COLUMBUS, Ohio, May 26, 2017 /PRNewswire/ -- Big Lots, Inc.
(NYSE: BIG) today reported income of $51.5
million, or $1.15 per diluted
share, for the first quarter of fiscal 2017 ended April 29, 2017. This result compares to our
guidance of income in the range of $0.95 to
$1.05 per diluted share and represents a 40% increase over
adjusted income of $40.0 million, or
$0.82 per diluted share (see non-GAAP
table included later in this release), for the first quarter of
fiscal 2016. Comparable store sales decreased 0.9% for the first
quarter of fiscal 2017, compared to our guidance of flat to an
increase of 2%. Net sales for the first quarter of fiscal 2017
decreased 1.2% to $1,296.8 million, a
result of the comparable store sales decline and a lower store
count year-over-year.
Commenting on today's release, David
Campisi, Chief Executive Officer and President of Big Lots,
stated, "I'm pleased to report record earnings per share for Q1
despite a very challenging environment for most traditional
retailers. After a slow start to the quarter in February, our
ownable and winnable merchandise strategy demonstrated its
resiliency by bouncing back with low to mid-single digit comps in
March and April, along with solid comp store performance
month-to-date in May to start second quarter. Jennifer is
responding to our focus on improving the quality and value of our
product assortments and enjoying our improving in-store service
levels."
FIRST QUARTER HIGHLIGHTS
- Record income of $1.15 per
diluted share, a 40% increase compared to last year's adjusted
income of $0.82 per diluted share
(non-GAAP)
- Operating profit dollar growth of 23%
|
Earnings per diluted
share
|
|
|
|
|
|
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|
|
Q1 2017
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|
Q1 2016
|
|
|
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Earnings per diluted
share
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$1.15
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|
$0.79
|
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Impact of legacy
pension costs (1)
|
|
-
|
|
$0.03
|
|
|
|
|
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|
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Earnings per diluted
share - adjusted basis
|
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$1.15
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$0.82
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% change to
LY
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+40%
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(1)
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Non-GAAP detailed
reconciliation provided below.
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Inventory and Cash Management
Inventory ended the first quarter of fiscal 2017 at $836 million, compared to $807 million for the first quarter of fiscal
2016. Inventory levels per store increased compared to last year,
partially offset by a lower store count year-over-year.
We ended the first quarter of fiscal 2017 with $66 million of Cash and Cash Equivalents and
$116 million of borrowings under our
credit facility compared to $64
million of Cash and Cash Equivalents and $154 million of borrowings under our credit
facility as of the end of the first quarter of fiscal 2016. Cash
flow (cash provided by operating activities less cash used in
investing activities) was focused on returning cash to our
shareholders (stock repurchases and dividend repayments) and
lowering our overall debt levels.
Total Cash Returned To Shareholders
As a reminder, on February 28, 2017,
our Board of Directors approved a share repurchase program ("2017
Share Repurchase Program") providing for the repurchase of up to
$150 million of our common shares in
open market and/or privately negotiated transactions at our
discretion, subject to market conditions and other factors. Through
the first quarter of fiscal 2017, we invested $34 million to purchase 0.7 million shares,
leaving us with approximately $116
million of authorization remaining at the end of the first
quarter. Common shares acquired through the 2017 Share Repurchase
Program will be available to meet obligations under our equity
compensation plans and for general corporate purposes.
As announced in a separate press release earlier today, on
May 25, 2017, our Board of Directors
declared a quarterly cash dividend of $0.25 per common share. This dividend payment of
approximately $11 million is payable
on June 23, 2017, to shareholders of
record as of the close of business on June
9, 2017.
The combination of share repurchase activity and our quarterly
dividend payment represents approximately $45 million returned to shareholders during the
first quarter of fiscal 2017.
FISCAL Q2 2017 GUIDANCE
- Provides initial Q2 guidance for income of $0.58 to $0.63 per diluted share, representing an
12% to 21% increase compared to adjusted income of $0.52 per diluted share (non-GAAP) for the same
period last year
- Provides initial Q2 guidance for comparable store sales
increase in the low single digits
For the second quarter of fiscal 2017, we estimate income will
be in the range of $0.58 to $0.63 per
diluted share, compared to adjusted income of $0.52 per diluted share (non-GAAP) for the second
quarter of fiscal 2016. This guidance is based on a comparable
store sales increase in the low single digit range, compared to a
0.3% comparable store sales increase in the second quarter of
fiscal 2016.
