UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549


 

FORM 8-K

 

CURRENT REPORT
P
ursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

 

Date of report  (Date of earliest event reported)  May 3, 2016

 

 

SMART & FINAL STORES, INC.
(Exact Name of Registrant as Specified in Charter)

 

 

Delaware

 

 

 

001-36626

 

 

 

80-0862253

 

(State or Other Jurisdiction
of Incorporation)

 

 

(Commission
File Number)

 

 

(IRS Employer
Identification No.)

 

 

 

600 Citadel Drive, Commerce, CA

 

 

 

90040

 

 

 

 

 

 

(Address of Principal Executive Offices)

 

 

(Zip Code)

 

 

Registrant’s telephone number, including area code (323) 869-7500

 

 

 

 

 

 

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 



 

Item 2.02        Results of Operations and Financial Condition.

 

On May 3, 2016, Smart & Final Stores, Inc. issued a press release announcing its financial results for the quarter ended March 27, 2016.  The text of the press release is included as Exhibit 99.1 to this Form 8-K.

 

The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

 

Item 9.01.       Financial Statements and Exhibits.

 

(d)                   Exhibits:

 

Exhibit Number          Description

 

99.1                                                                                                                    Press Release, dated May 3, 2016

 



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

SMART & FINAL STORES, INC.

 

 

Date:  May 3, 2016

 

 

 

 

 

 

By:

/s/ Richard N. Phegley

 

Name:

Richard N. Phegley

 

Title:

Senior Vice President and Chief Financial Officer

 



 

Exhibit Index

 

Exhibit Number

 

Description

 

 

 

99.1

 

Press Release, dated May 3, 2016

 


Exhibit 99.1

 

 

Smart & Final Stores, Inc. Reports First Quarter 2016 Financial Results

 

COMMERCE, Calif. (May 3, 2016) –Smart & Final Stores, Inc. (the “Company”) (NYSE:SFS), the value-oriented food and everyday staples retailer, today reported financial results for the twelve-week period ended March 27, 2016.

 

First Quarter Highlights:

·                 Net sales increased 10.5% to $908.5 million

·                 Comparable store sales growth of 2.0%

·                 Net loss of $2.0 million, or $0.03 per diluted share

·                 Adjusted net income of $6.3 million, or $0.08 per diluted share

·                 Adjusted EBITDA of $35.0 million

·                 290 stores at quarter-end, including 143 Smart & Final Extra! stores

 

“Smart & Final Stores’ positive momentum has continued with a solid start to 2016.  Strong traffic growth contributed to a 2.0% comparable store sales increase in the first quarter despite persistent deflationary headwinds,” said David Hirz, President and Chief Executive Officer.  “We continue to drive engagement and attract new customers with our successful merchandising and marketing initiatives.”

 

Mr. Hirz added, “Our exciting store development plans are ahead of schedule. Next week we plan to open the last of the 33 acquired former Albertsons and Safeway locations, which were briefly operated under the Haggen banner.  With these locations, we’re increasing Smart & Final’s presence in our important Los Angeles and Orange County markets, as well as doubling our penetration in the California Central Coast and San Diego markets.  In all of our markets, we look forward to building deeper community ties and meeting the shopping needs of each unique area.”

 

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 adjusted net income, adjusted net income per share, adjusted net income per diluted share, EBITDA and adjusted EBITDA, 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 numbers below are first presented on a GAAP basis and then on an adjusted basis.

 

First Quarter Fiscal 2016 Financial Results

Net sales were $908.5 million, representing a 10.5% increase as compared to $822.2 million in the same period of 2015.  Net sales growth was driven by a 2.0% increase in comparable store sales and from the net sales contribution of new stores. The growth in comparable store sales was comprised of a 2.4% increase in comparable transaction count and a 0.4% decrease in comparable average transaction size, including the impact of deflation in key product categories in both store banners.

 

1



 

Net sales for Smart & Final banner stores were $709.3 million, a 12.8% increase as compared to $628.8 million in the same period of 2015.  Comparable store sales growth for the Smart & Final banner was 2.5% in the first quarter.

 

Net sales for Cash & Carry banner stores were $199.1 million, a 3.0% increase as compared to $193.3 million in the same period of 2015.  Comparable store sales growth for the Cash & Carry banner was 0.3% in the first quarter.

 

Gross margin from operations was $128.4 million, a 5.1% increase as compared to $122.2 million in the same period of 2015. Gross margin rate in the first quarter was 14.1% as compared to 14.9% in the same period of 2015, and was impacted by the carrying costs associated with the acquired former Haggen banner stores.

