Updates Fiscal 2017 Outlook to Reflect Amended Terms
COPPELL, Texas--(BUSINESS WIRE)--
The Container Store Group, Inc. (NYSE:TCS) (the “Company”), today
announced it has completed the amendment of its senior secured term loan
credit facility, led by JP Morgan Chase Bank, N.A. The amended and
restated facility extended the maturity date to August 18, 2021 with an
increase in the applicable interest rate margin for LIBOR loans to 7%,
and for base rate loans to 6%, and reduced the aggregate principal
amount of the term loan to $300 million.
“We are pleased to announce the amendment of our senior secured term
loan that extends the maturity date while also including a soft call
provision that provides us enhanced financial flexibility,” said Jodi
Taylor, Chief Financial Officer and Chief Administrative Officer. “We
remain focused on executing our initiatives to drive sales and
profitability and deliver operational improvement. We are updating our
previously provided fiscal 2017 outlook to reflect the costs and higher
interest expense associated with this amendment.”
As a result of the amendment, for fiscal 2017, the Company expects to
incur approximately $7 million of incremental interest expense for a
total of approximately $25 million, and debt extinguishment costs of
approximately $2 million. The Company expects fiscal 2017 net income per
share to be $0.13 to $0.23 based on estimated common shares outstanding
of 49 million. Adjusted net income is expected to be $0.27 to $0.40 per
share (see Reconciliation of GAAP to Non-GAAP Financial Measures table).
All other elements of the Company’s previously issued outlook remain
unchanged.
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 about our expectations regarding our goals,
strategies, priorities and initiatives; and our anticipated interest
expense and financial performance for fiscal 2017.
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: our Optimization Plan may
not result in improved sales and profitability; our inability to open or
relocate new stores, or remodel existing stores, in the timeframe and at
the locations we anticipate; overall decline in the health of the
economy, consumer spending, and the housing market; our operating and
financial performance in a given period may not meet the guidance we
provided to the public; 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; effects of a security breach or cyber-attack of our website
or information technology systems; 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, and the transition in our
executive leadership; 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 June 1, 2017, 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 (NYSE:TCS) is the nation’s leading retailer of
storage and organization products — a concept they originated in 1978.
Today, with locations nationwide, the retailer offers more than 11,000
products designed to save space and time, a suite of custom closet
systems and an array of digital shopping services. Visit www.containerstore.com
for more information about store locations, the product collection and
services offered. Visit www.containerstore.com/blog
for real solutions from the really organized and www.whatwestandfor.com
to learn more about the company’s unique culture.
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 income and adjusted net income per diluted share with the most
directly comparable GAAP financial measures of GAAP net income and GAAP
net income per diluted share.
|
Fiscal Year 2017 Outlook
|
|
Low
|
High
|
Numerator:
|
|
|
Net income
|
$6,200
|
$11,100
|
Optimization Plan implementation charges (a)
|
9,000
|
11,000
|
Loss on extinguishment of debt (b)
|
2,400
|
2,400
|
Taxes(c)
|
(4,200)
|
(4,900)
|
Adjusted net income
|
$13,400
|
$19,600
|
|
|
|
Denominator:
|
|
|
Weighted average common shares outstanding – diluted
|
49,000,000
|
49,000,000
|
|
|
|
Net income per diluted share
|
$0.13
|
$0.23
|
Adjusted net income per diluted share
|
$0.27
|
$0.40
|
(a) Charges incurred as part of the implementation of our Optimization
Plan, which we do not consider in our evaluation of ongoing performance.
(b) Loss recorded as a result of the amendment made to the Senior
Secured Term Loan Facility in August 2017, which we do not consider in
our evaluation of our ongoing operations.
(c) Tax impact of adjustments to net income, which we do not consider in
our evaluation of ongoing performance.
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Source: The Container Store Group, Inc.