FISCAL 2017 GUIDANCE
- Updates guidance for fiscal 2017 income to be in the range
of $4.05 to $4.20 per diluted share,
representing an 11% to 15% increase compared to fiscal 2016
adjusted income of $3.64 per diluted
share (non-GAAP)
- Affirms guidance for fiscal 2017 comparable store sales
increase of 1% to 2%
- Affirms guidance for fiscal 2017 cash flow of $180 to $190 million
Based on the actual results for the first quarter and the
guidance provided for the second quarter, we are updating our
guidance for the full year of fiscal 2017. We estimate fiscal 2017
income will be in the range of $4.05 to
$4.20 per diluted share, compared to our prior guidance of
$3.95 to $4.10 per diluted share.
This compares to adjusted income of $3.64 per diluted share (non-GAAP) for fiscal
2016. This outlook is based on a comparable store sales increase in
the range of 1% to 2%. We estimate this financial performance will
result in cash flow of $180 to $190
million.
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Q2
|
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Full Year
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2017
Guidance
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2016
(1)
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2017
Guidance
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|
2016
(1)
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|
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|
|
|
|
|
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Earnings per diluted
share
|
|
$0.58 -
$0.63
|
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$0.52
|
|
$4.05 -
$4.20
|
|
$3.64
|
|
|
(1)
|
Non-GAAP detailed
reconciliation provided below.
|
Conference Call/Webcast
We will host a conference call
today at 8:00 a.m. to discuss our
financial results for the first quarter of fiscal 2017 and provide
commentary on our outlook for fiscal 2017. We invite you to listen
to the webcast of the conference call through the Investor
Relations section of our website http://www.biglots.com. If you are
unable to join the live webcast, an archive of the call will be
available through the Investor Relations section of our website
http://www.biglots.com/ after 12:00 noon today and will remain
available through midnight on Friday, June
9, 2017. A replay of this call will also be available
beginning today at 12:00 noon through June
9 by dialing 1.888.203.1112 (Toll Free USA and Canada) or 1.719.457.0820 (International), and
entering Replay Passcode 5856504. All times are Eastern Time.
Headquartered in Columbus,
Ohio, Big Lots, Inc. (NYSE: BIG) is a unique,
non-traditional, discount retailer operating 1,434 BIG LOTS stores
in 47 states with product assortments in the merchandise categories
of Furniture, Seasonal, Soft Home, Food, Consumables, Hard Home,
and Electronics, Toys & Accessories. Our vision is to be
recognized for providing an outstanding shopping experience for our
customers, valuing and developing our associates, and creating
growth for our shareholders. Big Lots supports the communities it
serves through the Big Lots Foundation, a charitable organization
focused on four areas of need: hunger, housing, healthcare, and
education. For more information about the Company, visit
www.biglots.com.
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements in this release are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, and such statements are
intended to qualify for the protection of the safe harbor provided
by the Act. The words "anticipate," "estimate," "expect,"
"objective," "goal," "project," "intend," "plan," "believe,"
"will," "should," "may," "target," "forecast," "guidance,"
"outlook" and similar expressions generally identify
forward-looking statements. Similarly, descriptions of our
objectives, strategies, plans, goals or targets are also
forward-looking statements. Forward-looking statements relate to
the expectations of management as to future occurrences and trends,
including statements expressing optimism or pessimism about future
operating results or events and projected sales, earnings, capital
expenditures and business strategy. Forward-looking statements are
based upon a number of assumptions concerning future conditions
that may ultimately prove to be inaccurate. Forward-looking
statements are and will be based upon management's then-current
views and assumptions regarding future events and operating
performance, and are applicable only as of the dates of such
statements. Although we believe the expectations expressed in
forward-looking statements are based on reasonable assumptions
within the bounds of our knowledge, forward-looking statements, by
their nature, involve risks, uncertainties and other factors, any
one or a combination of which could materially affect our business,
financial condition, results of operations or liquidity.
