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Form 8-K LOWES COMPANIES INC For: Feb 25

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February 25, 2015 8:30 AM EST


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant To Section 13 or 15 (d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) February 25, 2015

LOWE'S COMPANIES, INC.
(Exact name of registrant as specified in its charter)

 
North Carolina
 
1-7898
 
56-0578072
 
 
(State or other jurisdiction
of incorporation)
 
(Commission File
Number)
 
(IRS Employer
 Identification No.)
 

 
1000 Lowe's Blvd., Mooresville, NC
28117
 
 
(Address of principal executive offices)
(Zip Code)
 
 
 
 
 
 
Registrant's telephone number, including area code
(704) 758-1000
 
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:
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 February 25, 2015, Lowe’s Companies, Inc. (the “Company”) issued a press release, furnished as Exhibit 99.1 and incorporated herein by reference, announcing the Company’s financial results for its fourth quarter and year ended January 30, 2015.
 
The information contained in this Current Report on Form 8-K, including the exhibit attached hereto, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Furthermore, the information contained in this Item 2.02 shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended.

Item 9.01
 
Financial Statements and Exhibits
 
 
 
(d)
 
Exhibits
 
 
 
99.1
 
Press Release dated February 25, 2015 announcing the financial results of the Company for its fourth quarter and year ended January 30, 2015




SIGNATURE
 
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.
 
 
LOWE'S COMPANIES, INC.
 
 
 
 
 
Date: February 25, 2015
By:
/s/ Matthew V. Hollifield
 
 
 
Matthew V. Hollifield
Senior Vice President and Chief Accounting Officer
 





Exhibit 99.1
February 25, 2015
For 6:00 am ET Release
Contacts:
Shareholders’/Analysts’ Inquiries:
 
Media Inquiries:
 
Tiffany Mason
 
Chris Ahearn
 
704-758-2033
 
704-758-2304
 
 

LOWE’S REPORTS FOURTH QUARTER SALES AND EARNINGS RESULTS
-- Comparable Sales Increased 7.3 Percent --
-- Diluted Earnings Per Share Increased 58.6 Percent to a Record $0.46 --

MOORESVILLE, N.C. - Lowe’s Companies, Inc. (NYSE: LOW) today reported net earnings of $450 million for the quarter ended January 30, 2015, a 47.0 percent increase over the same period a year ago. Diluted earnings per share increased 58.6 percent to $0.46 from $0.29 in the fourth quarter of 2013. For the fiscal year ended January 30, 2015, net earnings increased 18.0 percent from the same period a year ago to $2.7 billion, and diluted earnings per share increased 26.6 percent to $2.71.

Sales for the fourth quarter increased 7.6 percent to $12.5 billion from $11.7 billion in the fourth quarter of 2013, and comparable sales for the quarter increased 7.3 percent. Comparable sales for the U.S. business increased 7.4 percent. For the fiscal year, sales were $56.2 billion, a 5.3 percent increase over the same period a year ago, and comparable sales increased 4.3 percent on a consolidated basis and for the U.S. business.

“I would like to thank our employees for their hard work and dedication,” commented Robert A. Niblock, Lowe’s chairman, president and CEO. “Their steadfast commitment to serving customers is critical to our success, and an important driver of this quarter’s strong results.

“We remain focused on improving our profitability even while investing in key capabilities to drive sales growth,” Niblock added. “Our transformation is gaining momentum, and macroeconomic fundamentals are aligned for modestly stronger home improvement industry growth in 2015.”

Delivering on its commitment to return excess cash to shareholders, the company repurchased $1.0 billion of stock under its share repurchase program and paid $225 million in dividends in the fourth quarter. For the fiscal year, the company repurchased $3.9 billion of stock under its share repurchase program and paid $822 million in dividends.

As of January 30, 2015, Lowe’s operated 1,840 home improvement and hardware stores in the United States, Canada and Mexico representing 200.9 million square feet of retail selling space.

A conference call to discuss fourth quarter 2014 operating results is scheduled for today (Wednesday, February 25) at 9:00 am ET. The conference call will be available by webcast and can be accessed by visiting Lowe’s website at www.Lowes.com/investor and clicking on Lowe’s Fourth Quarter 2014 Earnings Conference Call Webcast. Supplemental slides will be available fifteen minutes prior to the start of the conference call. A replay of the call will be archived on Lowes.com/investor until May 19, 2015.





