COPPELL, Texas--(BUSINESS WIRE)--
The Container Store Group, Inc. (NYSE:TCS) (the “Company”), today
announced financial results for the first quarter ended May 31, 2014.
“Net sales were $173.4 million in first quarter, an increase of 8.6%
over first quarter of fiscal 2013. We thought our sluggish sales were
all because of weather and calendar shifts that began last November and
continued into the spring, but now we’ve come to realize it’s more than
weather and calendar. Consistent with so many of our fellow retailers,
we are experiencing a retail ‘funk’. Our comparable store sales declined
0.8%, in the first quarter.” said Kip Tindell, Chairman and Chief
Executive Officer. “It is important to remember that historically first
quarter at The Container Store is by far our lowest from both a sales
and profitability standpoint. Simply put, it represents less than zero
percent of our annual earnings. So we’re disappointed with the first
quarter, but the first quarter has very little impact on our full year
earnings results."
Tindell added, “We are confident that customer enthusiasm for our brand,
and employee morale are at all time highs, yet we continue to experience
slight traffic declines in this surprisingly tepid retail environment.
While consumers are buying homes and automobiles and even high ticket
furniture, most segments of retail are, like us, seeing more challenging
sales than we had hoped early in 2014 – so we’re not alone in this. We
believe we’ll have a slight improvement in the second and third
quarters. But we are very much looking forward to the fourth quarter as
we comp against the worst weather we had in our history last year and
believe we will see marked improvement in our sales trends. Historically
over 60% of our profitability has been derived in the fourth quarter, so
from a profitability perspective fourth quarter is very important for
us.”
“We were pleased that during our first quarter, in order to preserve our
brand and to protect gross margin, we didn't accelerate our promotional
levels in what continues to be an incredibly promotional consumer
environment. And we continue to be proud of our average ticket growth
and the service that our wonderful employees provide our customers every
day. We’re adept at offsetting occasional traffic declines with average
ticket growth – last year our comparable average ticket increased a
robust 5.6%, and the previous year we increased comparable average
ticket 4.2%. All of our employees are so proud of our ability to do
this. We have crafted and continue to craft ways to energize traffic,
increase customer engagement, maximize sales and drive profitability
with things like our new loyalty program POP!, our ATHOME personalized
organization service and a thrilling new luxury, custom, solid closet
collection. We believe these initiatives, along with our everyday focus
on solutions-based selling, will help us turn a slight traffic decline
into slight traffic increases.”
The Container Store announced that it will launch a brand new, exclusive
custom solid drawer and shelving closet solution this year. The new
product will be a higher end offering than its current assortment and
will provide customers with custom-built solutions crafted from the
highest quality materials and with a variety of choices in wood grain
finishes and extras including lighting and storage options for shoes,
jewelry and handbags. The new closet collection will be custom and made
to order and will include the service of the retailer’s in-store expert
salespeople, ATHOME organizers, and its installation services.
“Our customers have been asking for an even more luxurious closet
offering as they think about their dream closet, which has become an
area of the home that they want to be a well-appointed, beautifully
designed reflection of their style, while remaining extremely functional
and efficient. Many customers want a more custom-built look. And this
new collection is just that – a quality, custom closet with all of the
accoutrements and customer service you’d expect from us,” said Tindell.
“We are very optimistic that this collection and service will appeal to
our loyal customers, but also attract new customers to our brand. We
expect that the average ticket on our new closet collection will be even
higher than the over $2,000 current average ticket we have experienced
with our ATHOME service, and therefore believe it will contribute very
meaningfully to comparable store sales increases in the longer term. We
believe this could be a game changer for us.”
The Container Store’s new solid drawer and shelving closet collection
will pilot late this fall in its seven stores in the Dallas/Fort Worth
Metroplex with planned rollout to the rest of its stores beginning in
the spring of 2015.
Additionally, The Container Store has expanded the rollout of its ATHOME
personalized in-home organization and design service beyond the Texas
market, having successfully just launched the service in its Manhattan
locations. The Company plans to bring this service to additional markets
such as Los Angeles, Chicago and the Washington-DC market by the end of
this calendar year, with rollout to the rest of its stores in 2015. The
Company noted that the average ticket for its ATHOME service is in
excess of $2,000 compared to its store average ticket of approximately
$60.