Forward-looking statements that we make herein and in other
reports and releases are not guarantees of future performance and
actual results may differ materially from those discussed in such
forward-looking statements as a result of various factors,
including, but not limited to, current economic and credit
conditions, the cost of goods, our inability to successfully
execute strategic initiatives, competitive pressures, economic
pressures on our customers and us, the availability of brand name
closeout merchandise, trade restrictions, freight costs, the risks
discussed in the Risk Factors section of our most recent Annual
Report on Form 10-K, and other factors discussed from time to time
in our other filings with the SEC, including Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K. This release should be
read in conjunction with such filings, and you should consider all
of these risks, uncertainties and other factors carefully in
evaluating forward-looking statements.
You are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date thereof. We undertake
no obligation to publicly update forward-looking statements,
whether as a result of new information, future events or otherwise.
You are advised, however, to consult any further disclosures we
make on related subjects in our public announcements and SEC
filings.
BIG LOTS, INC. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
APRIL
29
|
|
APRIL
30
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$65,731
|
|
$64,390
|
|
|
|
Inventories
|
|
836,121
|
|
807,058
|
|
|
|
Other current
assets
|
|
88,283
|
|
84,717
|
|
|
|
Total
current assets
|
|
990,135
|
|
956,165
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment - net
|
|
518,820
|
|
552,289
|
|
|
|
|
|
|
|
|
|
|
Deferred income
taxes
|
|
45,020
|
|
54,924
|
|
|
Other
assets
|
|
45,740
|
|
43,243
|
|
|
|
|
|
$1,599,715
|
|
$1,606,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$369,135
|
|
$363,473
|
|
|
|
Property, payroll
and other taxes
|
|
85,843
|
|
85,205
|
|
|
|
Accrued operating
expenses
|
|
75,525
|
|
93,122
|
|
|
|
Insurance
reserves
|
|
39,893
|
|
41,870
|
|
|
|
Accrued salaries
and wages
|
|
26,856
|
|
48,345
|
|
|
|
Income taxes
payable
|
|
55,059
|
|
22,786
|
|
|
|
Total
current liabilities
|
|
652,311
|
|
654,801
|
|
|
|
|
|
|
|
|
|
|
Long-term
obligations under bank credit facility
|
|
115,700
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|
153,800
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|
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|
|
|
|
|
|
|
|
Deferred
rent
|
|
56,444
|
|
58,142
|
|
|
Insurance
reserves
|
|
57,303
|
|
57,814
|
|
|
Unrecognized tax
benefits
|
|
17,423
|
|
16,275
|
|
|
Other
liabilities
|
|
46,629
|
|
45,715
|
|
|
|
|
|
|
|
|
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|
Shareholders'
equity
|
|
653,905
|
|
620,074
|
|
|
|
|
|
$1,599,715
|
|
$1,606,621
|
|
|
BIG LOTS, INC. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
13 WEEKS
ENDED
|
|
13 WEEKS
ENDED
|
|
|
|
APRIL 29,
2017
|
|
APRIL 30,
2016
|
|
|
|
|
%
|
|
|
%
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
Net
sales
|
|
$1,296,787
|
100.0
|
|
$1,312,575
|
100.0
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
524,275
|
40.4
|
|
517,681
|
39.4
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expenses
|
|
415,972
|
32.1
|
|
425,403
|
32.4
|
|
|
|
|
|
|
|
|
|
Depreciation
expense
|
|
28,595
|
2.2
|
|
29,719
|
2.3
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
79,708
|
6.1
|
|
62,559
|
4.8
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(1,009)
|
(0.1)
|
|
(634)
|
(0.0)
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
(517)
|
(0.0)
|
|
764
|
0.1
|
|
|
|
|
|
|
|
|
Income before
income taxes
|
|
78,182
|
6.0
|
|
62,689
|
4.8
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
26,670
