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13.09.2016 22:10
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At Home Group Inc. Announces Second Quarter Fiscal 2017 Financial Results
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PR Newswire
PLANO, Texas, Sept. 13, 2016
PLANO, Texas, Sept. 13, 2016 /PRNewswire/ -- At Home Group Inc. (NYSE: HOME), the home décor superstore, today announced its financial results for the second quarter of fiscal 2017, which ended July 30, 2016.
Lee Bird, President and Chief Executive Officer, stated: "The second fiscal quarter marked our ninth consecutive quarter of over 20% net sales growth and our tenth consecutive quarter of positive comparable store sales growth, reflecting the broad consumer appeal of our differentiated, value-oriented brand. This top line performance, coupled with our efficient operating structure and strong execution by our teams, enabled us to deliver EPS of $0.12 and pro forma adjusted EPS1 of $0.13 while continuing to make planned investments to drive profitable growth."
Mr. Bird continued: "At Home is passionate about offering customers an unmatched breadth and depth of product at attractive values while enjoying industry-leading profitability metrics. With over 115 stores today and long-term potential for at least 600, we believe there is a long runway of growth ahead. We are focused on delivering against this opportunity with our proven, disciplined and flexible real estate strategy and compelling paybacks across a range of formats and markets. In addition, we are confident that our merchandising and marketing strategies, our talented team, as well as our previous investments in people, systems and processes, position us well to deliver on our short-term and long-term growth and profitability goals."
For the Thirteen Weeks Ended July 30, 2016
- Net sales increased 20.8% to $188.4 million from $156.0 million in the second quarter of fiscal 2016 driven by the net addition of 22 new stores and a comparable store sales increase of 0.9%.
- We opened 10 new stores in the second quarter of fiscal 2017 and ended the quarter with 115 stores in 29 states. This represents a unit increase of 23.7% over the same quarter in the prior year.
- Gross profit increased 17.6% to $62.1 million from $52.8 million in the prior year. Gross margin decreased 90 basis points to 32.9% due to increased occupancy costs associated with our third quarter fiscal 2016 sale-leaseback transaction relating to five properties, as well as the liquidation of merchandise in our Plano, Texas store prior to its successful relocation.
- Selling, general and administrative expenses ("SG&A") increased 34.4% to $42.2 million from $31.4 million in the prior year period. The increase is primarily driven by the net addition of 22 stores since the end of the second quarter of fiscal 2016, the timing of new store openings in upcoming periods and corporate and strategic investments to support our growth strategies, including a $2.1 million increase in brand advertising to drive overall consumer awareness of the At Home brand. In addition, in the second quarter of fiscal 2017 we recognized a $0.3 million loss on the sale of land in connection with the expansion of our distribution center compared with a $1.8 million gain recognized on the sale of a property in Houston, Texas in the second quarter of fiscal 2016.
- Adjusted SG&A1, which excludes nonrecurring costs incurred as a result of our August 2016 initial public offering ("IPO") increased 34.4% to $42.2 million from $31.4 million or 22.4% of sales compared to 20.1% in the second quarter of last year.
- Operating income was $18.9 million compared to $21.0 million in the second quarter of fiscal 2016. Operating margin decreased 340 basis points to 10.0%.
- Adjusted operating income1 was $18.9 million or 10.0% of sales compared to $21.0 million or 13.4% of sales in the same period last year.
- Interest expense decreased to $8.5 million from $9.0 million in the same period of the prior year due to the refinancing of our 10.75% senior secured notes that occurred early in the second quarter of fiscal 2016.
- Income tax expense was $4.1 million based on an effective rate of 39.0% as compared to $22.1 million and an effective rate of (91.7)% in the same quarter of the prior year. The prior year tax rate was impacted by state income taxes as well as by changes in the valuation allowance on deferred tax assets.
- Net income was $6.3 million. This compares to a net loss of $46.1 million in the second quarter of fiscal 2016, which included a $36.0 million loss on the extinguishment of debt.
- Pro forma adjusted net income1 was $8.2 million compared to $9.7 million in the second quarter of fiscal 2016.
- EPS was $0.12 compared to $(0.91) in the second quarter of fiscal 2016. Pro forma adjusted EPS1 was $0.13 compared to $0.16 in the second quarter of fiscal 2016.
- Adjusted EBITDA1 increased 10.0% to $36.6 million compared to $33.3 million in the comparable period last year.