 

Operating and administrative expenses were $125.1 million, a 17.0% increase as compared to $107.0 million in the same period of 2015. This increase was primarily related to expenses associated with 32 new stores developed over the prior 12 months and related support costs.

 

Net loss was $2.0 million, including the effect of higher store development costs, as compared to net income of $4.9 million in the same period of 2015. Net loss per diluted share was $0.03 as compared to net income per diluted share of $0.06 in the same period of 2015.

 

Adjusted net income was $6.3 million, a decrease of 19.1% as compared to $7.7 million for the same period of 2015. Adjusted net income per diluted share was $0.08 as compared to $0.10 in the same period of 2015.

 

Adjusted EBITDA remained unchanged at $35.0 million, as compared to the same period of 2015.

 

Growth and Development

During the first quarter of fiscal year 2016, the Company opened 14 new Smart & Final Extra! stores and completed two relocations of legacy Smart & Final stores to the Smart & Final Extra! format stores. As of March 27, 2016, the Company operated a total of 143 Smart & Final Extra! and 92 legacy Smart & Final stores, and 55 Cash & Carry stores.

 

Operating Stores at Quarter End (March 27, 2016)

 

 

 

Smart & Final Banner Stores

 

 

 

 

 

 

Extra!
format

 

Legacy
format

 

Total

 

Cash & Carry
Banner Stores

 

Total
Company

End of Fiscal Year 2015

 

127

 

94

 

221

 

55

 

276

New stores

 

14

 

-

 

14

 

-

 

14

Relocations, net

 

2

 

(2)

 

-

 

-

 

-

Conversions

 

-

 

-

 

-

 

-

 

-

End of 1st Quarter 2016

 

143

 

92

 

235

 

55

 

290

 

2



 

Leverage and Liquidity

At March 27, 2016, the Company’s debt, net of debt issuance costs, was $616.5 million and cash and cash equivalents were $63.1 million.

 

In the twelve-week period ended March 27, 2016, the Company generated cash from operations of $11.9 million and invested $30.3 million in capital expenditures, primarily related to the development of Extra! format stores and to improvements of existing assets.

 

Outlook

The Company is maintaining the previously issued guidance for the 2016 fiscal year ending January 1, 2017:

 

Net sales growth

15% - 16%

Comparable store sales growth 

2.5% - 3.0%

Unit growth (net new stores)

33 Smart & Final Extra!

4 - 5 Cash & Carry

Relocations of existing stores to Extra! format

6 Smart & Final

 

Conversions of legacy stores to Extra! format

6 stores

Adjusted EBITDA

$205 - $210 million

Adjusted net income

$58 - $60 million

Adjusted diluted EPS

$0.75 - $0.77

Capital expenditures 

$150 - $160 million

Basic weighted average shares

73.3 million

Fully diluted weighted average shares

77.6 million

 

The above guidance includes certain non-GAAP financial measures (namely adjusted net income, adjusted net income per diluted share and Adjusted EBITDA), 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: costs associated with the acquired Haggen store locations of approximately $19 million, non-cash rent related to other stores of approximately $6 million and share-based compensation expense of approximately $9 million. 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.

 

In the second quarter of 2016, the Company expects to open 16 new Smart & Final Extra! stores and complete two relocations of legacy Smart & Final stores to the Extra! format. At the end of the second quarter, the Company expects to have opened 30 of the 33 new Smart & Final Extra! stores planned for fiscal year 2016.

 

3



 

First Quarter 2016 Conference Call

The Company will host a conference call today at 2:00 p.m. PT / 5:00 p.m. ET to discuss its first quarter 2016 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 “Investors” section of the Company’s web site at http://www.smartandfinal-investor.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 (877) 870-5176 (U.S.) or (858) 384-5517 (International) and entering the replay pin number: 13634612.  The telephonic replay will be available until 11:59 p.m. Eastern Time, on Tuesday, May 17, 2016.

 

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 March 27, 2016, the Company operated 290 grocery and foodservice stores under the “Smart & Final,” “Smart & Final Extra!” and “Cash & Carry Smart Foodservice” banners in California, Oregon, Washington, Arizona, Nevada, and Idaho, with an additional 15 stores in Northwestern Mexico operated through a joint venture. In business for 145 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.

