Grocery Outlet Holding Corp. (NASDAQ: GO) ("Grocery Outlet" or the
"Company") today announced financial results for the fourth quarter
and full fiscal year 2020 ended January 2, 2021, both of which
contained one additional week ("53rd week") versus the comparable
prior periods.
Highlights for Fourth Quarter Fiscal
2020 as compared to the Fourth Quarter Fiscal 2019:
- Net sales
increased by 23.1% to $806.8 million, which includes $53.3 million
from the 53rd week.
- Comparable store
sales increased by 7.9% on a 13-week basis over a 5.1% increase in
the same period last year.
- The Company opened
eight new stores ending the quarter with 380 stores in six
states.
- Net income
increased 146.8% to $24.3 million, or $0.24 per diluted share.
- Adjusted net
income(1) increased 46.1% to $24.2 million, or $0.24 per non-GAAP
diluted share.
- Adjusted EBITDA(1)
increased 24.7% to $51.2 million.
Eric Lindberg, CEO of Grocery Outlet, stated,
"Reflecting on 2020, our flexible business model, supported by many
years of strategic investments, positioned us to deliver
exceptional financial results in an unprecedented environment. I am
extremely proud of the commitment demonstrated by our organization
as we rose to meet the challenges created by the COVID
pandemic.
On the heels of an extraordinary year, we will
continue to focus on making strategic, disciplined investments to
support our growth. We believe that our value proposition is as
strong as ever, we have ample white space to execute 10% annual
unit growth and we remain committed to continuously reinvesting in
the business, all of which position us to achieve our long-term
growth objectives."
Highlights for the Full Year Fiscal 2020
as compared to the Full Year Fiscal 2019 :
- Net sales
increased by 22.5% to $3.13 billion.
- Comparable store
sales increased by 12.7% on a 52-week basis compared to a 5.2%
increase in the comparable period last year.
- The Company opened
35 new stores and closed two stores during the year.
- Net income
increased 592.1% to $106.7 million, or $1.08 per diluted
share.
- Adjusted net
income(1) increased 86.9% to $112.7 million, or $1.14 per non-GAAP
diluted share.
- Adjusted EBITDA(1)
increased 32.4% to $222.9 million.
Balance Sheet and Cash
Flow:
- Cash and cash
equivalents totaled $105.3 million at the end of the fourth quarter
of fiscal 2020.
- Total debt was
$449.2 million at the end of the fourth quarter of fiscal
2020.
- Net cash provided
by operations during fiscal 2020 was $181.2 million.
- Capital
expenditures for the fourth quarter of fiscal 2020, excluding the
impact of tenant improvement allowances, were
$39.1 million.
__________________________________
(1) Beginning with the fourth quarter of fiscal
2020, we updated our definitions of our non-GAAP financial measures
to simplify our presentation and enhance comparability between
periods. A historical reconciliation of net income to both our
revised and previous definitions of adjusted EBITDA, non-GAAP
adjusted net income and non-GAAP adjusted diluted earnings per
share is set forth in the attachment to this release. Please note
that our non-GAAP financial measures should be considered as a
supplement to, and not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP.
Outlook:
- The Company
currently expects to open between 36 and 38 stores this year with
one closure.
- The Company
anticipates that comparable sales for the first quarter will
decline in the negative high-single digits reflecting the impact of
cycling the initial demand surge related to the COVID-19 pandemic
in March 2020.
- Excluding the
impact of discrete items, the Company anticipates a normalized
fiscal 2021 tax rate of 28%.
- Capital
expenditures, net of tenant improvement allowances, are estimated
to be approximately $130.0 million.
- As a reminder, the
Company will report 52 weeks of operating results in fiscal 2021
compared to 53 weeks in fiscal 2020.
Conference Call
Information:
A conference call to discuss the fourth quarter
and full year fiscal 2020 financial results is scheduled for today,
March 2, 2021 at 4:30 p.m. Eastern Time. Investors and analysts
interested in participating in the call are invited to dial
877-407-9208 approximately 10 minutes prior to the start of the
call. A live audio webcast of the conference call will be available
online at https://investors.groceryoutlet.com.
A taped replay of the conference call will be
available within two hours of the conclusion of the call and can be
accessed both online and by dialing 844-512-2921. The pin number to
access the telephone replay is 13715871. The replay will be
available for approximately two weeks after the call.
Non-GAAP Financial
Information:
In addition to reporting financial results in
accordance with accounting principles generally accepted in the
United States ("GAAP"), the Company uses EBITDA, adjusted EBITDA,
adjusted net income and adjusted diluted earnings per share
measures of performance to evaluate the effectiveness of its
business strategies, to make budgeting decisions and to compare its
performance against that of other peer companies using similar
measures. Management believes it is useful to investors and
analysts to evaluate these non-GAAP measures on the same basis as
management uses to evaluate our operating results.
Adjusted EBITDA is defined as net income before
interest expense, taxes, depreciation and amortization ("EBITDA")
and other adjustments noted in the "Reconciliation of GAAP Net
Income to Adjusted EBITDA" table below. Adjusted net income is
defined as net income before the adjustments noted in table
"Reconciliation of GAAP Net Income to Adjusted Net Income"
below.
