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Q2 Net Revenues Increased 30%; Q2 Comparable Store Sales Increased 26%; Q2 Adjusted Diluted EPS Increased 48% to $0.49
Company Increases Fiscal 2013 Adjusted Diluted EPS Guidance to $1.65 to $1.70 from Previous Guidance of $1.41 to $1.47
CORTE MADERA, Calif.--(BUSINESS WIRE)--September 10, 2013--
Restoration Hardware Holdings, Inc. (NYSE: RH) today announced financial results for the second quarter ended August 3, 2013.
Second Quarter Highlights
-- Net revenues increased 30% on top of a 24% increase for the same period
last year
-- Comparable store sales increased 26% on top of 31% growth for the
same period last year
-- Direct revenues increased 33% on top of a 29% increase for the
same period last year
-- Adjusted operating income increased 56% to $34.2 million from $21.9
million for the same period last year; GAAP operating loss of $27.8
million from operating income of $19.7 million for the same period last
year
-- Adjusted net income increased 62% to $19.8 million from $12.2 million for
the same period last year; GAAP net loss of $17.8 million from net income
of $17.6 million for the same period last year
-- Adjusted diluted earnings per share increased 48% to $0.49 compared to
$0.33 last year; GAAP diluted loss per share of $0.46
Gary Friedman, Chairman, Creator, Curator, and Co-Chief Executive Officer, said, "We are pleased to announce record financial results for the second quarter. Our industry-leading performance is a reflection of our ability to innovate, curate and integrate new products and businesses offering an unmatched customer experience. We continued to take market share during the quarter, delivering 30% growth in net revenues driven by a comp store sales increase of 26% on top of 31% comp growth last year and 17% percent in 2011. We significantly expanded our operating margin and increased adjusted net income by 62% while at the same time continued to invest in our infrastructure and new businesses to support our future growth."
Mr. Friedman continued, "Due to the current strength of our business, the continued evolution of our Source Book model, and the enhanced ability to connect with our customers through digital and electronic marketing, we are moving to a once per year mailing of our Source Books. We believe this decision will result in a step change effect in our earnings and cash flow model, allowing us to reach double-digit operating margins and free cash flow positive significantly ahead of our prior expectations. We are eliminating the mailing of our Fall 2013 Source Books and plan to mail an annual edition each Spring. Concurrently, we are raising our earnings estimates for the remainder of 2013 to reflect our current business trends and the associated cost savings."
Carlos Alberini, Co-Chief Executive Officer, commented, "Our business momentum remains very strong and provides good visibility into the back half of the year. Our expected top line growth, coupled with a more efficient cost structure, positions us to drive a significant and sustainable expansion in our operating margins, and over 60% growth in our adjusted EPS for this year. This latest step change to our business gives us even more confidence in the power of our model and in our ability to surpass the long-term financial goals we have set for our Company, including adjusted earnings growth in the mid to high twenties annually."
Mr. Alberini concluded, "As we look forward, the transformation of our real estate remains our top priority and the true key to unlocking the value of our dominant assortment. Our existing Full Line Design Galleries continue to be highly productive and are driving strong results in each market. Los Angeles and Houston delivered comps in excess of 29% during the second quarter, ahead of the rest of our chain. Also, our new locations in Scottsdale, Boston and Indianapolis continue to perform ahead of expectations. We plan to open new Full Line Design Galleries in Greenwich, Atlanta and Los Angeles in 2014 and are currently in negotiations for more than 30 locations in other key markets. We continue to believe we can open more than 10 locations a year, beginning in 2015. Our next generation Full Line Design Galleries will be larger and showcase our dominant assortment and new businesses, and they will provide opportunities for higher sales, increased earnings, lower capital investment and higher ROIC in each market."
Second Quarter Fiscal 2013 Financial Results
Revenue - Net revenues for the second quarter of fiscal 2013 increased 30% to $382.1 million from $292.9 million for the second quarter of fiscal 2012. This is on top of a 24% increase in net revenues for the second quarter of fiscal 2012.
-- Comparable store sales increased 26% for the second quarter of fiscal
2013. This growth is on top of an increase of 31% in comparable store
sales for the second quarter of fiscal 2012.
-- As of August 3, 2013, the Company operated a total of 70 retail stores,
consisting of 62 Galleries, 5 Full Line Design Galleries and 3 Baby &
Child Galleries, as well as 17 outlet stores throughout the United States
and Canada. This compares to a total of 73 retail stores, consisting of
70 Galleries, 2 Full Line Design Galleries and 2 Baby & Child Galleries,
as well as 10 outlet stores open at the end of the second quarter of
fiscal 2012.
-- Direct revenues increased 33% in the second quarter of fiscal 2013. This
growth is on top of the 29% increase in direct revenues for the second
quarter of fiscal 2012.
Operating Income (Loss)* - Adjusted operating income for the second quarter of fiscal 2013 increased 56% to $34.2 million compared to $21.9 million for the second quarter of fiscal 2012. Including the impact of variable and one-time non-cash stock-based compensation charges and costs related to the Company's follow-on offerings, the GAAP operating loss reached $27.8 million compared to GAAP operating income of $19.7 million for the prior year fiscal quarter.
EBITDA* - Adjusted EBITDA for the second quarter of fiscal 2013 increased 42% to $40.8 million compared to adjusted EBITDA of $28.7 million for the second quarter of fiscal 2012. Including the impact of variable and one-time non-cash stock-based compensation charges and costs related to the Company's follow-on offerings, EBITDA for the quarter was a loss of $21.2 million compared to positive EBITDA of $26.1 million for the prior year fiscal quarter.
Net Income (Loss)* - Adjusted net income increased 62% to $19.8 million for the second quarter of fiscal 2013 from $12.2 million for the second quarter of fiscal 2012. Adjusted net income is calculated using a 40% effective tax rate. GAAP net loss for the second quarter of fiscal 2013 was $17.8 million compared to GAAP net income of $17.6 million for the second quarter of fiscal 2012.
Earnings Per Share* - Adjusted diluted EPS increased 48% to $0.49 for the second quarter of fiscal 2013 from $0.33 for the second quarter of fiscal 2012. GAAP diluted EPS for the second quarter of fiscal 2013 was a loss of $0.46.
First Half Fiscal 2013 Financial Results
Revenue - Net revenues for the six months ended August 3, 2013 increased 34% to $683.4 million from $510.8 million for the first half of fiscal 2012. This is on top of a 22% increase in net revenues for the first half of fiscal 2012.
-- Comparable store sales increased 33% for the first half of fiscal 2013.
This growth compares to an increase of 29% in comparable store sales for
the first half of fiscal 2012.
-- Direct revenues increased 35% in the first half of fiscal 2013. This
growth is on top of the 25% increase in direct revenues for the first
half of fiscal 2012.
Operating Income (Loss)* - Adjusted operating income for the first half of fiscal 2013 increased 82% to $38.8 million compared to $21.3 million in the first half of fiscal 2012. Including the impact of variable and one-time non-cash stock-based compensation charges and costs related to the Company's follow-on offerings, GAAP operating loss was $27.3 million compared to GAAP operating income of $17.6 million for the year ago period.
EBITDA* - Adjusted EBITDA for the first half of fiscal 2013 increased 49% to $52.0 million compared to adjusted EBITDA of $34.9 million for the first half of fiscal 2012. Including the impact of variable and one-time non-cash stock-based compensation charges and costs related to the Company's follow-on offerings, EBITDA for the first half of 2013 was a loss of $14.0 million compared to positive EBITDA of $30.5 million for the prior year period.
Net Income (Loss)* - Adjusted net income increased 102% to $22.1 million for the first half of fiscal 2013 from $10.9 million for the first half of fiscal 2012. GAAP net loss for the first half of fiscal 2013 was $18.0 million compared to GAAP net income of $13.9 million for the year ago period.
Earnings Per Share* - Adjusted diluted EPS increased 87% to $0.56 for the first half of fiscal 2013 from $0.30 for the same period last year. GAAP diluted EPS during the first half of fiscal 2013 was a loss of $0.47.
Outlook
The Company is providing the following guidance for the third quarter of fiscal 2013:
-- Net revenues in the range of $385 million to $395 million
-- Adjusted net income in the range of $11.2 million to $12.0 million
-- Adjusted diluted EPS in the range of $0.27 to $0.29
The Company is providing the following guidance for the fourth quarter of fiscal 2013:
-- Net revenues in the range of $490 million to $500 million
-- Adjusted net income in the range of $34.3 million to $35.5 million
-- Adjusted diluted EPS in the range of $0.81 to $0.84
The Company is increasing its guidance for the fiscal year ending February 1, 2014:
-- Net revenues in the range of $1.56 billion to $1.58 billion.
-- Adjusted net income in the range of $67.6 million to $69.5 million
-- Adjusted diluted EPS in the range of $1.65 to $1.70
Note: The Company's adjusted net income and adjusted diluted earnings per share guidance does not include charges and costs which are expected to be similar to those charges and costs excluded from adjusted net income and adjusted diluted earnings in prior quarters. The Company's fiscal year 2013 will include 52 weeks compared to fiscal year 2012 which included 53 weeks.
Conference Call and Webcast Information
Restoration Hardware Holdings, Inc. will host a conference call at 2:00 p.m. PT (5:00 p.m. ET) today to discuss the second quarter results. Interested parties may access the call by dialing (866) 394-6658 (United States/Canada) or (706) 679-9188 (International). A live broadcast of Restoration Hardware's quarterly conference call will also be available online at the Company's website www.restorationhardware.com under Investor Relations. A replay of the conference call will be available through September 24, 2013 by dialing (855) 859-2056 or (404) 537-3406 and entering passcode 45774673 as well as on the Company's investor relations website.
About Restoration Hardware Holdings, Inc.
RH (Restoration Hardware Holdings, Inc. - NYSE:RH) is a curator of design, taste and style in the luxury lifestyle market. The Company offers collections through its retail galleries, source books, and online at RH.com.
*Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles (GAAP), the Company uses the following non-GAAP financial measures: adjusted operating income, EBITDA, adjusted EBITDA, adjusted net income, pro forma EPS and adjusted diluted EPS (collectively the "non-GAAP financial measures"). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The Company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company believes that they provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. The non-GAAP financial measures used by the Company in this press release may be different from the methods used by other companies.
For more information on the non-GAAP financial measures, please see the Reconciliation of GAAP to non-GAAP Financial Measures tables in this press release. These accompanying tables include details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures. With respect to the Company's adjusted net income and adjusted diluted EPS guidance for the third fiscal quarter, the fourth fiscal quarter and the full year of fiscal 2013, the Company is not able to provide a reconciliation of these non-GAAP financial measures to GAAP without unreasonable effort as our estimated results are preliminary and may change as we complete the quarter close process and management's review of our financial statements.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of the federal securities laws including statements related to the expected benefits to the Company's earnings and cash flow model of moving to a once per year mailing of Source Books, the Company's ability to surpass long-term financial goals, the Company's plans to open Full Line Design Galleries in Greenwich, Atlanta and Los Angeles in 2014, the Company's belief that it can open more than 10 locations a year beginning in 2015, the expectations that the next generation of Full Line Design Galleries will be larger and provide opportunities for higher sales, increased earnings, lower capital investment and higher ROIC in each market, and the Company's future financial guidance, including for the third fiscal quarter of 2013, the fourth fiscal quarter of 2013 and the full year ending February 1, 2014. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "may," "will," "should," "likely" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future events. We cannot assure you that future developments affecting us will be those that we have anticipated. Important risks and uncertainties that could cause actual results to differ materially from our expectations include, among others, recent changes in general economic conditions and the impact on consumer confidence and consumer spending, changes in customer demand for our products, our ability to anticipate consumer preferences and buying trends, risks related to the number of new business initiatives we are undertaking, risks in the implementation or our real estate portfolio transformation, delays in store openings, as well as those risks and uncertainties disclosed under the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Restoration Hardware Holdings' Form 10-K filed with the Securities and Exchange Commission on April 29, 2013, and similar disclosures in subsequent reports filed with the SEC, which are available on our investor relations website at ir.restorationhardware.com and on the SEC website at www.sec.gov. Any forward-looking statement made by us in this press release speaks only as of the date on which we make it. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.
