UNITED NATURAL FOODS, INC. | |||
(Exact name of registrant as specified in its charter) | |||
Delaware | 001-15723 | 05-0376157 | |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |
313 Iron Horse Way, Providence, RI 02908 | |||
(Address of principal executive offices) (Zip Code) |
N/A |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common stock, par value $0.01 | UNFI | New York Stock Exchange |
Item 2.02 | Results of Operations and Financial Condition. |
Exhibit No. | Description | |
99.1 |
UNITED NATURAL FOODS, INC. | |
By: | /s/ John W. Howard |
Name: | John W. Howard |
Title: | Interim Chief Financial Officer |
• | Fourth Quarter Net Sales Increased to $6.41 billion, or 2.8% when excluding the contribution from SUPERVALU and the additional week in the quarter compared to last year’s fourth quarter |
• | Fourth Quarter Net income of $18.9 million |
• | Fourth Quarter Earnings Per Diluted Share (EPS) of $0.36; Adjusted EPS of $0.44 |
• | Net outstanding debt decreased by $166 million since the end of the third quarter and $353 million since the end of the first quarter |
Fourth Quarter Ended | Fiscal Year | ||||||||||
($ in thousands, except for per share data) | August 3, 2019 (14 weeks) | July 28, 2018 (13 weeks) | August 3, 2019 (53 weeks) | ||||||||
Net sales | $ | 6,407,086 | $ | 2,592,248 | $ | 21,387,068 | |||||
Net Income (Loss) | $ | 18,937 | $ | 32,788 | $ | (284,990 | ) | ||||
Adjusted EBITDA(1) | $ | 165,542 | $ | 85,064 | $ | 562,484 | |||||
Earnings (Loss) Per Diluted Share (EPS) | $ | 0.36 | $ | 0.64 | $ | (5.56 | ) | ||||
Adjusted Earnings Per Diluted Share (EPS) (1) | $ | 0.44 | $ | 0.76 | $ | 2.08 |
(1) | Please refer to the tables in this press release for a reconciliation of these non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with U.S. GAAP. |
Comparable 13-Week Legacy UNFI % Growth | Fourth Quarter Ended | |||||||||||
Customer Channel | Total % Growth | August 3, 2019 (14 weeks) | July 28, 2018 (13 weeks)(1) | |||||||||
Supermarkets | 473.5% | (0.9)% | $ | 4,024 | $ | 702 | ||||||
Supernatural | 18.5% | 10.1% | 1,164 | 982 | ||||||||
Independents | 26.6% | 0.4% | 848 | 670 | ||||||||
Other | 55.5% | (10.0)% | 371 | 238 | ||||||||
Total | 147.2% | 2.8% | $ | 6,407 | $ | 2,592 |
(1) | During the second quarter of fiscal 2019, the presentation of net sales by customer channel was adjusted to reflect changes in the classification of customer types as a result of a detailed review of customer channel definitions. There was no impact to the Consolidated Statements of Operations as a result of revising the classification of customer types. As a result of this adjustment, net sales to our supermarkets channel and to our other channel for the fourth quarter of fiscal 2018 decreased approximately $5 million and $14 million, respectively, compared to the previously reported amounts, while net sales to the independents channel for the fourth quarter of fiscal 2018 increased approximately $19 million compared to the previously reported amounts. |
Fiscal Year Ending August 1, 2020 | ||
Net Sales ($ in billions) | $23.5 - $24.3 | |
Net Income ($ in millions) | $19 - $48 | |
Earnings Per Diluted Share (EPS) | $0.35 - $0.89 | |
Adjusted Earnings Per Diluted Share (EPS) (2) (3) | $1.22 - $1.76 | |
Adjusted EBITDA(3) ($ in millions) | $560 - $600 | |
Capital Expenditures (% of Net Sales) | ~ 1% |
(1) | The outlook provided above is for fiscal 2020 only and replaces and supersedes any and all guidance provided prior to the date hereof covering fiscal 2020 or subsequent years. This outlook is forward-looking, is based on management's current estimates and expectations and is subject to a number of risks, including many that are outside of management's control. See cautionary language below. |
