8-K
0001579298false00015792982022-03-032022-03-03

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): March 3, 2022

 

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BURLINGTON STORES, INC.

(Exact Name of Registrant As Specified In Charter)

 

 

 

 

 

Delaware

001-36107

80-0895227

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

2006 Route 130 North

Burlington, New Jersey 08016

(Address of Principal Executive Offices, including Zip Code)

(609) 387-7800

(Registrant’s telephone number, including area code)

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

BURL

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 


 

Item 2.02. Results of Operations and Financial Condition.

On March 3, 2022, Burlington Stores, Inc. issued a press release announcing its operating results for the fourth quarter and fiscal year ended January 29, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report.

The information contained in this Item 2.02, and Exhibit 99.1 attached hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of, or otherwise regarded as filed under, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

 

 

 

Exhibit

No.

Description

 

 

 

 

 

 

99.1

Press Release dated March 3, 2022.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 


 

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

BURLINGTON STORES, INC.

 

/s/ David Glick

 

David Glick

Group Senior Vice President of Investor Relations and Treasurer

Date: March 3, 2022

 


EX-99.1

 

 

Exhibit 99.1

 

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Burlington Stores, Inc. Reports Fourth Quarter 2021 Results

All Fiscal 2021 comparisons are made versus the same period in Fiscal 2019

For the fourth quarter of Fiscal 2021:

o
On a GAAP basis, total sales increased 18%, net income was $122 million, and diluted EPS was $1.80
o
Comparable store sales increased 6%
o
On a non-GAAP basis, Adjusted EPS was $2.53

For the full year Fiscal 2021:

o
On a GAAP basis, total sales increased 28%, net income was $409 million, and diluted EPS was $6.00, inclusive of $156 million of debt extinguishment charges, or $2.07 per share
o
On a non-GAAP basis, comparable store sales increased 15%, Adjusted EBIT increased 20%, and Adjusted EPS increased 14%
o
Redeemed $533 million of debt during Fiscal 2021
o
Resumed share repurchases and increased buyback authorization; bought back $250 million in stock, and approved new $500 million authorization

 

BURLINGTON, New Jersey; March 3, 2022 — Burlington Stores, Inc. (NYSE: BURL), a nationally recognized off-price retailer of high-quality, branded apparel, footwear, accessories, and merchandise for the home at everyday low prices, today announced its results for the fourth quarter ended January 29, 2022.

Michael O’Sullivan, CEO, stated, “2021 was a record-breaking year for Burlington. We achieved top-line sales growth of 28% and comp sales growth of 15%. This performance was well ahead of our major competitors. We demonstrated a remarkable ability to chase sales and respond to consumer trends, and we made huge progress on our Burlington 2.0 strategic objectives.”

Commenting on Q4, he went on, “Ordinarily we would be happy with 6% comp growth in Q4 but compared to the rest of 2021 this was a slowdown in our trend. This slowdown was partially driven by lower traffic to our stores, due to a number of external factors, and partially driven by the late delivery of some critical receipts in December. There are specific actions that we have identified and that we can take to better manage these receipt issues going forward.”

 

Lastly, “We think the outlook for retail spending in 2022 is extremely unpredictable especially as we lap government stimulus programs, and as general price inflation begins to bite. This kind of unpredictability has,

1

 


 

in the past, tended to favor off-price. In 2022 we will plan our business conservatively but then be ready to chase and take advantage of opportunities.”

 

Fiscal 2021 Fourth Quarter Operating Results (for the 13-week period ended January 29, 2022 compared with the 13-week period ended February 2, 2020)

 