As of tomorrow, the Company will have completed the launch of its new
customer engagement program POP! (Perfectly Organized Perks) in all of
its stores. In addition to being able to sign up at any store location,
customers across the country can also become a “POP! Star” by enrolling
online at containerstore.com.
The Container Store opened three new stores in the first quarter in King
of Prussia, PA, a second store in the Seattle area and its first Rhode
Island store located in the Providence area. The Company today also
announced the location for an additional store in the Phoenix, AZ,
market that will contribute to its 12% minimum square footage growth in
fiscal 2014.
“Last quarter we announced we're accelerating our annual square footage
growth from 10% to 12% and we’re excited we’re able to add an eighth new
store to achieve that 12% minimum square footage growth even in this
fiscal year. Our average first year, four wall Adjusted EBITDA margin on
new stores has averaged 23% and our invested capital has seen a payback
of about 2 ½ years,” Tindell said.
Remaining Store Openings for Fiscal 2014
-
Relocation of Oakbrook, IL (Opened June 28th)
-
Los Angeles, CA (Farmer’s Market at the Grove) (Opening August 9th)
-
Salt Lake City area in Murray, UT (Fashion Place Mall) (Opening October
18th)
-
Chicago, IL (South Loop area at the Roosevelt Collection) (Opening November
15th)
-
Phoenix area in Glendale, AZ (Arrowhead Towne Center) (Opening January
31st, 2015)
First Quarter 2014 Results
For the first quarter ended May 31, 2014, on a consolidated basis:
-
Net sales were $173.4 million, up 8.6% as compared to the first
quarter of fiscal 2013. Net sales in The Container Store retail
business were $149.7 million, up 8.9% as compared to the first quarter
of fiscal 2013. The increase in net sales was driven by new store
sales and the extension of Our Annual elfa® Sale in the
fourth quarter of fiscal 2013, which led to an increase in merchandise
delivered to customers during the first quarter of fiscal 2014 as
compared to the first quarter of fiscal 2013. This more than offset
the comparable store sales operating measure decline of 0.8%. Elfa
third party sales increased 7.0% during the first quarter of fiscal
2014, as compared to the first quarter of fiscal 2013.
-
Gross margin was 58.1%, a decrease of 30 basis points compared to the
first quarter of fiscal 2013. This decline in gross margin was
primarily due to an increase in discounted merchandise delivered to
customers in the first quarter of fiscal 2014 due to the extension of
Our Annual elfa® Sale in the fourth quarter of fiscal 2013
and, to a lesser extent, the appreciation of the Swedish krona to the
US dollar. These declines were partially offset by improved margins at
Elfa primarily due to improved leverage of fixed costs during the
quarter.
-
Selling, general and administrative expenses (“SG&A”) increased by
9.3% to $91.2 million from $83.4 million in the first quarter of
fiscal 2013. SG&A as a percentage of net sales increased 30 basis
points primarily due to ongoing costs incurred related to becoming a
public company, as well as preparation for future growth and strategic
initiatives.
-
The Company ended the quarter with 66 stores in 24 states and the
District of Columbia. The Company opened three new stores in the first
quarter of fiscal 2014, as compared to two new stores in the first
quarter of fiscal 2013.
-
Net interest expense decreased to $4.3 million from $5.6 million in
the first quarter of fiscal 2013.
-
The effective tax rate for the first quarter of fiscal 2014 was 35.0%,
as compared to 29.6% in the first quarter of fiscal 2013. The increase
in the effective tax rate is primarily due to a shift in the mix of
projected domestic and foreign earnings, as well as fluctuations in
the valuation allowance recorded against domestic earnings in the
first quarter of fiscal 2013. In our calculation of adjusted net loss,
the effective tax rate for the first quarter of fiscal 2014 was 35.0%,
as compared to 40.7% in the first quarter of fiscal 2013.
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•
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U.S. generally accepted accounting principles (“GAAP”) net loss
was $3.6 million in the first quarter of fiscal 2014 compared to
$4.8 million in the first quarter of fiscal 2013. After
considering distributions accumulated to preferred shareholders of
zero and $22.3 million in the first quarters of fiscal 2014 and
fiscal 2013, respectively, net loss per diluted common share was
$0.07 in the first quarter of fiscal 2014 compared to $9.25 in the
first quarter of fiscal 2013.
