Ollie's Bargain Outlet Holdings, Inc. Announces Fiscal 2015 Third Quarter Financial Results
Third Quarter Summary:
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Total net sales increased 16.4% to
$174.6 million ;
-
Comparable store sales increased 3.2%;
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The Company opened 13 new stores, ending the quarter with 200 stores in 17 states. This represents an increase of 15.6% in total number of stores from the third quarter of fiscal 2014;
-
Adjusted EBITDA increased 18.2% to
$20.0 million (adjusted EBITDA is not a measure recognized under generally accepted accounting principles ("GAAP"); see reconciliation of GAAP to non-GAAP table);
-
Operating income increased 10.4% to
$13.9 million . Excluding pre-opening expenses to eliminate the impact of opening 13 new stores during the current period compared to six store openings in the same period last year, operating income increased 18.6% to$16.3 million (see reconciliation of GAAP to non-GAAP table) and;
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Net income increased 39.4% to
$6.8 million , or$0.11 per diluted share.
Third Quarter Results
Net sales increased 16.4% to
Gross profit increased 17.3% to
Selling, general and administrative ("SG&A") expenses increased 17.5% to
Pre-opening expenses related to new store growth increased 110.2% to
Adjusted EBITDA increased 18.2% to
Operating income increased 10.4% to
Net income increased 39.4% to
Balance Sheet and Cash Flow Highlights
The Company's cash balance at the end of the third quarter of fiscal 2015 was
Inventory at the end of the third quarter of fiscal 2015 increased 14.4% to
Capital expenditures for the third quarter of fiscal 2015 totaled
Outlook
Ollie's currently estimates the following results for the fiscal year ending
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Total net sales to increase approximately 17% to
$745 million ;
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Comparable store sales growth of approximately 4%;
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The opening of 28 new stores (of which we have opened 27 new stores to date) and closure of 1 store. This represents an increase of 15.3% in total number of stores from fiscal 2014;
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Adjusted EBITDA to increase approximately 19% to
$95 million , or 13% of net sales. Adjusted EBITDA excludes non-cash stock based compensation expense, pre-opening expenses, non-cash purchase accounting items, and transaction related expenses;
-
Operating income to increase approximately 19% to
$75 million , or 10% of net sales;
-
Net income to increase approximately 30% to
$35 million , or 4.5% of net sales;
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Net income per diluted share (GAAP) of approximately
$0.63 based on an estimated weighted diluted average shares outstanding of approximately$56.3 million ; and
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Adjusted net income to increase approximately 35% to
$37 million and adjusted diluted earnings per share of approximately$0.66 . 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 third 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 | Thirty-nine weeks ended | |||
October 31, 2015 |
November 1, 2014 |
October 31, 2015 |
November 1, 2014 |
|
( dollars in thousands) | ||||
Consolidated statement of income data: | ||||
Net sales | $174,565 | $150,005 | $518,968 | $437,310 |
Cost of sales | 104,641 | 90,410 | 314,943 | 263,108 |
Gross profit | 69,924 | 59,595 | 204,025 | 174,202 |
Selling, general and administrative expenses | 51,796 | 44,063 | 147,242 | 126, 066 |
Depreciation and amortization expenses | 1,810 | 1,773 | 5,265 | 5,291 |
Pre-opening expenses | 2,380 | 1,132 | 5,252 | 4,186 |
