(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of principal executive offices) | (Zip Code) | |||||||||||||
( | ||||||||||||||
(Registrant's telephone number, including area code) |
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)) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Exhibit No. | Description | |||||||
104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
Grocery Outlet Holding Corp. | |||||||||||||||||
Date: | February 28, 2023 | By: | /s/ Charles C. Bracher | ||||||||||||||
Name: | Charles C. Bracher | ||||||||||||||||
Title: | Chief Financial Officer | ||||||||||||||||
New store openings, net | 25 to 28 | ||||
Net sales | $3.85 billion to $3.90 billion | ||||
Comparable store sales increase | 4.5% to 5.5% | ||||
Gross margin | ~30.6% | ||||
Adjusted EBITDA, revised definition(1) | $237 million to $243 million | ||||
Adjusted earnings per share — diluted, revised definition(1) | $0.94 to $0.99 | ||||
Capital expenditures (net of tenant improvement allowances) | ~$155 million |
13 Weeks Ended | 52 Weeks Ended | ||||||||||||||||||||||
December 31, 2022 | January 1, 2022 | December 31, 2022 | January 1, 2022 | ||||||||||||||||||||
Net sales | $ | 930,830 | $ | 782,701 | $ | 3,578,101 | $ | 3,079,582 | |||||||||||||||
Cost of sales | 649,666 | 540,752 | 2,486,002 | 2,130,796 | |||||||||||||||||||
Gross profit | 281,164 | 241,949 | 1,092,099 | 948,786 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling, general and administrative | 230,231 | 200,593 | 889,347 | 773,718 | |||||||||||||||||||
Depreciation and amortization | 18,776 | 18,361 | 75,206 | 68,358 | |||||||||||||||||||
Share-based compensation | 8,193 | 7,564 | 32,556 | 17,615 | |||||||||||||||||||
Total operating expenses | 257,200 | 226,518 | 997,109 | 859,691 | |||||||||||||||||||
Income from operations | 23,964 | 15,431 | 94,990 | 89,095 | |||||||||||||||||||
Other expenses (income): | |||||||||||||||||||||||
Interest expense, net | 5,612 | 3,786 | 17,967 | 15,564 | |||||||||||||||||||
Gain on insurance recoveries | — | — | — | (3,970) | |||||||||||||||||||
Loss on debt extinguishment | — | — | 1,274 | — | |||||||||||||||||||
Total other expenses (income) | 5,612 | 3,786 | 19,241 | 11,594 | |||||||||||||||||||
Income before income taxes | 18,352 | 11,645 | 75,749 | 77,501 | |||||||||||||||||||
Income tax expense | 2,463 | 5,006 | 10,697 | 15,191 | |||||||||||||||||||
Net income and comprehensive income | $ | 15,889 | $ | 6,639 | $ | 65,052 | $ | 62,310 | |||||||||||||||
Basic earnings per share | $ | 0.16 | $ | 0.07 | $ | 0.67 | $ | 0.65 | |||||||||||||||
Diluted earnings per share | $ | 0.16 | $ | 0.07 | $ | 0.65 | $ | 0.63 | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | 97,463 | 96,092 | 96,812 | 95,725 | |||||||||||||||||||
Diluted | 100,589 | 99,103 | 100,162 | 99,418 |
December 31, 2022 | January 1, 2022 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 102,728 | $ | 140,085 | |||||||
Independent operator receivables and current portion of independent operator notes, net of allowance | 10,805 | 7,219 | |||||||||
Other accounts receivable, net of allowance | 4,368 | 3,159 | |||||||||
Merchandise inventories | 334,319 | 275,502 | |||||||||
Prepaid expenses and other current assets | 15,137 | 16,780 | |||||||||
