- Net sales of $537.1 million and a comparable store sales
increase of 187.3%
- EPS of $0.81 and adjusted EPS1 of $0.87
- Files preliminary proxy in connection with pending
transaction and issues separate press release outlining financial
projections through fiscal 2026
At Home Group Inc. (NYSE: HOME), the home décor superstore,
today announced its financial results for the first quarter ended
May 1, 2021.
For the Thirteen Weeks Ended May 1,
2021
- The Company opened nine and closed two stores in the first
quarter of fiscal 2022, ending the quarter with 226 stores in 40
states. The Company opened a net eight stores since the first
quarter of fiscal 2021, representing a 3.7% increase.
- Net sales increased 182.9% to $537.1 million from $189.8
million in the first quarter of fiscal 2021.
- Comparable store sales increased 187.3% driven by strong
demand, including approximately $45 million of estimated sales
benefit attributable to stimulus payments not expected to recur in
future quarters and the continued execution of our strategic
initiatives. Reported comparable store sales in the first and
second quarters of fiscal 2021 were (46.5%) and 42.3% respectively.
Adjusting for the calendar shift as a result of the 53rd week in
fiscal year 2021, comparable store sales in the first and second
quarters of fiscal 2021 would have been approximately 300 basis
points lower and 800 basis points higher, respectively, largely due
to the impact of temporary store closures during those periods
related to the COVID-19 pandemic.
- Gross profit was $200.3 million compared to $16.4 million in
the first quarter of fiscal 2021. Gross margin was 37.3% compared
to 8.6% in the prior year period primarily due to occupancy,
depreciation, freight and distribution center expense leverage as a
result of increased net sales and, to a lesser extent, product
margin expansion. The Company continues to expect increased freight
costs to significantly impact gross margin in the second half of
fiscal 2022.
- Selling, general and administrative expenses (“SG&A”)
increased 63.3% to $108.5 million from $66.5 million in the first
quarter of fiscal 2021. As a percentage of net sales, SG&A
decreased to 20.2% from 35.0% in the prior year period primarily
due to expense leverage as a result of increased sales.
- Operating income was $89.4 million compared to a loss of
$(372.1) million in the first quarter of fiscal 2021 that included
a non-cash goodwill impairment charge of $319.7 million. Adjusted
operating income1 increased to $90.0 million from a loss of $(52.3)
million in the prior year period. Adjusted operating margin1
increased to 16.8% from (27.6)% driven by the gross margin and
SG&A factors described above.
- Interest expense increased to $8.1 million from $7.0 million in
the first quarter of fiscal 2021 primarily due to interest incurred
on our 8.750% senior secured notes and $35.0 million term loan
tranche (the “FILO Loans”), and partially offset by interest
avoided by the repayment of our term loan and no borrowings
outstanding under our revolving credit facility (the “ABL
Facility”).
- Income tax expense was $19.7 million, and our effective tax
rate was 25.9%. In the first quarter of fiscal 2021, income tax
benefit was $20.1 million, and our effective tax rate was
5.3%.
- Net income was $56.3 million compared to a loss of $(358.9)
million in the first quarter of fiscal 2021. Adjusted Net Income1
was $60.7 million compared to a loss of $(39.2) million in the
prior year period.
- EPS was $0.81 compared to $(5.60) in the first quarter of
fiscal 2021 and adjusted EPS1 was $0.87 compared to $(0.61) in the
prior year period.
- Adjusted EBITDA1 was $110.6 million compared to $(14.6) million
in the first quarter of fiscal 2021.
Balance Sheet Highlights as of May 1,
2021
- The Company had $150.5 million of cash and no borrowings
outstanding under the ABL Facility compared to $43.6 million of
cash and $342.0 million of borrowings as of April 25, 2020.
Borrowing availability under the ABL Facility was $325.2 million,
inclusive of $35.0 million of minimum required availability.
- Net inventories decreased 9.3% to $369.0 million from $407.0
million as of April 25, 2020.
- Long-term debt was $308.6 million compared to $334.2 million as
of April 25, 2020. On April 30, 2021, the Company repaid in full
the FILO Loans for $34.6 million, including a $2.0 million
prepayment premium, which resulted in a $5.3 million loss on
extinguishment of debt.