(2) | Beginning with periods ending after August 3, 2019, the Company will use an adjusted effective tax rate in calculating Adjusted EPS. The adjusted effective tax rate will be calculated based on adjusted net income before tax. It will also exclude the potential impact of changes to uncertain tax positions, valuation allowances, stock compensation accounting (ASU 2016-09) and discrete GAAP tax items which could impact the comparability of the operational effective tax rate. This change is reflected in the Company’s outlook for Adjusted EPS for fiscal 2020. The Company believes using this adjusted effective tax rate will provide better consistency across the interim reporting periods since each of these discrete items can cause volatility in the GAAP tax rate that is not indicative of the true operations of the Company. By providing this non-GAAP measure, management intends to provide investors with a meaningful, consistent comparison of the Company’s effective tax rate on ongoing operations. |
(3) | Please refer to the tables in this press release for a reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP. |
INVESTOR CONTACT: | |||
Steve Bloomquist | |||
Vice President, Investor Relations | |||
952-828-4144 |
Fourth Quarter Ended | Fiscal Year Ended | ||||||||||||||
August 3, 2019 (14 weeks) | July 28, 2018 (13 weeks) | August 3, 2019 (53 weeks) | July 28, 2018 (52 weeks) | ||||||||||||
Net sales | $ | 6,407,086 | $ | 2,592,248 | $ | 21,387,068 | $ | 10,226,683 | |||||||
Cost of sales | 5,584,740 | 2,216,306 | 18,602,058 | 8,703,916 | |||||||||||
Gross profit | 822,346 | 375,942 | 2,785,010 | 1,522,767 | |||||||||||
Operating expenses | 776,945 | 316,598 | 2,629,713 | 1,274,562 | |||||||||||
Goodwill and asset impairment (benefit) charges | (39,851 | ) | — | 292,770 | 11,242 | ||||||||||
Restructuring, acquisition and integration related expenses | 18,972 | 9,587 | 153,539 | 9,738 | |||||||||||
Operating income (loss) | 66,280 | 49,757 | (291,012 | ) | 227,225 | ||||||||||
Other expense (income): | |||||||||||||||
Net periodic benefit income, excluding service cost | (12,035 | ) | — | (34,726 | ) | — | |||||||||
Interest expense, net | 58,814 | 3,965 | 179,963 | 16,025 | |||||||||||
Other, net | (1,188 | ) | (240 | ) | (957 | ) | (1,545 | ) | |||||||
Total other expense, net | 45,591 | 3,725 | 144,280 | 14,480 | |||||||||||
Income (loss) from continuing operations before income taxes | 20,689 | 46,032 | (435,292 | ) | 212,745 | ||||||||||
Provision (benefit) for income taxes | 19,482 | 13,244 | (84,609 | ) | 47,075 | ||||||||||
Net income (loss) from continuing operations | 1,207 | 32,788 | (350,683 | ) | 165,670 | ||||||||||
Income from discontinued operations, net of tax | 17,953 | — | 65,800 | — | |||||||||||
Net income (loss) including noncontrolling interests | 19,160 | 32,788 | (284,883 | ) | 165,670 | ||||||||||
Less net income attributable to noncontrolling interests | (223 | ) | — | (107 | ) | — | |||||||||
Net income (loss) attributable to United Natural Foods, Inc. | $ | 18,937 | $ | 32,788 | $ | (284,990 | ) | $ | 165,670 | ||||||
Basic earnings (loss) per share: | |||||||||||||||
Continuing operations | $ | 0.02 | $ | 0.65 | $ | (6.84 | ) | $ | 3.28 | ||||||
Discontinued operations | $ | 0.34 | $ | — | $ | 1.28 | $ | — | |||||||
Basic income (loss) per share | $ | 0.36 | $ | 0.65 | $ | (5.56 | ) | $ | 3.28 | ||||||
Diluted earnings (loss) per share: | |||||||||||||||
Continuing operations | $ | 0.02 | $ | 0.64 | $ | (6.84 | ) | $ | 3.26 | ||||||
Discontinued operations | $ | 0.33 | $ | — | $ | 1.27 | $ | — | |||||||
Diluted income (loss) per share | $ | 0.36 | $ | 0.64 | $ | (5.56 | ) | $ | 3.26 | ||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 52,631 | 50,431 | 51,245 | 50,530 | |||||||||||
Diluted | 52,976 | 50,901 | 51,537 | 50,837 |
August 3, 2019 | July 28, 2018 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 42,350 | $ | 23,315 | |||
Accounts receivable, net | 1,065,699 | 579,702 | |||||
Inventories | 2,089,416 | 1,135,775 | |||||
Prepaid expenses and other current assets | 226,727 | 50,122 | |||||
Current assets of discontinued operations | 143,729 | — | |||||
Total current assets | 3,567,921 | 1,788,914 | |||||
Property and equipment, net | 1,639,259 | 571,146 | |||||
