COMMERCE, Calif., March 8, 2017 /PRNewswire/ -- Smart &
Final Stores, Inc. (the "Company") (NYSE:SFS), the value-oriented
food and everyday staples retailer, today reported financial
results for the fiscal fourth quarter and full year ended
January 1, 2017.
Full Year Highlights:
- Net sales increase of 9.3% to $4,341.8
million
- Comparable store sales decrease of 0.5%, including impacts of
deflation and cannibalization
- Net income of $12.9 million, or
$0.17 per diluted share
- Adjusted net income of $42.2
million, or $0.54 per diluted
share
- Adjusted EBITDA of $180.3
million
"We are pleased with our performance in 2016, which marks a
period of unprecedented store growth," said David Hirz, President and Chief Executive
Officer. "Our 2016 store development included the successful
integration of a major acquisition resulting in the largest number
of new Smart & Final Extra! stores in a single year in
the Company's history, and we simultaneously expanded our Cash
& Carry banner. We continue to build upon our
differentiated brand message as the one-stop shop for business and
household needs, and to communicate Smart & Final's
unique banner propositions to both new and existing customers."
Mr. Hirz added, "2016 was not without its challenges as the
continued effects of deflation and anticipated impacts from
cannibalization pressured comparable store sales growth and
earnings. Looking ahead to 2017, we expect these pressures to
ease as we move through the year and that, when combined with our
merchandising and marketing initiatives, will position us to return
to positive comparable store sales growth in 2017."
The Company's fiscal year and fiscal fourth quarter ended
January 1, 2017 comprised 52-week and
12-week periods respectively, and the Company's fiscal year and
fiscal fourth quarter ended January 3,
2016 comprised 53-week and 13-week periods,
respectively. For comparability of net sales between periods,
the Company includes in the presentation below consistent 52-week
and 12-week comparisons, calculated by excluding the first week of
the 53-week and 13-week periods, respectively.
In order to aid understanding of the Company's business
performance, it has presented results in conformity with accounting
principles generally accepted in the
United States ("GAAP") and has also presented adjusted net
income, adjusted net income per share, adjusted net income per
diluted share, EBITDA and adjusted EBITDA, which are non-GAAP
measures that are explained and reconciled to the comparable GAAP
measures in the tables included in this release. Where applicable,
the numbers below are first presented on a GAAP basis and then on
an adjusted basis.
Fourth Quarter Fiscal 2016 Financial Results
Net sales
were $1,000.6 million in the 12-week
quarter ended January 1, 2017,
representing a 0.3% increase as compared to $997.6 million in the 13-week quarter ended
January 3, 2016. On a
consistent 12-week comparison basis, sales increased by 9.2% from
the prior year quarter. Net sales growth was driven by the
net sales contribution of new stores, partially offset by a 2.0%
decrease in comparable store sales. Comparable store sales were
comprised of a 0.2% increase in comparable transaction count,
including the effect of anticipated cannibalization from new
stores, and a 2.2% decrease in comparable average transaction size,
including the impact of deflation in key product categories in both
store banners.
Net sales for Smart & Final banner stores were
$796.2 million for the 12-week
quarter ended January 1, 2017, a 2.0%
increase as compared to $780.6
million in the 13-week quarter ended January 3, 2016. On a consistent 12-week
comparison basis, sales increased by 11.1% from the prior year
quarter. Comparable store sales for the Smart &
Final banner decreased 2.1% in the fourth quarter.
Net sales for Cash & Carry banner stores were
$204.4 million for the 12-week period
ended January 1, 2017, a 5.8%
decrease as compared to $217.0
million in the 13-week quarter ended January 3, 2016. On a consistent 12-week
comparison basis, sales increased by 2.6% from the prior year
quarter. Comparable store sales for the Cash &
Carry banner decreased 1.5% in the fourth quarter.
Gross margin from operations was $140.9
million, a 4.7% decrease as compared to $147.9 million in the fourth quarter of 2015.
Gross margin rate was 14.1% as compared to 14.8% in the same period
of 2015.
Operating and administrative expenses were $135.2 million, a 7.4% increase as compared to
$125.9 million in the same period of
2015. This increase was primarily related to expenses associated
with 37 new stores opened over the prior 12 months and related
support costs.