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•
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Adjusted net loss was $3.6 million or $0.07 per adjusted diluted
common share compared to $3.2 million or $0.07 per adjusted
diluted common share for the first quarter of fiscal 2013, which
excludes certain items that we do not consider in the evaluation
of ongoing operating performance, including IPO-related expenses,
certain restructuring charges, and loss on extinguishment of debt
(see GAAP/Non-GAAP reconciliation table at the end of this
release).
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-
Adjusted EBITDA was $10.2 million compared to $10.6 million in the
first quarter of fiscal 2013 (see GAAP/Non-GAAP reconciliation table).
Balance sheet highlights as of May 31, 2014:
-
Cash: $8.6 million
-
Total debt: $361.6 million
-
Total liquidity (cash plus availability on revolving credit facilities
of $60.2 million): $68.8 million
Outlook
The Company announced the opening of an additional eighth store location
for fiscal 2014, in the Phoenix, AZ market on January 31, 2015 to
achieve its targeted 12% minimum square footage growth. This additional
store will have a limited timeframe to generate sales in the fiscal
year, but will record all grand opening expenses in fiscal 2014 and as
such is expected to reduce current year net income per diluted common
share by approximately $0.02. The Company is updating annual fiscal 2014
guidance as follows:
Full fiscal 2014 consolidated net sales are expected to be $820 to $830
million based on announced store openings and an increase in comparable
store sales of 1.5% - 2.5%. Net income is expected to be $0.49 to $0.54
per diluted common share based on estimated diluted common shares
outstanding of 49 million. This assumes a tax rate of approximately
38.8% for the full year. Adjusted EBITDA is expected to be $98 to $102
million.
The Company also expects comparable store sales to be flat to slightly
positive in the second and third quarters of fiscal 2014, and to
increase in the mid single digit range in the fourth quarter of fiscal
2014.
Conference Call Information
A conference call to discuss first quarter fiscal 2014 financial results
is scheduled for today, July 8, 2014, at 4:30 PM Eastern Time. Investors
and analysts interested in participating in the call are invited to dial
(877) 407-3982 (international callers please dial (201) 493-6780)
approximately 10 minutes prior to the start of the call. A live audio
webcast of the conference call will be available online at www.containerstore.com
in the investor relations section of the website.
A taped replay of the conference call will be available within two hours
of the conclusion of the call and can be accessed both online and by
dialing (877) 870-5176 (international replay number is (858) 384-5517.
The pin number to access the telephone replay is 13585258. The replay
will be available through July 15, 2014 at 11:59 pm. Eastern Time.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. All
statements contained in this press release that do not relate to matters
of historical fact should be considered forward-looking statements,
including statements regarding: our beliefs about customer enthusiasm
for our brand and employee morale, anticipated financial performance and
liquidity, initiatives and solutions we believe provide significant
opportunities for our business, expectations regarding the expansion of
the personalized in-home organization and design service, expectations
regarding the new custom solid closet collection, expectations for new
store openings, and expectations regarding our ability to meet annual
square footage growth guidance.
These forward-looking statements are based on management’s current
expectations. These statements are neither promises nor guarantees, but
involve known and unknown risks, uncertainties and other important
factors that may cause our actual results, performance or achievements
to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements,
including, but not limited to, the following: overall decline in the
health of the economy, consumer spending, and the housing market; our
inability to manage costs and risks relating to new store openings; our
inability to source and market new products to meet consumer
preferences; our failure to achieve or maintain profitability; our
dependence on a single distribution center for all of our stores; our
vulnerability to natural disasters and other unexpected events; our
reliance upon independent third party transportation providers; our
inability to protect our brand; our failure to successfully anticipate
consumer preferences and demand; our inability to manage our growth;
inability to locate available retail store sites on terms acceptable to
us; our inability to maintain sufficient levels of cash flow to meet
growth expectations; disruptions in the global financial markets leading
to difficulty in borrowing sufficient amounts of capital to finance the
carrying costs of inventory to pay for capital expenditures and
operating costs; fluctuations in currency exchange rates; our inability
to effectively manage our online sales; competition from other stores
and internet based competition; our inability to obtain merchandise on a
timely basis at competitive prices as a result of changes in vendor
relationships; vendors may sell similar or identical products to our
competitors; our reliance on key executive management; our inability to
find, train and retain key personnel; labor relations difficulties;
increases in health care costs and labor costs; our dependence on
foreign imports for our merchandise; violations of the U.S. Foreign
Corrupt Practices Act and similar worldwide anti bribery and anti
kickback laws; and our indebtedness may restrict our current and future
operations.
