Bluestem Group Inc. (BGRP)

[Olmsted]

Bluestem posts 3Q earnings

http://www.bluestem.com/wp-content/uploads/2015/12/Bluestem-Group-Q3-2015-Earnings-Press-Release.pdf

Bluestem Group Inc. Announces Unaudited
Consolidated Third Quarter 2015 Earnings Results
Eden Prairie, MN – December 15, 2015 – Bluestem Group Inc. (OTCMKTS: BGRP) today reported
unaudited consolidated financial results that include its wholly-owned subsidiary, Bluestem Brands, Inc.
and its subsidiaries (“Bluestem”), for the 13-week period ended October 30, 2015 (we refer to the 13-
week periods ended October 30, 2015 and October 31, 2014 in this release as respectively the “third
quarter” of fiscal 2015 and fiscal 2014). Bluestem is a multi-brand, online retailer of a broad selection of
name-brand and private label general merchandise serving low- to middle-income consumers
nationwide.
“Bluestem Group delivered another strong quarter. Net retail sales, including sales from the Orchard
portfolio which was acquired on July 10th of 2015, were $475.0 million, and adjusted EBITDA was $30.9
million. Although net principal losses for the quarter were 130 bps higher than last year, the year-overyear
increase continues to narrow. On the Orchard front, we are making good progress on the
integration; we’re already cross-selling merchandise, we’ve consolidated and renegotiated several
meaningful contracts, and we’ve centralized the appropriate back-office and operations functions in
order to streamline both companies and drive the benefits anticipated in our acquisition model,” said
Steve Nave, Bluestem Group’s Chief Executive Officer.
Third Quarter 2015 Bluestem Group Consolidated Highlights – Includes Bluestem Brands beginning
November 7, 2014, and Orchard Brands beginning July 10, 2015
? Adjusted EBITDA for the third quarter of fiscal 2015 was $30.9 million compared to $8.3 million in
the third quarter of fiscal 2014.
? Net income from continuing operations for the third quarter of fiscal 2015 was $11.2 million
compared to net income from continuing operations of $5.4 million for the third quarter of fiscal
2014. Diluted loss per share from continuing operations was $0.02 for the third quarter of fiscal
2015, compared to diluted earnings per share from continuing operations of $0.06 for the third
quarter of fiscal 2014. Included in the third quarter net income was a $14.1 million non-cash gain
from derivatives in our own equity.
? Net gain on loans held for sale, investments available-for-sale, and equity in income of joint
ventures and partnership was $2.3 million in third quarter of fiscal 2015, which included net
gains of $0.7 million on proceeds of $5.9 million from dispositions of $5.2 million in net assets.
As of the end of the third quarter, the company had $74.9 million in net commercial real estate
assets remaining.
? Cash and cash equivalents were $164.9 million as of October 30, 2015.
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Third Quarter 2015 Bluestem Brands Stand-alone Highlights – Includes Orchard Brands beginning July
10, 2015
? Net sales for the third quarter of fiscal 2015 were $475.0 million, including $234.3 million of net
sales from the Orchard Portfolio, a 123% increase over net sales of $213.3 million for the third
quarter of fiscal 2014.
? Bluestem’s adjusted EBITDA was $27.0 million in the third quarter of fiscal 2015 compared to
adjusted EBITDA of $11.5 million for the third quarter of fiscal 2014.
? Bluestem Legacy Portfolio net sales for the third quarter of fiscal 2015 were $240.7 million, a 13%
increase compared to $213.3 million in the third quarter of fiscal 2014.
? Orchard Portfolio net sales for the third quarter of fiscal 2015 were $234.3 million, a 5% decrease
compared to Orchard’s net sales of $247.8 million for the 13 weeks ended October 25, 2014.
? Fingerhut and Gettington revolving new customer credit accounts were 169 thousand, an 11%
increase over 152 thousand in the third quarter of fiscal 2014.
? FreshStart new customer credit accounts were 55 thousand, an 8% increase over 51 thousand in the
third quarter of fiscal 2014.
? Fingerhut and Gettington active accounts increased to 1.69 million as of the end of the third quarter
of fiscal 2015, a 10% increase over the end of the third quarter of fiscal 2014.
? 30+ day delinquent balances on the revolving portfolio were 17.6% at the end of the third quarter of
fiscal 2015 compared to 17.8% for the same period in 2014.
? Net principal charge-off rate on the revolving portfolio was 18.8% for the third quarter of fiscal 2015
compared to 17.5% for the third quarter of 2014.
? Orchard Portfolio active customers were 8.0 million as of the end of the third quarter of fiscal 2015.
? Orchard’s active customers were 7.9 million as of September 27, 2014.
All financial information included in this release is unaudited. Information for Bluestem Group is
presented on a consolidated basis, including Bluestem Brands Inc., beginning November 7, 2014 and the
Orchard Portfolio beginning July 10, 2015. Consolidated information for Bluestem Group’s whollyowned
subsidiary, Bluestem Brands Inc., is also presented on a stand-alone basis. The acquisitions of
Bluestem Brands and Orchard were accounted for as business combinations.
Adjusted EBITDA is defined in the accompanying financial information of Bluestem Group and Bluestem
Brands. Please see “Bluestem Group Inc. and Bluestem Brands, Inc. Financial Information-Overview
and Basis of Presentation” below and accompanying disclosures for a more detailed explanation of the
foregoing matters, reconciliations to results reported under GAAP and other important information for
investors to consider.