Lowe's Business Outlook

Fiscal Year 2015 (comparisons to fiscal year 2014; based on U.S. GAAP unless otherwise noted)
•
Total sales are expected to increase 4.5 to 5 percent.
•
Comparable sales are expected to increase 4 to 4.5 percent.
•
The company expects to open 15 to 20 home improvement and hardware stores.
•
Earnings before interest and taxes as a percentage of sales (operating margin) are expected to increase 80 to 100 basis points.
•
The effective income tax rate is expected to be approximately 38.1%.
•
Diluted earnings per share of approximately $3.29 are expected for the fiscal year ending January 29, 2016.

Disclosure Regarding Forward-Looking Statements

This news release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Statements of the company's expectations for sales growth, comparable sales, earnings and performance, shareholder value, capital expenditures, cash flows, the housing market, the home improvement industry, demand for services, share repurchases, the Company’s strategic initiatives and any statement of an assumption underlying any of the foregoing, constitute "forward-looking statements" under the Act.  Although we believe that the expectations, opinions, projections, and comments reflected in these forward-looking statements are reasonable, we can give no assurance that such statements will prove to be correct. A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results either expressed or implied by our forward-looking statements including, but not limited to, changes in general economic conditions, such as the rate of unemployment, interest rate and currency fluctuations, fuel and other energy costs, slower growth in personal income, changes in consumer spending, changes in the rate of housing turnover, the availability of consumer credit and of mortgage financing, inflation or deflation of commodity prices, and other factors which can negatively affect our customers, as well as our ability to: (i) respond to adverse trends in the housing industry, such as the psychological effects of lower home prices, and moderating rates of growth in housing renovation and repair activity, as well as uneven recovery in commercial building activity; (ii) secure, develop, and otherwise implement new technologies and processes designed to enhance our efficiency and competitiveness; (iii) attract, train, and retain highly-qualified associates; (iv) manage our business effectively as we adapt our traditional operating model to meet the changing expectations of our customers; (v) maintain, improve, upgrade and protect our critical information systems from data security breaches and other cyber threats; (vi) respond to fluctuations in the prices and availability of services, supplies, and products; (vii) respond to the growth and impact of competition; (viii) address changes in existing or new laws or regulations that affect consumer credit, employment/labor, trade, product safety, transportation/logistics, energy costs, health care, tax or environmental issues; and (ix) respond to unanticipated weather conditions that could adversely affect sales. In addition, we could experience additional impairment losses if the actual results of our operating stores are not consistent with the assumptions and judgments we have made in estimating future cash flows and determining asset fair values. For more information about these and other risks and uncertainties that we are exposed to, you should read the "Risk Factors" and "Critical Accounting Policies and Estimates" included in our Annual Report on Form 10-K to the United States Securities and Exchange Commission (the “SEC”) and the description of material changes therein or updated version thereof, if any, included in our Quarterly Reports on Form 10-Q.

The forward-looking statements contained in this news release are based upon data available as of the date of this release or other specified date and speak only as of such date.  All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf about any of the matters covered in this release are qualified by these cautionary statements and the “Risk Factors” included in our Annual Report on Form 10-K to the SEC and the description of material changes, if any, therein included in our Quarterly Reports on Form 10-Q.  We expressly disclaim any obligation to update or revise any forward-looking statement, whether as a result of new information, change in circumstances, future events, or otherwise.

 

Lowe’s Companies, Inc. (NYSE: LOW) is a FORTUNE® 100 home improvement company serving approximately 16 million customers a week in the United States, Canada and Mexico through its stores and online at lowes.com, lowes.ca and lowes.com.mx. With fiscal year 2014 sales of $56.2 billion, Lowe’s has 1,840 home improvement and hardware stores and more than 265,000 employees. Founded in 1946 and based in Mooresville, N.C., Lowe’s supports the communities it serves through programs that focus on K-12 public education and community improvement projects. For more information, visit Lowes.com.
###




Lowe's Companies, Inc.
Consolidated Statements of Current and Retained Earnings
In Millions, Except Per Share and Percentage Data
 
