hhgregg, Inc. (NYSE: HGG) ("hhgregg" or the "Company") today
announced operating results for the fourth quarter and full year
ended March 31, 2016 as compared to the fourth quarter and
full year ended March 31, 2015.
Fourth Quarter
Summary
- Net sales decreased 9.6% to $439
million year-over-year.
- Comparable store sales decreased
9.3% year-over-year, however appliance comp sales for February and
March increased 4.9%.
- Gross margin increased to 28.7%
compared to 28.6% in the prior year fourth quarter
- Net loss per diluted share, as
adjusted, was $(0.28) compared to $(0.63) in the prior year
fourth quarter.
- Adjusted EBITDA increased $7.9
million in the current year fiscal quarter from a loss of $7.8
million in the prior year fourth quarter.
Fiscal Year 2016
Summary
- Net sales decreased (8.0)% to $2.0
billion year-over-year.
- Comparable store sales decreased
(7.7)% year-over-year.
- The Company realized $66.9 million
in cost savings, primarily through better-targeted advertising
expenditures, store operations and corporate overhead expense
reductions, exceeding its fiscal year goal of $50 million.
- Adjusted EBITDA increased $14.8
million to $8.2 million compared to $(6.6) million in fiscal year
2015.
Robert Riesbeck, Chief Financial Officer and Interim President
and Chief Executive Officer, commented, “We strengthened the
company in fiscal 2016 and enter fiscal 2017 with significantly
improved EBITDA and cost savings that exceeded our target. Our
primary focus this year is on driving revenue. We finished our
fourth quarter with improved momentum, specifically in appliances
where we achieved a positive 4.9% comparable store sales increase
over February and March combined. We will be as passionate and
focused on revenue growth in fiscal 2017 as we were on cost
reductions in fiscal 2016, and believe that our past and future
investments will help us significantly improve our net sales and
profitability this fiscal year."
Three Months Ended Twelve Months Ended
March 31, March 31, (unaudited, amounts in
thousands, except share and per share data)
2016
2015 2016 2015 Net sales $ 438,840 $
485,603 $ 1,959,998 $ 2,129,374 Net sales % decrease (9.6 )% (9.8
)% (8.0 )% (8.9 )% Comparable store sales % decrease (1) (9.3 )%
(10.0 )% (7.7 )% (9.2 )% Gross profit as a % of net sales 28.7 %
28.6 % 28.3 % 28.5 % SG&A as a % of net sales 24.2 % 24.7 %
22.8 % 22.9 % Net advertising expense as a % of net sales 4.9 % 6.1
% 5.4 % 6.0 % Depreciation and amortization expense as a % of net
sales 1.6 % 1.8 % 1.6 % 1.9 % Asset impairment charges as a % of
net sales — % 1.0 % 1.1 % 2.2 % Loss from operations as a % of net
sales (2.1 )% (5.1 )% (2.6 )% (4.7 )% Net interest expense as a %
of net sales 0.2 % 0.1 % 0.1 % 0.1 % Income tax benefit (expense)
as a % of net sales 0.2 % n/m n/m (1.4 )% Net loss $ (9,085 ) $
(25,228 ) $ (54,879 ) $ (132,746 ) Net loss, as adjusted (2) $
(7,675 ) $ (17,371 ) $ (26,522 ) $ (38,685 ) Net loss per diluted
share $ (0.33 ) $ (0.91 ) $ (1.98 ) $ (4.72 ) Net loss per diluted
share, as adjusted (2) $ (0.28 ) $ (0.63 ) $ (0.96 ) $ (1.38 )
Adjusted EBITDA (3) $ 16 $ (7,838 ) 8,241 (6,589 ) Weighted average
shares outstanding—diluted 27,707,978 27,663,764 27,701,055
28,129,596 Number of stores open at the end of period 226 228
(1)
Comprised of net sales at stores in
operation for at least 14 full months, including remodeled and
relocated stores, as well as net sales for the Company’s e-commerce
site.
