Mattress Firm Announces Third Fiscal Quarter Financial Results
Mattress Firm Announces Third Fiscal Quarter Financial Results
— Net Sales Increased 51.1% with 6.6% Comparable-Store Sales Growth —
— Earnings per Diluted Share of $0.47 on an Adjusted Basis, $0.37 on a GAAP
basis —
— Strengthens Market Leadership In North and South Carolina with Agreement to
Acquire 28 Stores —
— Updates Financial Guidance for Fiscal 2012 —
Business Wire
HOUSTON -- December 04, 2012
Mattress Firm Holding Corp. (NASDAQ: MFRM) today announced its financial
results for the third fiscal quarter (13 weeks) ended October 30, 2012. Net
sales for the third fiscal quarter increased 51.1% to $277.3 million,
reflecting comparable-store sales growth of 6.6% and an increase in store
units from new store openings and acquisitions. The Company reported
third-quarter GAAP earnings per diluted share (“EPS”) of $0.37. Excluding
acquisition-related costs and secondary offering costs, adjusted earnings per
diluted share (“Adjusted EPS”) for the third fiscal quarter were $0.47.
Diluted EPS on a generally accepted accounting principles (“GAAP”) basis and
non-GAAP (“Adjusted”) basis are reconciled in the table below:
Third Fiscal Quarter Reconciliation of GAAP to Adjusted EPS
See “Reported to Adjusted Statements of Operations Data” for Notes
Thirteen Weeks Thirty-Nine Weeks
Ended Ended
October 30, 2012 October 30, 2012
GAAP EPS $ 0.37 $ 0.95
Acquisition-related costs (1) 0.05 0.20
Secondary offering costs (2) 0.04 0.04
Adjusted EPS * $ 0.47 $ 1.19
* Due to rounding to the nearest cent, totals may not equal the sum of the
lines in the table above.
“We have continued to drive strong performance as evidenced by our 6.6% and
8.8% comparable-store sales growth in the third fiscal quarter and the first
nine months of fiscal 2012, respectively, while adding more than 280 net
stores through accretive acquisitions and new store openings since the
beginning of this fiscal year,” stated Steve Stagner, Mattress Firm’s
president and chief executive officer. “Our core strategy of further
penetrating our existing and new markets continues to result in increased
market share and profitability, and the acquired stores continue to generate
total sales above our initial expectations. We believe we are well positioned
to drive revenue and earnings in the coming years through store growth and our
relative market share strategy. However, our expectations for the balance of
this fiscal year are now below our previous plan in light of recent sales
trends that continue to be impacted by ticket pressures and, beginning in
early November, lower traffic growth. We expect that targeted initiatives
being deployed internally will address many of our sales challenges. It is
important to keep in context that in fiscal 2012, even after giving effect to
our updated guidance, we expect to achieve impressive full year revenue and
operating earnings growth in excess of 40% over the prior year. As we look to
fiscal 2013, we remain confident that the execution of our growth strategy and
improving operating efficiencies will drive market share and EPS gains.”
Third Quarter Financial Summary
* Net sales increased 51.1% to $277.3 million in the third fiscal quarter of
2012, reflecting comparable-store sales growth of 6.6% and growth in store
units from new store openings and acquisitions.
* Company-operated stores increased to 1,011 as of the end of the third
fiscal quarter. During the quarter, the Company opened 31 new stores,
closed 11, and added 34 from the acquisition of Mattress X-Press in
September 2012.
* Income from operations for the third fiscal quarter was $23.0 million.
Excluding $5.0 million of acquisition-related and secondary offering
costs, adjusted income from operations was $28.0 million, representing an
increase of $6.6 million, or 30.9%, over the prior year.
* Adjusted operating margin in the third fiscal quarter increased 112
basis-points over the second fiscal quarter of fiscal 2012, and such
improvement included a 40 basis-point improvement in gross margin, a 107
basis-point decrease in selling and marketing expense, offset by a 35
basis-point increase in general and administrative expense and other
items. Adjusted operating margin in the third fiscal quarter was 10.1% as
compared to 11.7% in the same quarter of 2011, and such decrease included
a 177 basis-point increase in selling and marketing expense, a 20
basis-point increase in other expense categories, offset by a 41
basis-point decrease in general and administrative expense.