Adjusted EBITDA and adjusted net income are
non-GAAP measures and may not be comparable to similar measures
reported by other companies. Adjusted EBITDA and adjusted net
income have limitations as analytical tools, and you should not
consider them in isolation or as a substitute for analysis of our
results as reported under GAAP.
Beginning with the fourth quarter of fiscal
2020, we updated our definitions of adjusted EBITDA and non-GAAP
adjusted net income to simplify our presentation and enhance
comparability between periods. We no longer exclude new store
pre-opening expenses from our presentation of adjusted EBITDA and
non-GAAP adjusted net income. We also updated our definition of
non-GAAP adjusted net income to exclude the tax impact of options
exercises and vesting of restricted stock units. Lastly, debt
extinguishment and modification costs were reclassified to the
other adjustments line item within the presentation of both
adjusted EBITDA and non-GAAP adjusted net income. The presentation
for adjusted EBITDA and non-GAAP adjusted net income for all
periods presented have been recast to reflect these changes and a
reconciliation between the revised and previous definitions of
adjusted EBITDA and non-GAAP adjusted net income have been provided
within the "Reconciliation of GAAP Net Income to Adjusted EBITDA",
"Reconciliation of GAAP Net Income to Adjusted Net Income",
"Quarterly Reconciliation of GAAP Net Income to Adjusted EBITDA",
and "Quarterly Reconciliation of GAAP Net Income to Adjusted Net
Income" tables below.
Forward-Looking Statements:
This news release includes forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 as contained in Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, which reflect management's current views
and estimates regarding the prospects of the industry and the
Company’s prospects, plans, business, results of operations,
financial position, future financial performance and business
strategy. These forward-looking statements generally can be
identified by the use of forward-looking terminology such as "may,"
"should," "expect," "intend," "will," "estimate," "anticipate,"
"believe," "predict," "potential" or "continue" or the negatives of
these terms or variations of them or similar terminology. Although
the Company believes that the expectations reflected in these
forward-looking statements are reasonable, the Company cannot
provide any assurance that these expectations will prove to be
correct.
The following factors are among those that may
cause actual results to differ materially from the forward-looking
statements: failure of suppliers to consistently supply us with
opportunistic products at attractive pricing; inability to
successfully identify trends and maintain a consistent level of
opportunistic products; failure to maintain or increase comparable
store sales; changes affecting the market prices of the products we
sell; failure to open, relocate or remodel stores on schedule;
risks associated with newly opened stores; inability to retain the
loyalty of our customers; costs and implementation difficulties
associated with marketing, advertising and promotions; failure to
maintain our reputation and the value of our brand, including
protecting our intellectual property; any significant disruption to
our distribution network, the operations of our distributions
centers and our timely receipt of inventory; inability to maintain
sufficient levels of cash flow from our operations; risks
associated with leasing substantial amounts of space; failure to
participate effectively or at all in the growing online retail
marketplace; unexpected costs and negative effects if we incur
losses not covered by our insurance program; inability to attract,
train and retain highly qualified employees; difficulties
associated with labor relations; loss of our key personnel or
inability to hire additional qualified personnel; risks associated
with economic conditions; competition in the retail food industry;
movement of consumer trends toward private labels and away from
name-brand products; major health epidemics, such as the outbreak
of COVID-19, and other outbreaks; natural disasters and unusual
weather conditions (whether or not caused by climate change), power
outages, pandemic outbreaks, terrorist acts, global political
events and other serious catastrophic events; failure to maintain
the security of information we hold relating to personal
information or payment card data of our customers, employees and
suppliers; material disruption to our information technology
systems; risks associated with products we and our independent
operators ("IOs") sell; risks associated with laws and regulations
generally applicable to retailers; legal proceedings from
customers, suppliers, employees, governments or competitors;
failure of our IOs to successfully manage their business; failure
of our IOs to repay notes outstanding to us; inability to attract
and retain qualified IOs; inability of our IOs to avoid excess
inventory shrink; any loss or changeover of an IO; legal
proceedings initiated against our IOs; legal challenges to the
IO/independent contractor business model; failure to maintain
positive relationships with our IOs; risks associated with actions
our IOs could take that could harm our business; our substantial
indebtedness could affect our ability to operate our business,
react to changes in the economy or industry or pay our debts and
meet our obligations; our ability to generate cash flow to service
our substantial debt obligations; impairment of goodwill and other
intangible assets; any significant decline in our operating profit
and taxable income; risks associated with tax matters; changes in
accounting standards and subjective assumptions, estimates and
judgments by management related to complex accounting matters;
failure to comply with requirements to design, implement and
maintain effective internal controls; and the other factors
discussed under "Risk Factors" in the Company’s most recent reports
on Forms 10-Q and 10-K. Such risk factors may be updated from time
to time in the Company’s periodic filings with the SEC. The
Company’s periodic filings are accessible on the SEC’s website at
www.sec.gov.
