Exhibit 99.1
99 CENTS ONLY STORES REPORTS STRONG FOURTH QUARTER
AND FULL YEAR FISCAL 2017 RESULTS
Fourth Quarter Fiscal 2017 Overview:
· Net sales increased 6.7% to $552.5 million compared to the prior year
· Same-store sales increased by 6.4% compared to the prior year
· Gross margin, as a percentage of net sales, increased to 30.1%, up from 26.7% in the prior year
· Net loss was $20.9 million compared to net loss of $18.4 million in the prior year
· Adjusted EBITDA(1) was $23.4 million compared to $2.4 million in the prior year
Full-Year Fiscal 2017 Overview:
· Net sales increased 2.9% to $2,062.0 million compared to the prior year
· Same-store sales increased by 2.1% compared to the prior year
· Gross margin, as a percentage of net sales, increased to 29.2%, up from 28.1% in the prior year
· Net loss was $118.2 million compared to $248.0 million in the prior year
· Adjusted EBITDA increased 28% to $50.6 million compared to the prior year
CITY OF COMMERCE, California — April 20, 2017 — 99 Cents Only Stores LLC (the “Company”) announced its financial results for the fourth quarter and full fiscal year of 2017 ended January 27, 2017 (“fiscal 2017”).
Geoffrey Covert, President and Chief Executive Officer, stated, “We concluded fiscal 2017 with a strong fourth quarter driven by growth in same store sales, expanding margins and lower inventory levels. As a result, we continued to solidify 99 Cents Only Stores’ liquidity position while generating significant year-over-year growth in adjusted EBITDA.”
Mr. Covert continued, “Net sales for the fourth quarter were $552.5 million, up 6.7% over the prior year period. On a same-store basis, sales were up an impressive 6.4%, resulting from a 4.4% increase in basket, coupled with a 1.9% increase in transaction count. In addition, fourth quarter gross margin of 30.1% improved 340 basis points year-over-year, primarily due to our concerted efforts to improve shrink and scrap and execution in our logistics network. I am also pleased with our continued success in inventory management as total inventory declined on both a year-over-year and sequential quarter basis. Importantly, adjusted EBITDA was $23.4 million for the fourth quarter compared to $2.4 million in the fourth quarter of last year. For the full year, adjusted EBITDA of $50.6 million was up 28% compared to the prior year. We are encouraged by this result, which represents the reversal of a two-year decline in adjusted EBITDA.”
(1) EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are financial measures that are considered “non-GAAP financial measures” under the Securities and Exchange Commission regulations. The definitions of, an explanation of how and why the Company uses, and a reconciliation to the most directly comparable GAAP measure of, these non-GAAP measures are included in this press release.
Mr. Covert concluded, “Overall, fiscal 2017 was a very productive and transformative year for 99 Cents Only Stores and we head into fiscal 2018 as a financially stronger and more customer-focused enterprise. I am confident we can continue to build on the foundational strengths of our business to achieve our longer-term goal of sustained profitable growth.”
Fourth Quarter Financial Results
For the fourth quarter of fiscal 2017, the Company’s net sales increased 6.7% to $552.5 million, compared to $517.8 million in the fourth quarter of fiscal 2016. Same-store sales increased 6.4% compared to the fourth quarter of fiscal 2016, with higher average ticket of 4.4% in addition to higher customer traffic of 1.9%. The increase in same-store sales was primarily due to higher sales from seasonal merchandise, driven by improvements in product assortment and replenishment processes, as well as general merchandise, including strong sell-through of above $1 merchandise. In addition, sales of fresh offerings improved due to better product availability, improved in-stock levels and the expansion of the Company’s third party distributor partnership. These improvements were partially offset by the ongoing deflationary environment in milk and eggs.
Gross margin, as a percentage of net sales, was 30.1% in the fourth quarter of fiscal 2017, an increase of 340 basis points from the fourth quarter of fiscal 2016. Gross margin increased primarily due to lower inventory shrinkage as well as lower distribution and transportation costs. Selling, general and administrative expenses were $172.6 million, or 31.2%, as a percentage of net sales, representing a decrease of 10 basis points from the fourth quarter of fiscal 2016. The improvement was primarily driven by a decrease in workers’ compensation accrual partially offset by higher performance-based compensation expense and increases in the California minimum wage.
