Company Exceeds Outlook on Comparable Store Sales and EPS, Maintains
Targets for Fiscal 2015
Key Strategic Initiatives on Track for Full Rollout in 2015 and
Having a Notable Impact
DALLAS--(BUSINESS WIRE)--
The Container Store Group, Inc. (NYSE:TCS) (the “Company”), today
announced financial results for the first quarter of fiscal 2015 ended
May 30, 2015.
-
Company comparable store sales for the first quarter of fiscal 2015
were down 0.9% compared to first quarter of fiscal 2014, exceeding the
Company’s stated outlook for the first quarter of down 3% to 4%.
Excluding lost sales due to West Coast port delays, estimated at 1
percentage point, comparable store sales would have been approximately
flat for the quarter.
-
Consolidated net sales were $169.8 million, down 2.1%; however,
consolidated net sales were up 0.9% after converting Elfa’s net sales
results from Swedish krona to U.S. dollars using the prior year’s
conversion rate for both periods. Due to the strengthening of the U.S.
dollar against the Swedish krona, the conversion of Elfa’s net sales
into U.S. dollars resulted in a reduction of approximately $5.2
million for the quarter.
-
The Company exceeded its stated outlook for the first quarter of
($0.12) to ($0.14) per share with a net loss of ($0.11) per share or
$5.2 million in the first quarter of fiscal 2015 compared to a net
loss of $3.6 million or ($0.07) per share for the first quarter of
fiscal 2014. Net loss of approximately ($0.03) per share for the first
quarter of 2015 is attributable to spend for key strategic initiatives
and lost sales due to the West Coast port delays. The Company’s first
quarter historically represents approximately 20% of its sales and
also typically generates a net loss.
-
The Company opened its first of 10 planned stores for fiscal 2015 – in
Tucson, AZ – to end the quarter with 71 stores and is on track to
achieve its targeted 12% square footage growth for fiscal 2015.
“Our first quarter financial performance exceeded our expectations, as
we delivered better than forecasted comparable store sales and improved
gross margin,” said Kip Tindell, Chairman and Chief Executive Officer.
“The implementation of our three major strategic initiatives – TCS
Closets, Contained Home and POP! – remains on track, as planned, and
we’re encouraged by the start of the ‘snowballing effect’ on their
results. As we expected, we’ve seen that, in general, our stores with
the strongest comparable store sales increases are the ones that have
had TCS Closets and Contained Home the longest. In fact, if we isolate
our seven Dallas-area stores, TCS Closets alone added three percentage
points of incremental comparable store sales to those stores in the
first quarter of fiscal 2015. We remain confident in, and are
maintaining, our previously stated sales and EPS outlook for the fiscal
year.”
-
TCS ClosetsTM: The Company is pleased with
the rollout of its new custom closet collection, with the average
ticket continuing to exceed $10,000 since launch – greatly exceeding
the Company’s day-to-day average ticket of approximately $60. With
each store’s TCS Closets rollout, the Company is experiencing more
rapid acceptance and action by customers and employees alike. The
Company believes this shorter timeframe between launch and a store’s
first sales is a result of the refinements and enhancements in
training support, in-store displays, the selling process and overall
customer experience. In addition, more than 90% of TCS Closets
customers have made a subsequent purchase since buying a TCS Closet.
The Company is encouraged by the synergistic relationship between TCS
Closets and The Container Store’s best-selling product elfa®
shelving and drawer system, both of which are located in the Company’s
custom closet section of its stores. As the Company expected, there is
a positive sales trend in both elfa® sales and elfa®
average ticket in the stores that have had TCS Closets the longest.
TCS
Closets was available in the planned 36 stores at the end of the first
quarter and is on track to roll out to all current and new stores by
the end of fiscal 2015:
Q2 23 stores in
Southern CA, Denver, Florida, Phoenix, San Francisco/Bay Area, Las
Vegas, Salt Lake City, St Louis, Indianapolis, Cincinnati and Columbus
Q3
9 stores in Philadelphia, Atlanta, Charlotte, Raleigh, Nashville,
Little Rock and Minneapolis
Q4 3 stores in
Seattle and Portland
The Company has launched a national
marketing campaign to support TCS Closets, which includes advertising
in home design magazines, direct mail, online presence, social media,
special events and public relations.
