares outstanding amounted to
67.7 million at the end of the quarter compared with 69.0 million
at the end of last year’s first quarter. The decrease was primarily
the result of share repurchases under the Company’s share
repurchase program, discussed in more detail below. From the end of
the first quarter of Fiscal 2018 through the end of the first
quarter of Fiscal 2019, the Company has repurchased approximately
1.8 million shares of its common stock under its share repurchase
program.
- Adjusted EBITDA increased 2%, or $3 million
higher than last year’s first quarter. The 55 basis point decline
in Adjusted EBITDA as a percentage of sales was primarily driven by
higher freight expense, as well as deleverage on fixed expenses.
Adjusted EBIT decreased 2%, or $2 million below the prior year
period, to $117 million. The 65 basis point decline in Adjusted
EBIT as a percentage of sales was primarily driven by the same
factors, as well as higher depreciation expense.
Inventory
- Merchandise inventories were $896 million vs. $787 million last
year. The increase was due to inventory related to the addition of
37 net new stores opened since the end of the first quarter of
Fiscal 2018, and an increase in pack and hold inventory, which was
28% of total inventory at the end of the first quarter of Fiscal
2019 compared to 27% at the end of the first quarter of Fiscal
2018. In addition, comparable store inventory increased 5% at the
end of the first quarter of Fiscal 2019.
Share Repurchase Activity
- During the first quarter, the Company invested $123 million of
cash to repurchase 841,460 shares of its common stock. As of the
end of the first quarter, the Company had $176 million remaining on
its current share repurchase authorization.
New Lease Accounting
Standard
- The Company adopted the new Lease Accounting Standard in the
first quarter. As a result, at the end of the first quarter, the
Company recorded approximately $2.1 billion of additional
right-of-use assets and approximately $2.3 billion of additional
lease liabilities. Adoption of this standard also resulted in a
change in the timing of certain expense recognition, primarily
related to favorable lease costs, as well as a reclassification of
these favorable lease costs from depreciation and amortization to
SG&A.
Full Year Fiscal 2019 and Second Quarter
2019 Outlook
The following outlook excludes approximately $4 million in
management transition costs that we will now incur in Fiscal 2019
as a result of our recent CEO succession announcement. This
incremental expense, approximately $0.05 per share, will negatively
impact our earnings in the second half of Fiscal 2019. While we
will include this expense in our reported Adjusted Net Income in
Fiscal 2019, we will update investors quarterly regarding the
management transition costs incurred.
For the full Fiscal Year 2019 (the
52-weeks ending February 1, 2020), the Company now
expects:
- Total sales to increase in the range of 8.5% to 9.2%; this
assumes comparable store sales to increase in the range of 1% to 2%
for the second quarter of Fiscal 2019, and 2% to 3% for the balance
of Fiscal 2019, resulting in a full year comparable store sales
increase of 1.3% to 2.1% on top of the 3.2% increase during Fiscal
2018;
- Depreciation and amortization, exclusive of favorable lease
costs, to be approximately $210 million;
- Adjusted EBIT margin to be approximately flat to last
year;
- Interest expense of approximately $53 million;
- An effective tax rate of approximately 21%;
- To open 50 net new stores, and invest Net Capital Expenditures
of approximately $310 million; and
- Based on first quarter results, Adjusted EPS is now expected to
be in the range of $6.93 to $7.01, utilizing an updated fully
diluted share count of approximately 68 million, as compared to
$6.04 on a GAAP basis and $6.44 on a non-GAAP basis last year. This
outlook excludes an expected $0.05 per share impact of management
transition costs.
For the second quarter of Fiscal 2019
(the 13 weeks ending August 3, 2019), the Company
expects:
- Total sales to increase in the range of 8% to 9%;
- Comparable store sales to increase 1% to 2%; and
- Adjusted EPS in the range of $1.11 to $1.15, which assumes a
fully diluted share count of approximately 67.5 million, as
compared to $1.03 on a GAAP basis and $1.15 on a non-GAAP basis
last year.