* Acquisition-related costs included in income from operations related to
the Mattress Giant and Mattress X-Press acquisitions totaled $3.0 million
during the third fiscal quarter and consisted of $0.5 million classified
as cost of sales attributable to duplicate warehouse facilities and costs
of remerchandising the acquired stores, and $2.5 million classified as
general and administrative expenses related to direct costs of the
transactions, costs of retraining personnel and duplicate costs of the
Mattress Giant corporate office.
* The Company completed the public offering of 5,435,684 shares of its
common stock by certain of its shareholders on October 10, 2012. The
Company did not sell any shares of common stock in the offering and did
not receive any proceeds from the sale. The Company incurred approximately
$1.9 million in costs related to the offering.
Acquisitions
In September 2012, the Company completed the acquisition of the assets and
operations of Mattress XPress, Inc. and Mattress XPress of Georgia, Inc.
(collectively “Mattress X-Press”), including 29 mattress specialty stores
located primarily in South Florida and five stores in Georgia, for
approximately $13.2 million. The Company has commenced rebranding of the
Mattress X-Press stores as Mattress Firm, with completion anticipated to occur
by the end of fiscal 2012.
Subsequent to the end of the third fiscal quarter, in November 2012, the
Company entered into an agreement to acquire the assets and operations of
Factory Mattress & Water Bed Outlet of Charlotte, Inc. (dba “Mattress
Source”), including 28 mattress specialty stores in North Carolina and South
Carolina, for approximately $11.2 million, subject to customary adjustments.
The closing of the acquisition, which is conditioned on the prior satisfaction
of customary closing conditions, is expected to occur by the end of the fourth
fiscal quarter of 2012 and will be funded by cash reserves and revolver
borrowings. The Company intends to rebrand the stores as Mattress Firm
subsequent to the closing of the transaction.
Consistent with our core relative market share strategy, the Mattress X-Press
and pending Mattress Source acquisitions will add stores in markets where
Mattress Firm currently has company-operated stores. The addition of the
acquired stores, once rebranded, is expected to drive advertising efficiency
and improved market-level profitability in those markets.
The effect of rebranding on the sales per store performance of the former
Mattress Giant stores has continued to be positive, as demonstrated by the
charts accompanied in this release.
Year-to-Date Financial Summary
Net revenues increased $233.7 million, or 45.4%, to $749.1 million, for the
three fiscal quarters (thirty-nine weeks) ended October 30, 2012, from $515.4
million in the comparable prior-year period, reflecting comparable-store sales
growth of 8.8% and an increase in store units from new store openings and
acquisitions.
The Company opened 88 new stores and acquired 215 stores, while closing 21
stores in the first nine months of fiscal 2012, adding 282 net store units, an
increase of 38.7%.
Net income was $32.3 million for the three fiscal quarters ended October 30,
2012 and GAAP EPS was $0.95. Excluding acquisition-related and secondary
offering costs, and related tax effects, adjusted net income was $40.4 million
for the three fiscal quarters and Adjusted EPS was $1.19. See “Reported to
Adjusted Statements of Operations Data” below for a reconciliation of net
income as reported to adjusted net income.
Balance Sheet
The Company had cash and cash equivalents of $10.9 million at the end of the
third fiscal quarter on October 30, 2012. On November 5, 2012, the Company
completed an amendment of its senior credit agreement. As a result of the
amendment, the maturity of term borrowings in the aggregate amount of $200
million was extended by two years to January 18, 2016, the maturity of the
revolving loan facility was extended by two years to January 18, 2015 and the
revolving loan commitment was increased to $100 million from the previous
commitment of $35 million. The interest rate on the extended term borrowings
was revised to LIBOR plus a margin of 3.5%, representing a 1.25% increase over
the previous rate. Furthermore, the annual amount of permitted capital
expenditures was increased to $80 million from the previous annual amount of
$40 million, beginning with fiscal 2012.
Financial Guidance
The Company expects the pending acquisition of 28 Mattress Source stores to
add incremental sales during the fourth fiscal quarter of 2012 of
approximately $2.0 million. Such sales estimates anticipate temporary closings
of the stores while rebranding efforts are undertaken. The impact on EPS
during the fourth fiscal quarter of 2012 is expected to be a reduction of
$0.03 that is attributable to acquisition-related costs. The Company expects
that these acquired stores will be accretive to EPS for the fiscal year (52
weeks) ending January 28, 2014 (“fiscal 2013”) by $0.05 to $0.06 as a result
of expected increases in sales volumes and improvement in operational
efficiencies of the rebranded stores.
