Announces Intended Launch of NFT Marketplace
by Close of Q2 FY22
GameStop Corp. (NYSE: GME) (“GameStop” or the “Company”) today
released financial results for the fourth quarter and fiscal year
ended January 29, 2022. The Company’s condensed and consolidated
financial statements, including GAAP and non-GAAP results, are
below. The Company’s Form 10-K and supplemental information can be
found at http://investor.GameStop.com. The Company also announced
it intends to launch its marketplace for non-fungible tokens
(“NFTs”) by the end of the second quarter of fiscal year 2022.
FOURTH QUARTER OVERVIEW
- Generated net sales of $2.254 billion for the quarter, compared
to $2.122 billion in the fourth quarter of 2020 and $2.194 billion
in the fourth quarter of 2019.
- Established new and expanded brand relationships, including
with PC gaming companies such as Alienware, Corsair and Lenovo,
that contributed to sales growth in the quarter.
- Grew PowerUp Rewards Pro members by 32% on a year-over-year
basis, taking total membership to approximately 5.8 million.
- Entered into a partnership with Immutable X that is intended to
support the development of GameStop’s NFT marketplace and provide
the Company with up to $150 million in IMX tokens upon achievement
of certain milestones.
- Launched a redesigned app, which includes an enhanced user
interface, improved scalability for a larger product catalog and
more functionality to support exclusive offers and promotions.
- Hired dozens of additional individuals with experience in areas
such as blockchain gaming, ecommerce and technology, product
refurbishment and operations.
FULL YEAR OVERVIEW
- Generated net sales of $6.011 billion for the fiscal year,
compared to $5.090 billion for fiscal year 2020.
- Expanded the product catalog to include a broader set of
consumer electronics, PC gaming equipment and refurbished
hardware.
- Made significant and long-term investments in the Company’s
fulfillment network, systems and teams.
- Established new offices in Seattle, Washington and Boston,
Massachusetts, which are technology hubs with established talent
markets.
- Raised more than $1.67 billion in capital and eliminated all of
the Company’s long-term debt, other than a $44.6 million
low-interest, unsecured term loan associated with the French
government’s response to COVID-19.
- Ended the fiscal year with $1.271 billion in cash and cash
equivalents and $915 million in inventory, compared to $635 million
in cash and $602.5 million in inventory at the end of fiscal year
2020. Increased investments in inventory reflect the Company’s
focus on meeting heightened demand and mitigating supply chain
headwinds.
CONFERENCE CALL INFORMATION
A webcast with management is scheduled for March 17, 2022, at
5:00 p.m. ET to discuss the Company’s fourth quarter and full-year
activities and financial results. This call, along with
supplemental information, can also be accessed at
http://investor.GameStop.com. The phone number for the investor
conference call is 877-451-6152 and the confirmation code is
13725350. This webcast will be archived for two months on
GameStop’s investor relations website.
NON-GAAP MEASURES AND OTHER METRICS
As a supplement to the Company’s financial results presented in
accordance with U.S. generally accepted accounting principles
(GAAP), GameStop may use certain non-GAAP measures, such as
adjusted SG&A, adjusted operating income (loss), adjusted net
income (loss), adjusted diluted earnings (loss) per share, adjusted
EBITDA and free cash flow. The Company believes these non-GAAP
financial measures provide useful information to investors in
evaluating the Company’s core operating performance. Adjusted
selling, general and administrative expenses (“Adjusted SG&A”),
adjusted operating income (loss), adjusted net income (loss) and
adjusted diluted earnings (loss) per share exclude the effect of
items such as transformation costs, asset impairments, store
closure costs, severance, as well as divestiture costs. Results
reported as constant currency exclude the impact of fluctuations in
foreign currency exchange rates by converting the Company’s local
currency financial results using the prior period exchange rates
and comparing these adjusted amounts to the Company’s current
period reported results. The Company’s definition and calculation
of non-GAAP financial measures may differ from that of other
companies. Non-GAAP financial measures should be viewed as
supplementing, and not as an alternative or substitute for, the
Company’s financial results prepared in accordance with GAAP.