Goodwill | 442,256 | 362,495 | |||||
Intangible assets, net | 1,041,058 | 193,209 | |||||
Deferred income taxes | 31,087 | — | |||||
Other assets | 107,319 | 48,708 | |||||
Long-term assets of discontinued operations | 352,065 | — | |||||
Total assets | $ | 7,180,965 | $ | 2,964,472 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable | $ | 1,476,857 | $ | 517,125 | |||
Accrued expenses and other current liabilities | 249,426 | 103,526 | |||||
Accrued compensation and benefits | 148,296 | 66,132 | |||||
Current portion of long-term debt and capital lease obligations | 112,103 | 12,441 | |||||
Current liabilities of discontinued operations | 122,265 | — | |||||
Total current liabilities | 2,108,947 | 699,224 | |||||
Long-term debt | 2,819,050 | 308,836 | |||||
Long-term capital lease obligations | 108,208 | 31,487 | |||||
Pension and other postretirement benefit obligations | 237,266 | — | |||||
Deferred income taxes | 1,042 | 44,384 | |||||
Other long-term liabilities | 393,595 | 34,586 | |||||
Long-term liabilities of discontinued operations | 1,923 | — | |||||
Total liabilities | 5,670,031 | 1,118,517 | |||||
Stockholders’ equity: | |||||||
Preferred stock, $0.01 par value, authorized 5,000 shares; none issued or outstanding | — | — | |||||
Common stock, $0.01 par value, authorized 100,000 shares; 53,501 shares issued and 52,886 shares outstanding at August 3, 2019; 51,025 issued and 50,411 shares outstanding shares at July 28, 2018 | 535 | 510 | |||||
Additional paid-in capital | 530,801 | 483,623 | |||||
Treasury stock at cost | (24,231 | ) | (24,231 | ) | |||
Accumulated other comprehensive loss | (108,953 | ) | (14,179 | ) | |||
Retained earnings | 1,115,519 | 1,400,232 | |||||
Total United Natural Foods, Inc. stockholders’ equity | 1,513,671 | 1,845,955 | |||||
Noncontrolling interests | (2,737 | ) | — | ||||
Total stockholders' equity | 1,510,934 | 1,845,955 | |||||
Total liabilities and stockholders’ equity | $ | 7,180,965 | $ | 2,964,472 |
Fiscal Year Ended | |||||||
(In thousands) | August 3, 2019 (53 weeks) | July 28, 2018 (52 weeks) | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net (loss) income including noncontrolling interests | $ | (284,883 | ) | $ | 165,670 | ||
Income from discontinued operations, net of tax | 65,800 | — | |||||
Net (loss) income from continuing operations | (350,683 | ) | 165,670 | ||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 246,825 | 87,631 | |||||
Share-based compensation | 25,551 | 25,783 | |||||
Loss on disposal of assets | 2,859 | 2,820 | |||||
Gain associated with disposal of investment | — | (699 | ) | ||||
Closed property and other restructuring charges | 26,875 | — | |||||
Goodwill and asset impairments | 292,770 | 11,242 | |||||
Net pension and other postretirement benefit income | (34,553 | ) | — | ||||
Deferred income tax benefit | (60,798 | ) | (14,819 | ) | |||
LIFO charge | 24,120 | — | |||||
Change in accounting estimate | — | (20,909 | ) | ||||
Provision for doubtful accounts | 9,749 | 12,006 | |||||
Loss on debt extinguishment | 2,903 | — | |||||
Non-cash interest expense | 12,751 | 275 | |||||
Changes in operating assets and liabilities, net of acquired businesses | |||||||
Accounts receivable | 52,735 | (67,283 | ) | ||||
Inventories | 177,094 | (108,795 | ) | ||||
Prepaid expenses and other assets | (43,167 | ) | 4,473 | ||||
Accounts payable | (40,149 | ) | 3,961 | ||||
Accrued expenses, other liabilities and other | (169,760 | ) | 7,682 | ||||
Net cash provided by operating activities of continuing operations | 175,122 | 109,038 | |||||
Net cash provided by operating activities of discontinued operations | 109,408 | — | |||||
Net cash provided by operating activities | 284,530 | 109,038 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Capital expenditures | (207,817 | ) | (44,608 | ) | |||
Purchases of acquired businesses, net of cash acquired | (2,292,435 | ) | (39 | ) | |||
Proceeds from dispositions of assets | 173,747 | 283 | |||||
Proceeds from disposal of investments | — | 756 | |||||
