Form 8-K BED BATH & BEYOND INC For: Jun 22
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) June 22, 2016
BED BATH & BEYOND INC.
(Exact name of registrant as specified in its charter)
| New York | 0-20214 | 11-2250488 |
| (State or other jurisdiction | (Commission | (I.R.S. Employer |
| of incorporation) | File Number) | Identification No.) |
650 Liberty Avenue
Union, New Jersey 07083
(Address of principal executive offices) (Zip code)
(908) 688-0888
(Registrant's telephone number, including area code)
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 June 22, 2016, Bed Bath & Beyond Inc. (the “Company”) issued a press release announcing the Company’s financial results for its fiscal first quarter ended May 28, 2016. A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure
The Company’s June 22, 2016 press release further announced that its Board of Directors has declared a quarterly dividend of $.125 per share, to be paid on October 18, 2016 to shareholders of record as of September 16, 2016.
The information in this Current Report on Form 8-K (including the exhibit attached hereto) is being furnished under Item 2.02 and 7.01 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of such section or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
| (d) | Exhibits: |
| 99.1 | Press Release issued by Bed Bath & Beyond Inc. on June 22, 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.
| BED BATH & BEYOND INC. | ||
| (Registrant) | ||
| Date: June 22, 2016 | By: | /s/ Susan E. Lattmann |
| Susan E. Lattmann | ||
| Chief Financial Officer and Treasurer | ||
| (Principal Financial and Accounting Officer) | ||
EXHIBIT INDEX
|
| Exhibit No. | Description | |
| 99.1 | Press Release issued by Bed Bath & Beyond Inc. on June 22, 2016. |
Exhibit 99.1
FOR IMMEDIATE RELEASE
BED BATH & BEYOND
INC. REPORTS RESULTS FOR
FISCAL 2016 FIRST QUARTER
| · | Net Earnings per Diluted Share of $.80 |
| · | Net Sales of $2.7 Billion, Flat to Prior Year Quarter |
| · | Comparable Sales Decrease of Approximately 0.5% |
| · | Board of Directors Declares Quarterly Dividend |
| · | Fiscal 2016 Net Earnings per Diluted Share Expected to be Within Range Previously Described |
UNION, New Jersey, June 22, 2016 --- Bed Bath & Beyond Inc. (NASDAQ: BBBY) today reported financial results for the first quarter of fiscal 2016 ended May 28, 2016.
First Quarter Results
For the first quarter of fiscal 2016, the Company reported net earnings of $.80 per diluted share ($122.6 million) compared with $.93 per diluted share ($158.5 million) for the first quarter of fiscal 2015. Net sales for the first quarters of fiscal 2016 and 2015 were approximately $2.738 billion. Comparable sales in the first quarter of fiscal 2016 decreased by approximately 0.5%, compared with an increase of approximately 2.2% in the prior year period. Comparable sales from customer-facing digital channels grew in excess of 20% while comparable sales from stores declined in the low single-digit percentage range during the first quarter of fiscal 2016.
Capital Allocation
The Company’s Board of Directors has declared a quarterly dividend of $.125 per share, to be paid on October 18, 2016 to shareholders of record as of September 16, 2016.
During the first quarter of fiscal 2016, the Company repurchased approximately $178 million of its common stock, representing approximately 3.8 million shares, under its existing $2.5 billion share repurchase program. As of May 28, 2016, the program had a remaining balance of approximately $2.1 billion, and is expected to be completed in the latter half of fiscal 2019 or in fiscal 2020.
Fiscal 2016 Outlook
Bed Bath & Beyond Inc.’s conference call with analysts and investors will be held today at 5:00 pm (ET). During this call, the Company plans to review its financial planning assumptions for fiscal 2016.
Based on these planning assumptions, which reflect actual first quarter results, current business trends and include the slight dilution anticipated from the purchase during the Company’s second quarter of One Kings Lane, Inc., Bed Bath & Beyond expects its fiscal 2016 net earnings per diluted share to be comfortably within the $4.50 to just over $5.00 range that it has earned over the past several years, during a heavy investment phase. This is the range of net earnings per diluted share that the Company previously described in its April 6, 2016, fiscal fourth quarter earnings press release.
The Company’s fiscal 2016 first quarter conference call may be accessed by dialing 1-888-771-4371, or if international, 847-585-4405, using conference ID number 42747608. The replay of the call can be accessed by dialing 1-888-843-7419, using conference ID number 42747608. The call and replay can also be accessed via audio webcast on the investor relations section of our website at www.bedbathandbeyond.com.