 

INVESTOR CONTACTS:

 

 

Laura Bainbridge / Andrew Greenebaum

MEDIA CONTACT:

 

Addo Communications

press@smartandfinal.com

 

O: 310.829.5400

 

 

investors@smartandfinal.com

 

 

 

4



 

Smart & Final Stores, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

(In Thousands, Except Share and Per Share Amounts)

 

 

 

 

Twelve Weeks Ended

 

 

 

March 27, 2016

 

March 22, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

908,453

 

$

822,170

 

Cost of sales, buying and occupancy

 

780,102

 

700,005

 

Gross margin

 

128,351

 

122,165

 

 

 

 

 

 

 

Operating and administrative expenses

 

125,082

 

106,951

 

Income from operations

 

3,269

 

15,214

 

 

 

 

 

 

 

Interest expense, net

 

7,311

 

7,998

 

Equity in earnings of joint venture

 

444

 

515

 

(Loss) income before income taxes

 

(3,598)

 

7,731

 

 

 

 

 

 

 

Income tax benefit (provision)

 

1,580

 

(2,848)

 

Net (loss) income

 

$

(2,018)

 

$

4,883

 

 

 

 

 

 

 

Net (loss) earnings per share:

 

 

 

 

 

Basic

 

$

(0.03)

 

$

0.07

 

Diluted

 

$

(0.03)

 

$

0.06

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

Basic

 

73,189,149

 

73,084,282

 

Diluted

 

73,189,149

 

76,654,281

 

 

5



 

Smart & Final Stores, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In Thousands, Except Share and Per Share Amounts)

 

 

 

March 27, 2016

 

 

January 3, 2016

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

  $

63,073

 

 

  $

59,327

 

Accounts receivable, less allowances of $448 and $454 at

 

 

 

 

 

 

March 27, 2016 and January 3, 2016, respectively

 

24,903

 

 

27,304

 

Inventories

 

235,250

 

 

234,289

 

Prepaid expenses and other current assets

 

34,026

 

 

29,072

 

Deferred income taxes

 

22,471

 

 

22,471

 

Total current assets

 

379,723

 

 

372,463

 

 

 

 

 

 

 

 

Property, plant, and equipment:

 

 

 

 

 

 

Land

 

10,810

 

 

10,940

 

Buildings and improvements

 

20,021

 

 

20,441

 

Leasehold improvements

 

245,626

 

 

237,820

 

Fixtures and equipment

 

282,775

 

 

266,080

 

Construction in progress

 

37,223

 

 

19,501

 

 

 

596,455

 

 

554,782

 

Less accumulated depreciation and amortization

 

190,114

 

 

174,906

 

 

 

406,341

 

 

379,876

 

 

 

 

 

 

 

 

Capitalized software, net of accumulated amortization of

 

 

 

 

 

 

$13,110 and $12,356 at March 27, 2016 and

 

 

 

 

 

 

January 3, 2016, respectively

 

11,077

 

 

11,365

 

Other intangible assets, net

 

374,912

 

 

376,122

 

Goodwill

 

611,242

 

 

611,242

 

Equity investment in joint venture

 

13,219

 

 

12,763

 

Other assets

 

55,464

 

 

53,250

 

Total assets

 

  $

1,851,978

 

 

  $

1,817,081

 

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

  $

185,432

 

 

  $

194,149

 

Accrued salaries and wages

 

30,210

 

 

33,859

 

Accrued expenses

 

98,195

 

 

77,374

 

Current portion of debt, less issuance costs

 

29,052

 

 

3,904

 

Total current liabilities

 

342,889

 

 

309,286

 

 

 

 

 

 

 

 

Long-term debt, less issuance costs

 

587,415

 

 

586,956

 

Deferred income taxes

 

127,761

 

 

128,752

 

Postretirement and postemployment benefits

 

116,948

 

 

117,417

 

Other long-term liabilities

 

114,264

 

 

108,099

 

 

 

 

 

 

 

 

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 - 73,659,156 and 73,789,608 at

 

 

 

 

 

 

March 27, 2016 and January 3, 2016, respectively

 

74

 

 

74

 

Additional paid-in capital

 

503,007

 

 

502,304

 

Retained earnings

 

66,413

 

 

70,181

 

Accumulated other comprehensive loss

 

(6,793

)

 

(5,988

)

Total stockholders’ equity

 

562,701

 

 

566,571

 

Total liabilities and stockholders’ equity

 

  $

1,851,978

 

 

  $

1,817,081

 

 

6



 

Smart & Final Stores, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In Thousands)

 

 

 

Twelve Weeks Ended

 

 

 

March 27, 2016

 

 

March 22, 2015

 

Operating activities

 

 

 

 

 

 

Net (loss) income

 

  $

(2,018

)

 

  $

4,883

 

Adjustments to reconcile net (loss) income to net cash provided

 

 

 

 

 

 

by operating activities:

 

 

 

 

 

 

Depreciation

 

10,189

 

 

8,056

 

Amortization

 