(1)
Represents a non-GAAP financial measure. For additional
information about non-GAAP measures, including, where applicable,
reconciliations to the most directly comparable financial measures
presented in accordance with GAAP, please see “Non-GAAP Measures”
below. Refer to “Terminology” section for the Company’s non-GAAP
definitions.
Subsequent Events
On May 6, 2021, the Company announced it has entered into a
definitive agreement to be acquired by funds affiliated with
Hellman & Friedman LLC (“the transaction”). Under the terms of
the agreement, At Home stockholders will receive $36.00 per share
in cash. The parties currently expect the transaction to be
completed in the third quarter of calendar year 2021, subject to
the satisfaction of customary closing conditions, including the
approval of At Home’s stockholders and expiration of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976. The transaction is not subject to a financing condition. Upon
completion of the transaction, At Home will become a privately-held
company and At Home’s shares will no longer trade on The New York
Stock Exchange.
Outlook and At Home Preliminary Proxy
Filing Regarding Pending Transaction
Given the pending transaction and the continued uncertainty
related to COVID-19, the Company is not providing formal guidance
at this time.
In a separate press release issued today, At Home announced the
filing of its preliminary proxy materials with the Securities and
Exchange Commission in connection with the transaction. Among other
things, the preliminary proxy and press release include the
Company’s financial projections through fiscal 2026.
The press release and corresponding filing are available on the
Company’s investor relations page at investor.athome.com.
Conference Call
Due to the pending transaction, the Company will not host a
conference call to review the first quarter fiscal 2022 financial
results.
Terminology
We define certain terms used in this release as follows:
“Adjusted EBITDA” means net income (loss) before net interest
expense, income tax provision (benefit) and depreciation and
amortization, adjusted for the impact of certain other items as
defined in our debt agreements, including certain legal settlements
and consulting and other professional fees, stock-based
compensation expense, impairment charges, loss on extinguishment of
debt, (gain) loss on sale-leaseback, non-cash rent and other
adjustments.
“Adjusted Net Income” means net income (loss), adjusted for
impairment charges, (gain) loss on sale-leaseback, loss on
extinguishment of debt, payroll tax expenses and the income tax
associated with initial public offering non-cash stock-based
compensation expense (the “IPO Grant”) and other adjustments.
“Adjusted operating income” means operating income (loss),
adjusted for impairment charges, (gain) loss on sale-leaseback,
payroll tax expenses associated with IPO Grant stock option
exercises and other adjustments.
“Adjusted operating margin” means adjusted operating income
(loss) divided by net sales.
“Adjusted SG&A” means selling, general and administrative
expenses adjusted for certain expenses, including payroll tax
expenses associated with IPO Grant stock option exercises and other
adjustments.
“Comparable store sales” means, for any reporting period, the
change in period-over-period net sales for the comparable store
base. A store is included in the comparable store sales calculation
on the first day of the sixteenth full fiscal month following the
store's opening, which is when we believe comparability is
achieved. When a store is being relocated or remodeled, we exclude
sales from that store in the calculation of comparable store sales
until the first day of the sixteenth full fiscal month after it
reopens. Sales resulting from our omnichannel initiatives occur at
the store level and are included in the calculation of comparable
store sales.
“EPS” means diluted earnings (loss) per share.
“GAAP” means accounting principles generally accepted in the
United States.
“Leverage ratio” means Net Debt divided by Adjusted EBITDA for
the trailing twelve months.
“Net Debt” includes long-term debt, borrowing under the ABL
revolving credit facility, and current portion of long-term debt
and financing obligations, less unamortized deferred debt issuance
cost and cash and cash equivalents. Net Debt excludes operating
lease liabilities recognized in accordance with ASC 842 Leases.
“Adjusted EPS” means Adjusted Net Income divided by diluted
weighted average shares outstanding.
“Store-level Adjusted EBITDA” means Adjusted EBITDA, adjusted
further to exclude the impact of costs associated with new store
openings and certain corporate overhead expenses that we do not
consider in our evaluation of the ongoing operating performance of
our stores from period to period.