(2)
Amounts are adjusted in both the three and
twelve months ended March 31, 2016 and 2015 to exclude the impact
of severance due to our transformation efforts, consulting expenses
paid to outside parties to assist with our transformation efforts
and fixed asset impairment charges. Amounts are adjusted in the
three months ended March 31, 2016 for monetizing a federal tax
credit that was previously reserved. Amounts are adjusted in the
twelve months ended March 31, 2016 for the federal tax credit
previously discussed, as well as expenses associated with the
Internal Revenue Service's settlement of a prior year tax matter.
Amounts are adjusted in the twelve months ended March 31, 2015 for
establishing a valuation allowance for deferred tax asset. See the
attached reconciliation of non-GAAP measures to GAAP measures.
(3)
Amounts are adjusted in both the current
and prior year to exclude the impact of severance due to our
transformation efforts, consulting expenses paid to outside parties
to assist with our transformation efforts and fixed asset
impairment charges See the attached reconciliation of non-GAAP
measures to GAAP measures.
The Company's net sales performance in the quarter and fiscal
year ended March 31, 2016 was driven primarily by a comparable
store sales decline. Net sales mix and comparable store sales
percentage changes by product category for the three and twelve
months ended March 31, 2016 and 2015 were as follows:
Net Sales Mix Summary Comparable Store
Sales Summary
Three Months EndedMarch
31,
Twelve Months EndedMarch
31,
Three Months EndedMarch
31,
Twelve Months EndedMarch
31,
2016 2015 2016 2015
2016 2015 2016 2015
Appliances 56 % 51 % 53 % 51 % (0.4 )% (5.0 )% (3.2 )% (3.1 )%
Consumer electronics (1) 34 % 38 % 36 % 37 % (19.6 )% (9.8 )% (10.3
)% (10.9 )% Home products (2) 6 % 5 % 6 % 5 % 2.8
%
(12.5 )% 5.4
%
(4.7 )% Computers and tablets 4 % 6 % 5 % 7 % (32.2 )% (37.6 )%
(35.0 )% (34.0 )% Total 100 % 100 % 100 % 100 % (9.3 )% (10.0 )%
(7.7 )% (9.2 )%
(1)
Primarily consists of televisions, audio,
personal electronics and accessories.
(2)
Primarily consists of furniture and
mattresses.
FOURTH QUARTER FINANCIAL RESULTS
The Company's comparable store sales drivers for the three
months ended March 31, 2016 are summarized below:
Comparable StoreSales
Average Selling Price Sales Unit Volume
Appliances (0.4 )% Increase Decrease Consumer electronics (1) (19.6
)% Decrease Decrease Home products (2) 2.8
%
Increase Decrease Computers and tablets (32.2 )% Decrease Decrease
Total (9.3 )%
(1)
Primarily consists of televisions, audio,
personal electronics and accessories.
(2)
Primarily consists of furniture and
mattresses.
The Company's gross profit margin, expressed as gross profit as
a percentage of net sales, increased for the three month period
ended March 31, 2016 to 28.7% from 28.6% for the comparable
prior year period.
- The Company's increase in gross profit
margin for the period was primarily a result of favorable product
sales mix to categories with higher gross margin rates offsetting
the decrease in gross profit margin rates in all categories except
home products. The decrease in gross margin rates was primarily
driven by free delivery in appliances and a continued promotional
environment.
Cost Structure Highlights
The Company managed its cost structure to align with its sales
levels and to keep the Company positioned for positive adjusted
EBITDA.
- During the fourth quarter, hhgregg
realized $21.1 million of its expected $50 million of annual cost
savings for fiscal 2016.
- The decrease in advertising expense of
$8.1 million for the fourth quarter was due to a reduction of gross
advertising spend primarily driven by reductions in print media
along with rebalancing of spending among more efficient advertising
mediums.
- The decrease in SG&A as a
percentage of net sales to 24.2% from 24.7% for the three month
comparable prior year period was a result of:
- 43 basis points decrease, or $6.1
million, in wages due to the Company's continuing effort to drive
efficiencies in its labor structure;
- 38 basis points decrease, or $1.9
million, primarily due to the lapping of consulting expenses to
assist with our transformation efforts in the prior year
period;
- 27 basis points decrease, or $1.8
million, in bank transaction fees due to less enhanced financing
options than prior year; and
- 24 basis points decrease, or $1.8
million, in employee benefits due to a reduction of medical
expenses and payroll taxes driven by the efficiencies in the
Company's labor structure.These decreases were partially offset
by:
- a 28 basis points increase, or $0.3
million, in delivery services due to free delivery for appliances
and a shift in sales mix to more products which require delivery;
and
- a 71 basis point increase,or $0.1
million, in occupancy costs primarily due to increased property tax
rates and the deleveraging effect of lower net sales in the current
quarter.