Certain of the items that may be excluded or included in non-GAAP
financial measures may be significant items that could impact the
Company’s financial position, results of operations or cash flows
and should therefore be considered in assessing the Company’s
actual and future financial condition and performance.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS -
SAFE HARBOR
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements are based upon management’s current beliefs,
views, estimates and expectations, including as to the Company’s
industry, business strategy, goals and expectations concerning its
market position, strategic and transformation initiatives, future
operations, margins, profitability, sales growth, capital
expenditures, liquidity, capital resources, expansion of technology
expertise, and other financial and operating information, including
expectations as to future operating profit improvement. Such
statements include without limitation those about the Company’s
expectations for fiscal 2022, future financial and operating
results, projections and other statements that are not historical
facts. Forward-looking statements are subject to significant risks
and uncertainties and actual developments, business decisions,
outcomes and results may differ materially from those reflected or
described in the forward-looking statements. The following factors,
among others, could cause actual developments, business decisions,
outcomes and results to differ materially from those reflected or
described in the forward-looking statements: economic, social, and
political conditions in the markets in which we operate; the impact
of the COVID-19 pandemic on the Company’s business and financial
results; the cyclicality of the video game industry; the Company’s
dependence on the timely delivery of new and innovative products
from its vendors; the impact of technological advances in the video
game industry and related changes in consumer behavior on the
Company’s sales; the Company’s ability to keep pace with changing
industry technology and consumer preferences; the Company’s ability
to obtain favorable terms from its current and future suppliers and
service providers; the ability of the Company’s third party
delivery services to deliver products to the Company’s retail
locations, fulfillment centers and consumers and changes in the
terms the Company has with such service providers; the Company’s
dependence on sales during the holiday selling season; the decrease
in popularity of certain types of video games containing graphic
violence; the Company’s ability to renew or enter into new leases
on favorable terms; the Company’s ability to maintain strong retail
and ecommerce experiences for its customers; the Company’s
strategic plans and transformation initiatives and the Company’s
ability to achieve the desired results of its transformation
initiatives within the anticipated time-frame or at all; enhanced
risks as new business initiatives lead the Company to engage in new
activities; the competitive nature of the Company’s industry,
including competition from multi-channel retailers, ecommerce
businesses, and others; disruptions or interruptions to the
Company’s logistics capabilities or supply chain or the supply
chain of the Company's suppliers; the Company’s ability to
anticipate, identify and react to trends in pop culture with regard
to its sales of collectibles; the ability and willingness of the
Company’s vendors to provide marketing and merchandising support at
historical or anticipated levels; restrictions on the Company’s
ability to purchase and sell pre-owned products; changes to tariff
and import/export regulations; unfavorable changes in the Company’s
global tax rate; legislative actions; the Company’s ability to
comply with federal, state, local and international laws and
regulations and statutes; the evolution of government regulation
related to blockchain, digital assets and Web 3.0 technology;
fluctuations in the Company’s results of operations from quarter to
quarter; the restrictions contained in the agreement governing the
Company’s revolving credit facility; the Company’s ability to
generate sufficient cash flow to fund its operations; the Company’s
ability to incur additional debt; turnover in senior management or
the Company’s ability to attract and retain qualified personnel;
turnover in the Company’s Board of Directors; the Company’s ability
to maintain the security or privacy of its customer, associate or
Company information; potential damage to the Company’s reputation
or customers' perception of the Company; occurrence of weather
events, natural disasters, public health crises and other
unexpected events; potential failure or inadequacy of the Company's
computerized systems; the Company’s ability to maintain effective
control over financial reporting; volatility in the Company’s Class
A Common Stock price, including volatility due to potential short
squeezes; continued high degrees of media coverage by third
parties; the availability and future sales of substantial amounts
of the Company’s Class A Common Stock; and potential future
litigation and other legal proceedings. Additional factors that
could cause results to differ materially from those reflected or
described in the forward-looking statements can be found on
GameStop's most recent Annual Report on Form 10-K filed with the
SEC and available at http://www.sec.gov or
http://investor.GameStop.com. Forward-looking statements contained
in this press release speak only as of the date of this press
release. The Company undertakes no obligation to publicly update
any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as may be
required by any applicable securities laws.