These and other important factors discussed under the caption “Risk
Factors” in our Annual Report on Form 10-K filed with the Securities and
Exchange Commission, or SEC, on May 28, 2014, and our other reports
filed with the SEC could cause actual results to differ materially from
those indicated by the forward-looking statements made in this press
release. Any such forward-looking statements represent management’s
estimates as of the date of this press release. While we may elect to
update such forward-looking statements at some point in the future, we
disclaim any obligation to do so, even if subsequent events cause our
views to change. These forward-looking statements should not be relied
upon as representing our views as of any date subsequent to the date of
this press release.
About The Container Store
The Container Store is the nation’s leading retailer of storage and
organization products and the only retailer solely devoted to the
storage and organization category of retailing. The Company originated
the concept of storage and organization retailing when it opened its
first store in 1978. Today, the retailer has 66 store locations
nationwide that each average 25,000 square feet. The Container Store has
over 10,000 products to help customers save space and, ultimately, save
them time. As the pace of modern life accelerates and being organized is
not a luxury anymore but a necessity, The Container Store is devoted to
making customers more productive, relaxed and happier by selling
customized, complete solutions. Since its inception, the retailer has
nurtured an employee-first culture and couples its one-of-kind product
collection with a high level of customer service delivered by its highly
trained organization experts. The Company has been named to FORTUNE
magazine’s 100 Best Companies To Work For® — 15 years in a row. Visit www.containerstore.com
for more information about store locations, the product collection and
services offered. To find out more about The Container Store’s unique
culture, Foundation PrinciplesTM and devotion to Conscious
Capitalism®, visit the retailer’s blog at www.whatwestandfor.com.
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The Container Store Group, Inc.
Consolidated balance sheets (unaudited)
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(In thousands, except share and per share amounts)
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May 31,
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March 1,
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June 1,
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2014
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2014
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2013
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Assets
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Current assets:
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Cash
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$
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8,610
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$
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18,046
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$
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13,703
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Accounts receivable, net
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29,267
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|
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32,273
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|
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23,087
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Inventory
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94,626
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85,595
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91,150
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Prepaid expenses
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7,953
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14,121
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6,587
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Forward contracts
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-
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-
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329
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Deferred tax assets, net
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3,967
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3,967
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855
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Other current assets
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11,558
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10,405
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10,515
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Total current assets
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155,981
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164,407
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146,226
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Noncurrent assets:
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Property and equipment, net
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164,779
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161,431
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141,402
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Goodwill
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202,815
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202,815
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202,815
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Trade names
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240,021
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242,290
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240,528
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Deferred financing costs, net
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9,210
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9,699
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|
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10,633
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Noncurrent deferred tax assets, net
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1,179
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1,323
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1,667
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Other assets
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1,211
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1,184
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881
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Total noncurrent assets
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619,215
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618,742
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597,926
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Total assets
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$
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775,196
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$
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783,149
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$
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744,152
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Liabilities and shareholders’ equity
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Current liabilities:
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Accounts payable
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$
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47,846
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$
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49,282
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$
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47,291
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Accrued liabilities
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54,420
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60,496
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47,846
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Revolving lines of credit
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23,529
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16,033