Total sales increased 18% compared to the fourth quarter of Fiscal 2019 to $2,603 million, while comparable store sales increased 6% compared to the fourth quarter of Fiscal 2019.
Gross margin rate was 39.8% vs. 42.1% for the fourth quarter of Fiscal 2019, a decrease of 230 basis points. Merchandise margins increased 30 basis points but were more than offset by 260 basis points of increased freight costs.
Product sourcing costs, which are included in selling, general and administrative expenses (SG&A), were $159 million vs. $89 million in the fourth quarter of Fiscal 2019. Product sourcing costs include the costs of processing goods through our supply chain and buying costs.
SG&A was 28.5% as a percentage of net sales vs. 27.0% in the fourth quarter of Fiscal 2019. Adjusted SG&A, as defined below, was 22.2% as a percentage of net sales vs. 22.7% in the fourth quarter of Fiscal 2019, an improvement of 50 basis points.
The effective tax rate was 31.8% vs. 24.0% in the fourth quarter of Fiscal 2019. The Adjusted Effective Tax Rate was 24.2% vs. 23.8% in the fourth quarter of Fiscal 2019.
Net income was $122 million, or $1.80 per share vs. $206 million, or $3.08 per share for the fourth quarter of Fiscal 2019. Adjusted Net Income was $171 million, or $2.53 per share vs. $215 million, or $3.21 per share for the fourth quarter of Fiscal 2019.
Diluted weighted average shares outstanding amounted to 67.6 million during the quarter compared with 67.0 million during the fourth quarter of Fiscal 2019.
Adjusted EBITDA was $307 million vs. $349 million in the fourth quarter of Fiscal 2019, a decrease of 410 basis points as a percentage of sales. Adjusted EBIT was $241 million vs. $294 million for the fourth quarter of Fiscal 2019, a decrease of 410 basis points as a percentage of sales.

 

Full Year Fiscal 2021 Results

Total sales increased 28% compared to Fiscal 2019. Net income decreased 12% to $409 million, or $6.00 per share vs. $6.91 per share in Fiscal 2019, a decrease of 13%. Adjusted EBIT increased 20%, or $132 million, to $802 million, a decrease of 60 basis points as a percentage of sales. Adjusted Net Income of $573 million increased 16% vs. Fiscal 2019, while Adjusted EPS was $8.41 vs. $7.35 in Fiscal 2019, an increase of 14%.

 

Given the volatility in Fiscal 2020 results caused by COVID-19 and to assist with comparability, all fourth quarter and full year Fiscal 2021 comparisons are made versus the fourth quarter or full year Fiscal 2019. For a discussion of results for Fiscal 2021 as compared to Fiscal 2020, refer to our Annual Report on Form 10-K for the year ended January 29, 2022, which will be filed with the Securities and Exchange Commission (the “SEC”).

 

Inventory

2

 


 

Merchandise inventories were $1,021 million vs. $777 million at the end of Fiscal 2019. Comparable store inventories decreased 30%. Reserve inventory was 50% of total inventory at the end of Fiscal 2021 compared to 33% at the end of Fiscal 2019.

 

Liquidity and Debt

The Company ended the fourth quarter of Fiscal 2021 with $1,685 million in liquidity, comprised of $1,091 million in unrestricted cash and $594 million in availability on its ABL facility. The Company ended the fourth quarter with $1,555 million in outstanding total debt, including $957 million in a Term Loan facility, $572 million in Convertible Notes, and no borrowings on the ABL facility.
During the fourth quarter, the Company extended the maturity of its ABL facility from June 2023 to December 2026. In addition, the Company increased the size of the ABL facility from $600 million to $650 million and reduced applicable interest rate margins.

 

Convertible Note and Common Stock Repurchases

During the fourth quarter, the Company entered into privately negotiated transactions to repurchase approximately $72 million in principal amount of the Company’s outstanding 2.25% Convertible Notes. The total transaction value of approximately $109 million was settled in cash in the fourth quarter.
In addition, during the fourth quarter the Company repurchased 344,492 shares of its common stock for $100 million. As of the end of the fourth quarter, the Company had $150 million remaining on its then-current share repurchase authorization.
In February 2022, the Company’s Board of Directors authorized the repurchase of up to an additional $500 million of common stock, which is authorized to be executed through February 2024.

 

Outlook

Given the uncertainty surrounding the pace of the recovery of consumer demand and the ongoing COVID-19 pandemic, the Company is not providing sales or earnings guidance for Fiscal 2022 (the 52-weeks ending January 28, 2023) at this time.

