HOFFMAN ESTATES, Ill.,
March 14, 2018 /PRNewswire/
-- Sears Holdings Corporation ("Holdings," "we," "us," "our,"
or the "Company") (NASDAQ: SHLD) today announced financial results
for its fourth quarter and full year ended February 3, 2018.
As a supplement to this announcement, a presentation, pre-recorded
conference call and audio webcast are available at our
website http://searsholdings.com/invest.
In summary, today we reported the following:
- Generated positive Adjusted EBITDA during the fourth quarter of
2017 with year-over-year improvement of $63
million;
- Completed secured loan in connection with the previously
announced PBGC transaction which unlocks nearly $980 million of appraised asset value; and
- Expect to report year-over-year Adjusted EBITDA improvement in
the first quarter of 2018 as we continue to focus on liquidity
required to effectuate our transformation.
Net income attributable to Holdings' shareholders was
$182 million ($1.69 earnings per diluted share) for the fourth
quarter of 2017, which included a non-cash tax benefit of
approximately $470 million related to
tax reform, as well as a non-cash accounting charge of $72 million related to the impairment of the
Sears trade name. This compares to a net loss attributable to
Holdings' shareholders of $607
million ($5.67 loss per
diluted share) for the prior year fourth quarter, which also
included a non-cash accounting charge of $381 million related to the impairment of the
Sears trade name. Adjusted EBITDA was $2
million in the fourth quarter of 2017 compared to
$(61) million in the prior year
fourth quarter.
Edward S. Lampert, Chairman and
Chief Executive Officer of Holdings, said, "We made progress in
2017, with a return to positive Adjusted EBITDA and another quarter
of year-over-year improvement in our financial results. We also
took the actions necessary to increase our liquidity and fund our
ongoing transformation of the Company. In addition, we entered
important partnerships, such as our agreement to sell Kenmore
appliances and related services through Amazon, that broaden the
reach of our brands. Finally, we continued to enhance our Shop Your
Way ecosystem to offer our members more compelling and uniquely
tailored value and shopping experiences."
"We also recognize that we need to do more if we are to deliver
on our commitment to return to profitability in 2018. We will work
to build on the progress we made in 2017, including ongoing actions
to improve or close unprofitable stores and to unlock the value in
our assets. Importantly, to ensure our long-term viability, we must
substantially improve our sales and gross margin performance,
including adjustments to our business model," Lampert
concluded.
Rob Riecker, Chief Financial
Officer of Holdings, said, "As we continue with our transformation
efforts, Sears Holdings has taken a number of actions to improve
financial flexibility and support our operations. In addition to
pursuing several transactions to adjust our capital structure in
order to enhance our liquidity and financial position, we are
taking incremental actions to further streamline our operations to
drive profitability, including cost reductions of $200
million on an annualized basis in 2018 unrelated to store
closures."
Actions undertaken during the fourth quarter of 2017 and into
the first quarter of 2018 to provide the Company with additional
financial flexibility included:
- Extended the maturity of an existing term loan, which
originally was to mature in June 2018 (the "Term Loan"),
to January 2019, with the option to further extend the
maturity to July 2019. During the fourth quarter, the Company
paid down the Term Loan reducing the outstanding balance to
approximately $398 million;
- Raised $210 million in new financing in the fourth
quarter of 2017, and an additional $40
million subsequent to quarter-end, through a series of
financial transactions, supported by ground leases and certain
intellectual property, with the ability to raise an additional
$50 million against the same
collateral;
- Amended the borrowing base definition in the indenture relating
to the Company's second lien notes, maturing October 15, 2018,
to change the advance rate for inventory to 75%, increased from
65%. The amendment also defers the collateral coverage test for
purposes of the repurchase offer covenant in such indenture and
restarts it with the second quarter of 2018 (such that no
collateral coverage event can occur until the end of the third
quarter of 2018). The Company has also made corresponding
amendments to its second lien credit agreement;
- Amended its Domestic Credit Agreement, dated as of
July 21, 2015, increasing the size of the general debt basket
to $1.25 billion;
- Completed a third amendment to the Second Lien Credit
Agreement, dated as of September 1, 2016, which increased the
maximum aggregate principal of the uncommitted line of credit
facility established under the Second Lien Credit Agreement to
$600 million and extended the maximum duration of line of
credit loans to 270 days;
- Secured an additional $100
million incremental real estate loan (the "Incremental
Loan") on March 8, 2018, pursuant to
an amendment to the Second Amended and Restated Loan Agreement,
dated as of October 18, 2017, with
JPP, LLC and JPP II, LLC, entities affiliated with ESL Investments,
Inc. The Incremental Loan is secured by the same real estate
properties as the 2017 Secured Loan Facility, and certain
properties under the previous Incremental Loans outstanding, and
matures in July 2020. The Company expects to use the proceeds
of the Incremental Loan for general corporate purposes;
- Closed on a new secured loan (the "Secured Loan") and mezzanine
loan (the "Mezzanine Loan"), pursuant to which the Company received
aggregate gross proceeds of $440
million. The Secured Loan is secured by properties that were
previously subject to a ring-fence arrangement with the Pension
Benefit Guaranty Corporation (the "PBGC"), and the Mezzanine Loan
is secured by a pledge of the equity interests in SRC O.P. LLC, the
direct parent company of the entities that own such properties.