You should not rely upon forward-looking
statements as predictions of future events. Although the Company
believes that the expectations reflected in the forward-looking
statements are reasonable, the Company cannot guarantee that the
future results, levels of activity, performance and events and
circumstances reflected in the forward-looking statements will be
achieved or occur. Except as required by applicable law, the
Company undertakes no obligation to update publicly any
forward-looking statements for any reason after the date of this
news release to conform these statements to actual results or to
changes in our expectations.
About Grocery Outlet:
Based in Emeryville, California, Grocery Outlet
is a high-growth, extreme value retailer of quality, name-brand
consumables and fresh products sold through a network of
independently operated stores. Grocery Outlet has more than 375
stores in California, Washington, Oregon, Pennsylvania, Idaho and
Nevada.
GROCERY OUTLET HOLDING
CORP.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME(in thousands,
except per share data)(unaudited)
|
14 Weeks Ended |
|
13 Weeks Ended |
|
53 Weeks Ended |
|
52 Weeks Ended |
|
January 2,2021 |
|
December 28,2019 |
|
January 2,2021 |
|
December 28,2019 |
Net sales |
$ |
806,821 |
|
|
|
$ |
655,517 |
|
|
$ |
3,134,640 |
|
|
|
$ |
2,559,617 |
|
Cost of sales |
562,434 |
|
|
|
455,239 |
|
|
2,161,293 |
|
|
|
1,772,515 |
|
Gross profit |
244,387 |
|
|
|
200,278 |
|
|
973,347 |
|
|
|
787,102 |
|
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and administrative |
197,596 |
|
|
|
167,895 |
|
|
772,409 |
|
|
|
639,437 |
|
Depreciation and amortization |
15,188 |
|
|
|
9,793 |
|
|
55,479 |
|
|
|
47,883 |
|
Share-based compensation |
3,775 |
|
|
|
5,586 |
|
|
38,084 |
|
|
|
31,439 |
|
Total operating expenses |
216,559 |
|
|
|
183,274 |
|
|
865,972 |
|
|
|
718,759 |
|
Income from operations |
27,828 |
|
|
|
17,004 |
|
|
107,375 |
|
|
|
68,343 |
|
Other expenses: |
|
|
|
|
|
|
|
Interest expense, net |
4,106 |
|
|
|
6,695 |
|
|
20,043 |
|
|
|
45,927 |
|
Debt extinguishment and modification costs |
— |
|
|
|
— |
|
|
198 |
|
|
|
5,634 |
|
Total other expenses |
4,106 |
|
|
|
6,695 |
|
|
20,241 |
|
|
|
51,561 |
|
Income before income
taxes |
23,722 |
|
|
|
10,309 |
|
|
87,134 |
|
|
|
16,782 |
|
Income tax expense
(benefit) |
(542 |
) |
|
|
477 |
|
|
(19,579 |
) |
|
|
1,363 |
|
Net income and comprehensive
income |
$ |
24,264 |
|
|
|
$ |
9,832 |
|
|
$ |
106,713 |
|
|
|
$ |
15,419 |
|
Basic earnings per share |
$ |
0.26 |
|
|
|
$ |
0.11 |
|
|
$ |
1.16 |
|
|
|
$ |
0.20 |
|
Diluted earnings per
share |
$ |
0.24 |
|
|
|
$ |
0.11 |
|
|
$ |
1.08 |
|
|
|
$ |
0.19 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
Basic |
94,299 |
|
|
|
88,841 |
|
|
91,818 |
|
|
|
79,044 |
|
Diluted |
99,470 |
|
|
|
93,076 |
|
|
98,452 |
|
|
|
81,863 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROCERY OUTLET HOLDING
CORP.CONDENSED CONSOLIDATED BALANCE
SHEETS(in
thousands)(unaudited)
|
January 2,2021 |
|
December 28,2019 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
105,326 |
|
|
$ |
28,101 |
|
Independent operator receivables and current portion of independent
operator notes, net of allowance |
5,443 |
|
|
7,003 |
|
Other accounts receivable, net of allowance |
5,950 |
|
|
2,849 |
|
Merchandise inventories |
245,157 |
|
|
219,420 |
|
Prepaid expenses and other current assets |
20,081 |
|
|
13,453 |
|
Total current assets |
381,957 |
|
|
270,826 |
|
Independent operator notes,
net of allowance |
27,440 |
|
|
20,331 |
|
Property and equipment,
net |
433,652 |
|
|
356,614 |
|
Operating lease right-of-use
assets |
835,397 |
|
|
734,327 |
|
Intangible assets, net |
48,226 |
|
|
47,792 |
|
Goodwill |
747,943 |
|
|
747,943 |
|