 

The Company is issuing the following Fiscal 2022 guidance items:

Capital expenditures, net of landlord allowances, is expected to be approximately $725 million;
The Company expects to open 120 new stores, while relocating or closing 30 stores, for a total of 90 net new stores in Fiscal 2022;
Depreciation & amortization, exclusive of favorable lease costs, is expected to be approximately $300 million;
Interest expense is expected to be approximately $61 million; and
The effective tax rate is expected to be approximately 26% to 27%.

 

Note Regarding Non-GAAP Financial Measures

 

3

 


 

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 Adjusted Operating Margin), and Adjusted Effective Tax Rate. The Company believes these supplemental measures are useful in evaluating the performance of its business and provide greater transparency into its results of operations. In particular, the Company believes that excluding certain items that may vary substantially in frequency and magnitude from what it considers to be its core operating results are useful supplemental measures that assist in evaluating its ability to generate earnings and leverage sales, and to more readily compare core operating results between past and future periods. These non-GAAP financial measures are defined and reconciled to the most comparable GAAP measures later in this document.

 

Fourth Quarter 2021 Conference Call

The Company will hold a conference call on March 3, 2022 at 8:30 a.m. ET to discuss the Company’s fourth quarter and fiscal 2021 results. The U.S. toll free dial-in for the conference call is 1-866-437-5084 (passcode: 2137698) 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 after the conclusion of the call on March 3, 2022 beginning at 11:30 a.m. ET through March 10, 2022 11:59 p.m. ET. 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 2137698.

 

About Burlington Stores, Inc.

 

Burlington Stores, Inc., headquartered in New Jersey, is a nationally recognized off-price retailer with Fiscal 2021 net sales of $9.3 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 840 stores as of the end of Fiscal 2021, 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, toys, gifts and coats.

 

For more information about the Company, visit www.burlington.com.

 

Investor Relations Contacts:

David J. Glick

Daniel Delrosario

855-973-8445
Info@BurlingtonInvestors.com

4

 


 

 

Allison Malkin

ICR, Inc.

203-682-8225

 

Safe Harbor for Forward-Looking and Cautionary Statements

This 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. All statements other than statements of historical fact included in this release, including those about our expected sales trend, our liquidity position, inventory plans, and the economic environment, as well as statements 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 events or results to differ materially from those we expected, including the impact of the COVID-19 pandemic and actions taken to slow its spread and the related impacts on economic activity, financial markets, labor markets and the global supply chain; general economic conditions, including inflation, and the related impact on consumer confidence and spending; competitive factors, including pricing and promotional activities of major competitors and an increase in competition within the markets in which we compete; weather patterns, including changes in year-over-year temperatures; the reduction in traffic to, or the closing of, the other destination retailers in the shopping areas where our stores are located; changing consumer preferences and demand; industry trends, including changes in buying, inventory and other business practices; natural and man-made disasters, including fire, snow and ice storms, flood, hail, hurricanes and earthquakes; our ability to successfully implement one or more of our strategic initiatives and growth plans; the availability, selection and purchasing of attractive merchandise on favorable terms; the availability of desirable store locations on suitable terms; industry trends, including changes in buying, inventory and other business practices; terrorist attacks, particularly attacks on or within markets in which we operate; our ability to attract, train and retain quality employees and temporary personnel in appropriate numbers; our ability to control costs and expenses; the solvency of parties with whom we do business and their willingness to perform their obligations to us; import risks, including tax and trade policies, tariffs and government regulations; our dependence on vendors for our merchandise; domestic and international events affecting the delivery of merchandise to our stores; unforeseen cyber-related problems or attacks; regulatory and tax changes; issues with merchandise safety and shrinkage; any unforeseen material loss or casualty or the existence of adverse litigation; the impact of current and future laws and the interpretation of such laws; our substantial level of indebtedness and related debt-service obligations; consequences of the failure to comply with covenants in our debt agreements; the availability of adequate financing; and each of the factors that may be described from time to time in our filings with the 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.