Additional Information and Where to
Find It
This communication may be deemed to be solicitation material in
respect of the proposed acquisition of the Company by an affiliate
of Hellman & Friedman LLC. In connection with the proposed
merger, the Company will file with the Securities and Exchange
Commission (“SEC”) and furnish to its stockholders a proxy
statement and other relevant documents. STOCKHOLDERS OF THE COMPANY
ARE ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE
(INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION. Investors may obtain a free copy of
the proxy statement (when it becomes available) and other relevant
documents filed by the Company with the SEC at the SEC’s Web site
at http://www.sec.gov. The proxy statement and such other documents
once filed by the Company with the SEC may also be obtained for
free from the Investor Relations section of the Company’s web site
(http://investor.athome.com/) or by directing a request to: the
Company, 1600 East Plano Parkway, Plano, Texas, 75074, Attention:
Investor Relations. Copies of documents filed by the Company with
the SEC may also be obtained for free at the SEC’s Web site at
http://www.sec.gov.
Participants in the
Solicitation
The Company and its officers and directors may be deemed to be
participants in the solicitation of proxies from the stockholders
of the Company in connection with the proposed merger. Information
about the Company’s executive officers and directors is set forth
in the Company’s Annual Report on Form 10-K, which was filed by the
Company with the SEC on March 24, 2021, and the proxy statement for
the Company’s 2021 annual meeting of stockholders, which was filed
with the SEC by the Company on May 4, 2021. Investors may obtain
more detailed information regarding the direct and indirect
interests of the Company and its executive officers and directors
in the proposed merger by reading the preliminary and definitive
proxy statement regarding the proposed merger when each such
document is filed with the SEC. When available, you may obtain free
copies of these documents as described in the preceding
paragraph.
Forward-Looking
Statements
This release contains forward-looking statements made pursuant
to and within the meaning of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. You can generally
identify forward-looking statements by our use of forward-looking
terminology such as "anticipate", "are confident", "assume",
"believe", "continue", "could", "estimate", "expect", "intend",
“look ahead”, "look forward", "may", "might", "on track",
"outlook", "plan", "potential", "predict", "reaffirm", "seek",
"should", "trend", “will”, or “vision” or the negative thereof or
comparable terminology regarding future events or conditions. In
particular, forward-looking statements in this release include,
without limitation, statements about our financial and operating
performance, cash flows, liquidity, financial condition, inventory,
the markets in which we operate, expected new store openings, our
real estate strategy, the impact of the COVID-19 pandemic, growth
targets, potential growth opportunities, market share, competition,
the impact of expected stock option exercises and future capital
expenditures, estimates of expenses we may incur in connection with
equity incentive awards to management, customer and macroeconomic
trends, expectations regarding the closing of the merger and other
statements regarding our expectations, beliefs, plans, strategies,
objectives, prospects, assumptions, or future events or
performance.
Such forward-looking statements are based on our current beliefs
and expectations, which we believe are reasonable. However,
forward-looking statements are subject to significant known and
unknown risks and uncertainties that may cause actual results,
performance or achievements in future periods to differ materially
from those assumed, projected or contemplated in the
forward-looking statements, including, but not limited to, the
following factors: the ongoing global COVID-19 pandemic and related
challenges, risks and uncertainties, including historical and
potential future measures taken by governmental and regulatory
authorities (such as requiring store closures), which have
significantly disrupted our business, employees, customers and
global supply chain, and for a period of time, adversely impacted
our financial condition (including resulting in goodwill
impairment) and financial performance, and which disruption and
adverse impacts may continue in the future; the recent and ongoing
direct and indirect adverse impacts of the global COVID-19 pandemic
to the global economy and retail industry; the eventual timing and
duration of economic stabilization and recovery from the COVID-19
pandemic; general economic conditions in the United States and
globally, including consumer confidence and spending, and any
changes to current favorable macroeconomic trends of strong home
sales, nesting and de-urbanization (which were enhanced and
accelerated due to COVID-19, and may not continue upon a successful
vaccine rollout in significant numbers that impacts consumer
behavior); our indebtedness and our ability to increase future
leverage, as well as limitations on future sources of liquidity,
including debt covenant compliance; our ability to implement our
growth strategy of opening new stores, which was suspended for