Three Months Ended
 
Year Ended
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
 
 
January 30, 2015
 
January 31, 2014
 
January 30, 2015
 
January 31, 2014
Current Earnings
Amount
 
Percent
 
Amount
 
Percent
 
Amount
 
Percent
 
Amount
 
Percent
Net sales
$
12,540

 
100.00
 
$
11,660

 
100.00
 
$
56,223

 
100.00
 
$
53,417

 
100.00
Cost of sales
8,194

 
65.34
 
7,618

 
65.33
 
36,665

 
65.21
 
34,941

 
65.41
Gross margin
4,346

 
34.66
 
4,042

 
34.67
 
19,558

 
34.79
 
18,476

 
34.59
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative
3,165

 
25.24
 
3,045

 
26.12
 
13,281

 
23.62
 
12,865

 
24.08
Depreciation
362

 
2.89
 
370

 
3.17
 
1,485

 
2.64
 
1,462

 
2.74
Interest - net
132

 
1.05
 
128

 
1.10
 
516

 
0.92
 
476

 
0.89
Total expenses
3,659

 
29.18
 
3,543

 
30.39
 
15,282

 
27.18
 
14,803

 
27.71
Pre-tax earnings
687

 
5.48
 
499

 
4.28
 
4,276

 
7.61
 
3,673

 
6.88
Income tax provision
237

 
1.90
 
193

 
1.66
 
1,578

 
2.81
 
1,387

 
2.60
Net earnings
$
450

 
3.58
 
$
306

 
2.62
 
$
2,698

 
4.80
 
$
2,286

 
4.28
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - basic
964

 
 
 
1,035

 
 
 
988

 
 
 
1,059

 
 
Basic earnings per common share (1)
$
0.46

 
 
 
$
0.29

 
 
 
$
2.71

 
 
 
$
2.14

 
 
Weighted average common shares outstanding - diluted
967

 
 
 
1,037

 
 
 
990

 
 
 
1,061

 
 
Diluted earnings per common share (1)
$
0.46

 
 
 
$
0.29

 
 
 
$
2.71

 
 
 
$
2.14

 
 
Cash dividends per share
$
0.23

 
 
 
$
0.18

 
 
 
$
0.87

 
 
 
$
0.70

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retained Earnings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
10,271

 
 
 
$
12,103

 
 
 
$
11,355

 
 
 
$
13,224

 
 
Net earnings
450

 
 
 
306

 
 
 
2,698

 
 
 
2,286

 
 
Cash dividends
(222
)
 
 
 
(186
)
 
 
 
(858
)
 
 
 
(741
)
 
 
Share repurchases
(908
)
 
 
 
(868
)
 
 
 
(3,604
)
 
 
 
(3,414
)
 
 
Balance at end of period
$
9,591

 
 
 
$
11,355

 
 
 
$
9,591

 
 
 
$
11,355

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Under the two-class method, earnings per share is calculated using net earnings allocable to common shares, which is derived by reducing net earnings by the earnings allocable to participating securities. Net earnings allocable to common shares used in the basic and diluted earnings per share calculation were $447 million for the three months ended January 30, 2015 and $304 million for the three months ended January 31, 2014. Net earnings allocable to common shares used in the basic and diluted earnings per share calculation were $2,682 million for the fiscal year ended January 30, 2015 and $2,271 million for the fiscal year ended January 31, 2014.

Lowe's Companies, Inc.
Consolidated Statements of Comprehensive Income
In Millions, Except Percentage Data
 
Three Months Ended
 
Year Ended
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
 
 
January 30, 2015
 
January 31, 2014
 
January 30, 2015
 
January 31, 2014
 
Amount
 
Percent
 
Amount
 
Percent
 
Amount
 
Percent
 
Amount
 
Percent
Net earnings
$
450

 
3.58

 
$
306

 
2.62

 
$
2,698

 
4.80

 
$
2,286

 
4.28

Foreign currency translation adjustments - net of tax
(75
)
 
(0.59
)
 
(40
)
 
(0.34
)
 
(86
)
 
(0.15
)
 
(68
)
 
(0.13
)
Net unrealized investment losses - net of tax
—

 
—

 
—

 
—

 
—

 
—

 
(1
)
 
—

Other comprehensive loss
(75
)
 
(0.59
)
 
(40
)
 
(0.34
)
 
(86
)
 
(0.15
)
 
(69
)
 