Deferred income tax assets,
net |
3,529 |
|
|
— |
|
Other assets |
7,480 |
|
|
7,696 |
|
Total assets |
$ |
2,485,624 |
|
|
$ |
2,185,529 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Trade accounts payable |
$ |
114,278 |
|
|
$ |
119,217 |
|
Accrued expenses |
35,699 |
|
|
31,363 |
|
Accrued compensation |
26,447 |
|
|
14,915 |
|
Current portion of long-term debt |
— |
|
|
246 |
|
Current lease liabilities |
48,675 |
|
|
38,245 |
|
Income and other taxes payable |
7,547 |
|
|
4,641 |
|
Total current liabilities |
232,646 |
|
|
208,627 |
|
Long-term debt, net |
449,233 |
|
|
447,743 |
|
Deferred income tax
liabilities, net |
— |
|
|
16,020 |
|
Long-term lease
liabilities |
881,438 |
|
|
767,755 |
|
Total liabilities |
1,563,317 |
|
|
1,440,145 |
|
Stockholders’ equity: |
|
|
|
Voting common stock |
95 |
|
|
89 |
|
Series A preferred stock |
— |
|
|
— |
|
Additional paid-in capital |
787,047 |
|
|
717,282 |
|
Retained earnings |
135,165 |
|
|
28,013 |
|
Total stockholders’ equity |
922,307 |
|
|
745,384 |
|
Total liabilities and stockholders’ equity |
$ |
2,485,624 |
|
|
$ |
2,185,529 |
|
|
|
|
|
|
|
|
|
GROCERY OUTLET HOLDING
CORP.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(in
thousands)(unaudited)
|
53 Weeks Ended |
|
52 Weeks Ended |
|
January 2,2021 |
|
December 28,2019 |
Cash flows from
operating activities: |
|
|
|
Net income |
$ |
106,713 |
|
|
|
$ |
15,419 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation of property and equipment |
50,749 |
|
|
|
42,906 |
|
|
Amortization of intangible and other assets |
7,302 |
|
|
|
7,237 |
|
|
Amortization of debt issuance costs and discounts |
2,452 |
|
|
|
2,542 |
|
|
Debt extinguishment and modification costs |
198 |
|
|
|
5,634 |
|
|
Share-based compensation |
38,084 |
|
|
|
31,439 |
|
|
Provision for accounts receivable |
(456 |
) |
|
|
2,575 |
|
|
Deferred income taxes |
(19,578 |
) |
|
|
872 |
|
|
Other |
1,954 |
|
|
|
1,955 |
|
|
Changes in operating assets and liabilities: |
|
|
|
Independent operator and other accounts receivable |
(4,943 |
) |
|
|
(3,649 |
) |
|
Merchandise inventories |
(25,737 |
) |
|
|
(21,115 |
) |
|
Prepaid expenses and other current assets |
(6,628 |
) |
|
|
498 |
|
|
Income and other taxes payable |
2,906 |
|
|
|
1,191 |
|
|
Trade accounts payable, accrued compensation and other accrued
expenses |
4,778 |
|
|
|
22,599 |
|
|
Proceeds from insurance recoveries |
479 |
|
|
|
— |
|
|
Changes in operating lease assets and liabilities, net |
22,964 |
|
|
|
22,732 |
|
|
Net cash provided by operating activities |
181,237 |
|
|
|
132,835 |
|
|
Cash flows from
investing activities: |
|
|
|
Advances to independent operators |
(10,372 |
) |
|
|
(12,811 |
) |
|
Repayments of advances from independent operators |
6,793 |
|
|
|
4,473 |
|
|
Purchases of property and equipment |
(124,920 |
) |
|
|
(97,194 |
) |
|
Proceeds from sales of assets |
269 |
|
|
|
586 |
|
|
Intangible assets and licenses |
(5,861 |
) |
|
|
(3,073 |
) |
|
Proceeds from insurance recoveries |
305 |
|
|
|
— |
|
|
Net cash used in investing activities |
(133,786 |
) |
|
|
(108,019 |
) |
|
Cash flows from
financing activities: |
|
|
|
Proceeds from initial public offering, net of underwriting
discounts paid |
— |
|
|
|
407,666 |
|
|
Proceeds from exercise of share-based compensation awards |
32,604 |
|
|
|
4,444 |
|
|
Proceeds from revolving credit facility loan |
90,000 |
|
|
|
— |
|
|
Principal payments on revolving credit facility loan |
(90,000 |
) |
|
|
— |
|
|
Payments made for net settlement of employee share-based
awards |
(483 |
) |
|
|
(2,813 |
) |
|
Other direct costs paid related to the initial public offering |
— |
|
|
|
(7,062 |
) |
|
Principal payments on term loans |
(188 |
) |
|
|
(414,813 |
) |
|
Principal payments on other borrowings |