|
2.1
|
|
24,030
|
1.8
|
|
|
|
|
|
|
|
|
Net
income
|
|
$51,512
|
4.0
|
|
$38,659
|
2.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$1.16
|
|
|
$0.80
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$1.15
|
|
|
$0.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
44,361
|
|
|
48,466
|
|
|
|
|
|
|
|
|
|
|
Dilutive effect of
share-based awards
|
|
367
|
|
|
422
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
44,728
|
|
|
48,888
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
|
$0.25
|
|
|
$0.21
|
|
BIG LOTS, INC. AND
SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
13 WEEKS
ENDED
|
|
13 WEEKS
ENDED
|
|
|
|
|
|
APRIL 29,
2017
|
|
APRIL 30,
2016
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
Net cash
provided by operating activities
|
|
$85,454
|
|
$78,611
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
used in investing activities
|
|
(22,010)
|
|
(18,752)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
used in financing activities
|
|
(48,877)
|
|
(49,613)
|
|
|
|
|
|
|
|
|
|
|
Increase in cash
and cash equivalents
|
|
14,567
|
|
10,246
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
|
|
|
|
Beginning
of period
|
|
51,164
|
|
54,144
|
|
|
|
End of
period
|
|
$65,731
|
|
$64,390
|
|
|
BIG LOTS, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(In thousands, except per share
data)
(Unaudited)
The following tables reconcile: selling and administrative
expenses, selling and administrative expense rate, operating
profit, operating profit rate, income tax expense, effective income
tax rate, net income, and diluted earnings per share for the first
quarter of 2016, the second quarter of 2016, and the full-year 2016
(GAAP financial measures) to adjusted selling and administrative
expenses, adjusted selling and administrative expense rate,
adjusted operating profit, adjusted operating profit rate, adjusted
income tax expense, adjusted effective income tax rate, adjusted
net income, and adjusted diluted earnings per share (non-GAAP
financial measures).
First
quarter of 2016 - Thirteen weeks ended April 30,
2016
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustment
to
exclude pension
costs
|
|
As Adjusted
(non-
GAAP)
|
Selling and
administrative expenses
|
$
425,403
|
|
$
(2,140)
|
|
$
423,263
|
Selling and
administrative expense rate
|
32.4%
|
|
(0.2%)
|
|
32.2%
|
Operating
profit
|
|
62,559
|
|
2,140
|
|
64,699
|
Operating
profit rate
|
|
4.8%
|
|
0.2%
|
|
4.9%
|
Income tax
expense
|
|
24,030
|
|
846
|
|
24,876
|
Effective
income tax rate
|
|
38.3%
|
|
0.0%
|
|
38.4%
|
Net
income
|
|
38,659
|
|
1,294
|
|
39,953
|
Diluted
earnings per share
|
|
$
0.79
|
|
$
0.03
|
|
$
0.82
|
The above adjusted selling and administrative expenses, adjusted
selling and administrative expense rate, adjusted operating profit,
adjusted operating profit rate, adjusted income tax expense,
adjusted effective income tax rate, adjusted net income, and
adjusted diluted earnings per share are "non-GAAP financial
measures" as that term is defined by Rule 101 of Regulation G (17
CFR Part 244) and Item 10 of Regulation S-K (17 CFR Part 229).
These non-GAAP financial measures exclude from the most directly
comparable financial measures calculated and presented in
accordance with accounting principles generally accepted in
the United States of America
("GAAP") all costs associated with the Company's pension plans, as
the Company froze benefits and began termination activities for its
pension plans in 2015 with the intention of completing the
termination and distributing all plan assets during 2016, which
totaled $2,140 ($1,294, net of tax). The pension costs
encompass all items associated with net periodic benefit costs,
including curtailment and settlement charges, and professional fees
associated with the plan and plan termination proceedings.