For the Twenty-six Weeks Ended July 30, 2016
- Net sales increased 21.3% to $360.4 million from $297.2 million in the first half of fiscal 2016, driven by the net addition of 22 new stores since the end of the second quarter of fiscal 2016 and a comparable store sales increase of 1.4% over the prior year period.
- Gross profit increased 20.3% to $120.4 million year to date from $100.1 million in the first half of the prior year. Gross margin decreased 30 basis points to 33.4% due to increased occupancy costs as a result of our third quarter fiscal 2016 sale-leaseback transaction of five properties.
- SG&A increased 29.9% to $79.6 million from $61.3 million in the same period of fiscal 2016. The increase is primarily driven by the net addition of 22 stores, the timing of new store openings in upcoming periods, and corporate and strategic investments to support our growth strategies, including a $3.8 million increase in brand advertising to drive overall consumer awareness of the At Home brand. In addition, in the second quarter of fiscal 2017 we recognized a $0.3 million loss on the sale of land in connection with the expansion of our distribution center compared to a $1.8 million gain recognized on the sale of a property in Houston, Texas in the second quarter of fiscal 2016.
- Adjusted SG&A1, which excludes nonrecurring costs incurred as a result of our IPO, increased 30.2% to $79.6 million and 22.1% of sales compared to $61.1 million or 20.6% of sales in the second quarter of last year.
- Operating income was $38.9 million compared to $37.8 million in the first half of fiscal 2016. Operating margin decreased 190 basis points to 10.8%.
- Adjusted operating income1 was $38.9 million year to date or 10.8% of sales compared to $38.0 million or 12.8% of sales in the same period of the last year.
- Interest expense decreased to $16.7 million from $19.8 million in the comparable period of the prior year due to the refinancing of our 10.75% senior secured notes that occurred early in the second quarter of fiscal 2016.
- Income tax expense was $8.5 million based on an effective rate of 38.4% in the first half of fiscal 2017 as compared to $26.4 million and an effective rate of (146.8)% in the prior year period. The prior year tax rate was impacted by state income taxes as well as by changes in the valuation allowance on deferred tax assets.
- Net income was $13.7 million. This compares to a net loss of $44.3 million in the first half of fiscal 2016, which included a $36.0 million loss on the extinguishment of debt.
- Pro forma adjusted net income1 was $17.3 million compared to $17.2 million in the first half of fiscal 2016.
- EPS was $0.26 compared to $(0.87) in the first half of fiscal 2016. Pro forma adjusted EPS1 was $0.28 in both the first half of fiscal 2017 and the comparable prior year period.
- Adjusted EBITDA1 increased 12.6% to $70.5 million for the twenty-six weeks ended July 30, 2016.
Balance Sheet Highlights as of July 30, 2016
- Total liquidity (cash plus $79.5 million of availability on the revolving credit facility) was $87.6 million.
- Total debt was $437.6 million compared to $444.9 million as of August 1, 2015, consisting of outstanding current and long-term portions of our secured term loan facilities and mortgage loans. There was $102.7 million outstanding under our revolving credit facility.
Subsequent to July 30, 2016
On August 3, 2016, we priced our IPO at $15.00 per share. We sold 9,530,041 shares of common stock (including 863,041 shares sold on September 8, 2016 pursuant to the underwriters' over-allotment option) in the IPO, resulting in total net proceeds of $132.9 million after deducting underwriters' discounts and commissions. We also incurred offering costs of $5.1 million in connection with the IPO.
We used the net proceeds from the IPO to repay $130.0 million in principal amount of indebtedness outstanding, which represents a repayment in full of our $130.0 million second lien term loan facility (the "Second Lien Facility"). The repayment will result in a loss on extinguishment of debt in the amount of approximately $2.7 million, which will be recognized in the third quarter of fiscal 2017.
On August 31, 2016, Moody's Investor Service upgraded At Home Holding III Inc.'s Corporate Family Rating to "B1" from "B2". On September 9, 2016, S&P Global Ratings raised our corporate credit rating to "B" from "B -". Both rating agencies cited our reduced leverage as a result of the repayment of our Second Lien Facility with IPO proceeds, as well as their expectations that continued solid operating performance due to new unit expansion and positive comparable store sales growth will support further credit metric improvement.
On August 1, 2016, we entered into a sale-leaseback transaction pursuant to which we sold four properties in Broomfield, Colorado; Corpus Christi, Texas; Jenison, Michigan; and Buford, Georgia for a total of $32.6 million. Contemporaneously with the closing of the sale, we entered into a lease pursuant to which we leased back the properties for cumulative initial annual rent of $2.2 million, subject to annual escalations. Approximately $3.7 million of the proceeds from the sale were used to pay off a note payable related to the Corpus Christi property.