Net loss was $20.9 million in the fourth quarter of fiscal 2017 compared to net loss of $18.4 million in the fourth quarter of fiscal 2016. Net loss as a percentage of net sales was (3.8)% for the fourth quarter of fiscal 2017, compared to net loss as a percentage of net sales of (3.6)% for the fourth quarter of fiscal 2016. Adjusted EBITDA was $23.4 million in the fourth quarter of fiscal 2017, compared to $2.4 million in the fourth quarter of fiscal 2016. Adjusted EBITDA margin was 4.2% compared to 0.5% in the fourth quarter of fiscal 2016.
Full Year Financial Results
For the full-year fiscal 2017, the Company’s net sales increased 2.9% to $2,062.0 million, compared to $2,004.0 million in fiscal 2016. Same-store sales increased 2.1% driven by higher average ticket and traffic. Net loss was $118.2 million in fiscal 2017, compared to net loss of $248.0 million in fiscal 2016. Net loss as a percentage of net sales was (5.7)% in fiscal 2017, compared to net loss as a percentage of net sales of (12.4)% in fiscal 2016. Adjusted EBITDA was $50.6 million for the full-year fiscal 2017, compared to $39.5 million for fiscal 2016. Adjusted EBITDA margin was 2.5% for fiscal 2017, compared to 2.0% for fiscal 2016.
Average sales per store open at least 12 months, on a trailing 52-week period, were $5.2 million in fiscal 2017 compared to $5.1 million in fiscal 2016. Average net sales per estimated saleable square foot (computed for stores open at least 12 months), on a trailing 52-week period, were $319 per square foot for fiscal 2017 compared to $314 per square foot for fiscal 2016.
Store Openings
The Company opened one store in the fourth quarter of fiscal 2017 and, as previously announced, closed five stores in California upon the expiration of their leases. As of the end of the fourth quarter of fiscal 2017, the Company operated 390 stores.
Fiscal 2018 Outlook
For the fiscal year ended February 2, 2018 (“fiscal 2018”), the Company currently expects:
· Positive same-store sales growth
· Year-over-year decrease in net loss, and an increase in adjusted EBITDA over the same period
· 3 new store openings, all in the second half of the year
· Capital expenditures of approximately $53-$58 million
Change of Prior Period Results
During the fourth quarter of fiscal 2017, the Company determined that deferred tax liabilities as of January 29, 2016 were overstated by $6.9 million and the deferred tax valuation allowance was understated by $6.9 million. The total net deferred tax balances as of January 29, 2016 and tax provision for fiscal 2017 were not affected by this error. The Company analyzed the impact of the $6.9 million deferred tax liability overstatement on the goodwill impairment charge recorded in fiscal 2016 and determined that the charge was understated by $6.7 million. The Company has included a correction in this release that decreased goodwill by $6.7 million as of January 29, 2016 and increased the goodwill impairment charge by the same amount for the fourth quarter and full-year fiscal 2016.
CONFERENCE CALL DETAILS
The Company’s conference call to discuss its fiscal 2017 fourth quarter and full year results and the other matters described in this release is scheduled for Thursday, April 20, 2017 at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time).
The live call can be accessed by dialing 1-877-407-3982 (domestic) or 1-201-493-6780 (international). Please phone in approximately 10 minutes before the call is scheduled to begin and hold for an operator to assist you. Please inform the operator that you are calling in for 99 Cents Only Stores’ Fiscal 2017 Fourth Quarter and Full Year Earnings Conference Call, and be prepared to provide the operator with your name, company name, position and the conference ID: 13658711. The call will also be broadcast live over the Internet, accessible through the Investor Relations section of the Company’s website at www.99only.com/investor-relations.