Pursuant to the Company's November
2017 agreement with the PBGC, the Company will contribute
$407 million of the proceeds into the
Sears pension plans, which contribution relieves the Company of
contributions to its pension plans for approximately two years
(other than a $20 million
supplemental payment due in the second quarter of 2018). The
Company expects to pay down a substantial portion of the Secured
Loan over the next three to six months using proceeds generated
from the sale of the underlying properties; and
- Commenced private exchange offers for its outstanding 8% Senior
Unsecured Notes Due 2019 and 6 5/8% Senior Secured Notes Due
2018 to improve the terms on non-first lien debt.
Revenues and Comparable Store Sales
We follow a retail-based financial reporting calendar.
Accordingly, our fourth quarter and fiscal year 2017 results
reflect the 14- and 53- week periods ended February 3, 2018, respectively, whereas 2016
contained 13- and 52- weeks for the fourth quarter and year,
respectively.
We generated total revenues of $4.4
billion for the fourth quarter of 2017, compared with total
revenues of $6.1 billion for the
prior year fourth quarter, with store closures contributing to over
half of the decline, partially offset by the inclusion of an
additional week of revenues in the fourth quarter of 2017. Total
comparable store sales declined 15.6% for the fourth quarter. Kmart
comparable store sales declined 12.2%, while Sears comparable store
sales declined 18.1%.
For the full year, revenues were $16.7
billion in 2017 as compared to revenues of $22.1 billion in the prior year. The decline in
revenues included a decrease of approximately $3.2 billion as a result of having fewer Kmart
and Sears Full-line stores in operation. For the full year,
comparable store sales declined 13.5%, with Kmart comparable store
sales declining 11.4% and Sears comparable store sales declining
15.2%.
Financial Position
At February 3, 2018, we had utilized
approximately $648 million of our $1.5
billion revolving credit facility due in 2020, consisting
of $271 million of borrowings and $377
million of letters of credit outstanding. The amount available
to borrow under our credit facility was approximately $69
million, which reflects the effect of our springing fixed charge
coverage ratio covenant and the borrowing base limitation in our
revolving credit facility, which varies based on our overall
inventory and receivables balances. Availability under our general
debt basket was approximately $102
million at February 3, 2018.
The Company's total cash balances were $336 million at February 3, 2018, including
restricted cash of $154 million, compared to $286 million at January 28, 2017. Short-term
borrowings totaled $915 million at February 3, 2018,
consisting of $271 million of revolver
borrowings, $500 million of line of credit loans,
and $144 million of borrowings under the incremental real
estate loan.
Merchandise inventories at February 3, 2018 were
$2.8 billion, compared to
$4.0 billion at January 28,
2017, while merchandise payables were $0.6
billion and $1.0 billion at
February 3, 2018 and January 28, 2017, respectively.
Total long-term debt (long-term debt and capital lease
obligations) was $3.2 billion and
$4.2 billion at February 3, 2018
and January 28, 2017, respectively.