The Company has not presented a quantitative reconciliation of
the forward-looking non-GAAP financial measures set out above to
their most comparable GAAP financial measures because it would
require the Company to create estimated ranges on a GAAP basis,
which would entail unreasonable effort. Adjustments required to
reconcile forward-looking non-GAAP measures cannot be predicted
with reasonable certainty but may include, among others, costs
related to debt amendments, loss on extinguishment of debt, and
impairment charges, as well as the tax effect of such items. Some
or all of those adjustments could be significant.
Note Regarding Non-GAAP Financial
Measures
The foregoing discussion of the Company’s
operating results includes references to Adjusted SG&A,
Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings per Share
(or Adjusted EPS), Adjusted EBIT (or Operating Margin), and
Adjusted Effective Tax Rate. The Company believes these measures
are useful in evaluating the operating performance of the business
and for comparing its historical results to that of other
retailers. These non-GAAP financial measures are defined and
reconciled to the most comparable GAAP measure later in this
document.
First Quarter 2019 Conference Call
The Company will hold a conference call on Thursday, May 30,
2019 at 8:30 a.m. Eastern Time to discuss the Company’s first
quarter results. The U.S. toll free dial-in for the conference
call is 1-866-437-5084 and the international dial-in number is
1-409-220-9374.
A live webcast of the conference call will also be available on
the investor relations page of the Company's website at
www.burlingtoninvestors.com. For those unable to participate
in the conference call, a replay will be available beginning after
the conclusion of the call on May 30, 2019 through June 6,
2019. The U.S. toll-free replay dial-in number is
1-855-859-2056 and the international replay dial-in number is
1-404-537-3406. The replay passcode is 3096627. Additionally,
a replay of the call will be available on the investor relations
page of the Company's website at www.burlingtoninvestors.com.
Investors and others should note that Burlington Stores
currently announces material information using SEC filings, press
releases, public conference calls and webcasts. In the future,
Burlington Stores will continue to use these channels to distribute
material information about the Company, and may also utilize its
website and/or various social media sites to communicate important
information about the Company, key personnel, new brands and
services, trends, new marketing campaigns, corporate initiatives
and other matters. Information that the Company posts on its
website or on social media channels could be deemed material;
therefore, the Company encourages investors, the media, our
customers, business partners and others interested in Burlington
Stores to review the information posted on its website, as well as
the following social media channels:
Facebook (https://www.facebook.com/BurlingtonCoatFactory/) and
Twitter (https://twitter.com/burlington).
Any updates to the list of social media channels the Company may
use to communicate material information will be posted on the
investor relations page of the Company's website at
www.burlingtoninvestors.com.
About Burlington Stores, Inc.
Burlington Stores, Inc., headquartered in New Jersey, is a
nationally recognized off-price retailer with Fiscal 2018 net sales
of $6.6 billion. The Company is a Fortune 500 company and its
common stock is traded on the New York Stock Exchange under the
ticker symbol “BURL.” The Company operated 684 stores as of the end
of the first quarter of Fiscal 2019, inclusive of an internet
store, in 45 states and Puerto Rico, principally under the name
Burlington Stores. The Company’s stores offer an extensive
selection of in-season, fashion-focused merchandise at up to 60%
off other retailers' prices, including women’s ready-to-wear
apparel, menswear, youth apparel, baby, beauty, footwear,
accessories, home and coats.
For more information about the Company, visit
www.burlingtonstores.com.
Investor Relations Contact:David J.