Net loss was $0.3 million,
including the effect of higher store development and closure
expenses, and an income tax benefit of $1.7
million, as compared to net income of $10.0 million in the same period of 2015. Net
loss per diluted share was $0.00 as
compared to net income per diluted share of $0.13 in the same period of 2015.
Adjusted net income was $5.0
million as compared to $14.7
million for the same period of 2015. Adjusted net income per
diluted share was $0.07 as compared
to $0.19 in the same period of
2015.
Adjusted EBITDA was $37.3 million
as compared to $47.4 million in the
fourth quarter of 2015.
Fiscal 2016 Financial Results
In the 52-week year
ended January 1, 2017, net sales were
$4,341.8 million, an increase of 9.3%
as compared to $3,971.0 million in
the 53-week year ended January 3,
2016. On a consistent 52-week comparison basis, sales
increased by 11.2% from the prior year. Net sales growth was
driven by the net sales contribution of new stores, partially
offset by a 0.5% decline in comparable store sales. The
decline in comparable store sales was comprised of a 0.8% increase
in comparable transaction count and a 1.3% decrease in comparable
average transaction size.
Net sales for Smart & Final banner stores were
$3,400.8 million, a 12.0% increase as
compared to $3,037.0 million in
the 53-weeks of fiscal 2015. On a consistent 52-week
comparison basis, sales increased by 13.9% from the prior
year. Full year comparable store sales decline for the
Smart & Final banner was 0.6%.
Net sales for Cash & Carry banner stores were
$941.0 million, a 0.8% increase as
compared to $934.0 million in
the 53-weeks of fiscal 2015. On a consistent 52-week
comparison basis, sales increased by 2.4% from the prior
year. Full year comparable store sales decline for the
Cash & Carry banner was 0.3%.
Net income was $12.9 million,
including the effect of higher store development costs, as compared
to $38.3 million in 2015. Net income
per diluted share was $0.17 as
compared to $0.50 for 2015.
Adjusted net income was $42.2
million, a 25.0% decrease as compared to $56.3 million in 2015. Adjusted net income per
diluted share was $0.54 as compared
to $0.73 for 2015.
Adjusted EBITDA was $180.3
million, as compared to $192.9
million in 2015.
Growth and Development
During fiscal 2016, the Company
opened 33 new Smart & Final Extra! stores, completed six
conversions of legacy Smart & Final stores to the Smart
& Final Extra! format, relocated six legacy Smart
& Final stores and closed eight legacy Smart &
Final stores. The Company opened four new Cash &
Carry stores during fiscal 2016. As of January 1, 2017, the Company operated a total of
305 stores, including 172 Smart & Final Extra! stores,
74 legacy Smart & Final stores and 59 Cash &
Carry stores.
Operating Stores at
Fiscal Year End (January 1, 2017)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Smart &
Final Banner Stores
|
|
Cash &
Carry
Banner Stores
|
|
Total
Company
|
|
Extra!
format
|
|
Legacy
format
|
|
Total
|
|
|
End of Fiscal
2015
|
127
|
|
94
|
|
221
|
|
55
|
|
276
|
New stores
|
33
|
|
-
|
|
33
|
|
4
|
|
37
|
Relocations,
net
|
6
|
|
(6)
|
|
-
|
|
-
|
|
-
|
Conversions
|
6
|
|
(6)
|
|
-
|
|
-
|
|
-
|
Store
closures
|
-
|
|
(8)
|
|
(8)
|
|
-
|
|
(8)
|
End of Fiscal
2016
|
172
|
|
74
|
|
246
|
|
59
|
|
305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leverage and Liquidity
As of January 1, 2017, the Company's debt, net of debt
issuance costs, was $678.9 million
and cash and cash equivalents were $54.2
million.
In the 52-weeks ended January 1,
2017, the Company generated cash from operations of
$97.1 million and invested
$151.2 million in capital
expenditures, primarily related to the development of Extra!
format stores and to improvements of existing assets.
Outlook
The Company is providing the following
guidance for the full year ending December
31, 2017:
Net sales
growth
|
5.5% -
6.5%
|
Comparable store
sales growth
|
1.0% -
2.0%
|
Unit growth (new
stores)
|
15 Smart & Final
Extra!