Non-GAAP Financial Measures
In addition to our net income (loss) attributable to Holdings'
shareholders determined in accordance with Generally Accepted
Accounting Principles ("GAAP"), for purposes of evaluating
operating performance, we use Adjusted Earnings Before Interest,
Taxes, Depreciation and Amortization ("Adjusted EBITDA"), which is
a non-GAAP measure. The tables attached to this press release
provide a reconciliation of GAAP to the as adjusted amounts. We
believe that our use of Adjusted EBITDA provides an appropriate
measure for investors to use in assessing our performance across
periods, given that these measures provide adjustments for certain
significant items which may vary significantly from period to
period, improving the comparability of year-to-year results and is
therefore representative of our ongoing performance. Therefore, we
have adjusted our results for them to make our statements more
useful and comparable. However, we do not, and do not recommend
that you, solely use Adjusted EBITDA to assess our financial and
earnings performance.
As a result of the Seritage and JV transactions, Adjusted EBITDA
for the fourth quarter of 2017 and 2016 included additional rent
expense of approximately $40 million
and $47 million, respectively, while
the full year of 2017 and 2016 included additional rent expense of
approximately $169 million and
$197 million, respectively. Due to
the structure of the leases, we expect that our cash rent
obligations to Seritage and the joint venture partners will
decline, over time, as space in these stores is recaptured. From
the inception of the Seritage transaction to date, we have received
recapture notices on 55 properties and also exercised our right to
terminate the lease on 56 properties.
Forward-Looking Statements
This press release contains forward-looking statements intended
to qualify for the safe harbor from liability established by the
Private Securities Litigation Reform Act of 1995, including, but
not limited to, statements about our transformation through our
integrated retail strategy, our plans to redeploy and reconfigure
our assets, our liquidity, our ability to exercise financial
flexibility as we meet our obligations and pursue possible
strategic initiatives and other transactions, the commencement of
the private exchange offers and other statements that describe the
Company's plans. Whenever used, words such as "believe,"
"estimate," "intend," "will," "expect," and other terms of similar
meaning or expression are intended to identify such forward-looking
statements. Forward-looking statements, including these, are based
on the current beliefs and expectations of our management and are
subject to significant risks, assumptions and uncertainties, many
of which are beyond the Company's control, that may cause our
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by these forward-looking statements. Detailed
descriptions of other risks relating to Sears Holdings are
discussed in our Annual Report on Form 10-K for the fiscal year
ended January 28, 2017, and other
filings with the Securities and Exchange Commission. While we
believe that our forecasts and assumptions are reasonable, we
caution that actual results may differ materially. We intend the
forward-looking statements to speak only as of the time made and do
not undertake to update or revise them as more information becomes
available, except as required by law. Results presented herein are
unaudited. The unaudited and estimated financial results for the
fourth quarter and full-year 2017 contained in this press release
reflect a number of complex and subjective judgments and estimates
about the appropriateness of certain reported amounts and
disclosures. Our financial statements for the 2017 fiscal year are
not finalized. We are required to consider all available
information through the finalization of our financial statements
and their possible impact on our financial conditions and results
of operations for the period, including the impact of such
information on the complex judgments and estimates referred to
above. As a result, subsequent information or events may lead to
material differences between the information about the results of
operations described herein and the results of operations described
in our subsequent annual report. You should consider this
possibility in reviewing the financial information for the period
described above.
Pre-Recorded Conference Call and Audio Webcast
Sears Holdings, in conjunction with today's financial results
announcement, will post a pre-recorded conference call and
audio webcast on its corporate website. It will feature prepared
remarks from Mr. Riecker, who will focus his comments to provide
additional context around the quarter. The pre-recorded conference
call may be accessed by telephone at 844.826.0613 or 973.200.3092
(conference ID: 4997267), and on Sears Holdings' website at
http://www.searsholdings.com/invest/ under "Events &
Presentations." The accompanying presentation and transcript will
be posted online in conjunction.
About Sears Holdings Corporation
Sears Holdings Corporation (NASDAQ: SHLD) is a leading
integrated retailer focused on seamlessly connecting the digital
and physical shopping experiences to serve our members - wherever,
whenever and however they want to shop. Sears Holdings is home
to Shop Your Way®, a social shopping platform offering
members rewards for shopping at Sears and Kmart, as well as with
other retail partners across categories important to them. The
Company operates through its subsidiaries, including Sears, Roebuck
and Co. and Kmart Corporation, with full-line and specialty retail
stores across the United States.
For more information, visit www.searsholdings.com.