GameStop Corp.
Consolidated Statements of Operations (in millions, except
per share data) (unaudited)
13 weeks ended January
29, 2022
13 weeks ended January
30, 2021
Net sales
$
2,253.9
$
2,122.1
Cost of sales
1,875.7
1,673.5
Gross profit
378.2
448.6
Selling, general and administrative
expenses
538.9
419.1
Asset impairments
6.1
10.7
Operating earnings
(166.8
)
18.8
Interest expense, net
0.9
8.2
(Loss) earnings from continuing operations
before income taxes
(167.7
)
10.6
Income tax benefit
(20.2
)
(69.7
)
Net (loss) income from continuing
operations
(147.5
)
80.3
Income from discontinued operations, net
of tax
—
0.2
Net (loss) income
$
(147.5
)
$
80.5
Basic (loss) earnings per share:
Continuing operations
$
(1.94
)
$
1.23
Discontinued operations
—
—
Basic (loss) earnings per share
$
(1.94
)
$
1.23
Diluted (loss) earnings per share:
Continuing operations
$
(1.94
)
$
1.19
Discontinued operations
—
—
Diluted (loss) earnings per share
$
(1.94
)
$
1.19
Weighted average common shares
outstanding:
Basic
75.9
65.2
Diluted
75.9
67.8
Percentage of Net
Sales:
Net sales
100.0
%
100.0
%
Cost of sales
83.2
%
78.9
%
Gross profit
16.8
%
21.1
%
Selling, general and administrative
expenses
23.9
%
19.7
%
Asset impairments
0.3
%
0.5
%
Operating earnings
(7.4
) %
0.9
%
Interest expense, net
—
%
0.4
%
(Loss) earnings from continuing operations
before income taxes
(7.4
) %
0.5
%
Income tax benefit
(0.9
) %
(3.3
) %
Net (loss) income from continuing
operations
(6.5
) %
3.8
%
Income from discontinued operations, net
of tax
—
%
—
%
Net (loss) income
(6.5
) %
3.8
%
GameStop Corp.
Consolidated Statements of
Operations
(in millions, except per share
data)
(unaudited)
52 weeks ended January 29,
2022
52 weeks ended January 30,
2021
Net sales
$
6,010.7
$
5,089.8
Cost of sales
4,662.9
3,830.3
Gross profit
1,347.8
1,259.5
Selling, general and administrative
expenses
1,709.6
1,514.2
Asset impairments
6.7
15.5
Gain on sale of assets
—
(32.4)
Operating loss
(368.5)
(237.8)
Interest expense, net
26.9
32.1
Loss from continuing operations before
income taxes
(395.4)
(269.9)
Income tax benefit
(14.1)
(55.3)
Net loss from continuing operations
(381.3)
(214.6)
Loss from discontinued operations, net of
tax
—
(0.7)
Net loss
$
(381.3)
$
(215.3)
Basic loss per share:
Continuing operations
$
(5.25)
$
(3.30)
Discontinued operations
—
(0.01)
Basic loss per share:
$
(5.25)
$
(3.31)
Diluted (loss) per share:
Continuing operations
$
(5.25)
$
(3.30)
Discontinued operations
—
(0.01)
Diluted loss per share
$
(5.25)
$
(3.31)
Weighted average common shares
outstanding:
Basic
72.6
65.0
Diluted
72.6
65.0
Percentage of Net
Sales:
Net sales
100.0 %
100.0 %
Cost of sales
77.6 %
75.3 %
Gross profit
22.4 %
24.7 %
Selling, general and administrative
expenses
28.4 %
29.7 %
Asset impairments
0.1 %
0.3 %
Gain on sale of assets
— %
(0.6) %
Operating loss
(6.1) %
(4.7) %
Interest expense, net
0.4 %
0.6 %
Loss from continuing operations before
income taxes
(6.6) %
(5.3) %
Income tax benefit
(0.2) %
(1.1) %
Net loss from continuing operations
(6.3) %
(4.2) %
Loss from discontinued operations, net of
tax
— %
— %
Net loss
(6.3) %
(4.2) %
GameStop Corp.
