|
| |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
|
| |
(Address of principal executive offices) |
(Zip Code) |
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on which Registered | ||
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|
|
|
Accelerated filer ☐ | |
Non-accelerated filer ☐ Emerging growth company |
Smaller reporting company |
PART I. |
3 |
|||||
Item 1. |
3 |
|||||
3 |
||||||
4 |
||||||
4 |
||||||
5 |
||||||
6 |
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7 |
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18 |
||||||
Item 2. |
19 |
|||||
Item 3. |
26 |
|||||
Item 4. |
26 |
|||||
PART II. |
27 |
|||||
Item 1. |
27 |
|||||
Item 1A. |
27 |
|||||
Item 2. |
27 |
|||||
Item 3. |
28 |
|||||
Item 4. |
28 |
|||||
Item 5. |
28 |
|||||
Item 6. |
29 |
|||||
30 |
(in thousands) |
February 15, 2020 |
August 31, 2019 |
||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
|
$ |
|
||||
Accounts receivable |
|
|
||||||
Merchandise inventories |
|
|
||||||
Other current assets |
|
|
||||||
Total current assets |
|
|
||||||
Property and equipment: |
||||||||
Property and equipment |
|
|
||||||
Less: Accumulated depreciation and amortization |
( |
) |
( |
) | ||||
|
|
|||||||
Operating lease right-of-use assets |
|
|
||||||
Goodwill |
|
|
||||||
Deferred income taxes |
|
|
||||||
Other long-term assets |
|
|
||||||
|
|
|||||||
$ |
|
$ |
|
|||||
Liabilities and Stockholders’ Deficit |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ |
|
$ |
|
||||
Current portion of operating lease liabilities |
|
|
||||||
Accrued expenses and other |
|
|
||||||
Income taxes payable |
|
|
||||||
Total current liabilities |
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|
||||||
Long-term debt |
|
|
||||||
Operating lease liabilities, less current portion |
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|
||||||
Deferred income taxes |
|
|
||||||
Other l ong-term liabilities |
|
|
||||||
Commitments and contingencies |
|
|||||||
Stockholders’ deficit: |
||||||||
Preferred stock, authorized shares; shares issued |
|
|
||||||
Common stock, par value $ per share, authorized shares; shares issued and shares outstanding as of February 15 , 2020 ; shares issued and shares outstanding as of August 31 , 2019 |
|
|
||||||
Additional paid-in capital |
|
|
||||||
Retained deficit |
( |
) |
( |
) | ||||
Accumulated other comprehensive loss |
( |
) |
( |
) | ||||
Treasury stock, at cost |
( |
) |
( |
) | ||||
Total stockholders’ deficit |
( |
) |
( |
) | ||||
$ |
|
$ |
|
|||||
Twelve Weeks Ended |
Twenty-Four Weeks Ended |
|||||||||||||||
(in thousands, except per share data) |
February 15, 2020 |
February 9, 2019 |
February 15, 2020 |
February 9, 2019 |
||||||||||||
|
|
|
|
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|
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|
|
|
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|
|
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Net sales |
$ | |
$ | |
$ | |
$ | |
||||||||
Cost of sales, including warehouse and delivery expenses |
|
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|
||||||||||||
|
||||||||||||||||
Gross profit |
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|
||||||||||||
Operating, selling, general and administrative expenses |
|
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|
||||||||||||
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||||||||||||||||
Operating profit |
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|
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|
||||||||||||
Interest expense, net |
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|
||||||||||||
|
||||||||||||||||