The Company is updating its outlook for fiscal 2012 to include the anticipated
results from the pending acquisition of 28 Mattress Source stores, actual
results through the third quarter, and the Company’s expectation of future
results based on information currently known. Furthermore, the Company intends
to rebrand approximately 20 additional stores to Mattress Firm during the
first quarter of fiscal 2013 that were acquired in December 2010 and are
currently operated under the name Mattress Discounters, which will have an
effect on fiscal 2012 results. The GAAP EPS guidance for fiscal 2012 includes
a noncash impairment charge that will be recorded in the fiscal fourth quarter
of $2.1 million, before income tax benefit, related to the Mattress
Discounters intangible trade name asset.
Revised Revenue and Diluted Earnings per Share (EPS) Guidance:
Prior Guidance Updated Range
Range
Full Fiscal Year Ending January
29, 2013
Revenue (in billions) $1.022 to $1.039 $1.010 to
$1.015
New Stores 100 115 to 120
GAAP EPS $1.47 to $1.50 $1.18 to $1.21
Acquisition-related costs $0.20 to $0.23 $0.23
Secondary offering costs - $0.04
Noncash impairment charge - $0.04
Adjusted EPS $1.67 to $1.73 $1.49 to $1.52
Comparable-store sales increase 7% to 9% 6% to 6.5%
For the fourth fiscal quarter ending January 29, 2013, the Company expects net
sales in a range from $261 million to $266 million, GAAP EPS in a range from
$0.23 to $0.26, and Adjusted EPS in the range of $0.30 to $0.33, excluding
acquisition-related costs, secondary offering costs and noncash impairment
charge. Comparable-store sales are expected to be in the range of flat to an
increase of 2.0%.
Call Information
A conference call to discuss third fiscal quarter results is scheduled for
today, December 4, 2012, at 5:00 p.m. Eastern Time. The call will be hosted by
Steve Stagner, president and chief executive officer, and Jim Black, chief
financial officer.
The conference call will be accessible by telephone and the Internet. To
access the call, participants from within the U.S. may dial (877) 407-3982,
and participants from outside the U.S. may dial (201) 493-6780. Participants
may also access the call via live webcast by visiting the Company’s investor
relations Web site at www.mattressfirm.com.
The replay of the call will be available from approximately 8:00 p.m. Eastern
Time on December 4, 2012 through midnight Eastern Time on December 18, 2012.
To access the replay, the domestic dial-in number is (877) 870-5176, the
international dial-in number is (858) 384-5517, and the passcode is 404236.
The archive of the webcast will be available on the Company’s Web site for a
limited time.
Net Sales and Store Unit Information
The components of the net sales increase were as follows (in millions):
Increase (decrease) in net sales
Thirteen Weeks Thirty-Nine Weeks
Ended Ended
October 30, 2012 October 30, 2012
Comparable-store sales $ 12.0 $ 44.8
New stores 33.9 93.8
Acquired stores 49.9 101.3
Closed stores (2.0 ) (6.2 )
$ 93.8 $ 233.7
The composition of net sales by major category of product and services were as
follows (in millions):
Thirteen Weeks Ended Thirty-Nine Weeks Ended
November % of October % of November % of October % of
1, 30, 1, 30,
2011 Total 2012 Total 2011 Total 2012 Total
Specialty $ 86.0 46.9 % $ 144.8 52.2 % $ 225.1 43.7 % $ 378.7 50.6 %
mattresses
Conventional 82.0 44.7 % 109.3 39.4 % 245.1 47.6 % 307.2 41.0 %
mattresses
Furniture
and 11.6 6.3 % 17.9 6.5 % 33.8 6.6 % 49.2 6.6 %
accessories
Total
product 179.6 97.9 % 272.0 98.1 % 504.0 97.8 % 735.1 98.1 %
sales
Delivery
service 3.9 2.1 % 5.3 1.9 % 11.4 2.2 % 14.0 1.9 %
revenues
Total net $ 183.5 100.0 % $ 277.3 100.0 % $ 515.4 100.0 % $ 749.1 100.0 %
sales
Prior-year components of the Company’s net sales have been reallocated between
specialty mattresses and conventional mattresses to be consistent with
current-year presentation.
