Ollie's Bargain Outlet Holdings, Inc. Announces Fiscal 2015 Second Quarter Financial Results
Second Quarter Summary:
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Total net sales increased 19.0% to
$181.9 million ;
-
Comparable store sales increased 7.8%;
-
The Company opened seven new stores and closed one store, ending the quarter with 187 stores in 16 states. This represents an increase of 12% in total number of stores from the second quarter of fiscal 2014;
-
Adjusted EBITDA increased 22.0% to
$22.5 million (adjusted EBITDA is not a measure recognized under generally accepted accounting principles; see reconciliation of GAAP to non-GAAP table);
-
Operating income increased 20.2% to
$16.8 million ; and
-
U.S. generally accepted accounting principles, or GAAP, net income was
$6.4 million , or$0.12 per diluted share. Adjusted net income (see reconciliation of GAAP to non-GAAP table) increased 40.3% to$8.0 million , or$0.15 per diluted share.
Second Quarter Results
Net sales increased 19.0% to
Gross profit increased 18.4% to
Selling, general and administrative ("SG&A") expenses increased to
Adjusted EBITDA increased 22.0% to
Operating income increased 20.2% to
Net income was
Balance Sheet and Cash Flow Highlights
The Company's cash balance at the end of the second quarter of fiscal 2015 was
Inventory at the end of the second quarter of fiscal 2015 increased 7.4% to
Capital expenditures for the second quarter of fiscal 2015 totaled
Initial Public Offering
On
Outlook
Ollie's currently anticipates the following for the fiscal year ending
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Total net sales of
$738 million to $741 million ;
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Comparable store sales growth of 3.3% to 3.8%;
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The opening of 25-30 new stores (of which we have opened 15 new stores to date) and closure of 1 store;
-
Income from operations of
$72.4 million to $73.1 million , or 9.8% to 9.9% of net sales;
-
Net income of
$33.5 million to $33.9 million , or 4.5% to 4.6% of net sales;
-
Net income per diluted share (GAAP) of
$0.59 to $0.60 based on an estimated weighted diluted average shares outstanding of 56.3 million; and
-
Adjusted net income of
$35.2 million to $35.5 million and adjusted diluted earnings per share of$0.62 to $0.63 . Adjusted net income and adjusted diluted earnings per share exclude the loss on the extinguishment of debt and Transaction Related Expenses.
Conference Call Information
A conference call to discuss the fiscal 2015 second quarter financial results is scheduled for today,
Replays of the conference call will be available via telephone and the Internet. A telephone replay will be available beginning at approximately
About Ollie's
We are a highly differentiated and fast growing, extreme value retailer of brand name merchandise at drastically reduced prices. We are known for our assortment of merchandise offered as Good Stuff Cheap®. We offer name brand products,
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "could," "may," "might," "will," "likely," "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "continues," "projects" and similar references to future periods, or by the inclusion of forecasts or projections, the outlook for the Company's future business, prospects, financial performance, industry outlook, our 2015 business outlook and financial guidance. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions and the following: our failure to adequately manage our inventory or anticipate consumer demand; changes in consumer confidence and spending; risks associated with intense competition; our failure to open new profitable stores, or successfully enter new markets, on a timely basis or at all; our ability to manage our inventory balances; our failure to hire and retain key personnel and other qualified personnel; our inability to obtain favorable lease terms for our properties; the loss of, or disruption in the operations of, our centralized distribution centers; fluctuations in comparable store sales and results of operations, including on a quarterly basis; risks associated with our lack of operations in the growing online retail marketplace; our inability to successfully implement our marketing, advertising and promotional efforts; the seasonal nature of our business; the risks associated with doing business with international manufacturers; changes in government regulations, procedures and requirements; and our ability to service our indebtedness and to comply with our financial covenants together with the other factors set forth under "Risk Factors" in our filings with the