Income before income taxes |
|
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|
||||||||||||
Income tax expense |
|
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|
|
||||||||||||
|
||||||||||||||||
Net income |
$ | |
$ | |
$ | |
$ | |
||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
|
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|
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|
|
Weighted average shares for basic earnings per share |
|
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|
||||||||||||
Effect of dilutive stock equivalents |
|
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|
||||||||||||
|
||||||||||||||||
Weighted average shares for diluted earnings per share |
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||||||||||||
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||||||||||||||||
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|
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Basic earnings per share |
$ | |
$ | |
$ | |
$ | |
||||||||
|
||||||||||||||||
Diluted earnings per share |
$ | |
$ | |
$ | |
$ | |
||||||||
Twelve Weeks Ended |
Twenty-Four Weeks Ended |
|||||||||||||||
(in thousands) |
February 15, 2020 |
February 9, 2019 |
February 15, 2020 |
February 9, 2019 |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ | |
$ | |
$ | |
$ | |
||||||||
Other comprehensive income (loss): |
||||||||||||||||
Foreign currency translation adjustments |
|
|
|
( |
) | |||||||||||
Unrealized gains (losses) on marketable debt securities, net of taxes (1) |
|
|
( |
) | |
|||||||||||
Net derivative activities, net of taxes (2) |
|
|
|
|
||||||||||||
Total other comprehensive income (loss) |
|
|
|
( |
) | |||||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
$ | |
$ | |
$ | |
$ | |
||||||||
|
(1) |
Unrealized gains on marketable debt securities are presented net of taxes of $ |
(2) |
Net derivative activities are presented net of taxes of $ |
|
|
Twenty-Four Weeks Ended | ||||||||||||||
(in thousands) |
|
February 15, 2020 |
|
February 9, 2019 | ||||||||||||
|
|
|
|
|
|
|
|
| ||||||||
Cash flows from operating activities: |
|
|
||||||||||||||
Net income |
|
$ | |
|
$ | |
||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
||||||||||||||
Depreciation and amortization of property and equipment and intangibles |
|
|
|
|
||||||||||||
Amortization of debt origination fees |
|
|
|
|
||||||||||||
Deferred income taxes |
|
|
|
|
||||||||||||
Share-based compensation expense |
|
|
|
|
||||||||||||
Changes in operating assets and liabilities: |
|
|
||||||||||||||
Accounts receivable |
|
( |
) | |
( |
) | ||||||||||
Merchandise inventories |
|
( |
) | |
( |
) | ||||||||||
Accounts payable and accrued expenses |
|
|
|
|
||||||||||||
Income taxes payable |
|
|
|
|
||||||||||||
Other, net |
|
|
|
|
||||||||||||
|
|
|
||||||||||||||
Net cash provided by operating activities |
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash flows from investing activities: |
|
|
||||||||||||||
Capital expenditures |
|
( |
) | |
( |
) | ||||||||||
Purchase of marketable debt securities |
|
( |
) | |
( |
) | ||||||||||
Proceeds from sale of marketable debt securities |
|
|
|
|
||||||||||||
Proceeds from disposal of capital assets and other, net |
|
|
|
|
||||||||||||
|
|
|
||||||||||||||
Net cash used in investing activities |
|
( |
) | |
( |
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash flows from financing activities: |
|
|
||||||||||||||
Net proceeds from commercial paper |
|
|
|
|
||||||||||||
Net proceeds from sale of common stock |
|
|
|
|
||||||||||||
Purchase of treasury stock |
|
( |
) | |
( |
) | ||||||||||
Repayment of principal portion of finance lease liabilities |
