Ollie’s Bargain Outlet Holdings, Inc.
|
(Exact name of registrant as specified in its charter)
|
Delaware
|
(State or other jurisdiction of incorporation)
|
001-37501
|
80-0848819
|
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
6295 Allentown Boulevard
|
||
Suite 1
|
||
Harrisburg, Pennsylvania
|
17112
|
|
(Address of principal executive offices)
|
(Zip Code)
|
☐
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Item 2.02
|
Results of Operations and Financial Condition.
|
Item 9.01
|
Financial Statements and Exhibits.
|
(d)
|
Exhibits. The following exhibits are filed with this report:
|
Exhibit No.
|
Description
|
|
99.1
|
Press Release issued on April 4, 2018 of Ollie’s Bargain Outlet Holdings, Inc.
|
OLLIE’S BARGAIN OUTLET HOLDINGS, INC.
|
|||
By:
|
/s/ Jay Stasz
|
||
Name:
|
Jay Stasz
|
||
Title:
|
Senior Vice President and
|
||
Chief Financial Officer
|
|||
Date: April 4, 2018
|
Exhibit No.
|
Description
|
|
Press Release issued on April 4, 2018 of Ollie’s Bargain Outlet Holdings, Inc.
|
·
|
Total net sales increased 25.9% to $356.7 million. Excluding the impact of the 53rd week, net sales increased 20.0%.
|
·
|
Net sales in the 53rd week were $16.5 million and contributed less than $0.01 to diluted earnings per share.
|
·
|
Comparable store sales increased 4.4% on a 13-week basis.
|
·
|
The Company opened three stores during the quarter, ending the year with a total of 268 stores in 20 states, an increase in store count of 14.5% year over year.
|
·
|
Operating income increased 34.0% to $54.4 million.
|
·
|
Net income increased 186.9% to $70.1 million and net income per diluted share increased 174.4% to $1.07.
|
·
|
Adjusted net income(1) increased 35.6% to $33.1 million and adjusted net income per diluted share(1) increased 30.8% to $0.51.
|
·
|
Adjusted EBITDA(1) increased 31.0% to $59.2 million.
|
·
|
Total net sales increased 21.0% to $1.077 billion. Excluding the impact of the 53rd week, net sales increased 19.1%.
|
·
|
Comparable store sales increased 3.3% on a 52-week basis.
|
·
|
Operating income increased 32.8% to $135.8 million.
|
·
|
Net income increased 113.5% to $127.6 million and net income per diluted share increased 104.2% to $1.96.
|
·
|
Adjusted net income(1) increased 33.4% to $81.1 million and adjusted net income per diluted share(1) increased 28.9% to $1.25.
|
·
|
Adjusted EBITDA(1) increased 28.2% to $155.4 million.
|
(1)
|
As used throughout this release, adjusted operating income, adjusted net income, adjusted net income per diluted share, EBITDA and adjusted EBITDA are not measures recognized under U.S. generally accepted accounting principles (“GAAP”). Please see the accompanying financial tables which reconcile these non-GAAP measures to GAAP.
|
·
|
Total net sales of $1.20 billion to $1.21 billion, an increase of 13.2% to 14.1% on a 52-week basis;
|
·
|
Comparable store sales growth of 1.0% to 2.0%;
|
·
|
The opening of 36 to 38 new stores and no planned closures;
|
·
|
Operating income of $149.0 million to $152.0 million;
|
·
|
Adjusted net income(2) of $109.0 million to $112.0 million, which excludes income tax benefits due to the accounting change for stock-based compensation;
|
·
|
Adjusted net income per diluted share(2) of $1.65 to $1.69, which excludes income tax benefits due to the accounting change for stock-based compensation;
|
·
|
An effective tax rate of 26.0%, lower than prior years due to the 2017 Tax Act;
|
·
|
Estimated diluted weighted average shares outstanding of 66.0 million; and
|
·
|
Capital expenditures of $23.0 million to $25.0 million.
|
(2)
|
The guidance ranges as provided for adjusted net income and adjusted net income per diluted share exclude any income tax benefits due to the change in accounting for stock-based compensation as the Company cannot predict such estimates without unreasonable effort.
