Attached files
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| 8-K - 8K PRESS RELEASE - Burlington Coat Factory Investments Holdings, Inc. | form8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
COMPANY CONTACT:
Robert L. LaPenta, Jr.
Vice President –Treasurer
(609) 387-7800 ext. 1216
Burlington Coat Factory Announces Second Quarter and Year-To-Date Fiscal 2012 Operating Results
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·
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Comparative store sales increased 2.9% and 1.7% for the three and six months ended July 28, 2012 on top of 4.0% and 2.1% increases in the prior year periods.
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·
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Total Net Sales increased 8.9% and 7.2% during the three and six months ended July 28, 2012 versus last year.
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·
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Adjusted EBITDA increased $7.6 million or 32.9% during the three months ended July 28, 2012 versus last year.
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·
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Comparative store inventory turnover improved 21.3% and comparative store inventory decreased 15.4%.
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BURLINGTON, NEW JERSEY, September 11, 2012 – Burlington Coat Factory Investments Holdings, Inc. and its operating subsidiaries (the Company), a nationwide retailer based in Burlington, New Jersey, today announced its results for the second quarter and year to date ended July 28, 2012.
Second Quarter Fiscal 2012 Operating Results
Comparative store sales increased 2.9% and total net sales increased 8.9% to $864.2 million for the three months ended July 28, 2012 compared with last year.
Adjusted EBITDA for the three months ended July 28, 2012 increased $7.6 million or 32.9% to $30.7 million compared with $23.1 million for the three months ended July 30, 2011. The increase in the Company’s Adjusted EBITDA of $7.6 million was driven by our 8.9% total sales increase and a 100 basis point increase in gross margin.
Year to Date Fiscal 2012 Operating Results
Comparative store sales increased 1.7%. Total net sales increased 7.2% to $1,846.6 million for the six months ended July 28, 2012 compared with last year.
Adjusted EBITDA decreased $2.9 million, or 2.8%, to $100.6 million for the six months ended July 28, 2012 compared with last year. The decrease in the Company’s Adjusted EBITDA was primarily the result of certain investments aimed at improving our customers’ shopping experience which were made during the third and fourth quarters of Fiscal 2011 that have not annualized, partially offset by our total sales increase of 7.2%. Gross margin for the six months ended July 28, 2012 remained consistent with last year’s gross margin of 37.0%.
Tom Kingsbury, President and Chief Executive Officer stated, “We are pleased with our 32.9% increase in Adjusted EBITDA during the quarter, which was driven by our 8.9% overall sales growth and, most importantly, our 2.9% comparative store sales increase. We continue to stay focused on our inventory management which resulted in a 21% faster inventory turnover, reduced aged goods, and more fresh values for our customers.”
Second Quarter Fiscal 2012 Conference Call
The Company will hold a conference call for investors on Wednesday, September 19, 2012 at 10:00 a.m. Eastern Time to discuss the Company’s second quarter Fiscal 2012 operating results. To participate in the call, please dial 1-800-269-4378. This conference call will be recorded and available for replay beginning one hour after the end of the call and will be available through September 20, 2012 at 12:00 p.m. Eastern Time. To access the replay, please dial 1-800-633-8284, then the access number, 21604934. Additionally, a replay of the call will be available for 30 days on the Company’s website (www.burlingtoncoatfactory.com).
About Burlington Coat Factory
Burlington Coat Factory is a nationally recognized retailer of high-quality, branded apparel at everyday low prices. The Company currently serves its customers through its 482 stores in 44 states and Puerto Rico. For more information about Burlington Coat Factory, visit our website at www.burlingtoncoatfactory.com.
Safe Harbor for Forward-Looking and Cautionary Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We do not undertake to publicly update or revise our forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied in such statements will not be realized. The following factors, among others, could cause actual results to differ materially from those expressed or implied in any such forward-looking statements: competition in the retail industry, seasonality of our business, adverse weather conditions, changes in consumer preferences and consumer spending patterns, import risks, inflation, general economic conditions, our ability to implement our strategy, our substantial level of indebtedness and related debt-service obligations, restrictions imposed by covenants in our debt agreements, availability of adequate financing, our dependence on vendors for our merchandise, events affecting the delivery of merchandise to our stores, existence of adverse litigation and risks, availability of desirable locations on suitable terms, and other factors that may be described from time to time in our filings with the Securities and Exchange Commission (SEC). For any of these factors, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended.
