COMMERCE, Calif., July 25, 2018 /PRNewswire/ -- Smart & Final
Stores, Inc. (the "Company") (NYSE:SFS), the value-oriented food
and everyday staples retailer, today reported financial results for
the fiscal second quarter ended June 17,
2018.
Second Quarter Highlights:
- Net sales increased 4.4% to $1,125.5
million with a comparable store sales increase of 1.3%
- Business customer sales penetration in the Smart & Final
banner increased to 30.1% of sales
- Gross margin increased 4.6% to $169.7
million
- Adjusted EBITDA increased 2.5% to $49.3
million
- Net income of $6.6 million or
$0.09 per share
- Adjusted net income of $11.4
million or $0.16 per
share
"In the second quarter, we were pleased to deliver positive
comparable store sales in both our Smart & Final and Smart
Foodservice Warehouse store banners. This reflects how our
unique assortment of business and club-pack items, our high-quality
private label offerings, and rapidly expanding e-commerce channels
resonate with shoppers," said David
Hirz, president and chief executive officer. "While
investing in customer service initiatives, we also expanded
merchandise margins, grew adjusted EBITDA, and reduced outstanding
debt, resulting in an improved financial leverage ratio at
quarter-end."
In order to aid understanding of the Company's business
performance, it has presented results in conformity with accounting
principles generally accepted in the
United States ("GAAP") and has also presented EBITDA,
adjusted EBITDA, adjusted net income, adjusted net income per
share, and adjusted net income per diluted share, which are
non-GAAP measures that are explained and reconciled to the
comparable GAAP measures in the tables included in this release.
Where applicable, the results below are first presented on a GAAP
basis and then on a non-GAAP adjusted basis.
Fiscal Second Quarter 2018 Financial Results
Net sales
were $1,125.5 million in the 12-week
quarter ended June 17, 2018,
representing a 4.4% increase as compared to $1,078.3 million for the same period of 2017. Net
sales growth was driven by a 1.3% increase in comparable store
sales and from the net sales contribution of new stores. Comparable
store sales growth was comprised of a 2.8% increase in comparable
average transaction size, partially offset by a 1.4% decrease in
comparable transaction count.
Net sales for Smart & Final banner stores were $868.5 million, a 3.9% increase as compared to
$836.1 million for the same period of
2017. Comparable store sales growth for the Smart & Final
banner was 0.8% in the second quarter.
Net sales for Smart Foodservice Warehouse banner stores were
$257.0 million, a 6.1% increase as
compared to $242.2 million for the
same period of 2017. Comparable store sales growth for the Smart
Foodservice Warehouse banner was 3.3% in the second quarter.
Gross margin was $169.7 million, a
4.6% increase as compared to $162.3
million in the second quarter of 2017. Gross margin rate was
15.1% as compared to 15.0% for the same period of 2017. Gross
margin rate in the quarter was supported by our strategic sourcing,
merchandising and pricing initiatives.
Operating and administrative expenses were $150.6 million, a 5.2% increase as compared to
$143.1 million for the same period of
2017. This increase was related to expenses associated with the
effect of higher minimum wage rates, as well as new stores opened
during the prior twelve months and their related support costs.
Interest expense in the second quarter was $9.7 million, a 15.9% increase as compared to
$8.3 million in the prior year
quarter, primarily driven by higher interest rates as well as
accrued interest expense related to accounting for build-to-suit
store developments.
The Company's effective tax rate in the 2018 second quarter was
33%, including the effect of the 2017 Tax Cuts and Jobs Act and
certain tax adjustments. The Company currently projects a
2018 full year effective tax rate of approximately 27%.
Net income was $6.6 million, or
$0.09 per share, as compared to net
income of $7.1 million, or
$0.09 per share, for the same period
of 2017. Adjusted net income was $11.4
million, or $0.16 per share,
as compared to adjusted net income of $11.0
million, or $0.14 per share,
for the same period of 2017.
Adjusted EBITDA was $49.3 million,
an increase of 2.5% as compared to $48.0
million for the same period of 2017.
Fiscal Year-to-date Financial Results
In the
twenty-four weeks ended June 17, 2018, net sales
were $2,141.7 million, an increase of 4.7% as compared
to $2,045.3 million in the same period of 2017. Net sales
growth was driven by the net sales contribution of new stores and a
1.3% increase in comparable store sales. The increase in
comparable store sales was attributable to a 1.6% decrease in
comparable transaction count and a 2.9% increase in comparable
average transaction size.
