RH Announces $300 Million Share Repurchase Authorization
February 23 2017 - 4:05PM
Business Wire
RH (NYSE:RH) today announced that its Board of Directors has
authorized a $300 million common share repurchase program.
The Board has authorized a stock repurchase program of up to
$300 million. RH may purchase shares on a discretionary basis from
time to time through open market purchases, privately negotiated
transactions or other means, including through Rule 10b5-1 trading
plans or through the use of other techniques such as accelerated
share repurchases. The timing and amount of any transactions will
be subject to the discretion of RH based upon market conditions and
other opportunities that RH may have for the use or investment of
its cash balances. The repurchase program has no expiration date,
does not require the purchase of any minimum number of shares and
may be suspended, modified or discontinued at any time without
prior notice.
Gary Friedman, Chairman and Chief Executive Officer, commented,
“We believe our shares are currently undervalued and based on the
strength of our balance sheet, coupled with our long-term outlook,
an opportunity exists to create value for our shareholders while
continuing to invest in our key value-driving strategies – the
transformation of our real estate and expansion of our product
offering.”
Mr. Friedman continued, “We continue to believe that we are
making the necessary investments and changes to position our
business for the long-term. As we look forward to fiscal 2017, we
expect to anniversary the costs related to the launch of RH Modern;
benefit from the deferral of membership revenue, plus capture
additional revenue from new members and renewals; cycle our efforts
to reduce inventories and rationalize our SKU count; and expect
revenues to build from the mailing of our Fall 2016 Source Books
and the second mailing of the RH Modern Source Book this Spring. We
also expect incremental revenues from the four new Design Galleries
opened in 2016, and the six new Design Galleries opening in 2017,
five of which will have Cafes, Wine Vaults, and Coffee Bars similar
to our successful hospitality experience at our Gallery at the
Three Arts Club in Chicago. As we cycle these investments and
changes, we expect sales to reaccelerate, operating margins to
expand, and to generate free cash flow in 2017. We are confident
that our choices will prove to be the right ones, driving long-term
sustainable growth, improved returns on capital, and shareholder
value.”
About RH
RH (NYSE: RH) is a curator of design, taste and style in the
luxury lifestyle market. The Company offers collections through its
retail galleries, source books, and online at RH.com, RHModern.com,
and Waterworks.com.
Non-GAAP Financial
Measures
To supplement its condensed consolidated financial statements,
which are prepared and presented in accordance with Generally
Accepted Accounting Principles (“GAAP”), the Company uses the
following non-GAAP financial measures: adjusted net revenue,
adjusted gross margin, adjusted operating income, adjusted net
income, adjusted operating margin and adjusted diluted earnings per
share (collectively, “non-GAAP financial measures”). We compute
these measures by adjusting the applicable GAAP measures to remove
the impact of certain recurring and non-recurring charges and gains
and the tax effect of these adjustments. The presentation of this
financial information is not intended to be considered in isolation
or as a substitute for, or superior to, the financial information
prepared and presented in accordance with GAAP. The Company uses
these non-GAAP financial measures for financial and operational
decision making and as a means to evaluate period-to-period
comparisons. The Company believes that they provide useful
information about operating results, enhance the overall
understanding of past financial performance and future prospects,
and allow for greater transparency with respect to key metrics used
by management in its financial and operational decision making. The
non-GAAP financial measures referenced by the Company in this press
release may be different from the non-GAAP financial measures,
including similarly titled measures, used by other companies.
Forward-Looking
Statements
This release contains forward-looking statements within the
meaning of the federal securities laws including statements
regarding our belief that our shares are currently undervalued; our
belief that we are making the necessary investments and changes to
position our business for the long-term; our expectation that we
will anniversary the costs related to the launch of RH Modern; our
expectation that we will benefit from the deferral of membership
revenue, plus capture additional revenue from new members and
renewals; our expectation that we will cycle our efforts to reduce
inventories and rationalize our SKU count; our expectation that
revenues will build from the mailing of our Fall 2016 Source Books
and the second mailing of the RH Modern Source Book this Spring;
our expectation for incremental revenues from the four new Design
Galleries opened in 2016 and from the six new Design Galleries
opening in 2017; our expectation that sales will reaccelerate,
operating margins will expand, and free cash flow will be generated
in 2017; statements relating to the timing or amount of any future
stock repurchases; any financial or operational factors or results
that are described as short term, one-time, non-recurring or
unusual (as similar operational or financial factors may adversely
affect the Company’s future results including as a result of
charges, costs and other items that may occur in one or more
subsequent financial reporting periods), and any statements or
assumptions underlying any of the foregoing. 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,” “will,” “should,”
“likely” and other words and terms of similar meaning in connection
with any discussion of the timing or nature of future events. We
cannot assure you that future developments affecting us will be
those that we have anticipated. Important risks and uncertainties
that could cause actual results to differ materially from our
expectations include, among others, our ability to retain key
personnel; successful implementation of our growth strategy; our
ability to take advantage of the transaction with Waterworks;
uncertainties in the current performance of our business including
a range of risks related to our operations as well as external
economic factors; general economic conditions and the impact on
consumer confidence and spending; changes in customer demand for
our products; factors affecting our outstanding convertible senior
notes; our ability to anticipate consumer preferences and buying
trends, and maintaining our brand promise to customers; changes in
consumer spending based on weather and other conditions beyond our
control; risks related to the number of new business initiatives we
are undertaking; strikes and work stoppages affecting port workers
and other industries involved in the transportation of our
products; our ability to obtain our products in a timely fashion or
in the quantities required; our ability to employ reasonable and
appropriate security measures to protect personal information that
we collect; our ability to support our growth with appropriate
information technology systems; risks related to “conflict
minerals” compliance and its impact on sourcing, if any, as well as
those risks and uncertainties disclosed under the sections entitled
“Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in RH’s most recent
Form 10-K filed with the Securities and Exchange Commission, and
similar disclosures in subsequent reports filed with the SEC, which
are available on our investor relations website at
ir.restorationhardware.com and on the SEC website at www.sec.gov.
Any forward-looking statement made by us in this press release
speaks only as of the date on which we make it. We undertake no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future developments or
otherwise, except as may be required by any applicable securities
laws.
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version on businesswire.com: http://www.businesswire.com/news/home/20170223006605/en/
RHCammeron McLaughlin, 415-945-4998SVP, Investor Relations and
Strategycmclaughlin@rh.com
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