10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 29, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number 001-36107

 

https://cdn.kscope.io/a30014b693832e0360c30907f79321ba-img210854090_0.jpg 

BURLINGTON STORES, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

80-0895227

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

2006 Route 130 North

Burlington, New Jersey

 

08016

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (609) 387-7800

 

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

 

BURL

 

New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-Accelerated filer

Smaller reporting company

 

 

Emerging growth company

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

The registrant had 64,884,349 shares of common stock outstanding as of April 29, 2023.

 


 

BURLINGTON STORES, INC.

INDEX

 

 

 

Page

Part I—Financial Information

 

3

 

 

 

Item 1. Financial Statements (unaudited)

 

3

 

 

 

Condensed Consolidated Statements of Income - Three Months Ended April 29, 2023 and April 30, 2022

 

3

 

 

 

Condensed Consolidated Statements of Comprehensive Income – Three Months Ended April 29, 2023 and April 30, 2022

 

4

 

 

 

Condensed Consolidated Balance Sheets – April 29, 2023, January 28, 2023 and April 30, 2022

 

5

 

 

 

Condensed Consolidated Statements of Cash Flows – Three Months Ended April 29, 2023 and April 30, 2022

 

6

 

 

 

Notes to Condensed Consolidated Financial Statements

 

6

 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

18

 

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

31

 

 

 

Item 4. Controls and Procedures

 

31

 

 

 

Part II—Other Information

 

31

 

 

 

Item 1. Legal Proceedings

 

31

 

 

 

Item 1A. Risk Factors

 

31

 

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

32

 

 

 

Item 3. Defaults Upon Senior Securities

 

32

 

 

 

Item 4. Mine Safety Disclosures

 

32

 

 

 

Item 5. Other Information

 

32

 

 

 

Item 6. Exhibits

 

33

 

 

 

SIGNATURES

 

34

 

 

 

 

2


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BURLINGTON STORES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(All amounts in thousands, except per share data)

 

 

Three Months Ended

 

 

 

April 29,

 

 

April 30,

 

 

 

2023

 

 

2022

 

REVENUES:

 

 

 

 

 

 

Net sales

 

$

2,132,793

 

 

$

1,925,643

 

Other revenue

 

 

4,163

 

 

 

4,049

 

Total revenue

 

 

2,136,956

 

 

 

1,929,692

 

COSTS AND EXPENSES:

 

 

 

 

 

 

Cost of sales

 

 

1,231,646

 

 

 

1,136,946

 

Selling, general and administrative expenses

 

 

755,628

 

 

 

680,327

 

Depreciation and amortization

 

 

70,529

 

 

 

66,304

 

Impairment charges - long-lived assets

 

 

844

 

 

 

2,543

 

Other income - net

 

 

(8,998

)

 

 

(3,398

)

Loss on extinguishment of debt

 

 

24,644

 

 

 

14,657

 

Interest expense

 

 

19,345

 

 

 

14,606

 

Total costs and expenses

 

 

2,093,638

 

 

 

1,911,985

 

Income before income tax expense

 

 

43,318

 

 

 

17,707

 

Income tax expense

 

 

10,570

 

 

 

1,533

 

Net income

 

$

32,748

 

 

$

16,174

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

Common stock - basic

 

$

0.50

 

 

$

0.24

 

Common stock - diluted

 

$

0.50

 

 

$

0.24

 

Weighted average number of common shares:

 

 

 

 

 

 

Common stock - basic

 

 

64,954

 

 

 

66,281

 

Common stock - diluted

 

 

65,291

 

 

 

66,645

 

 

See Notes to Condensed Consolidated Financial Statements.

 

 

3


 

BURLINGTON STORES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(All amounts in thousands)

 

 

 

Three Months Ended

 

 

 

April 29,

 

 

April 30,

 

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

Net income

 

$

32,748

 

 

$

16,174

 

Other comprehensive income, net of tax:

 

 

 

 

 

 

Interest rate derivative contracts:

 

 

 

 

 

 

Net unrealized gain arising during the period

 

 

947

 

 

 

20,060

 

Net reclassification into earnings during the period

 

 

(827

)

 

 

2,842

 

Other comprehensive income, net of tax

 

 

120

 

 

 

22,902

 

Total comprehensive income

 

$

32,868

 

 

$

39,076

 

 

See Notes to Condensed Consolidated Financial Statements.

 

4


 

BURLINGTON STORES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(All amounts in thousands, except share and per share data)

 

 

 

 

April 29,

 

 

January 28,

 

 

April 30,

 

 

 

2023

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

532,443

 

 

$

872,623

 

 

$

627,050

 

Restricted cash and cash equivalents

 

 

6,582

 

 

 

6,582

 

 

 

6,582

 

Accounts receivable—net

 

 

78,477

 

 

 

71,091

 

 

 

77,708

 

Merchandise inventories

 

 

1,231,092

 

 

 

1,181,982

 

 

 

1,257,104

 

Assets held for disposal

 

 

5,120

 

 

 

19,823

 

 

 

3,791

 

Prepaid and other current assets

 

 

136,751

 

 

 

131,691

 

 

 

209,007

 