Total current assets | 467,357 | 442,745 | |||||||||
Independent operator notes, net of allowance | 22,535 | 21,516 | |||||||||
Property and equipment, net | 560,746 | 499,387 | |||||||||
Operating lease right-of-use assets | 902,163 | 898,152 | |||||||||
Intangible assets, net | 63,993 | 51,921 | |||||||||
Goodwill | 747,943 | 747,943 | |||||||||
Other assets | 7,667 | 8,144 | |||||||||
Total assets | $ | 2,772,404 | $ | 2,669,808 | |||||||
Liabilities and Stockholders' Equity | |||||||||||
Current liabilities: | |||||||||||
Trade accounts payable | $ | 137,631 | $ | 122,110 | |||||||
Accrued and other current liabilities | 53,213 | 49,025 | |||||||||
Accrued compensation | 27,194 | 8,450 | |||||||||
Current lease liabilities | 54,586 | 51,136 | |||||||||
Income and other taxes payable | 7,890 | 7,185 | |||||||||
Total current liabilities | 280,514 | 237,906 | |||||||||
Long-term debt, net | 379,650 | 451,468 | |||||||||
Deferred income tax liabilities, net | 19,782 | 9,416 | |||||||||
Long-term lease liabilities | 980,759 | 961,746 | |||||||||
Other long-term liabilities | 1,485 | — | |||||||||
Total liabilities | 1,662,190 | 1,660,536 | |||||||||
Stockholders' equity: | |||||||||||
Common stock | 98 | 96 | |||||||||
Series A preferred stock | — | — | |||||||||
Additional paid-in capital | 847,589 | 811,701 | |||||||||
Retained earnings | 262,527 | 197,475 | |||||||||
Total stockholders' equity | 1,110,214 | 1,009,272 | |||||||||
Total liabilities and stockholders' equity | $ | 2,772,404 | $ | 2,669,808 |
52 Weeks Ended | |||||||||||
December 31, 2022 | January 1, 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 65,052 | $ | 62,310 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation of property and equipment | 70,451 | 63,442 | |||||||||
Amortization of intangible and other assets | 7,800 | 7,682 | |||||||||
Amortization of debt issuance costs and discounts | 2,264 | 2,511 | |||||||||
Non-cash rent | 6,932 | 10,753 | |||||||||
Gain on insurance recoveries | — | (3,970) | |||||||||
Loss on debt extinguishment | 1,274 | — | |||||||||
Share-based compensation | 32,556 | 17,615 | |||||||||
Provision for accounts receivable | 4,318 | 4,813 | |||||||||
Proceeds from insurance recoveries - business interruption and inventory | — | 2,103 | |||||||||
Deferred income taxes | 10,367 | 12,944 | |||||||||
Other | 1,176 | 1,251 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Independent operator and other accounts receivable | (7,230) | (21) | |||||||||
Merchandise inventories | (58,817) | (30,345) | |||||||||
Prepaid expenses and other assets | 841 | 3,301 | |||||||||
Income and other taxes payable | 705 | (362) | |||||||||
Trade accounts payable, accrued compensation and other liabilities | 35,094 | 3,179 | |||||||||
Changes in operating lease assets and liabilities, net | 12,728 | 8,381 | |||||||||
Net cash provided by operating activities | 185,511 | 165,587 | |||||||||
Cash flows from investing activities: | |||||||||||
Advances to independent operators | (9,819) | (10,024) | |||||||||
Repayments of advances from independent operators | 6,917 | 4,563 | |||||||||
Purchases of property and equipment | (130,482) | (123,384) | |||||||||
Proceeds from sales of assets | 39 | 37 | |||||||||