Glick855-973-8445 Info@BurlingtonInvestors.com
Allison MalkinCaitlin MorahanICR, Inc.203-682-8225
Safe Harbor for Forward-Looking and Cautionary
StatementsThis release contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended (Exchange Act). All statements other than statements of
historical fact included in this release, including those made in
the section describing our outlook for future periods, are
forward-looking statements. Forward-looking statements discuss our
current expectations and projections relating to our financial
condition, results of operations, plans, objectives, future
performance and business. You can identify forward-looking
statements by the fact that they do not relate strictly to
historical or current facts. We do not undertake to publicly update
or revise our forward-looking statements even if experience or
future changes make it clear that any projected results expressed
or implied in such statements will not be realized. If we do update
one or more forward-looking statements, no inference should be made
that we will make additional updates with respect to those or other
forward-looking statements. All forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially from those we expected, including general
economic conditions; our ability to successfully implement one or
more of our strategic initiatives and growth plans; the
availability of desirable store locations on suitable terms;
changing consumer preferences and demand; industry trends,
including changes in buying, inventory and other business practices
by customers; competitive factors, including pricing and
promotional activities of major competitors and an increase in
competition within the markets in which we compete; the
availability, selection and purchasing of attractive merchandise on
favorable terms; import risks, including tax and trade
policies, tariffs and government regulations; weather patterns,
including, among other things, changes in year-over-year
temperatures; our future profitability; our ability to control
costs and expenses; unforeseen cyber-related problems or attacks;
any unforeseen material loss or casualty; the effect of inflation;
regulatory and tax changes; our relationships with employees; the
impact of current and future laws and the interpretation of such
laws; terrorist attacks, particularly attacks on or within markets
in which we operate; natural and man-made disasters, including
fire, snow and ice storms, flood, hail, hurricanes and earthquakes;
our substantial level of indebtedness and related debt-service
obligations; restrictions imposed by covenants in our debt
agreements; availability of adequate financing; our dependence on
vendors for our merchandise; domestic events affecting the delivery
of merchandise to our stores; existence of adverse litigation; and
each of the factors that may be described from time to time in our
filings with the Securities and Exchange Commission (SEC). For each
of these factors, the Company claims the protection of the safe
harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, as amended.
BURLINGTON STORES,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (unaudited) (All amounts
in thousands)
|
|
Three Months Ended |
|
|
|
May 4, |
|
|
May 5, |
|
|
|
2019 |
|
|
2018 |
|
REVENUES: |
|
|
|
|
|
|
|
|
Net sales |
|
$ |
1,628,547 |
|
|
$ |
1,518,446 |
|
Other revenue |
|
|
5,647 |
|
|
|
6,262 |
|
Total revenue |
|
|
1,634,194 |
|
|
|
1,524,708 |
|
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
|
Cost of sales |
|
|
961,318 |
|
|
|
892,682 |
|
Selling, general and
administrative expenses |
|
|
517,378 |
|
|
|
468,348 |
|
Costs related to debt
amendments |
|
|
(382 |
) |
|
|
— |
|
Depreciation and
amortization |
|
|
50,641 |
|
|
|