(1,024 |
) |
|
|
(865 |
) |
|
Dividends paid |
(434 |
) |
|
|
(3,645 |
) |
|
Debt issuance costs paid |
(701 |
) |
|
|
(690 |
) |
|
Net cash provided by (used in) financing activities |
29,774 |
|
|
|
(17,778 |
) |
|
Net increase in cash and cash
equivalents |
77,225 |
|
|
|
7,038 |
|
|
Cash and cash equivalents at
beginning of period |
28,101 |
|
|
|
21,063 |
|
|
Cash and cash equivalents at
end of period |
$ |
105,326 |
|
|
|
$ |
28,101 |
|
|
|
|
|
|
|
|
|
|
|
|
GROCERY OUTLET HOLDING
CORP.RECONCILIATION OF GAAP NET INCOME TO ADJUSTED
EBITDA(in
thousands)(unaudited)
|
14 Weeks Ended |
|
13 Weeks Ended |
|
53 Weeks Ended |
|
52 Weeks Ended |
|
January 2,2021 |
|
December 28,2019 |
|
January 2,2021 |
|
December 28,2019 |
Net income |
$ |
24,264 |
|
|
|
$ |
9,832 |
|
|
$ |
106,713 |
|
|
|
$ |
15,419 |
|
Interest expense, net |
4,106 |
|
|
|
6,695 |
|
|
20,043 |
|
|
|
45,927 |
|
Income tax expense
(benefit) |
(542 |
) |
|
|
477 |
|
|
(19,579 |
) |
|
|
1,363 |
|
Depreciation and amortization
expenses (a) |
15,798 |
|
|
|
10,356 |
|
|
58,051 |
|
|
|
50,143 |
|
EBITDA |
43,626 |
|
|
|
27,360 |
|
|
165,228 |
|
|
|
112,852 |
|
Share-based compensation
expenses (b) |
3,775 |
|
|
|
5,586 |
|
|
38,084 |
|
|
|
31,439 |
|
Non-cash rent (c) |
3,025 |
|
|
|
5,275 |
|
|
10,673 |
|
|
|
10,582 |
|
Asset impairment and gain or
loss on disposition (d) |
569 |
|
|
|
1,457 |
|
|
1,727 |
|
|
|
1,957 |
|
Provision for (write-off of)
accounts receivable reserves (e) |
(777 |
) |
|
|
202 |
|
|
(456 |
) |
|
|
2,575 |
|
Other (f) |
1,001 |
|
|
|
1,183 |
|
|
7,666 |
|
|
|
8,928 |
|
Adjusted EBITDA, revised definition |
$ |
51,219 |
|
|
|
$ |
41,063 |
|
|
$ |
222,922 |
|
|
|
$ |
168,333 |
|
|
|
|
|
|
|
|
|
Revised definition no longer
adjusts for: |
|
|
|
|
|
|
|
New store pre-opening expenses (g) |
297 |
|
|
|
473 |
|
|
1,542 |
|
|
|
1,509 |
|
Adjusted EBITDA, previous definition |
$ |
51,516 |
|
|
|
$ |
41,536 |
|
|
$ |
224,464 |
|
|
|
$ |
169,842 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROCERY OUTLET HOLDING
CORP.RECONCILIATION OF GAAP NET INCOME TO ADJUSTED
NET INCOME(in thousands, except per share
data)(unaudited)
|
14 Weeks Ended |
|
13 Weeks Ended |
|
53 Weeks Ended |
|
52 Weeks Ended |
|
January 2,2021 |
|
December 28,2019 |
|
January 2,2021 |
|
December 28,2019 |
Net income |
$ |
24,264 |
|
|
|
$ |
9,832 |
|
|
|
$ |
106,713 |
|
|
|
$ |
15,419 |
|
|
Share-based compensation
expenses (b) |
3,775 |
|
|
|
5,586 |
|
|
|
38,084 |
|
|
|
31,439 |
|
|
Non-cash rent (c) |
3,025 |
|
|
|
5,275 |
|
|
|
10,673 |
|
|
|
10,582 |
|
|
Asset impairment and gain or
loss on disposition (d) |
569 |
|
|
|
1,457 |
|
|
|
1,727 |
|
|
|
1,957 |
|
|
Provision for (write-off of)
accounts receivable reserves (e) |
(777 |
) |
|
|
202 |
|
|
|
(456 |
) |
|
|
2,575 |
|
|
Other (f) |
1,001 |
|
|
|
1,183 |
|
|
|
7,666 |
|
|
|
8,928 |
|
|
Amortization of purchase
accounting assets and deferred financing costs (h) |
2,985 |
|
|
|
461 |
|
|
|
11,808 |
|
|
|
11,917 |
|
|
Tax impact of option exercises
and vesting of restricted stock units (i) |
(7,631 |
) |
|
|
(2,993 |
) |
|
|
(44,089 |
) |
|
|
(3,587 |
) |
|
Tax effect of total
adjustments (j) |
(2,963 |
) |
|
|
(4,404 |
) |
|
|
(19,461 |
) |
|
|
(18,939 |
) |
|
Non-GAAP adjusted net income, revised definition |
$ |
24,248 |
|
|
|
$ |
16,599 |
|
|
|
$ |
112,665 |
|
|
|
$ |
60,291 |
|
|
GAAP earnings per share |
|
|
|
|
|
|
|
Basic |
$ |
0.26 |
|
|
|
$ |
0.11 |
|
|
|
$ |
1.16 |
|
|
|
$ |
0.20 |
|
|
Diluted |
$ |
0.24 |
|
|
|
$ |
0.11 |
|
|
|
$ |
1.08 |
|
|
|
$ |
0.19 |
|
|
Non-GAAP adjusted earnings per
share, revised definition |
|
|
|
|
|
|
|
Basic |
$ |
0.26 |
|
|
|
$ |
0.19 |
|
|
|
$ |
1.23 |
|
|
|
$ |
0.76 |
|
|
Diluted |
$ |
0.24 |
|
|
|
$ |
0.18 |
|
|
|
$ |
1.14 |
|
|
|