The activity with respect to the number of Company-operated store units was as
follows:
Thirteen Weeks Thirty-Nine Weeks
Ended Ended
October 30, 2012 October 30, 2012
Store units, beginning of period 957 729
New stores 31 88
Acquired stores 34 215
Closed stores (11 ) (21 )
Store units, end of period 1,011 1,011
Forward-Looking Statements
Certain statements contained in this press release are not based on historical
fact and are “forward-looking statements” within the meaning of applicable
federal securities laws and regulations. In many cases, you can identify
forward-looking statements by terminology such as “may,” “would,” “should,”
“could,” “forecast,” “feel,” “project,” “expect,” “plan,” “anticipate,”
“believe,” “estimate,” “predict,” “intend,” “potential,” “continue” or the
negative of these terms or other comparable terminology; however, not all
forward-looking statements contain these identifying words. The
forward-looking statements contained in this press release, such as those
relating to our net sales and EPS for fiscal year 2012, the pending
acquisition of Mattress Source stores, the rebranding and integration of these
and other recently acquired stores and the effect of such stores on our net
sales and EPS for fiscal 2012, and our EPS for fiscal 2013, are subject to
various risks and uncertainties, including but not limited to downturns in the
economy and a reduction in discretionary spending by consumers; our ability to
execute our key business strategies and advance our market-level
profitability; our ability to profitably open and operate new stores and
capture additional market share; our relationship with our primary mattress
suppliers; our dependence on a few key employees; the possible impairment of
our goodwill or other acquired intangible assets; the effect of our planned
growth and the integration of our acquisitions (including our recent
acquisition of Mattress Giant and the operations of Mattress X-Press and the
pending acquisition of the Mattress Source operations) on our business
infrastructure; the impact of seasonality on our financial results and
comparable-store sales; our ability to raise adequate capital to support our
expansion strategy; our success in pursuing and completing strategic
acquisitions; the effectiveness and efficiency of our advertising
expenditures; our success in keeping warranty claims and comfort exchange
return rates within acceptable levels; our ability to deliver our products in
a timely manner; our status as a holding company with no business operations;
our ability to anticipate consumer trends; risks related to our controlling
stockholder, J.W. Childs Associates, L.P.; heightened competition; changes in
applicable regulations; risks related to our franchises, including our lack of
control over their operation and our liabilities if they default on note or
lease obligations; risks related to our stock and other factors set forth
under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year
ended January 31, 2012 filed with the Securities and Exchange Commission
(“SEC”) on April 20, 2012 (as amended on May 30, 2012) and our other SEC
filings. Forward-looking statements relate to future events or our future
financial performance and reflect management’s expectations or beliefs
concerning future events as of the date of this press release. Actual results
of operations may differ materially from those set forth in any
forward-looking statements, and the inclusion of a projection or
forward-looking statement in this press release should not be regarded as a
representation by us that our plans or objectives will be achieved. Except as
required by applicable law, we do not undertake to publicly update or revise
any of these forward-looking statements, whether as a result of new
information, future events or otherwise.
Non-GAAP Financial Measures
Adjusted EBITDA is defined as net income before income tax expense, interest
income, interest expense, depreciation and amortization (“EBITDA”), without
giving effect to non-cash goodwill and intangible asset impairment charges,
gains or losses on store closings and impairment of store assets, gains or
losses related to the early extinguishment of debt, financial sponsor fees and
expenses, non-cash charges related to stock based awards and other items that
are excluded by management in reviewing the results of operations. We have
presented Adjusted EBITDA because we believe that the exclusion of these items
is appropriate to provide additional information to investors about our
ongoing operating performance excluding certain non-cash and other items and
to provide additional information with respect to our ability to comply with
various covenants in documents governing our indebtedness and as a means to
evaluate our period-to-period results. In evaluating Adjusted EBITDA, you
should be aware that in the future we may incur expenses that are the same as
or similar to some of the adjustments in this presentation. Our presentation
of Adjusted EBITDA should not be construed to imply that our future results
will be unaffected by any such adjustments. We have provided this information
to analysts, investors and other third parties to enable them to perform more
meaningful comparisons of past, present and future operating results and as a
means to evaluate the results of our ongoing operations. Management also uses
Adjusted EBITDA to determine executive incentive compensation payment levels.