RESTORATION HARDWARE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
---------------------------------------------------- ----------------------------------------------------
August 3, % of Net July 28, % of Net August 3, % of Net July 28, % of Net
2013 Revenues 2012 Revenues 2013 Revenues 2012 Revenues
------------ ----------- ------------ ----------- ------------ ----------- ------------ -----------
Net revenues $ 382,098 100.0% $ 292,906 100.0% $ 683,435 100.0% $ 510,820 100.0%
Cost of goods
sold 242,872 63.6% 178,779 61.0% 442,332 64.7% 321,425 62.9%
---------- ----- --- ---------- ----- --- ---------- ----- --- ---------- ----- ---
Gross profit 139,226 36.4% 114,127 39.0% 241,103 35.3% 189,395 37.1%
Selling, general
and
administrative
expenses 167,006 43.7% 94,465 32.3% 268,372 39.3% 171,830 33.7%
---------- ----- --- ---------- ----- --- ---------- ----- --- ---------- ----- ---
Income (loss)
from
operations (27,780) -7.3% 19,662 6.7% (27,269) -4.0% 17,565 3.4%
Interest expense (1,191) -0.2% (1,479) -0.5% (2,031) -0.3% (3,054) -0.6%
---------- ----- --- ---------- ----- --- ---------- ----- --- ---------- ----- ---
Income (loss)
before
income
taxes (28,971) -7.5% 18,183 6.2% (29,300) -4.3% 14,511 2.8%
Income tax
expense
(benefit) (11,136) -2.8% 567 0.2% (11,304) -1.7% 623 0.1%
---------- ----- --- ---------- ----- --- ---------- ----- --- ---------- ----- ---
Net income
(loss) $ (17,835) -4.7% $ 17,616 6.0% $ (17,996) -2.6% $ 13,888 2.7%
========== ===== === ========== ===== === ========== ===== === ========== ===== ===
Weighted-average
shares used in
computing basic
and diluted net
income (loss)
per share 38,712,000 1,000 38,394,013 1,000
Basic and diluted
net income
(loss) per
share $ (0.46) $ 17,616 $ (0.47) $ 13,888
Pro forma
weighted-average
shares used in
computing pro
forma basic and
diluted net
income per share
([a]) 36,971,500 36,971,500
Pro forma basic
and diluted net
income per
share $ 0.48 $ 0.38
[a] On a pro forma basis, basic and diluted shares outstanding for the three and six months ended July 28, 2012 include (1) the impact of the Company's reorganization, as further described in the Company's final prospectus filed with the Securities and Exchange Commission on November 5, 2012 (the "Reorganization"), as well as (2) the 4,782,609 shares of common stock that the Company issued and sold on November 7, 2012 in its initial public offering, as if such events had been completed as of the beginning of the respective periods and the common stock resulting therefrom was outstanding for the respective periods.
RESTORATION HARDWARE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
August 3, February 2, July 28,
2013 2013 2012
------------ -------------- -----------
ASSETS
Cash and cash equivalents $ 15,012 $ 8,354 $ 10,102
Merchandise inventories 406,676 353,329 275,485
Other current assets 155,715 131,075 98,604
-------- ---------- -------
Total current assets 577,403 492,758 384,191
Property and equipment--net 154,008 111,406 87,904
Goodwill and other intangibles 171,730 172,724 174,125
Other assets 26,223 12,725 4,655
-------- ---------- -------
Total assets $ 929,364 $ 789,613 $ 650,875
======== ========== =======
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable and accrued
expenses $ 205,551 $ 145,353 $ 117,175
Other current liabilities 91,455 74,071 68,239
-------- ---------- -------
Total current liabilities 297,006 219,424 185,414
Revolving line of credit and term
loan 87,575 82,501 144,452
Other long term liabilities 45,410 36,077 55,885
-------- ---------- -------
Total liabilities 429,991 338,002 385,751
-------- ---------- -------
Stockholders' equity 499,373 451,611 265,124
-------- ---------- -------
Total liabilities and
stockholders' equity $ 929,364 $ 789,613 $ 650,875
======== ========== =======
RESTORATION HARDWARE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
-------------------------
August 3, July 28,
2013 2012
------------ -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (17,996) $ 13,888
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization 13,228 12,892
Stock-based compensation expense 64,282 738
Other non-cash items (13,805) 309
Change in assets and liabilities:
Merchandise inventories (53,483) (29,639)
Accounts payable, accrued expenses, and
other 39,203 (2,821)
------- -------
Net cash provided by (used in) operating
activities 31,429 (4,633)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (30,616) (13,517)
Purchases of trademarks -- (304)
-------
Net cash used in investing activities (30,616) (13,821)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings under revolving line of
credit 5,074 22,135
Payments on capital leases (760) (2,104)
Stock options exercised 695 --
Excess tax benefit from exercise of stock
options 1,032 --
Tax witholdings related to issuance of
stock-based awards (178) --
------- -------
Net cash provided by financing activities 5,863 20,031
------- -------
Effects of foreign currency exchange rate
translation (18) 13
------- -------
Net increase in cash and cash equivalents 6,658 1,590
Cash and cash equivalents
Beginning of period 8,354 8,512
------- -------
End of period $ 15,012 $ 10,102
======= =======
RESTORATION HARDWARE HOLDINGS, INC.
OPERATING METRICS AND OTHER DATA
(Unaudited)
Three Months Ended Six Months Ended
------------------------------ ---------------------------
August 3, July 28, August 3, July 28,
2013 2012 2013 2012
--------------- ------------- -------------- -----------
Growth in net
revenues:
Stores ([a]) 28% 21% 33% 19%
Direct 33% 29% 35% 25%
Total 30% 24% 34% 22%
Retail () :
Comparable
store sales
change ([c]) 26% 31% 33% 29%
Retail stores
open at
beginning of
period 70 74 71 74
Stores opened -- -- 2 3
Stores closed -- 1 3 4
Retail stores
open at end of
period 70 73 70 73
Retail sales
per leased
selling square
foot ([d]) $ 353 $ 281 $ 638 $ 481
Total leased
square footage
at end of
period (in
thousands) 796 792 796 792
Total leased
selling square
footage at end
of period (in
thousands)
([e]) 521 516 521 516
Direct:
Catalogs
circulated (in
thousands)
([f]) 7,995 225 7,995 15,131
Catalog pages
circulated (in
millions)
([f]) 5,691 54 5,691 7,417
Direct as a
percentage of
net revenues
([g]) 47% 46% 47% 46%
[a] Store data represents retail stores plus outlet stores. Net revenues for outlet stores for the three months ended August 3, 2013 and July 28, 2012 were $20.6 million and $13.4 million, respectively. Net revenues for outlet stores for the six months ended August 3, 2013 and July 28, 2012 were $35.0 million and $24.3 million, respectively.
Retail data has been calculated based upon retail stores, which includes our Baby & Child stores and excludes outlet stores.
[c] Comparable store sales have been calculated based upon retail stores that were open at least fourteen full months as of the end of the reporting period and did not change square footage by more than 20% between periods. If a store is closed for seven days during a month, that month will be excluded from comparable store sales. Comparable store net revenues exclude revenues from outlet stores.
[d] Retail sales per leased selling square foot is calculated by dividing total net revenues for all retail stores, comparable and non-comparable, by the average leased selling square footage for the period.
[e] Leased selling square footage is retail space at our stores used to sell our products. Leased selling square footage excludes backrooms at retail stores used for storage, office space or similar matters. Leased selling square footage excludes exterior sales space located outside a store, such as courtyards, gardens and rooftops. Leased selling square footage includes approximately 4,500 square feet related to one owned store location.
[f] The catalogs and catalog pages circulated from period to period do not take into account different page sizes per catalog distributed. Page sizes and page counts vary for different catalog mailings and we sometimes mail different versions of a catalog at the same time. Accordingly, period to period comparisons of catalogs circulated and catalog pages circulated do not take these variations into account.
[g] Direct revenues include sales through our catalogs and websites.
RESTORATION HARDWARE HOLDINGS, INC.
RECONCILIATION OF ADJUSTED INCOME STATEMENT ITEMS
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended
-------------------------------------------------------------------------------------------------------------
Reported Adjusted Reported Adjusted
August 3, August 3, % of Net July 28, July 28, % of Net
2013 Adjustments 2013 Revenues 2012 Adjustments 2012 Revenues
------------ ------------- ------------ ----------- --------- --------------- ------------ -----------
Net revenues $ 382,098 $ -- $ 382,098 100.0% $292,906 $ -- $ 292,906 100.0%
Cost of goods
sold 242,872 -- 242,872 63.6% 178,779 -- 178,779 61.0%
---------- -------- ---------- ----- --- ------- ------- ---------- ----- ---
Gross profit 139,226 -- 139,226 36.4% 114,127 -- 114,127 39.0%
Selling, general
and
administrative
expenses ([a]) 167,006 (61,960) 105,046 27.5% 94,465 (2,226) 92,239 31.5%
---------- -------- ---------- ----- --- ------- ------- ---------- ----- ---
Income (loss)
from
operations (27,780) 61,960 34,180 8.9% 19,662 2,226 21,888 7.5%
Interest expense (1,191) -- (1,191) -0.2% (1,479) -- (1,479) -0.5%
---------- -------- ---------- ----- --- ------- ------- ---------- ----- ---
Income (loss)
before
income
taxes (28,971) 61,960 32,989 8.7% 18,183 2,226 20,409 7.0%
Income tax
expense
(benefit) () (11,136) 24,332 13,196 3.5% 567 7,597 8,164 2.8%
---------- -------- ---------- ----- --- ------- ------- ---------- ----- ---
Net income
(loss)
([c]) $ (17,835) $ 37,628 $ 19,793 5.2% $ 17,616 $ (5,371) $ 12,245 4.2%
========== ======== ========== ===== === ======= ======= ========== ===== ===
EBITDA ([d]) $ (21,182) $ 40,778 $ 26,130 $ 28,738
Weighted-average
shares used in
computing basic
net income
(loss) per share
([e]) 38,712,000 38,712,000 1,000 36,971,500
Weighted-average
shares used in
computing
diluted net
income (loss)
per share ([e]) 38,712,000 40,696,706 1,000 36,971,500
Basic net income
(loss) per
share $ (0.46) $ 0.51 $ 17,616 $ 0.33
Diluted net
income (loss)
per share $ (0.46) $ 0.49 $ 17,616 $ 0.33
[a] The adjustments for selling, general, and administrative expenses include management and pre-initial public offering board fees, certain non-cash and other one-time compensation, follow-on offering fees, lease termination costs and special committee investigation and remediation costs. See table titled "Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income" for additional details.
Assumes a normalized tax rate of 40% for all periods presented. See table titled "Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income" for additional details.
[c] Adjusted net income is a supplemental measure of financial performance that is not required by, or presented in accordance with, GAAP. We define adjusted net income as consolidated net income (loss) less non-recurring and other items. Adjusted net income is included in this press release because management believes that adjusted net income provides meaningful supplemental information for investors regarding the performance of our business and facilitates a meaningful evaluation of actual results on a comparable basis with historical results. Our management uses this non-GAAP financial measure in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter.
[d] EBITDA and Adjusted EBITDA are supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. We define EBITDA as consolidated net income (loss) before depreciation and amortization, interest expense and provision for income taxes. Adjusted EBITDA reflects further adjustments to EBITDA to eliminate the impact of certain items including non-cash or other items that we do not consider representative of our ongoing financial performance. EBITDA and Adjusted EBITDA are included in this press release because they are key metrics used by management, our Board of Directors and our principal shareholders to assess our financial performance, and Adjusted EBITDA is used in connection with determining incentive compensation under our Management Incentive Program ("MIP"). Additionally, EBITDA is frequently used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that Adjusted EBITDA provides useful information facilitating operating performance comparisons from period to period and company to company. We use EBITDA and Adjusted EBITDA, alongside other GAAP measures such as gross profit, operating income (loss) and net income (loss), to measure profitability, as a key profitability target in our annual and other budgets, and to compare our performance against that of peer companies. Please see the table titled "Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA" for further information.
[e] On an adjusted basis for the three months ended July 28, 2012, basic and diluted shares outstanding include (1) the impact of the Reorganization, as well as (2) the 4,782,609 shares of common stock that the Company issued and sold on November 7, 2012 in its initial public offering, as if such events had been completed as of the beginning of the period and the common stock resulting therefrom was outstanding for the period.
RESTORATION HARDWARE HOLDINGS, INC.