Operating income | 13,938 | 12,627 | 46,266 | 38,659 |
Interest expense, net | 3,289 | 4,754 | 12,286 | 13,796 |
Loss on extinguishment of debt | -- | -- | 2,351 | 671 |
Income before income taxes | 10,649 | 7,873 | 31,629 | 24,192 |
Income tax expense | 3,887 | 3,022 | 11,854 | 9,285 |
Net income | $6,762 | $4,851 | $19,775 | $14,907 |
Percentage of net sales (1): | ||||
Net sales | 100.0% | 100.0% | 100.0% | 100.0% |
Cost of sales | 59.9 | 60.3 | 60.7 | 60.2 |
Gross profit | 40.1 | 39.7 | 39.3 | 39.8 |
Selling, general and administrative expenses | 29.7 | 29.4 | 28.4 | 28.8 |
Depreciation and amortization expenses | 1.0 | 1.2 | 1.0 | 1.2 |
Pre-opening expenses | 1.4 | 0.8 | 1.0 | 1.0 |
Operating income | 8.0 | 8.4 | 8.9 | 8.8 |
Interest expense, net | 1.9 | 3.2 | 2.4 | 3.2 |
Loss on extinguishment of debt | -- | -- | 0.5 | 0.2 |
Income before income taxes | 6.1 | 5.2 | 6.1 | 5.5 |
Income tax expense | 2.2 | 2.0 | 2.3 | 2.1 |
Net income | 3.9% | 3.2% | 3.8% | 3.4% |
Select Operating Data: | ||||
Number of new stores | 13 | 6 | 25 | 19 |
Number of store closings | -- | -- | (1) | -- |
Number of stores open at end of period | 200 | 173 | 200 | 173 |
Average net sales per store | $904 | $882 | $2,802 | $2,659 |
Comparable stores sales change | 3.2% | 6.2% | 6.5% | 2.4% |
(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) | ||
Assets |
October 31, 2015 |
November 1, 2014 |
Current assets: | ||
Cash | $3,960 | $3,341 |
Inventories | 212,581 | 185,843 |
Accounts receivable | 418 | 343 |
Deferred income taxes | 4,559 | 3,166 |
Prepaid expenses and other assets | 6,771 | 6,198 |
Total current assets | 228,289 | 198,891 |
Property and equipment, net | 38,726 | 34,379 |
Goodwill | 444,850 | 444,850 |
Trade name and other intangible assets, net | 233,291 | 233,742 |
Other assets | 5,185 | 6,841 |
Total assets | $950,341 | $918,703 |
Liabilities and Stockholders' Equity | ||
Current liabilities: | ||
Current portion of long-term debt | $3,367 | $3,350 |
Accounts payable | 50,995 | 44,600 |
Accrued expenses | 31,321 | 28,895 |
Total current liabilities | 85,683 | 76,845 |
Revolving credit facility | 18,054 | 22,667 |
Long-term debt | 209,080 | 318,619 |
Deferred income taxes | 91,673 | 93,782 |
Other long-term liabilities | 4,099 | 2,872 |
Total liabilities | 408,589 | 514,785 |
Stockholders' equity | ||
Common stock | 59 | 48 |
Additional paid-in capital | 532,182 | 392,169 |
Retained earnings | 9,597 | 11,730 |
Treasury – common stock | (86) | (29) |
Total stockholders' equity | 541,752 | 403,918 |
Total liabilities and stockholders' equity | $950,341 | $918,703 |
Ollie's Bargain Outlet Holdings, Inc. | ||||
Condensed Consolidated Statements of Cash Flows | ||||
(In thousands) | ||||
(Unaudited) | ||||
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October 31, 2015 |
November 1, 2014 |
October 31, 2015 |
November 1, 2014 |
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Net cash provided by (used in) operating activities | $1,772 | $7,241 | $(15,383) | $(12,198) |
Net cash used in investing activities | (4,893) | (2,271) | (10,894) | (12,081) |
Net cash provided by (used in) financing activities | 6,299 | (2,924) | 8,285 | 15,454 |
Net increase/(decrease) in cash | 3,178 | 2,046 | (17,992) | (8,825) |
Cash at the beginning of the period | 782 | 1,295 | 21,952 | 12,166 |
Cash at the end of the period | $3,960 | $3,341 | $3,960 | $3,341 |
Ollie's Bargain Outlet Holdings, Inc. | ||||
Supplemental Information – Consolidated Adjusted Operating Income 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 adjusted operating income, adjusted net income, adjusted diluted earnings per share, and adjusted EBITDA, with the most directly comparable GAAP financial measures of operating income, net income and diluted earnings per share, respectively. 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 GAAP operating income to adjusted operating income | ||||