Burlington Coat Factory Investments Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(Amounts in thousands)
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Six Months Ended
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Three Months Ended
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||||||||||||
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July 28,
2012
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July 30,
2011
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July 28,
2012
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July 30,
2011
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||||||||||
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REVENUES:
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Net Sales
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$
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1,846,603
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$
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1,722,431
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$
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864,181
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$
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793,349
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|||||
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Other Revenue
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15,093
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14,343
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7,559
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7,095
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Total Revenue
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1,861,696
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1,736,774
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871,740
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800,444
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COSTS AND EXPENSES:
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Cost of Sales (Exclusive of Depreciation and Amortization)
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1,163,434
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1,084,356
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543,549
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507,053
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Selling and Administrative Expenses
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613,327
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565,533
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306,190
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276,705
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Restructuring and Separation Costs
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1,806
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5,190
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328
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5,190
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Depreciation and Amortization
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79,903
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73,987
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39,979
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37,367
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Impairment Charges – Long-Lived Assets
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78
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34
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66
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25
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Other Income, Net
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(4,415
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)
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(5,120
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)
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(2,113
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)
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(2,311
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)
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|||||
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Loss on Extinguishment of Debt
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3,413
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37,764
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3,413
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-
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Interest Expense (Inclusive of Gain/Loss on Interest Rate Cap Agreements)
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57,108
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63,164
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27,629
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32,310
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1,914,654
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1,824,908
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919,041
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856,339
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Loss Before Income Tax Benefit
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(52,958
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)
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(88,134
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)
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(47,301
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)
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(55,895
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)
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Income Tax Benefit
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(17,761
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)
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(34,314
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)
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(16,044
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)
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(23,132
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)
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Net Loss
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$
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(35,197
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)
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$
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(53,820
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)
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$
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(31,257
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)
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$
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(32,763
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)
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EBITDA and Adjusted EBITDA
The following tables calculate the Company’s EBITDA (earnings from operations before interest, taxes and depreciation and amortization) and Adjusted EBITDA, both of which are considered Non-GAAP financial measures. Generally, a Non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Adjusted EBITDA, as defined in the credit agreement governing our Term Loan Facility, starts with consolidated net (loss) income for the period and adds back (i) depreciation, amortization, impairments and other non-cash charges that were deducted in arriving at consolidated net (loss) income, (ii) the (benefit) provision for taxes, (iii) interest expense, (iv) advisory fees, and (v) unusual, non-recurring or extraordinary expenses, losses or charges as reasonably approved by the administrative agent for such period. Adjusted EBITDA is used to calculate the consolidated leverage ratio and the consolidated interest coverage ratio under the Company’s Term Loan Facility. We present Adjusted EBITDA because we believe it is a useful supplemental measure in evaluating the performance of our business and provides greater transparency into our results of operations.
The Company believes that EBITDA and Adjusted EBITDA provide investors helpful information with respect to our operations and financial condition. The Company has provided this additional information to assist the reader in understanding our ability to meet our future debt service, fund our capital expenditures and working capital requirements and to comply with various covenants in each indenture governing our outstanding senior notes, as well as various covenants related to our senior secured credit facilities which are material to our financial condition and financial statements. Other companies in our industry may calculate these non-GAAP measures differently such that our calculation may not be directly comparable. The adjustments to these metrics are not in accordance with regulations adopted by the SEC that apply to periodic reports presented under the Exchange Act. Accordingly, EBITDA and Adjusted EBITDA may be presented differently in filings made with the SEC than as presented in this report or not presented at all.