Net sales for Smart & Final banner stores
were $1,663.6 million, an increase of 3.9% as compared
to $1,601.1 million in the first half of 2017.
Year-to-date comparable store sales for the Smart &
Final banner increased 0.4%.
Net sales for Smart Foodservice Warehouse banner stores
were $478.1 million, a 7.6% increase as compared
to $444.2 million in the same period of
2017. Year-to-date comparable store sales for the Smart
Foodservice Warehouse banner increased 4.5%.
Net loss was $0.5 million, as compared to net income
of $2.5 million in the first
half of 2017, which included a tax benefit of $2.2 million. Net loss per diluted share
was $0.01 as compared to net income per diluted
share of $0.03 for the same
period of 2017.
Adjusted net income was $8.6 million, as compared
to $9.5 million in the first half of 2017. Adjusted net
income per diluted share was $0.12, flat compared to the same
period of 2017.
Adjusted EBITDA was $77.9 million,
as compared to $72.5 million in the
same period of 2017.
Growth and Development
During the fiscal second quarter of 2018, the Company relocated one
legacy Smart & Final store and closed two legacy Smart &
Final stores. The Company opened one new Smart Foodservice
Warehouse store in the quarter. As of June
17, 2018, the Company operated a total of 322 stores,
including 195 Smart & Final Extra! stores, 63 legacy
format Smart & Final stores and 64 Smart Foodservice
Warehouse stores.
Operating Stores at
Quarter End (June 17, 2018)
|
|
|
|
|
|
|
|
|
|
|
|
Smart &
Final Banner Stores
|
|
Smart
Foodservice
Warehouse
Banner
Stores
|
|
Total
Company
|
|
Extra!
format
|
|
Legacy
format
|
|
Total
|
|
|
End of Fiscal Year
2017
|
194
|
|
66
|
|
260
|
|
63
|
|
323
|
New stores
|
-
|
|
-
|
|
-
|
|
1
|
|
1
|
Relocations,
net
|
1
|
|
(1)
|
|
-
|
|
-
|
|
-
|
Conversions
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Store
Closures
|
-
|
|
(2)
|
|
(2)
|
|
-
|
|
(2)
|
End of 2nd Quarter
2018
|
195
|
|
63
|
|
258
|
|
64
|
|
322
|
Leverage and Liquidity
As of June 17, 2018, the Company's debt, net of debt
issuance costs, was $677.2 million
and cash and cash equivalents were $64.2
million.
During the twenty-four weeks ending June
17, 2018, the Company generated cash from operations of
$65.3 million and invested
$65.4 million in capital
expenditures, primarily related to the improvement of existing
assets.
Outlook
The Company is updating its previously issued
guidance for the full year ending December
30, 2018, to reflect current store development
expectations:
|
Previous Full
Year 2018 Guidance
|
Updated Full
Year 2018 Guidance
|
Net sales
growth
|
4.0% -
5.0%
|
Unchanged
|
Comparable store
sales growth
|
1.0% -
2.0%
|
Unchanged
|
Unit growth (new
stores)
|
3-5 Smart & Final
Extra! stores
3-5 Smart Foodservice
Warehouse stores
|
5 Smart & Final
Extra! stores
4 Smart Foodservice
Warehouse stores
|
Relocations or
expansions of legacy stores to Extra! format
|
3-5 Smart &
Final stores
|
3-4 Smart &
Final stores
|
Adjusted
EBITDA
|
$180 - $190
million
|
Unchanged
|
Adjusted net
income
|
$31 - $35
million
|
Unchanged
|
Adjusted diluted
EPS
|
$0.42 -
$0.47
|
Unchanged
|
Capital
expenditures (net)
|
$80 - $90
million
|
Unchanged
|
Fully diluted
weighted average shares
|
74 to 75
million
|
Unchanged
|
The above guidance includes certain non-GAAP financial measures
(namely adjusted EBITDA, adjusted net income and adjusted net
income per diluted share), which exclude certain costs and non-cash
costs and provide investors with additional financial measures of
the expected operating performance of the Company's business. The
primary factors in reconciling these non-GAAP financial measures to
comparable GAAP measures include the following: pre-opening costs
associated with new stores of approximately $3.1 million, non-cash rent related to stores of
approximately $4.2 million,
share-based compensation expense of approximately $14.5 million, and $4.2
million of store closure expenses. The other amounts needed
to reconcile these non-GAAP financial measures to comparable GAAP
measures cannot be quantified and are not available without an
unreasonable effort.