On September 9, 2016, we entered into a sale-leaseback transaction pursuant to which we sold three properties in Colorado Springs, Colorado; Kissimmee, Florida; and O'Fallon, Illinois for a total of $30.6 million. Contemporaneously with the closing of the sale, we entered into a lease pursuant to which we leased back the properties for cumulative initial annual rent of $2.1 million, subject to annual escalations.
Fiscal 2017 Outlook & Key Assumptions
Judd Nystrom, Chief Financial Officer, stated: "Given the investments we have made in the first half of the year, we remain on track to deliver strong top and bottom line results for fiscal 2017. Our fiscal 2017 outlook assumes we will deliver 19% to 21% net sales growth, an almost six-fold increase in net income, and a 32% to 40% increase in pro forma adjusted net income." Below is an overview of our outlook for selected fiscal 2017 financial data and related assumptions:
- Net sales are expected to be in a range of $738 million to $750 million. Our net sales growth outlook is based on 22 net new store openings and an assumed comparable store sales increase of 1.5% to 2.0%.
- Net income is expected to be in a range of $24 million to $26 million, with pro forma adjusted net income1 in a range of $33.5 million to $35.5 million1,2, based on an assumed 38.5% annual effective tax rate for fiscal 2017 and annual interest expense of approximately $27 million.
- EPS is expected to be in a range of $0.42 to $0.45, with pro forma adjusted EPS2 in a range of $0.53 to $0.56, based on assumed diluted weighted average shares outstanding of approximately 57 million and pro forma diluted weighted average shares outstanding1 of approximately 63 million, respectively.
- Gross capital expenditures are expected to be in a range of $140 million to $160 million, or $75 million to $85 million net of assumed sale-leaseback proceeds.
1 Represents a non-GAAP financial measure. For additional information about non-GAAP measures, including reconciliations to the most directly comparable financial measures presented in accordance with GAAP, please see "Non-GAAP Measures" below.
2 Projected pro forma adjusted net income excludes the following estimated pre-tax adjustments for fiscal 2017: a $2.7 million loss on extinguishment of debt from the use of IPO proceeds to repay our $130.0 million Second Lien Facility; $5.6 million in non-cash stock-based compensation related to a special one-time IPO bonus grant; $1.0 million of transaction related costs associated with our IPO; and a $6.2 million pro forma interest adjustment to normalize results for the impact of repaying our Second Lien Facility with IPO proceeds.
Conference Call Details
A conference call to discuss the second quarter fiscal 2017 financial results is scheduled for today, September 13, 2016, at 4:30 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial 888-684-1265 (international callers please dial 913-312-1502) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call, together with related materials, will be available online at investor.athome.com.
A recorded replay of the conference call will be available within two hours of the conclusion of the call and can be accessed both online at investor.athome.com and by dialing 877-870-5176 (international callers please dial 858-384-5517). The pin number to access the telephone replay is 6730553. The replay will be available until September 20, 2016.
Terminology
We define certain terms used in this release as follows:
"Adjusted EBITDA" means net income (loss) before interest expense, net, loss from early extinguishment of debt, income tax (benefit) provision and depreciation and amortization, adjusted for the impact of certain other items permitted by our debt agreements, including certain legal settlements and consulting and other professional fees, costs associated with new store openings, relocation and employee recruiting incentives, management fees and expenses, stock-based compensation expense, impairment of our trade name and non-cash rent.
"adjusted net income" means net income (loss) before certain one-time expenses associated with our IPO and non-cash stock-based compensation related to a special one-time IPO bonus grant, as well as loss on extinguishment of debt and the tax impact of such adjustments.
"adjusted operating income" means operating income (loss) before certain one-time expenses associated with our IPO and non-cash stock-based compensation related to a special one-time IPO bonus grant.
"adjusted SG&A" means selling, general and administrative expenses, excluding certain one-time expenses associated with our IPO and non-cash stock-based compensation related to a special one-time IPO bonus grant.
"comparable store sales" means, for any reporting period, the change in period-over-period net sales for the comparable store base, beginning with stores on the first day of the sixteenth full fiscal month following the store's opening. When a store is being relocated or remodeled, we exclude sales from that store in the calculation of comparable store sales until the first day of the sixteenth full fiscal month after it reopens.