7,345

 

 

6,445

 

Amortization of deferred financing costs and debt discount

 

639

 

 

655

 

Share-based compensation

 

1,507

 

 

2,384

 

Excess tax benefits related to share-based payments

 

(379

)

 

(55

)

Deferred income taxes

 

(446

)

 

(883

)

Equity in earnings of joint venture

 

(444

)

 

(515

)

Gain on disposal of property, plant, and equipment

 

78

 

 

(3

)

Asset impairment

 

128

 

 

431

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

2,401

 

 

4,120

 

Inventories

 

(961

)

 

12,313

 

Prepaid expenses and other assets

 

(5,838

)

 

9,061

 

Accounts payable

 

(8,717

)

 

(19,828

)

Accrued salaries and wages

 

(3,649

)

 

1,944

 

Other accrued liabilities

 

12,037

 

 

9,059

 

Net cash provided by operating activities

 

11,872

 

 

38,067

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

Purchases of property, plant, and equipment

 

(28,217

)

 

(22,920

)

Proceeds from disposal of property, plant, and equipment

 

386

 

 

4,889

 

Assets acquired in Haggen Transaction

 

(1,801

)

 

 

Investment in capitalized software

 

(696

)

 

(1,463

)

Other

 

(209

)

 

(1,260

)

Net cash used in investing activities

 

(30,537

)

 

(20,754

)

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

Proceeds from exercise of stock options

 

146

 

 

107

 

Payment of minimum withholding taxes on net share settlement of

 

 

 

 

 

 

share-based compensation awards

 

(91

)

 

 

Fees paid in conjunction with debt financing

 

(31

)

 

(31

)

Borrowings on bank line of credit

 

25,000

 

 

 

Payments of public offering costs

 

 

 

(214

)

Excess tax benefits related to share-based payments

 

379

 

 

55

 

Stock repurchases

 

(2,992

)

 

 

Net cash provided by (used in) financing activities

 

22,411

 

 

(83

)

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

3,746

 

 

17,230

 

Cash and cash equivalents at beginning of period

 

59,327

 

 

106,847

 

Cash and cash equivalents at end of period

 

  $

63,073

 

 

  $

124,077

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

Interest

 

  $

236

 

 

  $

212

 

Income taxes

 

  $

4

 

 

  $

770

 

 

 

 

 

 

 

 

Non-cash investing and financing activities

 

 

 

 

 

 

Software development costs incurred but not paid

 

  $

79

 

 

  $

117

 

Construction in progress costs incurred but not paid

 

  $

23,660

 

 

  $

15,947

 

 

7



 

Smart & Final Stores, Inc. and Subsidiaries

 

Segment Reporting

(In Thousands)

 

 

 

Smart & Final

 

Cash & Carry

 

Corporate / Other

 

Consolidated

 

Twelve Weeks Ended March 27, 2016

 

 

 

 

 

 

 

 

 

Net sales

 

  $

709,314

 

  $

199,139

 

  $

-

 

 

  $

908,453

 

Cost of sales, distribution and store occupancy

 

606,682

 

171,117

 

2,303

 

 

780,102

 

Operating and administrative expenses

 

95,200

 

14,825

 

15,057

 

 

125,082

 

Income (loss) from operations

 

  $

7,432

 

  $

13,197

 

  $

(17,360

)

 

  $

3,269

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

  $

26,599

 

  $

1,062

 

  $

1,252

 

 

  $

28,913

 

Assets acquired in Haggen Transaction

 

  $

1,801

 

  $

-

 

  $

-

 

 

  $

1,801

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Weeks Ended March 22, 2015

 

 

 

 

 

 

 

 

 

 

Net sales

 

  $

628,836

 

  $

193,334

 

  $

-

 

 

  $

822,170

 

Cost of sales, distribution and store occupancy

 

530,620

 

167,307

 

2,078

 

 

700,005

 

Operating and administrative expenses

 

78,247

 

13,887

 

14,817

 

 

106,951

 

Income (loss) from operations

 

  $

19,969

 

  $

12,140

 

  $

(16,895

)

 

  $

15,214

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

  $

20,867

 

  $

1,678

 

  $

1,838

 

 

  $

24,383

 

 

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 adjusted net income, adjusted net income per share, adjusted net income per diluted share, EBITDA and Adjusted EBITDA) 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 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.  The Company defines EBITDA as net income before depreciation and amortization, interest expense and provision for income tax, and adjusted EBITDA as EBITDA adjusted for the items set forth in the table below.

 

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 adjusted net income, EBITDA and adjusted EBITDA to net income, and adjusted net income per share and adjusted net income per diluted share to net income per share, for the twelve-week period ended March 27, 2016.