Payments for long-term investment | (110 | ) | (3,397 | ) | |||
Payment of company owned life insurance premiums | (170 | ) | — | ||||
Net cash used in investing activities of continuing operations | (2,326,785 | ) | (47,005 | ) | |||
Net cash provided by investing activities of discontinued operations | 67,998 | — | |||||
Net cash used in investing activities | (2,258,787 | ) | (47,005 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from borrowings of long-term debt | 1,926,642 | — | |||||
Proceeds from borrowings under revolving credit line | 3,971,504 | 556,061 | |||||
Proceeds from issuance of other loans | 22,358 | — | |||||
Repayments of borrowings under revolving credit line | (3,101,679 | ) | (569,671 | ) | |||
Repayments of long-term debt and capital lease obligations | (779,909 | ) | (12,128 | ) | |||
Repurchase of common stock | — | (24,231 | ) | ||||
Proceeds from the issuance of common stock and exercise of stock options | 23,975 | 975 | |||||
Payment of employee restricted stock tax withholdings | (2,727 | ) | (4,563 | ) | |||
Payments for debt issuance costs | (62,600 | ) | — | ||||
Net cash provided by (used in) financing activities of continuing operations | 1,997,564 | (53,557 | ) | ||||
Net cash used in by financing activities of discontinued operations | (1,212 | ) | — | ||||
Net cash provided by (used in) financing activities | 1,996,352 | (53,557 | ) | ||||
EFFECT OF EXCHANGE RATE ON CASH | (143 | ) | (575 | ) | |||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 21,952 | 7,901 | |||||
Cash and cash equivalents at beginning of period | 23,315 | 15,414 | |||||
Cash and cash equivalents at end of period | 45,267 | 23,315 | |||||
Less: cash and cash equivalents of discontinued operations | (2,917 | ) | — | ||||
Cash and cash equivalents of continuing operations | $ | 42,350 | $ | 23,315 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid for interest | $ | 183,042 | $ | 16,471 | |||
Cash paid for federal and state income taxes, net of refunds | $ | 77,676 | $ | 64,042 |
Reconciliation of Net Income (Loss) per Diluted Common Share to Adjusted Net Income per Diluted Common Share (unaudited) | |||||||||||||||
Fourth Quarter Ended | Fiscal Year Ended | ||||||||||||||
August 3, 2019 (14 weeks) | July 28, 2018 (13 weeks) | August 3, 2019 (53 weeks) | July 28, 2018 (52 weeks) | ||||||||||||
Net income (loss) attributable to UNFI per diluted common share | $ | 0.36 | $ | 0.64 | $ | (5.56 | ) | $ | 3.26 | ||||||
Restructuring, acquisition, and integration related expenses(1) | 0.36 | 0.19 | 2.99 | 0.19 | |||||||||||
Goodwill and asset impairment (benefit) charges(2) | (0.75 | ) | — | 5.70 | 0.22 | ||||||||||
Loss on debt extinguishment(3) | 0.01 | — | 0.06 | — | |||||||||||
Interest expense on senior notes(4) | — | — | 0.06 | — | |||||||||||
Inventory fair value adjustment(5) | — | — | 0.20 | — | |||||||||||
Net tax benefit related to U.S. Tax Reform(6) | — | (0.02 | ) | — | (0.43 | ) | |||||||||
Legal settlement income, net of reserve adjustment(7) | (0.07 | ) | — | (0.03 | ) | — | |||||||||
Discontinued operations store closures and other charges, net(8) | 0.17 | — | 0.44 | — | |||||||||||
Tax impact of adjustments(9) | 0.35 | (0.06 | ) | (1.78 | ) | (0.13 | ) | ||||||||
Adjusted net income per diluted common share(10) | $ | 0.44 | $ | 0.76 | $ | 2.08 | $ | 3.11 |
(1) | Primarily reflects expenses resulting from the acquisition of SUPERVALU, including severance costs, store closure charges, and acquisition and integration expenses. |
(2) | Fiscal 2019 reflects a goodwill impairment charge and the related adjustment attributable to the SUPERVALU acquisition. Fiscal 2018 reflects goodwill and asset impairment charges recorded related to the previously disposed Earth Origin’s Market retail business. |
(3) | Reflects non-cash charges related to the acceleration of unamortized debt issuance costs due to term loan prepayments and extinguishment charges from the Company’s term loan, which was in place prior to the acquisition of SUPERVALU. |