Fiscal Second Quarter 2018 Conference Call
The Company
will host a conference call today at 2:00
p.m. Pacific Time / 5:00 p.m. Eastern
Time to discuss its fiscal second quarter 2018 financial
results. To participate in the call, please dial (877) 407-0784
(U.S.) or (201) 689-8560 (International) ten minutes prior to the
start time. The conference call can also be accessed on the "For
Investors" section of the Company's web site at
www.smartandfinal.com.
For those unable to participate during the live broadcast, a
telephonic replay of the call will also be available beginning
today at approximately 8:00 p.m. Eastern
Time, by dialing (844) 512-2921 (U.S.) or (412) 317-6671
(International) and entering the replay pin number: 13681354. The
telephonic replay will be available until 11:59 p.m. Eastern Time, August 8, 2018.
About Smart & Final
Smart & Final Stores, Inc.
(NYSE: SFS), is a value-oriented food and everyday staples
retailer, headquartered in Commerce (near Los
Angeles), California. The
Company offers quality products in a variety of sizes, saving
household, nonprofit and business customers time and money. As of
June 17, 2018, the Company operated
322 grocery and foodservice stores under the "Smart & Final,"
"Smart & Final Extra!" and "Smart Foodservice Warehouse Stores"
banners in California,
Oregon, Washington, Arizona, Nevada, Idaho, Montana and Utah, with an additional 15 stores in
Northwestern Mexico operated
through a joint venture. In business for over 146 years, the
Company remains committed to giving back to local communities
through employee volunteer opportunities and Company donations to
local nonprofits.
Forward-Looking Statements
Certain statements
contained in this release that are not historical information
contain forward-looking statements. The forward-looking statements
involve risks and uncertainties and actual results may differ
materially from those projected or implied. Further, certain
forward-looking statements are based on assumptions of future
events which may not prove to be accurate. These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "may," "should," "expects,"
"plans," "anticipates," "could," "intends," "target," "projects,"
"contemplates," "believes," "estimates," "predicts," "potential" or
"continue" or, in each case, their negative, or other variations or
comparable terminology. The Company derives many of its
forward-looking statements from its operating budgets and
forecasts, which are based upon many detailed assumptions. While
the Company believes that its assumptions are reasonable, it is
difficult to predict the impact of known factors and, of course, it
is impossible to anticipate all factors that could affect actual
results. These factors are discussed in the special note concerning
"Forward-Looking Statements," "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," and "Business" sections and elsewhere in the Company's
Annual Report on Form 10-K filed with the Securities and Exchange
Commission.
You should keep in mind that any forward-looking statement made
by the Company herein, or elsewhere, speaks only as of the date on
which made. New risks and uncertainties come up from time to time,
and it is impossible for the Company to predict these events or how
they may affect it. The Company has no obligation to update any
forward-looking statements after the date hereof, except as
required by federal securities laws.