 

 

 

5

 


 

BURLINGTON STORES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(unaudited)

(All amounts in thousands, except per share data)

 

 

 

Three Months Ended

 

 

Fiscal Year Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

 

 

2022

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

 

2020

 

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

2,603,461

 

 

$

2,278,935

 

 

$

2,201,384

 

 

$

9,306,549

 

 

$

5,751,541

 

 

$

7,261,243

 

Other revenue

 

 

5,547

 

 

 

3,959

 

 

 

7,215

 

 

 

15,707

 

 

 

12,439

 

 

 

25,155

 

Total revenue

 

 

2,609,008

 

 

 

2,282,894

 

 

 

2,208,599

 

 

 

9,322,256

 

 

 

5,763,980

 

 

 

7,286,398

 

COSTS AND EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

1,566,723

 

 

 

1,309,443

 

 

 

1,274,089

 

 

 

5,436,155

 

 

 

3,555,024

 

 

 

4,228,740

 

Selling, general and administrative expenses

 

 

741,622

 

 

 

704,964

 

 

 

595,316

 

 

 

2,868,527

 

 

 

2,326,928

 

 

 

2,228,178

 

Costs related to debt issuances and amendments

 

 

 

 

 

 

 

 

 

 

 

3,419

 

 

 

3,633

 

 

 

(375

)

Depreciation and amortization

 

 

66,131

 

 

 

56,712

 

 

 

55,089

 

 

 

249,217

 

 

 

220,390

 

 

 

210,720

 

Impairment charges - long-lived assets

 

 

4,514

 

 

 

437

 

 

 

4,315

 

 

 

7,748

 

 

 

6,012

 

 

 

4,315

 

Other income - net

 

 

(1,364

)

 

 

(4,119

)

 

 

(3,514

)

 

 

(11,630

)

 

 

(8,353

)

 

 

(16,531

)

Loss on extinguishment of debt

 

 

38,264

 

 

 

 

 

 

 

 

 

156,020

 

 

 

202

 

 

 

 

Interest expense

 

 

14,792

 

 

 

27,260

 

 

 

11,872

 

 

 

67,502

 

 

 

97,767

 

 

 

50,826

 

Total costs and expenses

 

 

2,430,682

 

 

 

2,094,697

 

 

 

1,937,167

 

 

 

8,776,958

 

 

 

6,201,603

 

 

 

6,705,873

 

Income (loss) before income tax expense (benefit)

 

 

178,326

 

 

 

188,197

 

 

 

271,432

 

 

 

545,298

 

 

 

(437,623

)

 

 

580,525

 

Income tax expense (benefit)

 

 

56,690

 

 

 

32,203

 

 

 

65,107

 

 

 

136,459

 

 

 

(221,124

)

 

 

115,409

 

Net income (loss)

 

$

121,636

 

 

$

155,994

 

 

$

206,325

 

 

$

408,839

 

 

$

(216,499

)

 

$

465,116

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income (loss) per common share

 

$

1.80

 

 

$

2.33

 

 

$

3.08

 

 

$

6.00

 

 

$

(3.28

)

 

$

6.91

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares - diluted

 

 

67,626

 

 

 

66,962

 

 

 

67,010

 

 

 

68,126

 

 

 

65,962

 

 

 

67,293

 

 

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BURLINGTON STORES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(All amounts in thousands)

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

 

 

2022

 

 

2021

 

 

2020

 

ASSETS

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,091,091

 

 

$

1,380,276

 

 

$

403,074

 

Restricted cash and cash equivalents

 

 

6,582

 

 

 

6,582

 

 

 

6,582

 

Accounts receivable—net

 

 

54,089

 

 

 

62,161

 

 

 

91,508

 

Merchandise inventories

 

 

1,021,009

 

 

 

740,788

 

 

 

777,248

 

Assets held for disposal

 

 

4,358

 

 

 

6,655

 

 

 

2,261

 

Prepaid and other current assets

 

 

370,515

 

 

 

314,154

 

 

 

136,698

 

Total current assets

 

 

2,547,644

 

 

 

2,510,616

 

 

 

1,417,371

 

Property and equipment—net

 