About the Company
Bed Bath & Beyond Inc. and subsidiaries (the “Company”) is a retailer selling a wide assortment of domestics merchandise and home furnishings which operates under the names Bed Bath & Beyond, Christmas Tree Shops, Christmas Tree Shops andThat! or andThat!, Harmon or Harmon Face Values, buybuy BABY and World Market, Cost Plus World Market or Cost Plus. Customers can purchase products from the Company either in-store, online, with a mobile device or through a contact center. The Company generally has the ability to have customer purchases picked up in-store or shipped direct to the customer from the Company’s distribution facilities, stores or vendors. In addition, the Company operates Of a Kind, an e-commerce website that features specially commissioned, limited edition items from emerging fashion and home designers, and One Kings Lane, an authority in home décor and design offering a unique collection of select home goods, designer and vintage items. The Company also operates Linen Holdings, a provider of a variety of textile products, amenities and other goods to institutional customers in the hospitality, cruise line, healthcare and other industries. Additionally, the Company is a partner in a joint venture which operates retail stores in Mexico under the name Bed Bath & Beyond.
The Company operates websites at bedbathandbeyond.com, bedbathandbeyond.ca, worldmarket.com, buybuybaby.com, buybuybaby.ca, christmastreeshops.com, harmondiscount.com, ofakind.com, onekingslane.com, harborlinen.com and t-ygroup.com. As of May 28, 2016, the Company had a total of 1,533 stores, including 1,021 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada, 277 stores under the names of World Market, Cost Plus World Market or Cost Plus, 105 buybuy BABY stores, 79 stores under the names Christmas Tree Shops, Christmas Tree Shops andThat! or andThat!, and 51 stores under the names Harmon or Harmon Face Values. During the fiscal first quarter, the Company opened one Bed Bath & Beyond store, one andThat! store, one Cost Plus World Market store and one Harmon store, and closed one Harmon store. In addition, the Company is a partner in a joint venture which operates seven stores in Mexico under the name Bed Bath & Beyond.
Forward-Looking Statements
This press release may contain forward-looking statements. Many of these forward-looking statements can be identified by use of words such as may, will, expect, anticipate, approximate, estimate, assume, continue, model, project, plan, and similar words and phrases. The Company’s actual results and future financial condition may differ materially from those expressed in any such forward-looking statements as a result of many factors. Such factors include, without limitation: general economic conditions including the housing market, a challenging overall macroeconomic environment and related changes in the retailing environment; consumer preferences, spending habits and adoption of new technologies; demographics and other macroeconomic factors that may impact the level of spending for the types of merchandise sold by the Company; civil disturbances and terrorist acts; unusual weather patterns and natural disasters; competition from existing and potential competitors; competition from other channels of distribution; pricing pressures; liquidity; the ability to attract and retain qualified employees in all areas of the organization; the cost of labor, merchandise and other costs and expenses; potential supply chain disruption due to political instability, labor disturbances, product recalls, financial or operational instability of suppliers or carriers, and other items; the ability to find suitable locations at acceptable occupancy costs and other terms to support the Company’s plans for new stores; the ability to assess and implement technologies in support of the Company’s development of its omnichannel capabilities; the ability to establish and profitably maintain the appropriate mix of digital and physical presence in the markets it serves; uncertainty in financial markets; disruptions to the Company’s information technology systems including but not limited to security breaches of systems protecting consumer and employee information; reputational risk arising from challenges to the Company’s or a third party supplier’s compliance with various laws, regulations or standards, including those related to labor, health, safety, privacy or the environment; reputational risk arising from third-party merchandise or service vendor performance in direct home delivery or assembly of product for customers; changes to statutory, regulatory and legal requirements; new, or developments in existing, litigation, claims or assessments; changes to, or new, tax laws or interpretation of existing tax laws; changes to, or new, accounting standards; foreign currency exchange rate fluctuations; and the integration of acquired businesses. The Company does not undertake any obligation to update its forward-looking statements.
INVESTOR CONTACT:
| Janet M. Barth | (908) 613-5820 |
BED BATH & BEYOND INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(in thousands, except per share data)
(unaudited)
| Three Months Ended | ||||||||
| May 28, | May 30, | |||||||
| 2016 | 2015 | |||||||
| Net sales | $ | 2,738,084 | $ | 2,738,495 | ||||
| Cost of sales | 1,714,492 | 1,694,362 | ||||||