Income Taxes
During the fourth quarter of fiscal 2016 the Company recorded
$0.8 million of income tax benefit due to the monetizing of a
federal tax credit that was previously reserved.
FISCAL YEAR FINANCIAL RESULTS
The Company's comparable store sales drivers for fiscal year
2016 are summarized below:
Comparable StoreSales
Average Selling Price Sales Unit Volume
Appliances (3.2 )% Increase Decrease Consumer electronics (1) (10.3
)% Increase Decrease Home products (2) 5.4
%
Increase Increase Computers and tablets (35.0 )% Decrease Decrease
Total (7.7 )%
(1)
Primarily consists of televisions, audio,
personal electronics and accessories.
(2)
Primarily consists of furniture and
mattresses.
The Company's gross profit margin, expressed as gross profit as
a percentage of net sales, decreased 20 basis points for the twelve
month period ended March 31, 2016 to 28.3% from 28.5% for the
comparable prior year period.
- The Company's decrease in gross profit
margin was due to lower gross profit margin rates in all
categories, except home products, partially offset by a favorable
sales mix shift to product categories with higher gross profit
rates, such as appliances and furniture.
Cost Structure Highlights
The Company managed its cost structure to align with its sales
levels and to position the Company for positive adjusted
EBITDA.
- During fiscal 2016, hhgregg realized
$66.9 million of its expected $50 million of annual cost savings.
This was inclusive of $4.2 million of additional fees associated
with customer financing described below.
- The decrease in advertising expense of
$23.8 million for fiscal 2016 was due to a reduction of gross
advertising spend primarily driven by reductions in print media
along with rebalancing of spending among more efficient advertising
mediums.
- The decrease in SG&A as a
percentage of net sales to 22.8% from 22.9% for fiscal 2016
compared to fiscal 2015 was a result of:
- 59 basis points decrease, or $26.7
million, in wages due to the Company's continuing effort to drive
efficiencies in its labor structure;
- 17 basis points decrease, or $5.8
million, in employee benefits due to a reduction of medical
expenses and payroll taxes driven by the efficiencies in the
Company's labor structure; and
- 12 basis points decrease, or $8.1
million, in delivery services due to efficiencies in routing and
lower fuel prices, slightly offset by free delivery for appliances
and a shift in sales mix to more products which require delivery in
the fourth quarter.These decreases were partially offset by:
- a 30 basis points increase, or $4.2
million, in fees associated with the higher cost of offering
customers extended months special financing options and the
increased use of the private label credit card; and
- a 57 basis point increase, or $1.3
million, in occupancy costs primarily due to increased property tax
rates.
Asset Impairment
During fiscal 2016, the Company recorded $20.9 million of
pre-tax, non-cash charges related to impairment of property, plant
and equipment. For the 2015 fiscal year, total pre-tax, non-cash
impairment charge was $47.9 million.
Income Taxes
In fiscal 2016, the Company recorded $0.4 million of income tax
expense compared to $30.8 million recorded in fiscal 2015. For the
current year, the income tax expense recorded was due primarily to
the settlement of an Internal Revenue Service examination for the
prior year, partially offset by monetizing a federal tax credit
that was previously fully reserved. There was no income tax expense
or benefit related to results of the current year operations due to
the Company's full valuation allowance. In the prior year, the
Company recognized income tax expense on a pretax loss resulting
from the full valuation allowance that was recorded to reduce the
net deferred tax assets of the Company to zero.
Teleconference and Webcast
hhgregg will be conducting a conference call to discuss
operating results for the fiscal year ended March 31, 2016, on
Thursday, May 19, 2016 at 9:00 a.m. (Eastern Time). Our call will
be hosted by Robert Riesbeck, our Interim President and Chief
Executive Officer and Chief Financial Officer, and Lance Peterson,
our Director of Finance & Investor Relations.