|
14 Weeks
Ended
|
13 Weeks
Ended
|
53 Weeks
Ended
|
52 Weeks
Ended
|
|||||||||||||
February 3,
2018
|
January 28,
2017
|
February 3,
2018
|
January 28,
2017
|
|||||||||||||
Net sales
|
$
|
356,669
|
$
|
283,355
|
$
|
1,077,032
|
$
|
890,315
|
||||||||
Cost of sales
|
216,172
|
169,963
|
645,385
|
529,904
|
||||||||||||
Gross profit
|
140,497
|
113,392
|
431,647
|
360,411
|
||||||||||||
Selling, general and administrative expenses
|
82,541
|
69,823
|
278,174
|
242,891
|
||||||||||||
Depreciation and amortization expenses
|
2,667
|
2,255
|
9,817
|
8,443
|
||||||||||||
Pre-opening expenses
|
895
|
731
|
7,900
|
6,883
|
||||||||||||
Operating income
|
54,394
|
40,583
|
135,756
|
102,194
|
||||||||||||
Interest expense, net
|
870
|
1,395
|
4,471
|
5,935
|
||||||||||||
Loss on extinguishment of debt
|
401
|
-
|
798
|
-
|
||||||||||||
Income before income taxes
|
53,123
|
39,188
|
130,487
|
96,259
|
||||||||||||
Income tax expense
|
(16,931
|
)
|
14,768
|
2,893
|
36,495
|
|||||||||||
Net income
|
$
|
70,054
|
$
|
24,420
|
$
|
127,594
|
$
|
59,764
|
||||||||
Earnings per common share:
|
||||||||||||||||
Basic
|
$
|
1.13
|
$
|
0.40
|
$
|
2.08
|
$
|
0.99
|
||||||||
Diluted
|
$
|
1.07
|
$
|
0.39
|
$
|
1.96
|
$
|
0.96
|
||||||||
Weighted average common shares outstanding:
|
||||||||||||||||
Basic
|
61,786
|
60,623
|
61,353
|
60,160
|
||||||||||||
Diluted
|
65,351
|
62,918
|
64,950
|
62,415
|
||||||||||||
Percentage of net sales (1):
|
||||||||||||||||
Net sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||||
Cost of sales
|
60.6
|
60.0
|
59.9
|
59.5
|
||||||||||||
Gross profit
|
39.4
|
40.0
|
40.1
|
40.5
|
||||||||||||
Selling, general and administrative expenses
|
23.1
|
24.6
|
25.8
|
27.3
|
||||||||||||
Depreciation and amortization expenses
|
0.7
|
0.8
|
0.9
|
0.9
|
||||||||||||
Pre-opening expenses
|
0.3
|
0.3
|
0.7
|
0.8
|
||||||||||||
Operating income
|
15.3
|
14.3
|
12.6
|
11.5
|
||||||||||||
Interest expense, net
|
0.2
|
0.5
|
0.4
|
0.7
|
||||||||||||
Loss on extinguishment of debt
|
0.1
|
—
|
0.1
|
—
|
||||||||||||
Income before income taxes
|
14.9
|
13.8
|
12.1
|
10.8
|
||||||||||||
Income tax expense
|
(4.7
|
)
|
5.2
|
0.3
|
4.1
|
|||||||||||
Net income
|
19.6
|
%
|
8.6
|
%
|
11.8
|
%
|
6.7
|
%
|
(1)
|
Components may not add to totals due to rounding.