4 Cash &
Carry
|
Relocations of
existing stores to Extra! format
|
3 Smart &
Final stores
|
Expansions or
conversions of legacy stores to Extra! format
|
4 to 5 Smart
& Final stores
|
Adjusted
EBITDA
|
$185 - $195
million
|
Adjusted net
income
|
$39 - $43
million
|
Adjusted diluted
EPS
|
$0.50 -
$0.55
|
Capital
expenditures
|
$120 - $130
million
|
Fully diluted
weighted average shares
|
77 million
|
The above guidance includes certain non-GAAP financial measures
(namely adjusted net income, adjusted net income per diluted share
and adjusted EBITDA), which exclude certain costs and non-cash
costs and provide investors with additional financial measures of
the expected operating performance of the Company's business. The
primary factors in reconciling these non-GAAP financial measures to
comparable GAAP measures include the following: pre-opening costs
associated with new stores of approximately $6 million, non-cash rent, related to stores, of
approximately $4 million and
share-based compensation expense of approximately $10 million. The other amounts needed to
reconcile these non-GAAP financial measures to comparable GAAP
measures cannot be quantified and are not available without an
unreasonable effort.
In the first quarter of fiscal year 2017, the Company expects to
open two new Smart & Final Extra! stores, and one new
Cash & Carry store.
Fourth Quarter and Fiscal 2016 Conference Call
The
Company will host a conference call today at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to discuss its fiscal
fourth quarter and 2016 financial results. To participate in the
call, please dial (877) 407-0784 (U.S.) or (201) 689-8560
(International) ten minutes prior to the start time. The conference
call can also be accessed on the "Investors" section of the
Company's web site at http://www.smartandfinal-investor.com/.
For those unable to participate during the live broadcast, a
telephonic replay of the call will also be available beginning
today at approximately 8:00 p.m. Eastern
Time, by dialing (844) 512-2921 (U.S.) or (412) 317-6671
(International) and entering the replay pin number: 13653391.
The telephonic replay will be available until 11:59 p.m. Eastern Time, on Wednesday, March 22, 2017.
About Smart & Final
Smart & Final Stores, Inc.
(NYSE: SFS), is a value-oriented food and everyday staples
retailer, headquartered in Commerce (near Los
Angeles), California. The
Company offers quality products in a variety of sizes, saving
household, nonprofit and business customers time and money. As of
January 1, 2017, the Company operated
305 grocery and foodservice stores under the "Smart & Final,"
"Smart & Final Extra!" and "Cash & Carry Smart Foodservice"
banners in California,
Oregon, Washington, Arizona, Nevada, Idaho
and Utah, with an additional 15
stores in Northwestern Mexico
operated through a joint venture. In business for over 145 years,
the Company remains committed to giving back to local communities
through employee volunteer opportunities and Company donations to
local nonprofits.
Forward-Looking Statements
Certain statements
contained in this release that are not historical information
contain forward-looking statements. The forward-looking statements
involve risks and uncertainties and actual results may differ
materially from those projected or implied. Further, certain
forward-looking statements are based on assumptions of future
events which may not prove to be accurate. These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "may," "should," "expects,"
"plans," "anticipates," "could," "intends," "target," "projects,"
"contemplates," "believes," "estimates," "predicts," "potential" or
"continue" or, in each case, their negative, or other variations or
comparable terminology. The Company derives many of its
forward-looking statements from its operating budgets and
forecasts, which are based upon many detailed assumptions. While
the Company believes that its assumptions are reasonable, it is
difficult to predict the impact of known factors and, of course, it
is impossible to anticipate all factors that could affect actual
results. These factors are discussed in the special note concerning
"Forward-Looking Statements," "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," and "Business" sections and elsewhere in the Company's
Annual Report on Form 10-K filed with the Securities and Exchange
Commission.
You should keep in mind that any forward-looking statement made
by the Company herein, or elsewhere, speaks only as of the date on
which made. New risks and uncertainties come up from time to time,
and it is impossible for the Company to predict these events or how
they may affect it. The Company has no obligation to update any
forward-looking statements after the date hereof, except as
required by federal securities laws.