50,509 |
|
Other income - net |
|
|
(2,092 |
) |
|
|
(1,351 |
) |
Interest expense |
|
|
13,371 |
|
|
|
14,521 |
|
Total costs and expenses |
|
|
1,540,234 |
|
|
|
1,424,709 |
|
Income before income
tax expense |
|
|
93,960 |
|
|
|
99,999 |
|
Income tax expense |
|
|
16,195 |
|
|
|
17,411 |
|
Net income |
|
$ |
77,765 |
|
|
$ |
82,588 |
|
|
|
|
|
|
|
|
|
|
BURLINGTON STORES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited) (All amounts in
thousands)
|
|
May 4, |
|
|
February 2, |
|
|
May 5, |
|
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
105,031 |
|
|
$ |
112,274 |
|
|
$ |
83,008 |
|
Restricted cash and cash
equivalents |
|
|
21,882 |
|
|
|
21,882 |
|
|
|
21,882 |
|
Accounts receivable—net |
|
|
99,461 |
|
|
|
58,752 |
|
|
|
82,758 |
|
Merchandise inventories |
|
|
895,813 |
|
|
|
954,183 |
|
|
|
786,559 |
|
Prepaid and other current
assets |
|
|
129,614 |
|
|
|
124,809 |
|
|
|
126,694 |
|
Total current assets |
|
|
1,251,801 |
|
|
|
1,271,900 |
|
|
|
1,100,901 |
|
Property and
equipment—net |
|
|
1,288,180 |
|
|
|
1,253,705 |
|
|
|
1,148,257 |
|
Operating lease assets |
|
|
2,144,757 |
|
|
|
— |
|
|
|
— |
|
Goodwill and intangible
assets—net |
|
|
286,005 |
|
|
|
449,388 |
|
|
|
468,669 |
|
Deferred tax assets |
|
|
4,191 |
|
|
|
4,361 |
|
|
|
6,724 |
|
Other assets |
|
|
90,305 |
|
|
|
99,818 |
|
|
|
100,895 |
|
Total
assets |
|
$ |
5,065,239 |
|
|
$ |
3,079,172 |
|
|
$ |
2,825,446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
707,672 |
|
|
$ |
848,561 |
|
|
$ |
726,635 |
|
Current operating lease
liabilities |
|
|
273,348 |
|
|
|
— |
|
|
|
— |
|
Other current liabilities |
|
|
359,818 |
|
|
|
396,257 |
|
|
|
351,974 |
|
Current maturities of long
term debt |
|
|
3,052 |
|
|
|
2,924 |
|
|
|
13,040 |
|
Total current liabilities |
|
|
1,343,890 |
|
|
|
1,247,742 |
|
|
|
1,091,649 |
|
Long term debt |
|
|
1,133,385 |
|
|
|
983,643 |
|
|
|
1,122,552 |
|
Long term operating lease
liabilities |
|
|
2,045,743 |
|
|
|
— |
|
|
|
— |
|
Other liabilities |
|
|
83,393 |
|
|
|
346,298 |
|
|
|
318,367 |
|
Deferred tax liabilities |
|
|
180,280 |
|
|
|
178,779 |
|
|
|
181,607 |
|
Stockholders' equity |
|
|
278,548 |
|
|
|
322,710 |
|
|
|
111,271 |
|
Total liabilities and
stockholders' equity |
|
$ |
5,065,239 |
|
|
$ |
3,079,172 |
|
|
$ |
2,825,446 |
|
BURLINGTON STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited) (All amounts in
thousands)
|
|
Three Months Ended |
|
|
|
May 4, |
|
|
May 5, |
|
|
|
2019 |
|
|
2018 |
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
Net income |
|
$ |
77,765 |
|
|
$ |
82,588 |
|
Adjustments to reconcile net
income to net cash provided by operating activities |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
50,641 |
|
|
|
50,509 |
|
Deferred income taxes |
|
|
2,993 |
|
|
|
1,721 |
|
Non-cash stock compensation expense |
|
|
9,427 |
|
|
|
7,023 |
|
Non-cash rent |
|
|
(380 |
) |
|
|
(6,203 |
) |
Deferred rent incentives |
|
|
12,213 |
|
|
|
8,709 |
|
Changes in assets and
liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(20,170 |
) |
|
|
(10,377 |
) |
Merchandise inventories |
|
|
57,864 |
|
|
|
(33,997 |
) |
Accounts payable |
|
|
(140,767 |
) |
|
|
(12,716 |
) |
Other current assets and liabilities |
|
|
(3,513 |
) |
|
|
(29,670 |
) |
Long term assets and liabilities |
|
|
7,517 |
|
|
|
738 |
|
Other operating
activities |
|
|
601 |
|
|
|
1,885 |
|
Net cash provided by
operating activities |
|
|
54,191 |
|
|
|
60,210 |
|
INVESTING
ACTIVITIES |
|
|
|
|
|
|
|
|
Cash paid for property and
equipment |
|
|
(83,781 |
) |
|
|
(60,382 |
) |
Other investing activities |
|
|
(72 |
) |
|
|
2,440 |
|
Net cash (used in)
investing activities |
|
|
(83,853 |
) |
|
|
(57,942 |
) |
FINANCING
ACTIVITIES |
|
|
|
|
|
|
|
|
Proceeds from long term debt—ABL