|
( |
) | |
( |
) | ||||||||||
|
|
|
||||||||||||||
Net cash used in financing activities |
|
( |
) | |
( |
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||
Effect of exchange rate changes on cash |
|
|
|
( |
) | |||||||||||
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||
Net (decrease) in cash and cash equivalents |
|
( |
) | |
( |
) | ||||||||||
Cash and cash equivalents at beginning of period |
|
|
|
|
||||||||||||
|
|
|
||||||||||||||
Cash and cash equivalents at end of period |
|
$ | |
|
$ | |
||||||||||
|
|
|
Twelve Weeks Ended February 15, 2020 |
||||||||||||||||||||||||||||||
(in thousands) |
Common Shares Issued |
Common Stock |
Additional Paid-in Capital |
Retained Deficit |
Accumulated Other Comprehensive Loss |
Treasury Stock |
Total |
|||||||||||||||||||||||
Balance at November 23, 2019 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||
Net income |
– |
|||||||||||||||||||||||||||||
Total other comprehensive income |
– |
|||||||||||||||||||||||||||||
Retirement of treasury shares |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||
Purchase of |
– |
( |
) |
( |
) | |||||||||||||||||||||||||
Issuance of common stock under stock options and stock purchase plans |
||||||||||||||||||||||||||||||
Share-based compensation expense |
– |
|||||||||||||||||||||||||||||
Balance at February 15, 2020 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||
Twelve Weeks Ended February 9, 2019 |
||||||||||||||||||||||||||||||||
(in thousands) |
Common Shares Issued |
Common Stock |
Additional Paid-in Capital |
Retained Deficit |
Accumulated Other Comprehensive Loss |
Treasury Stock |
Total |
|||||||||||||||||||||||||
Balance at November 17, 2018 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||
Net income |
– |
|||||||||||||||||||||||||||||||
Total other comprehensive income |
– |
|||||||||||||||||||||||||||||||
Retirement of treasury shares |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||
Purchase of |
– |
( |
) |
( |
) | |||||||||||||||||||||||||||
Issuance of common stock under stock options and stock purchase plans |
||||||||||||||||||||||||||||||||
Share-based compensation expense |
– |
|||||||||||||||||||||||||||||||
Balance at February 9, 2019 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||
Twenty-Four Weeks Ended February 15, 2020 |
||||||||||||||||||||||||||||||||
(in thousands) |
Common Shares Issued |
Common Stock |
Additional Paid-in Capital |
Retained Deficit |
Accumulated Other Comprehensive Loss |
Treasury Stock |
Total |
|||||||||||||||||||||||||
Balance at August 31, 2019 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||
Net income |
– |
|||||||||||||||||||||||||||||||
Total other comprehensive income |
– |
|||||||||||||||||||||||||||||||
Retirement of treasury shares |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||
Purchase of |
– |
( |
) |
( |
) | |||||||||||||||||||||||||||
Issuance of common stock under stock options and stock purchase plans |
||||||||||||||||||||||||||||||||
Share-based compensation expense |
– |
|||||||||||||||||||||||||||||||
Balance at February 15, 2020 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||
Twenty-Four Weeks Ended February 9, 2019 |
||||||||||||||||||||||||||||||||
(in thousands) |
Common Shares Issued |
Common Stock |
Additional Paid-in Capital |
Retained Deficit |
Accumulated Other Comprehensive Loss |
Treasury Stock |
Total |
|||||||||||||||||||||||||
Balance at August 25, 2018 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||
Cumulative effect of adoption of ASU 2014-09 |
– |
( |
) |
( |
) | |||||||||||||||||||||||||||
Balance at August 25, 2018, as adjusted |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||