RECONCILIATION OF ADJUSTED INCOME STATEMENT ITEMS
(In thousands, except share and per share amounts)
(Unaudited)
Six Months Ended
-------------------------------------------------------------------------------------------------------------
Reported Adjusted Reported Adjusted
August 3, August 3, % of Net July 28, July 28, % of Net
2013 Adjustments 2013 Revenues 2012 Adjustments 2012 Revenues
------------ ------------- ------------ ----------- --------- --------------- ------------ -----------
Net revenues $ 683,435 $ -- $ 683,435 100.0% $510,820 $ -- $ 510,820 100.0%
Cost of goods
sold 442,332 -- 442,332 64.7% 321,425 -- 321,425 62.9%
---------- -------- ---------- ----- --- ------- ------- ---------- ----- ---
Gross profit 241,103 -- 241,103 35.3% 189,395 -- 189,395 37.1%
Selling, general
and
administrative
expenses ([a]) 268,372 (66,050) 202,322 29.6% 171,830 (3,690) 168,140 32.9%
---------- -------- ---------- ----- --- ------- ------- ---------- ----- ---
Income (loss)
from
operations (27,269) 66,050 38,781 5.7% 17,565 3,690 21,255 4.2%
Interest expense (2,031) -- (2,031) -0.3% (3,054) -- (3,054) -0.6%
---------- -------- ---------- ----- --- ------- ------- ---------- ----- ---
Income (loss)
before
income
taxes (29,300) 66,050 36,750 5.4% 14,511 3,690 18,201 3.6%
Income tax
expense
(benefit) () (11,304) 26,004 14,700 2.2% 623 6,658 7,281 1.5%
---------- -------- ---------- ----- --- ------- ------- ---------- ----- ---
Net income
(loss)
([c]) $ (17,996) $ 40,046 $ 22,050 3.2% $ 13,888 $ (2,968) $ 10,920 2.1%
========== ======== ========== ===== === ======= ======= ========== ===== ===
EBITDA ([d]) $ (14,041) $ 52,009 $ 30,457 $ 34,897
Weighted-average
shares used in
computing basic
net income
(loss) per share
([e]) 38,394,013 38,394,013 1,000 36,971,500
Weighted-average
shares used in
computing
diluted net
income (loss)
per share ([e]) 38,394,013 39,511,685 1,000 36,971,500
Basic net income
(loss) per
share $ (0.47) $ 0.57 $ 13,888 $ 0.30
Diluted net
income (loss)
per share $ (0.47) $ 0.56 $ 13,888 $ 0.30
[a] The adjustments for selling, general, and administrative expenses include management and pre-initial public offering board fees, certain non-cash and other one-time compensation, follow-on offering fees, lease termination costs and special committee investigation and remediation costs. See table titled "Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income" for additional details.
Assumes a normalized tax rate of 40% for all periods presented. See table titled "Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income" for additional details.
[c] Adjusted net income is a supplemental measure of financial performance that is not required by, or presented in accordance with, GAAP. We define adjusted net income as consolidated net income (loss) less non-recurring and other items. Adjusted net income is included in this press release because management believes that adjusted net income provides meaningful supplemental information for investors regarding the performance of our business and facilitates a meaningful evaluation of actual results on a comparable basis with historical results. Our management uses this non-GAAP financial measure in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter.
[d] EBITDA and Adjusted EBITDA are supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. We define EBITDA as consolidated net income (loss) before depreciation and amortization, interest expense and provision for income taxes. Adjusted EBITDA reflects further adjustments to EBITDA to eliminate the impact of certain items including non-cash or other items that we do not consider representative of our ongoing financial performance. EBITDA and Adjusted EBITDA are included in this press release because they are key metrics used by management, our Board of Directors and our principal shareholders to assess our financial performance, and Adjusted EBITDA is used in connection with determining incentive compensation under our MIP. Additionally, EBITDA is frequently used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that Adjusted EBITDA provides useful information facilitating operating performance comparisons from period to period and company to company. We use EBITDA and Adjusted EBITDA, alongside other GAAP measures such as gross profit, operating income (loss) and net income (loss), to measure profitability, as a key profitability target in our annual and other budgets, and to compare our performance against that of peer companies. Please see the table titled "Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA" for further information.
[e] On an adjusted basis for the six months ended July 28, 2012, basic and diluted shares outstanding include (1) the impact of the Reorganization, as well as (2) the 4,782,609 shares of common stock that the Company issued and sold on November 7, 2012 in its initial public offering, as if such events had been completed as of the beginning of the period and the common stock resulting therefrom was outstanding for the period.
RESTORATION HARDWARE HOLDINGS, INC.
RECONCILIATION OF NET INCOME (LOSS) TO OPERATING INCOME (LOSS)
AND ADJUSTED OPERATING INCOME
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
------------------------- ---------------------------
August 3, July 28, August 3, July 28,
2013 2012 2013 2012
------------ ----------- ------------ -------------
Net income
(loss) $ (17,835) $ 17,616 $ (17,996) $ 13,888
Interest expense 1,191 1,479 2,031 3,054
Income tax
expense
(benefit) (11,136) 567 (11,304) 623
------- ------ ------- ------
Operating
income
(loss) (27,780) 19,662 (27,269) 17,565
Management and
pre-IPO board
fees ([a]) -- 1,198 -- 2,087
Non-cash
compensation
() 59,832 -- 63,155 --
Follow-on
offering fees
([c]) 2,128 -- 2,895 --
Lease
termination
costs ([d]) -- (961) -- (386)
Special
committee
investigation
and remediation
([e]) -- 1,989 -- 1,989
------- ------ ------- ------
Adjusted
operating
income $ 34,180 $ 21,888 $ 38,781 $ 21,255
======= ====== ======= ======
[a] Represents fees paid in accordance with our management services agreement with Home Holdings, LLC ("Home Holdings"), as well as fees and expense reimbursements paid to our Board of Directors prior to the initial public offering. All management fees were paid in full at the time of the initial public offering. Board fees and expenses subsequent to the initial public offering are not included in the above adjustments and are included in both the operating and adjusted operating income (loss) amounts.
Includes non-cash compensation charges related to the performance-based vesting of certain shares granted to Mr. Friedman, as well as the one-time, fully vested option granted to Mr. Friedman upon his reappointment as Chairman and Co-Chief Executive Officer in July 2013. All other equity related awards granted to employees are not included in the above adjustments and are included in both the operating and adjusted operating income (loss) amounts.
[c] Represents legal and other professional fees incurred in connection with our follow-on offerings in May 2013 and July 2013.
[d] Includes lease termination costs for retail stores that were closed prior to their respective lease termination dates. The amounts in the three and six months ended July 28, 2012 relate to changes in estimates regarding liabilities for future lease payments for closed stores.
[e] Represents legal and other professional fees, incurred in connection with the investigation conducted by the special committee of the Board of Directors relating to Mr. Friedman and our subsequent remedial actions.
RESTORATION HARDWARE HOLDINGS, INC.
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
------------------------- ---------------------------
August 3, July 28, August 3, July 28,
2013 2012 2013 2012
------------ ----------- ------------ -------------
Net income
(loss) $ (17,835) $ 17,616 $ (17,996) $ 13,888
Depreciation and
amortization 6,598 6,468 13,228 12,892
Interest expense 1,191 1,479 2,031 3,054
Income tax
expense
(benefit) (11,136) 567 (11,304) 623
------- ------ ------- ------
EBITDA
([a]) (21,182) 26,130 (14,041) 30,457
Management and
pre-IPO board
fees () -- 1,198 -- 2,087
Non-cash
compensation
([c]) 59,832 351 63,155 738
Follow-on
offering fees
([d]) 2,128 -- 2,895 --
Lease
termination
costs ([e]) -- (961) -- (386)
Special
committee
investigation
and remediation
([f]) -- 1,989 -- 1,989
Other ([g]) -- 31 -- 12
------- ------ ------- ------
Adjusted
EBITDA
([a]) $ 40,778 $ 28,738 $ 52,009 $ 34,897
======= ====== ======= ======
[a] EBITDA and Adjusted EBITDA are supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. We define EBITDA as consolidated net income (loss) before depreciation and amortization, interest expense and provision for income taxes. Adjusted EBITDA reflects further adjustments to EBITDA to eliminate the impact of certain items including non-cash or other items that we do not consider representative of our ongoing financial performance. EBITDA and Adjusted EBITDA are included in this press release because they are key metrics used by management, our Board of Directors and our principal shareholders to assess our financial performance, and Adjusted EBITDA is used in connection with determining incentive compensation under our MIP. Additionally, EBITDA is frequently used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that Adjusted EBITDA provides useful information facilitating operating performance comparisons from period to period and company to company. We use EBITDA and Adjusted EBITDA, alongside other GAAP measures such as gross profit, operating income (loss) and net income (loss), to measure profitability, as a key profitability target in our annual and other budgets, and to compare our performance against that of peer companies. EBITDA and Adjusted EBITDA are not GAAP measures of our financial performance or liquidity and should not be considered as alternatives to net income (loss), as a measure of financial performance, cash flows from operating activities, as a measure of liquidity, or any other performance measure derived in accordance with GAAP and they should not be construed as an implication that our future results will be unaffected by non-recurring and other items. Our measures of EBITDA and Adjusted EBITDA are not necessarily comparable to other similarly titled captions for other companies due to different methods of calculation.
Represents fees paid in accordance with our management services agreement with Home Holdings, as well as fees and expense reimbursements paid to our Board of Directors prior to the initial public offering. All management fees were paid in full at the time of the initial public offering. Board fees and expenses subsequent to the initial public offering are not included in the above adjustments and are included in both the EBITDA and Adjusted EBITDA amounts.
[c] The three and six months ended August 3, 2013 include non-cash compensation charges related to the performance-based vesting of certain shares granted to Mr. Friedman, as well as the one-time, fully vested option granted to Mr. Friedman upon his reappointment as Chairman and Co-Chief Executive Officer in July 2013. The three and six months ended July 28, 2012 includes stock-based compensation expense incurred prior to the initial public offering. All other equity related awards granted to employees subsequent to the initial public offering are not included in the above adjustments and are included in both the EBITDA and Adjusted EBITDA amounts.
[d] Represents legal and other professional fees incurred in connection with our follow-on offerings in May 2013 and July 2013.
[e] Includes lease termination costs for retail stores that were closed prior to their respective lease termination dates. The amounts in the three and six months ended July 28, 2012 relate to changes in estimates regarding liabilities for future lease payments for closed stores.
[f] Represents legal and other professional fees, incurred in connection with the investigation conducted by the special committee of the Board of Directors relating to Mr. Friedman and our subsequent remedial actions.
[g] Represents certain other items which management believes are not indicative of our ongoing operating performance, which includes foreign exchange gains and losses for the three and six months ended July 28, 2012.
RESTORATION HARDWARE HOLDINGS, INC.
RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED NET INCOME
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
------------------- ---------------------------
August 3, July 28, August 3, July 28,
2013 2012 2013 2012
--------- -------- ------------ -------------
GAAP net income
(loss) $(17,835) $17,616 $ (17,996) $ 13,888
------- ------ ------- ------
Adjustments
(pre-tax):
Management and
pre-IPO board
fees ([a]) $ -- $ 1,198 $ -- $ 2,087
Non-cash
compensation
() 59,832 -- 63,155 --
Follow-on
offering fees
([c]) 2,128 -- 2,895 --
Lease
termination
costs ([d]) -- (961) -- (386)
Special
committee
investigation
and
remediation
([e]) -- 1,989 -- 1,989
------- ------ ------- ------
Subtotal adjusted
items 61,960 2,226 66,050 3,690
Impact of
income tax
items ([f]) (24,332) (7,597) (26,004) (6,658)
------- ------ ------- ------
Adjusted net
income ([g]) $ 19,793 $12,245 $ 22,050 $ 10,920
======= ====== ======= ======
[a] Represents fees paid in accordance with our management services agreement with Home Holdings, as well as fees and expense reimbursements paid to our Board of Directors prior to the initial public offering. All management fees were paid in full at the time of the initial public offering. Board fees and expenses subsequent to the initial public offering are not included in the above adjustments and are included in both the GAAP and adjusted net income (loss) amounts.
Includes non-cash compensation charges related to the performance-based vesting of certain shares granted to Mr. Friedman, as well as the one-time, fully vested option granted to Mr. Friedman upon his reappointment as Chairman and Co-Chief Executive Officer in July 2013. All other equity related awards granted to employees are not included in the above adjustments and are included in both the GAAP and adjusted net income (loss) amounts.
[c] Represents legal and other professional fees incurred in connection with our follow-on offerings in May 2013 and July 2013.
[d] Includes lease termination costs for retail stores that were closed prior to their respective lease termination dates. The amounts in the three and six months ended July 28, 2012 relate to changes in estimates regarding liabilities for future lease payments for closed stores.
[e] Represents legal and other professional fees, incurred in connection with the investigation conducted by the special committee of the Board of Directors relating to Mr. Friedman and our subsequent remedial actions.
[f] Assumes a normalized tax rate of 40% for all periods presented.
[g] Adjusted net income is a supplemental measure of financial performance that is not required by, or presented in accordance with, GAAP. We define adjusted net income as consolidated net income (loss) less non-recurring and other items. Adjusted net income is included in this press release because management believes that adjusted net income provides meaningful supplemental information for investors regarding the performance of our business and facilitates a meaningful evaluation of actual results on a comparable basis with historical results. Our management uses this non-GAAP financial measure in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter.