Ollie's Bargain Outlet Holdings, Inc. | ||||
Condensed Consolidated Statements of Income | ||||
(In thousands except for share and per share amounts) | ||||
(Unaudited) | ||||
Thirteen weeks ended | Twenty-six weeks ended | |||
August 1, 2015 |
August 2, 2014 |
August 1, 2015 |
August 2, 2014 |
|
Net sales | $181,933 | $152,910 | $344,403 | $287,305 |
Cost of sales | 111,875 | 93,718 | 210,302 | 172,698 |
Gross profit | 70,058 | 59,192 | 134,101 | 114,607 |
Selling, general and administrative expenses | 49,575 | 42,049 | 95,446 | 82,003 |
Depreciation and amortization expenses | 1,760 | 1,794 | 3,455 | 3,518 |
Pre-opening expenses | 1,882 | 1,334 | 2,872 | 3,054 |
Operating income | 16,841 | 14,015 | 32,328 | 26,032 |
Interest expense | 4,423 | 4,720 | 8,997 | 9,042 |
Loss on extinguishment of debt | 2,351 | -- | 2,351 | 671 |
Income before income taxes | 10,067 | 9,295 | 20,980 | 16,319 |
Income tax expense | 3,715 | 3,567 | 7,967 | 6,263 |
Net income | $6,352 | $5,728 | $13,013 | $10,056 |
Earnings per common share: | ||||
Basic | $0.13 | $0.12 | $0.26 | $0.21 |
Diluted | $0.12 | $0.12 | $0.26 | $0.21 |
Weighted-average common shares outstanding: | ||||
Basic | 50,102,137 | 48,203,515 | 49,149,335 | 48,203,515 |
Diluted | 52,056,945 | 48,203,515 | 50,800,577 | 48,203,515 |
Percentage of net sales (1): | ||||
Net sales | 100.0% | 100.0% | 100.0% | 100.0% |
Cost of sales | 61.5 | 61.3 | 61.1 | 60.1 |
Gross profit | 38.5 | 38.7 | 38.9 | 39.9 |
Selling, general and administrative expenses | 27.2 | 27.5 | 27.7 | 28.5 |
Depreciation and amortization expenses | 1.0 | 1.2 | 1.0 | 1.2 |
Pre-opening expenses | 1.0 | 0.9 | 0.8 | 1.1 |
Operating income | 9.3 | 9.2 | 9.4 | 9.1 |
Interest expense | 2.4 | 3.1 | 2.6 | 3.1 |
Loss on extinguishment of debt | 1.3 | -- | 0.7 | 0.2 |
Income before income taxes | 5.5 | 6.1 | 6.1 | 5.7 |
Income tax expense | 2.0 | 2.3 | 2.3 | 2.2 |
Net income | 3.5% | 3.7% | 3.8% | 3.5% |
(1) Components may not add to totals due to rounding. |
Ollie's Bargain Outlet Holdings, Inc. | ||
Condensed Consolidated Balance Sheets | ||
(In thousands except for share and per share amounts) | ||
(Unaudited) | ||
August 1, 2015 | August 2, 2014 | |
Assets | ||
Current assets: | ||
Cash | $782 | $1,295 |
Inventories | 187,242 | 174,279 |
Accounts receivable | 570 | 332 |
Deferred income taxes | 4,322 | 2,762 |
Prepaid expenses and other assets | 5,612 | 5,271 |
Total current assets | 198,528 | 183,939 |
Property and equipment, net | 36,136 | 34,145 |
Goodwill | 444,850 | 444,850 |
Trade name and other intangible assets, net | 233,399 | 233,927 |
Other assets | 5,474 | 7,191 |
Total assets | $918,387 | $904,052 |
Liabilities and Stockholders' Equity | ||
Current liabilities: | ||
Current portion of long-term debt | $3,372 | $ 3,350 |
Accounts payable | 40,304 | 37,638 |
Income taxes payable | -- | 453 |
Accrued expenses | 27,117 | 23,759 |
Total current liabilities | 70,793 | 65,200 |
Revolving credit facility | 9,648 | 24,724 |
Long-term debt | 209,795 | 319,300 |
Deferred income taxes | 91,706 | 93,994 |
Other long-term liabilities | 3,321 | 2,728 |
Total liabilities | 385,263 | 505,946 |
Stockholders' equity | ||
Common stock | 58 | 48 |
Additional paid-in capital | 530,317 | 391,179 |
Retained earnings | 2,835 | 6,879 |
Treasury – common stock | (86) | -- |
Total stockholders' equity | 533,124 | 398,106 |
Total liabilities and stockholders' equity | $918,387 | $904,052 |
Ollie's Bargain Outlet Holdings, Inc. | ||||
Condensed Consolidated Statements of Cash Flows | ||||
(In thousands) | ||||
(Unaudited) | ||||
Thirteen weeks ended | Twenty-six weeks ended | |||
August 1, 2015 |
August 2, 2014 |
August 1, 2015 |
August 2, 2014 |
|
Net cash used in operating activities | $(2,654) | $(12,394) | $(17,155) | $(19,439) |
Net cash used in investing activities | (3,498) | (3,171) | (6,001) | (9,810) |
Net cash provided by financing activities | 2,881 | 14,109 | 1,986 | 18,378 |
Net decrease in cash | (3,271) | (1,456) | (21,170) | (10,871) |
