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Business Wire 25-Oct-2018 4:10 PM
Boot Barn Holdings, Inc. (NYSE:BOOT) today announced its financial results for the second fiscal quarter ended September 29, 2018.
Highlights for the quarter ended September 29, 2018, were as follows:
Jim Conroy, Chief Executive Officer, commented, "We are very pleased with our second quarter results and the underlying strength in the business. Same store sales increased double digits, both in our retail stores and online, which combined with merchandise margin expansion from increased full-price selling and exclusive brand penetration, drove 130 basis points of operating margin improvement over last year. During the quarter, we made significant progress across each of our four strategic growth initiatives. Most notably, in mid-September we successfully launched our new exclusive brand, Idyllwind, Fueled by Miranda Lambert. We are well positioned to continue driving improved results during our upcoming holiday quarter and over the long term." Mr. Conroy continued, "We are also pleased with sales through the first three weeks of our fiscal third quarter, which continue to be very strong both in our retail stores and online."
Operating Results for the Second Quarter Ended September 29, 2018
Operating Results for the Six Months Ended September 29, 2018
Balance Sheet Highlights as of September 29, 2018
Fiscal Year 2019 Outlook
For the fiscal year ending March 30, 2019, the Company now expects:
For the fiscal third quarter ending December 29, 2018, the Company expects:
Conference Call Information
A conference call to discuss the financial results for the second quarter of fiscal year 2019 is scheduled for today, October 25, 2018, at 4:30 p.m. ET (1:30 p.m. PT). Investors and analysts interested in participating in the call are invited to dial (866) 548-4713. The conference call will also be available to interested parties through a live webcast at investor.bootbarn.com. Please visit the website and select the "Events and Presentations" link at least 15 minutes prior to the start of the call to register and download any necessary software. A telephone replay of the call will be available until November 25, 2018, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the conference identification number: 2518566. Please note participants must enter the conference identification number in order to access the replay.
About Boot Barn
Boot Barn is the nation's leading lifestyle retailer of western and work-related footwear, apparel and accessories for men, women and children. The Company offers its loyal customer base a wide selection of work and lifestyle brands. As of the date of this release, Boot Barn operates 232 stores in 31 states, in addition to an e-commerce channel www.bootbarn.com. The Company also operates www.sheplers.com, the nation's leading pure play online western and work retailer and www.countryoutfitter.com, an e-commerce site selling to customers who live a country lifestyle. For more information, call 888-Boot-Barn or visit www.bootbarn.com.
Forward Looking Statements
This press release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this press release are forward-looking statements. Forward-looking statements refer to our current expectations and projections relating to, by way of example and without limitation, our financial condition, liquidity, profitability, results of operations, margins, plans, objectives, strategies, future performance, business and industry. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate", "estimate", "expect", "project", "plan", "intend", "believe", "may", "might", "will", "could", "should", "can have", "likely", "outlook" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events, but not all forward-looking statements contain these identifying words. These forward-looking statements are based on assumptions that the Company's management has made in light of their industry experience and on their perceptions of historical trends, current conditions, expected future developments and other factors they believe are appropriate under the circumstances. As you consider this press release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond the Company's control) and assumptions. These risks, uncertainties and assumptions include, but are not limited to, the following: decreases in consumer spending due to declines in consumer confidence, local economic conditions or changes in consumer preferences; the Company's ability to effectively execute on its growth strategy; and the Company's failure to maintain and enhance its strong brand image, to compete effectively, to maintain good relationships with its key suppliers, and to improve and expand its exclusive product offerings. The Company discusses the foregoing risks and other risks in greater detail under the heading "Risk factors" in the periodic reports filed by the Company with the Securities and Exchange Commission. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect the Company's actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. Because of these factors, the Company cautions that you should not place undue reliance on any of these forward-looking statements. New risks and uncertainties arise from time to time, and it is impossible for the Company to predict those events or how they may affect the Company. Further, any forward-looking statement speaks only as of the date on which it is made. Except as required by law, the Company does not intend to update or revise the forward-looking statements in this press release after the date of this press release.