Smart & Final
Stores, Inc. and Subsidiaries
|
Consolidated
Statements of Operations
|
(In Thousands, Except
Share and Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Weeks
Ended
|
|
Thirteen Weeks
Ended
|
|
Fifty-two Weeks
Ended
|
|
Fifty-three Weeks
Ended
|
|
January 1,
2017
|
|
January 3,
2016
|
|
January 1,
2017
|
|
January 3,
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$
1,000,632
|
|
$
997,626
|
|
$
4,341,795
|
|
$
3,970,980
|
Cost of sales, buying
and occupancy
|
859,722
|
|
849,753
|
|
3,712,291
|
|
3,372,120
|
Gross
margin
|
140,910
|
|
147,873
|
|
629,504
|
|
598,860
|
|
|
|
|
|
|
|
|
Operating and
administrative expenses
|
135,183
|
|
125,873
|
|
582,486
|
|
503,995
|
Income from
operations
|
5,727
|
|
22,000
|
|
47,018
|
|
94,865
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
7,925
|
|
7,680
|
|
32,654
|
|
32,687
|
Loss on early
extinguishment of debt
|
-
|
|
-
|
|
4,978
|
|
2,192
|
Equity in earnings of
joint venture
|
295
|
|
333
|
|
1,525
|
|
1,378
|
Income (loss) before
income taxes benefit (provision)
|
(1,903)
|
|
14,653
|
|
10,911
|
|
61,364
|
|
|
|
|
|
|
|
|
Income tax benefit
(provision)
|
1,650
|
|
(4,692)
|
|
2,037
|
|
(23,102)
|
Net income
(loss)
|
$
(253)
|
|
$
9,961
|
|
$
12,948
|
|
$
38,262
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.00
|
|
$
0.14
|
|
$
0.18
|
|
$
0.52
|
Diluted
|
$
0.00
|
|
$
0.13
|
|
$
0.17
|
|
$
0.50
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
71,962,127
|
|
73,191,829
|
|
72,727,071
|
|
73,121,964
|
Diluted
|
71,962,127
|
|
77,497,406
|
|
78,026,159
|
|
77,141,621
|
Smart & Final
Stores, Inc. and Subsidiaries
|
Consolidated Balance
Sheets
|
(In Thousands, Except
Share and Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
January 1,
2017
|
|
January 3,
2016
|
|
|
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
54,235
|
|
$
59,327
|
Accounts receivable, less
allowances of $434 and $454 at January 1, 2017 and January
3, 2016, respectively
|
31,809
|
|
27,304
|
Inventories
|
278,718
|
|
234,289
|
Prepaid expenses and
other current assets
|
48,769
|
|
29,072
|
Deferred income
taxes
|
22,105
|
|
22,471
|
Total current
assets
|
435,636
|
|
372,463
|
|
|
|
|
Property, plant, and
equipment:
|
|
|
|
Land
|
9,106
|
|
10,940
|
Buildings and
improvements
|
17,351
|
|
20,441
|
Leasehold
improvements
|
301,522
|
|
237,820
|
Fixtures and
equipment
|
353,764
|
|
266,080
|
Construction in
progress
|
12,110
|
|
19,501
|
|
693,853
|
|
554,782
|
Less accumulated
depreciation and amortization
|
249,251
|
|
174,906
|
|
444,602
|
|
379,876
|
|
|
|
|
Capitalized software,
net of accumulated amortization of $13,293 and $12,356 at January
1, 2017 and January 3, 2016, respectively
|
10,392
|
|
11,365
|
Other intangible
assets, net
|
369,519
|
|
376,122
|
Goodwill
|
611,242
|
|
611,242
|
Equity investment in
joint venture
|
14,366
|
|
12,763
|
Other
assets
|
66,662
|
|
53,250
|
Total
assets
|
$
1,952,419
|
|
$
1,817,081
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
225,227
|
|
$
194,149
|
Accrued salaries and
wages
|
31,933
|
|
33,859
|
Accrued
expenses
|
82,925
|
|
77,374
|
Current portion of
debt, less debt issuance costs
|
62,352
|
|
3,904
|
Total current
liabilities
|
402,437
|
|
309,286
|
|
|
|
|
Long-term debt, less
debt issuance costs
|
616,588
|
|
586,956
|
Deferred income
taxes
|
129,902
|
|
128,752
|
Postretirement and
postemployment benefits
|
121,409
|
|
117,417
|
Other long-term
liabilities
|
129,834
|
|
108,099
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Preferred stock,
$0.001 par value;
|
|
|
|
Authorized shares –
10,000,000
|
|
|
|
Issued and
outstanding shares – none
|
–
|
|
–
|
Common stock, $0.001
par value;
|
|
|
|
Authorized shares –
340,000,000
|
|
|
|
Issued and
outstanding shares - 72,930,653 and 73,789,608 at January 1, 2017