$ |
0.74 |
|
|
|
|
|
|
|
|
|
|
Revised definition no longer
adjusts for: |
|
|
|
|
|
|
|
New store pre-opening expenses (g) |
297 |
|
|
|
473 |
|
|
|
1,542 |
|
|
|
1,509 |
|
|
Revised definition now adjusts
for: |
|
|
|
|
|
|
|
Tax impact of option exercises and vesting of restricted stock
units (i) |
7,631 |
|
|
|
2,993 |
|
|
|
44,089 |
|
|
|
3,587 |
|
|
Change in tax effect of total
adjustments (j) |
(82 |
) |
|
|
(149 |
) |
|
|
(431 |
) |
|
|
(424 |
) |
|
Non-GAAP adjusted net income, previous definition |
$ |
32,094 |
|
|
|
$ |
19,916 |
|
|
|
$ |
157,865 |
|
|
|
$ |
64,963 |
|
|
Non-GAAP adjusted earnings per
share, previous definition |
|
|
|
|
|
|
|
Basic |
$ |
0.34 |
|
|
|
$ |
0.22 |
|
|
|
$ |
1.72 |
|
|
|
$ |
0.82 |
|
|
Diluted |
$ |
0.32 |
|
|
|
$ |
0.21 |
|
|
|
$ |
1.60 |
|
|
|
$ |
0.79 |
|
|
|
|
|
|
|
|
|
|
GAAP & Non-GAAP weighted
average shares outstanding |
|
|
|
|
|
|
|
Basic |
94,299 |
|
|
|
88,841 |
|
|
|
91,818 |
|
|
|
79,044 |
|
|
Diluted |
99,470 |
|
|
|
93,076 |
|
|
|
98,452 |
|
|
|
81,863 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROCERY OUTLET HOLDING
CORP.QUARTERLY RECONCILIATION OF GAAP NET INCOME
TO ADJUSTED EBITDA(in
thousands)(unaudited)
|
13 Weeks Ended |
|
13 Weeks Ended |
|
13 Weeks Ended |
|
13 Weeks Ended |
|
13 Weeks Ended |
|
13 Weeks Ended |
|
13 Weeks Ended |
|
14 Weeks Ended |
|
March 30,2019 |
|
June 29,2019 |
|
September 28,2019 |
|
December 28,2019 |
|
March 28,2020 |
|
June 27,2020 |
|
September 26,2020 |
|
January 2,2021 |
Net income (loss) |
$ |
3,774 |
|
|
$ |
(10,632 |
) |
|
$ |
12,445 |
|
|
$ |
9,832 |
|
|
$ |
12,642 |
|
|
$ |
29,333 |
|
|
|
$ |
40,474 |
|
|
$ |
24,264 |
|
Interest expense, net |
16,438 |
|
|
15,452 |
|
|
7,342 |
|
|
6,695 |
|
|
5,834 |
|
|
5,270 |
|
|
|
4,833 |
|
|
4,106 |
|
Income tax expense
(benefit) |
1,444 |
|
|
(4,247 |
) |
|
3,689 |
|
|
477 |
|
|
(1,801 |
) |
|
(2,244 |
) |
|
|
(14,992 |
) |
|
(542 |
) |
Depreciation and amortization
expenses (a) |
12,849 |
|
|
13,156 |
|
|
13,782 |
|
|
10,356 |
|
|
13,570 |
|
|
13,887 |
|
|
|
14,796 |
|
|
15,798 |
|
EBITDA |
34,505 |
|
|
13,729 |
|
|
37,258 |
|
|
27,360 |
|
|
30,245 |
|
|
46,246 |
|
|
|
45,111 |
|
|
43,626 |
|
Share-based compensation
expenses (b) |
211 |
|
|
22,750 |
|
|
2,892 |
|
|
5,586 |
|
|
20,277 |
|
|
10,175 |
|
|
|
3,857 |
|
|
3,775 |
|
Non-cash rent (c) |
1,862 |
|
|
1,816 |
|
|
1,629 |
|
|
5,275 |
|
|
2,214 |
|
|
2,759 |
|
|
|
2,675 |
|
|
3,025 |
|
Asset impairment and gain or
loss on disposition (d) |
182 |
|
|
233 |
|
|
85 |
|
|
1,457 |
|
|
975 |
|
|
(22 |
) |
|
|
205 |
|
|
569 |
|
Provision for (write-off of)
accounts receivable reserves (e) |
1,483 |
|
|
581 |
|
|
309 |
|
|
202 |
|
|
848 |
|
|
(899 |
) |
|
|
372 |
|
|
(777 |
) |
Other (f) |
459 |
|
|
5,577 |
|
|
1,709 |
|
|
1,183 |
|
|
2,062 |
|
|
2,048 |
|
|
|
2,555 |
|
|
1,001 |
|
Adjusted EBITDA, revised definition |
$ |
38,702 |
|
|
$ |
44,686 |
|
|
$ |
43,882 |
|
|
$ |
41,063 |
|
|
$ |
56,621 |
|
|
$ |
60,307 |
|
|
|
$ |
54,775 |
|
|
$ |
51,219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revised definition no longer
adjusts for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New store pre-opening expenses (g) |
421 |
|
|
321 |
|
|
294 |
|
|
473 |
|
|
406 |
|
|
337 |
|
|
|
502 |
|
|
297 |
|
Adjusted EBITDA, previous definition |
$ |
39,123 |
|
|
$ |
45,007 |
|
|
$ |
44,176 |
|
|
$ |
41,536 |
|
|
$ |
57,027 |
|
|
$ |
60,644 |
|
|
|
$ |
55,277 |
|
|
$ |
51,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROCERY OUTLET HOLDING
CORP.QUARTERLY RECONCILIATION OF GAAP NET INCOME
TO ADJUSTED NET INCOME(in thousands, except per
share data)(unaudited)
|
13 Weeks Ended |
|
13 Weeks Ended |
|
13 Weeks Ended |
|
13 Weeks Ended |
|
13 Weeks Ended |
|
13 Weeks Ended |
|
13 Weeks Ended |
|