Sears Holdings
Corporation
|
Consolidated
Statements of Operations
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
Years
Ended
|
millions, except
per share data
|
|
February
3, 2018
|
|
January
28, 2017
|
|
February
3, 2018
|
|
January
28, 2017
|
REVENUES
|
|
|
|
|
|
|
|
|
Merchandise
sales
|
|
$
|
3,589
|
|
|
$
|
5,125
|
|
|
$
|
13,409
|
|
|
$
|
18,236
|
|
Services and
other
|
|
787
|
|
|
927
|
|
|
3,293
|
|
|
3,902
|
|
Total revenues
|
|
|
4,376
|
|
|
|
6,052
|
|
|
|
16,702
|
|
|
|
22,138
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES
|
|
|
|
|
|
|
|
|
Cost of sales, buying
and occupancy - merchandise sales
|
|
3,029
|
|
|
4,256
|
|
|
11,349
|
|
|
15,184
|
|
Gross margin dollars - merchandise sales
|
|
560
|
|
|
869
|
|
|
2,060
|
|
|
3,052
|
|
Gross margin rate - merchandise sales
|
|
15.6
|
%
|
|
17.0
|
%
|
|
15.4
|
%
|
|
16.7
|
%
|
Cost of sales and
occupancy - services and other
|
|
423
|
|
|
509
|
|
|
1,826
|
|
|
2,268
|
|
Gross margin dollars - services and other
|
|
364
|
|
|
418
|
|
|
1,467
|
|
|
1,634
|
|
Gross margin rate - services and other
|
|
46.3
|
%
|
|
45.1
|
%
|
|
44.5
|
%
|
|
41.9
|
%
|
Total cost of sales,
buying and occupancy
|
|
3,452
|
|
|
4,765
|
|
|
13,175
|
|
|
17,452
|
|
Total gross margin dollars
|
|
924
|
|
|
1,287
|
|
|
3,527
|
|
|
4,686
|
|
Total gross margin rate
|
|
21.1
|
%
|
|
21.3
|
%
|
|
21.1
|
%
|
|
21.2
|
%
|
Selling and
administrative
|
|
1,156
|
|
|
1,579
|
|
|
5,131
|
|
|
6,109
|
|
Selling and
administrative expense as a percentage of total
revenues
|
|
26.4
|
%
|
|
26.1
|
%
|
|
30.7
|
%
|
|
27.6
|
%
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
73
|
|
|
97
|
|
|
332
|
|
|
375
|
|
Impairment
charges
|
|
113
|
|
|
409
|
|
|
142
|
|
|
427
|
|
Gain on sales of
assets
|
|
(211)
|
|
|
(81)
|
|
|
(1,648)
|
|
|
(247)
|
|
Total costs and expenses
|
|
4,583
|
|
|
6,769
|
|
|
17,132
|
|
|
24,116
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
(207)
|
|
|
(717)
|
|
|
(430)
|
|
|
(1,978)
|
|
Interest
expense
|
|
(152)
|
|
|
(115)
|
|
|
(539)
|
|
|
(404)
|
|
Interest and
investment income (loss)
|
|
2
|
|
|
(1)
|
|
|
(12)
|
|
|
(26)
|
|
Other
income
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(357)
|
|
|
(820)
|
|
|
(981)
|
|
|
(2,395)
|
|
Income tax
benefit
|
|
539
|
|
|
213
|
|
|
598
|
|
|
174
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS
|
|
$
|
182
|
|
|
$
|
(607)
|
|
|
$
|
(383)
|
|
|
$
|
(2,221)
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
PER COMMON SHARE ATTRIBUTABLE TO HOLDINGS'
SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
|
$
|
1.69
|
|
|
$
|
(5.67)
|
|
|
$
|
(3.57)
|
|
|
$
|
(20.78)
|
|
Diluted weighted
average common shares outstanding
|
|
107.7
|
|
|
107.0
|
|
|
107.4
|
|