RESTORATION HARDWARE HOLDINGS, INC.
RECONCILIATION OF NET INCOME (LOSS) PER SHARE TO
ADJUSTED NET INCOME PER SHARE
(Unaudited)
Three Months Ended Six Months Ended
------------------------ --------------------------
August 3, July 28, August 3, July 28,
2013 2012 2013 2012
----------- ----------- ----------- -------------
GAAP diluted net
loss per share $ (0.46) $ 17,616 $ (0.47) $ 13,888
====== ====== ====== ======
Pro forma diluted
net income (loss)
per share ([a]) $ (0.44) $ 0.48 $ (0.46) $ 0.38
EPS impact of
adjustments
(pre-tax):
Management and
pre-IPO board
fees () $ -- $ 0.03 $ -- $ 0.06
Non-cash
compensation
([c]) 1.47 -- 1.60 --
Follow-on
offering fees
([d]) 0.05 -- 0.07 --
Lease
termination
costs ([e]) -- (0.03) -- (0.01)
Special
committee
investigation
and
remediation
([f]) -- 0.05 -- 0.05
------ ------ ------ ------
Subtotal adjusted
items 1.52 0.05 1.67 0.10
Impact of
income tax
items ([g]) (0.59) (0.20) (0.65) (0.18)
------ ------ ------ ------
Adjusted diluted
net income per
share ([h]) $ 0.49 $ 0.33 $ 0.56 $ 0.30
====== ====== ====== ======
[a] Pro forma diluted net loss per share for the three and six months ended August 3, 2013 is calculated based on GAAP net loss and diluted weighted-average shares of 40,696,706 and 39,511,685, respectively. Pro forma diluted net income per share for the three and six months ended July 28, 2012 is calculated based on GAAP net income and the Company's vested share count as if (1) the Reorganization and (2) initial public offering had been completed as of the beginning of the respective periods and the common stock resulting therefrom was outstanding for the respective periods.
Represents fees paid in accordance with our management services agreement with Home Holdings, as well as fees and expense reimbursements paid to our Board of Directors prior to the initial public offering. All management fees were paid in full at the time of the initial public offering. Board fees and expenses subsequent to the initial public offering are not included in the above adjustments and are included in both the GAAP and adjusted net income (loss) amounts.
[c] Includes non-cash compensation charges related to the performance-based vesting of certain shares granted to Mr. Friedman, as well as the one-time, fully vested option granted to Mr. Friedman upon his reappointment as Chairman and Co-Chief Executive Officer in July 2013. All other equity related awards granted to employees are not included in the above adjustments and are included in both the GAAP and adjusted net income (loss) amounts.
[d] Represents legal and other professional fees incurred in connection with our follow-on offerings in May 2013 and July 2013.
[e] Includes lease termination costs for retail stores that were closed prior to their respective lease termination dates. The amounts in the three and six months ended July 28, 2012 relate to changes in estimates regarding liabilities for future lease payments for closed stores.
[f] Represents legal and other professional fees, incurred in connection with the investigation conducted by the special committee of the Board of Directors relating to Mr. Friedman and our subsequent remedial actions.
[g] Assumes a normalized tax rate of 40% for all periods presented.
[h] Adjusted diluted net income per share is a supplemental measure of financial performance that is not required by, or presented in accordance with GAAP. We define adjusted net income per share as consolidated net income (loss) less non-recurring and other items divided by the Company's post-initial public offering share count. Adjusted net income per share is included in this press release because management believes that adjusted net income per share provides meaningful supplemental information for investors regarding the performance of our business and facilitates a meaningful evaluation of actual results on a comparable basis with historical results. Our management uses this non-GAAP financial measure in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter.
http://online.wsj.com/article/PR-CO-20130910-909773.html
Mattress Firm Announces Second Fiscal Quarter Financial Results
-- Net Sales Increased 15.5% --
HOUSTON, Sep 06, 2013 (BUSINESS WIRE) -- ---- Opened 35 New Stores --
---- Earnings per Diluted Share of $0.41 on a GAAP Basis, $0.43 on an Adjusted Basis --
---- Updates Financial Guidance for Fiscal Year 2013 --
Mattress Firm Holding Corp. (the "Company") MFRM -0.57% today announced its financial results for the second fiscal quarter (13 weeks) ended July 30, 2013. Net sales for the second fiscal quarter increased 15.5% to $302.5 million, reflecting incremental sales from new and acquired stores, offset by a comparable-store sales decline of 0.3%. The Company reported second fiscal quarter earnings per diluted share ("EPS") on a generally accepted accounting principles ("GAAP") basis of $0.41, and EPS on a non-GAAP adjusted basis, excluding acquisition-related and ERP system implementation costs ("Adjusted"), of $0.43. Diluted EPS on a GAAP basis and Adjusted basis are reconciled in the table below:
Second Fiscal Quarter Reconciliation of GAAP to Adjusted EPS
See "Reconciliation of Reported (GAAP) to Adjusted Statements of
Operations Data" for Notes
Thirteen Weeks Ended Twenty-Six Weeks Ended
----------------------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------------
July 31, 2012 July 30, 2013 July 31, 2012 July 30, 2013
---------------------------- ---------------------------- ---------------------------- ----------------------------
GAAP EPS $ 0.30 $ 0.41 $ 0.59 $ 0.77
Acquisition-related costs (1) 0.12 - 0.14 0.01
ERP system implementation costs (2) - 0.02 - 0.03
-------------------- ------ -------------------- ------ -------------------- ------ -------------------- ------
Adjusted EPS $ 0.42 $ 0.43 $ 0.73 $ 0.81
==================== ====== ==================== ====== ==================== ====== ==================== ======
"Our exciting growth story continued in the second quarter of 2013, as we added 35 new stores organically, bringing our total company-operated store count to over 1,100," stated Steve Stagner, Mattress Firm's president and chief executive officer. "We saw revenues increase by 15% over the prior year to $303 million, which evidences that our growth is outpacing the mattress industry, which has experienced mid-single digit growth during the comparable period. The former Mattress Giant stores continue to generate strong sales growth that is driving operating margin expansion, while sales at our legacy stores in those acquisition markets have also improved year over year, further validating the strength of our relative market share strategy. We expect that the second half of the year will benefit from a return to higher industry-level advertising media spend relative to recent quarters that we anticipate will drive improvement in customer traffic and sales trends in our business."
Second Quarter Financial Summary
-- Net sales for the second fiscal quarter increased 15.5% to $302.5 million, reflecting incremental sales from new and acquired stores, offset by a comparable-store sales decline of 0.3%.
-- Opened 35 new stores and closed 10 stores bringing the total number of Company-operated stores to 1,121 as of the end of the fiscal quarter.
-- Income from operations was $25.9 million. Excluding $1.0 million of acquisition-related costs and ERP system implementation costs, Adjusted income from operations was $26.9 million, representing an increase of $3.4 million, or 14.3%, over Adjusted income from operations for the comparable prior year period. Please refer to "Reconciliation of Reported (GAAP) to Adjusted Statements of Operations Data" for a reconciliation of income from operations to Adjusted income from operations and other information.
-- Adjusted operating margin decreased 10 basis points to 8.9% of net sales as compared to 9.0% in the same quarter of fiscal 2012, and consisted of a 30 basis-point increase in gross margin, a 40 basis-point improvement in sales and marketing expense leverage, a 60 basis-point decline in general and administrative expense leverage and an aggregate 20 basis-point operating margin decline in other categories.
-- Net income was $14.1 million and GAAP EPS was $0.41. Excluding $0.6 million, net of income taxes, of acquisition-related and ERP system implementation costs, Adjusted net income was $14.7 million and Adjusted EPS was $0.43, an increase of 3.7% over Adjusted EPS for the comparable prior year period. Please refer to "Reconciliation of Reported (GAAP) to Adjusted Statements of Operations Data" for a reconciliation of net income and GAAP EPS to Adjusted net income and Adjusted EPS, respectively, and other information.
Acquisitions
With respect to the acquisitions of former Mattress Giant stores in November 2011 and May 2012, the rebranding of the acquired stores was substantially complete by the end of fiscal 2012. The per store sales results of those stores for the months since the date of rebranding and for one year thereafter are demonstrated by the charts accompanying this release.
Year-to-Date Financial Summary
Net revenues increased $106.7 million, or 22.6%, to $578.5 million, for the two fiscal quarters (twenty-six weeks) ended July 30, 2013, from $471.8 million in the comparable prior year period, reflecting incremental sales from new and acquired stores, offset by a comparable-store sales decline of 2.5%.
The Company opened 81 new stores while closing 17 stores during the first half of fiscal 2013, adding 64 net store units.
Net income was $26.1 million for the two fiscal quarters ended July 30, 2013 and GAAP EPS was $0.77. Excluding acquisition-related and ERP system implementation costs, adjusted net income was $27.5 million for the two fiscal quarters and Adjusted EPS was $0.81. See "Reconciliation of Reported (GAAP) to Adjusted Statements of Operations Data" below for a reconciliation of net income as reported to adjusted net income.
Liquidity and Capital Resources
The Company had cash and cash equivalents of $6.4 million at the end of the second fiscal quarter. Net cash provided by operating activities was $24.7 million for the second fiscal quarter. As of July 30, 2013, there was $5.0 million of borrowings outstanding under the revolving portion of the 2012 Senior Credit Facility (as defined in the Company's filings with the Securities and Exchange Commission) and approximately $1.4 million in outstanding letters of credit, with additional borrowing capacity of $93.6 million.
Financial Guidance
The Company is updating its guidance for the fiscal year (52 weeks) ending January 28, 2014 ("fiscal year 2013"), which was originally issued in March 2013.
Prior Guidance Range Updated Range
-------------------- ----------------
Full Fiscal Year Ending January 28, 2014
-----------------------------------------
Net sales (in billions) $1.237 to $1.250 $1.194 to $1.207
New stores 110 to 120 130 to 140
Net store unit increase 90 to 95 105 to 110
GAAP EPS $1.81 to $1.89 $1.66 to $1.74
Acquisition-related costs per share $0.01 $0.01
ERP system implementation costs per share $0.07 to $0.09 $0.07 to $0.09
Adjusted EPS $1.90 to $1.98 $1.75 to $1.83
Comparable-store sales growth low single digit flat
Call Information
A conference call to discuss second fiscal quarter results is scheduled for today, September 6, 2013, at 8:30 a.m. Eastern Time. The call will be hosted by Steve Stagner, Chief Executive Officer, and Jim Black, Chief Financial Officer.
The conference call will be accessible by telephone and the internet. To access the call, participants from within the U.S. may dial (877) 407-3982, and participants from outside the U.S. may dial (201) 493-6780. Participants may also access the call via live webcast by visiting the Company's investor relations web site at http://www.mattressfirm.com.
The replay of the call will be available from approximately 11:30 a.m. Eastern Time on September 6, 2013 through midnight Eastern Time on September 20, 2013. To access the replay, the domestic dial-in number is (877) 870-5176, the international dial-in number is (858) 384-5517, and the passcode is 419608. The archive of the webcast will be available on the Company's web site for a limited time.