fiscal 2021 (with the exception of stores that were at or near
completion) and, while ramping significantly, will be limited in
the near term; our ability to effectively obtain, manage and
allocate inventory, and satisfy changing consumer preferences;
increasing freight and transportation costs (including the adverse
effects of international equipment shortages and shipping delays)
and increasing commodity prices; reliance on third-party vendors
for a significant portion of our merchandise, including supply
chain disruption matters and international trade regulations
(including tariffs) that have, and may continue to, adversely
impact many international vendors; the loss or disruption to
operating our distribution network; significant competition in the
fragmented home décor industry, including increasing e-commerce;
the implementation and execution of our At Home 2.0 and omnichannel
strategies and related investments; natural disasters and other
adverse impacts on regions in the United States where we have
significant operations; our success in obtaining favorable lease
terms and of our sale-leaseback strategy; our reliance on the
continuing growth and utility of our loyalty program; our ability
to attract, develop and retain employee talent and to manage labor
costs; the disproportionate impact of our seasonal sales activity
to our overall results; risks related to the loss or disruption of
our information systems and data and our ability to prevent or
mitigate breaches of our information security and the compromise of
sensitive and confidential data; our ability to comply with privacy
and other laws and regulations, including those associated with
entering new markets; the possibility that we may be unable to
obtain required stockholder approval or that other conditions to
closing the proposed merger with Hellman & Friedman LLC may not
be satisfied, such that the proposed merger will not close or that
the closing may be delayed; general economic conditions; the
proposed merger may involve unexpected costs, liabilities or
delays; risks that the transaction disrupts our current plans and
operations; the outcome of any legal proceedings related to the
proposed merger; the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement; and the significant volatility of the trading price of
our common stock.
Additional information about these and other factors that may
cause actual results, performance or achievements in future periods
to differ materially from those assumed, projected or contemplated
in the forward-looking statements may be found in “Item 1A. Risk
Factors” of our Annual Report on Form 10-K for the fiscal year
ended January 30, 2021 and subsequent reports we file with the
Securities and Exchange Commission, including our Quarterly Reports
on Form 10-Q. You are cautioned not to place undue reliance on the
forward-looking statements included herein, which speak only as of
the date hereof or the date otherwise specified herein. Except as
required by law, we do not undertake any obligation to update or
revise any forward-looking statements for any reason, whether as a
result of new information, future events or otherwise.
About At Home Group Inc.
At Home (NYSE:HOME), the home decor superstore, offers over
50,000 on-trend home products to fit any budget or style, from
furniture, mirrors, rugs, art and housewares to tabletop, patio and
seasonal decor. At Home is headquartered in Plano, Texas, and
currently operates 226 stores in 40 states. For more information,
please visit us online at investor.athome.com.
-Financial Tables to Follow-
AT HOME GROUP INC.
Condensed Consolidated Balance
Sheets
(in thousands, except share
and per share data)
May 1, 2021
January 30, 2021
April 25, 2020
Assets
Current assets:
Cash and cash equivalents
$
150,547
$
125,842
$
43,640
Inventories, net
369,014
364,473
406,972
Prepaid expenses
14,665
13,456
12,254
Income taxes receivable
—
22,223
38,536
Other current assets
16,967
11,619
10,325
Total current assets
551,193
537,613
511,727
Operating lease right-of-use assets
1,313,104
1,289,991
1,237,563
Property and equipment, net
713,187
688,295
715,427
Trade name
1,458
1,458
1,458
Debt issuance costs, net
4,984
5,264
1,096
Other assets
1,845
2,292
1,091
Total assets
$
2,585,771
$
2,524,913
$
2,468,362
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable
$
123,219
$
130,327
$
114,504
Accrued and other current liabilities
162,537
184,850
78,099
Revolving line of credit
—
—
342,000
Current portion of operating lease
liabilities
78,106
78,634
82,040
Current portion of long-term debt
1,037
4,563
5,050
Income taxes payable
19,637
—
—
Total current liabilities
384,536
398,374
621,693
Operating lease liabilities
1,337,578
1,315,625
1,257,430
Long-term debt
308,555
314,300
334,174
Deferred income taxes
6,034
9,716
—
Other long-term liabilities
2,864
2,738
3,349
Total liabilities
2,039,567
2,040,753
2,216,646
Stockholders' Equity
Common stock; $0.01 par value; 500,000,000
shares authorized; 65,484,047, 65,342,489 and 64,185,751 shares
issued and outstanding, respectively
655
653
642
Additional paid-in capital
688,023
682,304
659,084
Accumulated deficit
(142,474
)
(198,797
)
(408,010
)
Total stockholders' equity
546,204
484,160
251,716
Total liabilities and stockholders'
equity
$
2,585,771
$
2,524,913
$
2,468,362
AT HOME GROUP INC.