 

1,552,237

 

 

 

1,438,863

 

 

 

1,403,173

 

Operating lease assets

 

 

2,638,473

 

 

 

2,469,366

 

 

 

2,397,842

 

Goodwill and intangible assets—net

 

 

285,064

 

 

 

285,064

 

 

 

285,064

 

Deferred tax assets

 

 

3,959

 

 

 

4,422

 

 

 

4,678

 

Other assets

 

 

62,136

 

 

 

72,761

 

 

 

85,731

 

Total assets

 

$

7,089,513

 

 

$

6,781,092

 

 

$

5,593,859

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,080,802

 

 

$

862,638

 

 

$

759,107

 

Current operating lease liabilities

 

 

358,793

 

 

 

304,629

 

 

 

302,185

 

Other current liabilities

 

 

493,695

 

 

 

512,830

 

 

 

397,032

 

Current maturities of long term debt

 

 

14,357

 

 

 

3,899

 

 

 

3,577

 

Total current liabilities

 

 

1,947,647

 

 

 

1,683,996

 

 

 

1,461,901

 

Long term debt

 

 

1,541,102

 

 

 

1,927,770

 

 

 

1,001,723

 

Long term operating lease liabilities

 

 

2,539,420

 

 

 

2,400,782

 

 

 

2,322,000

 

Other liabilities

 

 

80,904

 

 

 

103,940

 

 

 

97,798

 

Deferred tax liabilities

 

 

220,023

 

 

 

199,850

 

 

 

182,288

 

Stockholders' equity

 

 

760,417

 

 

 

464,754

 

 

 

528,149

 

Total liabilities and stockholders' equity

 

$

7,089,513

 

 

$

6,781,092

 

 

$

5,593,859

 

 

 

7

 


 

BURLINGTON STORES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(All amounts in thousands)

 

 

 

Fiscal Year Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

 

 

2022

 

 

2021

 

 

2020

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

408,839

 

 

$

(216,499

)

 

$

465,116

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

249,217

 

 

 

220,390

 

 

 

210,720

 

Deferred income taxes

 

 

51,952

 

 

 

(24,959

)

 

 

9,070

 

Loss on extinguishment of debt

 

 

156,020

 

 

 

202

 

 

 

 

Non-cash stock compensation expense

 

 

58,546

 

 

 

55,845

 

 

 

43,928

 

Non-cash lease expense

 

 

(10,294

)

 

 

(1,530

)

 

 

12,599

 

Cash received from landlord allowances

 

 

34,051

 

 

 

40,663

 

 

 

56,280

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

10,186

 

 

 

26,858

 

 

 

(8,816

)

Merchandise inventories

 

 

(280,220

)

 

 

36,459

 

 

 

176,430

 

Accounts payable

 

 

214,792

 

 

 

104,607

 

 

 

(90,899

)

Other current assets and liabilities

 

 

(89,492

)

 

 

(73,583

)

 

 

11,604

 

Long term assets and liabilities

 

 

(2,782

)

 

 

562

 

 

 

3,176

 

Other operating activities

 

 

32,344

 

 

 

50,166

 

 

 

2,517

 

Net cash provided by operating activities

 

 

833,159

 

 

 

219,181

 

 

 

891,725

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

Cash paid for property and equipment

 

 

(352,467

)

 

 

(273,282

)

 

 

(328,357

)

Lease acquisition costs

 

 

(576

)

 

 

 

 

 

(1,983

)

Proceeds from insurance recoveries related to property and equipment

 

 

 

 

 

220

 

 

 

5,131

 

Proceeds from sale of property and equipment and assets held for sale

 

 

8,654

 

 

 

 

 

 

 

Other investing activities

 

 

 

 

 

(1,070

)

 

 

611

 

Net cash (used in) investing activities

 

 

(344,389

)

 

 

(274,132

)

 

 

(324,598

)

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

Proceeds from long term debt—ABL Line of Credit

 

 

 

 

 

400,000

 

 

 

1,294,400

 

Principal payments on long term debt—ABL Line of Credit

 

 

 

 

