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8-K - BOOT BARN HOLDINGS, INC. 8-K - Boot Barn Holdings, Inc. | a51604793.htm |
Exhibit 99.1
Boot Barn Holdings, Inc. Announces First Quarter Fiscal Year 2018 Financial Results
IRVINE, Calif.--(BUSINESS WIRE)--August 1, 2017--Boot Barn Holdings, Inc. (NYSE:BOOT) today announced its financial results for the first fiscal quarter ended July 1, 2017.
Highlights for the quarter ended July 1, 2017, were as follows:
- Net sales increased 4.5% to $139.4 million.
- Same store sales increased 1.3%.
- Net income was $0.8 million, or $0.03 per diluted share, compared to net income of $0.6 million, or $0.02 per diluted share in the prior-year period.
- The Company opened one new store.
Jim Conroy, Chief Executive Officer, commented, “We are encouraged with our start to fiscal 2018 as sales and earnings per share both exceeded expectations. Same store sales increased 1.3% as low single-digit growth in our physical stores and a strong double-digit gain in our bootbarn.com business more than offset a decline at sheplers.com. We believe our commitment and focus on the store business have helped return us to positive store comps during the quarter, a trend that has carried into the second quarter. Importantly, our stores in oil and gas markets also continued to improve, highlighted by a low single-digit sales increase for our stores in Texas. Meanwhile, we continue to make progress on improving organic search and increasing the site speed at sheplers.com following the technical problems we encountered upon transition of the e-commerce site to a new software platform in February. Despite this temporary setback, we believe an upgraded e-commerce platform was a necessary investment, and will position us well for the next level of omni-channel leadership and contribute to future earnings growth.”
Operating Results for the First Quarter Ended July 1, 2017
- Net sales increased 4.5% to $139.4 million from $133.4 million in the prior-year period. Net sales increased due to the opening of 11 new stores over the past twelve months, a 1.3% increase in same store sales, and sales from the recently acquired Country Outfitter site.
- Gross profit was $41.4 million, or 29.7% of net sales, compared to $40.8 million, or 30.5% of net sales in the prior-year period. Gross profit increased primarily due to increased sales. As a percentage of sales, consolidated gross margin declined as a result of increased buying and occupancy costs.
- Selling, general and administrative expense was $36.5 million, or 26.2% of net sales, compared to $36.3 million, or 27.2% of net sales in the prior-year period. Selling, general and administrative expenses declined as a percentage of sales as a result of lower corporate payroll and overhead costs.
- Income from operations was $4.9 million, or 3.5% of net sales, compared to $4.5 million, or 3.3% of net sales in the prior-year period.
- The Company opened one new store and ended the quarter with 220 stores in 31 states.
- Net income was $0.8 million, or $0.03 per diluted share, compared to $0.6 million, or $0.02 per diluted share in the prior-year period.
Balance Sheet Highlights as of July 1, 2017
- Cash of $7.3 million.
- Average inventory per store decreased 4% compared to June 25, 2016.
- Total net debt of $245.2 million, including $62.8 million outstanding on revolving credit facility.
Fiscal Year 2018 Outlook
For the fiscal year ending March 31, 2018, the Company continues to expect:
- To open 12 new stores, including one store opened in the first quarter.
- Flat to slightly positive same store sales growth.
- Income from operations between $37.8 million and $40.0 million.
- Net income of $14.0 million to $15.4 million.
- Net income per diluted share of $0.52 to $0.57 based on 27.1 million weighted average diluted shares outstanding.
For the fiscal second quarter ending September 30, 2017 the Company expects:
- Same store sales to be roughly in line with first quarter sales.
- Net income per diluted share of $0.00 to $0.02 based on 27.0 million weighted average diluted shares outstanding.
Conference Call Information
A conference call to discuss the financial results for the first quarter of fiscal year 2018 is scheduled for today, August 1, 2017, at 4:30 p.m. ET (1:30 p.m. PT). Investors and analysts interested in participating in the call are invited to dial (877) 407-4018. The conference call will also be available to interested parties through a live webcast at investor.bootbarn.com. Please visit the website and select the “Events and Presentations” link at least 15 minutes prior to the start of the call to register and download any necessary software. A telephone replay of the call will be available until September 1, 2017, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the conference identification number: 13666743. Please note participants must enter the conference identification number in order to access the replay.