Investments in intangible assets and licenses | (16,586) | (9,772) | |||||||||
Proceeds from insurance recoveries - property and equipment | — | 1,867 | |||||||||
Net cash used in investing activities | (149,931) | (136,713) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from exercise of stock options | 6,890 | 7,226 | |||||||||
Principal payments on senior term loan | (75,000) | — | |||||||||
Principal payments on finance leases | (1,271) | (1,155) | |||||||||
Repurchase of common stock | (3,451) | — | |||||||||
Dividends paid | (105) | (186) | |||||||||
Net cash provided (used in) by financing activities | (72,937) | 5,885 | |||||||||
Net increase (decrease) in cash and cash equivalents | (37,357) | 34,759 | |||||||||
Cash and cash equivalents at beginning of period | 140,085 | 105,326 | |||||||||
Cash and cash equivalents at end of period | $ | 102,728 | $ | 140,085 |
13 Weeks Ended | 52 Weeks Ended | ||||||||||||||||||||||
December 31, 2022 | January 1, 2022 | December 31, 2022 | January 1, 2022 | ||||||||||||||||||||
Net income | $ | 15,889 | $ | 6,639 | $ | 65,052 | $ | 62,310 | |||||||||||||||
Interest expense, net | 5,612 | 3,786 | 17,967 | 15,564 | |||||||||||||||||||
Income tax expense | 2,463 | 5,006 | 10,697 | 15,191 | |||||||||||||||||||
Depreciation and amortization expenses (1) | 19,553 | 19,079 | 78,251 | 71,124 | |||||||||||||||||||
EBITDA | 43,517 | 34,510 | 171,967 | 164,189 | |||||||||||||||||||
Share-based compensation expenses (2) | 8,193 | 7,564 | 32,556 | 17,615 | |||||||||||||||||||
Asset impairment and gain or loss on disposition (3) | 288 | 298 | 1,176 | 1,241 | |||||||||||||||||||
Other (4) | 2,331 | 1,347 | 8,983 | (153) | |||||||||||||||||||
Adjusted EBITDA, revised definition | $ | 54,329 | $ | 43,719 | $ | 214,682 | $ | 182,892 | |||||||||||||||
Revised definition no longer adjusts for: | |||||||||||||||||||||||
Non-cash rent (5) | 1,572 | 2,393 | 6,932 | 10,753 | |||||||||||||||||||
Provision for accounts receivable reserves (6) | 1,545 | 1,284 | 4,318 | 4,813 | |||||||||||||||||||
Adjusted EBITDA, previous definition | $ | 57,446 | $ | 47,396 | $ | 225,932 | $ | 198,458 |
13 Weeks Ended | 52 Weeks Ended | ||||||||||||||||||||||
December 31, 2022 | January 1, 2022 | December 31, 2022 | January 1, 2022 | ||||||||||||||||||||
Net income | $ | 15,889 | $ | 6,639 | $ | 65,052 | $ | 62,310 | |||||||||||||||
Share-based compensation expenses (2) | 8,193 | 7,564 | 32,556 | 17,615 | |||||||||||||||||||
Asset impairment and gain or loss on disposition (3) | 288 | 298 | 1,176 | 1,241 | |||||||||||||||||||
Other (4) | 2,331 | 1,347 | 8,983 | (153) | |||||||||||||||||||
Amortization of purchase accounting assets and deferred financing costs (7) | 1,679 | 2,992 | 10,877 | 11,821 | |||||||||||||||||||
Tax adjustment to normalize effective tax rate (8) | (2,435) | 1,597 | (10,084) | (5,928) | |||||||||||||||||||
Tax effect of total adjustments (9) | (3,330) | (3,189) | (14,702) | (8,318) | |||||||||||||||||||
Adjusted net income, revised definition | $ | 22,615 | $ | 17,248 | $ | 93,858 | $ | 78,588 | |||||||||||||||
GAAP earnings per share | |||||||||||||||||||||||
Basic | $ | 0.16 | $ | 0.07 | $ | 0.67 | $ | 0.65 | |||||||||||||||
Diluted | $ | 0.16 | $ | 0.07 | $ | 0.65 | $ | 0.63 | |||||||||||||||