Boot Barn Holdings, Inc. |
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Consolidated Balance Sheets |
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(In thousands, except per share data) |
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(Unaudited) |
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September 29, | March 31, | ||||||||
2018 | 2018 | ||||||||
Assets |
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Current assets: | |||||||||
Cash and cash equivalents | $ | 9,406 | $ | 9,016 | |||||
Accounts receivable, net | 4,445 | 4,389 | |||||||
Inventories | 230,089 | 211,472 | |||||||
Prepaid expenses and other current assets | 20,090 | 16,250 | |||||||
Total current assets | 264,030 | 241,127 | |||||||
Property and equipment, net | 95,014 | 89,208 | |||||||
Goodwill | 195,858 | 193,095 | |||||||
Intangible assets, net | 63,140 | 63,383 | |||||||
Other assets | 1,143 | 1,128 | |||||||
Total assets | $ | 619,185 | $ | 587,941 | |||||
Liabilities and stockholders' equity | |||||||||
Current liabilities: | |||||||||
Line of credit | $ | 26,120 | $ | 21,006 | |||||
Accounts payable | 102,764 | 89,958 | |||||||
Accrued expenses and other current liabilities | 40,209 | 40,034 | |||||||
Total current liabilities | 169,093 | 150,998 | |||||||
Deferred taxes | 14,637 | 13,030 | |||||||
Long-term portion of notes payable, net | 173,745 | 183,200 | |||||||
Capital lease obligation | 7,023 | 7,303 | |||||||
Other liabilities | 19,725 | 18,804 | |||||||
Total liabilities | 384,223 | 373,335 | |||||||
Stockholders' equity: | |||||||||
Common stock, $0.0001 par value; September 29, 2018 - 100,000 shares authorized, 28,377 shares issued; March 31, 2018 - 100,000 shares authorized, 27,331 shares issued | 3 | 3 | |||||||
Preferred stock, $0.0001 par value; 10,000 shares authorized, no shares issued or outstanding | — | — | |||||||
Additional paid-in capital | 157,568 | 148,127 | |||||||
Retained earnings | 77,965 | 66,670 | |||||||
Less: Common stock held in treasury, at cost, 47 and 31 shares at September 29, 2018 and March 31, 2018, respectively | (574 | ) | (194 | ) | |||||
Total stockholders' equity | 234,962 | 214,606 | |||||||
Total liabilities and stockholders' equity | $ | 619,185 | $ | 587,941 | |||||
Boot Barn Holdings, Inc. | |||||||||||||
Consolidated Statements of Operations | |||||||||||||
(In thousands, except per share data) |
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(Unaudited) |
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Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||
September 29, | September 30, | September 29, | September 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||
Net sales | $ | 168,109 | $ | 143,072 | $ | 330,093 | $ | 282,451 | |||||
Cost of goods sold | 117,191 | 101,382 | 227,728 | 199,369 | |||||||||
Gross profit | 50,918 | 41,690 | 102,365 | 83,082 | |||||||||
Selling, general and administrative expenses | 42,221 | 36,052 | 83,839 | 72,503 | |||||||||
Income from operations | 8,697 | 5,638 | 18,526 | 10,579 | |||||||||
Interest expense, net | 4,153 | 3,789 | 8,253 | 7,447 | |||||||||
Income before income taxes | 4,544 | 1,849 | 10,273 | 3,132 | |||||||||
Income tax expense/(benefit) | 10 | 751 | (1,022 | ) | 1,257 | ||||||||
Net income | $ | 4,534 | $ | 1,098 | $ | 11,295 | $ | 1,875 | |||||
Earnings per share: | |||||||||||||
Basic shares | $ | 0.16 | $ | 0.04 | $ | 0.41 | $ | 0.07 | |||||
Diluted shares | $ | 0.16 | $ | 0.04 | $ | 0.39 | $ | 0.07 | |||||
Weighted average shares outstanding: | |||||||||||||
Basic shares | 28,119 | 26,608 | 27,861 | 26,584 | |||||||||
Diluted shares | 28,875 | 26,950 | 28,721 | 26,960 | |||||||||
Boot Barn Holdings, Inc. | ||||||||
Consolidated Statements of Cash Flows | ||||||||
(In thousands) |
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(Unaudited) |
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Twenty-Six Weeks Ended | ||||||||
September 29, | September 30, | |||||||
2018 | 2017 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 11,295 | $ | 1,875 | ||||
Adjustments to reconcile net income to net cash provided by/(used in) operating activities: | ||||||||
Depreciation | 8,654 | 7,584 | ||||||
Stock-based compensation | 1,416 | 1,253 | ||||||
Amortization of intangible assets | 350 | 671 | ||||||
Amortization of debt issuance fees and debt discount | 630 | 593 | ||||||
Loss on disposal of property and equipment | 27 | 61 | ||||||
Hurricane-related asset write-off | — | 3,222 | ||||||
Insurance recovery receivable | — | (3,422 | ) | |||||
Accretion of above market leases | (13 | ) | (1 | ) | ||||
Store impairment charge | 305 | — | ||||||
Deferred taxes | 1,607 | (371 | ) | |||||