Cash at the beginning of the period | 4,053 | 2,751 | 21,952 | 12,166 |
Cash at the end of the period | $782 | $1,295 | $782 | $1,295 |
Ollie's Bargain Outlet Holdings, Inc. | ||||
Supplemental Information – Consolidated EBITDA, Adjusted EBITDA, and Adjusted Net Income | ||||
Reconciliation of GAAP to Non-GAAP Financial Measures | ||||
(In thousands except for share and per share amounts) | ||||
(Unaudited) | ||||
The tables below reconcile the non-GAAP financial measures of EBITDA, adjusted EBITDA, adjusted net income, and adjusted diluted earnings per share, with the most directly comparable GAAP financial measures of net income and diluted earnings per share. Adjusted net income and adjusted diluted earnings per share give effect, net of tax, to transaction related expenses, and the loss on extinguishment of debt related to the pay down of our debt with the proceeds received from the initial public offering. | ||||
Reconciliation of net income to EBITDA and adjusted EBITDA | ||||
Thirteen weeks ended | Twenty-six weeks ended | |||
August 1, 2015 | August 2, 2014 | August 1, 2015 | August 2, 2014 | |
Net income | $6,352 | $5,728 | $13,013 | $10,056 |
Interest expense | 4,423 | 4,720 | 8,997 | 9,042 |
Loss on extinguishment of debt | 2,351 | -- | 2,351 | 671 |
Depreciation and amortization | 2,305 | 2,206 | 4,543 | 4,298 |
Income tax expense | 3,715 | 3,567 | 7,967 | 6,263 |
EBITDA | $19,146 | $16,221 | $36,871 | $30,330 |
Non-cash stock based compensation | 1,209 | 962 | 2,296 | 1,862 |
Pre-opening expenses | 1,882 | 1,334 | 2,872 | 3,054 |
Non –cash purchase accounting items | (81) | (97) | (167) | (198) |
Debt financing expenses | -- | -- | -- | 445 |
Transaction Related Expenses | 322 | -- | 322 | -- |
Adjusted EBITDA | $22,478 | $18,420 | $42,194 | $35,493 |
Reconciliation of GAAP net income to adjusted net income | ||||
Thirteen weeks ended | Twenty-six weeks ended | |||
August 1, 2015 | August 2, 2014 | August 1, 2015 | August 2, 2014 | |
Net income | $6,352 | $5,728 | $13,013 | $10,056 |
Transaction related expenses | 322 | -- | 322 | -- |
Loss on extinguishment of debt | 2,351 | -- | 2,351 | 671 |
Adjustment to provision for income taxes (1) | (986) | -- | (1,015) | (258) |
Adjusted net income | $8,039 | $5,728 | $14,671 | $10,469 |
(1) The provision for income taxes uses an effective tax rate of 36.9% and 38.4% for the thirteen weeks ended August 1, 2015 and August 2, 2014, respectively. The provision for income taxes uses the effective tax rate of 38.0% and 38.4% for the twenty-six weeks ended August 1, 2015 and August 2, 2014, respectively. The adjustment to the provision for income taxes includes the tax effect for transaction related expenses and loss on extinguishment of debt. |
Ollie's Bargain Outlet Holdings, Inc. | ||||
Supplemental Information – Consolidated Adjusted EPS and Key Statistics | ||||
Reconciliation of GAAP to Non-GAAP Financial Measures | ||||
(Unaudited) | ||||
Reconciliation of adjusted net income per share | ||||
Thirteen weeks ended | Twenty-six weeks ended | |||
August 1, 2015 | August 2, 2014 | August 1, 2015 | August 2, 2014 | |
Net income per share, diluted | $0.12 | $0.12 | $0.26 | $0.21 |
Adjustments | 0.03 | -- | 0.03 | 0.01 |
Adjusted net income per share, diluted | $0.15 | $0.12 | $0.29 | $0.22 |
Weighted-average common shares outstanding, diluted | 52,056,945 | 48,203,515 | 50,800,577 | 48,203,515 |
Key Statistics | ||||
Thirteen weeks ended | Twenty-six weeks ended | |||
August 1, 2015 | August 2, 2014 | August 1, 2015 | August 2, 2014 | |
Number of stores – Beginning of period | 181 | 161 | 176 | 154 |
New stores | 7 | 6 | 12 | 13 |
Closed stores | (1) | -- | (1) | -- |
Number of stores – End of period | 187 | 167 | 187 | 167 |
Average net sales per store | $986 | $929 | $1,899 | $1,777 |
(in thousands) (1) | ||||
Comparable store sales change | 7.8% | 3.8% | 8.3% | 0.5% |
Comparable store count – end of period | 159 | 133 | 159 | 133 |
(1) Average net sales per store represents the weighted average of total net sales divided by the number of stores open, in each case at the end of each week in a fiscal year. |
CONTACT: Investor Contact:John Rouleau ICR 203-682-8200 John.Rouleau@icrinc.com Media Contact:Dan Haines Vice President - Marketing & Advertising 717-657-2300 dhaines@ollies.us