Condensed Consolidated Balance
Sheets
(in millions)
(unaudited)
January 29,
2022
January 30,
2021
Current assets:
Cash and cash equivalents
$
1,271.4
$
508.5
Restricted cash
33.1
110.0
Receivables, net
141.1
105.3
Merchandise inventories
915.0
602.5
Prepaid expenses and other current
assets
238.2
224.9
Total current assets
2,598.8
1,551.2
Property and equipment, net
163.6
201.2
Operating lease right-of-use assets
586.6
662.1
Deferred income taxes
16.3
—
Long-term restricted cash
15.4
16.5
Other noncurrent assets
118.6
41.6
Total assets
$
3,499.3
$
2,472.6
Current liabilities:
Accounts payable
$
471.0
$
341.8
Accrued liabilities and other current
liabilities
668.9
626.8
Current portion of operating lease
liabilities
210.7
227.4
Short-term debt, including current portion
of long-term debt, net
4.1
121.7
Borrowings under revolving line of
credit
—
25.0
Total current liabilities
1,354.7
1,342.7
Long-term debt, net
40.5
216.0
Operating lease liabilities
393.7
456.7
Other long-term liabilities
107.9
20.5
Total liabilities
1,896.8
2,035.9
Stockholders’ equity
1,602.5
436.7
Total liabilities and stockholders’
equity
$
3,499.3
$
2,472.6
GameStop Corp.
Consolidated Statements of
Cash Flows
(in millions)
(unaudited)
13 weeks ended January
29, 2022
13 weeks ended January
30, 2021
Cash flows from operating activities:
Net (loss) income
$
(147.5)
$
80.5
Adjustments to reconcile net loss to net
cash flows from operating activities:
Depreciation and amortization
24.0
19.6
Asset impairments
6.1
10.7
Stock-based compensation expenses
9.8
1.8
Deferred income taxes
(16.3)
34.9
Loss on disposal of property and
equipment, net
3.5
3.3
Other
(2.1)
(1.7)
Changes in operating assets and
liabilities:
Receivables, net
(59.4)
(26.0)
Merchandise inventories
215.6
270.8
Prepaid expenses and other current
assets
(1.4)
11.3
Prepaid income taxes and income taxes
payable
(8.8)
(98.7)
Accounts payable and accrued
liabilities
(152.5)
(157.5)
Operating lease right-of-use assets and
liabilities
17.2
17.9
Changes in other long-term liabilities
1.5
(2.1)
Net cash flows (used in) provided by
operating activities
(110.3)
164.8
Cash flows from investing activities:
Capital expenditures
(21.3)
(27.4)
Other
(2.3)
1.0
Net cash flows used in investing
activities
(23.6)
(26.4)
Cash flows from financing activities:
Payments of financing costs
(3.0)
—
Net repayments of senior notes
—
(125.0)
Issuance of common stock, net of share
repurchases for withholding taxes
(0.2)
4.1
Net cash flows used in financing
activities
(3.2)
(120.9)
Exchange rate effect on cash, cash
equivalents and restricted cash
(11.1)
14.9
(Decrease) increase in cash, cash
equivalents and restricted cash
(148.2)
32.4
Cash, cash equivalents and restricted cash
at beginning of period
1,468.1
602.6
Cash, cash equivalents and restricted cash
at end of period
$
1,319.9
$
635.0
GameStop Corp.