In addition, our compliance with certain covenants under the credit agreement
between our indirect wholly owned subsidiary, Mattress Holding Corp., certain
lenders, and UBS Securities LLC, as sole arranger and bookrunner and a lender,
are calculated based on similar measures, which differ from Adjusted EBITDA
primarily by the inclusion of pro forma results for acquired businesses in
those similar measures. Other companies in our industry may calculate Adjusted
EBITDA differently than we do. Adjusted EBITDA is not a measure of performance
under U.S. GAAP and should not be considered as a substitute for net income
prepared in accordance with U.S. GAAP. Adjusted EBITDA has significant
limitations as an analytical tool, and you should not consider it in isolation
or as a substitute for analysis of our results as reported under U.S. GAAP.
The following table contains a reconciliation of our net income determined in
accordance with U.S. GAAP to EBITDA and Adjusted EBITDA for the periods
indicated (in thousands):
Thirteen Weeks Ended Thirty-Nine Weeks Ended
November 1, October November October 30
30, 1,
2011 2012 2011 2012
Net income $ 12,314 $ 12,456 $ 16,979 $ 32,277
Income tax 551 8,484 870 19,972
expense
Interest income (1 ) - (4 ) (1 )
Interest 8,530 2,097 25,479 6,386
expense
Depreciation
and 4,234 6,257 12,951 16,432
amortization
Intangible
assets and 439 (215 ) 1,254 972
other
amortization
EBITDA 26,067 29,079 57,529 76,038
Loss on store
closings and 285 196 324 267
impairment of
store assets
Loss from debt - - 1,873 -
extinguishment
Financial
sponsor fees 102 12 294 63
and expenses
Stock-based 19 651 58 1,653
compensation
Secondary - 1,935 - 1,935
offering costs
Vendor new 473 304 773 937
store funds (a)
Acquisition
related 70 3,025 178 10,074
expenses (b)
Other (c) 242 (132 ) 924 (896 )
Adjusted EBITDA $ 27,258 $ 35,070 $ 61,953 $ 90,071
Adjustment to recognize vendor funds received upon the opening of a
(a) new store in the period opened, rather than over 36-months as
presented in our financial statements, which is consistent with how
management has historically reviewed its results of operations.
Noncash effect included in net income related to purchase accounting
adjustments made to inventories resulting from acquisitions and
(b) other acquisition-related cash costs included in net income, such as
direct acquisition costs and costs related to training and
integration of acquired businesses.
(c) Consists of various items that management excludes in reviewing the
results of operations.
As Adjusted EPS and the other “As Adjusted” data provided in this press
release are also considered non-GAAP financial measures. For more information,
please refer to “Reported to Adjusted Statements of Operations Data” below.
MATTRESS FIRM HOLDING CORP.
Consolidated Balance Sheets
(In thousands, except share amounts)
January 31, October 30,
2012 2012
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 47,946 $ 10,855
Accounts receivable, net 18,607 28,187
Inventories 40,961 62,181
Deferred income taxes 12,574 6,357
Prepaid expenses and other current assets 12,054 15,715
Total current assets 132,142 123,295
Property and equipment, net 95,674 133,905
Intangible assets, net 84,795 91,206
Goodwill 291,141 345,423
Debt issue costs and other, net 9,729 10,839
Total assets $ 613,481 $ 704,668
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable and current maturities of $ 2,414 $ 6,953
long-term debt
Accounts payable 42,396 76,952
Accrued liabilities 31,780 41,447
Customer deposits 6,294 8,290
Total current liabilities 82,884 133,642
Long-term debt, net of current maturities 225,940 225,630
Deferred income taxes 31,045 25,840
Other noncurrent liabilities 49,353 61,367
Total liabilities 389,222 446,479
Stockholders' equity:
Common stock, $0.01 par value; 120,000,000
shares authorized;
33,768,828 shares issued and outstanding at
January 31, 2012 and October 30, 2012 338 338
Additional paid-in capital 361,717 363,370
Accumulated deficit (137,796 ) (105,519 )
Total stockholders' equity 224,259 258,189
Total liabilities and stockholders' equity $ 613,481 $ 704,668
MATTRESS FIRM HOLDING CORP.