Line of Credit |
|
|
588,300 |
|
|
|
238,800 |
|
Principal payments on long term
debt—ABL Line of Credit |
|
|
(438,300 |
) |
|
|
(227,000 |
) |
Principal payments on long term
debt—Term Loan Facility |
|
|
— |
|
|
|
(2,793 |
) |
Purchase of treasury
shares |
|
|
(130,319 |
) |
|
|
(70,254 |
) |
Other financing
activities |
|
|
2,738 |
|
|
|
2,783 |
|
Net cash provided by
(used in) financing activities |
|
|
22,419 |
|
|
|
(58,464 |
) |
(Decrease) in cash, cash
equivalents, restricted cash and restricted cash equivalents |
|
|
(7,243 |
) |
|
|
(56,196 |
) |
Cash, cash equivalents,
restricted cash and restricted cash equivalents at beginning of
period |
|
|
134,156 |
|
|
|
161,086 |
|
Cash, cash
equivalents, restricted cash and restricted cash equivalents at end
of period |
|
$ |
126,913 |
|
|
$ |
104,890 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial
Measures(Unaudited)(Amounts in thousands except per share
data)
The following tables calculate the Company’s Adjusted Net
Income, Adjusted EPS, Adjusted EBITDA, Adjusted EBIT, Adjusted
SG&A and Adjusted Effective Tax Rate, all of which are
considered non-GAAP financial measures. Generally, a non-GAAP
financial measure is a numerical measure of a company’s
performance, financial position or cash flows that either excludes
or includes amounts that are not normally excluded or included in
the most directly comparable measure calculated and presented in
accordance with GAAP.
Adjusted Net Income is defined as net income, exclusive of the
following items if applicable: (i) net favorable lease costs;
(ii) costs related to debt amendments; (iii) loss on
extinguishment of debt; (iv) impairment charges; and (v) other
unusual, non-recurring or extraordinary expenses, losses, charges
or gains, all of which are tax effected to arrive at Adjusted Net
Income.
Adjusted EPS is defined as Adjusted Net Income divided by
the fully diluted weighted average shares outstanding, as defined
in the table below.
Adjusted EBITDA is defined as net income, exclusive of the
following items, if applicable: (i) interest expense; (ii)
interest income; (iii) loss on extinguishment of debt;
(iv) income tax expense; (v) depreciation and
amortization; (vi) impairment charges; (vii) costs
related to debt amendments; and (viii) other unusual, non-recurring
or extraordinary expenses, losses, charges or gains.
Adjusted EBIT (or Adjusted Operating Margin) is defined as net
income, exclusive of the following items, if applicable:
(i) interest expense; (ii) interest income; (iii) loss on
extinguishment of debt; (iv) income tax expense;
(v) impairment charges; (vi) net favorable lease costs;
(vii) costs related to debt amendments; and (viii) other
unusual, non-recurring or extraordinary expenses, losses, charges
or gains.
Adjusted SG&A is defined as SG&A less product sourcing
costs and favorable lease costs.
Adjusted Effective Tax Rate is defined as the GAAP effective tax
rate less the tax effect of the reconciling items to arrive at
Adjusted Net Income (footnote (c) in the table below).
The Company presents Adjusted Net Income, Adjusted EPS, Adjusted
EBITDA, Adjusted EBIT, Adjusted SG&A and Adjusted Effective Tax
Rate, because it believes they are useful supplemental measures in
evaluating the performance of the Company’s business and provide
greater transparency into the results of operations. In particular,
the Company believes that excluding certain items that may vary
substantially in frequency and magnitude from what the Company
considers to be its core operating results are useful supplemental
measures that assist in evaluating the Company’s ability to
generate earnings and leverage sales, and to more readily compare
core operating results between past and future periods.