Smart & Final
Stores, Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Operations
|
(Unaudited)
|
(In Thousands, Except
Share and Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Weeks
Ended
|
|
Twenty-four Weeks
Ended
|
|
June 17,
2018
|
|
June 18,
2017
|
|
June 17,
2018
|
|
June 18,
2017
|
|
|
|
|
|
|
|
|
Net
sales
|
$
1,125,484
|
|
$
1,078,287
|
|
$
2,141,721
|
|
$
2,045,304
|
Cost of sales, buying
and occupancy
|
955,767
|
|
916,017
|
|
1,825,742
|
|
1,749,923
|
Gross
margin
|
169,717
|
|
162,270
|
|
315,979
|
|
295,381
|
|
|
|
|
|
|
|
|
Operating and
administrative expenses
|
150,572
|
|
143,062
|
|
298,002
|
|
278,736
|
Income from
operations
|
19,145
|
|
19,208
|
|
17,977
|
|
16,645
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
9,664
|
|
8,335
|
|
18,915
|
|
16,509
|
Equity in earnings of
joint venture
|
373
|
|
47
|
|
950
|
|
214
|
Income before income
taxes
|
9,854
|
|
10,920
|
|
12
|
|
350
|
|
|
|
|
|
|
|
|
Income tax
(provision) benefit
|
(3,253)
|
|
(3,792)
|
|
(505)
|
|
2,186
|
Net income
(loss)
|
$
6,601
|
|
$
7,128
|
|
$
(493)
|
|
$
2,536
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.09
|
|
$
0.10
|
|
$
(0.01)
|
|
$
0.04
|
Diluted
|
$
0.09
|
|
$
0.09
|
|
$
(0.01)
|
|
$
0.03
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
72,658,662
|
|
72,573,681
|
|
72,444,916
|
|
72,430,786
|
Diluted
|
73,374,180
|
|
76,251,510
|
|
72,444,916
|
|
76,478,054
|
Smart & Final
Stores, Inc. and Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
(In Thousands, Except
Share and Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
June 17,
2018
|
|
December 31,
2017
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
64,214
|
|
$
71,671
|
Accounts receivable,
less allowances of $175 and $177 at
|
|
|
|
June 17, 2018 and
December 31, 2017, respectively
|
31,970
|
|
33,019
|
Inventories
|
284,998
|
|
289,712
|
Prepaid expenses and
other current assets
|
32,477
|
|
54,241
|
Total current
assets
|
413,659
|
|
448,643
|
|
|
|
|
Property, plant, and
equipment:
|
|
|
|
Land
|
11,116
|
|
10,076
|
Buildings and
improvements
|
54,554
|
|
53,965
|
Leasehold
improvements
|
357,738
|
|
346,181
|
Fixtures and
equipment
|
436,546
|
|
421,912
|
Construction in
progress
|
32,043
|
|
8,242
|
|
891,997
|
|
840,376
|
Less accumulated
depreciation and amortization
|
380,206
|
|
338,149
|
|
511,791
|
|
502,227
|
|
|
|
|
Assets under capital
leases
|
4,586
|
|
-
|
Capitalized software,
net of accumulated amortization of
|
|
|
|
$18,690 and $17,325
at June 17, 2018 and
|
|
|
|
December 31, 2017,
respectively
|
28,065
|
|
21,984
|
Other intangible
assets, net
|
359,316
|
|
362,536
|
Goodwill
|
385,918
|
|
385,918
|
Equity investment in
joint venture
|
16,378
|
|
15,380
|
Other
assets
|
79,529
|
|
73,249
|
Total
assets
|
$
1,799,242
|
|
$
1,809,937
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
221,819
|
|
$
245,009
|
Accrued salaries and
wages
|
32,456
|
|
36,216
|
Accrued
expenses
|
113,269
|
|
100,639
|
Current portion of
debt, less debt issuance costs
|
58,677
|
|
81,512
|
Total current
liabilities
|
426,221
|
|
463,376
|
|
|
|
|
Obligations under
capital leases
|
4,586
|
|
-
|
Long-term debt, less
debt issuance costs
|
618,482
|
|
617,867
|
Deferred income
taxes
|
39,853
|
|
38,095
|
Postretirement and
postemployment benefits
|
124,589
|
|
127,649
|
Other long-term
liabilities
|
175,452
|
|
159,904
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Preferred stock,
$0.001 par value;
|
|
|
|
Authorized shares –
10,000,000
|
|
|
|
Issued and
outstanding shares – none
|
–
|
|
–
|
Common stock, $0.001
par value;
|
|
|
|
Authorized shares –
340,000,000
|
|
|
|
Issued and
outstanding shares - 75,934,423 and 74,120,113
|
|
|
|
at June 17,
2018 and December 31, 2017, respectively
|
76
|
|
74