-
Contained HomeSM: The Company’s in-home
organization service was available in the planned 47 stores at the end
of the first quarter and is also on track to roll out to all current
and new stores by the end of fiscal 2015. Average ticket is
approximately $2,500 program-to-date.
Q2 12
stores in Florida, Phoenix, Las Vegas, St Louis, Indianapolis,
Cincinnati and Columbus
Q3 9 stores in
Philadelphia, Atlanta, Charlotte, Raleigh, Nashville, Little Rock and
Minneapolis
Q4 3 stores in Seattle and Portland
The
Company is rapidly contracting with additional Contained Home
organizers and is now up to approximately 130 organizers to date.
Satisfaction with Contained Home is high, with over 90% of customers
giving the service a 4 or 5 out of 5 stars on the Company’s follow up
survey. Contained Home will also be supported by a national marketing
campaign, which includes advertising in home design magazines, direct
mail, online presence, social media and public relations.
-
POP! Perfectly Organized Perks®: The
Container Store’s new customer engagement program has reached over 2
million members (POP! Stars) since launching in July 2014 and is
adding about 25,000 members each week. As the Company enters the next
phase of the program, it will further capitalize on its consumer data
in order to create deeper, one-on-one, customized connections, offers
and conversations with its customers.
New stores
The Company opened a store in Tucson, AZ (Tucson Mall) on May 30th
and completed its first store opening for the second quarter on June 27th
in Overland Park, KS (Hawthorne Plaza). In total, including the two
aforementioned locations, the Company plans to open 10 new stores,
including one relocation, in fiscal year 2015:
-
July 18th — Columbus, OH (Easton Gateway) Relocation
-
August 15th — Yonkers, NY (Ridge Hill)
-
September 12th — Milwaukee, WI (Mayfair Mall)
-
September 26th — Phoenix, AZ (The Shops at Town and Country)
-
October 17th — Christiana, DE (Christiana Fashion Center)
-
November 14th — Oxnard, CA (The Collection at River Park)
-
January 30, 2016 — Sacramento, CA (Howe Bout Arden)
-
February 20, 2016 — Alpharetta, GA (Avalon)
First Quarter 2015 Results
For the first quarter ended May 30, 2015, on a consolidated basis:
-
Net sales were $169.8 million, down 2.1% as compared to the first
quarter of fiscal 2014; however, net sales were up 0.9% after
converting Elfa’s third-party net sales results from Swedish krona to
U.S. dollars using the prior year’s conversion rate for both periods.
The strengthening of the U.S. dollar against the Swedish krona led to
a negative conversion impact of $5.2 million in the first quarter of
fiscal 2015. Net sales in The Container Store retail business were
$152.7 million, up 2.0% as compared to the first quarter of fiscal
2014. The increase in net sales was driven by new store sales, which
more than offset the comparable store sales operating measure decline
of 0.9%. In local currency, Elfa third-party net sales declined 5.8%,
primarily due to lower sales in Russia and Norway.
-
Gross margin was 58.5%, an increase of 40 basis points compared to the
first quarter of fiscal 2014. The Container Store retail business
gross margin remained stable at 58.2% as the impact of the stronger
U.S. dollar on gross margin was offset by a shift in timing of elfa®
product offers and the introduction of everyday free shipping on
orders over $75, combined with a shift in product and services mix.
Elfa gross margin declined 160 basis points primarily due to higher
freight costs. On a consolidated basis, gross margin increased as the
decline in Elfa gross margin was more than offset by the stability in
The Container Store retail business gross margin, due to a larger
percentage of net sales coming from The Container Store retail
business.
-
Selling, general and administrative expenses (“SG&A”) increased by
3.3% to $93.9 million from $90.9 million in the first quarter of
fiscal 2014. SG&A as a percentage of net sales increased 290 basis
points primarily due to the impact of a larger percentage of total net
sales coming from The Container Store retail business, combined with
increased healthcare costs, the expected increased costs related to
strategic initiatives, and deleveraging of occupancy costs.