A telephonic replay of the call will be available beginning Thursday, April 20, 2017, at 2:00 p.m. Eastern Time, through Thursday, May 4, 2017, at 11:59 p.m. Eastern Time. To access the replay, dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and enter the replay pin number: 13658711. A replay of the webcast will also be available for 60 days upon completion of the conference call, accessible through the Investor Relations section of the Company’s website at www.99only.com/investor-relations.
A copy of this earnings release and supplemental slides will be available prior to the call, accessible through the Investor Relations section of the Company’s website at www.99only.com/investor-relations.
Non-GAAP Financial Measures
The Company defines EBITDA as net income before interest expense (income) and other financial costs, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA for the relevant period as adjusted by various items set forth in the reconciliation tables below, including stock-based compensation, impairment of goodwill and other assets, expenses, charges and reserves related to strategic initiatives and executive recruitment and severance, amortization of gain on sale-leaseback transactions, and other non-cash or one-time or other items as permitted by the terms of the Company’s debt instruments. Adjusted EBITDA margin is Adjusted EBITDA divided by total sales. Adjusted EBITDA and Adjusted EBITDA margin as presented herein, are supplemental measures of the Company’s performance that are not required by, or presented in accordance with, generally accepted accounting principles in the United States of America (“GAAP”). The Company’s management uses EBITDA, Adjusted EBITDA and Adjusted EBITDA margin to assess its core operating performance and that of its competitors. In addition, Adjusted EBITDA is used to determine the Company’s compliance and ability to take certain actions under the covenants contained in the Company’s debt instruments. EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are not measures of the Company’s financial performance under GAAP and should not be considered in isolation or as alternatives to net income, operating income or any other performance measures derived in accordance with GAAP, as measures of operating performance or operating cash flows or as measures of liquidity.
Merger and Conversion to LLC
On January 13, 2012, 99¢ Only Stores was acquired by affiliates of Ares Management LLC, Canada Pension Plan Investment Board and the Gold-Schiffer family. The acquisition is referred to as the “Merger.” Effective October 18, 2013, 99¢ Only Stores converted from a California corporation to a California limited liability company, 99 Cents Only Stores LLC. The term the “Company” refers to 99¢ Only Stores and its consolidated subsidiaries prior to the conversion date and to 99 Cents Only Stores LLC and its consolidated subsidiaries on or after the conversion date.
About 99 Cents Only Stores
Founded in 1982, 99 Cents Only Stores LLC is the leading operator of extreme value stores in California and the Southwestern United States. The Company currently operates 390 stores located in California, Texas, Arizona and Nevada. 99 Cents Only Stores LLC offers a broad assortment of name brand and other attractively priced merchandise and compelling seasonal product offerings. For more information, visit www.99only.com.
Investor Contact:
Addo Investor Relations
Lasse Glassen
(424) 238-6249
lglassen@addoir.com
### Tables to Follow ###
The following tables reconcile EBITDA and Adjusted EBITDA to net income for the periods indicated:
|
|
|
For the Fourth Quarter Ended |
| ||||
|
|
|
January 27, |
|
January 29, |
| ||
|
|
|
(In thousands) |
| ||||
|
|
|
(Unaudited) |
| ||||
|
|
|
|
|
|
| ||
|
Net loss |
|
$ |
(20,889 |
) |
$ |
(18,387 |
) |
|
Interest expense, net |
|
18,532 |
|
16,350 |
| ||
|
(Benefit) provision for income taxes |
|
(4,136 |
) |
(627 |
) | ||
|
Depreciation and amortization |
|
18,093 |
|
17,681 |
| ||
|
EBITDA |
|
$ |
11,600 |
|
$ |
15,017 |
|
|
Stock-based compensation (a) |
|
149 |
|
83 |
| ||
|
Purchase accounting effect on leases (b) |
|
1,051 |
|
558 |
| ||
|
Goodwill impairment (c) |
|
— |
|
(21,300 |
) | ||
|
Impairment of long-lived assets (d) |
|
270 |
|
1,661 |
| ||
|
Cost of sales adjustments (e) |
|
— |
|
1,865 |
| ||
|
Inventory adjustments (f) |
|
— |
|
30 |
| ||
|
Employee related expenses (g) |
|
3,886 |
|
1,753 |
| ||
|
Real-estate projects termination charges (h) |
|
998 |
|
— |
| ||
|
Professional and consultant fees (i) |
|
1,790 |
|
1,206 |
| ||
|
Loss on sales of assets (j) |
|
1,005 |
|
3 |
| ||
|
Promotional adjustments (k) |
|
— |
|
710 |
| ||
|
Other (l) |
|
2,660 |
|
822 |
| ||
|
Adjusted EBITDA |
|
$ |
23,409 |
|
$ |
2,408 |
|
(a) Represents stock-based compensation expense incurred in connection with various stock-based compensation plans in which certain Company employees have participated.