The Company believes that these non-GAAP measures provide
investors helpful information with respect to the Company’s
operations and financial condition. Other companies in the retail
industry may calculate these non-GAAP measures differently such
that the Company’s calculation may not be directly comparable.
The following table shows the Company’s reconciliation of net
income to Adjusted Net Income and Adjusted EPS for the periods
indicated:
|
|
(unaudited) |
|
|
|
(in thousands, except per share data) |
|
|
|
Three Months Ended |
|
|
|
May 4, |
|
|
May 5, |
|
|
|
2019 |
|
|
2018 |
|
Reconciliation of net income to Adjusted Net
Income: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
77,765 |
|
|
$ |
82,588 |
|
Net favorable lease costs (a) |
|
|
10,701 |
|
|
|
5,325 |
|
Costs related to debt amendments (b) |
|
|
(382 |
) |
|
|
— |
|
Tax effect (e) |
|
|
(2,597 |
) |
|
|
(927 |
) |
Adjusted Net Income |
|
$ |
85,487 |
|
|
$ |
86,986 |
|
Fully diluted weighted average shares outstanding (f) |
|
|
67,730 |
|
|
|
68,970 |
|
Adjusted Earnings per Share |
|
$ |
1.26 |
|
|
$ |
1.26 |
|
|
|
|
|
|
|
|
|
|
The following table shows the Company’s reconciliation of net
income to Adjusted EBITDA for the periods indicated:
|
|
(unaudited) |
|
|
|
(in thousands) |
|
|
|
Three Months Ended |
|
|
|
May 4, |
|
|
May 5, |
|
|
|
2019 |
|
|
2018 |
|
Reconciliation of net income to Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
77,765 |
|
|
$ |
82,588 |
|
Interest expense |
|
|
13,371 |
|
|
|
14,521 |
|
Interest income |
|
|
(205 |
) |
|
|
(80 |
) |
Costs related to debt amendments (b) |
|
|
(382 |
) |
|
|
— |
|
Depreciation and amortization (g) |
|
|
61,180 |
|
|
|
50,509 |
|
Income tax expense |
|
|
16,195 |
|
|
|
17,411 |
|
Adjusted EBITDA |
|
$ |
167,924 |
|
|
$ |
164,949 |
|
|
|
|
|
|
|
|
|
|
The following table shows the Company’s reconciliation of net
income to Adjusted EBIT for the periods indicated:
|
|
(unaudited) |
|
|
|
(in thousands) |
|
|
|
Three Months Ended |
|
|
|
May 4, |
|
|
May 5, |
|
|
|
2019 |
|
|
2018 |
|
Reconciliation of net income to Adjusted
EBIT: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
77,765 |
|
|
$ |
82,588 |
|
Interest expense |
|
|
13,371 |
|
|
|
14,521 |
|
Interest income |
|
|
(205 |
) |
|
|
(80 |
) |
Costs related to debt amendments (b) |
|
|
(382 |
) |
|
|
— |
|
Net favorable lease costs (a) |
|
|
10,701 |
|
|
|
5,325 |
|
Income tax expense |
|
|
16,195 |
|
|
|
17,411 |
|
Adjusted EBIT |
|
$ |
117,445 |
|
|
$ |
119,765 |
|
|
|
|
|
|
|
|
|
|
The following table shows the Company’s reconciliation of
SG&A to Adjusted SG&A for the periods indicated:
|
|
(unaudited) |
|
|
|
(in thousands) |
|
|
|
Three Months Ended |
|
|
|
May 4, |
|
|
May 5, |
|
Reconciliation of
SG&A to Adjusted SG&A: |
|
2019 |
|
|
2018 |
|
SG&A |
|
|
517,378 |
|
|
|
468,348 |
|
Favorable lease costs (a) |
|
|
(10,539 |
) |
|
|
— |
|
Product sourcing costs |
|
|
(78,577 |
) |
|
|
(71,616 |
) |
Adjusted SG&A |
|
|
428,262 |
|
|
|
396,732 |
|
The following table shows the reconciliation of the Company’s
effective tax rates on a GAAP basis to the Adjusted Effective Tax
Rates for the periods indicated:
|
|
(unaudited) |
|
|
|
Three Months Ended |
|
|
|
May 4, |
|
|
May 5, |
|
|
|
2019 |
|
|
2018 |
|
Effective tax rate on a GAAP basis |