Condensed Consolidated
Statements of Operations
(in thousands, except share
and per share data)
Thirteen Weeks Ended
May 1, 2021
April 25, 2020
Net sales
$
537,078
$
189,846
Cost of sales
336,803
173,496
Gross profit
200,275
16,350
Operating expenses
Selling, general and administrative
expenses
108,536
66,466
Impairment charges
—
319,732
Depreciation and amortization
2,317
2,213
Total operating expenses
110,853
388,411
Operating income (loss)
89,422
(372,061
)
Interest expense, net
8,119
6,971
Loss on extinguishment of debt
5,253
—
Income (loss) before income
taxes
76,050
(379,032
)
Income tax provision (benefit)
19,727
(20,090
)
Net income (loss)
$
56,323
$
(358,942
)
Earnings per share:
Net income (loss) per common share:
Basic
$
0.86
$
(5.60
)
Diluted
$
0.81
$
(5.60
)
Weighted average shares outstanding:
Basic
65,405,610
64,130,000
Diluted
69,544,441
64,130,000
AT HOME GROUP INC.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
Thirteen Weeks Ended
May 1, 2021
April 25, 2020
Operating Activities
Net income (loss)
$
56,323
$
(358,942
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization
18,323
18,148
Non-cash lease expense
21,076
19,420
Impairment charges
-
319,732
Loss on extinguishment of debt
5,253
-
Non-cash interest expense
1,496
550
Deferred income taxes
(3,681
)
16,965
Stock-based compensation
4,116
2,063
Other non-cash losses, net
237
7
Changes in operating assets and
liabilities:
Inventories
(4,541
)
10,791
Prepaid expenses and other current
assets
15,666
(43,213
)
Other assets
457
(48
)
Accounts payable
(9,047
)
(7,261
)
Accrued liabilities
(23,971
)
(31,933
)
Income taxes payable
19,280
(137
)
Operating lease liabilities
(23,207
)
(1,345
)
Net cash provided by (used in) operating
activities
77,780
(55,203
)
Investing Activities
Purchase of property and equipment
(19,272
)
(19,236
)
Net proceeds from sale of property and
equipment
59
-
Net cash used in investing activities
(19,213
)
(19,236
)
Financing Activities
Payments under lines of credit
-
(98,310
)
Proceeds from lines of credit
-
204,640
Payment of Term Loan
-
(880
)
Payment of FILO Loans and prepayment
premium
(35,225
)
-
Payments on long-term debt
(232
)
(102
)
Proceeds from issuance of long-term
debt
-
664
Proceeds from (payments for) stock,
including tax
1,605
(16
)
Net cash (used in) provided by financing
activities
(33,852
)
105,996
Increase in cash, cash equivalents and
restricted cash
24,715
31,557
Cash, cash equivalents and restricted
cash, beginning of period
125,877
12,085
Cash, cash equivalents and restricted
cash, end of period
$
150,592
$
43,642
Supplemental Cash Flow
Information
Cash paid for interest
$
13,579
$
6,689
Cash received for income taxes
$
(18,076
)
$
(10
)
Supplemental Information for Non-cash
Investing and Financing Activities
Increase in current liabilities of
property and equipment
$
4,079
$
157
Property and equipment acquired under
finance lease, net
$
20,160
$
-
Non-GAAP Measures
Certain financial measures presented in this release, such as
leverage ratio, Net Debt, Adjusted EBITDA, adjusted SG&A,
adjusted operating income, adjusted operating margin, Adjusted Net
Income, adjusted EPS and Store-level Adjusted EBITDA (collectively,
“non-GAAP financial measures”), are not presented in accordance
with GAAP.