(b) Represents purchase accounting effect on rent revenue and rent expense.
(c) Represents goodwill impairment charge related to the retail reporting unit.
(d) Represents impairment charges primarily related to liquor licenses in fiscal 2017 and impairment of underperforming stores, trademarks, favorable lease and equipment in fiscal 2016.
(e) Represents adjustments related primarily to lower of cost or market adjustments and close-out inventory write-offs.
(f) Represents charges related to excess and obsolescence reserve.
(g) Represents expenses related primarily to severance, signing and retention bonuses.
(h) Represents charges relating to previously capitalized store and distribution center real-estate development costs expensed upon termination of related projects.
(i) Represents professional and consultant fees primarily related to profitability improvement and other strategic initiatives.
(j) Represents amortization of gain related to sale-leaseback arrangements and net gain/loss on the sale/disposal of non-core assets.
(k) Represents promotions aimed at profitability improvement.
(l) Represents non-cash or other charges and income: for fiscal 2017, legal reserve adjustments, non-recurring professional fees, prior year property tax and sales tax assessment and other; for fiscal 2016, legal reserve adjustments and other.
The following tables reconcile EBITDA and Adjusted EBITDA to net loss for the periods indicated:
|
|
|
For the Year Ended |
| ||||
|
|
|
January 27, |
|
January 29, |
| ||
|
|
|
(In thousands) |
| ||||
|
|
|
(Unaudited) |
| ||||
|
|
|
|
|
|
| ||
|
Net loss |
|
$ |
(118,159 |
) |
$ |
(247,953 |
) |
|
Interest expense, net |
|
68,717 |
|
65,649 |
| ||
|
(Benefit) provision for income taxes |
|
(3,990 |
) |
31,942 |
| ||
|
Depreciation and amortization |
|
70,780 |
|
68,191 |
| ||
|
EBITDA |
|
$ |
17,348 |
|
$ |
(82,171 |
) |
|
Stock-based compensation (a) |
|
692 |
|
1,538 |
| ||
|
Purchase accounting effect on leases (b) |
|
3,198 |
|
2,449 |
| ||
|
Goodwill impairment (c) |
|
— |
|
98,700 |
| ||
|
Impairment of long-lived assets (d) |
|
761 |
|
2,171 |
| ||
|
Cost of sales adjustments (e) |
|
824 |
|
2,770 |
| ||
|
Inventory adjustments (f) |
|
1,827 |
|
627 |
| ||
|
Employee related expenses (g) |
|
10,824 |
|
7,740 |
| ||
|
Real estate projects termination charges (h) |
|
1,009 |
|
2,949 |
| ||
|
Professional and consultant fees (i) |
|
4,525 |
|
1,713 |
| ||
|
Loss (gain) on sales of assets (j) |
|
893 |
|
(5,596 |
) | ||
|
Promotional adjustments (k) |
|
— |
|
4,370 |
| ||
|
Loss on extinguishment (l) |
|
335 |
|
— |
| ||
|
Other (m) |
|
8,321 |
|
2,233 |
| ||
|
Adjusted EBITDA |
|
$ |
50,557 |
|
$ |
39,493 |
|
(a) Represents stock-based compensation expense incurred in connection with various stock-based compensation plans in which certain Company employees have participated.
(b) Represents purchase accounting effect on rent revenue and rent expense.
(c) Represents goodwill impairment charge related to the retail reporting unit.