About Boot Barn
Boot Barn is the nation’s leading lifestyle retailer of western and work-related footwear, apparel and accessories for men, women and children. The Company offers its loyal customer base a wide selection of work and lifestyle brands. As of the date of this release, Boot Barn operates 219 stores in 31 states, in addition to an e-commerce channel www.bootbarn.com. The Company also operates www.sheplers.com, the nation’s leading pure play online western and work retailer. Sheplers has been part of the western, outdoor, and work lifestyle for over 100 years. Beginning in February 2017, the Company has operated www.countryoutfitter.com, an e-commerce site selling to customers who live a country lifestyle. For more information, call 888-Boot-Barn or visit www.bootbarn.com.
Non-GAAP Financial Measures
The Company presents adjusted EBITDA to help the Company describe its operating and financial performance. Adjusted EBITDA is a non-GAAP financial measure and should not be construed in isolation or as an alternative to net income or cash flow statement data (as presented in the Company’s consolidated financial statements in accordance with generally accepted accounting principles in the United States, or GAAP), or as a better indicator of operating performance or as a measure of liquidity. Adjusted EBITDA, as defined by the Company, may not be comparable to similar non-GAAP financial measures presented by other companies. The Company’s management believes that adjusted EBITDA provides investors with transparency and helps illustrate financial results. See the table at the end of this press release for a reconciliation of adjusted EBITDA to net income.
Forward Looking Statements
This press release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this press release are forward-looking statements. Forward-looking statements refer to our current expectations and projections relating to, by way of example and without limitation, our financial condition, liquidity, profitability, results of operations, margins, plans, objectives, strategies, future performance, business and industry. 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”, “might”, “will”, “could”, “should”, “can have”, “likely”, “outlook” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events, but not all forward-looking statements contain these identifying words. These forward-looking statements are based on assumptions that the Company’s management has made in light of their industry experience and on their perceptions of historical trends, current conditions, expected future developments and other factors they believe are appropriate under the circumstances. As you consider this press release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond the Company’s control) and assumptions. These risks, uncertainties and assumptions include, but are not limited to, the following: decreases in consumer spending due to declines in consumer confidence, local economic conditions or changes in consumer preferences and the Company’s ability to effectively execute on its growth strategy; the failure to maintain and enhance its strong brand image; inability to compete effectively; failure to maintain good relationships with its key suppliers; and inability to improve and expand its exclusive product offerings. The Company discusses the foregoing risks and other risks in greater detail under the heading “Risk factors” in the periodic reports filed by the Company with the Securities and Exchange Commission. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect the Company’s actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. Because of these factors, the Company cautions that you should not place undue reliance on any of these forward-looking statements. New risks and uncertainties arise from time to time, and it is impossible for the Company to predict those events or how they may affect the Company. Further, any forward-looking statement speaks only as of the date on which it is made. Except as required by law, the Company does not intend to update or revise the forward-looking statements in this press release after the date of this press release.
Boot Barn Holdings, Inc. | ||||||||||
Consolidated Balance Sheets | ||||||||||
(In thousands, except per share data) |
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(Unaudited) |
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July 1, | April 1, | |||||||||