Consolidated Statements of
Cash Flows
(in millions)
(unaudited)
52 weeks ended January 29,
2022
52 weeks ended January 30,
2021
Cash flows from operating activities:
Net loss
$
(381.3)
$
(215.3)
Adjustments to reconcile net loss to net
cash flows from operating activities:
Depreciation and amortization
77.2
80.7
Loss (gain) on retirement of debt
18.2
(1.5)
Asset impairments
6.7
15.5
Stock-based compensation expenses
30.5
7.9
Deferred income taxes
(16.3)
80.3
Loss (gain) on disposal of property and
equipment, net
5.4
(27.3)
Other
(3.5)
2.4
Changes in operating assets and
liabilities:
Receivables, net
(38.4)
39.8
Merchandise inventories
(329.6)
282.4
Prepaid expenses and other current
assets
(6.5)
8.4
Prepaid income taxes and income taxes
payable
(21.7)
(87.0)
Accounts payable and accrued
liabilities
224.4
(78.6)
Operating lease right-of-use assets and
liabilities
(0.9)
19.0
Changes in other long-term liabilities
1.5
(3.0)
Net cash flows (used in) provided by
operating activities
(434.3)
123.7
Cash flows from investing activities:
Capital expenditures
(62.0)
(60.0)
Proceeds from sale of property and
equipment
—
95.5
Other
(2.8)
1.4
Net cash flows (used in) provided by
investing activities
(64.8)
36.9
Cash flows from financing activities:
Proceeds from issuance of common stock,
net of costs
1,672.8
—
Net repayments of senior notes
(307.4)
(130.3)
Proceeds from French term loans
—
47.1
Borrowings from the revolver
—
150.0
Repayments of revolver borrowings
(25.0)
(125.0)
Settlement of stock awards
(136.8)
3.1
Payments of financing costs
(3.0)
—
Other
—
(0.3)
Net cash flows provided by (used in)
financing activities
1,200.6
(55.4)
Exchange rate effect on cash, cash
equivalents and restricted cash
(16.6)
16.3
Increase in cash, cash equivalents and
restricted cash
684.9
121.5
Cash, cash equivalents and restricted cash
at beginning of period
635.0
513.5
Cash, cash equivalents and restricted cash
at end of period
$
1,319.9
$
635.0
GameStop Corp.
Schedule I
Sales Mix
(in millions)
(unaudited)
13 weeks ended January 29,
2022
13 weeks ended January 30,
2021
Net Sales:
Net Sales
Percent of Total
Net Sales
Percent of Total
Hardware and accessories(1)
$
1,188.7
52.7 %
$
1,162.7
54.8 %
Software(2)
785.9
34.9 %
731.2
34.4 %
Collectibles
279.3
12.4 %
228.2
10.8 %
Total
$
2,253.9
100.0 %
$
2,122.1
100.0 %
52 weeks ended January 29,
2022
52 weeks ended January 30,
2021
Net Sales:
Net Sales
Percent of Total
Net Sales
Percent of Total
Hardware and accessories(1)
$
3,171.7
52.8 %
$
2,530.8
49.7 %
Software(2)
2,014.8
33.5 %
1,979.1
38.9 %
Collectibles
824.2
13.7 %
579.9
11.4 %
Total
$
6,010.7
100.0 %
$
5,089.8
100.0 %
(1) Includes sales of new and pre-owned
hardware, accessories, hardware bundles in which hardware and
digital or physical software are sold together in a single SKU,
interactive game figures, strategy guides, mobile and consumer
electronics.
(2) Includes sales of new and pre-owned
video game software, digital software and PC entertainment
software.
GameStop Corp. Schedule II (in millions)
(unaudited)
Non-GAAP results
The following table reconciles the Company's selling, general
and administrative expenses ("SG&A"), operating earnings, net
income (loss) and earnings (loss) per share as presented in its
consolidated statements of operations and prepared in accordance
with United States generally accepted accounting principles
("GAAP") to its adjusted SG&A, adjusted operating income
(loss), adjusted net income (loss) and adjusted diluted earnings
per share. The diluted weighted-average shares outstanding used to
calculate adjusted earnings per share may differ from GAAP
weighted-average shares outstanding. Under GAAP, basic and diluted
weighted-average shares outstanding are the same in periods where
there is a net loss. The tax adjustments below for the 13 and 52
weeks ended January 29, 2022 respectively, include provisions for
the tax effects of non-GAAP adjustments. The reconciliations below
are from continuing operations only.