|
Assets
|
February 3,
2018
|
January 28,
2017
|
||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
39,234
|
$
|
98,683
|
||||
Inventories
|
255,185
|
210,107
|
||||||
Accounts receivable
|
1,271
|
301
|
||||||
Prepaid expenses and other assets
|
7,986
|
3,739
|
||||||
Total current assets
|
303,676
|
312,830
|
||||||
Property and equipment, net
|
54,888
|
46,333
|
||||||
Goodwill
|
444,850
|
444,850
|
||||||
Trade name and other intangible assets, net
|
232,639
|
232,977
|
||||||
Other assets
|
2,146
|
2,385
|
||||||
Total assets
|
$
|
1,038,199
|
$
|
1,039,375
|
||||
Liabilities and Stockholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Current portion of long-term debt
|
$
|
10,158
|
$
|
5,077
|
||||
Accounts payable
|
74,206
|
50,448
|
||||||
Income taxes payable
|
6,035
|
4,548
|
||||||
Accrued expenses
|
46,327
|
44,748
|
||||||
Total current liabilities
|
136,726
|
104,821
|
||||||
Revolving credit facility
|
-
|
-
|
||||||
Long-term debt
|
38,835
|
188,923
|
||||||
Deferred income taxes
|
59,073
|
89,224
|
||||||
Other long-term liabilities
|
7,103
|
5,146
|
||||||
Total liabilities
|
241,737
|
388,114
|
||||||
Stockholders’ equity:
|
||||||||
Common stock
|
62
|
61
|
||||||
Additional paid-in capital
|
583,467
|
565,861
|
||||||
Retained earnings
|
213,019
|
85,425
|
||||||
Treasury - common stock
|
(86
|
)
|
(86
|
)
|
||||
Total stockholders’ equity
|
796,462
|
651,261
|
||||||
Total liabilities and stockholders’ equity
|
$
|
1,038,199
|
$
|
1,039,375
|
14 Weeks
Ended
|
13 Weeks
Ended
|
53 Weeks
Ended
|
52 Weeks
Ended
|
|||||||||||||
February 3,
2018
|
January 28,
2017
|
February 3,
2018
|
January 28,
2017
|
|||||||||||||
Net cash provided by operating activities
|
$
|
75,552
|
$
|
62,927
|
$
|
95,936
|
$
|
67,088
|
||||||||
Net cash used in investing activities
|
(4,038
|
)
|
(2,205
|
)
|
(19,157
|
)
|
(16,423
|
)
|
||||||||
Net cash provided by (used in) financing activities
|
(74,444
|
)
|
2,000
|
(136,228
|
)
|
17,759
|
||||||||||
Net increase (decrease) in cash and cash equivalents
|
(2,930
|
)
|
62,722
|
(59,449
|
)
|
68,424
|
||||||||||
Cash and cash equivalents at the beginning of the period
|
42,164
|
35,961
|
98,683
|
30,259
|
||||||||||||
Cash and cash equivalents at the end of the period
|
$
|
39,234
|
$
|
98,683
|
$
|
39,234
|
$
|
98,683
|
14 Weeks
Ended
|
13 Weeks
Ended
|
53 Weeks
Ended
|
52 Weeks
Ended
|
|||||||||||||
February 3,
2018
|
January 28,
2017
|
February 3,
2018
|
January 28,
2017
|
|||||||||||||
Operating income
|
$
|
54,394
|
$
|
40,583
|
$
|
135,756
|
$
|
102,194
|
||||||||
Transaction related expenses
|
-
|
-
|
-
|
1,736
|
||||||||||||
Adjusted operating income
|
$
|
54,394
|
$
|
40,583
|
$
|
135,756
|
$
|
103,930
|
14 Weeks
Ended
|
13 Weeks
Ended
|
53 Weeks
Ended
|
52 Weeks
Ended
|
|||||||||||||
February 3,
2018
|
January 28,
2017
|
February 3,
2018
|
January 28,
2017
|
|||||||||||||
Net income
|
$
|
70,054
|
$
|
24,420
|
$
|
127,594
|
$
|
59,764
|
||||||||
Transaction related expenses
|
-
|
-
|
-
|
1,736
|
||||||||||||
Loss on extinguishment of debt
|
401
|
-
|
798
|
-
|
||||||||||||
Adjustment to provision for income taxes (1)
|
(153
|
)
|
-
|
(306
|
) |
(672
|
)
|
|||||||||
Income tax benefits due to the 2017 Tax Act (2)
|
(32,557
|
)
|
-
|
(32,557
|
) |
-
|
||||||||||
Income tax benefits due to accounting change for stock-based compensation (3)
|
(4,626
|
)
|
-
|
(14,409
|
) |
-
|
||||||||||
Adjusted net income
|
$
|
33,119
|
$
|
24,420
|
$
|
81,120
|
$
|
60,828
|
(1)
|
The effective tax rate used for the adjustment to the provision for income taxes was the normalized effective tax rate in the quarter in which the related costs were incurred. The adjustment to the provision for income taxes includes the tax effect for the transaction related expenses and loss on extinguishment of debt.