Second
quarter of 2016 - Thirteen weeks ended July 30,
2016
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustment
to
exclude pension
costs
|
|
As Adjusted
(non-
GAAP)
|
Selling and
administrative expenses
|
$
416,746
|
|
$
(1,070)
|
|
$
415,676
|
Selling and
administrative expense rate
|
34.6%
|
|
(0.1%)
|
|
34.5%
|
Operating
profit
|
|
38,920
|
|
1,070
|
|
39,990
|
Operating
profit rate
|
|
3.2%
|
|
0.1%
|
|
3.3%
|
Income tax
expense
|
|
14,305
|
|
424
|
|
14,729
|
Effective
income tax rate
|
|
38.6%
|
|
0.0%
|
|
38.7%
|
Net
income
|
|
22,715
|
|
646
|
|
23,361
|
Diluted
earnings per share
|
|
$
0.50
|
|
$
0.01
|
|
$
0.52
|
The above adjusted selling and administrative expenses, adjusted
selling and administrative expense rate, adjusted operating profit,
adjusted operating profit rate, adjusted income tax expense,
adjusted effective income tax rate, adjusted net income, and
adjusted diluted earnings per share are "non-GAAP financial
measures" as that term is defined by Rule 101 of Regulation G (17
CFR Part 244) and Item 10 of Regulation S-K (17 CFR Part 229).
These non-GAAP financial measures exclude from the most directly
comparable financial measures calculated and presented in
accordance with accounting principles generally accepted in
the United States of America
("GAAP") all costs associated with the Company's pension plans, as
the Company froze benefits and began termination activities for its
pension plans in 2015 with the intentions of completing the
termination and distributing all plan assets during 2016, which
totaled $1,070 ($646, net of tax). The pension costs
encompass all items associated with net periodic benefit costs,
including curtailment and settlement charges, and professional fees
associated with the plan and plan termination proceedings.
Full Year
2016 - Fifty-two weeks ended January 28, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustment
to
exclude pension
costs
|
|
Gain on sale
of
real estate
|
|
As Adjusted
(non-
GAAP)
|
Selling and
administrative expenses
|
$
1,730,956
|
|
$
(27,766)
|
|
$
3,823
|
|
$
1,707,013
|
Selling and
administrative expense rate
|
33.3%
|
|
(0.5%)
|
|
0.1%
|
|
32.8%
|
Operating
profit
|
|
248,003
|
|
27,766
|
|
(3,823)
|
|
271,946
|
Operating
profit rate
|
|
4.8%
|
|
0.5%
|
|
(0.1%)
|
|
5.2%
|
Income tax
expense
|
|
91,471
|
|
10,976
|
|
(1,412)
|
|
101,035
|
Effective
income tax rate
|
|
37.4%
|
|
0.2%
|
|
0.0%
|
|
37.7%
|
Net
income
|
|
152,828
|
|
16,790
|
|
(2,411)
|
|
167,207
|
Diluted
earnings per share
|
|
$
3.32
|
|
$
0.37
|
|
$
(0.05)
|
|
$
3.64
|
The above adjusted selling and administrative expenses, adjusted
selling and administrative expense rate, adjusted operating profit,
adjusted operating profit rate, adjusted income tax expense,
adjusted effective income tax rate, adjusted net income, and
adjusted diluted earnings per share are "non-GAAP financial
measures" as that term is defined by Rule 101 of Regulation G (17
CFR Part 244) and Item 10 of Regulation S-K (17 CFR Part 229).
These non-GAAP financial measures exclude from the most directly
comparable financial measures calculated and presented in
accordance with GAAP: (1) all costs associated with the Company's
pension plans, as the Company completed termination and
distribution proceedings in 2016, which totaled $27,766 ($16,790,
net of tax); and (2) a pretax adjustment for a gain on the sale of
real estate of $3,823 ($2,411, net of tax). The pension costs encompass
all items associated with net periodic benefit costs, including
curtailment and settlement charges, and professional fees
associated with the plan and plan termination proceedings.
Our management believes that the disclosure of these non-GAAP
financial measures provides useful information to investors because
the non-GAAP financial measures present an alternative and more
relevant method for measuring our operating performance, excluding
special items included in the most directly comparable GAAP
financial measures, that management believes is more indicative of
our on-going operating results and financial condition. Our
management uses these non-GAAP financial measures, along with the
most directly comparable GAAP financial measures, in evaluating our
operating performance.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/big-lots-reports-record-first-quarter-earnings-of-115-per-diluted-share-300464366.html
SOURCE Big Lots, Inc.