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18,178
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Current portion of long-term debt
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5,741
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7,527
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9,769
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Income taxes payable
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640
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3,474
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379
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Deferred tax liabilities, net
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29
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29
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43
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Total current liabilities
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132,205
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136,841
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123,506
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Noncurrent liabilities:
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Long-term debt
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332,306
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327,724
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368,102
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Noncurrent deferred tax liabilities, net
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82,638
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85,442
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86,620
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Deferred rent and other long-term liabilities
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36,354
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35,956
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30,116
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Total noncurrent liabilities
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451,298
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449,122
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484,838
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Total liabilities
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583,503
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585,963
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608,344
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Shareholders’ equity:
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Common stock, $0.01 par value, 250,000,000 shares authorized,
47,974,829 shares issued and outstanding at May 31, 2014;
250,000,000 shares authorized, 47,941,180 shares issued and
outstanding at March 1, 2014; 3,528,280 shares authorized, 2,942,326
shares issued and 2,929,466 shares outstanding at June 1, 2013
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480
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479
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29
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Preferred stock, $0.01 par value:
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Senior cumulative; no shares authorized, issued or outstanding at
May 31, 2014 and March 1, 2014; 250,000 shares authorized, 202,480
shares issued and 202,196 shares outstanding at June 1, 2013
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-
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-
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2
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Junior cumulative; no shares authorized, issued or outstanding at
May 31, 2014 and March 1, 2014; 250,000 shares authorized, 202,480
shares issued and 202,196 shares outstanding at June 1, 2013
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-
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-
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2
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Additional paid-in capital
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854,174
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853,295
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455,346
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Accumulated other comprehensive (loss) income
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(1,111
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)
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1,683
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(158
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)
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Retained deficit
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(661,850
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)
|
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(658,271
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)
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(318,626
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)
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Treasury stock, no shares at May 31, 2014 and March 1, 2014;13,426
shares at June 1, 2013
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-
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-
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(787
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)
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Total shareholders’ equity
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191,693
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|
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197,186
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|
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|
135,808
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Total liabilities and shareholders’ equity
|
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|
$
|
775,196
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|
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$
|
783,149
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$
|
744,152
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The Container Store Group, Inc.
Consolidated statements of operations (unaudited)
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(In thousands, except share and
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per share amounts)
|
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Thirteen Weeks Ended
|
|
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May 31, 2014
|
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June 1, 2013
|
Net sales
|
|
|
$
|
173,438
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$
|
159,645
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Cost of sales (excluding depreciation and amortization)
|
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|
72,586
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|
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|
66,441
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Gross profit
|
|
|
|
100,852
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|
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|
93,204
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Selling, general, and administrative expenses (excluding
depreciation and amortization)
|
|
|
|
91,189
|
|
|
|
|
83,449
|
|
Pre-opening costs
|
|
|
|
2,987
|
|
|
|
|
1,962
|
|
Depreciation and amortization
|
|
|
|
7,256
|
|
|
|
|
7,470
|
|
Restructuring charges
|
|
|
|
-
|
|
|
|
|
241
|
|
Other expenses
|
|
|
|
525
|
|
|
|
|
219
|
|
Loss on disposal of assets
|
|
|
|
100
|
|
|
|
|
22
|
|
Loss from operations
|
|
|
|
(1,205
|
)
|
|
|
|
(159
|
)
|
Interest expense, net
|
|
|
|
4,302
|
|
|
|
|
5,555
|
|
Loss on extinguishment of debt
|
|
|
|
-
|
|
|
|
|
1,101
|
|
Loss before taxes
|
|
|
|
(5,507
|
)
|
|
|
|
(6,815
|
)
|
Benefit for income taxes
|
|
|
|
(1,928
|
)
|
|
|
|
(2,020
|
)
|
Net loss
|
|
|
$
|
(3,579
|
)
|
|
|
$
|
(4,795
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Less: Distributions accumulated to preferred shareholders
|
|
|
|
-
|
|
|
|
|
(22,299
|
)
|
Net loss available to common shareholders
|
|
|
$
|
(3,579
|
)
|
|
|
$
|
(27,094
|
)
|
Basic and diluted net loss per common share
|
|
|
$
|
(0.07
|
)
|
|
|
$
|
(9.25
|
)
|
Weighted-average common shares outstanding - basic and diluted
|
|
|
|
47,946,616
|
|
|
|
|
2,929,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Container Store Group, Inc.