Net Sales and Store Unit Information
The components of the net sales increase for the thirteen and twenty-six weeks ended July 30, 2013 as compared to the corresponding prior year period were as follows (in millions):
Increase (Decrease) in Net Sales
-------------------------------------------------------------------------------------------------------------------------------------------------
-------------
Thirteen Weeks Twenty-Six Weeks
Ended Ended
July 30, 2013 July 30, 2013
----------------------------------------------- ------------------------------------------------
Comparable-store sales $ (0.7 ) $ (11.5 )
New stores 33.5 62.4
Acquired stores 11.4 61.7
Closed stores (3.7 ) (5.9 )
-------------------- ---- -------------------- -------------------- ----- --------------------
$ 40.5 $ 106.7
==================== ==== ==================== ==================== ===== ====================
The composition of net sales by major category of product and services were as follows (in millions):
Thirteen Weeks Ended Twenty-Six Weeks Ended
-------------------------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------
July 31, % of July 30, % of July 31, % of July 30, % of
2012 Total 2013 Total 2012 Total 2013 Total
--------------------------- --------- --------------------------- --------- --------------------------- --------- --------------------------- ---------
Conventional mattresses $ 112.4 42.9 % $ 148.5 49.1 % $ 197.8 41.9 % $ 270.1 46.7 %
Specialty mattresses 127.6 48.7 % 129.2 42.7 % 233.9 49.6 % 259.0 44.8 %
Furniture and accessories 17.2 6.6 % 19.1 6.3 % 31.3 6.6 % 38.3 6.6 %
-------------------- ----- -------------------- ----- -------------------- ----- -------------------- -----
Total product sales 257.2 98.2 % 296.8 98.1 % 463.0 98.1 % 567.4 98.1 %
Delivery service revenues 4.8 1.8 % 5.7 1.9 % 8.8 1.9 % 11.1 1.9 %
-------------------- ----- -------------------- ----- -------------------- ----- -------------------- -----
Total net sales $ 262.0 100.0 % $ 302.5 100.0 % $ 471.8 100.0 % $ 578.5 100.0 %
==================== ===== ==================== ===== ==================== ===== ==================== =====
The activity with respect to the number of Company-operated store units was as follows:
Thirteen Weeks Twenty-Six Weeks
Ended Ended
July 30, 2013 July 30, 2013
--------------------------- ----------------------------
Store units, beginning of period 1,096 1,057
New stores 35 81
Closed stores (10 ) (17 )
------- -------------------- -------- --------------------
Store units, end of period 1,121 1,121
======= ==================== ======== ====================
Forward-Looking Statements
Certain statements contained in this press release are not based on historical fact and are "forward-looking statements" within the meaning of applicable federal securities laws and regulations. In many cases, you can identify forward-looking statements by terminology such as "may," "would," "should," "could," "forecast," "feel," "project," "expect," "plan," "anticipate," "believe," "estimate," "predict," "intend," "potential," "continue" or the negative of these terms or other comparable terminology; however, not all forward-looking statements contain these identifying words. The forward-looking statements contained in this press release, such as those relating to our net sales, GAAP and Adjusted EPS and net store unit change for fiscal year 2013, are subject to various risks and uncertainties, including but not limited to downturns in the economy; reduction in discretionary spending by consumers; our ability to execute our key business strategies and advance our market-level profitability; our ability to profitably open and operate new stores and capture additional market share; our relationship with our primary mattress suppliers; our dependence on a few key employees; the possible impairment of our goodwill or other acquired intangible assets; the effect of our planned growth and the integration of our acquisitions on our business infrastructure; the impact of seasonality on our financial results and comparable-store sales; our ability to raise adequate capital to support our expansion strategy; our success in pursuing and completing strategic acquisitions; the effectiveness and efficiency of our advertising expenditures; our success in keeping warranty claims and comfort exchange return rates within acceptable levels; our ability to deliver our products in a timely manner; our status as a holding company with no business operations; our ability to anticipate consumer trends; risks related to our controlling stockholder, J.W. Childs Associates, L.P.; heightened competition; changes in applicable regulations; risks related to our franchises, including our lack of control over their operation and our liabilities if they default on note or lease obligations; risks related to our stock and other factors set forth under "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended January 29, 2013 filed with the Securities and Exchange Commission ("SEC") on April 1, 2013 and our other SEC filings. Forward-looking statements relate to future events or our future financial performance and reflect management's expectations or beliefs concerning future events as of the date of this press release. Actual results of operations may differ materially from those set forth in any forward-looking statements, and the inclusion of a projection or forward-looking statement in this press release should not be regarded as a representation by us that our plans or objectives will be achieved. We do not undertake to publicly update or revise any of these forward-looking statements, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
Adjusted EBITDA is defined as net income before income tax expense, interest income, interest expense, depreciation and amortization ("EBITDA"), without giving effect to non-cash goodwill and intangible asset impairment charges, gains or losses on store closings and impairment of store assets, gains or losses related to the early extinguishment of debt, financial sponsor fees and expenses, non-cash charges related to stock-based awards and other items that are excluded by management in reviewing the results of operations. We have presented Adjusted EBITDA because we believe that the exclusion of these items is appropriate to provide additional information to investors about our ongoing operating performance excluding certain non-cash and other items and to provide additional information with respect to our ability to comply with various covenants in documents governing our indebtedness and as a means to evaluate our period-to-period results. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed to imply that our future results will be unaffected by any such adjustments. We have provided this information to analysts, investors and other third parties to enable them to perform more meaningful comparisons of past, present and future operating results and as a means to evaluate the results of our ongoing operations. Management also uses Adjusted EBITDA to determine executive incentive compensation payment levels. In addition, our compliance with certain covenants under the credit agreement between our indirect wholly owned subsidiary, Mattress Holding Corp., certain lenders, and UBS Securities LLC, as sole arranger, bookrunner, and lender, are calculated based on similar measures and differ from Adjusted EBITDA primarily by the inclusion of pro forma results for acquired businesses in those similar measures. Other companies in our industry may calculate Adjusted EBITDA differently than we do. Adjusted EBITDA is not a measure of performance under U.S. GAAP and should not be considered as a substitute for net income prepared in accordance with U.S. GAAP. Adjusted EBITDA has significant limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.
The following table contains a reconciliation of our net income determined in accordance with U.S. GAAP to EBITDA and Adjusted EBITDA for the periods indicated (in thousands):
Thirteen Weeks Ended Twenty-Six Weeks Ended
----------------------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------------
July 31, July 30, July 31, July 30,
2012 2013 2012 2013
------------------------------------------------- ---------------------------- ------------------------------------------------- ----------------------------
Net income $ 10,085 $ 14,123 $ 19,821 $ 26,132
Income tax expense 5,326 8,965 11,488 16,639
Interest expense, net 2,214 2,795 4,288 5,642
Depreciation and amortization 5,471 7,231 10,175 13,441
Intangible assets and other amortization 607 612 1,187 1,153
-------------------- ------ -------------------- -------------------- ------ -------------------- ------ -------------------- -------------------- ------
EBITDA 23,703 33,726 46,959 63,007
-------------------- ------ -------------------- -------------------- ------ -------------------- ------ -------------------- -------------------- ------
Loss on store closings and impairment of store assets 54 483 71 744
Financial sponsor fees and expenses 51 12 51 24
Stock-based compensation 493 967 1,002 1,854
Vendor new store funds (a) 250 96 633 983
Acquisition-related costs (b) 5,893 124 7,049 450
Other (c) (856 ) 595 (764 ) 1,164
-------------------- ------ -------------------- -------------------- ------ -------------------- ------ -------------------- -------------------- ------
Adjusted EBITDA $ 29,588 $ 36,003 $ 55,001 $ 68,226
==================== ====== ==================== ==================== ====== ==================== ====== ==================== ==================== ======
(a) We receive cash payments from certain vendors for each new
incremental store that we open ("new store funds"). New store funds
are initially recorded in other noncurrent liabilities when received
and are then amortized as a reduction of cost of sales over 36
months in our financial statements. Historically, we have considered
new store funds as a component of Adjusted EBITDA when received
since new store funds are included in cash provided from operations.
The adjustment includes the amount of new store funds received
during the period presented and eliminates the non-cash reduction in
cost of sales included in our results of operations.
(b) Reflects both non-cash effects included in net income related to
acquisition accounting adjustments made to inventories and other
acquisition-related cash costs included in net income, such as
direct acquisition costs and costs related to integration of
acquired businesses.
(c) Consists of various items that management excludes in reviewing the
results of operations, including $0.6 million and $1.2 million of
ERP system implementation costs incurred during the thirteen and
twenty-six weeks ended July 30, 2013, respectively.
Adjusted EPS and the other "Adjusted" data provided in this press release are also considered non-GAAP financial measures. We report our financial results in accordance with GAAP; however, management believes evaluating our ongoing operating results may be enhanced if investors have additional non-GAAP basis financial measures to facilitate year-over-year comparisons. Management reviews non-GAAP financial measures to assess ongoing operations and considers them to be effective indicators, for both management and investors, of our financial performance over time. Our management does not advocate that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. For more information, please refer to "Reconciliation of Reported (GAAP) to Adjusted Statements of Operations Data" below.
MATTRESS FIRM HOLDING CORP.
Consolidated Balance Sheets
(In thousands, except share amounts)
(unaudited)
January 29, July 30,
2013 2013
-------------------------------------------------- -----------------------------------------------------------------------
Assets
---------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 14,556 $ 6,370
Accounts receivable, net 26,246 24,911
Inventories 63,228 77,943
Deferred income tax asset 3,710 3,663
Prepaid expenses and other current assets 18,855 20,139
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total current assets 126,595 133,026
Property and equipment, net 144,612 159,376
Intangible assets, net 82,479 85,678
Goodwill 358,978 360,391
Debt issue costs and other, net 12,015 11,924
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total assets $ 724,679 $ 750,395
==================== ======= ==================== ==================== ==================== ======= ====================
Liabilities and Stockholders' Equity
---------------------------------------------------------------
Current liabilities:
Notes payable and current maturities of long-term debt $ 33,930 $ 29,567
Accounts payable 64,642 68,494
Accrued liabilities 41,106 41,925
Customer deposits 8,012 11,311
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total current liabilities 147,690 151,297
Long-term debt, net of current maturities 219,069 203,095
Deferred income tax liability 26,800 28,323
Other noncurrent liabilities 63,624 70,697
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total liabilities 457,183 453,412
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Commitments and contingencies
Stockholders' equity:
Common stock, $0.01 par value; 120,000,000 shares authorized;
33,795,630 and 33,865,752 shares issued and outstanding at
January 29, 2013 and July 30, 2013, respectively 338 339
Additional paid-in capital 365,083 368,437
Accumulated deficit (97,925 ) (71,793 )
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total stockholders' equity 267,496 296,983
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total liabilities and stockholders' equity $ 724,679 $ 750,395
==================== ======= ==================== ==================== ==================== ======= ====================
MATTRESS FIRM HOLDING CORP.
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(unaudited)
Thirteen Weeks Ended Twenty-Six Weeks Ended
-------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------
July 31, % of July 30, % of July 31, % of July 30, % of
2012 Sales 2013 Sales 2012 Sales 2013 Sales
-------------------------------- --------- -------------------------------- --------- -------------------------------- --------- -------------------------------- ---------------------
Net sales $ 262,018 100.0 % $ 302,541 100.0 % $ 471,832 100.0 % $ 578,498 100.0 %
Cost of sales 159,854 61.0 % 182,096 60.2 % 287,126 60.9 % 353,611 61.1 %
-------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ----------
Gross profit from retail operations 102,164 39.0 % 120,445 39.8 % 184,706 39.1 % 224,887 38.9 %
Franchise fees and royalty income 1,327 0.5 % 1,438 0.5 % 2,532 0.5 % 2,687 0.4 %
-------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ----------
103,491 39.5 % 121,883 40.3 % 187,238 39.6 % 227,574 39.3 %
-------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ----------
Operating expenses:
Sales and marketing expenses 66,564 25.4 % 75,768 25.0 % 115,692 24.5 % 139,499 24.1 %
General and administrative expenses 19,248 7.3 % 19,749 6.5 % 35,878 7.6 % 38,918 6.7 %
Loss on store closings and impairment of store assets 54 0.0 % 483 0.2 % 71 0.0 % 744 0.1 %
-------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ----------
Total operating expenses 85,866 32.8 % 96,000 31.7 % 151,641 32.1 % 179,161 30.9 %
-------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ----------
Income from operations 17,625 6.7 % 25,883 8.6 % 35,597 7.5 % 48,413 8.4 %
-------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ----------
Other expense:
Interest expense, net 2,214 0.8 % 2,795 1.0 % 4,288 0.9 % 5,642 1.0 %
-------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ----------
Income before income taxes 15,411 5.9 % 23,088 7.6 % 31,309 6.6 % 42,771 7.4 %
Income tax expense 5,326 2.1 % 8,965 2.9 % 11,488 2.4 % 16,639 2.9 %
-------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ----------
Net income $ 10,085 3.8 % $ 14,123 4.7 % $ 19,821 4.2 % $ 26,132 4.5 %
==================== ========== ==================== ========== ==================== ========== ==================== ==========
Basic net income per common share $ 0.30 $ 0.42 $ 0.59 $ 0.77
Diluted net income per common share $ 0.30 $ 0.41 $ 0.59 $ 0.77
Reconciliation of weighted-average shares outstanding:
Basic weighted average shares outstanding 33,768,828 33,853,733 33,768,828 33,832,928
Effect of dilutive securities:
Stock options 70,588 248,451 97,350 206,826
Restricted shares 1,293 47,456 980 36,813
-------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ----------
Diluted weighted average shares outstanding 33,840,709 34,149,640 33,867,158 34,076,567
==================== ========== ==================== ========== ==================== ========== ==================== ==========
MATTRESS FIRM HOLDING CORP.