 

(400,000

)

 

 

(1,294,400

)

Proceeds from long term debt—Term B-6 Loans

 

 

956,608

 

 

 

 

 

 

 

Principal payments on long term debt—Term B-5 Loans

 

 

(961,415

)

 

 

 

 

 

 

Proceeds from long term debt—Convertible Note

 

 

 

 

 

805,000

 

 

 

 

Principal payment on long term debt—Convertible Notes

 

 

(201,695

)

 

 

 

 

 

 

Proceeds from long term debt—Secured Note

 

 

 

 

 

300,000

 

 

 

 

Principal payments on long term debt—Secured Notes

 

 

(323,905

)

 

 

 

 

 

 

Purchase of treasury shares

 

 

(266,628

)

 

 

(65,526

)

 

 

(323,080

)

Other financing activities

 

 

19,080

 

 

 

(7,321

)

 

 

31,453

 

Net cash (used in) provided by financing activities

 

 

(777,955

)

 

 

1,032,153

 

 

 

(291,627

)

(Decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents

 

 

(289,185

)

 

 

977,202

 

 

 

275,500

 

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period

 

 

1,386,858

 

 

 

409,656

 

 

 

134,156

 

Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period

 

$

1,097,673

 

 

$

1,386,858

 

 

$

409,656

 

 

8

 


 

 

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

(Amounts in thousands, except per share data)

The following tables calculate the Company’s Adjusted Net Income (Loss), 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 (Loss) is defined as net income (loss), exclusive of the following items, if applicable: (i) net favorable lease costs; (ii) costs related to debt issuances and amendments; (iii) loss on extinguishment of debt; (iv) impairment charges; (v) amounts related to certain litigation matters; (vi) non-cash interest expense on the Convertible Notes; (vii) costs related to closing the e-commerce store; and (viii) other unusual, non-recurring or extraordinary expenses, losses, charges or gains, all of which are tax effected to arrive at Adjusted Net Income (Loss).

Adjusted EPS is defined as Adjusted Net Income (Loss) divided by the diluted weighted average shares outstanding, as defined in the table below.

Adjusted EBITDA is defined as net income (loss), exclusive of the following items, if applicable: (i) interest expense; (ii) interest income; (iii) loss on extinguishment of debt; (iv) income tax expense (benefit); (v) depreciation and amortization; (vi) impairment charges; (vii) costs related to debt issuances and amendments; (viii) amounts related to certain litigation matters; (ix) costs related to closing the e-commerce store; and (x) other unusual, non-recurring or extraordinary expenses, losses, charges or gains.

Adjusted EBIT (or Adjusted Operating Margin) is defined as net income (loss), exclusive of the following items, if applicable: (i) interest expense; (ii) interest income; (iii) loss on extinguishment of debt; (iv) income tax expense (benefit); (v) impairment charges; (vi) net favorable lease costs; (vii) costs related to debt issuances and amendments; (viii) amounts related to certain litigation matters; (ix) costs related to closing the e-commerce store; and (x) other unusual, non-recurring or extraordinary expenses, losses, charges or gains.

Adjusted SG&A is defined as SG&A less product sourcing costs, favorable lease costs, amounts related to certain litigation matters and costs related to closing the e-commerce store.

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 (g) in the table below).

The Company presents Adjusted Net Income (Loss), 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.

9

 


 

The following table shows the Company’s reconciliation of net income (loss) to Adjusted Net Income (Loss) and Adjusted EPS for the periods indicated:

 

 

(unaudited)

 

 

 

(in thousands, except per share data)

 

 

 

Three Months Ended

 

 

Fiscal Year Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

 

 

2022

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

 

2020

 

Reconciliation of net income (loss) to Adjusted Net Income (Loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

121,636

 

 

$

155,994

 

 

$

206,325

 

 

$

408,839

 

 

$

(216,499

)

 

$

465,116

 

Net favorable lease costs (a)

 

 

4,726

 

 

 

5,677

 

 

 

7,499

 

 

 

21,914

 

 

 

24,078

 

 

 

35,761

 