(4) | Interest expense recorded in connection with the redemption of acquired SUPERVALU senior notes. |
(5) | Non-cash charge related to the step-up in inventory values from purchase accounting. |
(6) | The amounts reflected in the 13-week and 52-week period ended July 28, 2018 represents the earnings per share impact of a $0.8 million and $21.7 million benefit, respectively, related to the remeasurement of net deferred tax liabilities as a result of U.S. tax reform enacted in December 2017. |
(7) | Reflects income received to settle a legal proceeding and a charge related to our assessment of legal proceedings. |
(8) | Amounts represent store closure charges and an inventory fair value adjustment related to discontinued operations, net of the effect of fees received from credit card companies related to a settlement. |
(9) | Represents the tax effect of the adjustments; fiscal 2018 excludes the net tax benefit related to U.S. Tax Reform. |
(10) | The computation of adjusted diluted earnings per share is calculated using diluted weighted average shares outstanding, which includes the net effect of dilutive stock awards. |
Reconciliation of Net Income (Loss) from continuing operations and Income from discontinued operations, net of tax to Adjusted EBITDA (unaudited) | |||||||||||||||
(in thousands) | |||||||||||||||
Fourth Quarter Ended | Fiscal Year Ended | ||||||||||||||
August 3, 2019 (14 weeks) | July 28, 2018 (13 weeks) | August 3, 2019 (53 weeks) | July 28, 2018 (52 weeks) | ||||||||||||
Net income (loss) from continuing operations(1) | $ | 1,207 | $ | 32,788 | $ | (350,683 | ) | $ | 165,670 | ||||||
Adjustments to continuing operations net income (loss): | |||||||||||||||
Total other expense, net | 45,591 | 3,725 | 144,280 | 14,480 | |||||||||||
Provision (benefit) for income taxes | 19,482 | 13,244 | (84,609 | ) | 47,075 | ||||||||||
Depreciation and amortization | 77,045 | 21,649 | 246,825 | 87,631 | |||||||||||
Share-based compensation | 11,116 | 4,071 | 38,879 | 25,783 | |||||||||||
Restructuring, acquisition, and integration related expenses | 18,972 | 9,587 | 153,539 | 9,738 | |||||||||||
Goodwill and asset impairment (benefit) charges | (39,851 | ) | — | 292,770 | 11,242 | ||||||||||
Inventory fair value adjustment | — | — | 10,463 | — | |||||||||||
Legal settlement income, net of reserve adjustment | (3,590 | ) | — | (1,390 | ) | — | |||||||||
Adjusted EBITDA of discontinued operations(2) | 35,570 | — | 112,410 | $ | — | ||||||||||
Adjusted EBITDA | $ | 165,542 | $ | 85,064 | $ | 562,484 | $ | 361,619 | |||||||
Income from discontinued operations, net of tax(1) | $ | 17,953 | $ | — | $ | 65,800 | $ | — | |||||||
Adjustments to discontinued operations net income: | |||||||||||||||
Less net (income) loss attributable to noncontrolling interests(1) | (223 | ) | — | (107 | ) | — | |||||||||
Total other expense, net | 3,335 | — | 2,378 | — | |||||||||||
Provision for income taxes | 8,081 | — | 21,840 | — | |||||||||||
Other expense | 31 | 860 | — | ||||||||||||
Share-based compensation | 310 | — | 1,616 | — | |||||||||||
Restructuring, store closure and other charges, net(3) | 6,083 | — | 20,023 | — | |||||||||||
Adjusted EBITDA of discontinued operations(2) | $ | 35,570 | $ | — | $ | 112,410 | $ | — |
(1) | In the third quarter of fiscal 2019, UNFI expanded its GAAP reconciliations to provide additional supplemental information regarding its adjustments within discontinued operations to arrive at the consolidated measure of Adjusted EBITDA. Previously, these line items were presented together as Net (loss) income attributable to United Natural Foods, Inc. These lines have been separated to provide for a separate presentation of the adjustments included within Adjusted EBITDA related to discontinued operations. This additional information had no impact on the previously presented calculation and definition of Adjusted EBITDA. For additional information regarding our discontinued operations, refer to UNFI’s Quarterly Report on Form 10-Q filed on June 5, 2019. |