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
Twenty-Six Weeks Ended
----------------------------------------------------------------------------------------------------------------------------------------------
July 31, July 30,
Cash flows from operating activities: 2012 2013
------------------------------------------------------------------- ----------------------------------------------- -----------------------------------------------
Net income $ 19,821 $ 26,132
Adjustments to reconcile net income to cash flows
provided by operating activities:
Depreciation and amortization 10,175 13,441
Loan fee and other amortization 1,217 1,050
Deferred income tax expense 4,261 1,842
Stock-based compensation 1,002 1,854
Loss on store closings and impairment of store assets 71 744
Effects of changes in operating assets and liabilities, excluding
business acquisitions:
Accounts receivable (3,116 ) 1,337
Inventories (14,672 ) (14,699 )
Prepaid expenses and other current assets (1,354 ) (1,268 )
Other assets 391 (2,074 )
Accounts payable 1,763 2,130
Accrued liabilities 7,913 819
Customer deposits 850 3,181
Other noncurrent liabilities 1,774 6,175
-------------------- ------- -------------------- -------------------- ------- --------------------
Net cash provided by operating activities 30,096 40,664
-------------------- ------- -------------------- -------------------- ------- --------------------
Cash flows from investing activities:
-------------------------------------------------------------------
Purchases of property and equipment (31,667 ) (27,886 )
Business acquisitions, net of cash acquired (43,984 ) (2,042 )
-------------------- ------- -------------------- -------------------- ------- --------------------
Net cash used in investing activities (75,651 ) (29,928 )
-------------------- ------- -------------------- -------------------- ------- --------------------
Cash flows from financing activities:
-------------------------------------------------------------------
Proceeds from issuance of debt 15,000 25,000
Principal payments of debt (11,203 ) (45,424 )
Proceeds from exercise of common stock options - 1,272
Excess tax benefits associated with stock-based awards - 230
-------------------- ------- -------------------- -------------------- ------- --------------------
Net cash provided by (used) in financing activities 3,797 (18,922 )
-------------------- ------- -------------------- -------------------- ------- --------------------
Net decrease in cash and cash equivalents (41,758 ) (8,186 )
Cash and cash equivalents, beginning of period 47,946 14,556
-------------------- ------- -------------------- -------------------- ------- --------------------
Cash and cash equivalents, end of period $ 6,188 $ 6,370
==================== ======= ==================== ==================== ======= ====================
MATTRESS FIRM HOLDING CORP.
Reconciliation of Reported (GAAP) to Adjusted Statements of
Operations Data
(In thousands, except share and per share amounts)
Thirteen Weeks Ended
-------------------------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
July 31, 2012 July 30, 2013
-------------------------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Income Income Diluted Income Income Diluted
From Before In- Net Weighted Diluted From Before In- Net Weighted Diluted
Operations come Taxes Income Shares EPS Operations come Taxes Income Shares EPS
------------------------------------------------- ------------------------------------------------- ------------------------------------------------- -------------------- -------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- -------------------- --------------------------------
As Reported $ 17,625 $ 15,411 $ 10,085 33,840,709 $ 0.30 $ 25,883 $ 23,088 $ 14,123 34,149,640 $ 0.41
% of sales 6.7 % 5.9 % 3.8 % 8.6 % 7.6 % 4.7 %
Acquisition-related costs (1) 5,893 5,893 4,130 0.12 124 124 75 0.00
ERP system implementation costs (2) - - - - 894 894 547 0.02
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- -------------------- ----------
Total adjustments 5,893 5,893 4,130 - 0.12 1,018 1,018 622 - 0.02
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- -------------------- ----------
As Adjusted $ 23,518 $ 21,304 $ 14,215 33,840,709 $ 0.42 $ 26,901 $ 24,106 $ 14,745 34,149,640 $ 0.43
==================== ====== ==================== ==================== ====== ==================== ==================== ====== ==================== ==================== ==================== ==== ==================== ====== ==================== ==================== ====== ==================== ==================== ====== ==================== ==================== ==================== ==========
% of sales 9.0 % 8.1 % 5.4 % 8.9 % 8.0 % 4.9 %
Twenty-Six Weeks Ended
-------------------------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
July 31, 2012 July 30, 2013
-------------------------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Income Income Diluted Income Income Diluted
From Before In- Net Weighted Diluted From Before In- Net Weighted Diluted
Operations come Taxes Income Shares EPS Operations come Taxes Income Shares EPS
------------------------------------------------- ------------------------------------------------- ------------------------------------------------- -------------------- -------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- -------------------- --------------------------------
As Reported $ 35,597 $ 31,309 $ 19,821 33,867,158 $ 0.59 $ 48,413 $ 42,771 $ 26,132 34,076,567 $ 0.77
% of sales 7.5 % 6.6 % 4.2 % 8.4 % 7.4 % 4.5 %
Acquisition-related costs (1) 7,049 7,049 4,829 0.14 450 450 276 0.01
ERP system implementation costs (2) - - - - 1,845 1,845 1,131 0.03
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- -------------------- ----------
Total adjustments 7,049 7,049 4,829 - 0.14 2,295 2,295 1,407 - 0.04
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- -------------------- ----------
As Adjusted $ 42,646 $ 38,358 $ 24,650 33,867,158 $ 0.73 $ 50,708 $ 45,066 $ 27,539 34,076,567 $ 0.81
==================== ====== ==================== ==================== ====== ==================== ==================== ====== ==================== ==================== ==================== ==== ==================== ====== ==================== ==================== ====== ==================== ==================== ====== ==================== ==================== ==================== ==========
% of sales 9.0 % 8.1 % 5.2 % 8.8 % 7.8 % 4.8 %
-----------------------------------
(1) On May 2, 2012, we acquired all of the equity interests of MGHC Holding Corporation ("Mattress Giant"), including 181 mattress specialty retail stores. On September 25, 2012, we acquired the leasehold interests, store assets, distribution center assets and related inventories, and assumption of certain liabilities of Mattress XPress, Inc. and Mattress XPress of Georgia, Inc. (collectively, "Mattress X-Press"), including 34 mattress specialty retail stores. On December 11, 2012, we acquired the assets and operations of Factory Mattress & Water Bed Outlet of Charlotte, Inc. ("Mattress Source"), including 27 mattress specialty retail stores. On June 14, 2013, we acquired the assets and operations of Olejo, Inc., an online retailer primarily focused on mattresses and bedding-related products. Acquisition-related costs, consisting of direct transaction costs and integration costs are included in the results of operations as incurred. During the thirteen weeks ended July 31, 2012 and July 30, 2013, we incurred approximately $5.9 million and $0.1 million of acquisition-related costs, respectively. During the twenty-six weeks ended July 31, 2012 and July 30, 2013, we incurred approximately $7.1 million and $0.5 million of acquisition-related costs, respectively.
(2) Reflects implementation costs included in the results of operations as incurred, consisting primarily of training-related costs in connection with the roll-out of the Microsoft Dynamics AX for Retail Enterprise Resource Planning system ("ERP system"). During the thirteen and twenty-six weeks ended July 30, 2013, we incurred approximately $0.9 million and $1.8 million of ERP system implementation costs, respectively.
Our "As Adjusted" data is considered a non-U.S. GAAP financial measure and is not in accordance with, or preferable to, "As Reported," or GAAP financial data. However, we are providing this information as we believe it facilitates year-over-year comparisons for investors and financial analysts.
About Mattress Firm
Houston-based Mattress Firm is a high growth specialty retailer, recognized as the nation's leading bedding specialty retailer, offering a broad selection of both traditional and specialty mattresses, bedding accessories and related products from leading manufacturers. With more than 1,200 company-operated and franchisee stores across 31 states, Mattress Firm has the largest geographic footprint in the United States among multi-brand mattress specialty retailers. Mattress Firm offers customers comfortable store environments, guarantees on price, comfort and service, and highly-trained sales professionals. More information is available at http://www.mattressfirm.com. Mattress Firm's website is not part of this press release.
Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20130906005131/en/
SOURCE: Mattress Firm Holding Corp.
http://www.marketwatch.com/story/mattress-firm-announces-second-fiscal-quarter-financial-results-2013-09-06
The CEO - talks about outsourcing research work to the U Of Florida.
RF Industries Ltd (NASDAQ: RFIL) reported Q3 diluted EPS of $0.13, versus $0.10 reported last year. Revenue for the quarter came in at $9.6 million, versus $7.3 million reported last year.
Howard Hill, Chief Executive Officer, commented, "We are pleased to report record revenue for the fourth consecutive quarter and continued strong demand for our offerings across all end markets. In particular, we have been focused on growing our custom interconnect solutions to the wireless infrastructure industry. During the quarter, we continued to see the positive impact of this long term strategy with strong sales and profitability in our Cables Unlimited division. Our aim is to continue to provide customized solutions, such as our custom cable product, to new and existing customers that allow them to remain competitive in this space.
http://www.streetinsider.com/Earnings/RF+Industries+Ltd+(RFIL)+Reports+Q3+EPS+of+$0.13/8682368.html
http://www.executiveleadersradio.com/bedrosian-arthur-207.aspx
The interview of the CEO starts from somewhere around 17 minutes. Interesting guy. This company is expecting more good news.
announced improved results for the fiscal year ended June 30, 2013, aided by enhanced operations and a favorable exchange rate, partially offset by lower oil and product prices.
The South Africa-based petrochemicals group reported headline earnings per share, excluding one-time items of R52.53 (US$6.00), up by 24.9% from R42.07 earned in the last fiscal year.
Segmental Analysis
South African Energy Cluster: Within its South African energy cluster, Sasol Mining's operating income decreased 3.2% to R2.2 billion, affected by higher transportation, mining and other expenses. However, the sector witnessed increased output.
Sasol Gas generated an operating profit of R4.1 billion, up 36.3% year over year. This increase can be attributed to higher sale prices and output.
Sasol Synfuels' operating profit jumped 29.6% to R28.6 billion, mainly reflecting higher output and positive foreign exchange movements that significantly made up for cost escalation.
Sasol Oil reported an operating profit of R2.1 billion as against R1.6 billion in the last fiscal year. The improvement is aided by improved refining and marketing margins along with increased prices of petroleum products. To some extent, this was offset by the drop in output.
International Energy Cluster: Sasol Synfuels International recorded an operating profit of R1.6 billion, down from R1.9 billion in the prior fiscal year. The result was affected by a drop in output owing to the shutdown of the Qatar-based ORYX gas-to-liquids plant.
Sasol Petroleum International incurred an operating loss of R1.9 billion, narrowed from the loss reported in the prior fiscal year, mainly reflecting improved gross margin. This was however partially offset by increased exploration, operation and depreciation expenses.
Chemical Cluster: Sasol Polymers incurred an operating loss of R2.8 billion against a profit of R716 million in the prior fiscal year. The segment results were adversely affected by weak domestic margin.
Sasol Solvents' operating income was down to R916 million, from the previous fiscal year's level of R1.4 billion. The results were affected by weak product prices and margins.
Sasol Olefins & Surfactants reported an operating profit of R3.6 billion, up by 12.1% from the income of R3.2 billion during the corresponding period of 2012. The positive comparison came on the back of increase in margin from the company’s operations in the U.S. This was however partially offset by margin pressure in European activities.
Operating Cash Flow & Capex
Sasol generated R59.3 billion in operating cash flow, a 24.0% year-over-year increase, primarily due to higher flow of cash from operating activities somewhat nullified by increased working capital. The world's largest producer of motor fuels from coal spent R32.3 billion in capital expenditure during the period.
Dividend
The company announced a final cash dividend of R13.30 per share. The dividend will be paid on Oct 14 to shareholders of record as on Oct 11, 2013. The holders of American Depositary Receipts (“ADRs”) will be paid on Oct 25, 2013.
Stocks to Consider
Sasol Ltd. currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.
http://www.zacks.com/stock/news/108999/sasol-posts-stronger-earnings
News Releases
SeaChange International Reports Second Quarter Fiscal 2014 Results
September 05, 2013
· Product Revenue of $16.2 Million Increased by 20% Year over Year
· Non-GAAP Operating Income of $3.4 Million Increased by 189% Year over Year
· GAAP Operating Income of $0.5 Million, Compared to $7.5 Million GAAP Operating Loss in Prior Year
· GAAP Gross Margins Exceed 57%
· Up to $25 Million Share Repurchase Authorized
ACTON, Mass. (Sept. 5, 2013) – SeaChange International, Inc. (NASDAQ: SEAC), a leading global multi-screen video software innovator, today reported second quarter fiscal 2014 revenue of $37.4 million and non-GAAP operating income of $3.4 million, or $0.10 per fully diluted share, from continuing operations. In comparison, second quarter fiscal 2013 revenue was $36.7 million and non-GAAP operating income was $1.2 million, or $0.04 per fully diluted share, from continuing operations. The Company posted a U.S. GAAP operating income of $0.5 million, or $0.01 per diluted share for the second quarter of fiscal 2014, compared to a U.S. GAAP operating loss for the second quarter of fiscal 2013 of $7.5 million, or $0.23 per basic share. The Company’s U.S. GAAP second quarter fiscal 2014 results include charges of $2.9 million that are excluded from our non-GAAP results, which consisted primarily of stock-based compensation and amortization of intangible assets from prior acquisitions.