|
106.9
|
|
Sears Holdings
Corporation
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
|
|
|
millions
|
|
February
3, 2018
|
|
January
28, 2017
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and
cash equivalents
|
|
$
|
182
|
|
|
$
|
286
|
|
Restricted cash
|
|
154
|
|
|
—
|
|
Accounts
receivable
|
|
343
|
|
|
466
|
|
Merchandise inventories
|
|
2,798
|
|
|
3,959
|
|
Prepaid
expenses and other current assets
|
|
335
|
|
|
285
|
|
Total
current assets
|
|
3,812
|
|
|
4,996
|
|
|
|
|
|
|
Property and
equipment (net of accumulated depreciation and amortization of
$2,381 and 2,841)
|
|
1,729
|
|
|
2,240
|
|
Goodwill
|
|
269
|
|
|
269
|
|
Trade names and other
intangible assets
|
|
1,168
|
|
|
1,521
|
|
Other
assets
|
|
284
|
|
|
336
|
|
TOTAL
ASSETS
|
|
$
|
7,262
|
|
|
$
|
9,362
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Short-term borrowings
|
|
$
|
915
|
|
|
$
|
—
|
|
Current
portion of long-term debt and capitalized lease
obligations
|
|
968
|
|
|
590
|
|
Merchandise payables
|
|
576
|
|
|
1,048
|
|
Unearned
revenues
|
|
641
|
|
|
748
|
|
Other
taxes
|
|
247
|
|
|
339
|
|
Other
current liabilities
|
|
1,568
|
|
|
1,956
|
|
Total
current liabilities
|
|
4,915
|
|
|
4,681
|
|
|
|
|
|
|
Long-term debt and
capitalized lease obligations
|
|
2,249
|
|
|
3,573
|
|
Pension and
postretirement benefits
|
|
1,619
|
|
|
1,750
|
|
Deferred gain on
sale-leaseback
|
|
362
|
|
|
563
|
|
Sale-leaseback
financing obligation
|
|
247
|
|
|
235
|
|
Other long-term
liabilities
|
|
1,467
|
|
|
1,641
|
|
Long-term deferred
tax liabilities
|
|
126
|
|
|
743
|
|
Total
Liabilities
|
|
10,985
|
|
|
13,186
|
|
Total
Deficit
|
|
(3,723)
|
|
|
(3,824)
|
|
TOTAL
LIABILITIES AND DEFICIT
|
|
$
|
7,262
|
|
|
$
|
9,362
|
|
|
|
|
|
|
Total common shares
outstanding
|
|
107.8
|
|
|
107.1
|
|
Sears Holdings
Corporation
|
Segment
Results
|
(Unaudited)
|
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
February 3, 2018
|
millions, except
store data
|
|
Kmart
|
|
Sears
Domestic
|
|
Sears
Holdings
|
Total
revenues
|
|
$
|
1,475
|
|
|
$
|
2,901
|
|
|
$
|
4,376
|
|
|
|
|
|
|
|
|
Cost of sales, buying
and occupancy
|
|
1,190
|
|
|
2,262
|
|
|
3,452
|
|
Gross margin
dollars
|
|
285
|
|
|
639
|
|
|
924
|
|
Gross margin
rate
|
|
19.3
|
%
|
|
22.0
|
%
|
|
21.1
|
%
|
|
|
|
|
|
|
|
Selling and
administrative
|
|
363
|
|
|
793
|
|
|
1,156
|
|
Selling and
administrative expense as a percentage of total
revenues
|
|
24.6
|
%
|
|
27.3
|
%
|
|
26.4
|
%
|
Depreciation and
amortization
|
|
14
|
|
|
59
|
|
|
73
|
|
Impairment
charges
|
|
5
|
|
|
108
|
|
|
113
|
|
Gain on sales of
assets
|
|
(73)
|
|
|
(138)
|
|
|
(211)
|
|
Total costs and
expenses
|
|
1,499
|
|
|
3,084
|
|
|
4,583
|
|
Operating
loss
|
|
$
|
(24)