"EPS" means diluted earnings per share.
"GAAP" means accounting principles generally accepted in the United States.
"pro forma adjusted net income" means adjusted net income as adjusted for comparability between periods to reflect the impact of interest on indebtedness repaid during the periods presented, the tax impact of adjustments to adjusted net income and normalization of income tax rates during the periods presented.
"pro forma adjusted EPS" means pro forma adjusted net income divided by pro forma diluted weighted average shares outstanding.
"pro forma diluted weighted average shares outstanding" means diluted share count on a pro forma basis after giving effect to the issuance of the shares of common stock in the IPO as if it had occurred at the beginning of the period presented.
"Store-level Adjusted EBITDA" means Adjusted EBITDA, adjusted further to exclude the impact of certain corporate overhead expenses, which we do not consider in our evaluation of the ongoing performance of our stores from period to period.
Forward-Looking Statements
This release contains forward-looking statements. You can generally identify forward-looking statements by our use of forward-looking terminology such as "anticipate," "are confident," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "on track," "plan," "potential," "predict," "seek," "should," or "vision," or the negative thereof or other variations thereon or comparable terminology. In particular, statements about our outlook and assumptions for financial performance for fiscal 2017, as well as statements about the markets in which we operate, expected new store openings, potential growth opportunities and future capital expenditures and our expectations, beliefs, plans, strategies, objectives, prospects, assumptions or future events or performance contained in this document are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed in our final prospectus, dated August 3, 2016, filed pursuant to Rule 424(b) under the Securities Act of 1933 with the SEC under the headings "Prospectus Summary," "Risk Factors," "Cautionary Note Regarding Forward-Looking Statements," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business," and in future filings we may make with the SEC, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this release are not guarantees of future performance and our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements contained herein. In addition, even if our results of operations, financial condition and liquidity, and events in the industry in which we operate, are consistent with the forward-looking statements contained in this prospectus, they may not be predictive of results or developments in future periods.
Any forward-looking statement that we make in this release speaks only as of the date of such statement. Except as required by law, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this document.
About At Home Group Inc.
At Home, the home décor superstore, is focused on providing customers with the broadest assortment of home décor products to suit any style, any room, at any budget, for any reason to redecorate. With a wide assortment of 50,000 items throughout our stores, At Home enables customers to express themselves and create a home that reflects their personality and style. Our differentiated merchandising strategy allows us to identify trends and then value engineer products to provide the aesthetics our customers want at attractive price points. Our highly efficient operating model seeks to drive growth and profitability while minimizing operating risk, ultimately allowing us to deliver exceptional value to our customers. We utilize a flexible and disciplined real estate strategy that enables us to successfully open and operate stores across a wide range of formats and markets. We believe that our broad and comprehensive offering and compelling value proposition combine to create a leading destination for home décor. As of July 30, 2016, At Home operated 115 stores in 29 states and 65 markets and is headquartered in Plano, Texas. For more information, visit investor.athome.com.
-Financial Tables to Follow-
| AT HOME GROUP INC. Condensed Consolidated Balance Sheets (in thousands, except share and per share data) (Unaudited) | ||||||||||
| | | | | | | | | | | |
| | | July 30, 2016 | | January 30, 2016 | | August 1, 2015 | | |||
| Assets | | | | | | | | | | |
| Current assets: | | | | | | | | | | |
| Cash and cash equivalents | | $ | 8,145 | | $ | 5,428 | | $ | 6,151 | |
| Inventories, net | | | 212,604 | | | 176,388 | | | 167,550 | |
| Prepaid expenses | | | 4,423 | | | 6,351 | | | 8,207 | |
| Other current assets | | | 5,553 | | | 3,229 | | | 1,142 | |
| Total current assets | | | 230,725 | | | 191,396 | | | 183,050 | |
| Property and equipment, net | | | 324,122 | | | 272,776 | | | 249,398 | |
| Goodwill | | | 569,732 | | | 569,732 | | | 569,732 | |
| Trade name | | | 1,440 | | | 872 | | | 872 | |
| Debt issuance costs, net | | | 1,442 | | | 1,323 | | | 1,513 | |
| Restricted cash | | | 392 | | | 26 | | | 1,531 | |
| Noncurrent deferred tax asset | | | 14,726 | | | 14,726 | | | — | |
| Other assets Werbung Mehr Nachrichten zur Home Federal Bancorp, Inc. Aktie kostenlos abonnieren
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