For the first six months of fiscal 2014, the Company posted revenues of $72.9 million and non-GAAP operating income of $4.6 million compared to revenues of $73.4 million and non-GAAP operating income of $3.5 million in the same prior period. The Company posted a GAAP operating loss for the first six months of fiscal 2014 of approximately $1.3 million compared to GAAP operating loss of $8.7 million for the same prior period.
“We are pleased that, in the second quarter, we achieved sequential and year over year increases in revenues and operating income and substantial growth in gross margins, which exceeded 57 percent,” said Raghu Rau, Chief Executive Officer, SeaChange. “Our results would have been even better but for delays in receiving timely acceptance within the quarter for some of our new generation software products because of ongoing custom integrations with third-party products. We continued to make significant market progress including an Adrenalin rollout with one of the largest U.S. cable television operators, and Adrenalin and VOD advertising acceptance by a large European telco. We have also announced a large number of deployments, domestically and internationally, for our market-leading content management solutions. And we continued our Nucleus gateway software momentum with two more design wins.”
Commenting on the Company’s outlook, Anthony Dias, Chief Financial Officer, stated, “We continue to respond to strong demand for our new products and focus on optimizing our cost structure, and we anticipate solid performance in our second half. We expect third quarter revenues to be sequentially higher than the second quarter, and fourth quarter revenues to be sequentially higher than the third quarter. However, due to the uncertainty of timing in customer acceptance of new products, the Company expects its full year revenues to be at the lower end of its previously provided guidance of $165 million to $175 million. The Company continues to expect that its full fiscal 2014 non-GAAP operating income will be in the range of $0.53 to $0.71 per fully diluted share, as previously guided.”
SeaChange ended the second quarter of fiscal 2014 with cash, cash equivalents and marketable securities of $126.5 million, compared to $122.3 million for the previous quarter. The Company also announced that its Board of Directors has authorized the repurchase of up to $25 million of its shares through January 31, 2015 by means of open market purchases, privately negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934. Depending on market conditions and other factors, the repurchase may be commenced or suspended at any time, or from time to time, without prior notice.
The Company will host a conference call to discuss its second quarter fiscal 2014 results at 5:00 p.m. ET today, Thursday, September 5. The call may be accessed at 877-407-8037 (U.S.) and 201-689-8037 (international) and via live webcast at www.schange.com/IR. For those unable to listen to the live conference call, a replay will be available through September 19, 2013 and may be accessed by dialing 877-660-6853 (U.S.) or 201-612-7415 (international). Callers will be prompted for replay conference ID number 419491. An archived version of the webcast will also be available on the investor relations section of the Company’s website at www.schange.com/IR.
About SeaChange International
Ranked among the top 250 software companies in the world, SeaChange International (NASDAQ: SEAC) enables transformative multi-screen video services through an open, cloud-based, intelligent software platform trusted by cable, IPTV and mobile operators globally. Personalized and fully monetized video experiences anytime on any device, in the home and everywhere, are the product of the Company’s superior video back office platform, advertising and in-home gateway offerings.
SeaChange’s hundreds of customers are many of the world’s most powerful media brands including all major cable operators in the Americas and Europe, and the largest telecom companies in the world. Headquartered in Acton, Massachusetts, SeaChange is TL 9000 certified and has product development, support and sales offices around the world. Visit www.schange.com.
Safe Harbor Provision
Any statements contained in this press release that do not describe historical facts, including without limitation statements regarding future financial performance and the repurchase of the Company’s shares, are neither promises nor guarantees and may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements contained herein are based on current assumptions and expectations, but are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations. Factors that could cause actual future results to differ materially from current expectations include the following: the continued spending by the Company’s customers on video systems and services; the continued development of the multi-screen video market; the Company’s ability to successfully introduce new products or enhancements to existing products including its next generation products scheduled for release in fiscal year 2014; worldwide economic cycles; steps taken to address the variability in the market for our products and services; uncertainties introduced by our prior evaluation of strategic alternatives; the Company’s transition to being a company that primarily provides software solutions; the loss of one of the Company’s large customers; the cancellation or deferral of purchases of the Company’s products; the length of the Company’s sales cycles; the timing of revenue recognition of new products due to customer integration and acceptance requirements; any decline in demand or average selling prices for our products; the Company’s ability to manage its growth; the risks associated with international operations; compliance with conflict minerals regulations; foreign currency fluctuation; the Company’s ability to protect its intellectual property rights and the expenses that may be incurred by the Company to protect its intellectual property rights; an unfavorable result of current or future litigation; content providers limiting the scope of content licensed for use in the video-on-demand market or other limitations in materials we use to provide our products and services; the Company’s ability to compete in its marketplace; the Company’s ability to respond to changing technologies; the impact of acquisitions or divestitures made by the Company; changes in the regulatory environment; the Company’s ability to hire and retain highly skilled employees; and the effectiveness of the Company’s disclosure controls and procedures and internal controls over financial reporting.
Further information on factors that could cause actual results to differ from those anticipated is detailed in various publicly available documents made by the Company from time to time with the Securities and Exchange Commission, including but not limited to, those appearing under the caption “Certain Risk Factors” in the Company’s Annual Report on Form 10-K filed on April 10, 2013. Any forward-looking statements should be considered in light of those factors. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak as of the date they are made. The Company disclaims any obligation to publicly update or revise any such statements to reflect any change in Company expectations or events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results may differ from those set forth in the forward-looking statements.
Use of Non-GAAP Financial Information
We define non-GAAP income from operations as U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) operating income or loss plus stock-based compensation expenses, amortization of intangible assets, inventory write-downs, if any, earn-outs and change in fair value of earn-outs, professional fees associated with acquisitions and divestitures, litigation and strategic alternatives and severance and other restructuring costs. We define adjusted EBITDA as U.S. GAAP operating income or loss before depreciation expense, amortization of intangible assets, stock-based compensation expense, inventory write-downs, if any, earn-outs and change in fair value of earn-outs, professional fees associated with acquisitions, divestitures, litigation and strategic alternatives, severance and other restructuring costs. We discuss non-GAAP income from operations in our quarterly earnings releases and certain other communications as we believe non-GAAP income from operations and adjusted EBITDA are both important measures that are not calculated according to U.S. GAAP. We use non-GAAP income from operations and adjusted EBITDA in internal forecasts and models when establishing internal operating budgets, supplementing the financial results and forecasts reported to our Board of Directors, determining a component of bonus compensation for executive officers and other key employees based on operating performance and evaluating short-term and long-term operating trends in our operations. We believe that non-GAAP income from operations and adjusted EBITDA financial measures assist in providing an enhanced understanding of our underlying operational measures to manage the business, to evaluate performance compared to prior periods and the marketplace, and to establish operational goals. We believe that these non-GAAP financial adjustments are useful to investors because they allow investors to evaluate the effectiveness of the methodology and information used by management in our financial and operational decision-making.
Non-GAAP income from operations and adjusted EBITDA are non-GAAP financial measures and should not be considered in isolation or as a substitute for financial information provided in accordance with U.S. GAAP. These non-GAAP financial measures may not be computed in the same manner as similarly titled measures used by other companies. We expect to continue to incur expenses similar to the non-GAAP income from operations and adjusted EBITDA financial adjustments described above, and investors should not infer from our presentation of this non-GAAP financial measure that these costs are unusual, infrequent or non-recurring.
In managing and reviewing our business performance, we exclude a number of items required by U.S. GAAP. Management believes that excluding these items is useful in understanding the trends and managing our operations. We provide these supplemental non-GAAP measures in order to assist the investment community to see SeaChange through the “eyes of management,” and therefore enhance the understanding of SeaChange’s operating performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative to, our reported results prepared in accordance with U.S. GAAP. Our non-GAAP financial measures reflect adjustments based on the following items:
Amortization of Intangible Assets. We incur amortization expense of intangibles related to various acquisitions that have been made in recent years. These intangible assets are valued at the time of acquisition, are then amortized over a period of several years after the acquisition and generally cannot be changed or influenced by management after the acquisition. We believe that exclusion of these expenses allows comparisons of operating results that are consistent over time for both the Company’s newly-acquired and long-held businesses.
Stock-based Compensation Expense. We incur expenses related to stock-based compensation included in our U.S. GAAP presentation of cost of revenues, selling, general and administrative expense and research and development expense. Although stock-based compensation is an expense we incur and is viewed as a form of compensation, these expenses vary in amount from period to period, and are affected by market forces that are difficult to predict and are not within the control of management, such as the market price and volatility of our shares, risk-free interest rates and the expected term and forfeiture rates of the awards.
Inventory Write-down. We incur inventory write-downs of our legacy product lines as we end of life certain product lines to focus on selling our new products being developed.
Earn-outs and Change in Fair Value of Earn-outs. Earn-outs and the change in the fair value of the earn-outs are considered by management to be non-recurring expenses to the former shareholders of the businesses we acquire. We also incur expense due to changes in fair value related to contingent consideration that we believe would otherwise impair comparability among periods.
Professional Fees: Acquisitions, Divestitures, Litigation and Strategic Alternatives. We have excluded the effect of professional fees associated with our acquisitions and divestitures, litigation and strategic alternatives because the amount and timing of these expenses are largely non-recurring.
Severance and Other Restructuring. We incurred charges due to the restructuring of our business, including severance charges and facility reductions resulting from our restructuring and streamlining efforts and any changes due to revised estimates, which we generally would not have otherwise incurred in the periods presented as part of our continuing operations. We also incurred charges for the hiring and appointment of the Chief Executive Officer.
Depreciation Expense. We incur depreciation expense related to capital assets purchased to support the ongoing operations of the business. These assets are recorded at cost and are depreciated using the straight-line method over the useful life of the asset. Purchases of such assets may vary significantly from period to period and without any correlation to underlying operating performance. Management believes that exclusion of depreciation expense allows comparisons of operating results that are consistent across past, present and future periods.
The following tables reconcile the Company’s income (loss) from operations, the most directly comparable U.S. GAAP financial measure, to the Company’s non-GAAP income from operations and the reconciliation of our U.S. GAAP income (loss) from operations to our adjusted EBITDA for the three and six months ended July 31, 2013 and 2012:
For the fiscal 2013 fourth quarter, net sales rose significantly to $40.2 million, up 13% from $35.7 million for last year's fourth quarter. Gross profit increased to $15.2 million from $12.0 million for the fiscal 2012 fourth quarter. As a percentage of net sales, gross margin increased to 38% from 34% last year. Research and development (R&D) expenses decreased to $3.7 million, compared with $4.0 million for the fiscal 2012 fourth quarter. Selling, general and administrative (SG&A) expenses increased to $5.8 million, compared with $5.4 million in the same quarter of the prior year. [i]Operating income more than doubled to $5.7 million from $2.6 million for the fourth quarter of fiscal 2012.[url][/url][tag]insert-text-here[/tag] Net income attributable to Lannett Company rose to $3.6 million, or $0.12 per diluted share, from $1.4 million, or $0.05 per diluted share, for the same period last year.
"Our full year net income for fiscal 2013 was our highest in the company's history," said Arthur Bedrosian, president and chief executive officer of Lannett. "In addition, we reported record net sales for the fourth quarter and full year fiscal 2013. Our excellent financial performance was driven by sales growth across all of our key product categories, as well as a higher gross margin percentage due to favorable sales mix, price increases and enhanced manufacturing efficiencies."
For the fiscal 2013 full year, net sales increased to $151.1 million from $123.0 million for the corresponding prior year. Gross profit rose to $57.4 million from $38.9 million last year. R&D expenses were $16.3 million, compared with $11.8 million for fiscal 2012. SG&A expenses amounted to $22.4 million, versus $20.2 million for fiscal 2012. Operating income nearly tripled to $18.8 million from $6.9 million a year ago. Net income attributable to Lannett Company increased to $13.3 million, equal to $0.46 per diluted share, which included a favorable litigation settlement of $1.3 million, equal to $0.03 per diluted share. This compares with $3.9 million, or $0.14 per diluted share, for fiscal 2012.
Bedrosian added, "In addition to our record financial performance, we recently completed an important contract extension with Jerome Stevens Pharmaceuticals (JSP). Under the amended agreement, Lannett will continue to be the exclusive distributor of substantially all JSP products for an additional five years, through March 2019. This, combined with 15 product applications currently pending at the FDA and our increased investment in product development, will fuel our positive momentum going forward."
Guidance for Fiscal 2014
Based on Lannett's current outlook, the company provided financial guidance for the fiscal 2014 full year as follows:
-- Net sales in the range of $181 million to $186 million;
-- Gross margin as a percentage of net sales of approximately 43% to 44%;
-- R&D expense in the range of $24 million to $26 million;
-- SG&A expense ranging from $28 million to $30 million;
-- The full year effective tax rate in the range of 34% to 36%; and,
-- Capital expenditures are expected to be in the range of $28 million to
$32 million, which includes the purchase and partial fit-out of a new
facility.