-
Net interest expense decreased to $4.2 million from $4.3 million in
the first quarter of fiscal 2014.
-
The effective tax rate for the first quarter of fiscal 2015 was 36.7%,
as compared to 35.0% in the first quarter of fiscal 2014. The increase
in the effective tax rate is primarily due to a greater portion of our
projected annual earnings expected to come from the U.S., which has a
higher tax rate than our foreign subsidiaries.
-
U.S. generally accepted accounting principles (“GAAP”) net loss was
$5.2 million, or ($0.11) per diluted share, in the first quarter of
fiscal 2015 compared to net loss of $3.6 million, or ($0.07) per
diluted share in the first quarter of fiscal 2014. The non-GAAP
measures of adjusted net loss and adjusted net loss per diluted share
were the same as the respective GAAP measures in the first quarter of
fiscal 2015 and the first quarter of fiscal 2014 as there were no
reconciling items present in these periods (see GAAP/Non-GAAP
reconciliation table).
-
Adjusted EBITDA was $4.8 million in the first quarter of fiscal 2015
compared to $10.2 million in the first quarter of fiscal 2014 (see
GAAP/Non-GAAP reconciliation table).
|
Balance sheet highlights:
|
|
|
|
|
(In thousands)
|
|
May 30, 2015
|
|
May 31, 2014
|
|
Cash
|
|
$9,829
|
|
|
$8,610
|
|
|
Total debt
|
|
$346,243
|
|
|
$361,576
|
|
|
Liquidity*
|
|
$82,709
|
|
|
$68,790
|
|
|
*Cash plus availability on revolving credit facilities
|
|
|
|
|
Outlook
For fiscal 2015, consolidated net sales are expected to be $800 to $815
million, based on the Company’s expected store openings and a comparable
store sales change of -2% to 0%. Net income is expected to be $0.30 to
$0.38 per diluted common share based on estimated diluted common shares
outstanding of 49 million. This assumes a tax rate of approximately 39%
for the full year. Adjusted EBITDA is expected to be between $85 and $91
million.
This outlook incorporates approximately $4.5 million of expenses, or
$0.06 per diluted common share, associated with the implementation of
the above outlined key strategic initiatives.
Conference Call Information
A conference call to discuss first quarter fiscal 2015 financial results
is scheduled for today, July 7, 2015, 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 13612302. The replay
will be available through July 14, 2015 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 expectations regarding the new POP!, Contained Home and TCS
Closets programs, including without limitation plans to roll out TCS
Closets and Contained Home to all stores in fiscal 2015 and plans to
create deeper relationships with customers in connection with POP!,
expectations for new store openings and relocations, guidance regarding
annual square footage growth, and statements regarding our anticipated
financial performance, expenses and liquidity.
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 inability to
successfully implement our three major initiatives — POP!, Contained
Home and TCS Closets — in the timeframe we expect or at all; our
inability to open or relocate new 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 inability to manage costs
and risks relating to new store openings; our inability to source and
market new products to meet consumer preferences; the risk that our
operating and financial performance in a given period will not meet the
guidance we provided to the public; the risk that significant new
business initiatives may not be successful; 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 lease space on
favorable terms; fluctuations in currency exchange rates; risks related
to a security breach or cyber-attack of our website or information
technology systems, and other damage to such systems; effects of
competition on our business; our inability to effectively manage our
online sales; risks related to our inability to obtain capital on
satisfactory terms or at all; 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; 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; material damage to or interruptions in our information
technology systems; 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 8, 2015, 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 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 72 store
locations nationwide that each average 25,000 square feet. The Container
Store has over 10,500 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® — 16
years in a row. Visit 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
Principles and devotion to Conscious Capitalism, visit the retailer’s
culture blog at whatwestandfor.com or read Chairman & CEO Kip Tindell’s
new book UNCONTAINABLE: How Passion, Commitment, and Conscious
Capitalism Built a Business Where Everyone Thrives (available at The
Container Store, uncontainable.com and anywhere books are sold).