These non-GAAP financial measures are used by our management and
our board of directors to assess our financial performance. We
present leverage ratio and Net Debt because we believe that
investors find these metrics useful in evaluating our overall
liquidity. Adjusted EBITDA is frequently used by analysts,
investors and other interested parties to evaluate companies in our
industry. In addition to covenant compliance, we use Adjusted
EBITDA to supplement GAAP measures of performance to evaluate the
effectiveness of our business strategies, to make budgeting
decisions and to compare our performance against that of other peer
companies using similar measures. We use Store-level Adjusted
EBITDA as a supplemental measure to evaluate the performance and
profitability of each of our stores, individually and in the
aggregate, especially given the level of investments we have made
in our home office and infrastructure over the past eight years to
support future growth. We also believe that Store-level Adjusted
EBITDA is a useful measure in evaluating our operating performance
because it removes the impact of general and administrative
expenses, which are not incurred at the store level, and the costs
of opening new stores, which are non-recurring at the store level,
and thereby enables the comparability of the operating performance
of our stores during the period. We use Store-level Adjusted EBITDA
information to benchmark our performance versus competitors.
Store-level Adjusted EBITDA should not be used as a substitute for
consolidated measures of profitability of performance because it
does not reflect corporate overhead expenses that are necessary to
allow us to effectively operate our stores and generate Store-level
Adjusted EBITDA. We present adjusted SG&A, adjusted operating
income, adjusted operating margin, Adjusted Net Income and adjusted
EPS because we believe it assists investors and analysts in
comparing our performance across reporting periods on a consistent
basis by excluding items that we do not believe are indicative of
our core operating performance.
You are encouraged to evaluate these non-GAAP financial measures
and the reasons we consider them appropriate for supplemental
analysis. In evaluating our non-GAAP financial measures, you should
be aware that in the future we may incur expenses that are the same
as or similar to some of the adjustments in our presentation of
non-GAAP financial measures. Our presentation of non-GAAP financial
measures should not be construed as an inference that our future
results will be unaffected by unusual or non-recurring items. There
can be no assurance that we will not modify the presentation of our
non-GAAP financial measures in the future, and any such
modification may be material. In addition, our non-GAAP financial
measures may not be comparable to similarly titled measures used by
other companies in our industry or across different industries.
AT HOME GROUP INC. Supplemental Information
- Reconciliation of GAAP to Non-GAAP Financial Measures (in
thousands, except margin, share, per share and ratio data)
The tables below reconcile the non-GAAP financial measures of
adjusted SG&A, adjusted operating income, Adjusted Net Income,
adjusted EPS, Adjusted EBITDA, Store-level Adjusted EBITDA, Net
Debt and leverage ratio to their most directly comparable GAAP
financial measures.
Reconciliation of selling, general and
administrative expenses to adjusted SG&A
Thirteen Weeks Ended
May 1, 2021
April 25, 2020
Selling, general and administrative
expenses, as reported
$
108,536
$
66,466
Adjustments:
Other(a)
(543
)
—
Adjusted selling, general and
administrative expenses
$
107,993
$
66,466
Reconciliation of operating income
(loss) to adjusted operating income
Thirteen Weeks Ended
May 1, 2021
April 25, 2020
Operating income (loss), as
reported
$
89,422
$
(372,061
)
Adjustments:
Impairment charges(b)
—
319,732
Other(a)
543
—
Adjusted operating income
$
89,965
$
(52,329
)
Adjusted operating margin
16.8
%
(27.6
)%
Reconciliation of net income (loss) to
Adjusted Net Income and adjusted EPS
Thirteen Weeks Ended
May 1, 2021
April 25, 2020
Net income (loss), as reported
$
56,323
$
(358,942
)
Adjustments:
Impairment charges(b)
—
319,732
Loss on extinguishment of debt
5,253
—
Other(a)
543
—
Tax impact of adjustments to net income
(loss)(c)
(1,373
)
—
Adjusted Net Income
60,746
(39,210
)
Diluted weighted average shares
outstanding
69,544,441
64,130,000
Adjusted EPS
$
0.87
$
(0.61
)
______________
(a)
Other adjustments include costs related to the pending merger
with Hellman & Friedman LLC during the thirteen weeks ended May
1, 2021.
(b)
For the thirteen weeks ended April 25, 2020, represents a
non-cash impairment charge of $319.7 million related to full
impairment of goodwill.