| Gross profit | 1,023,592 | 1,044,133 | ||||||
| Selling, general and administrative expenses | 810,566 | 770,864 | ||||||
| Operating profit | 213,026 | 273,269 | ||||||
| Interest expense, net | 16,315 | 19,901 | ||||||
| Earnings before provision for income taxes | 196,711 | 253,368 | ||||||
| Provision for income taxes | 74,092 | 94,917 | ||||||
| Net earnings | $ | 122,619 | $ | 158,451 | ||||
| Net earnings per share - Basic | $ | 0.81 | $ | 0.94 | ||||
| Net earnings per share - Diluted | $ | 0.80 | $ | 0.93 | ||||
| Weighted average shares outstanding - Basic | 152,157 | 168,772 | ||||||
| Weighted average shares outstanding - Diluted | 153,752 | 171,133 | ||||||
BED BATH & BEYOND INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, unaudited)
| May 28, | May 30, | |||||||
| 2016 | 2015 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 544,269 | $ | 615,230 | ||||
| Short term investment securities | 22,495 | 76,872 | ||||||
| Merchandise inventories | 2,923,043 | 2,844,361 | ||||||
| Other current assets | 408,224 | 394,238 | ||||||
| Total current assets | 3,898,031 | 3,930,701 | ||||||
| Long term investment securities | 78,349 | 100,463 | ||||||
| Property and equipment, net | 1,723,429 | 1,657,119 | ||||||
| Goodwill | 487,169 | 486,279 | ||||||
| Other assets | 391,999 | 415,303 | ||||||
| $ | 6,578,977 | $ | 6,589,865 | |||||
| Liabilities and Shareholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,145,055 | $ | 1,133,673 | ||||
| Accrued expenses and other current liabilities | 471,728 | 431,216 | ||||||
| Merchandise credit and gift card liabilities | 306,431 | 317,899 | ||||||
| Current income taxes payable | 53,933 | 90,365 | ||||||
| Total current liabilities | 1,977,147 | 1,973,153 | ||||||
| Deferred rent and other liabilities | 505,512 | 491,095 | ||||||
| Income taxes payable | 75,977 | 82,633 | ||||||
| Long term debt | 1,491,254 | 1,490,788 | ||||||
| Total liabilities | 4,049,890 | 4,037,669 | ||||||
| Shareholders' equity: | ||||||||
| Preferred stock - $0.01 par value; authorized - 1,000 | ||||||||
| shares; no shares issued or outstanding | - | - | ||||||
| Common stock - $0.01 par value; authorized - 900,000 shares; | ||||||||
| issued 339,150 and 337,389 shares, respectively; | ||||||||
| outstanding 154,462 and 169,596 shares, respectively | 3,392 | 3,374 | ||||||
| Additional paid-in capital | 1,921,970 | 1,831,657 | ||||||
| Retained earnings | 10,498,036 | 9,711,827 | ||||||
| Treasury stock, at cost; 184,688 and 167,793 shares, respectively | (9,846,641 | ) | (8,953,281 | ) | ||||
| Accumulated other comprehensive loss | (47,670 | ) | (41,381 | ) | ||||
| Total shareholders' equity | 2,529,087 | 2,552,196 | ||||||
| $ | 6,578,977 | $ | 6,589,865 | |||||
Certain
reclassifications have been made to the Fiscal Year 2015 balance sheet to conform to the
Fiscal Year 2016 consolidated balance
sheet presentation.
BED BATH & BEYOND INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands, unaudited)
| Three Months Ended | ||||||||
| May 28, | May 30, | |||||||
| 2016 | 2015 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net earnings | $ | 122,619 | $ | 158,451 | ||||
| Adjustments to reconcile net earnings to net cash | ||||||||
| provided by operating activities: | ||||||||
| Depreciation and amortization | 70,445 | 62,617 | ||||||
| Stock-based compensation | 20,748 | 17,740 | ||||||
| Excess tax benefit from stock-based compensation | (1,325 | ) | (9,335 | ) | ||||
| Deferred income taxes | 4,153 | (4,234 | ) | |||||
| Other | (479 | ) | (403 | ) | ||||
| Increase in assets: | ||||||||
| Merchandise inventories | (71,933 | ) | (112,188 | ) | ||||
| Trading investment securities | (7,515 | ) | (3,363 | ) | ||||
| Other current assets | (32,502 | ) | (26,846 | ) | ||||
| Other assets | (11,946 | ) | (6,909 | ) | ||||
| Increase (decrease) in liabilities: | ||||||||
| Accounts payable | 66,260 | 7,307 | ||||||
| Accrued expenses and other current liabilities | 42,631 | 27,779 | ||||||
| Merchandise credit and gift card liabilities | 8,319 | 11,718 | ||||||
| Income taxes payable | (4,932 | ) | 25,591 | |||||
| Deferred rent and other liabilities | 3,300 | (1,017 | ) | |||||
| Net cash provided by operating activities | 207,843 | 146,908 | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Purchase of held-to-maturity investment securities | - | (16,873 | ) | |||||
| Redemption of held-to-maturity investment securities | 63,742 | 50,000 | ||||||
| Capital expenditures | (89,455 | ) | (72,364 | ) | ||||
| Net cash used in investing activities | (25,713 | ) | (39,237 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from exercise of stock options | 19,246 | 7,536 | ||||||
| Excess tax benefit from stock-based compensation | 1,325 | 9,335 | ||||||
| Repurchase of common stock, including fees | (178,124 | ) | (385,349 | ) | ||||
| Net cash used in financing activities | (157,553 | ) | (368,478 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 4,119 | 463 | ||||||
| Net increase (decrease) in cash and cash equivalents | 28,696 | (260,344 | ) | |||||
| Cash and cash equivalents: | ||||||||
| Beginning of period | 515,573 | 875,574 | ||||||
| End of period | $ | 544,269 | $ | 615,230 | ||||
Certain
reclassifications have been made to the Fiscal Year 2015 Statement of Cash Flows to conform to the
Fiscal Year 2016 cash flow
presentation.