|
|
|
$
|
(183)
|
|
|
$
|
(207)
|
|
|
|
|
|
|
|
|
Number of:
|
|
|
|
|
|
|
Kmart
Stores
|
|
432
|
|
|
—
|
|
|
432
|
|
Full-Line
Stores
|
|
—
|
|
|
547
|
|
|
547
|
|
Specialty
Stores
|
|
—
|
|
|
23
|
|
|
23
|
|
Total
Stores
|
|
432
|
|
|
570
|
|
|
1,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
January 28, 2017
|
millions, except
store data
|
|
Kmart
|
|
Sears
Domestic
|
|
Sears
Holdings
|
Total
revenues
|
|
$
|
2,402
|
|
|
$
|
3,650
|
|
|
$
|
6,052
|
|
|
|
|
|
|
|
|
Cost of sales, buying
and occupancy
|
|
1,993
|
|
|
2,772
|
|
|
4,765
|
|
Gross margin
dollars
|
|
409
|
|
|
878
|
|
|
1,287
|
|
Gross margin
rate
|
|
17.0
|
%
|
|
24.1
|
%
|
|
21.3
|
%
|
|
|
|
|
|
|
|
Selling and
administrative
|
|
578
|
|
|
1,001
|
|
|
1,579
|
|
Selling and
administrative expense as a percentage of total
revenues
|
|
24.1
|
%
|
|
27.4
|
%
|
|
26.1
|
%
|
Depreciation and
amortization
|
|
20
|
|
|
77
|
|
|
97
|
|
Impairment
charges
|
|
15
|
|
|
394
|
|
|
409
|
|
Gain on sales of
assets
|
|
(61)
|
|
|
(20)
|
|
|
(81)
|
|
Total costs and
expenses
|
|
2,545
|
|
|
4,224
|
|
|
6,769
|
|
Operating
loss
|
|
$
|
(143)
|
|
|
$
|
(574)
|
|
|
$
|
(717)
|
|
|
|
|
|
|
|
|
Number of:
|
|
|
|
|
|
|
Kmart
Stores
|
|
735
|
|
|
—
|
|
|
735
|
|
Full-Line
Stores
|
|
—
|
|
|
670
|
|
|
670
|
|
Specialty
Stores
|
|
—
|
|
|
25
|
|
|
25
|
|
Total
Stores
|
|
735
|
|
|
695
|
|
|
1,430
|
|
|
|
|
|
|
|
|
Sears Holdings
Corporation
|
Segment
Results
|
(Unaudited)
|
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
February 3, 2018
|
millions, except
store data
|
|
Kmart
|
|
Sears
Domestic
|
|
Sears
Holdings
|
Total
revenues
|
|
$
|
5,618
|
|
|
$
|
11,084
|
|
|
$
|
16,702
|
|
|
|
|
|
|
|
|
Cost of sales, buying
and occupancy
|
|
4,601
|
|
|
8,574
|
|
|
13,175
|
|
Gross margin
dollars
|
|
1,017
|
|
|
2,510
|
|
|
3,527
|
|
Gross margin
rate
|
|
18.1
|
%
|
|
22.6
|
%
|
|
21.1
|
%
|
|
|
|
|
|
|
|
Selling and
administrative
|
|
1,455
|
|
|
3,676
|
|
|
5,131
|
|
Selling and
administrative expense as a percentage of total
revenues
|
|
25.9
|
%
|
|
33.2
|
%
|
|
30.7
|
%
|
Depreciation and
amortization
|
|
60
|
|
|
272
|
|
|
332
|
|
Impairment
charges
|
|
16
|
|
|
126
|
|
|
142
|
|
Gain on sales of
assets
|
|
(881)
|
|
|
(767)
|
|
|
(1,648)
|
|
Total costs and
expenses
|
|
5,251
|
|
|
11,881
|
|
|
17,132
|
|
Operating income
(loss)
|
|
$
|
367
|
|
|
$
|
(797)
|
|
|
$
|
(430)
|
|
|
|
|
|
|
|
|
Number of:
|
|
|
|
|
|
|
Kmart
Stores
|
|
432
|
|
|
—
|
|
|
432
|
|
Full-Line
Stores
|
|
—
|
|
|
547
|
|
|
547
|
|
Specialty
Stores
|
|
—
|
|
|
23
|
|
|
23
|
|
Total
Stores
|
|
432
|
|
|
570
|
|
|
1,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended January
28, 2017
|
millions, except
store data
|
|
Kmart
|
|
Sears
Domestic
|
|
Sears