|
The Container Store Group, Inc.
|
|
Consolidated balance sheets (unaudited)
|
|
|
|
(In thousands, except share and per share amounts)
|
|
May 30,
|
|
February 28,
|
|
May 31,
|
|
|
2015
|
|
2015
|
|
2014
|
|
Assets
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash
|
|
$9,829
|
|
|
$24,994
|
|
|
$8,610
|
|
|
Accounts receivable, net
|
|
21,929
|
|
|
24,319
|
|
|
29,267
|
|
|
Inventory
|
|
103,619
|
|
|
83,724
|
|
|
94,626
|
|
|
Prepaid expenses
|
|
6,476
|
|
|
7,895
|
|
|
7,953
|
|
|
Income taxes receivable
|
|
908
|
|
|
1,698
|
|
|
600
|
|
|
Deferred tax assets, net
|
|
3,256
|
|
|
3,256
|
|
|
3,967
|
|
|
Other current assets
|
|
10,686
|
|
|
11,056
|
|
|
10,958
|
|
|
Total current assets
|
|
156,703
|
|
|
156,942
|
|
|
155,981
|
|
|
Noncurrent assets:
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
170,851
|
|
|
169,053
|
|
|
164,779
|
|
|
Goodwill
|
|
202,815
|
|
|
202,815
|
|
|
202,815
|
|
|
Trade names
|
|
228,593
|
|
|
229,433
|
|
|
240,021
|
|
|
Deferred financing costs, net
|
|
7,253
|
|
|
7,742
|
|
|
9,210
|
|
|
Noncurrent deferred tax assets, net
|
|
2,186
|
|
|
1,739
|
|
|
1,179
|
|
|
Other assets
|
|
1,622
|
|
|
1,333
|
|
|
1,211
|
|
|
Total noncurrent assets
|
|
613,320
|
|
|
612,115
|
|
|
619,215
|
|
|
Total assets
|
|
$770,023
|
|
|
$769,057
|
|
|
$775,196
|
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$57,035
|
|
|
$48,904
|
|
|
$47,846
|
|
|
Accrued liabilities
|
|
52,991
|
|
|
59,891
|
|
|
54,420
|
|
|
Revolving lines of credit
|
|
7,407
|
|
|
2,834
|
|
|
23,529
|
|
|
Current portion of long-term debt
|
|
5,274
|
|
|
5,319
|
|
|
5,741
|
|
|
Income taxes payable
|
|
5
|
|
|
2,188
|
|
|
640
|
|
|
Deferred tax liabilities, net
|
|
-
|
|
|
-
|
|
|
29
|
|
|
Total current liabilities
|
|
122,712
|
|
|
119,136
|
|
|
132,205
|
|
|
Noncurrent liabilities:
|
|
|
|
|
|
|
|
Long-term debt
|
|
333,562
|
|
|
326,775
|
|
|
332,306
|
|
|
Noncurrent deferred tax liabilities, net
|
|
79,843
|
|
|
82,965
|
|
|
82,638
|
|
|
Deferred rent and other long-term liabilities
|
|
37,764
|
|
|
38,319
|
|
|
36,354
|
|
|
Total noncurrent liabilities
|
|
451,169
|
|
|
448,059
|
|
|
451,298
|
|
|
Total liabilities
|
|
573,881
|
|
|
567,195
|
|
|
583,503
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
|
Common stock, $0.01 par value, 250,000,000 shares authorized;
47,983,804 shares issued and outstanding at May 30, 2015; 47,983,660
shares issued and outstanding at February 28, 2015; 47,974,829
shares issued and outstanding at May 31, 2014
|
|
480
|
|
|
480
|
|
|
480
|
|
|
Additional paid-in capital
|
|
855,648
|
|
|
855,322
|
|
|
854,174
|
|
|
Accumulated other comprehensive loss
|
|
(19,189
|
)
|
|
(18,342
|
)
|
|
(1,111
|
)
|
|
Retained deficit
|
|
(640,797
|
)
|
|
(635,598
|
)
|
|
(661,850
|
)
|
|
Total shareholders’ equity
|
|
196,142
|
|
|
201,862
|
|
|
191,693
|
|
|
Total liabilities and shareholders’ equity
|
|
$770,023
|
|
|
$769,057
|
|
|
$775,196
|
|
|
|
|
The Container Store Group, Inc.