14 Weeks Ended |
|
March 30,2019 |
|
June 29,2019 |
|
September 28,2019 |
|
December 28,2019 |
|
March 28,2020 |
|
June 27,2020 |
|
September 26,2020 |
|
January 2,2021 |
Net income (loss) |
$ |
3,774 |
|
|
$ |
(10,632 |
) |
|
$ |
12,445 |
|
|
$ |
9,832 |
|
|
$ |
12,642 |
|
|
$ |
29,333 |
|
|
$ |
40,474 |
|
|
$ |
24,264 |
|
Share-based compensation
expenses (b) |
211 |
|
|
22,750 |
|
|
2,892 |
|
|
5,586 |
|
|
20,277 |
|
|
10,175 |
|
|
3,857 |
|
|
3,775 |
|
Non-cash rent (c) |
1,862 |
|
|
1,816 |
|
|
1,629 |
|
|
5,275 |
|
|
2,214 |
|
|
2,759 |
|
|
2,675 |
|
|
3,025 |
|
Asset impairment and gain or
loss on disposition (d) |
182 |
|
|
233 |
|
|
85 |
|
|
1,457 |
|
|
975 |
|
|
(22 |
) |
|
205 |
|
|
569 |
|
Provision for (write-off of)
accounts receivable reserves (e) |
1,483 |
|
|
581 |
|
|
309 |
|
|
202 |
|
|
848 |
|
|
(899 |
) |
|
372 |
|
|
(777 |
) |
Other (f) |
459 |
|
|
5,577 |
|
|
1,709 |
|
|
1,183 |
|
|
2,062 |
|
|
2,048 |
|
|
2,555 |
|
|
1,001 |
|
Amortization of purchase
accounting assets and deferred financing costs (h) |
3,916 |
|
|
3,835 |
|
|
3,705 |
|
|
461 |
|
|
2,936 |
|
|
2,944 |
|
|
2,943 |
|
|
2,985 |
|
Tax impact of option exercises
and vesting of restricted stock units (i) |
1 |
|
|
(26 |
) |
|
(569 |
) |
|
(2,993 |
) |
|
(4,994 |
) |
|
(9,584 |
) |
|
(21,880 |
) |
|
(7,631 |
) |
Tax effect of total
adjustments (j) |
(2,244 |
) |
|
(9,929 |
) |
|
(2,362 |
) |
|
(4,404 |
) |
|
(8,207 |
) |
|
(4,761 |
) |
|
(3,530 |
) |
|
(2,963 |
) |
Non-GAAP adjusted net income, revised definition |
$ |
9,644 |
|
|
$ |
14,205 |
|
|
$ |
19,843 |
|
|
$ |
16,599 |
|
|
$ |
28,753 |
|
|
$ |
31,993 |
|
|
$ |
27,671 |
|
|
$ |
24,248 |
|
GAAP earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.06 |
|
|
$ |
(0.15 |
) |
|
$ |
0.14 |
|
|
$ |
0.11 |
|
|
$ |
0.14 |
|
|
$ |
0.32 |
|
|
$ |
0.44 |
|
|
$ |
0.26 |
|
Diluted |
$ |
0.06 |
|
|
$ |
(0.15 |
) |
|
$ |
0.13 |
|
|
$ |
0.11 |
|
|
$ |
0.13 |
|
|
$ |
0.30 |
|
|
$ |
0.41 |
|
|
$ |
0.24 |
|
Non-GAAP adjusted earnings per
share, revised definition |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.14 |
|
|
$ |
0.20 |
|
|
$ |
0.22 |
|
|
$ |
0.19 |
|
|
$ |
0.32 |
|
|
$ |
0.35 |
|
|
$ |
0.30 |
|
|
$ |
0.26 |
|
Diluted |
$ |
0.14 |
|
|
$ |
0.20 |
|
|
$ |
0.21 |
|
|
$ |
0.18 |
|
|
$ |
0.30 |
|
|
$ |
0.32 |
|
|
$ |
0.28 |
|
|
$ |
0.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revised definition no longer
adjusts for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New store pre-opening expenses (g) |
421 |
|
|
321 |
|
|
294 |
|
|
473 |
|
|
406 |
|
|
337 |
|
|
502 |
|
|
297 |
|
Revised definition now adjusts
for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax impact of option exercises and vesting of restricted stock
units (i) |
(1 |
) |
|
26 |
|
|
569 |
|
|
2,993 |
|
|
4,994 |
|
|
9,584 |
|
|
21,880 |
|
|
7,631 |
|
Change in tax effect of total
adjustments (j) |
(117 |
) |
|
(92 |
) |
|
(66 |
) |
|
(149 |
) |
|
(114 |
) |
|
(95 |
) |
|
(140 |
) |
|
(82 |
) |
Non-GAAP adjusted net income, previous definition |
$ |
9,947 |
|
|
$ |
14,460 |
|
|
$ |
20,640 |
|
|
$ |
19,916 |
|
|
$ |
34,039 |
|
|
$ |
41,819 |
|
|
$ |
49,913 |
|
|
$ |
32,094 |
|
Non-GAAP adjusted earnings per
share, previous definition |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.15 |
|
|
$ |
0.21 |
|
|
$ |
0.23 |
|
|
$ |
0.22 |
|
|
$ |
0.38 |
|
|
$ |
0.46 |
|
|
$ |
0.54 |
|
|
$ |
0.34 |
|
Diluted |
$ |
0.15 |
|
|
$ |
0.20 |
|
|
$ |
0.22 |
|
|
$ |
0.21 |
|
|
$ |
0.36 |
|
|
$ |
0.42 |
|
|
$ |
0.50 |
|
|
$ |
0.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP weighted average shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
68,514 |
|
|
70,475 |
|
|
88,345 |
|
|
88,841 |
|
|
89,481 |
|
|
90,800 |
|
|
92,489 |
|
|
94,299 |
|
Diluted |
68,553 |
|
|
70,475 |
|
|
93,183 |