Interested investors and other parties may listen to a
simultaneous webcast of the conference call by logging onto
hhgregg’s website at www.hhgregg.com (to access webcast
registration directly click here). The
on-line replay will be available for a limited time immediately
following the call. The call can also be accessed live over the
phone by dialing (877) 304-8963. Callers should reference the
hhgregg earnings call.
About hhgregg
hhgregg is an appliance, electronics and furniture retailer that
is committed to providing customers with a truly differentiated
purchase experience through superior customer service,
knowledgeable sales associates and the highest quality product
selections. Founded in 1955, hhgregg is a multi-regional retailer
currently with 226 stores in 20 states that also offers
market-leading global and local brands at value prices nationwide
via hhgregg.com.
Forward Looking Statements
The following is a Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995:
This press release includes forward-looking statements,
including with respect to the Company’s financial performance,
ability to manage costs, ability to execute the Company's 2017
initiatives, innovation in the video industry, the impact and
amount of non-cash charges, and shifts in the Company’s sales mix.
hhgregg has based these forward-looking statements on its current
expectations, assumptions, estimates and projections. While hhgregg
believes these expectations, assumptions, estimates and projections
are reasonable, these forward-looking statements are only
predictions and involve known and unknown risks and uncertainties,
many of which are beyond its control. These and other important
factors may cause hhgregg’s actual results, performance or
achievements to differ materially from any future results,
performance or achievements expressed or implied by these
forward-looking statements. Some of the key factors that could
cause actual results to differ from hhgregg’s expectations are: the
ability to successfully execute the Company's strategies and
initiatives, particularly in returning the Company to profitable
growth; the Company's ability to increase customer traffic and
conversion; competition in the retail industry; the Company's
ability to maintain a positive brand perception and recognition;
the Company's ability to attract and retain qualified personnel;
the Company's ability to maintain the security of customer,
associate and Company information; rules, regulations, contractual
obligations, compliance requirements and fees associated with
accepting a variety of payment methods; the Company's ability to
effectively achieve cost cutting initiatives; the Company's ability
to generate strong cash flows to support its operating activities;
the Company's relationships and operations of its key suppliers;
the Company's ability to generate sufficient cash flows to recover
the fair value of long-lived assets; the Company's ability to
maintain and upgrade its information technology systems; the
fluctuation of the Company's comparable store sales; the effect of
general and regional economic and employment conditions on the
Company's net sales; the Company's ability to meet financial
performance guidance; disruption in the Company's supply chain;
changes in trade regulation, currency fluctuations and prevailing
interest rates; and the potential for litigation.
Other factors that could cause actual results to differ from
those implied by the forward-looking statements in this press
release are more fully described in the “Risk Factors” section in
the Company’s Annual Report on Form 10-K for fiscal year 2016
filed May 19, 2016. Given these risks and uncertainties,
you are cautioned not to place undue reliance on these
forward-looking statements. The forward-looking statements included
in this press release are made only as of the date hereof. hhgregg
does not undertake, and specifically declines, any obligation to
update any of these statements or to publicly announce the results
of any revisions to any of these statements to reflect future
events or developments.