|
|
Consolidated statements of operations (unaudited)
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
(In thousands, except share and per share amounts)
|
May 30, 2015
|
|
May 31, 2014
|
|
Net sales
|
|
$169,833
|
|
|
$173,438
|
|
|
Cost of sales (excluding depreciation and amortization)
|
|
70,505
|
|
|
72,586
|
|
|
Gross profit
|
|
99,328
|
|
|
100,852
|
|
|
Selling, general, and administrative expenses (excluding
depreciation and amortization)
|
|
93,941
|
|
|
90,912
|
|
|
Stock-based compensation
|
|
328
|
|
|
277
|
|
|
Pre-opening costs
|
|
1,056
|
|
|
2,987
|
|
|
Depreciation and amortization
|
|
8,037
|
|
|
7,256
|
|
|
Other expenses
|
|
-
|
|
|
525
|
|
|
Loss on disposal of assets
|
|
5
|
|
|
100
|
|
|
Loss from operations
|
|
(4,039
|
)
|
|
(1,205
|
)
|
|
Interest expense, net
|
|
4,168
|
|
|
4,302
|
|
|
Loss before taxes
|
|
(8,207
|
)
|
|
(5,507
|
)
|
|
Benefit for income taxes
|
|
(3,008
|
)
|
|
(1,928
|
)
|
|
Net loss
|
|
$(5,199
|
)
|
|
$(3,579
|
)
|
|
Basic and diluted net loss per common share
|
|
$(0.11
|
)
|
|
$(0.07
|
)
|
|
Weighted-average common shares outstanding - basic and diluted
|
|
47,983,738
|
|
|
47,946,616
|
|
|
|
|
The Container Store Group, Inc.
|
|
Consolidated statements of cash
|
|
flows (unaudited)
|
|
|
|
Thirteen Weeks Ended
|
|
(In thousands)
|
|
May 30, 2015
|
|
May 31, 2014
|
|
Operating activities
|
|
|
|
|
|
Net loss
|
|
$(5,199
|
)
|
|
$(3,579
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
8,037
|
|
|
7,256
|
|
|
Stock-based compensation
|
|
328
|
|
|
277
|
|
|
Excess tax benefit from stock-based compensation
|
|
-
|
|
|
(15
|
)
|
|
Loss on disposal of property and equipment
|
|
5
|
|
|
100
|
|
|
Deferred tax benefit
|
|
(3,043
|
)
|
|
(2,106
|
)
|
|
Noncash interest
|
|
489
|
|
|
489
|
|
|
Other
|
|
83
|
|
|
-
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
Accounts receivable
|
|
2,023
|
|
|
2,558
|
|
|
Inventory
|
|
(19,811
|
)
|
|
(9,728
|
)
|
|
Prepaid expenses and other assets
|
|
1,009
|
|
|
5,369
|
|
|
Accounts payable and accrued liabilities
|
|
4,415
|
|
|
(5,489
|
)
|
|
Income taxes
|
|
(1,524
|
)
|
|
(3,340
|
)
|
|
Other noncurrent liabilities
|
|
(416
|
)
|
|
445
|
|
|
Net cash used in operating activities
|
|
(13,604
|
)
|
|
(7,763
|
)
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
Additions to property and equipment
|
|
(13,332
|
)
|
|
(13,418
|
)
|
|
Proceeds from sale of property and equipment
|
|
188
|
|
|
-
|
|
|
Net cash used in investing activities
|
|
(13,144
|
)
|
|
(13,418
|
)
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
Borrowings on revolving lines of credit
|
|
13,967
|
|
|
18,334
|
|
|
Payments on revolving lines of credit
|
|
(9,327
|
)
|
|
(9,961
|
)
|
|
Borrowings on long-term debt
|
|
8,000
|
|
|
8,000
|
|
|
Payments on long-term debt
|
|
(1,320
|
)
|
|
(5,172
|
)
|
|
Proceeds from the exercise of stock options
|
|
3
|
|
|
587
|
|
|
Excess tax benefit from stock-based compensation
|
|
-
|
|
|
15
|
|
|
Net cash provided by financing activities