2017 | 2017 | |||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 7,305 | $ | 8,035 | ||||||
Accounts receivable, net | 4,144 | 4,354 | ||||||||
Inventories | 192,343 | 189,096 | ||||||||
Prepaid expenses and other current assets | 14,394 | 22,818 | ||||||||
Total current assets | 218,186 | 224,303 | ||||||||
Property and equipment, net | 84,389 | 82,711 | ||||||||
Goodwill | 193,095 | 193,095 | ||||||||
Intangible assets, net | 64,149 | 64,511 | ||||||||
Other assets | 977 | 961 | ||||||||
Total assets | $ | 560,796 | $ | 565,581 | ||||||
Liabilities and stockholders’ equity | ||||||||||
Current liabilities: | ||||||||||
Line of credit | $ | 62,819 | $ | 33,274 | ||||||
Accounts payable | 60,745 | 77,482 | ||||||||
Accrued expenses and other current liabilities | 35,887 | 35,983 | ||||||||
Current portion of notes payable, net | — | 1,062 | ||||||||
Total current liabilities | 159,451 | 147,801 | ||||||||
Deferred taxes | 11,735 | 20,961 | ||||||||
Long-term portion of notes payable, net | 182,419 | 191,517 | ||||||||
Capital lease obligation | 7,703 | 7,825 | ||||||||
Other liabilities | 18,305 | 17,568 | ||||||||
Total liabilities | 379,613 | 385,672 | ||||||||
Stockholders’ equity: | ||||||||||
Common stock, $0.0001 par value; July 1, 2017 - 100,000 shares authorized, 26,618 shares issued; April 1, 2017 - 100,000 shares authorized, 26,575 shares issued | 3 | 3 | ||||||||
Preferred stock, $0.0001 par value; 10,000 shares authorized, no shares issued or outstanding | — | — | ||||||||
Additional paid-in capital | 142,759 | 142,184 | ||||||||
Retained earnings | 38,568 | 37,791 | ||||||||
Less: Common stock held in treasury, at cost, 26 and 14 shares at July 1, 2017 and April 1, 2017, respectively | (147 | ) | (69 | ) | ||||||
Total stockholders’ equity | 181,183 | 179,909 | ||||||||
Total liabilities and stockholders’ equity | $ | 560,796 | $ | 565,581 | ||||||
Boot Barn Holdings, Inc. | ||||||||
Consolidated Statements of Operations | ||||||||
(In thousands, except per share data) |
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(Unaudited) |
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Thirteen Weeks Ended | ||||||||
July 1, | June 25, | |||||||
2017 | 2016 | |||||||
Net sales | $ | 139,379 | $ | 133,414 | ||||
Cost of goods sold | 97,987 | 92,664 | ||||||
Gross profit | 41,392 | 40,750 | ||||||
Selling, general and administrative expenses | 36,451 | 36,300 | ||||||
Income from operations | 4,941 | 4,450 | ||||||
Interest expense, net | 3,658 | 3,560 | ||||||
Income before income taxes | 1,283 | 890 | ||||||
Income tax expense | 506 | 266 | ||||||
Net income | $ | 777 | $ | 624 | ||||
Earnings per share: | ||||||||
Basic shares | $ | 0.03 | $ | 0.02 | ||||
Diluted shares | $ | 0.03 | $ | 0.02 | ||||
Weighted average shares outstanding: | ||||||||
Basic shares | 26,559 | 26,373 | ||||||
Diluted shares | 26,969 | 26,616 | ||||||
Boot Barn Holdings, Inc. | ||||||||||
Consolidated Statements of Cash Flows | ||||||||||
(In thousands) |
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(Unaudited) |
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Thirteen Weeks Ended | ||||||||||
July 1, | June 25, | |||||||||
2017 | 2016 | |||||||||
Cash flows from operating activities | ||||||||||
Net income | $ | 777 | $ | 624 | ||||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||||
Depreciation | 3,751 | 3,518 | ||||||||
Stock-based compensation | 575 | 756 | ||||||||
Amortization of intangible assets | 362 | 561 | ||||||||
Amortization and write-off of debt issuance fees and debt discount | 289 | 281 | ||||||||
Loss on disposal of property and equipment | 14 | 59 | ||||||||
Accretion of above market leases | — | (14 | ) | |||||||
Deferred taxes | 564 | (141 | ) | |||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable, net | 210 | 671 | ||||||||
Inventories | (3,247 | ) | (2,890 | ) | ||||||
Prepaid expenses and other current assets | (1,296 | ) | (1,201 | ) | ||||||
Other assets | (16 | ) | 1,040 | |||||||
Accounts payable | (16,922 | ) | (7,815 | ) | ||||||
Accrued expenses and other current liabilities | (113 | ) | (3,666 | ) | ||||||
Other liabilities | 737 | 567 | ||||||||
Net cash used in operating activities | $ | (14,315 | ) | $ | (7,650 | ) | ||||
Cash flows from investing activities | ||||||||||
Purchases of property and equipment | $ | (5,258 | ) | $ | (4,721 | ) | ||||