and January 3, 2016, respectively
|
73
|
|
74
|
Additional paid-in
capital
|
500,666
|
|
502,304
|
Retained
earnings
|
65,093
|
|
70,181
|
Accumulated other
comprehensive loss
|
(13,583)
|
|
(5,988)
|
Total stockholders'
equity
|
552,249
|
|
566,571
|
Total liabilities and
stockholders' equity
|
$
1,952,419
|
|
$
1,817,081
|
Smart & Final
Stores, Inc. and Subsidiaries
|
Consolidated
Statements of Cash Flows
|
(In
Thousands)
|
|
|
|
|
|
|
|
|
|
Fifty-two Weeks
Ended
|
|
Fifty-three
Weeks Ended
|
|
January 1,
2017
|
|
January 3,
2016
|
Operating
activities
|
|
|
|
Net
income
|
$
12,948
|
|
$
38,262
|
Adjustments to reconcile net income to net cash
provided by operating activities:
|
|
|
|
Depreciation
|
51,385
|
|
38,585
|
Amortization
|
35,630
|
|
30,181
|
Amortization of debt
discount and debt issuance costs
|
2,511
|
|
2,780
|
Share-based
compensation
|
9,803
|
|
10,003
|
Excess tax benefits
related to share-based payments
|
–
|
|
(358)
|
Deferred income
taxes
|
(1,469)
|
|
3,325
|
Dividend from joint
venture
|
769
|
|
–
|
Equity in earnings of
joint venture
|
(1,525)
|
|
(1,378)
|
Gain (loss) on
disposal of property, plant, and equipment
|
282
|
|
(40)
|
Asset
impairment
|
1,323
|
|
1,413
|
Loss on early
extinguishment of debt
|
4,978
|
|
2,192
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts receivable,
net
|
(2,726)
|
|
(3,637)
|
Inventories
|
(44,429)
|
|
(10,885)
|
Prepaid expenses and
other assets
|
(23,962)
|
|
(1,202)
|
Accounts
payable
|
31,078
|
|
9,252
|
Accrued salaries and
wages
|
(1,926)
|
|
5,277
|
Other accrued
liabilities
|
22,423
|
|
21,621
|
Net cash provided by
operating activities
|
97,093
|
|
145,391
|
|
|
|
|
Investing
activities
|
|
|
|
Purchases of
property, plant, and equipment
|
(148,043)
|
|
(132,738)
|
Proceeds from
disposal of property, plant, and equipment
|
2,265
|
|
8,104
|
Assets acquired in
Haggen Transaction
|
(2,257)
|
|
(66,440)
|
Investment in
capitalized software
|
(3,193)
|
|
(4,265)
|
Other
|
(2,024)
|
|
(1,277)
|
Net cash used in
investing activities
|
(153,252)
|
|
(196,616)
|
|
|
|
|
Financing
activities
|
|
|
|
Proceeds from
exercise of stock options
|
4,667
|
|
719
|
Payment of minimum
withholding taxes on net share settlement of share-based
compensation awards
|
(669)
|
|
(694)
|
Fees paid in
conjunction with debt financing
|
(8,500)
|
|
(1,335)
|
Borrowings on bank
line of credit
|
97,000
|
|
15,000
|
Payments on bank line
of credit
|
(38,000)
|
|
(10,000)
|
Issuance of bank
debt, net of issuance costs
|
30,093
|
|
–
|
Payments of public
offering issuance costs
|
–
|
|
(214)
|
Excess tax benefits
related to share-based payments
|
–
|
|
358
|
Stock
repurchases
|
(33,524)
|
|
(129)
|
Net cash provided by
financing activities
|
51,067
|
|
3,705
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
(5,092)
|
|
(47,520)
|
Cash and cash
equivalents at beginning of period
|
59,327
|
|
106,847
|
Cash and cash
equivalents at end of period
|
$
54,235
|
|
$
59,327
|
|
|
|
|
Cash paid during the
period for:
|
|
|
|
Interest
|
$
29,750
|
|
$
29,462
|
Income
taxes
|
$
10,448
|
|
$
23,729
|
|
|
|
|
Non-cash investing
and financing activities
|
|
|
|
Software development
costs incurred but not paid
|
$
24
|
|
$
310
|
Construction in
progress costs incurred but not paid
|
$
12,070
|
|
$
8,534
|
Smart &
Final Stores, Inc. and Subsidiaries
|
Segment
Reporting
|
(In
Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Smart &
Final
|
|
Cash &
Carry
|
|
Corporate /
Other
|
|
Consolidated
|
Twelve Weeks
Ended January 1, 2017
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
796,250
|
|
$
204,382
|
|
$
-
|
|
$
1,000,632
|
Cost of sales,
distribution and store occupancy
|
|
680,210
|
|
177,324
|
|
2,188
|
|
859,722
|
Operating and