Adjusted earnings per share, revised definition | |||||||||||||||||||||||
Basic | $ | 0.23 | $ | 0.18 | $ | 0.97 | $ | 0.82 | |||||||||||||||
Diluted | $ | 0.22 | $ | 0.17 | $ | 0.94 | $ | 0.79 | |||||||||||||||
Revised definition no longer adjusts for: | |||||||||||||||||||||||
Non-cash rent (5) | 1,572 | 2,393 | 6,932 | 10,753 | |||||||||||||||||||
Provision for accounts receivable reserves (6) | 1,545 | 1,284 | 4,318 | 4,813 | |||||||||||||||||||
Change in tax effect of total adjustments (9) | (837) | (911) | (3,087) | (4,241) | |||||||||||||||||||
Adjusted net income, previous definition | $ | 24,895 | $ | 20,014 | $ | 102,021 | $ | 89,913 | |||||||||||||||
Adjusted earnings per share, previous definition | |||||||||||||||||||||||
Basic | $ | 0.26 | $ | 0.21 | $ | 1.05 | $ | 0.94 | |||||||||||||||
Diluted | $ | 0.25 | $ | 0.20 | $ | 1.02 | $ | 0.90 | |||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||||||
Basic | 97,463 | 96,092 | 96,812 | 95,725 | |||||||||||||||||||
Diluted | 100,589 | 99,103 | 100,162 | 99,418 |
13 Weeks Ended | |||||||||||||||||||||||||||||||||||||||||||||||
April 3, 2021 | July 3, 2021 | October 2, 2021 | January 1, 2022 | April 2, 2022 | July 2, 2022 | October 1, 2022 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||
Net income | $ | 18,892 | $ | 19,640 | $ | 17,139 | $ | 6,639 | $ | 11,574 | $ | 20,094 | $ | 17,495 | $ | 15,889 | |||||||||||||||||||||||||||||||
Interest expense, net | 3,906 | 3,922 | 3,950 | 3,786 | 3,682 | 3,875 | 4,798 | 5,612 | |||||||||||||||||||||||||||||||||||||||
Income tax expense | 1,049 | 4,082 | 5,054 | 5,006 | 4,172 | 1,668 | 2,394 | 2,463 | |||||||||||||||||||||||||||||||||||||||
Depreciation and amortization expenses (1) | 16,144 | 17,667 | 18,234 | 19,079 | 18,990 | 19,554 | 20,154 | 19,553 | |||||||||||||||||||||||||||||||||||||||
EBITDA | 39,991 | 45,311 | 44,377 | 34,510 | 38,418 | 45,191 | 44,841 | 43,517 | |||||||||||||||||||||||||||||||||||||||
Share-based compensation expenses (2) | 3,939 | 4,210 | 1,902 | 7,564 | 5,795 | 9,484 | 9,084 | 8,193 | |||||||||||||||||||||||||||||||||||||||
Asset impairment and gain or loss on disposition (3) | 452 | 305 | 186 | 298 | 363 | 182 | 343 | 288 | |||||||||||||||||||||||||||||||||||||||
Other (4) | 592 | (3,385) | 1,293 | 1,347 | 1,505 | 2,626 | 2,521 | 2,331 | |||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA, revised definition | $ | 44,974 | $ | 46,441 | $ | 47,758 | $ | 43,719 | $ | 46,081 | $ | 57,483 | $ | 56,789 | $ | 54,329 | |||||||||||||||||||||||||||||||
Revised definition no longer adjusts for: | |||||||||||||||||||||||||||||||||||||||||||||||
Non-cash rent (5) | 2,908 | 3,061 | 2,391 | 2,393 | 1,936 | 1,835 | 1,589 | 1,572 | |||||||||||||||||||||||||||||||||||||||
Provision for accounts receivable reserves (6) | 955 | 1,334 | 1,240 | 1,284 | 1,233 | 819 | 721 | 1,545 | |||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA, previous definition | $ | 48,837 | $ | 50,836 | $ | 51,389 | $ | 47,396 | $ | 49,250 | $ | 60,137 | $ | 59,099 | $ | 57,446 |
13 Weeks Ended | |||||||||||||||||||||||||||||||||||||||||||||||
April 3, 2021 | July 3, 2021 | October 2, 2021 | January 1, 2022 | April 2, 2022 | July 2, 2022 | October 1, 2022 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||