(2) | Adjusted EBITDA of discontinued operations excludes $7.9 million, $0.0 million, and $32.2 million and $0.0 million, respectively, as presented in this table, of operating lease rent expense related to stores within discontinued operations, but for which GAAP requires the expense to be included within continuing operations, as we expect to remain primarily obligated under these leases. We expect to assign these leases with the obligation to pay this rent expense to buyers of our retail discontinued operations upon sale. Due to these GAAP requirements to show rent expense, along with other administrative expenses of discontinued operations within continuing operations, UNFI believes the inclusion of discontinued operations results within Adjusted EBITDA provides UNFI and investors a meaningful measure of performance. |
(3) | Amounts represent store closure charges and costs, and an inventory fair value adjustment related to discontinued operations, net of the effect of fees received from credit card companies related to a settlement. |
Fiscal Year Ending August 1, 2020 | |||||||
Low Range | High Range | ||||||
Net income attributable to United Natural Foods, Inc. per diluted common share | $ | 0.35 | $ | 0.89 | |||
Estimated restructuring, acquisition and integration related expenses | 1.05 | 1.05 | |||||
Tax impact of adjustments | (0.18 | ) | (0.18 | ) | |||
Adjusted net income per diluted common share (1) (2) | $ | 1.22 | $ | 1.76 | |||
(1) | Fiscal year ending August 1, 2020 Adjusted net income per diluted common share includes results reflected in our discontinued operations related to a certain retail business. Management expects to divest that retail business during fiscal 2020 and will update guidance accordingly. |
(2) | The estimated adjusted effective tax rate excludes the potential impact of changes in uncertain tax positions (FIN 48), tax impacts related to ASU 2006-09 regarding stock compensation and valuation allowances. Refer to the below reconciliation for adjusted effective tax rate. |
Reconciliation of 2020 Guidance for Net Income Attributable to United Natural Foods, Inc. to Adjusted EBITDA (unaudited) | ||||||||||
(in thousands) | ||||||||||
Fiscal Year Ending August 1, 2020 | ||||||||||
Low Range | Estimate | High Range | ||||||||
Net income attributable to United Natural Foods, Inc. | $ | 19,000 | $ | 48,000 | ||||||
Provision for income taxes | 17,000 | 28,000 | ||||||||
Restructuring, acquisition and integration related costs(1) | 56,000 | |||||||||
Net interest expense | 196,000 | |||||||||
Total other (income) expense, net | (2,000 | ) | ||||||||
Depreciation and amortization | 268,000 | |||||||||
Share-based compensation | 48,000 | |||||||||
Net periodic benefit income, excluding service costs | (42,000 | ) | ||||||||
Adjusted EBITDA (2) | $ | 560,000 | $ | 600,000 |
(1) | Excludes potential costs and charges associated with divestiture of retail banners. |
(2) | Fiscal year ending August 1, 2020 Adjusted EBITDA includes results reflected in our Discontinued Operations related to a certain retail business. Management expects to divest that retail business during fiscal 2020 and will update guidance accordingly. |
Estimated Fiscal 2020 | |||
U.S. GAAP Effective Tax Rate | 44 | % | |
Discrete quarterly recognition of GAAP items (1) | (10 | )% | |
Tax impact of other charges and adjustments (2) | (2 | )% | |
Changes in valuation allowances (3) | (3 | )% | |
Adjusted Effective Tax Rate | 29 | % |
(1) | Reflects changes in tax laws, uncertain tax positions, the impact of stock-based compensation under ASU 2016-09 (Improvements to Employee Share Based Payment Accounting) and any prior-year audit adjustments. |
(2) | Reflects the tax impact of pre-tax adjustments, that are excluded from pre-tax income when calculating adjusted earnings per share. |
(3) | Reflects changes in valuation allowances related to changes in judgment regarding the realizability of deferred tax assets or current year operations. |