Holdings
|
Total
revenues
|
|
$
|
8,650
|
|
|
$
|
13,488
|
|
|
$
|
22,138
|
|
|
|
|
|
|
|
|
Cost of sales, buying
and occupancy
|
|
7,093
|
|
|
10,359
|
|
|
17,452
|
|
Gross margin
dollars
|
|
1,557
|
|
|
3,129
|
|
|
4,686
|
|
Gross margin
rate
|
|
18.0
|
%
|
|
23.2
|
%
|
|
21.2
|
%
|
|
|
|
|
|
|
|
Selling and
administrative
|
|
2,175
|
|
|
3,934
|
|
|
6,109
|
|
Selling and
administrative expense as a percentage of total
revenues
|
|
25.1
|
%
|
|
29.2
|
%
|
|
27.6
|
%
|
Depreciation and
amortization
|
|
71
|
|
|
304
|
|
|
375
|
|
Impairment
charges
|
|
22
|
|
|
405
|
|
|
427
|
|
Gain on sales of
assets
|
|
(181)
|
|
|
(66)
|
|
|
(247)
|
|
Total costs and
expenses
|
|
9,180
|
|
|
14,936
|
|
|
24,116
|
|
Operating
loss
|
|
$
|
(530)
|
|
|
$
|
(1,448)
|
|
|
$
|
(1,978)
|
|
|
|
|
|
|
|
|
Number of:
|
|
|
|
|
|
|
Kmart
Stores
|
|
735
|
|
|
—
|
|
|
735
|
|
Full-Line
Stores
|
|
—
|
|
|
670
|
|
|
670
|
|
Specialty
Stores
|
|
—
|
|
|
25
|
|
|
25
|
|
Total
Stores
|
|
735
|
|
|
695
|
|
|
1,430
|
|
|
|
|
|
|
|
|
Sears Holdings
Corporation
|
Adjusted EBITDA
Reconciliation
|
(Unaudited)
|
|
|
|
|
|
Quarters
Ended
|
|
Years
Ended
|
millions
|
February
3, 2018
|
|
January
28, 2017
|
|
February
3, 2018
|
|
January
28, 2017
|
Net income (loss)
attributable to Holdings per statement of operations
|
$
|
182
|
|
|
$
|
(607)
|
|
|
$
|
(383)
|
|
|
$
|
(2,221)
|
|
Income tax
benefit
|
(539)
|
|
|
(213)
|
|
|
(598)
|
|
|
(174)
|
|
Interest
expense
|
152
|
|
|
115
|
|
|
539
|
|
|
404
|
|
Interest and
investment (income) loss
|
(2)
|
|
|
1
|
|
|
12
|
|
|
26
|
|
Other
income
|
—
|
|
|
(13)
|
|
|
—
|
|
|
(13)
|
|
Operating
loss
|
(207)
|
|
|
(717)
|
|
|
(430)
|
|
|
(1,978)
|
|
Depreciation and
amortization
|
73
|
|
|
97
|
|
|
332
|
|
|
375
|
|
Gain on sales of
assets
|
(211)
|
|
|
(81)
|
|
|
(1,648)
|
|
|
(247)
|
|
Impairment
charges
|
113
|
|
|
409
|
|
|
142
|
|
|
427
|
|
Before excluded
items
|
(232)
|
|
|
(292)
|
|
|
(1,604)
|
|
|
(1,423)
|
|
|
|
|
|
|
|
|
|
Closed store reserve
and severance
|
143
|
|
|
202
|
|
|
462
|
|
|
384
|
|
Pension
expense
|
117
|
|
|
72
|
|
|
656
|
|
|
288
|
|
Other
(1)
|
(7)
|
|
|
(21)
|
|
|
2
|
|
|
31
|
|
Amortization of
deferred Seritage gain
|
(19)
|
|
|
(22)
|
|
|
(78)
|
|
|
(88)
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
2
|
|
|
$
|
(61)
|
|
|
$
|
(562)
|
|
|
$
|
(808)
|
|
|
|
(1)
|
The 14- and 53- week
periods ended February 3, 2018 consisted of items associated
with legal matters, expenses associated with natural disasters and
transaction costs associated with strategic initiatives. The 13-
and 52- week periods ended January 28, 2017 consisted of
expenses associated with legal matters, transaction costs
associated with strategic initiatives and other
expenses.