Net income | $ | 18,892 | $ | 19,640 | $ | 17,139 | $ | 6,639 | $ | 11,574 | $ | 20,094 | $ | 17,495 | $ | 15,889 | |||||||||||||||||||||||||||||||
Share-based compensation expenses (2) | 3,939 | 4,210 | 1,902 | 7,564 | 5,795 | 9,484 | 9,084 | 8,193 | |||||||||||||||||||||||||||||||||||||||
Asset impairment and gain or loss on disposition (3) | 452 | 305 | 186 | 298 | 363 | 182 | 343 | 288 | |||||||||||||||||||||||||||||||||||||||
Other (4) | 592 | (3,385) | 1,293 | 1,347 | 1,505 | 2,626 | 2,521 | 2,331 | |||||||||||||||||||||||||||||||||||||||
Amortization of purchase accounting assets and deferred financing costs (7) | 2,943 | 2,943 | 2,943 | 2,992 | 3,112 | 3,055 | 3,031 | 1,679 | |||||||||||||||||||||||||||||||||||||||
Tax adjustment to normalize effective tax rate (8) | (4,256) | (2,402) | (867) | 1,597 | (176) | (4,295) | (3,178) | (2,435) | |||||||||||||||||||||||||||||||||||||||
Tax effect of total adjustments (9) | (2,219) | (1,140) | (1,770) | (3,189) | (2,963) | (4,217) | (4,192) | (3,330) | |||||||||||||||||||||||||||||||||||||||
Adjusted net income, revised definition | $ | 20,343 | $ | 20,171 | $ | 20,826 | $ | 17,248 | $ | 19,210 | $ | 26,929 | $ | 25,104 | $ | 22,615 | |||||||||||||||||||||||||||||||
GAAP earnings per share | |||||||||||||||||||||||||||||||||||||||||||||||
Basic | $ | 0.20 | $ | 0.21 | $ | 0.18 | $ | 0.07 | $ | 0.12 | $ | 0.21 | $ | 0.18 | $ | 0.16 | |||||||||||||||||||||||||||||||
Diluted | $ | 0.19 | $ | 0.20 | $ | 0.17 | $ | 0.07 | $ | 0.12 | $ | 0.20 | $ | 0.17 | $ | 0.16 | |||||||||||||||||||||||||||||||
Adjusted earnings per share, revised definition | |||||||||||||||||||||||||||||||||||||||||||||||
Basic | $ | 0.21 | $ | 0.21 | $ | 0.22 | $ | 0.18 | $ | 0.20 | $ | 0.28 | $ | 0.26 | $ | 0.23 | |||||||||||||||||||||||||||||||
Diluted | $ | 0.20 | $ | 0.20 | $ | 0.21 | $ | 0.17 | $ | 0.19 | $ | 0.27 | $ | 0.25 | $ | 0.22 | |||||||||||||||||||||||||||||||
Revised definition no longer adjusts for: | |||||||||||||||||||||||||||||||||||||||||||||||
Non-cash rent (5) | 2,908 | 3,061 | 2,391 | 2,393 | 1,936 | 1,835 | 1,589 | 1,572 | |||||||||||||||||||||||||||||||||||||||
Provision for accounts receivable reserves (6) | 955 | 1,334 | 1,240 | 1,284 | 1,233 | 819 | 721 | 1,545 | |||||||||||||||||||||||||||||||||||||||
Change in tax effect of total adjustments (9) | (1,082) | (1,231) | (1,017) | (911) | (872) | (730) | (648) | (837) | |||||||||||||||||||||||||||||||||||||||
Adjusted net income, previous definition | $ | 23,124 | $ | 23,335 | $ | 23,440 | $ | 20,014 | $ | 21,507 | $ | 28,853 | $ | 26,766 | $ | 24,895 | |||||||||||||||||||||||||||||||
Adjusted earnings per share, previous definition | |||||||||||||||||||||||||||||||||||||||||||||||
Basic | $ | 0.24 | $ | 0.24 | $ | 0.24 | $ | 0.21 | $ | 0.22 | $ | 0.30 | $ | 0.28 | $ | 0.26 | |||||||||||||||||||||||||||||||
Diluted | $ | 0.23 | $ | 0.23 | $ | 0.24 | $ | 0.20 | $ | 0.22 | $ | 0.29 | $ | 0.27 | $ | 0.25 | |||||||||||||||||||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||||||||||||||||||||||||||||||
Basic | 95,195 | 95,724 | 95,955 | 96,092 | 96,148 | 96,578 | 97,057 | 97,463 | |||||||||||||||||||||||||||||||||||||||
Diluted | 99,570 | 99,604 | 99,169 | 99,103 | 99,434 | 100,140 | 100,485 | 100,589 |
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