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Form 8-K LOWES COMPANIES INC For: May 20

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May 20, 2015 7:51 AM EDT


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) May 20, 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 May 20, 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 first quarter ended May 1, 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 May 20, 2015 announcing the financial results of the Company for its first quarter ended May 1, 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: May 20, 2015
By:
/s/ Matthew V. Hollifield
 
 
 
Matthew V. Hollifield
Senior Vice President and Chief Accounting Officer
 





Exhibit 99.1
May 20, 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 FIRST QUARTER SALES AND EARNINGS RESULTS
-- Record First Quarter Sales of $14.1 Billion --
-- Diluted Earnings Per Share Increased 14.8 Percent --

MOORESVILLE, N.C. - Lowe’s Companies, Inc. (NYSE: LOW) today reported net earnings of $673 million for the quarter ended May 1, 2015, a 7.8 percent increase over the same period a year ago. Diluted earnings per share increased 14.8 percent to $0.70 from $0.61 in the first quarter of 2014.

Sales for the first quarter increased 5.4 percent to $14.1 billion from $13.4 billion in the first quarter of 2014, and comparable sales for the quarter increased 5.2 percent. Comparable sales for the U.S. home improvement business increased 5.3 percent.

“I am pleased that we executed well and delivered another strong quarter,” commented Robert A. Niblock, Lowe’s chairman, president and CEO. “We generated comparable sales growth in all regions of the country and across all product categories, driving strong earnings per share growth. I would like to thank our employees for their dedication to serving customers.”

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 $222 million in dividends in the first quarter.

As of May 1, 2015, Lowe’s operated 1,843 home improvement and hardware stores in the United States, Canada and Mexico representing 201.2 million square feet of retail selling space.

A conference call to discuss first quarter 2015 operating results is scheduled for today (Wednesday, May 20) 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 First Quarter 2015 Earnings Conference Call Webcast. Supplemental slides will be available soon after this news release. A replay of the call will be archived on Lowes.com/investor until August 18, 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”), which the words “believe”, “expect”, “project”, “will”, “should”, “could”, and similar expressions are intended to imply. 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 a demographic shift from single family to multi-family housing, a reduced rate of growth in household formation, and slower 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 necessary to realize the benefits of our strategic initiatives and enhance our efficiency; (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 more than 1,840 home improvement and hardware stores and 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 (Unaudited)
In Millions, Except Per Share and Percentage Data
 
Three Months Ended
 
May 1, 2015
 
May 2, 2014
Current Earnings
Amount
 
% Sales
 
Amount
 
% Sales
Net sales
$
14,129

 
100.00
 
$
13,403

 
100.00
Cost of sales
9,117

 
64.53
 
8,645

 
64.50
Gross margin
5,012

 
35.47
 
4,758

 
35.50
Expenses:
 
 
 
 
 
 
 
Selling, general and administrative
3,415

 
24.16
 
3,319

 
24.76
Depreciation
365

 
2.59
 
373

 
2.78
Interest - net
134

 
0.95
 
124

 
0.93
Total expenses
3,914

 
27.70
 
3,816

 
28.47
Pre-tax earnings
1,098

 
7.77
 
942

 
7.03
Income tax provision
425

 
3.01
 
318

 
2.37
Net earnings
$
673

 
4.76
 
$
624

 
4.66
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - basic
950

 
 
 
1,015

 
 
Basic earnings per common share (1)
$
0.70

 
 
 
$
0.61

 
 
Weighted average common shares outstanding - diluted
952

 
 
 
1,017

 
 
Diluted earnings per common share (1)
$
0.70

 
 
 
$
0.61

 
 
Cash dividends per share
$
0.23

 
 
 
$
0.18

 
 
 
 
 
 
 
 
 
 
Retained Earnings
 
 
 
 
 
 
 
Balance at beginning of period
$
9,591

 
 
 
$
11,355

 
 
Net earnings
673

 
 
 
624

 
 
Cash dividends
(218
)
 
 
 
(183
)
 
 
Share repurchases
(961
)
 
 
 
(811
)
 
 
Balance at end of period
$
9,085

 
 
 
$
10,985

 
 
 
 
 
 
 
 
 
 
(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 $670 million for the three months ended May 1, 2015 and $620 million for the three months ended May 2, 2014.