administrative expenses
|
|
100,067
|
|
15,556
|
|
19,560
|
|
135,183
|
Income (loss)
from operations
|
|
$
15,973
|
|
$
11,502
|
|
$
(21,748)
|
|
$
5,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
30,209
|
|
$
4,231
|
|
$
849
|
|
$
35,289
|
Assets acquired
in Haggen Transaction
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen
Weeks Ended January 3, 2016
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
780,592
|
|
$
217,034
|
|
$
-
|
|
$
997,626
|
Cost of sales,
distribution and store occupancy
|
|
662,194
|
|
185,469
|
|
2,090
|
|
849,753
|
Operating and
administrative expenses
|
|
95,089
|
|
15,885
|
|
14,899
|
|
125,873
|
Income (loss)
from operations
|
|
$
23,309
|
|
$
15,680
|
|
$
(16,989)
|
|
$
22,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
29,393
|
|
$
1,556
|
|
$
1,775
|
|
$
32,724
|
Assets acquired
in Haggen Transaction
|
|
$
66,440
|
|
$
-
|
|
$
-
|
|
$
66,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fifty-two
Weeks Ended January 1, 2017
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
3,400,755
|
|
$
941,040
|
|
$
-
|
|
$
4,341,795
|
Cost of sales,
distribution and store occupancy
|
|
2,894,222
|
|
808,258
|
|
9,811
|
|
3,712,291
|
Operating and
administrative expenses
|
|
444,318
|
|
66,688
|
|
71,480
|
|
582,486
|
Income (loss)
from operations
|
|
$
62,215
|
|
$
66,094
|
|
$
(81,291)
|
|
$
47,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
135,677
|
|
$
10,074
|
|
$
5,485
|
|
$
151,236
|
Assets acquired
in Haggen Transaction
|
|
$
2,257
|
|
$
-
|
|
$
-
|
|
$
2,257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fifty-three
Weeks Ended January 3, 2016
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
3,036,949
|
|
$
934,031
|
|
$
-
|
|
$
3,970,980
|
Cost of sales,
distribution and store occupancy
|
|
2,561,035
|
|
802,115
|
|
8,970
|
|
3,372,120
|
Operating and
administrative expenses
|
|
372,011
|
|
64,368
|
|
67,616
|
|
503,995
|
Income (loss)
from operations
|
|
$
103,903
|
|
$
67,548
|
|
$
(76,586)
|
|
$
94,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
122,808
|
|
$
7,616
|
|
$
6,579
|
|
$
137,003
|
Assets acquired
in Haggen Transaction
|
|
$
66,440
|
|
$
-
|
|
$
-
|
|
$
66,440
|
Non-GAAP Financial Measures
To supplement the Company's financial information presented in
accordance with GAAP, the Company uses certain non-GAAP financial
measures (namely adjusted net income, adjusted net income per
share, adjusted net income per diluted share, EBITDA and adjusted
EBITDA) to evaluate our operating and financial performance and to
compare such performance to that of prior periods. We also use
these non-GAAP financial measures in making operational and
financial decisions and in establishing operational goals. We
believe that providing these non-GAAP financial measures to
investors, as a supplement to GAAP financial measures, helps
investors to (i) evaluate our operating and financial performance
and future prospects, (ii) compare financial results across
accounting periods, (iii) better understand the long-term
performance of our core business and (iv) evaluate trends in our
business, all consistent with how management evaluates such
performance and movements. The Company defines adjusted net income
as net income adjusted for the items set forth in the table
below. The Company defines adjusted net income per share as
adjusted net income divided by the weighted average basic shares
outstanding. The Company defines adjusted net income per
diluted share as adjusted net income divided by the weighted
average diluted shares outstanding. The Company defines
EBITDA as net income before depreciation and amortization, interest
expense and provision for income tax, and adjusted EBITDA as EBITDA
adjusted for the items set forth in the table below.