Thirteen weeks ended | Thirty-nine weeks ended | |||
October 31, 2015 |
November 1, 2014 |
October 31, 2015 |
November 1, 2014 |
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Operating income | $13,938 | $12,627 | $46,266 | $38,659 |
Pre-opening expenses | 2,380 | 1,132 | 5,252 | 4,186 |
Adjusted operating income | $16,318 | $13,759 | $51,518 | $42,845 |
Reconciliation of GAAP net income to adjusted net income | ||||
Thirteen weeks ended | Thirty-nine weeks ended | |||
October 31, 2015 |
November 1, 2014 |
October 31, 2015 |
November 1, 2014 |
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Net income | $6,762 | $4,851 | $19,775 | $14,907 |
Transaction related expenses | -- | -- | 322 | -- |
Loss on extinguishment of debt | -- | -- | 2,351 | 671 |
Adjustment to provision for income taxes (1) | -- | -- | (1,015) | (258) |
Adjusted net income | $6,762 | $4,851 | $21,433 | $15,320 |
(1) The effective tax rate for the provision for income taxes used was 37.5% and 38.4% for the thirty-nine weeks ended October 31, 2015 and November 1, 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, EBITDA, Adjusted EBITDA, and Key Statistics | ||||
Reconciliation of GAAP to Non-GAAP Financial Measures | ||||
(In thousands except for share and per share amounts) | ||||
(Unaudited) | ||||
Reconciliation of adjusted net income per share | ||||
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October 31, 2015 |
November 1, 2014 |
October 31, 2015 |
November 1, 2014 |
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Net income per share, diluted | $0.11 | $0.10 | $0.37 | $0.31 |
Adjustments | -- | -- | 0.03 | 0.01 |
Adjusted net income per share, diluted | $0.11 | $0.10 | $0.40 | $0.32 |
Weighted-average common shares outstanding, diluted | 60,703,586 | 48,839,990 | 54,101,964 | 48,415,673 |
Reconciliation of net income to EBITDA and adjusted EBITDA | ||||
Thirteen weeks ended | Thirty-nine weeks ended | |||
October 31, 2015 |
November 1, 2014 |
October 31, 2015 |
November 1, 2014 |
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(dollars in thousands) | ||||
Net Income | $6,762 | $4,851 | $19,775 | $14,907 |
Interest expense, net | 3,289 | 4,754 | 12,286 | 13,796 |
Loss on extinguishment of debt | -- | -- | 2,351 | 671 |
Depreciation and amortization expenses | 2,358 | 2,246 | 6,901 | 6,544 |
Income tax expense | 3,887 | 3,022 | 11,854 | 9,285 |
EBITDA | 16,296 | 14,873 | 53,167 | 45,203 |
Non-cash stock based compensation expense | 1,372 | 990 | 3,667 | 2,852 |
Pre-opening expenses | 2,380 | 1,132 | 5,252 | 4,186 |
Non-cash purchase accounting items | (65) | (95) | (232) | (293) |
Transaction related expenses | -- | -- | 322 | -- |
Debt financing expenses | -- | -- | -- | 445 |
Adjusted EBITDA | $19,983 | $16,900 | $62,176 | $52,393 |
Ollie's Bargain Outlet Holdings, Inc. | ||||
Supplemental Information –Key Statistics | ||||
(Unaudited) | ||||
Key Statistics | ||||
Thirteen weeks ended | Thirty-nine weeks ended | |||
October 31, 2015 |
November 1, 2014 |
October 31, 2015 |
November 1, 2014 |
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Number of stores – Beginning of period | 187 | 167 | 176 | 154 |
New stores | 13 | 6 | 25 | 19 |
Closed stores | -- | -- | (1) | -- |
Number of stores – End of period | 200 | 173 | 200 | 173 |
Average net sales per store | $904 | $882 | $2,802 | $2,659 |
(in thousands) (1) | ||||
Comparable store sales change | 3.2% | 6.2% | 6.5% | 2.4% |
Comparable store count – end of period | 165 | 141 | 165 | 141 |
(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 or fiscal quarter. |
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