Net income |
– |
|||||||||||||||||||||||||||||||
Total other comprehensive loss |
– |
( |
) |
( |
) | |||||||||||||||||||||||||||
Retirement of treasury shares |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||
Purchase of |
– |
( |
) |
( |
) | |||||||||||||||||||||||||||
Issuance of common stock under stock options and stock purchase plans |
||||||||||||||||||||||||||||||||
Share-based compensation expense |
– |
|||||||||||||||||||||||||||||||
Balance at February 9, 2019 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||
Twenty-Four Weeks Ended | |||||||||
2020 |
2019 |
||||||||
Expected price volatility |
|||||||||
Risk-free interest rate |
|||||||||
Weighted average expected lives (in years) |
|||||||||
Forfeiture rate |
|||||||||
Dividend yield |
Number |
Weighted-Average Grant Date Fair Value |
|||||||
Nonvested at August 31, 2019 |
||||||||
Granted |
||||||||
Vested |
( |
) | ||||||
Canceled or forfeited |
( |
) | ||||||
Nonvested at February 15, 2020 |
||||||||
February 15, 2020 |
||||||||||||||||
(in thousands) |
Level 1 |
Level 2 |
Level 3 |
Fair Value |
||||||||||||
Other current assets |
$ | $ | $ | $ | ||||||||||||
Other long-term assets |
||||||||||||||||
$ | $ | $ | $ | |||||||||||||
August 31, 2019 |
||||||||||||||||
(in thousands) |
Level 1 |
Level 2 |
Level 3 |
Fair Value |
||||||||||||
Other current assets |
$ | $ | $ | $ | ||||||||||||
Other long-term assets |
||||||||||||||||
$ | $ | $ | $ | |||||||||||||
February 15, 2020 |
||||||||||||||||
(in thousands) |
Amortized Cost Basis |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
||||||||||||
Corporate debt securities |
$ | $ | $ | $ | ||||||||||||
Government bonds |
||||||||||||||||
Mortgage-backed securities |
( |
) | ||||||||||||||
Asset-backed securities and other |
( |
) | ||||||||||||||
$ | $ | $ | ( |
) | $ | |||||||||||
August 31, 2019 |
||||||||||||||||
(in thousands) |
Amortized Cost Basis |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
||||||||||||
Corporate debt securities |
$ | $ | $ | ( |
) | $ | ||||||||||
Government bonds |
||||||||||||||||
Mortgage-backed securities |
( |
) | ||||||||||||||
Asset-backed securities and other |
( |
) | ||||||||||||||
$ | $ | $ | ( |
) | $ | |||||||||||
(in thousands) |
February 15, 2020 |
August 31, 2019 | ||||||||||||||
$ | $ | |||||||||||||||
Commercial paper, weighted average interest rate of |
||||||||||||||||
Total debt before discounts and debt issuance costs |
||||||||||||||||
Less: Discounts and debt issuance costs |
||||||||||||||||
Long-term debt |
$ | $ | ||||||||||||||
(in thousands) |
Foreign Currency and Other (2) |
Net Unrealized Gain (Loss) on Securities |
Derivatives |
Total |
||||||||||||||
Balance at November 23, 2019 |
$ | ( |
) | $ | $ | ( |
) | $ | ( |
) | ||||||||
Other comprehensive income before reclassifications (1) |
||||||||||||||||||
Amounts reclassified from Accumulated other comprehensive (loss) income( 1 ) |
( |
) |
(3) |
|||||||||||||||
Balance at February 15, 2020 |
$ | ( |
) | $ | $ | ( |
) | $ | ( |
) | ||||||||
(in thousands) |
Foreign Currency and Other (2) |
Net Unrealized Gain (Loss) on Securities |
Derivatives |
Total |
||||||||||||||
Balance at November 17, 2018 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||
Other comprehensive income before reclassifications (1) |
||||||||||||||||||
Amounts reclassified from Accumulated other comprehensive income ( 1 ) |
(3) |
|||||||||||||||||
Balance at February 9, 2019 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) |
(1) |
Amounts in parentheses indicate debits to Accumulated other comprehensive loss. |
(2) |