Use of these non-GAAP measures may differ from similar measures
reported by other companies. Each of these non-GAAP measures has
its limitations as an analytical tool, and you should not consider
them in isolation or as a substitute for analysis of the Company's
results as reported under GAAP.
The following tables present reconciliations of adjusted net
income, EBITDA and adjusted EBITDA to net income, and adjusted net
income per share and adjusted net income per diluted share to net
income per share, for the 12-week and 52-week periods ended
January 1, 2017, and the 13-week
and 53-week periods ended January 3,
2016.
Smart &
Final Stores, Inc. and Subsidiaries
|
Reconciliation
of EBITDA to Adjusted EBITDA
|
(Unaudited)
|
(In
Thousands)
|
|
|
|
|
|
|
|
|
|
Twelve Weeks
Ended January 1,
2017
|
|
Thirteen Weeks
Ended January 3,
2016
|
|
Fifty-two Weeks
Ended January 1,
2017
|
|
Fifty-three Weeks
Ended January 3,
2016
|
Net income
(loss)
|
$
(253)
|
|
$
9,961
|
|
$
12,948
|
|
$
38,262
|
Depreciation and
amortization
|
22,500
|
|
17,096
|
|
87,015
|
|
68,766
|
Interest expense,
net
|
7,925
|
|
7,680
|
|
32,654
|
|
32,687
|
Income tax (benefit)
provision
|
(1,650)
|
|
4,692
|
|
(2,037)
|
|
23,102
|
EBITDA
|
28,522
|
|
39,429
|
|
130,580
|
|
162,817
|
|
|
|
|
|
|
|
|
Adjustments to
EBITDA
|
|
|
|
|
|
|
|
Transaction costs
(a)
|
-
|
|
-
|
|
-
|
|
936
|
Net loss from closed
stores and exit costs (b)
|
2,650
|
|
332
|
|
8,671
|
|
2,344
|
Loss from asset
dispositions (c)
|
594
|
|
838
|
|
1,598
|
|
1,396
|
Share-based
compensation expense (d)
|
2,555
|
|
1,922
|
|
9,803
|
|
10,003
|
Non-cash rent
(e)
|
442
|
|
1,430
|
|
2,498
|
|
4,508
|
Pre-opening costs
(f)
|
906
|
|
3,369
|
|
2,630
|
|
8,543
|
Costs associated with
acquired Haggen store locations (g)
|
1,266
|
|
-
|
|
20,513
|
|
-
|
Loss on
extinguishment of debt (h)
|
-
|
|
-
|
|
4,978
|
|
2,192
|
Other items
(i)
|
377
|
|
38
|
|
(1,018)
|
|
135
|
Adjusted
EBITDA
|
$
37,312
|
|
$
47,358
|
|
$
180,253
|
|
$
192,874
|
Smart &
Final Stores, Inc. and Subsidiaries
|
Reconciliation
of Net Income to Non-GAAP Adjusted Net Income
|
(Unaudited)
|
(In Thousands,
Except Share and Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
Twelve Weeks
Ended January 1,
2017
|
|
Thirteen Weeks
Ended January 3,
2016
|
|
Fifty-two Weeks
Ended January 1,
2017
|
|
Fifty-three Weeks
Ended January 3,
2016
|
Net income
(loss)
|
$
(253)
|
|
$
9,961
|
|
$
12,948
|
|
$
38,262
|
Income tax (benefit)
provision
|
(1,650)
|
|
4,692
|
|
(2,037)
|
|
23,102
|
Income (loss) before
income taxes (benefit)
|
(1,903)
|
|
14,653
|
|
10,911
|
|
61,364
|
|
|
|
|
|
|
|
|
Adjustments to net
income (loss)
|
|
|
|
|
|
|
|
Transaction costs
(a)
|
-
|
|
-
|
|
-
|
|
936
|
Net loss from closed
stores and exit costs (b)
|
2,650
|
|
332
|
|
8,671
|
|
2,344
|
Loss from asset