Changes in operating assets and liabilities, net of acquisition: | ||||||||
Insurance settlement | — | 700 | ||||||
Accounts receivable, net | (56 | ) | 823 | |||||
Inventories | (12,582 | ) | (22,124 | ) | ||||
Inventories purchased in asset acquisitions | (4,163 | ) | (2,752 | ) | ||||
Prepaid expenses and other current assets | (3,925 | ) | (1,083 | ) | ||||
Other assets | (30 | ) | (17 | ) | ||||
Accounts payable | 13,063 | 12,287 | ||||||
Accrued expenses and other current liabilities | 74 | (766 | ) | |||||
Other liabilities | 658 | 757 | ||||||
Net cash provided by/(used in) operating activities | $ | 17,310 | $ | (710 | ) | |||
Cash flows from investing activities | ||||||||
Purchases of property and equipment | $ | (15,007 | ) | $ | (11,279 | ) | ||
Acquisition of business, net of cash acquired | (4,424 | ) | — | |||||
Net cash used in investing activities | $ | (19,431 | ) | $ | (11,279 | ) | ||
Cash flows from financing activities | ||||||||
Borrowings on line of credit - net | $ | 5,114 | $ | 23,846 | ||||
Repayments on debt and capital lease obligations | (10,248 | ) | (10,212 | ) | ||||
Debt issuance fees paid | — | (520 | ) | |||||
Tax withholding payments for net share settlement | (380 | ) | (89 | ) | ||||
Proceeds from the exercise of stock options | 8,025 | 363 | ||||||
Net cash provided by financing activities | $ | 2,511 | $ | 13,388 | ||||
Net increase in cash and cash equivalents | 390 | 1,399 | ||||||
Cash and cash equivalents, beginning of period | 9,016 | 8,035 | ||||||
Cash and cash equivalents, end of period | $ | 9,406 | $ | 9,434 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for income taxes | $ | 301 | $ | 393 | ||||
Cash paid for interest | $ | 7,569 | $ | 6,744 | ||||
Supplemental disclosure of non-cash activities: | ||||||||
Unpaid purchases of property and equipment | $ | 985 | $ | 2,323 | ||||
Boot Barn Holdings, Inc. | |||||||||||||
Store Count | |||||||||||||
Fiscal Year Ended | Fiscal Year Ended | Quarter Ended | Quarter Ended | ||||||||||
April 1, | March 31, | June 30, | September 29, | ||||||||||
2017 | 2018 | 2018 | 2018 | ||||||||||
Store Count (BOP) | 208 | 219 | 226 | 230 | |||||||||
Opened/Acquired | 12 | 9 | 6 | 3 | |||||||||
Closed Boot Barn Stores | (1 | ) | (2 | ) | (2 | ) | (1 | ) | |||||
Store Count (EOP) | 219 | 226 | 230 | 232 | |||||||||
Debt Covenant EBITDA Reconciliation | ||||||||||||||||||
(Unaudited) |
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Thirteen Weeks Ended | ||||||||||||||||||
September 29, 2018 |
June 30,2018 |
March 31,2018 |
December 30,2017 |
September 30, 2017 |
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Boot Barn's Net income | $ | 4,534 | $ | 6,761 | $ | 6,855 | $ | 20,149 | $ | 1,098 | ||||||||
Income tax expense/(benefit) | 10 | (1,032 | ) | 619 | 425 | 751 | ||||||||||||
Interest expense, net | 4,153 | 4,100 | 3,808 | 3,821 | 3,789 | |||||||||||||
Depreciation and intangible asset amortization | 4,573 | 4,431 | 4,610 | 4,263 | 4,142 | |||||||||||||
Boot Barn's EBITDA | $ | 13,270 | $ | 14,260 | $ | 15,892 | $ | 28,658 | $ | 9,780 | ||||||||
Non-cash stock-based compensation (a) | $ | 804 | $ | 612 | $ | 398 | $ | 597 | $ | 678 | ||||||||
Non-cash accrual for future award redemptions (b) | 92 | 22 | (120 | ) | 47 | (162 | ) | |||||||||||
Loss on disposal of assets (c) | 27 | - | 179 | 12 | 47 | |||||||||||||
Store impairment charge (d) | 92 | 213 | 83 | - | - | |||||||||||||
Secondary offering costs (e) | - | 176 | 294 | - | - | |||||||||||||
Boot Barn's Adjusted EBITDA | $ | 14,285 | $ | 15,283 | $ | 16,726 | $ | 29,314 | $ | 10,343 | ||||||||
Additional adjustments (f) | 553 | 935 | 546 | 862 | 418 | |||||||||||||
Consolidated EBITDA per Loan Agreements | $ | 14,838 | $ | 16,218 | $ | 17,272 | $ | 30,176 | $ | 10,761 |
_______________________ |
(a) Represents non-cash compensation expenses related to stock options, restricted stock awards and restricted stock units granted to certain of our employees and directors. |
(b) Represents the non-cash accrual for future award redemptions in connection with our customer loyalty program. |
(c) Represents loss on disposal of assets from store closures. |
(d) Represents store impairment charges recorded in order to reduce the carrying amount of the assets to their estimated fair values. |
(e) Represents professional fees and expenses incurred in connection with the January 2018 and May 2018 secondary offerings. |
(f) Adjustments to Boot Barn's Adjusted EBITDA as provided in the 2015 Golub Term Loan and June 2015 Wells Fargo Revolver include pre-opening costs, franchise and state taxes, and other miscellaneous adjustments. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20181025005923/en/