Foreign currency is shown net of U.S. tax to account for foreign currency impacts of certain undistributed non-U.S. subsidiaries earnings. Other foreign currency is not shown net of additional U.S. tax as other basis differences of non-U.S. subsidiaries are intended to be permanently reinvested. |
(3) |
Represents gains on derivatives, net of taxes of $ |
(in th ousands) |
Foreign Currency and Other (2) |
Net Unrealized Gain (Loss) on Securities |
Derivatives |
Total |
||||||||||||
Balance at August 31, 2019 |
$ | ( |
) | $ | $ | ( |
) | $ | ( |
) | ||||||
Other comprehensive income (loss) before reclassifications (1) |
( |
) | ||||||||||||||
Amounts reclassified from Accumulated other comprehensive income (loss) (1) |
(3) |
(4) |
||||||||||||||
Balance at February 15, 2020 |
$ | ( |
) | $ | $ | ( |
) | $ |
( |
) | ||||||
(in th ousands) |
Foreign Currency and Other (2) |
Net Unrealized Gain (Loss) on Securities |
Derivatives |
Total |
||||||||||||
Balance at August 25, 2018 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Other comprehensive income (loss) before reclassifications (1) |
( |
) | ( |
) | ||||||||||||
Amounts reclassified from Accumulated other comprehensive (loss) (1) |
(4) |
|||||||||||||||
Balance at February 9, 2019 |
$ |
( |
) | $ | ( |
) | $ | ( |
) | $ |
( |
) | ||||
(1) |
Amounts in parentheses indicate debits to Accumulated other comprehensive loss. |
(2) |
Foreign currency is shown net of U.S. tax to account for foreign currency impacts of certain undistributed non-U.S. subsidiaries earnings. Other foreign currency is not shown net of additional U.S. tax as other basis differences of non-U.S. subsidiaries are intended to be permanently reinvested. |
(3) |
Represents realized losses on marketable debt securities, net of tax benefit of $ |
(4) |
Represents gains on derivatives, net of taxes of $ |
(in thousands) |
Estimated Useful Life |
Gross Carrying Amount |
Accumulated Amortization |
Net Carrying Amount |
||||||||||||
Amortizing intangible assets: |
||||||||||||||||
Technology |
$ | $ | ( |
) | $ | |||||||||||
Customer relationships |
( |
) | ||||||||||||||
Total intangible assets other than goodwill |
$ | $ | ( |
) | $ |
|||||||||||
(in thousands) |
Classification |
, 2020 |
||||
|
|
|
|
| ||
Assets: |
||||||
Operating |
Operating lease right-of-use assets |
$ | |
|||
Finance |
Property and equipment |
|
||||
Total lease assets |
$ | |
||||
|
||||||
Liabilities: Current: |
||||||
Operating |
Current portion of operating lease liabilities |
$ | |
|||
Finance |
Accrued expenses and other |
|
||||
Noncurrent: |
||||||
Operating |
Operating lease liabilities, less current portion |
|
||||
Finance |
Other long-term liabilities |
|
||||
Total lease liabilities |
$ | |
||||
(in thousands) |
Statement of Income Location |
Twelve Weeks Ended February 15, 2020 |
Twenty-Four Weeks Ended February 15, 2020 |
|||||||
|
|
|
|
|
|
|
| |||
Finance lease cost: |
||||||||||
Amortization of lease assets |
Depreciation and amortization |
$ | |
$ | |
|||||
Interest on lease liabilities |
Interest expense, net |
|
|
|||||||
Operating lease cost (1) |
Selling, general and administrative expenses |
|
|
|||||||
|
||||||||||
Total lease cost |
$ | |
$ | |
||||||
(in thousands) |
Finance Leases |
Operating Leases |
Total |
|||||||||||||||||||
2020 |
$ |
|
$ |
|
$ |
|
||||||||||||||||
2021 |
|
|
|
|
|
|||||||||||||||||
2022 |
|
|
|
|
||||||||||||||||||
2023 |
|
|
|
|||||||||||||||||||
2024 |
|
|
|
|||||||||||||||||||
Thereafter |
|
|
|
|||||||||||||||||||
Total lease payments |
|
|
|
|||||||||||||||||||
Less: Interest |
( |
) |
( |
) |
( |
) | ||||||||||||||||
Present value of lease liabilities |
$ |
|
$ |
|
$ |
|
||||||||||||||||
February 15, 2020 | |||