|
Sears Holdings
Corporation
|
Adjusted EBITDA
Reconciliation
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
Quarters Ended
|
millions
|
February 3,
2018
|
|
January 28,
2017
|
|
Kmart
|
Sears
Domestic
|
Sears
Holdings
|
|
Kmart
|
Sears
Domestic
|
Sears
Holdings
|
Operating loss per
statement of operations
|
$
|
(24)
|
|
$
|
(183)
|
|
$
|
(207)
|
|
|
$
|
(143)
|
|
$
|
(574)
|
|
$
|
(717)
|
|
Depreciation and
amortization
|
14
|
|
59
|
|
73
|
|
|
20
|
|
77
|
|
97
|
|
Gain on sales of
assets
|
(73)
|
|
(138)
|
|
(211)
|
|
|
(61)
|
|
(20)
|
|
(81)
|
|
Impairment
charges
|
5
|
|
108
|
|
113
|
|
|
15
|
|
394
|
|
409
|
|
Before excluded
items
|
(78)
|
|
(154)
|
|
(232)
|
|
|
(169)
|
|
(123)
|
|
(292)
|
|
|
|
|
|
|
|
|
|
Closed store reserve
and severance
|
92
|
|
51
|
|
143
|
|
|
159
|
|
43
|
|
202
|
|
Pension
expense
|
—
|
|
117
|
|
117
|
|
|
—
|
|
72
|
|
72
|
|
Other
(1)
|
(8)
|
|
1
|
|
(7)
|
|
|
7
|
|
(28)
|
|
(21)
|
|
Amortization of
deferred Seritage gain
|
(2)
|
|
(17)
|
|
(19)
|
|
|
(4)
|
|
(18)
|
|
(22)
|
|
Adjusted
EBITDA
|
$
|
4
|
|
$
|
(2)
|
|
$
|
2
|
|
|
$
|
(7)
|
|
$
|
(54)
|
|
$
|
(61)
|
|
|
|
|
|
|
|
|
|
% to
revenues
|
0.3
|
%
|
(0.1)
|
%
|
—
|
%
|
|
(0.3)
|
%
|
(1.5)
|
%
|
(1.0)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years
Ended
|
millions
|
February 3,
2018
|
|
January 28,
2017
|
|
Kmart
|
Sears
Domestic
|
Sears
Holdings
|
|
Kmart
|
Sears
Domestic
|
Sears
Holdings
|
Operating income
(loss) per statement of operations
|
$
|
367
|
|
$
|
(797)
|
|
$
|
(430)
|
|
|
$
|
(530)
|
|
$
|
(1,448)
|
|
$
|
(1,978)
|
|
Depreciation and
amortization
|
60
|
|
272
|
|
332
|
|
|
71
|
|
304
|
|
375
|
|
Gain on sales of
assets
|
(881)
|
|
(767)
|
|
(1,648)
|
|
|
(181)
|
|
(66)
|
|
(247)
|
|
Impairment
charges
|
16
|
|
126
|
|
142
|
|
|
22
|
|
405
|
|
427
|
|
Before excluded
items
|
(438)
|
|
(1,166)
|
|
(1,604)
|
|
|
(618)
|
|
(805)
|
|
(1,423)
|
|
|
|
|
|
|
|
|
|
Closed store reserve
and severance
|
281
|
|
181
|
|
462
|
|
|
318
|
|
66
|
|
384
|
|
Pension
expense
|
—
|
|
656
|
|
656
|
|
|
—
|
|
288
|
|
288
|
|
Other
(1)
|
(23)
|
|
25
|
|
2
|
|
|
15
|
|
16
|
|
31
|
|
Amortization of
deferred Seritage gain
|
(11)
|
|
(67)
|
|
(78)
|
|
|
(17)
|
|
(71)
|
|
(88)
|
|
Adjusted
EBITDA
|
$
|
(191)
|
|
$
|
(371)
|
|
$
|
(562)
|
|
|
$
|
(302)
|
|
$
|
(506)
|
|
$
|
(808)
|
|
|
|
|
|
|
|
|
|
% to
revenues
|
(3.4)
|
%
|
(3.3)
|
%
|
(3.4)
|
%
|
|
(3.5)
|
%
|
(3.8)
|
%
|
(3.6)
|
%
|
|
|
(1)
|
The 14- and 53- week
periods ended February 3, 2018 consisted of items associated
with legal matters, expenses associated with natural disasters and
transaction costs associated with strategic initiatives. The 13-
and 52- week periods ended January 28, 2017 consisted of
expenses associated with legal matters, transaction costs
associated with strategic initiatives and other
expenses.
|
|
|
NEWS MEDIA CONTACT:
Sears Holdings Public
Relations
(847) 286-8371
View original
content:http://www.prnewswire.com/news-releases/sears-holdings-reports-fourth-quarter-and-full-year-2017-results-300614287.html
SOURCE Sears Holdings Corporation