Non-cash interest expense on convertible notes (b)

 

 

 

 

 

7,694

 

 

 

 

 

 

 

 

 

23,988

 

 

 

 

Costs related to debt issuances and amendments (c)

 

 

 

 

 

 

 

 

 

 

 

3,419

 

 

 

3,633

 

 

 

(375

)

Loss on extinguishment of debt (d)

 

 

38,264

 

 

 

 

 

 

 

 

 

156,020

 

 

 

202

 

 

 

 

Impairment charges

 

 

4,514

 

 

 

437

 

 

 

4,315

 

 

 

7,748

 

 

 

6,012

 

 

 

4,315

 

Litigation matters (e)

 

 

 

 

 

2,000

 

 

 

 

 

 

 

 

 

22,788

 

 

 

 

E-commerce closure (f)

 

 

 

 

 

23

 

 

 

 

 

 

 

 

 

1,549

 

 

 

 

Tax effect (g)

 

 

2,093

 

 

 

(8,640

)

 

 

(3,012

)

 

 

(24,741

)

 

 

(35,273

)

 

 

(10,083

)

Adjusted Net Income (Loss)

 

$

171,233

 

 

$

163,185

 

 

$

215,127

 

 

$

573,199

 

 

$

(169,522

)

 

$

494,734

 

Diluted weighted average shares outstanding (h)

 

 

67,626

 

 

 

66,962

 

 

 

67,010

 

 

 

68,126

 

 

 

65,962

 

 

 

67,293

 

Adjusted Earnings per Share

 

$

2.53

 

 

$

2.44

 

 

$

3.21

 

 

$

8.41

 

 

$

(2.57

)

 

$

7.35

 

The following table shows the Company’s reconciliation of net income (loss) to Adjusted EBITDA for the periods indicated:
 

 

 

(unaudited)

 

 

 

(in thousands)

 

 

 

Three Months Ended

 

 

Fiscal Year Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

 

 

2022

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

 

2020

 

Reconciliation of net income (loss) to Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

121,636

 

 

$

155,994

 

 

$

206,325

 

 

$

408,839

 

 

$

(216,499

)

 

$

465,116

 

Interest expense

 

 

14,792

 

 

 

27,260

 

 

 

11,872

 

 

 

67,502

 

 

 

97,767

 

 

 

50,826

 

Interest income

 

 

(34

)

 

 

(77

)

 

 

(1,224

)

 

 

(189

)

 

 

(1,253

)

 

 

(1,720

)

Loss on extinguishment of debt (d)

 

 

38,264

 

 

 

 

 

 

 

 

 

156,020

 

 

 

202

 

 

 

 

Costs related to debt issuances and amendments (c)

 

 

 

 

 

 

 

 

 

 

 

3,419

 

 

 

3,633

 

 

 

(375

)

Litigation matters (e)

 

 

 

 

 

2,000

 

 

 

 

 

 

 

 

 

22,788

 

 

 

 

E-commerce closure (f)

 

 

 

 

 

23

 

 

 

 

 

 

 

 

 

1,549

 

 

 

 

Depreciation and amortization (i)

 

 

70,857

 

 

 

62,339

 

 

 

62,539

 

 

 

271,132

 

 

 

244,273

 

 

 

246,109

 

Impairment charges

 

 

4,514

 

 

 

437

 

 

 

4,315

 

 

 

7,748

 

 

 

6,012

 

 

 

4,315

 

Income tax expense (benefit)

 

 

56,690

 

 

 

32,203

 

 

 

65,107

 

 

 

136,459

 

 

 

(221,124

)

 

 

115,409

 

Adjusted EBITDA

 

$

306,719

 

 

$

280,179

 

 

$

348,934

 

 

$

1,050,930

 

 

$

(62,652

)

 

$

879,680

 

 

10

 


 

The following table shows the Company’s reconciliation of net income (loss) to Adjusted EBIT for the periods indicated:
 

 

 

(unaudited)

 

 

 

(in thousands)

 

 

 

Three Months Ended

 

 

Fiscal Year Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

 

 

2022

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

 

2020