(0.13
)
Comprehensive income
$
375

 
2.99

 
$
266

 
2.28

 
$
2,612

 
4.65

 
$
2,217

 
4.15

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




Lowe's Companies, Inc.
Consolidated Balance Sheets
In Millions, Except Par Value Data
 
 
 
(Unaudited)
 
 
 
 
 
January 30, 2015
 
January 31, 2014
Assets
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
 
 
$
466

 
$
391

Short-term investments
 
 
125

 
185

Merchandise inventory - net
 
 
8,911

 
9,127

Deferred income taxes - net
 
 
230

 
252

Other current assets
 
 
348

 
341

Total current assets
 
 
10,080

 
10,296

Property, less accumulated depreciation
 
 
20,034

 
20,834

Long-term investments
 
 
354

 
279

Other assets
 
 
1,359

 
1,323

Total assets
 
 
$
31,827

 
$
32,732

Liabilities and shareholders' equity
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Short-term borrowings
 
 
$
—

 
$
386

Current maturities of long-term debt
 
 
552

 
49

Accounts payable
 
 
5,124

 
5,008

Accrued compensation and employee benefits
 
 
773

 
785

Deferred revenue
 
 
979

 
892

Other current liabilities
 
 
1,920

 
1,756

Total current liabilities
 
 
9,348

 
8,876

Long-term debt, excluding current maturities
 
 
10,815

 
10,086

Deferred income taxes - net
 
 
97

 
291

Deferred revenue - extended protection plans
 
 
730

 
730

Other liabilities
 
 
869

 
896

Total liabilities
 
 
21,859

 
20,879

Shareholders' equity:
 
 
 
 
 
Preferred stock - $5 par value, none issued
 
 
—

 
—

Common stock - $.50 par value;
 
 
 
 
 
Shares issued and outstanding
 
 
 
 
 
January 30, 2015
960

 
 
 
 
January 31, 2014
1,030

 
480

 
515

Capital in excess of par value
 
 
—

 
—

Retained earnings
 
 
9,591

 
11,355

Accumulated other comprehensive loss
 
 
(103
)
 
(17
)
Total shareholders' equity
 
 
9,968

 
11,853

Total liabilities and shareholders' equity
 
 
$
31,827

 
$
32,732

 
 
 
 
 
 





Lowe's Companies, Inc.
Consolidated Statements of Cash Flows
In Millions
 
Year Ended
 
(Unaudited)
 
 
 
January 30, 2015
 
January 31, 2014
Cash flows from operating activities:
 
 
 
Net earnings
$
2,698

 
$
2,286

Adjustments to reconcile net earnings to net cash provided by operating activities:
 
 
 
Depreciation and amortization
1,586

 
1,562

Deferred income taxes
(171
)
 
(162
)
Loss on property and other assets - net
25

 
64

Loss on equity method investments
57

 
52

Share-based payment expense
119

 
100

Changes in operating assets and liabilities:
 
 
 
Merchandise inventory - net
170

 
(396
)
Other operating assets
130

 
(5
)
Accounts payable
127

 
291

Other operating liabilities
188

 
319

Net cash provided by operating activities
4,929

 
4,111

 
 
 
 
Cash flows from investing activities:
 
 
 
Purchases of investments
(820
)
 
(759
)
Proceeds from sale/maturity of investments
805

 
709

Capital expenditures
(880
)
 
(940
)
Contributions to equity method investments - net
(241
)
 
(173
)
Proceeds from sale of property and other long-term assets
52

 
75

Acquisition of businesses - net
—

 
(203
)
Other - net
(4
)
 
5

Net cash used in investing activities
(1,088
)
 
(1,286
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Net change in short-term borrowings
(386
)
 
386

Net proceeds from issuance of long-term debt
1,239

 
985

Repayment of long-term debt
(48
)
 
(47
)
Proceeds from issuance of common stock under share-based payment plans
137

 
165

Cash dividend payments
(822
)
 
(733
)
Repurchase of common stock
(3,905
)
 
(3,710
)
Other - net
24

 
(15
)
Net cash used in financing activities
(3,761
)
 
(2,969
)
 
 
 
 
Effect of exchange rate changes on cash
(5
)
 
(6
)
 
 
 
 
Net increase/(decrease) in cash and cash equivalents
75

 
(150
)
Cash and cash equivalents, beginning of year
391

 
541

Cash and cash equivalents, end of year
$
466

 
$
391

 
 
 
 



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