Weighted-average remaining lease term in years, inclusive of renewal options that are reasonably certain to be exercised |
|||
Finance leases – real estate |
| ||
Finance leases – vehicles |
| ||
Operating leases |
| ||
Weighted-average discount rate: |
|||
Finance leases – real estate |
| ||
Finance leases – vehicles |
| ||
Operating leases |
|
(in thousands) |
Twenty-Four Weeks Ended February 15, 2020 | ||
|
|
|
|
Cash paid for amounts included in the measurement of lease liabilities – operating cash flows from operating leases |
| ||
Leased assets obtained in exchange for new finance lease liabilities |
| ||
Leased assets obtained in exchange for new operating lease liabilities |
|
Twelve Weeks Ended |
Twenty-Four Weeks Ended |
|||||||||||||||
(in thousands) |
February 15, 2020 |
February 9, 2019 |
February 15, 2020 |
February 9, 2019 |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net Sales |
||||||||||||||||
Auto Parts Stores |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Other |
|
|
|
|
||||||||||||
Total |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Segment Profit |
||||||||||||||||
Auto Parts Stores |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Other |
|
|
|
|
||||||||||||
Gross profit |
|
|
|
|
||||||||||||
Operating, selling, general and administrative expenses |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Interest expense, net |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Income before income taxes |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
A |
B |
A-B=C |
D |
C+D |
||||||||||||||||
(in thousands, except percentage) |
Fiscal Year Ended August 31, 2019 (1) |
Twenty-Four Weeks Ended February 9, 2019 |
Twenty-Nine Weeks Ended August 31, 2019 |
Twenty-Four Weeks Ended February 15, 2020 |
Trailing Four Quarters Ended February 15, 2020 |
|||||||||||||||
Net income |
$ | 1,617,221 |
$ | 646,044 |
$ | 971,177 |
$ | 649,620 |
$ | 1,620,797 |
||||||||||
Adjustments: |
||||||||||||||||||||
Interest expense |
184,804 |
80,369 |
104,435 |
88,078 |
192,513 |
|||||||||||||||
Rent expense |
332,726 |
144,360 |
188,366 |
150,751 |
339,117 |
|||||||||||||||
Tax effect (2) |
(107,129 |
) | (46,519 |
) | (60,610 |
) | (49,438 |
) | (110,048 |
) | ||||||||||
Deferred tax liabilities, net of repatriation tax |
(6,340 |
) | (6,340 |
) | – |
– |
– |
|||||||||||||
Adjusted after-tax return |
$ | 2,021,282 |
$ | 817,914 |
$ | 1,203,368 |
$ | 839,011 |
$ | 2,042,379 |
||||||||||
Average debt (3) |
$ | 5,241,651 |
||||||||||||||||||
Average stockholders’ deficit (3) |
(1,676,987 |
) | ||||||||||||||||||
Add : Rent x 6 (4) |
2,034,702 |
|||||||||||||||||||
Average finance lease liabilities (3) |
178,416 |
|||||||||||||||||||
Invested capital |
$ | 5,777,782 |
||||||||||||||||||
Adjusted after-tax ROIC |
35.3% |
|||||||||||||||||||
A |
B |
A-B=C |
D |
C+D |
||||||||||||||||
(in thousands, except percentage) |
Fiscal Year Ended August 25, 2018 |
Twenty-Four Weeks Ended February 10, 2018 |
Twenty-Eight Weeks Ended August 25, 2018 |
Twenty-Four Weeks Ended February 9, 2019 |
Trailing Four Quarters Ended February 9, 2019 |
|||||||||||||||
Net income |
$ | 1,337,536 |
$ | 570,533 |
$ | 767,003 |
$ | 646,044 |
$ | 1,413,047 |
||||||||||
Adjustments: |
||||||||||||||||||||
Impairment before tax impact |
193,162 |
193,162 |
– |
– |
– |
|||||||||||||||
Pension termination charges before tax impact |
130,263 |
– |
130,263 |
– |
130,263 |
|||||||||||||||
Interest expense |
174,527 |
78,229 |
96,298 |
80,369 |
176,667 |
|||||||||||||||
Rent expense |
315,580 |
142,712 |
172,868 |
144,360 |
317,228 |
|||||||||||||||
Tax effect (2) |
(211,806 |
) | (112,656 |
) | (99,150 |
) | (52,861 |
) | (152,011 |
) | ||||||||||