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
Thirteen Weeks Ended Thirty-Nine Weeks Ended
November 1, % of October 30, % of November 1, % of October 30, % of
2011 Sales 2012 Sales 2011 Sales 2012 Sales
Net sales $ 183,514 100 % $ 277,259 100 % $ 515,352 100 % $ 749,091 100 %
Cost of sales 110,106 60.0 % 167,173 60.3 % 315,333 61.2 % 454,299 60.6 %
Gross profit
from retail 73,408 40.0 % 110,086 39.7 % 200,019 38.8 % 294,792 39.4 %
operations
Franchise fees
and royalty 1,329 0.7 % 1,490 0.5 % 3,401 0.7 % 4,022 0.5 %
income
74,737 40.7 % 111,576 40.2 % 203,420 39.5 % 298,814 39.9 %
Operating
expenses:
Sales and
marketing 41,420 22.6 % 67,475 24.3 % 122,138 23.7 % 183,167 24.5 %
expenses
General and
administrative 11,638 6.3 % 20,868 7.5 % 35,761 6.9 % 56,746 7.6 %
expenses
Loss on store
closings and 285 0.2 % 196 0.1 % 324 0.1 % 267 0.0 %
impairment of
store assets
Total operating 53,343 29.1 % 88,539 31.9 % 158,223 30.7 % 240,180 32.1 %
expenses
Income from 21,394 11.7 % 23,037 8.3 % 45,197 8.8 % 58,634 7.8 %
operations
Other expense
(income):
Interest income (1 ) 0.0 % - 0.0 % (4 ) 0.0 % (1 ) 0.0 %
Interest expense 8,530 4.6 % 2,097 0.8 % 25,479 4.9 % 6,386 0.9 %
Loss from debt - 0.0 % - 0.0 % 1,873 0.4 % - 0.0 %
extinguishment
8,529 4.6 % 2,097 0.8 % 27,348 5.3 % 6,385 0.9 %
Income before 12,865 7.0 % 20,940 7.6 % 17,849 3.5 % 52,249 7.0 %
income taxes
Income tax 551 0.3 % 8,484 3.1 % 870 0.2 % 19,972 2.7 %
expense
Net income $ 12,314 6.7 % $ 12,456 4.5 % $ 16,979 3.3 % $ 32,277 4.3 %
Basic net income $ 0.55 $ 0.37 $ 0.76 $ 0.96
per common share
Diluted net
income per $ 0.55 $ 0.37 $ 0.76 $ 0.95
common share
Reconciliation
of
weighted-average
shares
outstanding:
Basic weighted
average shares 22,399,952 33,768,828 22,399,952 33,768,828
outstanding
Effect of
dilutive
securities:
Stock options - 93,907 - 113,592
Restricted - 4,773 - 2,742
shares
Diluted weighted
average shares 22,399,952 33,867,508 22,399,952 33,885,162
outstanding
MATTRESS FIRM HOLDING CORP.
Consolidated Statements of Cash Flows
(In thousands)
Thirty-Nine Weeks Ended
November 1, October 30,
Cash flows from operating activities: 2011 2012
Net income $ 16,979 $ 32,277
Adjustments to reconcile net income to cash
flows
provided by operating activities:
Depreciation and amortization 12,951 16,432
Interest expense accrued and paid-in-kind 18,872 -
Loan fee and other amortization 1,911 1,855
Loss from debt extinguishment 1,873 -
Deferred income tax expense - 8,613
Stock-based compensation 58 1,653
Loss on store closings and impairment of 324 267
store assets
Effects of changes in operating assets and
liabilities,
excluding business acquisitions:
Accounts receivable (3,389 ) (6,887 )
Inventories (8,136 ) (15,219 )
Prepaid expenses and other current assets 256 (647 )
Other assets (2,476 ) (904 )
Accounts payable 9,531 22,138
Accrued liabilities 4,780 1,837
Customer deposits 933 134
Other noncurrent liabilities 3,250 4,906
Net cash provided by operating activities 57,717 66,455
Cash flows from investing activities:
Purchases of property and equipment (22,192 ) (50,726 )
Business acquisitions, net of cash acquired (100 ) (51,613 )
Net cash used in investing activities (22,292 ) (102,339 )
Cash flows from financing activities:
Proceeds from issuance of debt 40,198 18,000
Principal payments of debt (51,248 ) (19,207 )
Debt issuance costs (1,273 ) -
Net cash used in financing activities (12,323 ) (1,207 )
Net increase (decrease) in cash and cash 23,102 (37,091 )
equivalents
Cash and cash equivalents, beginning of 4,445 47,946
period
Cash and cash equivalents, end of period $ 27,547 $ 10,855
MATTRESS FIRM HOLDING CORP.