HHGREGG, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED)
Three Months Ended Twelve Months Ended
March 31, 2016 March 31, 2015
March 31, 2016 March 31, 2015
(In thousands, except share and per share data) Net sales $
438,840 $ 485,603 $ 1,959,998 $ 2,129,374 Cost of goods sold
313,090 346,651 1,406,216 1,523,536
Gross profit 125,750 138,952 553,782 605,838 Selling, general and
administrative expenses 106,392 120,127 447,508 488,391 Net
advertising expense 21,570 29,638 105,046 128,826 Depreciation and
amortization expense 6,928 8,840 32,043 40,200 Asset impairment
charges — 4,882 20,910 47,869 Loss from
operations (9,140 ) (24,535 ) (51,725 ) (99,448 ) Other expense
(income): Interest expense 776 678 2,742 2,600 Interest income (13
) (9 ) (22 ) (63 ) Total other expense 763 669 2,720
2,537 Loss before income taxes (9,903 ) (25,204 )
(54,445 ) (101,985 ) Income tax (benefit) expense (818 ) 24
434 30,761 Net loss $ (9,085 ) $ (25,228 ) $ (54,879
) $ (132,746 ) Net loss per share Basic and diluted $ (0.33 ) $
(0.91 ) $ (1.98 ) $ (4.72 ) Weighted average shares
outstanding-basic and diluted 27,707,978 27,663,764 27,701,055
28,129,596
HHGREGG, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(AS A PERCENTAGE OF NET
SALES)(UNAUDITED)
Three Months Ended Twelve Months Ended
March 31,2016
March 31,2015
March 31, 2016 March 31,
2015 Net sales 100.0
%
100.0
%
100.0
%
100.0
%
Cost of goods sold 71.3 71.4 71.7 71.5
Gross profit 28.7 28.6 28.3 28.5 Selling, general and
administrative expenses 24.2 24.7 22.8 22.9 Net advertising expense
4.9 6.1 5.4 6.0 Depreciation and amortization expense 1.6 1.8 1.6
1.9 Asset impairment charges — 1.0 1.1 2.2
Loss from operations (2.1 ) (5.1 ) (2.6 ) (4.7 ) Other
expense (income): Interest expense 0.2 0.1 0.1 0.1 Interest income
— — — — Total other expense 0.2
0.1 0.1 0.1 Loss before income taxes (2.3 )
(5.2 ) (2.8 ) (4.8 ) Income tax (benefit) expense (0.2 ) — —
1.4 Net loss (2.1 )% (5.2 )% (2.8 ) (6.2 )%
Certain percentage amounts do not sum due
to rounding
HHGREGG, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETSMARCH 31, 2016
AND 2015(UNAUDITED)
March 31, 2016 March 31,
2015 (In thousands, except share data) Assets
Current assets: Cash and cash equivalents $ 3,703 $ 30,401 Accounts
receivable—trade, less allowances of $5 and $19, respectively
11,106 11,901 Accounts receivable—other 14,937 16,715 Merchandise
inventories, net 256,559 257,469 Prepaid expenses and other current
assets 6,333 6,581 Income tax receivable 1,130 5,326
Total current assets 293,768 328,393 Net property and
equipment 87,472 128,107 Deferred financing costs, net 1,257 1,796
Deferred income taxes — 6,489 Other assets 2,855 2,844
Total long-term assets 91,584 139,236 Total
assets $ 385,352 $ 467,629
Liabilities and
Stockholders’ Equity Current liabilities: Accounts payable $
107,474 $ 112,143 Line of credit — — Customer deposits 43,235
48,742 Accrued liabilities 43,370 46,723 Deferred income taxes —
6,489 Total current liabilities 194,079
214,097 Long-term liabilities: Deferred rent 59,101 67,935
Other long-term liabilities 10,818 12,009 Total
long-term liabilities 69,919 79,944 Total liabilities
263,998 294,041 Stockholders’ equity: Preferred
stock, par value $.0001; 10,000,000 shares authorized; no shares
issued and outstanding as of March 31, 2016 and March 31, 2015,
respectively — — Common stock, par value $.0001; 150,000,000 shares
authorized; 41,204,660 and 41,161,753 shares issued; and 27,707,978
and 27,665,071 outstanding as of March 31, 2016 and March 31, 2015,
respectively 4 4 Additional paid-in capital 304,325 301,680
Retained earnings (accumulated deficit) (32,747 ) 22,132 Common