|
|
93,076 |
|
|
94,869 |
|
|
98,618 |
|
|
99,266 |
|
|
99,470 |
|
Non-GAAP weighted average
shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
68,514 |
|
|
70,475 |
|
|
88,345 |
|
|
88,841 |
|
|
89,481 |
|
|
90,800 |
|
|
92,489 |
|
|
94,299 |
|
Diluted (k) |
68,553 |
|
|
71,315 |
|
|
93,183 |
|
|
93,076 |
|
|
94,869 |
|
|
98,618 |
|
|
99,266 |
|
|
99,470 |
|
___________________________
(a) |
Includes depreciation related to our distribution centers which is
included within the cost of sales line item in our consolidated
statements of operations and comprehensive income. |
(b) |
Fiscal year ended amounts include non-cash share-based compensation
expense and $0.4 million and $3.6 million of cash dividends
paid in fiscal 2020 and fiscal 2019, respectively, in respect of
vested options as a result of dividends declared in connection with
our 2018 Recapitalization and our 2016 Recapitalization. |
(c) |
Consists of the non-cash portion of rent expense, which
represents the difference between our straight-line rent expense
recognized under GAAP and cash rent payments. The adjustment can
vary depending on the average age of our lease portfolio, which has
been impacted by our significant growth in recent years. |
(d) |
Represents impairment charges with respect to planned store
closures and gains or losses on dispositions of assets in
connection with store transitions to new IOs. |
(e) |
Represents non-cash changes in reserves related to our IO
notes and accounts receivable. |
(f) |
Represents other non-recurring, non-cash or
non-operational items, such as transaction related costs, including
costs related to employer payroll taxes associated with equity
awards, secondary equity offerings, store closing costs,
personnel-related costs, legal expenses, debt extinguishment and
modification costs, strategic project costs, and miscellaneous
costs. |
(g) |
Includes marketing, occupancy and other expenses incurred in
connection with store grand openings, including costs that will be
the IO’s responsibility after store opening. |
(h) |
Represents the amortization of debt issuance costs and incremental
amortization of an asset step-up resulting from purchase
price accounting related to our acquisition in 2014 by an
investment fund affiliated with Hellman & Friedman LLC, which
included trademarks, customer lists, and below-market leases. |
(i) |
Represents excess tax benefits related to stock option exercises
and vesting of restricted stock units to be recorded in earnings as
discrete items in the reporting period in which they occur. |
(j) |
Represents the tax effect of the total adjustments. Because of the
increased impact of discrete items on our effective tax rate
including the excess tax benefits from the exercise of stock
options and vesting of RSU share-based awards, beginning in the
fourth quarter of fiscal 2019, we changed our methodology to
calculate the tax effect of the total adjustments on a discrete
basis excluding any non-recurring and unusual tax items. Prior to
the fourth quarter of fiscal 2019, the methodology we used was to
calculate the tax effect of the total adjustments using our
quarterly effective tax rate. |
(k) |
To calculate the diluted non-GAAP adjusted earnings per share, we
adjusted the weighted-average shares outstanding for the dilutive
effect of all potential shares of common stock. In a period when we
record a net loss, the diluted net loss per share is the same as
basic net loss per share because the effects of potentially
dilutive items were anti-dilutive given the net loss position. |
INVESTOR RELATIONS CONTACT:
Jean Fontana
646-277-1214
Jean.Fontana@icrinc.com
MEDIA CONTACT:
Layla Kasha
510-379-2176
lkasha@cfgo.com
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