|
|
17.2 |
% |
|
|
17.4 |
% |
Adjustments to arrive at Adjusted Effective Tax Rate |
|
|
0.8 |
|
|
|
— |
|
Adjusted Effective Tax Rate |
|
|
18.0 |
% |
|
|
17.4 |
% |
|
|
|
|
|
|
|
|
|
The following table shows the Company’s reconciliation of net
income to Adjusted Net Income for the prior period Adjusted EPS
amounts used in this press release for the periods indicated:
|
|
(unaudited) |
|
|
|
(in thousands, except per share data) |
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
|
August 4, 2018 |
|
|
February 2, 2019 |
|
Reconciliation of net income to Adjusted Net
Income: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
70,957 |
|
|
$ |
414,745 |
|
Net favorable lease costs (a) |
|
|
9,551 |
|
|
|
26,081 |
|
Costs related to debt amendments (b) |
|
|
79 |
|
|
|
2,496 |
|
Loss on extinguishment of debt (c) |
|
|
1,361 |
|
|
|
1,823 |
|
Impairment charges (d) |
|
|
— |
|
|
|
6,844 |
|
Tax effect (e) |
|
|
(3,078 |
) |
|
|
(9,449 |
) |
Adjusted Net Income |
|
$ |
78,870 |
|
|
$ |
442,540 |
|
Fully diluted weighted average shares outstanding (f) |
|
|
68,769 |
|
|
|
68,679 |
|
Adjusted Earnings per Share |
|
$ |
1.15 |
|
|
$ |
6.44 |
|
|
|
|
|
|
|
|
|
|
(a) Net favorable lease costs represents the non-cash
amortization expense associated with favorable and unfavorable
leases that were recorded as a result of purchase accounting
related to the April 13, 2006 Bain Capital acquisition of
Burlington Coat Factory Warehouse Corporation. As a result of
adoption of ASC 2016-02, these expenses are recorded in the line
item “Selling, general and administrative expenses” in our
Condensed Consolidated Statement of Income for the three months
ended May 4, 2019. These expenses are recorded in the line item
“Depreciation and amortization” in our Condensed Consolidated
Statements of Income for the three months ended May 5, 2018, the
three months ended August 4, 2018 and the twelve months ended
February 2, 2019.(b) For the three months ended May 4, 2019,
amounts relate to the reversal of previously estimated costs
related to the repricing of our Term Loan Facility in Fiscal 2018.
For the three months ended August 4, 2018 and the twelve months
ended February 2, 2019, amounts relate to costs incurred in
connection with the review and execution of refinancing
opportunities.(c) Amounts relate to the refinancing of our Term
Loan Facility, the $150.0 million prepayment on our Term Loan
Facility, as well as the amendment to our ABL Credit Agreement.(d)
Represents impairment charges on long-lived assets(e) Tax effect is
calculated based on the effective tax rates (before discrete items)
for the respective periods for the tax impact of items (a) and
(d).(f) Fully diluted weighted average shares outstanding starts
with basic shares outstanding and adds back any potentially
dilutive securities outstanding during the period. Fully diluted
weighted average shares outstanding is equal to basic shares
outstanding if the Company is in an Adjusted Net Loss position.(g)
Includes $10.5 million of favorable lease costs included in the
line item “Selling, general and administrative expenses” in our
Condensed Consolidated Statement of Income for the three months
ended May 4, 2019.
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