Total current assets

 

 

1,990,465

 

 

 

2,283,792

 

 

 

2,181,242

 

Property and equipment—net

 

 

1,678,461

 

 

 

1,668,005

 

 

 

1,567,400

 

Operating lease assets

 

 

2,968,247

 

 

 

2,945,932

 

 

 

2,816,885

 

Tradenames

 

 

238,000

 

 

 

238,000

 

 

 

238,000

 

Goodwill

 

 

47,064

 

 

 

47,064

 

 

 

47,064

 

Deferred tax assets

 

 

3,079

 

 

 

3,205

 

 

 

3,824

 

Other assets

 

 

78,563

 

 

 

83,599

 

 

 

79,067

 

Total assets

 

$

7,003,879

 

 

$

7,269,597

 

 

$

6,933,482

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

829,212

 

 

$

955,793

 

 

$

962,208

 

Current operating lease liabilities

 

 

402,622

 

 

 

401,111

 

 

 

374,740

 

Other current liabilities

 

 

472,926

 

 

 

541,413

 

 

 

378,075

 

Current maturities of long term debt

 

 

13,753

 

 

 

13,634

 

 

 

14,473

 

Total current liabilities

 

 

1,718,513

 

 

 

1,911,951

 

 

 

1,729,496

 

Long term debt

 

 

1,350,416

 

 

 

1,462,072

 

 

 

1,474,941

 

Long term operating lease liabilities

 

 

2,842,785

 

 

 

2,825,292

 

 

 

2,709,016

 

Other liabilities

 

 

70,082

 

 

 

69,386

 

 

 

71,010

 

Deferred tax liabilities

 

 

220,609

 

 

 

205,991

 

 

 

232,863

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value: authorized: 50,000,000 
   shares;
no shares issued and outstanding

 

 

 

 

 

 

 

 

 

Common stock, $0.0001 par value:

 

 

 

 

 

 

 

 

 

   Authorized: 500,000,000 shares

 

 

 

 

 

 

 

 

 

   Issued: 82,157,501 shares, 82,037,994 shares and 81,800,820 shares, respectively

 

 

 

 

 

 

 

 

 

   Outstanding: 64,884,349 shares, 65,019,713 shares and 66,072,065 shares, respectively

 

 

8

 

 

 

8

 

 

 

7

 

Additional paid-in-capital

 

 

2,043,111

 

 

 

2,015,625

 

 

 

1,948,980

 

Accumulated earnings

 

 

677,163

 

 

 

644,415

 

 

 

430,466

 

Accumulated other comprehensive income

 

 

28,868

 

 

 

28,748

 

 

 

18,461

 

Treasury stock, at cost

 

 

(1,947,676

)

 

 

(1,893,891

)

 

 

(1,681,758

)

Total stockholders' equity

 

 

801,474

 

 

 

794,905

 

 

 

716,156

 

Total liabilities and stockholders' equity

 

$

7,003,879

 

 

$

7,269,597

 

 

$

6,933,482

 

 

See Notes to Condensed Consolidated Financial Statements.

 

5


 

BURLINGTON STORES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(All amounts in thousands)

 

 

Three Months Ended

 

 

 

April 29,

 

 

April 30,

 

 

 

2023

 

 

2022

 

OPERATING ACTIVITIES

 

 

 

 

 

Net income

 

$

32,748

 

 

$

16,174

 

Adjustments to reconcile net income to net cash used in operating activities

 

 

 

 

 

Depreciation and amortization

 

 

70,529

 

 

 

66,304

 

Impairment chargeslong-lived assets

 

 

844

 

 

 

2,543

 

Amortization of deferred financing costs

 

 

855

 

 

 

986

 

Accretion of long term debt instruments

 

 

236

 

 

 

238

 

Deferred income taxes

 

 

14,699

 

 

 

4,496

 

Loss on extinguishment of debt

 

 

24,644

 

 

 

14,657

 

Non-cash stock compensation expense

 

 

16,722

 

 

 

16,705

 

Non-cash lease expense

 

 

(970

)

 

 

(357

)

Cash received from landlord allowances

 

 

4,349

 

 

 

7,199

 

Changes in assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(7,418

)

 

 

(23,710

)

Merchandise inventories

 

 

(49,110

)

 

 

(236,096

)

Prepaid and other current assets

 

 

(5,060

)

 

 

161,509

 

Accounts payable

 

 

(125,241

)

 

 

(119,282

)

Other current liabilities

 

 

(53,943

)

 

 

(88,880

)

Other long term assets and long term liabilities

 

 

723

 

 

 

1,114

 

Other operating activities

 

 

(2,559

)

 

 

4,101

 

Net cash used in operating activities

 

 

(77,952

)

 

 

(172,299

)

INVESTING ACTIVITIES

 

 

 

 

 

Cash paid for property and equipment

 

 

(95,688

)

 

 

(106,899

)

Lease acquisition costs

 

 

(4,549

)

 

 

 

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

 

 

14,080

 

 

 

 

Other investing activities

 

 

 

 

 

(75

)

Net cash used in investing activities

 

 

(86,157

)

 

 

(106,974

)

FINANCING ACTIVITIES

 