The company noted that its guidance for fiscal 2014 does not include the impact of shares issued in connection with the JSP contract extension. The Company intends to expense the value of the shares issued, which approximates $20 million, in the fiscal 2014 first quarter. The impact of this transaction would also reduce the effective tax rate by approximately two percentage points.
Conference Call Information and Forward-Looking Statements
Later today, the company will host a conference call at 4:30 p.m. ET to review its results of operations for the fiscal 2013 fourth quarter and full year ended June 30, 2013. The conference call will be available to interested parties by dialing 877-261-8992 from the U.S. or Canada, or 847-619-6548 from international locations, passcode 35551980. The conference call will also be available through a live audio Internet broadcast at www.lannett.com. A playback of the call will be archived and accessible at this site for at least three months.
Discussion during the conference call may include forward-looking statements regarding such topics as, but not limited to, the company's financial status and performance, regulatory and operational developments, and any comments the company may make about its future plans or prospects in response to questions from participants on the conference call.
About Lannett Company, Inc.:
Lannett Company, founded in 1942, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of medical indications. For more information, visit the company's website at www.lannett.com.
This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Any such statements, including, but not limited to, achieving the financial metrics stated in the company's guidance for fiscal 2014, expected product approvals, the successful commercialization of products in development and products included in the contract extension with Jerome Stevens Pharmaceuticals, Inc., product applications pending at the FDA and recently approved products, whether expressed or implied, are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated due to a number of factors which include, but are not limited to, the difficulty in predicting the timing or outcome of FDA or other regulatory approvals or actions, the ability to successfully commercialize products upon approval, Lannett's estimated or anticipated future financial results, future inventory levels, future competition or pricing, future levels of operating expenses, product development efforts or performance, and other risk factors discussed in the company's Form 10-K and other documents filed with the Securities and Exchange Commission from time to time. These forward-looking statements represent the company's judgment as of the date of this news release. The company disclaims any intent or obligation to update these forward-looking statements.
LANNETT COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except share and per share data)
Three months ended Fiscal Year ended
June 30, June 30,
-------------------------- ----------------------------
2013 2012 2013 2012
---------- ---------- ---------- ----------
Net sales $ 40,174 $ 35,690 $ 151,054 $ 122,990
Cost of sales 24,971 23,677 93,634 84,043
---------- ---------- ---------- ----------
Gross profit 15,203 12,013 57,420 38,947
---------- ---------- ---------- ----------
Operating
expenses:
Research and
development 3,688 3,994 16,253 11,844
Selling,
general, and
administrative 5,839 5,413 22,410 20,193
---------- ---------- ---------- ----------
Total
operating
expenses 9,527 9,407 38,663 32,037
---------- ---------- ---------- ----------
Operating income 5,676 2,606 18,757 6,910
---------- ---------- ---------- ----------
Other income
(expense):
Foreign
currency gain
(loss) - (56) 3 (62)
Gain on sale of
assets 60 - 111 4
Gain (loss) on
investment
securities (144) (272) 699 (103)
Litigation
settlement - - 1,250 -
Interest and
dividend
income 32 25 116 142
Interest
expense (57) (59) (251) (273)
---------- ---------- ---------- ----------
Total other
income
(expense) (109) (362) 1,928 (292)
---------- ---------- ---------- ----------
Net income before
income tax 5,567 2,244 20,685 6,618
Income tax expense 1,950 812 7,303 2,600
---------- ---------- ---------- ----------
Net income 3,617 1,432 13,382 4,018
Less: Net
income
attributable
to
noncontrolling
interest 54 17 65 70
---------- ---------- ---------- ----------
Net income
attributable to
Lannett Company,
Inc. $ 3,563 $ 1,415 $ 13,317 $ 3,948
========== ========== ========== ==========
Earnings per
common share
attributable to
Lannett Company,
Inc.
Basic $ 0.12 $ 0.05 $ 0.47 $ 0.14
Diluted $ 0.12 $ 0.05 $ 0.46 $ 0.14
Weighted average
common shares
outstanding:
Basic 28,757,885 28,276,573 28,467,598 28,263,335
Diluted 29,778,828 28,384,177 28,942,933 28,408,432
LANNETT COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
June 30, 2013 June 30, 2012
--------------- -----------------
ASSETS
----------------------------------------
Current assets:
Cash and cash equivalents $ 42,689 $ 22,562
Investment securities 8,461 6,667
Accounts receivable, net 26,413 26,586
Inventories, net 32,531 27,064
Income taxes receivable - 2,120
Deferred tax assets 4,874 4,833
Other current assets 1,161 1,023
---------- ----------
Total current assets 116,129 90,855
Property, plant and equipment, net 40,141 37,068
Intangible assets, net 2,547 4,429
Deferred tax assets 8,005 9,069
Other assets 930 1,171
---------- ----------
TOTAL ASSETS $ 167,752 $ 142,592
========== ==========
LIABILITIES
----------------------------------------
Current liabilities:
Accounts payable $ 22,668 $ 17,989
Accrued expenses 2,697 2,931
Accrued payroll and payroll
related 6,910 3,198
Income taxes payable 154 -
Current portion of long-term debt 670 648
---------- ----------
Total current liabilities 33,099 24,766
Long-term debt, less current portion 5,844 6,513
---------- ----------
TOTAL LIABILITIES 38,943 31,279
---------- ----------
Commitment and Contingencies
STOCKHOLDERS' EQUITY
----------------------------------------
Common stock ($0.001 par value,
50,000,000 shares authorized;
29,284,592 and 28,594,437 shares
issued; 28,848,679 and 28,252,192
shares outstanding at June 30, 2013
and 2012, respectively) 29 29
Additional paid-in capital 104,075 99,515
Retained earnings 26,553 13,236
Accumulated other comprehensive loss (47) (63)
Treasury stock (435,913 and 342,245
shares at June 30, 2013 and 2012,
respectively) (2,034) (1,594)
---------- ----------
Total Lannett Company, Inc.
stockholders' equity 128,576 111,123
Noncontrolling interest 233 190
---------- ----------
Total stockholders' equity 128,809 111,313
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 167,752 $ 142,592
========== ==========
CONTACT: Robert Jaffe Co., LLC
Robert Jaffe, 424-288-4098
SOURCE: Lannett Company, Inc.
Copyright Business Wire 2013
Order free Annual Report for Lannett Co., Inc.
Visit http://djnweurope.ar.wilink.com/?ticker=US5160121019 or call +44 (0)208 391 6028
http://online.wsj.com/article/PR-CO-20130910-909771.html
I think the same. Unlike Kodak which was a technology company with similar history, retail industry may be more competitive than motor-vehicle industry- but I think JC Penny has real brand value that will keep them alive and thrive again.
Thank you for these authentic infos on JCP.
http://www.leesburgtoday.com/business/virginia-tourism-posts-record-stats-for/article_3e1c973c-1703-11e3-a4a9-0019bb2963f4.html
This article only talks about Virginia tourism but it must be similar for other states.
hopefully. To all longs..good luck. This is a solid company who makes money just because people want to Yelp. And they're more popular among young people and working professionals.
5 people want to go lunch --but they're undecided..One says...let me yelp and find out which restaurant is good. And 1 or 2 other know what Yelp means. The rest know what is Yelp for the first time.
And then, businesses put stickers at the shop/website (we're on yelp..please find our reviews)..So Yelp also does not have to advertise as much. Word of mouth. This company will become bigger I think. I don't know if they fit with other giants but when the mood is euphoric, we buy anything.
Yelp has no direct competitor. Customers love to Yelp, business owners love to get free business from Yelp. The positive reviews mean a lot to business owners. Independent service providers like -locksmiths, yoga teachers etc etc, they give you discount on request if you agree to provide them with good reviews. Yelp makes money through advertisement from business owners. You can pay 300 dollars a month and have your business profile featured or you can do Yelp deals. Either way, this is win-win-win situation for everyone. Until they have a real competitor (coca-cola vs pepsi)...they'll rule. As the economy is improving, more people want to venture business. Not all businesses survive but they'll use all kinds of methods in the hope to survive - including using Yelp.
Just my observation. I almost bought Yelp when it was selling around $20 but that's a different thing.
I'll buy some if it again goes downhill.
Nonsense. JCP is here to stay. It's going nowhere. Brand is not a joke.
Ok nevermind.
That's a lot of knowledge right there.
New here. Did Ross steal the market of JCP? ROST is 7 times bigger in value than JCP. But JCP has a brand identity and has been around forever. Why did they lose the market? Is this because many people can't afford to buy stuffs like they could before recession- higher gas price? TIA. I went and checked the store and nobody (customers/employees) seem to care about what Wall Street is thinking.
TPCA slowly rising
move on and no investing in the name of hope. These Q's are not for everyone.
my position is very small. cigarette money.
been following you guys for months..
bought few.
Nixon specific news about life out there..
http://austin.ynn.com/content/news/294597/eagle-ford-shale-drilling-a-boom-for-area-business
ya all still around? Damn this stock. I made few bucks back in 09. Good luck to ya'all. 4 damn years and some of the ihub names look familiar.
The other day I met a guy and we talked for a while. He was in SF from Italy for the research on fracking. So, it's a big deal everywhere it seems. Because I thought the guy was here doing paid research on fracking, which has high value. 2000 share transaction dropped 2 dollars so it was funny. I have membership issue which will be fixed soon. Hope you are doing well.
http://www.bizjournals.com/sanantonio/blog/2013/07/texas-now-has-nearly-48-percent-of-the.html
With 848 operating oil-and-gas rigs, Texas now accounts for almost 48 percent of U.S. rigs and nearly a quarter of the world’s rigs, according to the latest count from oilfield-services giant Baker Hughes.
West Texas’ Permian Basin has the largest share of rigs in the Lone Star State — 386, according to Baker Hughes numbers — but South Texas’ booming Eagle Ford Shale ranked second with 237.
McMullen County led the Eagle Ford with 35 operating rigs, and Karnes County boasted 32. LaSalle is the third most rig-populated county in the Eagle Ford with 28.
Feel like start calling you Mr 9 and half bagger for leaving BNCC early.
MR EI and Mr Chevy, with your little touch, the stock has seen some green light. Mr Carroll's eyes finally smiling it seems.
Another one-Oil production up 58 % in Eagle Ford
Oil production in Texas’s Eagle Ford shale formation rose 58 percent in May from the prior year.
The nine fields that make up the majority of Eagle Ford yielded 581,923 barrels of crude a day, according to preliminary data released by the Texas Railroad Commission, which oversees oil and gas drilling in the state. The fields produced 368,770 barrels daily in May 2012.
February output was revised to 574,032 barrels a day from the preliminary report of 530,689, the commission said. Production totals typically increase in subsequent months as the state receives revised, corrected or late reports.
Growing production out of Eagle Ford is helping fuel a renaissance in Texas crude. The state produced a total of 2.45 million barrels a day in April, the highest monthly level since April 1985, according to the Energy Information Administration, the statistical arm of the Energy Department. The EIA hasn’t released May production data for the state.
...
While the Eagle Ford continues to show increased production, there is even greater potential production in the Cline formation in West Texas near the Permian basin. Much of the Eagle Ford production is moving through the port of Corpus Christi because of a lack of pipelines to get it to production facilities near Houston.
http://prairiepundit.blogspot.com/2013/07/oil-production-up-58-in-eagle-ford.html
56Chevy, happy monday. Hope all is well.
Ok, I'm sorry and I don't know shit and I was drunk!
What interests you to ask this question all of a sudden? I'm sorry I didn't get it. Ok fuck it. Let me go to the thread of this anchor bank and see why you may be interested to compose such question. Man or woman...just buy some BNCC stock and you'll be okay by the end of the year. If you don't believe this shit, go check the board. I bet you'll thank me during thanksgiving by buying me some weed gift card, if that comes out to be true.
Q - What suggestion do you have for my 8 year old daughter?
A - We've always tried to stay sane when other people go crazy
http://www.bizjournals.com/sanfrancisco/blog/2013/05/warren-buffett-wells-fargo-berkshire.html?page=all
So, other people do go crazy by not buying stocks when they sell for a fair price.
That may be the hardest thing to do for most people- to actually buy and make money. They can't control themselves.
Putting the SA article in here. This bank is undervalued today.
http://seekingalpha.com/article/1494562-commonwealth-bank-under-the-radar-and-trading-at-4x-forward-core-earnings
Already the stock is making more sense. Thanks to the folks here and especially 56Chevy 10bagger and EI for giving this stock some life. My first pure play.
whats up with this stock.