 

8



 

Smart & Final Stores, Inc. and Subsidiaries

Reconciliation of EBITDA to Adjusted EBITDA

(Unaudited)

(In Thousands)

 

 

 

Twelve Weeks Ended

 

 

March 27, 2016

 

March 22, 2015

Net (loss) income

 

  $

(2,018

)

 

  $

4,883

 

Depreciation and amortization

 

17,534

 

 

14,501

 

Interest expense, net

 

7,311

 

 

7,998

 

Income tax (benefit) provision

 

(1,580

)

 

2,848

 

EBITDA

 

21,247

 

 

30,230

 

 

 

 

 

 

 

 

Adjustments to EBITDA

 

 

 

 

 

 

Transaction costs (a)

 

-

 

 

61

 

Net loss from closed stores and exit costs (b)

 

1,136

 

 

90

 

Loss from asset dispositions (c)

 

128

 

 

408

 

Share-based compensation expense (d)

 

1,507

 

 

2,384

 

Non-cash rent (e)

 

1,084

 

 

793

 

Pre-opening costs (f)

 

191

 

 

1,133

 

Costs associated with acquired Haggen store locations (g)

 

9,740

 

 

-

 

Other items (h)

 

6

 

 

(70

)

Adjusted EBITDA

 

  $

35,039

 

 

  $

35,029

 

 

9



 

Smart & Final  Stores, Inc. and Subsidiaries

Reconciliation of Net (Loss) Income to Non-GAAP Adjusted Net Income

(Unaudited)

(In Thousands, Except Share and Per Share Amounts)

 

 

 

Twelve Weeks Ended

 

 

March 27, 2016

 

March 22, 2015

 

Net (loss) income

 

  $

(2,018

)

 

  $

4,883

 

Income tax (benefit) provision

 

(1,580

)

 

2,848

 

Net income before income taxes

 

(3,598

)

 

7,731

 

 

 

 

 

 

 

 

Adjustments to Net (Loss) Income

 

 

 

 

 

 

Transaction costs (a)

 

-

 

 

61

 

Net loss from closed stores and exit costs (b)

 

1,136

 

 

90

 

Loss from asset dispositions (c)

 

128

 

 

408

 

Share-based compensation expense (d)

 

1,507

 

 

2,384

 

Non-cash rent (e)

 

1,084

 

 

793

 

Pre-opening costs (f)

 

191

 

 

1,133

 

Costs associated with acquired Haggen store locations (g)

 

9,740

 

 

-

 

Other items (h)

 

6

 

 

(70

)

Adjusted income tax provision

 

(3,941

)

 

(4,805

)

Adjusted net income

 

  $

6,253

 

 

  $

7,725

 

 

 

 

 

 

 

 

Adjusted Net Income Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share - basic

 

  $

(0.03

)

 

  $

0.07

 

Per share impact of net income adjustments

 

0.12

 

 

0.04

 

Adjusted net income per share - basic

 

  $

0.09

 

 

  $

0.11

 

Net income per share - diluted

 

  $

(0.03

)

 

  $

0.06

 

Per share impact of net income adjustments

 

0.11

 

 

0.04

 

Adjusted net income per share - diluted

 

  $

0.08

 

 

  $

0.10

 

 

 

 

 

 

 

 

Weighted average shares - basic

 

73,189,149

 

 

73,084,282

 

Weighted average shares - fully diluted

 

77,486,353

 

 

76,654,281

 

 

(a)  Represents costs primarily associated with the Company’s secondary public offering that were charged to expense in the quarter ended March 22, 2015.

(b)  Represents costs associated with store closure and exit costs.

(c)  Represents non-cash loss associated with asset dispositions and impairment charges.

(d)  Represents expenses associated with the Company’s equity-based incentive award program.

(e)  Represents non-cash component of recognized rent expense.

(f)   Represents new store and relocation opening costs consisting primarily of rent, utilities, distribution, store labor and advertising.

(g)  Represents new store opening costs and non-cash rent related to acquired former Haggen store locations.

(h)  Represents (i) severance costs in the quarters ended March 27, 2016 and March 22, 2015 and (ii) death benefit income from a Company-owned life insurance policy in the quarter ended March 22, 2015.

 

10


Document Format Files

Seq Description Document Type Size
1 8-K a16-10412_18k.htm 8-K 30853
2 EX-99.1 a16-10412_1ex99d1.htm EX-99.1 417642
3 GRAPHIC g104121mm01i001.jpg GRAPHIC 1927
  Complete submission text file 0001104659-16-117185.txt   452578