13 Weeks Ended January 29,
2022
13 Weeks Ended January 30,
2021
52 Weeks Ended January 29,
2022
52 Weeks Ended January 30,
2021
Adjusted
SG&A
SG&A
$
538.9
$
419.1
$
1,709.6
$
1,514.2
Transformation costs
—
0.4
(6.5)
(1.6)
Significant transactions (1)
—
—
(0.4)
(7.5)
Severance, divestitures, and other (2)
—
0.2
(18.3)
(7.6)
Adjusted SG&A
$
538.9
$
419.7
$
1,684.4
$
1,497.5
(1) Includes transaction costs associated
with the sale of an aggregate of 8,500,000 shares of our common
stock under our at-the-market equity offering program during the 52
weeks ended January 29, 2022 (the "ATM Transactions"). Prior year
includes transaction costs associated with our debt exchange.
(2) Severance includes cash and stock
based compensation expenses for key personnel that have separated
from the Company.
13 Weeks Ended January 29,
2022
13 Weeks Ended January 30,
2021
52 Weeks Ended January 29,
2022
52 Weeks Ended January 30,
2021
Adjusted
Operating Income (Loss)
Operating earnings (loss)
$
(166.8)
$
18.8
$
(368.5)
$
(237.8)
Transformation costs
—
(0.4)
6.5
1.6
Asset impairments
6.1
10.7
6.7
15.5
Significant transactions (1)
—
—
0.4
(24.9)
Severance, divestitures, and other (2)
—
(0.2)
18.3
7.6
Adjusted operating income
$
(160.7)
$
28.9
$
(336.6)
$
(238.0)
(1) Includes transaction costs associated
with our ATM transactions paid in the 52 weeks ended January 29,
2022. Prior year includes the gain on sale of assets relating to
sale-leaseback transactions and transaction costs associated with
our debt exchange.
(2) Severance includes cash and stock
based compensation expenses for key personnel that have separated
from the Company.
13 Weeks Ended January 29,
2022
13 Weeks Ended January 30,
2021
52 Weeks Ended January 29,
2022
52 Weeks Ended January 30,
2021
Adjusted Net
Income (Loss)
Net income (loss)
$
(147.5)
$
80.5
$
(381.3)
$
(215.3)
(Income) loss from discontinued
operations
—
(0.2)
—
0.7
Net income (loss) from continuing
operations
(147.5)
80.3
(381.3)
(214.6)
Transformation costs
—
(0.4)
6.5
1.6
Asset impairments
6.1
10.7
6.7
15.5
Significant transactions (1)
—
—
18.6
(24.9)
Severance, divestitures, and other (2)
—
(0.2)
18.3
7.6
Tax effect of non-GAAP adjustments
—
0.3
—
23.0
Adjusted net (loss) income
$
(141.4)
$
90.7
$
(331.2)
$
(191.8)
Adjusted Earnings (Loss) Per
Share
Basic
$
(1.86)
$
1.39
$
(4.56)
$
(2.95)
Diluted
$
(1.86)
$
1.34
$
(4.56)
$
(2.95)
Number of shares used in adjusted
calculation
Basic
75.9
65.2
72.6
65.0
Diluted
75.9
67.8
72.6
65.0
(1) Includes transaction costs associated
with our ATM transactions and first quarter make-whole premium and
accelerated amortization of the deferred financing costs associated
with the voluntary early redemption of the 2023 Senior Notes paid
in the 52 weeks ended January 29, 2022. Prior year includes the
gain on sale of assets relating to sale lease-back transactions, a
discount on open market purchases of the 2021 Senior Notes, gain on
the early retirement of debt for the 39 weeks ended January 30,
2021.
(2) Severance includes cash and
stock-based compensation expenses for key personnel that have
separated from the Company.
13 Weeks Ended
13 Weeks Ended
52 Weeks Ended
52 Weeks Ended
January 29, 2022
January 30, 2021
January 29, 2022
January 30, 2021
Reconciliation of
Adjusted EBITDA to Net Income (Loss)
Net (loss) income
$
(147.5)
$
80.5
$
(381.3)
$
(215.3)
(Loss) income from discontinued
operations, net of tax
—
(0.2)
—
0.7
(Loss) income from continuing
operations
$
(147.5)
$
80.3
$
(381.3)
$
(214.6)
Interest expense, net
0.9
8.2
26.9
32.1
Depreciation and amortization
24.0
19.6
77.2
80.7
Income tax benefit
(20.2)
(69.7)
(14.1)
(55.3)
EBITDA
$
(142.8)
$
38.4
$
(291.3)
$
(157.1)
Stock-based compensation expenses
9.8
1.8
22.5
7.9
Transformation costs
—
(0.4)
6.5
1.6
Asset impairments
6.1
10.7
6.7
15.5
Significant transactions(1)
—
—
0.4
(24.9)
Severance, divestitures, and other(2)
—
(0.2)
18.3
7.6
Adjusted EBITDA
$
(126.9)
$
50.3
$
(236.9)
$
(149.4)
(1) Includes transaction costs associated
with the ATM transactions paid in the 52 weeks ended January
29,2022. Prior year includes the gain on sale of assets relating to
sale-leaseback transactions and transaction costs associated with
our debt exchange.