Reported to Adjusted Statements of Operations Data
(In thousands, except share and per share amounts)
Thirteen Weeks Ended
November 1, October 30, 2012
2011
Acquisition- Secondary
Related Offering
As Reported As Reported Costs (1) Costs (2) As Adjusted
Income from operations $ 21,394 $ 23,037 $ 3,025 $ 1,935 $ 27,997
Other expense, net 8,529 2,097 - - 2,097
Income before income taxes 12,865 20,940 3,025 1,935 25,900
Income tax expense (3) 551 8,484 1,175 492 10,151
Net income $ 12,314 $ 12,456 $ 1,850 $ 1,443 $ 15,749
Basic net income per common $ 0.55 $ 0.37 $ 0.05 $ 0.04 $ 0.47
share *
Diluted net income per common $ 0.55 $ 0.37 $ 0.05 $ 0.04 $ 0.47
share *
Basic weighted average shares 22,399,952 33,768,828 33,768,828 33,768,828 33,768,828
outstanding
Diluted weighted average 22,399,952 33,867,508 33,867,508 33,867,508 33,867,508
shares outstanding
Thirty-Nine Weeks Ended
November 1, October 30, 2012
2011
Acquisition- Secondary
Related Offering
As Reported As Reported Costs (1) Costs (2) As Adjusted
Income from operations $ 45,197 $ 58,634 $ 10,074 $ 1,935 $ 70,643
Other expense, net 27,348 6,385 - - 6,385
Income before income taxes 17,849 52,249 10,074 1,935 64,258
Income tax expense (3) 870 19,972 3,395 492 23,859
Net income $ 16,979 $ 32,277 $ 6,679 $ 1,443 $ 40,399
Basic net income per common $ 0.76 $ 0.96 $ 0.20 $ 0.04 $ 1.20
share *
Diluted net income per common $ 0.76 $ 0.95 $ 0.20 $ 0.04 $ 1.19
share *
Basic weighted average shares 22,399,952 33,768,828 33,768,828 33,768,828 33,768,828
outstanding
Diluted weighted average 22,399,952 33,885,162 33,885,162 33,885,162 33,885,162
shares outstanding
_____________________________
* Due to rounding to the nearest cent per diluted share, totals may not equal
the sum of the line items in the table above.
(1) In April 2012, we announced the signing of an agreement for all of the
equity interests of MGHC Holding Corporation (“Mattress Giant”), including 181
specialty retail stores. The acquisition closed on May 2, 2012. In September
2012, we announced the signing of an agreement for the acquisition of the
leasehold interests, store assets, distribution center assets and related
inventories, and assumption of certain liabilities, of Mattress XPress, Inc.
and Mattress XPress of Georgia, Inc. (collectively, “Mattress X-Press”),
including 34 mattress specialty retail stores. The acquisition closed on
September 25, 2012. Acquisition-related costs, consisting of direct
transaction costs and integration costs, are included in the results of
operations as incurred. During the thirteen and thirty-nine weeks ended
October 30, 2012, we incurred $3.0 million and $10.1 million of
acquisition-related costs, respectively.
(2) Reflects $1.9 million of costs borne by us in connection with a secondary
offering of shares of common stock by certain of our selling stockholders
which was completed in October 2012.
(3) Reflects effective income tax rate of 38.9% and an additional $0.3 million
in foregone tax benefits on certain acquisition-related costs considered
nondeductible.
Our “As Adjusted” data is considered a non-U.S. GAAP financial measure and is
not in accordance with, or preferable to, “As Reported,” or GAAP financial
data. However, we are providing this information as we believe it facilitates
year-over-year comparisons for investors and financial analysts.
About Mattress Firm
Houston-based Mattress Firm is one of the nation’s leading specialty bedding
retailers, offering a broad selection of both traditional and specialty
mattresses from leading manufacturers, including Sealy, Serta, Simmons,
Stearns & Foster and Tempur-Pedic.
Photos/Multimedia Gallery Available:
http://www.businesswire.com/multimedia/home/20121204006662/en/
Multimedia
Available:http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50497564&lang=en
Contact:
Mattress Firm
Investor Relations:
Brad Cohen, 713-343-3652
ir@mattressfirm.com
or
Media:
Sari Martin, 203-682-8345
mattressfirm@icrinc.com
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