|
Additional paid-in
capital
|
513,631
|
|
506,098
|
Retained
deficit
|
(78,653)
|
|
(78,160)
|
Accumulated other
comprehensive loss
|
(24,995)
|
|
(24,966)
|
Total stockholders'
equity
|
410,059
|
|
403,046
|
Total liabilities and
stockholders' equity
|
$
1,799,242
|
|
$
1,809,937
|
Smart & Final
Stores, Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
(In
Thousands)
|
|
|
|
|
|
Twenty-four Weeks
Ended
|
|
June 17,
2018
|
|
June 18,
2017
|
|
|
|
|
Operating
activities
|
|
|
|
Net (loss)
income
|
$
(493)
|
|
$
2,536
|
Adjustments to
reconcile net (loss) income to net cash provided
by operating
activities:
|
|
|
|
Depreciation
|
27,607
|
|
25,989
|
Amortization
|
18,810
|
|
18,008
|
Amortization of debt
discount and debt issuance costs
|
918
|
|
891
|
Share-based
compensation
|
6,442
|
|
4,304
|
Deferred income
taxes
|
1,805
|
|
524
|
Equity in earnings of
joint venture
|
(950)
|
|
(214)
|
(Gain) loss on
disposal of property, plant, and equipment
|
(31)
|
|
14
|
Asset
impairment
|
1,622
|
|
550
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts receivable,
net
|
1,049
|
|
(2,958)
|
Inventories
|
4,714
|
|
12,149
|
Prepaid expenses and
other assets
|
20,220
|
|
18,318
|
Accounts
payable
|
(23,190)
|
|
5,559
|
Accrued salaries and
wages
|
(3,760)
|
|
1,340
|
Other accrued
liabilities
|
10,554
|
|
8,128
|
Net cash provided by
operating activities
|
65,317
|
|
95,138
|
|
|
|
|
Investing
activities
|
|
|
|
Purchases of
property, plant, and equipment
|
(58,313)
|
|
(62,646)
|
Proceeds from
disposal of property, plant, and equipment
|
33
|
|
1,807
|
Investment in
capitalized software
|
(7,112)
|
|
(6,836)
|
Other
|
(33)
|
|
(458)
|
Net cash used in
investing activities
|
(65,425)
|
|
(68,133)
|
|
|
|
|
Financing
activities
|
|
|
|
Proceeds from
exercise of stock options
|
1,430
|
|
3,626
|
Payment of minimum
withholding taxes on net share settlement of share-based
compensation awards
|
(339)
|
|
(1,524)
|
Fees paid in
conjunction with debt financing
|
(137)
|
|
(123)
|
Borrowings on bank
line of credit
|
42,000
|
|
38,000
|
Payments on bank line
of credit
|
(65,000)
|
|
(52,000)
|
Cash received from
landlords related to financing lease obligations
|
14,697
|
|
-
|
Stock
repurchases
|
-
|
|
(5,994)
|
Net cash used in
financing activities
|
(7,349)
|
|
(18,015)
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
(7,457)
|
|
8,990
|
Cash and cash
equivalents at beginning of period
|
71,671
|
|
54,235
|
Cash and cash
equivalents at end of period
|
$
64,214
|
|
$
63,225
|
|
|
|
|
Cash paid during the
period for:
|
|
|
|
Interest
|
$
16,421
|
|
$
11,012
|
|
|
|
|
Non-cash investing
and financing activities
|
|
|
|
Software development
costs incurred but not paid
|
$
4,005
|
|
$
340
|
Construction in
progress costs incurred but not paid
|
20,463
|
|
9,634
|
Property acquired
through capital and financing lease obligations
|
5,340
|
|
-
|
Smart &
Final Stores, Inc. and Subsidiaries
|
Segment
Reporting
|
(In
Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Smart &
Final
|
|
Smart
Foodservice
|
|
Corporate /
Other
|
|
Consolidated
|
Twelve Weeks
Ended June 17, 2018
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
868,457
|
|
$
257,027
|
|
$
-
|
|
$
1,125,484
|
Cost of sales,
distribution and store occupancy
|
|
734,123
|
|
219,546
|
|
2,098
|
|
955,767
|
Operating and
administrative expenses
|
|
115,868
|
|
18,873
|
|
15,831
|
|
150,572
|
Income (loss)
from operations
|
|
$
18,466
|
|
$
18,608
|
|
$
(17,929)
|
|
$
19,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
25,177
|
|
$
6,961
|
|
$
4,286
|
|
$
36,424
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Weeks
Ended June 18, 2017
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
836,134
|
|
$
242,153
|
|
$
-
|
|
$
1,078,287
|