Consolidated statements of cash
flows (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
|
Thirteen Weeks Ended
|
(In thousands)
|
|
|
May 31, 2014
|
|
|
June 1, 2013
|
Operating activities
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(3,579
|
)
|
|
|
$
|
(4,795
|
)
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
7,256
|
|
|
|
|
7,470
|
|
Stock-based compensation
|
|
|
|
277
|
|
|
|
|
99
|
|
Excess tax benefit from stock-based compensation
|
|
|
|
(15
|
)
|
|
|
|
-
|
|
Loss on disposal of property and equipment
|
|
|
|
100
|
|
|
|
|
22
|
|
Deferred tax benefit
|
|
|
|
(2,106
|
)
|
|
|
|
(1,791
|
)
|
Noncash refinancing expense
|
|
|
|
-
|
|
|
|
|
723
|
|
Noncash interest
|
|
|
|
489
|
|
|
|
|
434
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
2,558
|
|
|
|
|
2,090
|
|
Inventory
|
|
|
|
(9,728
|
)
|
|
|
|
(9,523
|
)
|
Prepaid expenses and other assets
|
|
|
|
5,369
|
|
|
|
|
5,076
|
|
Accounts payable and accrued liabilities
|
|
|
|
(5,489
|
)
|
|
|
|
(4,205
|
)
|
Income taxes payable
|
|
|
|
(3,340
|
)
|
|
|
|
(3,128
|
)
|
Other noncurrent liabilities
|
|
|
|
445
|
|
|
|
|
255
|
|
Net cash used in operating activities
|
|
|
|
(7,763
|
)
|
|
|
|
(7,273
|
)
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
Additions to property and equipment
|
|
|
|
(13,418
|
)
|
|
|
|
(9,450
|
)
|
Proceeds from sale of property and equipment
|
|
|
|
-
|
|
|
|
|
388
|
|
Net cash used in investing activities
|
|
|
|
(13,418
|
)
|
|
|
|
(9,062
|
)
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
Borrowings on revolving lines of credit
|
|
|
|
18,334
|
|
|
|
|
16,334
|
|
Payments on revolving lines of credit
|
|
|
|
(9,961
|
)
|
|
|
|
(11,205
|
)
|
Borrowings on long-term debt
|
|
|
|
8,000
|
|
|
|
|
95,000
|
|
Payments on long-term debt
|
|
|
|
(5,172
|
)
|
|
|
|
(2,203
|
)
|
Payment of debt issuance costs
|
|
|
|
-
|
|
|
|
|
(3,046
|
)
|
Proceeds from the exercise of stock options
|
|
|
|
587
|
|
|
|
|
-
|
|
Excess tax benefit from stock-based compensation
|
|
|
|
15
|
|
|
|
|
-
|
|
Payment of distributions to preferred shareholders
|
|
|
|
-
|
|
|
|
|
(90,000
|
)
|
Net cash provided by financing activities
|
|
|
|
11,803
|
|
|
|
|
4,880
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
|
(58
|
)
|
|
|
|
(193
|
)
|
Net decrease in cash
|
|
|
|
(9,436
|
)
|
|
|
|
(11,648
|
)
|
Cash at beginning of period
|
|
|
|
18,046
|
|
|
|
|
25,351
|
|
Cash at end of period
|
|
|
$
|
8,610
|
|
|
|
$
|
13,703
|
|
|
|
|
|
|
|
|
|
|
|
|
The Container Store Group, Inc. Supplemental Information -
Reconciliation of GAAP to Non-GAAP Financial Measures
(In
thousands, except share and per share amounts)
(unaudited)
The table below reconciles the non-GAAP financial measures of adjusted
net loss and adjusted net loss per diluted common share with the most
directly comparable GAAP financial measures of GAAP net loss available
to common shareholders and GAAP net loss per diluted common share.