(d) Represents impairment charges primarily related to an asset held for sale, liquor licenses and stores to be closed in fiscal 2017 and impairment of underperforming stores, trademarks, favorable lease and equipment in fiscal 2016.
(e) Represents adjustments related primarily to lower of cost or market adjustments for all periods and close-out inventory write-offs and return fee in fiscal 2016.
(f) Represents charges related to excess and obsolescence reserve and other.
(g) Represents expenses related primarily to severance, signing and retention bonuses.
(h) Represents charges relating to previously capitalized store and distribution /corporate center real-estate development costs expensed upon termination of related projects.
(i) Represents professional and consultant fees primarily aimed at profitability improvement and strategic initiatives.
(j) Represents amortization of gain related to sale-leaseback arrangements and net gain/loss on the sale/disposal of non-core assets.
(k) Represents promotions aimed at profitability improvement.
(l) Represents loss on extinguishment of debt from amendment of the asset based lending facility in the first quarter of fiscal 2017.
(m) Represents non-cash or other charges and income: for fiscal 2017, prior year property tax and sales tax assessment, non-recurring professional fees, legal reserve adjustments, insurance reimbursements and other; for fiscal 2016, legal reserve adjustments and other.
99 CENTS ONLY STORES LLC
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
|
|
|
January 27, |
|
January 29, |
| ||
|
|
|
(Unaudited) |
|
|
| ||
|
ASSETS |
|
|
|
|
| ||
|
Current Assets: |
|
|
|
|
| ||
|
Cash |
|
$ |
2,448 |
|
$ |
2,312 |
|
|
Accounts receivable, net of allowance for doubtful accounts of $122 and $140 at January 27, 2017 and January 29, 2016, respectively |
|
3,510 |
|
1,674 |
| ||
|
Income taxes receivable |
|
3,876 |
|
3,665 |
| ||
|
Inventories, net |
|
175,892 |
|
196,651 |
| ||
|
Assets held for sale |
|
4,903 |
|
2,308 |
| ||
|
Other |
|
10,307 |
|
18,570 |
| ||
|
Total current assets |
|
200,936 |
|
225,180 |
| ||
|
Property and equipment, net |
|
507,620 |
|
542,570 |
| ||
|
Deferred financing costs, net |
|
3,488 |
|
916 |
| ||
|
Intangible assets, net |
|
447,027 |
|
453,242 |
| ||
|
Goodwill |
|
381,045 |
|
381,045 |
| ||
|
Deposits and other assets |
|
8,592 |
|
7,352 |
| ||
|
Total assets |
|
$ |
1,548,708 |
|
$ |
1,610,305 |
|
|
|
|
|
|
|
| ||
|
LIABILITIES AND MEMBER’S EQUITY |
|
|
|
|
| ||
|
Current Liabilities: |
|
|
|
|
| ||
|
Accounts payable |
|
$ |
86,588 |
|
$ |
79,197 |
|
|
Payroll and payroll-related |
|
24,110 |
|
18,421 |
| ||
|
Sales tax |
|
19,389 |
|
13,314 |
| ||
|
Other accrued expenses |
|
46,082 |
|
39,520 |
| ||
|
Workers’ compensation |
|
69,169 |
|
76,389 |
| ||
|
Current portion of long-term debt |
|
6,138 |
|
6,138 |
| ||
|
Current portion of capital and financing lease obligations |
|
31,330 |
|
989 |
| ||
|
Total current liabilities |
|
282,806 |
|
233,968 |
| ||
|
Long-term debt, net of current portion |
|
865,375 |
|
875,843 |
| ||
|
Unfavorable lease commitments, net |
|
3,988 |
|
5,746 |
| ||
|
Deferred rent |
|
30,360 |
|
29,333 |
| ||
|
Deferred compensation liability |
|
816 |
|
709 |
| ||
|
Capital and financing lease obligation, net of current portion |
|
47,195 |
|
34,817 |
| ||
|
Long-term deferred income taxes |
|
161,450 |
|
163,045 |
| ||
|
Other liabilities |
|
12,297 |
|
5,118 |
| ||
|
Total liabilities |
|
1,404,287 |
|
1,348,579 |
| ||
|
|
|
|
|
|
| ||
|
Commitments and contingencies |
|
|
|
|
| ||
|
Member’s Equity: |
|
|
|
|
| ||
|
Member units — 100 units issued and outstanding at January 27, 2017 and January 29, 2016 |
|
550,918 |
|
550,226 |
| ||
|
Investment in Number Holdings, Inc. preferred stock |
|
(19,200 |
) |
(19,200 |
) | ||
|
Accumulated deficit |
|
(387,297 |
) |
(269,138 |
) | ||
|
Other comprehensive loss |
|
— |
|
(162 |
) | ||
|
Total equity |
|
144,421 |
|
261,726 |
| ||
|
Total liabilities and equity |
|
$ |
1,548,708 |
|
$ |
1,610,305 |
|
(1) The Consolidated Balance Sheet as of January 29, 2016 was retrospectively adjusted to reflect the adoption of Accounting Standards Update (“ASU”) No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” and ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” in the first quarter of fiscal 2017.