Cost of sales,
distribution and store occupancy
|
|
706,610
|
|
207,372
|
|
2,035
|
|
916,017
|
Operating and
administrative expenses
|
|
107,796
|
|
17,441
|
|
17,825
|
|
143,062
|
Income (loss)
from operations
|
|
$
21,728
|
|
$
17,340
|
|
$
(19,860)
|
|
$
19,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
33,830
|
|
$
3,501
|
|
$
3,057
|
|
$
40,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Smart &
Final
|
|
Smart
Foodservice
|
|
Corporate /
Other
|
|
Consolidated
|
Twenty-four
Weeks Ended June 17, 2018
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
1,663,649
|
|
$
478,072
|
|
$
-
|
|
$
2,141,721
|
Cost of sales,
distribution and store occupancy
|
|
1,412,738
|
|
409,017
|
|
3,987
|
|
1,825,742
|
Operating and
administrative expenses
|
|
225,437
|
|
36,669
|
|
35,896
|
|
298,002
|
Income (loss)
from operations
|
|
$
25,474
|
|
$
32,386
|
|
$
(39,883)
|
|
$
17,977
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
49,036
|
|
$
8,231
|
|
$
8,158
|
|
$
65,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twenty-four
Weeks Ended June 18, 2017
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
1,601,103
|
|
$
444,201
|
|
$
-
|
|
$
2,045,304
|
Cost of sales,
distribution and store occupancy
|
|
1,363,402
|
|
382,505
|
|
4,016
|
|
1,749,923
|
Operating and
administrative expenses
|
|
211,702
|
|
33,607
|
|
33,427
|
|
278,736
|
Income (loss)
from operations
|
|
$
25,999
|
|
$
28,089
|
|
$
(37,443)
|
|
$
16,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
54,804
|
|
$
6,374
|
|
$
8,304
|
|
$
69,482
|
Non-GAAP Financial Measures
To supplement the Company's financial information presented in
accordance with GAAP, the Company uses certain non-GAAP financial
measures (namely EBITDA and adjusted EBITDA, adjusted net income,
adjusted net income per share, and adjusted net income per diluted
share) to evaluate our operating and financial performance and to
compare such performance to that of prior periods. We also use
these non-GAAP financial measures in making operational and
financial decisions and in establishing operational goals. We
believe that providing these non-GAAP financial measures to
investors, as a supplement to GAAP financial measures, helps
investors to (i) evaluate our operating and financial performance
and future prospects, (ii) compare financial results across
accounting periods, (iii) better understand the long-term
performance of our core business and (iv) evaluate trends in our
business, all consistent with how management evaluates such
performance and movements. The Company defines EBITDA as net income
(loss) before depreciation and amortization, interest expense and
provision (benefit) for income tax, and adjusted EBITDA as EBITDA
adjusted for the items set forth in the table below. The
Company defines adjusted net income as net income adjusted for the
items set forth in the table below. The Company defines adjusted
net income per share as adjusted net income divided by the weighted
average basic shares outstanding. The Company defines adjusted net
income per diluted share as adjusted net income divided by the
weighted average diluted shares outstanding.
Use of these non-GAAP measures may differ from similar measures
reported by other companies. Each of these non-GAAP measures has
its limitations as an analytical tool, and you should not consider
them in isolation or as a substitute for analysis of the Company's
results as reported under GAAP.
The following tables present reconciliations of net income
(loss) to EBITDA, adjusted EBITDA and adjusted net income, and net
income (loss) per share to adjusted net income per share and
adjusted net income per diluted share, for the twelve-week and
twenty-four week periods ended June 17,
2018 and June 18, 2017.