|
|
Thirteen
|
|
|
|
Thirteen
|
Weeks Ended
|
|
|
Weeks Ended
|
|
|
May 31, 2014
|
|
|
|
June 1, 2013
|
Numerator:
|
|
|
|
|
|
|
Net loss available to common shareholders
|
|
$
|
(3,579
|
)
|
|
|
|
$
|
(27,094
|
)
|
Distributions accumulated to preferred shareholders
|
|
|
-
|
|
|
|
|
|
22,299
|
|
IPO costs
|
|
|
-
|
|
|
|
|
|
56
|
|
Restructuring charges
|
|
|
-
|
|
|
|
|
|
241
|
|
Loss on extinguishment of debt
|
|
|
-
|
|
|
|
|
|
1,101
|
|
Taxes
|
|
|
-
|
|
|
|
|
|
183
|
|
Adjusted net loss
|
|
$
|
(3,579
|
)
|
|
|
|
$
|
(3,214
|
)
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
Weighted average common shares outstanding – diluted
|
|
|
47,946,616
|
|
|
|
|
|
2,929,468
|
|
Adjust weighting factor of outstanding shares
|
|
|
28,213
|
|
|
|
|
|
45,045,361
|
|
Adjusted weighted average common shares outstanding - diluted
|
|
|
47,974,829
|
|
|
|
|
|
47,974,829
|
|
|
|
|
|
|
|
|
Adjusted net loss per diluted common share
|
|
$
|
(0.07
|
)
|
|
|
|
$
|
(0.07
|
)
|
|
|
|
|
|
|
|
The table below reconciles the non-GAAP financial measure Adjusted
EBITDA with the most directly comparable GAAP financial measure of GAAP
net loss.
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
|
|
May 31, 2014
|
|
|
June 1, 2013
|
Net loss
|
|
|
$
|
(3,579
|
)
|
|
|
$
|
(4,795
|
)
|
Depreciation and amortization
|
|
|
|
7,256
|
|
|
|
|
7,470
|
|
Interest expense, net
|
|
|
|
4,302
|
|
|
|
|
5,555
|
|
Income tax benefit
|
|
|
|
(1,928
|
)
|
|
|
|
(2,020
|
)
|
EBITDA
|
|
|
$
|
6,051
|
|
|
|
$
|
6,210
|
|
Management fees
|
|
|
|
-
|
|
|
|
|
250
|
|
Pre-opening costs
|
|
|
|
2,987
|
|
|
|
|
1,962
|
|
IPO costs
|
|
|
|
-
|
|
|
|
|
56
|
|
Noncash rent
|
|
|
|
410
|
|
|
|
|
391
|
|
Restructuring charges
|
|
|
|
-
|
|
|
|
|
241
|
|
Stock-based compensation
|
|
|
|
277
|
|
|
|
|
99
|
|
Loss on extinguishment of debt
|
|
|
|
-
|
|
|
|
|
1,101
|
|
Foreign exchange (gains) losses
|
|
|
|
(72
|
)
|
|
|
|
94
|
|
Other adjustments
|
|
|
|
549
|
|
|
|
|
187
|
|
Adjusted EBITDA
|
|
|
$
|
10,202
|
|
|
|
$
|
10,591
|
|
|
|
|
|
|
|
|
|
|
|
|
Note Regarding Non-GAAP Information
This press release includes financial measures that are not calculated
in accordance with GAAP, including adjusted net loss, adjusted net loss
per diluted common share, and Adjusted EBITDA. The Company has
reconciled these non-GAAP financial measures with the most directly
comparable GAAP financial measures in a table accompanying this release.
The Company believes that these non-GAAP financial measures not only
provide its management with comparable financial data for internal
financial analysis but also provide meaningful supplemental information
to investors. Specifically, these non-GAAP financial measures allow
investors to better understand the performance of the Company’s business
and facilitate a meaningful evaluation of its fiscal 2014 quarterly
diluted income per common share and actual results on a comparable basis
with its fiscal 2013 quarterly results. In evaluating these non-GAAP
financial measures, investors should be aware that in the future the
Company may incur expenses or be involved in transactions that are the
same as or similar to some of the adjustments in this presentation. The
Company’s presentation of non-GAAP financial measures should not be
construed to imply that its future results will be unaffected by any
such adjustments. The Company has provided this information as a means
to evaluate the results of its ongoing operations. Other companies in
the Company’s industry may calculate these items differently than it
does. Each of these measures is not a measure of performance under GAAP
and should not be considered as a substitute for the most directly
comparable financial measures prepared in accordance with GAAP. Non-GAAP
financial measures have limitations as analytical tools, and investors
should not consider them in isolation or as a substitute for analysis of
the Company’s results as reported under GAAP.
Source: The Container Store Group, Inc.