 

 

 

 

 

Principal payments on long term debt—Term B-6 Loans

 

 

(2,404

)

 

 

(2,404

)

Principal payment on long term debt—Convertible Notes

 

 

(133,656

)

 

 

(78,187

)

Purchase of treasury shares

 

 

(53,393

)

 

 

(104,763

)

Proceeds from stock option exercises

 

 

10,764

 

 

 

4,721

 

Other financing activities

 

 

2,618

 

 

 

(4,135

)

Net cash used in financing activities

 

 

(176,071

)

 

 

(184,768

)

Decrease in cash, cash equivalents, restricted cash and restricted cash equivalents

 

 

(340,180

)

 

 

(464,041

)

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

 

 

879,205

 

 

 

1,097,673

 

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

 

$

539,025

 

 

$

633,632

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Interest paid

 

$

27,066

 

 

$

14,228

 

Income tax payments (refund) - net

 

$

1,539

 

 

$

(177,205

)

Non-cash investing and financing activities:

 

 

 

 

 

 

Accrued purchases of property and equipment

 

$

49,628

 

 

$

37,235

 

See Notes to Condensed Consolidated Financial Statements.

BURLINGTON STORES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 29, 2023

(Unaudited)

1. Summary of Significant Accounting Policies

Basis of Presentation

As of April 29, 2023, Burlington Stores, Inc., a Delaware corporation (collectively with its subsidiaries, the Company), through its indirect subsidiary Burlington Coat Factory Warehouse Corporation (BCFWC), operated 933 retail stores.

These unaudited Condensed Consolidated Financial Statements include the accounts of Burlington Stores, Inc. and its subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. The Condensed Consolidated

 

6


 

Financial Statements are unaudited, but in the opinion of management reflect all adjustments (which are of a normal and recurring nature) necessary for the fair presentation of the results of operations for the interim periods presented. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023 (Fiscal 2022 10-K). The balance sheet at January 28, 2023 presented herein has been derived from the audited Consolidated Financial Statements contained in the Fiscal 2022 10-K. Because the Company’s business is seasonal in nature, the operating results for the three month period ended April 29, 2023 are not necessarily indicative of results for the fiscal year.

Accounting policies followed by the Company are described in Note 1, “Summary of Significant Accounting Policies,” included in Part II, Item 8 of the Fiscal 2022 10-K.

Fiscal Year

The Company defines its fiscal year as the 52- or 53-week period ending on the Saturday closest to January 31. Fiscal 2023 is defined as the 53-week year ending February 3, 2024 and Fiscal 2022 is defined as the 52-week year ended January 28, 2023. The first quarter of Fiscal 2023 and Fiscal 2022 each consist of 13 weeks.

Recently Adopted Accounting Standards

There were no new accounting standards that had a material impact on the Company’s Condensed Consolidated Financial Statements and notes thereto during the three month period ended April 29, 2023, and there were no new accounting standards or pronouncements that were issued but not yet effective as of April 29, 2023 that the Company expects to have a material impact on its financial position or results of operations upon becoming effective.

2. Stockholders’ Equity

Activity for the three month periods ended April 29, 2023 and April 30, 2022 in the Company’s stockholders’ equity are summarized below:

 

 

(in thousands, except share data)

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Accumulated
Other
Comprehensive

 

 

Treasury Stock

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

(Loss) Income

 

 

Shares

 

 

Amount

 

 

Total

 

Balance at January 28, 2023

 

 

82,037,994

 

 

$

8

 

 

$

2,015,625

 

 

$

644,415

 

 

$

28,748

 

 

 

(17,018,281

)

 

$

(1,893,891

)

 

$

794,905

 

Net income

 

 

 

 

 

 

 

 

 

 

 

32,748

 

 

 

 

 

 

 

 

 

 

 

 

32,748

 

Stock options exercised

 

 

90,971

 

 

 

 

 

 

10,764

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,764

 

Shares used for tax withholding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,457

)

 

 

(1,962

)

 

 

(1,962

)

Shares purchased as part of publicly announced program, inclusive of $0.4 million related to excise tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(245,414

)

 

 

(51,823

)

 

 

(51,823

)

Vesting of restricted shares

 

 

28,536

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation

 

 

 

 

 

 

 

 

16,722

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,722

 

Unrealized gains on interest rate derivative contracts, net of related taxes of $0.3 million

 

 

 

 

 

 

 

 

 

 

 

 

 

 

947

 

 

 

 

 

 

 

 

 

947

 

Amount reclassified from accumulated other comprehensive income into earnings, net of related tax benefit of $0.3 million

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(827

)

 

 

 

 

 

 

 

 

(827

)

Balance at April 29, 2023

 

 

82,157,501

 

 

$

8

 

 

$

2,043,111

 

 

$

677,163

 

 

$

28,868

 

 

 

(17,273,152

)

 

$

(1,947,676

)

 

$

801,474

 

 

 

 

7


 

 

 

(in thousands, except share data)

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated (Deficit)

 

 

Accumulated
Other
Comprehensive

 

 

Treasury Stock

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Loss

 

 

Shares

 

 

Amount

 

 

Total