|
|
11,323
|
|
|
11,803
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
260
|
|
|
(58
|
)
|
|
Net decrease in cash
|
|
(15,165
|
)
|
|
(9,436
|
)
|
|
Cash at beginning of period
|
|
24,994
|
|
|
18,046
|
|
|
Cash at end of period
|
|
$9,829
|
|
|
$8,610
|
|
|
|
|
|
|
|
|
Supplemental information for non-cash investing and financing
activities:
|
|
|
|
|
|
Purchases of property and equipment (included in accounts payable)
|
|
$2,194
|
|
|
$2,098
|
|
|
Capital lease obligation incurred
|
|
$231
|
|
|
$-
|
|
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, adjusted EBITDA and net sales after the
conversion of Elfa’s net sales from Swedish krona to U.S. dollars using
the prior year’s conversion rate. The Company believes the disclosure of
net sales without the effects of currency exchange rate fluctuations
helps investors understand the Company’s underlying performance. The
Company has reconciled all non-GAAP financial measures apart from net
sales adjusted for currency exchange rate fluctuations with the most
directly comparable GAAP financial measures in a table accompanying this
release. The Company believes that the non-GAAP financial measures used
in this press release 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 2015 quarterly and annual results on a
comparable basis with its fiscal 2014 quarterly and annual 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.
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 Weeks Ended
|
|
|
|
May 30, 2015
|
|
May 31, 2014
|
|
Numerator:
|
|
|
|
|
|
Net loss available to common shareholders
|
|
$(5,199
|
)
|
|
$(3,579
|
)
|
|
Distributions accumulated to preferred shareholders
|
|
-
|
|
|
-
|
|
|
IPO-related stock-based compensation
|
|
-
|
|
|
-
|
|
|
IPO costs
|
|
-
|
|
|
-
|
|
|
Restructuring charges
|
|
-
|
|
|
-
|
|
|
Goodwill and trade name impairment
|
|
-
|
|
|
-
|
|
|
Gain on disposal of subsidiary and real estate
|
|
-
|
|
|
-
|
|
|
Loss on extinguishment of debt
|
|
-
|
|
|
-
|
|
|
Certain taxes
|
|
-
|
|
|
-
|
|
|
Adjusted net loss
|
|
$(5,199
|
)
|
|
$(3,579
|
)
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
Weighted average common shares outstanding – diluted
|
|
47,983,738
|
|
|
47,946,616
|
|
|
|
|
|
|
|
|
Adjusted net loss per diluted common share
|
|
$(0.11
|
)
|
|
$(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 30, 2015
|
|
May 31, 2014
|
|
Net loss
|
|
$(5,199
|
)
|
|
$(3,579
|
)
|
|
Depreciation and amortization
|
|
8,037
|
|
|
7,256
|
|
|
Interest expense, net
|
|
4,168
|
|
|
4,302
|
|
|
Income tax benefit
|
|
(3,008
|
)
|
|
(1,928
|
)
|
|
EBITDA
|
|
$3,998
|
|
|
$6,051
|
|
|
Pre-opening costs
|
|
1,056
|
|
|
2,987
|
|
|
Noncash rent
|
|
(691
|
)
|
|
410
|
|
|
Stock-based compensation
|
|
328
|
|
|
277
|
|
|
Foreign exchange losses (gains)
|
|
45
|
|
|
(72
|
)
|
|
Other adjustments
|
|
18
|
|
|
549
|
|
|
Adjusted EBITDA
|
|
$4,754
|
|
|
$10,202
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20150707006344/en/
Source: The Container Store Group, Inc.