stock held in treasury at cost, 13,496,682 shares as of March 31,
2016 and March 31, 2015, respectively (150,228 ) (150,228 ) Total
stockholders’ equity 121,354 173,588 Total
liabilities and stockholders’ equity $ 385,352 $ 467,629
HHGREGG, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWSYEARS ENDED MARCH 31, 2016 AND
2015(UNAUDITED)
2016 2015 (In thousands) Cash
flows from operating activities: Net loss $ (54,879 ) $ (132,746 )
Adjustments to reconcile net loss to net cash provided by (used by)
operating activities: Depreciation and amortization 32,043 40,200
Amortization of deferred financing costs 539 538 Stock-based
compensation 2,709 4,623 Loss (gain) on sales of property and
equipment (19 ) 252 Deferred income taxes — 41,402 Asset impairment
charges 20,910 47,869 Tenant allowances received from landlords 812
986 Changes in operating assets and liabilities: Accounts
receivable—trade 795 3,220 Accounts receivable—other 986 384
Merchandise inventories 910 41,073 Income tax receivable 4,196
(3,946 ) Prepaid expenses and other assets 454 (108 ) Accounts
payable (12,537 ) (26,882 ) Customer deposits (5,507 ) 7,224 Income
tax payable — (122 ) Accrued liabilities (3,417 ) (4,317 ) Deferred
rent (8,854 ) (7,176 ) Other long-term liabilities (923 ) 289
Net cash provided by (used in) operating activities (21,782
) 12,763 Cash flows from investing activities: Purchases of
property and equipment (12,828 ) (22,522 ) Proceeds from sales of
property and equipment 117 45 Purchases of corporate-owned life
insurance (217 ) (646 ) Net cash used in investing activities
(12,928 ) (23,123 ) Cash flows from financing activities: Purchases
of treasury stock — (5,281 ) Net borrowings (repayments) on
inventory financing facility 8,012 (2,122 ) Net cash
provided by (used in) financing activities 8,012 (7,403 )
Net decrease in cash and cash equivalents (26,698 ) (17,763 ) Cash
and cash equivalents Beginning of period 30,401 48,164
End of period $ 3,703 $ 30,401 Supplemental
disclosure of cash flow information: Interest paid $ 2,205 $ 2,085
Income taxes received $ (3,523 ) $ (6,411 ) Capital expenditures
included in accounts payable $ 1,265 $ 1,409
HHGREGG, INC. AND
SUBSIDIARIESNON-GAAP RECONCILIATION OF NET LOSS, AS ADJUSTED
ANDDILUTED NET LOSS PER SHARE, AS
ADJUSTED,(UNAUDITED)
Three Months EndedMarch 31,
2016
Twelve Months EndedMarch 31,
2016
(Amounts in thousands, except share data) 2016
2015 2016 2015 Net loss as reported $
(9,085 ) $ (25,228 ) $ (54,879 ) $ (132,746 ) Non-cash adjustments
to net loss: Asset impairment charges — 4,882 20,910 47,869
Valuation allowance for deferred tax assets — — — 41,402 Cash
adjustments to net loss: Severance (1) 2,215 1,323 2,526 1,515
Consulting fees (2) 13 1,652 4,487 3,275 Income tax (benefit)
expense (3) (818 ) — 434 — Net loss, as
adjusted $ (7,675 ) $ (17,371 ) $ (26,522 ) $ (38,685 ) Weighted
average shares outstanding – Diluted 27,707,978 27,663,764
27,701,055 28,129,596 Net loss per diluted share as reported $
(0.33 ) $ (0.91 ) $ (1.98 ) $ (4.72 ) Net loss per diluted share,
as adjusted $ (0.28 ) $ (0.63 ) $ (0.96 ) $ (1.38 )
(1)
Expense for severance due to the
transformation efforts.
(2)
Costs paid to outside consultants to
assist with the Company's transformation efforts.
(3)
Included in the amount for three months
ended March 31, 2016 is $0.8 million for monetizing a federal tax
credit that was previously reserved. Included in the twelve months
ended March 31, 2016 amount is the $0.8 million income tax benefit
previously discussed, as well as expenses of $1.2 million charged
in the current period associated with the Internal Revenue
Service's settlement of a prior year tax matter.