Net cash used in investing activities | $ | (5,258 | ) | $ | (4,721 | ) | ||||
Cash flows from financing activities | ||||||||||
Borrowings on line of credit - net | $ | 29,545 | $ | 11,375 | ||||||
Repayments on debt and capital lease obligations | (10,105 | ) | (603 | ) | ||||||
Debt issuance fees | (519 | ) | — | |||||||
Tax withholding payments for net share settlement | (78 | ) | (25 | ) | ||||||
Proceeds from the exercise of stock options | — | 268 | ||||||||
Net cash provided by financing activities | $ | 18,843 | $ | 11,015 | ||||||
Net decrease in cash and cash equivalents | (730 | ) | (1,356 | ) | ||||||
Cash and cash equivalents, beginning of period | 8,035 | 7,195 | ||||||||
Cash and cash equivalents, end of period | $ | 7,305 | $ | 5,839 | ||||||
Supplemental disclosures of cash flow information: | ||||||||||
Cash paid for income taxes | $ | 308 | $ | 399 | ||||||
Cash paid for interest | $ | 3,384 | $ | 3,306 | ||||||
Supplemental disclosure of non-cash activities: | ||||||||||
Unpaid purchases of property and equipment | $ | 2,086 | $ | 1,253 | ||||||
Boot Barn Holdings, Inc. |
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Store Count |
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Fiscal Year Ended | Fiscal Year Ended | Quarter Ended | Quarter Ended | Quarter Ended | Quarter Ended | Quarter Ended | |||||||||||||
March 28, | March 26, | June 25, | September 24, | December 24, | April 1, | July 1, | |||||||||||||
2015 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | |||||||||||||
Store Count (BOP) | 152 | 169 | 208 | 210 | 212 | 219 | 219 | ||||||||||||
Opened/Acquired | 18 | 47 | 2 | 2 | 6 | 2 | 1 | ||||||||||||
Relocated | — | — | — | — | 1 | (1 | ) | — | |||||||||||
Closed Boot Barn Stores | (1 | ) | (2 | ) | — | — | — | (1 | ) | — | |||||||||
Closed Sheplers Stores | — | (6 | ) | — | — | — | — | — | |||||||||||
Store Count (EOP) | 169 | 208 | 210 | 212 | 219 | 219 | 220 | ||||||||||||
Debt Covenant EBITDA Reconciliation | |||||||||||||||||||
(Unaudited) |
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Thirteen Weeks Ended | Fourteen Weeks Ended | Thirteen Weeks Ended | |||||||||||||||||
July 1, |
April 1, |
December 24, |
September 24, |
June 25, |
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Boot Barn's Net income | $ | 777 | $ | 2,588 | $ | 10,507 | $ | 479 | $ | 624 | |||||||||
Income tax expense | 506 | 1,624 | 6,719 | 313 | 266 | ||||||||||||||
Interest expense, net | 3,658 | 3,851 | 3,637 | 3,651 | 3,560 | ||||||||||||||
Depreciation and intangible asset amortization | 4,113 | 4,407 | 4,207 | 4,017 | 4,079 | ||||||||||||||
Boot Barn's EBITDA | $ | 9,054 | $ | 12,470 | $ | 25,070 | $ | 8,460 | $ | 8,529 | |||||||||
Non-cash stock-based compensation (a) | $ | 575 | $ | 763 | $ | 754 | $ | 750 | $ | 756 | |||||||||
Non-cash accrual for future award redemptions (b) | 5 | (489 | ) | 399 | 133 | 42 | |||||||||||||
Loss/(gain) on disposal of assets and contract termination costs (c) | 14 | 204 | (22 | ) | 126 | 59 | |||||||||||||
Store impairment charge (d) | - | 1,164 | - | - | - | ||||||||||||||
Boot Barn's Adjusted EBITDA | $ | 9,648 | $ | 14,112 | $ | 26,201 | $ | 9,469 | $ | 9,386 | |||||||||
Additional adjustments1 | 628 | 156 | 778 | 891 | 1,345 | ||||||||||||||
Consolidated EBITDA per Loan Agreements | $ | 10,276 | $ | 14,268 | $ | 26,979 | $ | 10,360 | $ | 10,731 |
____________________ |
1Adjustments to Boot Barn's Adjusted EBITDA as stipulated in the 2015 Golub Term Loan and June 2015 Wells Fargo Revolver include pre-opening costs, franchise and state taxes, and other miscellaneous adjustments. |
(a) |
Represents non-cash compensation expenses related to stock options, restricted stock awards and restricted stock units granted to certain of our employees and directors. |
|
(b) |
Represents the non-cash accrual for future award redemptions in connection with our customer loyalty program. |
|
(c) |
Represents loss/(gain) on disposal of assets and contract termination costs from store closures and unused office and warehouse space. |
|
(d) |
Represents the store impairment charge recorded at three stores in the fourteen weeks ended April 1, 2017 in order to reduce the carrying amount of the assets to their estimated fair values. |
CONTACT:
Investor:
ICR, Inc.
Brendon Frey, 203-682-8216
BootBarnIR@icrinc.com
or
Media:
Boot Barn Holdings, Inc.
Jim Watkins, 949-453-4400 ext. 579
Vice President, Investor Relations
BootBarnIRMedia@bootbarn.com