EBITDA and Adjusted EBITDA are calculated as follows (amounts in thousands):
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Six Months Ended
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Three Months Ended
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July 28,
2012
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July 30,
2011
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July 28,
2012
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July 30,
2011
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Net Loss
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$
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(35,197
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)
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$
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(53,820
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)
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$
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(31,257
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)
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$
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(32,763
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)
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Interest Expense
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57,108
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63,164
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27,629
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32,310
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Income Tax Benefit
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(17,761
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)
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(34,314
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)
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(16,044
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)
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(23,132
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)
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Depreciation and Amortization
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79,903
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73,987
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39,979
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37,367
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EBITDA
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$
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84,053
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$
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49,017
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$
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20,307
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$
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13,782
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Impairment Charges – Long-Lived Assets
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78
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34
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66
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25
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Interest Income
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(46
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)
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(2
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)
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(25
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)
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(37
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)
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Non Cash Straight-Line Rent Expense (a)
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3,812
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4,835
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2,649
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2,326
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Advisory Fees (b)
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2,085
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2,157
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1,051
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1,041
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Stock Compensation Expense ( c)
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1,403
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900
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612
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195
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Amortization of Purchased Lease Rights (d)
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483
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438
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252
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221
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Severance and Restructuring (e)
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1,806
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5,190
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328
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5,190
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Franchise Taxes (f)
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646
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933
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298
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299
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Insurance Reserve (g)
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-
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674
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-
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(502
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)
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Advertising Expense Related to Barter (h)
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1,326
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1,604
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404
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326
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Loss on Disposal of Fixed Assets (i)
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795
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444
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628
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195
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Refinancing Fees (j)
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3,094
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(501
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)
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3,094
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26
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Loss on Extinguishment of Debt (k)
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3,413
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37,764
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3,413
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-
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Litigation Reserves (l)
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(2,324
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)
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-
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(2,393
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)
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-
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Transfer Tax (m)
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-
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(20
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)
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-
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(20
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)
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Adjusted EBITDA
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$
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100,624
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$
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103,467
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$
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30,684
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$
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23,067
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(a)
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Represents the difference between the actual base rent and rent expense calculated in accordance with GAAP (on a straight line basis), in accordance with the credit agreements governing the Term Loan Facility and ABL Line of Credit.
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(b)
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Represents the annual advisory fee of Bain Capital expensed during the fiscal periods, in accordance with the credit agreements governing the Term Loan Facility and ABL Line of Credit.
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(c)
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Represents expenses recorded under ASC Topic No. 718 “Stock Compensation” during the fiscal periods, in accordance with the credit agreements governing the Term Loan Facility and ABL Line of Credit.
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(d)
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Represents amortization of purchased lease rights which are recorded in rent expense within our selling and administrative line item, in accordance with the credit agreements governing the Term Loan Facility and ABL Line of Credit.
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(e)
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Represents a severance and restructuring charge resulting from a reorganization of certain positions within our stores and corporate locations, in accordance with the credit agreements governing the Term Loan and ABL Line of Credit.
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(f)
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Represents franchise taxes paid based on our equity, as approved by the administrative agents for the Term Loan Facility and ABL Line of Credit.
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(g)
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Represents non-cash change in reserves based on estimated general liability, workers’ compensation and health insurance claims as approved by the administrative agents for the Term Loan Facility and ABL Line of Credit.
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(h)
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Represents non-cash advertising expense based on the usage of barter advertising credits obtained as part of a non-cash exchange of inventory, as approved by the administrative agents for the Term Loan Facility and ABL Line of Credit.
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(i)
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Represents the gross non-cash loss recorded on the disposal of certain assets in the ordinary course of business, in accordance with the credit agreements governing the Term Loan Facility and ABL Line of Credit.
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(j)
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Represents refinancing fees that reduce Adjusted EBITDA per the administrative agents for the Term Loan Facility and the ABL Line of Credit.
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(k)
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Represents charges incurred in accordance with Topic No. 470, whereby we incurred a loss on the settlement of the old debt instruments as approved by the administrative agents for the Term Loan Facility and the ABL Line of Credit.
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(l)
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Represents reduction in legal assessments in conjunction with legal sentlements as approved by the administrative agents for the Term Loan Facility and ABL Line of Credit.
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(m)
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Represents one-time transfer taxes incurred on certain leased properties as approved by the administrative agents for the Term Loan Facility and the ABL Line of Credit.
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