HHGREGG, INC. AND
SUBSIDIARIESNON-GAAP RECONCILIATION OF EBITDA
ANDADJUSTED EBITDA (UNAUDITED)
Three Months EndedMarch 31,
2016
Twelve Months EndedMarch 31,
2016
(Amounts in thousands) 2016 2015
2016 2015 Net loss as reported $ (9,085
) $ (25,228 ) $ (54,879 ) $ (132,746 ) Adjustments: Depreciation
and amortization 6,928 8,840 32,043 40,200 Interest expense, net
763 669 2,720 2,537 Income tax (benefit) expense (818 ) 24
434 30,761 EBITDA $ (2,212 ) $
(15,695 ) $ (19,682 ) $ (59,248 ) Non-cash asset impairment charges
— 4,882 20,910 47,869 Severance 2,215 1,323 2,526 1,515 Consulting
Fees 13 1,652 4,487 3,275 Adjusted
EBITDA $ 16 $ (7,838 ) $ 8,241 $ (6,589 )
We believe that the non-GAAP measures described above provide
meaningful information to assist shareholders in understanding our
financial results and assessing our prospects for future
performance. Management believes adjusted net loss, adjusted net
loss per diluted share, EBITDA and Adjusted EBITDA are important
indicators of our operations because they exclude items that may
not be indicative of or are unrelated to our core operating results
and provide a baseline for analyzing trends in our underlying
businesses. Management makes standard adjustments for items such as
non-cash asset impairments, valuation allowance on deferred tax
assets, severance, consulting fees, income taxes recorded in
current period related to prior year periods, as well as
adjustments for other items that may arise during the period and
have a meaningful impact on comparability.
The above information provides reconciliations from net (loss),
the most comparable financial measure calculated and presented in
accordance with accounting principles generally accepted in U.S.
(“GAAP”), to non-GAAP financial measures. The Company has provided
non-GAAP financial measures, which are not calculated or presented
in accordance with GAAP, as information supplemental and in
addition to the financial measures presented in the accompanying
earnings release that are calculated and presented in accordance
with GAAP. Such non-GAAP financial measures should not be
considered superior to, as a substitute for, or as an alternative
to, and should be considered in conjunction with, the GAAP
financial measures presented in the earnings release. The non-GAAP
financial measures in the accompanying earnings release may differ
from similar measures used by other companies.
EBITDA represents net loss before income tax expense, interest
income, interest expense, depreciation and amortization. The
Company has presented EBITDA and Adjusted EBITDA because it
considers it an important supplemental measure of its performance
and believes it is frequently used by analysts, investors and other
interested parties in the evaluation of companies in its industry.
Management uses EBITDA and Adjusted EBITDA as a measurement tool
for evaluating its actual operating performance compared to budget
and prior periods. EBITDA and Adjusted EBITDA is not a measure of
performance under US GAAP and should not be considered as a
substitute for net loss prepared in accordance with GAAP. EBITDA
and Adjusted EBITDA has limitations as an analytical tool, and you
should not consider these in isolation or as a substitute for
analysis of the Company's results as reported under GAAP.
Some of the limitations of EBITDA and Adjusted EBITDA measures
are:
- EBITDA and Adjusted EBITDA do not
reflect the Company's cash expenditures, or future requirements,
for capital expenditures or contractual commitments;
- EBITDA and Adjusted EBITDA do not
reflect interest expense or the cash requirements necessary to
service interest payments on the Company's debt;
- EBITDA and Adjusted EBITDA do not
reflect tax expense or the cash requirements necessary to pay for
tax obligations; and
- Although depreciation and amortization
are non-cash charges, the asset being depreciated and amortized
will often have to be replaced in the future, and EBITDA and
Adjusted EBITDA do not reflect any cash requirements for such
replacements.
The Company compensates for these limitations by relying
primarily on its GAAP results and using EBITDA and Adjusted EBITDA
only as a supplement.
HHGREGG, INC. AND
SUBSIDIARIESStore Count by Quarter for Fiscal Years 2014,
2015 and 2016(Unaudited)
FY2014 FY2015 FY2016
Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4
Beginning Store Count 228 228 228 228 228 229 228 228 228
227 227 227 Store Openings — — — — 1 — — — 1 — — — Store
Closings — — — — — (1 ) —
— (2 ) — — (1 ) Ending Store Count 228
228 228 228 229 228 228
228 227 227 227 226
Note: hhgregg, Inc.’s fiscal year is comprised of four quarters
ending
June 30th, September 30th, December 31st
and March 31st.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160519005585/en/
hhgregg, Inc.Lance Peterson, 317-848-8710Director, Finance &
Investor Relationsinvestorrelations@hhgregg.com
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