dispositions (c)
|
594
|
|
838
|
|
1,598
|
|
1,396
|
Share-based
compensation expense (d)
|
2,555
|
|
1,922
|
|
9,803
|
|
10,003
|
Non-cash rent
(e)
|
442
|
|
1,430
|
|
2,498
|
|
4,508
|
Pre-opening costs
(f)
|
906
|
|
3,369
|
|
2,630
|
|
8,543
|
Costs associated with
acquired Haggen store locations (g)
|
1,266
|
|
-
|
|
20,513
|
|
-
|
Loss on
extinguishment of debt (h)
|
-
|
|
-
|
|
4,978
|
|
2,192
|
Other items
(i)
|
377
|
|
38
|
|
(1,018)
|
|
135
|
Adjusted income tax
provision
|
(1,890)
|
|
(7,859)
|
|
(18,363)
|
|
(35,139)
|
Adjusted net
income
|
$
4,997
|
|
$
14,723
|
|
$
42,221
|
|
$
56,282
|
|
|
|
|
|
|
|
|
Adjusted Net Income
Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share - basic
|
$
0.00
|
|
$
0.14
|
|
$
0.18
|
|
$
0.52
|
Per share impact of
net income adjustments
|
$
0.07
|
|
$
0.06
|
|
$
0.40
|
|
$
0.25
|
Adjusted net income
per share - basic
|
$
0.07
|
|
$
0.20
|
|
$
0.58
|
|
$
0.77
|
Net income (loss) per
share - diluted
|
$
0.00
|
|
$
0.13
|
|
$
0.17
|
|
$
0.50
|
Per share impact of
net income adjustments
|
$
0.07
|
|
$
0.06
|
|
$
0.37
|
|
$
0.23
|
Adjusted net income
per share - diluted
|
$
0.07
|
|
$
0.19
|
|
$
0.54
|
|
$
0.73
|
|
|
|
|
|
|
|
|
Weighted average
shares - basic
|
71,962,127
|
|
73,191,829
|
|
72,727,071
|
|
73,121,964
|
Weighted average
shares - fully diluted
|
76,552,257
|
|
77,497,406
|
|
78,026,159
|
|
77,141,621
|
|
|
(a)
|
Represents costs
primarily associated with the Company's secondary public offering
that were charged to expense in the fiscal year ended January 3,
2016.
|
(b)
|
Represents costs
associated with store closure and exit costs.
|
(c)
|
Represents non-cash
loss associated with asset dispositions and impairment
charges.
|
(d)
|
Represents expenses
associated with the Company's equity-based incentive award
program.
|
(e)
|
Represents non-cash
component of recognized rent expense.
|
(f)
|
Represents new store
and relocation opening costs consisting primarily of rent,
utilities, distribution, store labor and advertising.
|
(g)
|
Represents new store
opening and relocation costs and non-cash rent related to acquired
former Haggen store locations.
|
(h)
|
Represents loss on
the early extinguishment of debt in the fiscal years ended January
1, 2017 and January 3, 2016 in connection with amendments to the
Company's First Lien Term Loan Credit Facility.
|
(i)
|
Represents (i) death
benefit income from a Company-owned life insurance policy in the
fiscal years ended January 1, 2017 and January 3, 2016 and (ii)
severance costs in the twelve and fifty-two weeks ended
January 1, 2017 and the thirteen and fifty-three weeks ended
January 3, 2016.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/smart--final-stores-inc-reports-fourth-quarter-and-full-year-2016-financial-results-300420530.html
SOURCE Smart & Final Stores, Inc.