(c)
Represents the income tax impact of the adjusted expenses using
the annual effective tax rate excluding discrete items. After
giving effect to the adjustments to net income (loss), the adjusted
effective tax rate was 25.8% and 33.9% for the thirteen weeks ended
May 1, 2021 and April 25, 2020, respectively.
Reconciliation of net income (loss) to
EBITDA, Adjusted EBITDA and Store-level Adjusted EBITDA
Thirteen Weeks Ended
May 1, 2021
April 25, 2020
Net income (loss), as reported
$
56,323
$
(358,942
)
Interest expense, net
8,119
6,971
Income tax provision (benefit)
19,727
(20,090
)
Depreciation and amortization(a)
18,323
18,148
EBITDA
102,492
(353,913
)
Impairment charges(b)
—
319,732
Loss on extinguishment of debt
5,253
—
Consulting and other professional
services(c)
686
275
Stock-based compensation expense(d)
4,116
2,063
Non-cash rent(e)
(2,018
)
17,233
Other(f)
32
—
Adjusted EBITDA
110,561
(14,610
)
Costs associated with new store
openings(g)
5,282
3,579
Corporate overhead expenses(h)
39,515
25,017
Store-level Adjusted EBITDA
$
155,358
$
13,986
______________
(a)
Includes the portion of depreciation and amortization expenses
that are classified as cost of sales in our condensed consolidated
statements of operations.
(b)
For the thirteen weeks ended April 25, 2020, represents a
non-cash impairment charge of $319.7 million related to full
impairment of goodwill.
(c)
Primarily consists of other transaction costs, including $0.5
million in costs related to the pending merger with Hellman &
Friedman LLC during the thirteen weeks ended May 1, 2021.
(d)
Non-cash stock-based compensation expense related to the ongoing
equity incentive program that we have in place to incentivize,
retain and motivate our employees, officers, consultants and
non-employee directors.
(e)
Consists of the non-cash portion of rent, which reflects the
extent to which our GAAP straight-line rent expense recognized
exceeds or is less than our cash rent payments. The GAAP
straight-line rent expense adjustment can vary depending on the
average age of our lease portfolio, which has been impacted by our
significant growth. For newer leases, our rent expense recognized
typically exceeds our cash rent payments while for more mature
leases, rent expense recognized is typically less than our cash
rent payments. During the thirteen weeks ended April 25, 2020, due
to the COVID-19 pandemic, we began renegotiating leases to include
significant deferrals which resulted in higher non-cash rent
expense.
(f)
Other adjustments include amounts our management believes are
not representative of our ongoing operations.
(g)
Reflects non-capital expenditures associated with opening new
stores, including marketing and advertising, labor and cash
occupancy expenses. Costs related to new store openings represent
cash costs, and you should be aware that in the future we may incur
expenses that are similar to these costs. We anticipate that we
will continue to incur cash costs as we open new stores in the
future. We opened nine and six new stores during the thirteen weeks
ended May 1, 2021 and April 25, 2020, respectively.
(h)
Reflects corporate overhead expenses, which are not directly
related to the profitability of our stores, to facilitate
comparisons of store operating performance as we do not consider
these corporate overhead expenses when evaluating the ongoing
performance of our stores from period to period. Corporate overhead
expenses, which are a component of selling, general and
administrative expenses, are comprised of various home office
general and administrative expenses such as payroll expenses,
occupancy costs, marketing and advertising, and consulting and
professional fees.
Reconciliation of long-term debt to Net
Debt and leverage ratio
May 1, 2021
April 25, 2020
Long-term debt
$
308,555
$
334,174
Revolving line of credit
—
342,000
Current portion of long-term debt
1,037
5,050
Less: cash and cash equivalents
(150,547
)
(43,640
)
Net Debt
$
159,045
$
637,584
Adjusted EBITDA for the twelve months
ended
483,604
126,973
Leverage ratio
0.3x
5.0x
HOME-F
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version on businesswire.com: https://www.businesswire.com/news/home/20210602005407/en/
Investor Relations: Arvind Bhatia, CFA / 972.265.1299 /
ABhatia@AtHome.com Bethany Johns / 972.265.1326 /
BJohns@AtHome.com
Media: Carey Marin / 214.914.1157 /
MediaRelations@AtHome.com
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