Deferred tax liabilities, net of repatriation tax |
(132,113 |
) | (136,679 |
) | 4,566 |
(6,340 |
) | (1,774 |
) | |||||||||||
Adjusted after-tax return |
$ | 1,807,149 |
$ | 735,301 |
$ | 1,071,848 |
$ | 811,572 |
$ | 1,883,420 |
||||||||||
Average debt (3) |
$ | 5,054,281 |
||||||||||||||||||
Average stockholders’ deficit (3) |
(1,493,097 |
) | ||||||||||||||||||
Add: Rent x 6 |
1,903,368 |
|||||||||||||||||||
Average finance lease liabilities (3) |
156,840 |
|||||||||||||||||||
Invested capital |
$ | 5,621,392 |
||||||||||||||||||
Adjusted after-tax ROIC |
33.5% |
|||||||||||||||||||
(1) | The fiscal year ended August 31, 2019 consists of 53 weeks. |
(2) | Effective tax rate over trailing four quarters ended February 15, 2020 is 20.7% . Effective tax rate over trailing four quarters ended February 9, 2019 is 28.1% for pension termination and 23.5% for interest and rent expense. |
(3) | All averages are computed based on trailing 5 quarter balances. |
(4) | Effective September 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842), the new lease accounting standard that required the Company to recognize operating lease assets and liabilities in the balance sheet. The table below outlines the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the twenty-four weeks ended February 15, 2020. |
Total lease cost per ASC 842, for the 24 weeks ended February 15, 2020 |
$ | 190,390 |
||
Less: Finance lease interest and amortization |
(28,195 |
) | ||
Less: Variable operating lease components, related to insurance and common area maintenance for the 24 weeks ended February 15, 2020 |
(11,444 |
) | ||
Rent expense for the 24 weeks ended February 15, 2020 |
150,751 |
|||
Add: Rent expense for the 29 weeks ended August 31, 2019, as previously reported prior to the adoption of ASC 842 |
188,366 |
|||
Rent expense for the 53 weeks ended February 15, 2020 |
$ | 339,117 |
||
Reconciliation of Non-GAAP Financial Measure: Adjusted Debt to EBITDAR |
A |
B |
A-B=C |
D |
C+D |
||||||||||||||||
(in thousands, except ratio) |
Fiscal Year Ended August 31, 2019 |
Twenty-Four Weeks Ended February 9, 2019 |
Twenty-Nine Weeks Ended August 31, 2019 |
Twenty-Four Weeks Ended February 15, 2020 |
Trailing Four Quarters Ended February 15, 2020 |
|||||||||||||||
Net income |
$ | 1,617,221 |
$ | 646,044 |
$ | 971,177 |
$ | 649,620 |
$ | 1,620,797 |
||||||||||
Add: Interest expense |
184,804 |
80,369 |
104,435 |
88,078 |
192,513 |
|||||||||||||||
Income tax expense |
414,112 |
161,426 |
252,686 |
170,263 |
422,949 |
|||||||||||||||
Adjusted EBIT |
2,216,137 |
887,839 |
1,328,298 |
907,961 |
2,236,259 |
|||||||||||||||
Add: Depreciation expense |
369,957 |
166,230 |
203,727 |
180,420 |
384,147 |
|||||||||||||||
Rent expense |
332,726 |
144,360 |
188,366 |
150,751 |
339,117 |
|||||||||||||||
Share-based expense |
43,255 |
21,558 |
21,697 |
22,107 |
43,804 |
|||||||||||||||
Adjusted EBITDAR |
$ | 2,962,075 |
$ | 1,219,987 |
$ | 1,742,088 |
$ | 1,261,239 |
$ | 3,003,327 |
||||||||||
Debt |
$ | 5,451,471 |
||||||||||||||||||
Finance lease liabilities |
196,047 |
|||||||||||||||||||
Add: Rent x 6 (1) |
2,034,702 |
|||||||||||||||||||
Adjusted debt |
$ | 7,682,220 |
||||||||||||||||||
Adjusted debt to EBITDAR |
2.6 |
|||||||||||||||||||
A |
B |
A-B=C |
D |
C+D |
||||||||||||||||
(in thousands, except ratio) |
Fiscal Year Ended August 25, 2018 |
Twenty-Four Weeks Ended February 10, 2018 |
Twenty-Eight Weeks Ended August 25, 2018 |
Twenty-Four Weeks Ended February 9, 2019 |
Trailing Four Quarters Ended February 9, 2019 |
|||||||||||||||
Net income |
$ | 1,337,536 |
$ | 570,533 |
$ | 767,003 |
$ | 646,044 |
$ | 1,413,047 |
||||||||||
Add: Impairment before tax impact |
193,162 |
193,162 |
– |