|
(2)
|
Amount represents benefits related to changes in the U.S. tax code as a result of the 2017 Tax Act, effective as of January 1, 2018. The income tax benefit is primarily due to the net impact of the revaluation of net deferred tax liability balances as a result of the reduction in the federal corporate tax rate to 21% from the prior maximum rate of 35%.
|
(3)
|
Amount represents the impact from the recognition of excess tax benefits pursuant to Accounting Standards Update (“ASU”) 2016-09, Stock Compensation, which was in effect for the fourteen and fifty-three weeks ended February 3, 2018.
|
14 Weeks
Ended
|
13 Weeks
Ended
|
53 Weeks
Ended
|
52 Weeks
Ended
|
|||||||||||||
February 3,
2018
|
January 28,
2017
|
February 3,
2018
|
January 28,
2017
|
|||||||||||||
Net income per share, diluted
|
$
|
1.07
|
$
|
0.39
|
$
|
1.96
|
$
|
0.96
|
||||||||
Adjustments as noted above per diluted share:
|
||||||||||||||||
Transaction related expenses, net of taxes
|
-
|
-
|
-
|
0.02
|
||||||||||||
Loss on extinguishment of debt, net of taxes
|
0.00
|
-
|
0.01
|
-
|
||||||||||||
Income tax benefits due to the 2017 Tax Act
|
(0.50
|
)
|
-
|
(0.50
|
)
|
-
|
||||||||||
Income tax benefits due to accounting change for stock-based compensation
|
(0.07
|
)
|
-
|
(0.22
|
)
|
-
|
||||||||||
Adjusted net income per share, diluted (1)
|
$
|
0.51
|
$
|
0.39
|
$
|
1.25
|
$
|
0.97
|
||||||||
Weighted-average common shares outstanding, diluted
|
65,351
|
62,918
|
64,950
|
62,415
|
(1)
|
Totals may not foot due to rounding
|
14 Weeks
Ended
|
13 Weeks
Ended
|
53 Weeks
Ended
|
52 Weeks
Ended
|
|||||||||||||
February 3,
2018
|
January 28,
2017
|
February 3,
2018
|
January 28,
2017
|
|||||||||||||
Net income
|
$
|
70,054
|
$
|
24,420
|
$
|
127,594
|
$
|
59,764
|
||||||||
Interest expense, net
|
870
|
1,395
|
4,471
|
5,935
|
||||||||||||
Loss on extinguishment of debt
|
401
|
-
|
798
|
-
|
||||||||||||
Depreciation and amortization expenses
|
3,300
|
2,898
|
12,261
|
10,668
|
||||||||||||
Income tax expense
|
(16,931
|
)
|
14,768
|
2,893
|
36,495
|
|||||||||||
EBITDA
|
57,694
|
43,481
|
148,017
|
112,862
|
||||||||||||
Non-cash stock-based compensation expense
|
1,481
|
1,706
|
7,413
|
6,685
|
||||||||||||
Non-cash purchase accounting items
|
(5
|
)
|
(22
|
)
|
(64
|
)
|
(134
|
)
|
||||||||
Transaction related expenses
|
-
|
-
|
-
|
1,736
|
||||||||||||
Adjusted EBITDA
|
$
|
59,170
|
$
|
45,165
|
$
|
155,366
|
$
|
121,149
|
14 Weeks
Ended
|
13 Weeks
Ended
|
53 Weeks
Ended
|
52 Weeks
Ended
|
|||||||||||||
February 3,
2018
|
January 28,
2017
|
February 3,
2018
|
January 28,
2017
|
|||||||||||||
Number of stores - Beginning of period
|
265
|
232
|
234
|
203
|
||||||||||||
New stores
|
3
|
2
|
34
|
31
|
||||||||||||
Number of stores - End of period
|
268
|
234
|
268
|
234
|
||||||||||||
Average net sales per store (in thousands) (1)
|
$
|
1,332
|
$
|
1,211
|
$
|
4,248
|
$
|
4,050
|
||||||||
Comparable stores sales change
|
4.4
|
%
|
2.0
|
%
|
3.3
|
%
|
3.2
|
%
|
||||||||
Comparable store count – end of period
|
225
|
194
|
225
|
194
|
(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 quarter.
|