Lowe's Companies, Inc.
Consolidated Statements of Comprehensive Income (Unaudited)
In Millions, Except Percentage Data
 
Three Months Ended
 
May 1, 2015
 
May 2, 2014
 
Amount
 
% Sales
 
Amount
 
% Sales
Net earnings
$
673

 
4.76
 
$
624

 
4.66
Foreign currency translation adjustments - net of tax
22

 
0.16
 
8

 
0.06
Other comprehensive income
22

 
0.16
 
8

 
0.06
Comprehensive income
$
695

 
4.92
 
$
632

 
4.72
 
 
 
 
 
 
 
 




Lowe's Companies, Inc.
Consolidated Balance Sheets
In Millions, Except Par Value Data
 
 
 
(Unaudited)
 
(Unaudited)
 
 
 
 
 
May 1, 2015
 
May 2, 2014
 
January 30, 2015
Assets
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
 
 
$
1,434

 
$
658

 
$
466

Short-term investments
 
 
95

 
110

 
125

Merchandise inventory - net
 
 
10,614

 
10,515

 
8,911

Deferred income taxes - net
 
 
255

 
283

 
230

Other current assets
 
 
393

 
386

 
348

Total current assets
 
 
12,791

 
11,952

 
10,080

Property, less accumulated depreciation
 
 
19,892

 
20,617

 
20,034

Long-term investments
 
 
384

 
360

 
354

Other assets
 
 
1,355

 
1,300

 
1,359

Total assets
 
 
$
34,422

 
$
34,229

 
$
31,827

 
 
 
 
 
 
 
 
Liabilities and shareholders' equity
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
Current maturities of long-term debt
 
 
$
1,026

 
$
47

 
$
552

Accounts payable
 
 
8,023

 
7,051

 
5,124

Accrued compensation and employee benefits
 
 
555

 
501

 
773

Deferred revenue
 
 
1,153

 
1,055

 
979

Other current liabilities
 
 
2,213

 
2,160

 
1,920

Total current liabilities
 
 
12,970

 
10,814

 
9,348

Long-term debt, excluding current maturities
 
 
10,334

 
10,080

 
10,815

Deferred income taxes - net
 
 
98

 
261

 
97

Deferred revenue - extended protection plans
 
 
727

 
730

 
730

Other liabilities
 
 
816

 
862

 
869

Total liabilities
 
 
24,945

 
22,747

 
21,859

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

 
—

 
—

Common stock - $.50 par value;
 
 
 
 
 
 
 
Shares issued and outstanding
 
 
 
 
 
 
 
May 1, 2015
947

 
 
 
 
 
 
May 2, 2014
1,012

 
 
 
 
 
 
January 30, 2015
960

 
473

 
506

 
480

Capital in excess of par value
 
 
—

 
—

 
—

Retained earnings
 
 
9,085

 
10,985

 
9,591

Accumulated other comprehensive loss
 
 
(81
)
 
(9
)
 
(103
)
Total shareholders' equity
 
 
9,477

 
11,482

 
9,968

Total liabilities and shareholders' equity
 
 
$
34,422

 
$
34,229

 
$
31,827

 
 

 
 

 
 

 
 






Lowe's Companies, Inc.
Consolidated Statements of Cash Flows (Unaudited)
In Millions
 
Three Months Ended
 
May 1, 2015
 
May 2, 2014
Cash flows from operating activities:
 
 
 
Net earnings
$
673

 
$
624

Adjustments to reconcile net earnings to net cash provided by operating activities:
 
 
 
Depreciation and amortization
391

 
398

Deferred income taxes
(38
)
 
(67
)
Loss on property and other assets - net
7

 
24

Loss on equity method investments
17

 
17

Share-based payment expense
29

 
28

Changes in operating assets and liabilities:
 
 
 
Merchandise inventory - net
(1,687
)
 
(1,384
)
Other operating assets
(48
)
 
44

Accounts payable
2,893

 
2,041

Other operating liabilities
241

 
269

Net cash provided by operating activities
2,478

 
1,994

 
 
 
 
Cash flows from investing activities:
 
 
 
Purchases of investments
(65
)
 
(163
)
Proceeds from sale/maturity of investments
64

 
157

Capital expenditures
(232
)
 
(194
)
Contributions to equity method investments - net
(11
)
 
(91
)
Proceeds from sale of property and other long-term assets
3

 
16

Other - net
—

 
(5
)
Net cash used in investing activities
(241
)
 
(280
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Net decrease in short-term borrowings
—

 
(386
)
Repayment of long-term debt
(10
)
 
(12
)
Proceeds from issuance of common stock under share-based payment plans
21

 
24

Cash dividend payments
(222
)
 
(186
)
Repurchase of common stock
(1,109
)
 
(910
)
Other - net
50

 
23

Net cash used in financing activities
(1,270
)
 
(1,447
)
 
 
 
 
Effect of exchange rate changes on cash
1

 
—

 
 
 
 
Net increase in cash and cash equivalents
968

 
267

Cash and cash equivalents, beginning of period
466

 
391

Cash and cash equivalents, end of period
$
1,434

 
$
658

 
 
 
 



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