99 CENTS ONLY STORES LLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
|
|
|
For the Fourth Quarter Ended |
|
For the Years Ended |
| ||||||||
|
|
|
January 27, |
|
January 29, |
|
January 27, |
|
January 29, |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net Sales: |
|
|
|
|
|
|
|
|
| ||||
|
99¢ Only Stores |
|
$ |
543,908 |
|
$ |
508,368 |
|
$ |
2,023,034 |
|
$ |
1,961,050 |
|
|
Bargain Wholesale |
|
8,568 |
|
9,471 |
|
38,973 |
|
42,945 |
| ||||
|
Total sales |
|
552,476 |
|
517,839 |
|
2,062,007 |
|
2,003,995 |
| ||||
|
Cost of sales |
|
386,393 |
|
379,642 |
|
1,460,595 |
|
1,441,631 |
| ||||
|
Gross profit |
|
166,083 |
|
138,197 |
|
601,412 |
|
562,364 |
| ||||
|
Selling, general and administrative expenses |
|
172,576 |
|
162,161 |
|
654,509 |
|
614,026 |
| ||||
|
Goodwill impairment |
|
— |
|
(21,300 |
) |
— |
|
98,700 |
| ||||
|
Operating loss |
|
(6,493 |
) |
(2,664 |
) |
(53,097 |
) |
(150,362 |
) | ||||
|
Other (income) expense: |
|
|
|
|
|
|
|
|
| ||||
|
Interest income |
|
(2 |
) |
(1 |
) |
(47 |
) |
(4 |
) | ||||
|
Interest expense |
|
18,534 |
|
16,351 |
|
68,764 |
|
65,653 |
| ||||
|
Loss on extinguishment of debt |
|
— |
|
— |
|
335 |
|
— |
| ||||
|
Total other expense, net |
|
18,532 |
|
16,350 |
|
69,052 |
|
65,649 |
| ||||
|
Loss before provision for income taxes |
|
(25,025 |
) |
(19,014 |
) |
(122,149 |
) |
(216,011 |
) | ||||
|
(Benefit) provision for income taxes |
|
(4,136 |
) |
(627 |
) |
(3,990 |
) |
31,942 |
| ||||
|
Net loss |
|
$ |
(20,889 |
) |
$ |
(18,387 |
) |
$ |
(118,159 |
) |
$ |
(247,953 |
) |
99 CENTS ONLY STORES LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
|
|
For the Years Ended |
| ||||
|
|
|
January 27, |
|
January 29, |
| ||
|
|
|
|
|
|
| ||
|
Cash flows from operating activities: |
|
|
|
|
| ||
|
Net loss |
|
$ |
(118,159 |
) |
$ |
(247,953 |
) |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
| ||
|
Depreciation |
|
69,030 |
|
66,402 |
| ||
|
Amortization of deferred financing costs and accretion of OID |
|
5,988 |
|
4,820 |
| ||
|
Amortization of intangible assets |
|
1,750 |
|
1,789 |
| ||
|
Amortization of favorable/unfavorable leases, net |
|
2,737 |
|
1,704 |
| ||
|
Loss on extinguishment of debt |
|
335 |
|
— |
| ||
|
Loss (gain) on disposal of fixed assets |
|
532 |
|
(5,416 |
) | ||
|
Loss on interest rate hedge |
|
514 |
|
1,402 |
| ||
|
Goodwill impairment |
|
— |
|
98,700 |
| ||
|
Long-lived and intangible assets impairment |
|
761 |
|
2,171 |
| ||
|
Deferred income taxes |
|
(1,595 |
) |
33,394 |
| ||
|
Stock-based compensation |
|
692 |
|
1,538 |
| ||
|
Changes in assets and liabilities associated with operating activities: |
|
|
|
|
| ||
|
Accounts receivable |
|
(1,836 |
) |
280 |
| ||
|
Inventories |
|
20,759 |
|
99,389 |
| ||
|
Deposits and other assets |
|
6,506 |
|
1,228 |
| ||
|
Accounts payable |
|
9,377 |
|
(44,407 |
) | ||
|
Accrued expenses |
|
18,082 |
|
(2,081 |
) | ||
|
Accrued workers’ compensation |
|
(7,220 |
) |
5,898 |
| ||
|
Income taxes |
|
(319 |
) |
7,246 |