Smart &
Final Stores, Inc. and Subsidiaries
|
Reconciliation
of Net Income (Loss) to Non-GAAP Adjusted EBITDA
|
(Unaudited)
|
(In
Thousands)
|
|
|
|
|
|
|
|
|
|
Twelve Weeks
Ended June 17,
2018
|
|
Twelve Weeks
Ended June 18,
2017
|
|
Twenty-four
Weeks Ended
June 17, 2018
|
|
Twenty-four
Weeks Ended
June 18, 2017
|
Net income
(loss)
|
$
6,601
|
|
$
7,128
|
|
$
(493)
|
|
$
2,536
|
Depreciation
and amortization
|
23,125
|
|
22,314
|
|
46,417
|
|
43,997
|
Interest
expense, net
|
9,664
|
|
8,335
|
|
18,915
|
|
16,509
|
Income tax
provision (benefit)
|
3,253
|
|
3,792
|
|
505
|
|
(2,186)
|
EBITDA
|
42,643
|
|
41,569
|
|
65,344
|
|
60,856
|
|
|
|
|
|
|
|
|
Adjustments to
EBITDA
|
|
|
|
|
|
|
|
Net loss from
closed stores and exit costs (a)
|
1,434
|
|
891
|
|
1,525
|
|
1,281
|
Loss from asset
dispositions (b)
|
196
|
|
300
|
|
1,614
|
|
628
|
Share-based
compensation expense (c)
|
3,158
|
|
2,489
|
|
6,443
|
|
4,304
|
Non-cash rent
(d)
|
1,552
|
|
1,571
|
|
2,755
|
|
3,126
|
Pre-opening
costs (e)
|
483
|
|
1,196
|
|
414
|
|
2,173
|
Other items
(f)
|
(200)
|
|
25
|
|
(200)
|
|
81
|
Adjusted
EBITDA
|
$
49,266
|
|
$
48,041
|
|
$
77,895
|
|
$
72,449
|
Smart &
Final Stores, Inc. and Subsidiaries
|
Reconciliation
of Net Income (Loss) to Non-GAAP Adjusted Net
Income
|
(Unaudited)
|
(In Thousands,
Except Share and Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
Twelve Weeks
Ended June 17,
2018
|
|
Twelve Weeks
Ended June 18,
2017
|
|
Twenty-four
Weeks Ended
June 17, 2018
|
|
Twenty-four
Weeks Ended
June 18, 2017
|
Net income
(loss)
|
$
6,601
|
|
$
7,128
|
|
$
(493)
|
|
$
2,536
|
Income tax
provision (benefit)
|
3,253
|
|
3,792
|
|
505
|
|
(2,186)
|
Income before
income taxes
|
9,854
|
|
10,920
|
|
12
|
|
350
|
|
|
|
|
|
|
|
|
Adjustments to
net income (loss)
|
|
|
|
|
|
|
|
Net loss from
closed stores and exit costs (a)
|
1,434
|
|
891
|
|
1,525
|
|
1,281
|
Loss from asset
dispositions (b)
|
196
|
|
300
|
|
1,614
|
|
628
|
Share-based
compensation expense (c)
|
3,158
|
|
2,489
|
|
6,443
|
|
4,304
|
Non-cash rent
(d)
|
1,552
|
|
1,571
|
|
2,755
|
|
3,126
|
Pre-opening
costs (e)
|
483
|
|
1,196
|
|
414
|
|
2,173
|
Other items
(f)
|
(200)
|
|
25
|
|
(200)
|
|
81
|
Adjusted income
tax provision
|
(5,084)
|
|
(6,365)
|
|
(3,975)
|
|
(2,422)
|
Adjusted net
income
|
$
11,393
|
|
$
11,027
|
|
$
8,588
|
|
$
9,521
|
|
|
|
|
|
|
|
|
Adjusted Net Income
Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share - basic
|
$
0.09
|
|
$
0.10
|
|
$
(0.01)
|
|
$
0.04
|
Per share impact of
net income adjustments
|
0.07
|
|
0.05
|
|
0.13
|
|
0.09
|
Adjusted net income
per share - basic
|
$
0.16
|
|
$
0.15
|
|
$
0.12
|
|
$
0.13
|
Net income (loss) per
share - diluted
|
$
0.09
|
|
$
0.09
|
|
$
(0.01)
|
|
$
0.03
|
Per share impact of
net income adjustments
|
0.07
|
|
0.05
|
|
0.13
|
|
0.09
|
Adjusted net income
per share - diluted
|
$
0.16
|
|
$
0.14
|
|
$
0.12
|
|
$
0.12
|
|
|
|
|
|
|
|
|
Weighted average
shares - basic
|
72,658,662
|
|
72,573,681
|
|
72,444,916
|
|
72,430,786
|
Weighted average
shares - diluted
|
73,374,180
|
|
76,251,510
|
|
73,821,732
|
|
76,478,054
|
|
(a) Represents
costs associated with store closure and exit costs.
|
(b) Represents
non-cash loss associated with asset dispositions and impairment
charges.
|
(c) Represents
expenses associated with the Company's equity-based incentive award
program.
|
(d) Represents
non-cash component of recognized rent expense.
|
(e) Represents
new store and relocation opening costs consisting primarily of
rent, utilities, distribution, store labor and
advertising.
|
(f) Represents
severance costs in the twelve and twenty-four week periods ended
June 17, 2018 and June 18, 2017.
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/smart--final-stores-inc-reports-second-quarter-2018-financial-results-300686578.html
SOURCE Smart & Final Stores, Inc.