– |
– |
|||||||||||||||
Pension termination charges before tax impact |
130,263 |
– |
130,263 |
– |
130,263 |
|||||||||||||||
Interest expense |
174,527 |
78,229 |
96,298 |
80,369 |
176,667 |
|||||||||||||||
Income tax expense |
298,793 |
25,090 |
273,703 |
161,426 |
435,129 |
|||||||||||||||
Adjusted EBIT |
2,134,281 |
867,014 |
1,267,267 |
887,839 |
2,155,106 |
|||||||||||||||
Add: Depreciation expense |
345,084 |
157,337 |
187,747 |
166,230 |
353,977 |
|||||||||||||||
Rent expense |
315,580 |
142,712 |
172,868 |
144,360 |
317,228 |
|||||||||||||||
Share-based expense |
43,674 |
23,764 |
19,910 |
21,558 |
41,468 |
|||||||||||||||
Adjusted EBITDAR |
$ | 2,838,619 |
$ | 1,190,827 |
$ | 1,647,792 |
$ | 1,219,987 |
$ | 2,867,779 |
||||||||||
Debt |
$ | 5,111,201 |
||||||||||||||||||
Finance lease liabilities |
154,923 |
|||||||||||||||||||
Add: Rent x 6 |
1,903,368 |
|||||||||||||||||||
Adjusted debt |
$ | 7,169,492 |
||||||||||||||||||
Adjusted debt to EBITDAR |
2.5 |
|||||||||||||||||||
(1) | Effective September 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842), the new lease accounting standard that required the Company to recognize operating lease assets and liabilities in the balance sheet. The table below outlines the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the twenty-four weeks ended February 15, 2020. |
Total lease cost per ASC 842, for the 24 weeks ended February 15, 2020 |
$ | 190,390 |
||
Less: Finance lease interest and amortization |
(28,195 |
) | ||
Less: Variable operating lease components, related to insurance and common area maintenance for the 24 weeks ended February 15, 2020 |
(11,444 |
) | ||
Rent expense for the 24 weeks ended February 15, 2020 |
150,751 |
|||
Add: Rent expense for the 29 weeks ended August 31, 2019, as previously reported prior to the adoption of ASC 842 |
188,366 |
|||
Rent expense for the 53 weeks ended February 15, 2020 |
$ | 339,117 |
||
Item 3. |
Quantitative and Qualitative Disclosures about Market Risk |
Item 4. |
Controls and Procedures |
Item 1. |
Legal Proceedings |
Item 1A. |
Risk Factors |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
Period |
Total Number of Shares Purchased |
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs |
||||||||||||
November 24, 2019 to December 21, 2019 |
101,815 |
$ | 1,178.58 |
101,815 |
$ | 1,156,796,693 |
||||||||||
December 22, 2019 to January 18, 2020 |
165,045 |
1,180.58 |
165,045 |
961,947,076 |
||||||||||||
January 19, 2020 to February 15, 2020 |
– |
– |
– |
961,947,076 |
||||||||||||
Total |
266,860 |
$ | 1,179.82 |
266,860 |
$ | 961,947,076 |
||||||||||
Item 3. |
Defaults Upon Senior Securities |
Item 4. |
Mine Safety Disclosures |
Item 5. |
Other Information |
Item 6. |
Exhibits |
3.1 |
||||
3.2 |
||||
15.1 |
||||
31.1 |
||||
31.2 |
||||
32.1* |
||||
32.2* |
||||
101. INS |
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||
101.SCH |
Inline XBRL Taxonomy Extension Schema Document | |||
101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||
101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document | |||
101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document | |||
101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||
104. |
The cover page for the Company’s Quarterly Report on Form 10-Q for the quarter ended February 15, 2020, has been formatted in Inline XBRL. |
AUTOZONE, INC. |
By: /s/ WILLIAM T. GILES |
William T. Giles |
Chief Financial Officer and Executive Vice President |
Finance, Information Technology and Store Development |
(Principal Financial Officer) |
By: /s/ CHARLIE PLEAS, III |
Charlie Pleas, III |
Senior Vice President, Controller |
(Principal Accounting Officer) |