| ||
|
Deferred rent |
|
1,982 |
|
4,096 |
| ||
|
Other long-term liabilities |
|
6,656 |
|
1,457 |
| ||
|
Net cash provided by operating activities |
|
16,572 |
|
31,657 |
| ||
|
Cash flows from investing activities: |
|
|
|
|
| ||
|
Purchases of property and equipment |
|
(45,791 |
) |
(65,950 |
) | ||
|
Proceeds from sale of property and fixed assets |
|
6,234 |
|
31,436 |
| ||
|
Insurance recoveries for replacement assets |
|
937 |
|
— |
| ||
|
Net cash used in investing activities |
|
(38,620 |
) |
(34,514 |
) | ||
|
Cash flows from financing activities: |
|
|
|
|
| ||
|
Payments of long-term debt |
|
(6,138 |
) |
(6,138 |
) | ||
|
Proceeds under revolving credit facility |
|
264,800 |
|
471,350 |
| ||
|
Payments under revolving credit facility |
|
(273,300 |
) |
(480,550 |
) | ||
|
Payments of debt issuance costs |
|
(4,725 |
) |
(487 |
) | ||
|
Proceeds from financing lease obligations |
|
42,592 |
|
9,359 |
| ||
|
Payments of capital and financing lease obligations |
|
(1,045 |
) |
(381 |
) | ||
|
Payments to repurchase stock options of Number Holdings, Inc. |
|
— |
|
(390 |
) | ||
|
Net settlement of stock options of Number Holdings, Inc. for tax withholdings |
|
— |
|
(57 |
) | ||
|
Net cash provided by (used in) financing activities |
|
22,184 |
|
(7,294 |
) | ||
|
Net increase (decrease) in cash |
|
136 |
|
(10,151 |
) | ||
|
Cash - beginning of period |
|
2,312 |
|
12,463 |
| ||
|
Cash - end of period |
|
$ |
2,448 |
|
$ |
2,312 |
|
Safe Harbor Statement
The Company has included statements in this release that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act, as amended, and Section 27A of the Securities Act of 1933, as amended. As a general matter, forward-looking statements are those focused on future or anticipated events or trends, expectations and beliefs including, among other things, (a) trends affecting the financial condition or results of operations of the Company and (b) the business and growth strategies of the Company (including the Company’s store opening growth rate) that are not historical in nature. Such statements are intended to be identified by using words such as “believe,” “expect,” “intend,” “estimate,” “anticipate,” “will,” “project,” “plan” and similar expressions in connection with any discussion of future operating or financial performance. Any forward-looking statements are and will be based upon the Company’s then-current expectations, estimates and assumptions regarding future events and are applicable only as of the dates of such statements. Readers are cautioned not to put undue reliance on such forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those projected in this release for the reasons, among others, discussed in the reports and other documents the Company files from time to time with the Securities and Exchange Commission, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections contained in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2016. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.