(2) Severance includes cash and stock
based compensation for key personnel that have separated from the
Company.
GameStop Corp. Schedule III (in
millions) (unaudited)
Non-GAAP results
The following table reconciles the Company's cash flows provided
by operating activities as presented in its unaudited Consolidated
Statements of Cash Flows and prepared in accordance with GAAP to
its free cash flow and adjusted free cash flow.
13 Weeks Ended
13 Weeks Ended
52 Weeks Ended
52 Weeks Ended
January 29, 2022
January 30, 2021
January 29, 2022
January 30, 2021
Net cash flows (used in) provided by
operating activities
$
(110.3)
$
164.8
$
(434.3)
$
123.7
Capital expenditures
(21.3)
(27.4)
(62.0)
(60.0)
Free cash flow
$
(131.6)
$
137.4
$
(496.3)
$
63.7
Non-GAAP Measures and Other
Metrics
Adjusted EBITDA, adjusted selling, general and administrative
expense, adjusted operating income and adjusted net income are
supplemental financial measures of the Company’s performance that
are not required by, or presented in accordance with, GAAP. We
believe that the presentation of these non-GAAP financial measures
provides useful information to investors in assessing our financial
condition and results of operations.
We define Adjusted EBITDA as net income (loss) before income
taxes, plus interest expense, net and depreciation and
amortization, excluding stock-based compensation expenses,
transformation costs, business divestitures, asset impairments,
severance and other non-cash charges. Net income (loss) is the GAAP
financial measure most directly comparable to Adjusted EBITDA. Our
non-GAAP financial measures should not be considered as an
alternative to the most directly comparable GAAP financial measure.
Furthermore, non-GAAP financial measures have limitations as an
analytical tool because they exclude some but not all items that
affect the most directly comparable GAAP financial measures. Some
of these limitations include:
- certain items excluded from Adjusted EBITDA are significant
components in understanding and assessing a company’s financial
performance, such as a company’s cost of capital and tax
structure;
- Adjusted EBITDA does not reflect our cash expenditures or
future requirements for capital expenditures or contractual
commitments;
- Adjusted EBITDA does not reflect changes in, or cash
requirements for, our working capital needs;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often have to be
replaced in the future, and Adjusted EBITDA does not reflect any
cash requirements for such replacements; and
- our computations of Adjusted EBITDA may not be comparable to
other similarly titled measures of other companies.
We compensate for the limitations of adjusted EBITDA, adjusted
selling, general and administrative expense, adjusted operating
income and adjusted net income as analytical tools by reviewing the
comparable GAAP financial measure, understanding the differences
between the GAAP and non-GAAP financial measures and incorporating
these data points into our decision-making process. Adjusted
EBITDA, adjusted selling, general and administrative expense,
adjusted operating income and adjusted net income is provided in
addition to, and not as an alternative to, the Company’s financial
results prepared in accordance with GAAP, and should not be
considered in isolation or as a substitute for analysis of our
results as reported under GAAP. Because adjusted EBITDA, adjusted
selling, general and administrative expense, adjusted operating
income and adjusted net income may be defined and determined
differently by other companies in our industry, our definitions of
these non-GAAP financial measures may not be comparable to
similarly titled measures of other companies, thereby diminishing
their utility.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220317005428/en/
GameStop Investor Relations 817-424-2001 ir@gamestop.com
GameStop Public Relations 646-386-0091 media@gamestop.com
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