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BJ’s Wholesale Club Holdings, Inc. Announces Third Quarter Fiscal 2018 Results

November 20, 2018 4:05 PM

BJ’s Reports Third Quarter Results and Increases Earnings Outlook for Fiscal 2018

WESTBOROUGH, Mass.--(BUSINESS WIRE)-- BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ) today announced its financial results for the thirteen and thirty-nine weeks ended November 3, 2018.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20181120005658/en/

“We’re pleased with our third quarter performance, which exceeded our expectations for sales and earnings,” said Christopher J. Baldwin, Chairman and Chief Executive Officer, BJ’s Wholesale Club. “We continue to execute against our strategic priorities and have now delivered eleven consecutive quarters of improved profitability and five quarters of positive comp sales. We are still in the very early stages of our transformation and have significant opportunities ahead. We are optimistic our approach will deliver benefits to our members, shareholders and team members over the long term.”

Key Measures for the Thirteen Weeks (Q3 FY18) and Thirty-Nine Weeks (YTD FY18) Ended November 3, 2018:

BJ'S WHOLESALE CLUB HOLDINGS, INC. � � � � � � � � � �
(Amounts in thousands, except per share amounts)
� � � � �
Q3 Q3 % YTD YTD %
FY18 FY17

Growth

FY18 FY17

Growth

Net sales $ 3,150,234 $ 3,019,389 4.3 % $ 9,380,640 $ 9,006,022 4.2 %
Membership fee income � 71,429 � 64,856 10.1 % � 209,825 � 192,578 � 9.0 %
Total revenues $ 3,221,663 $ 3,084,245 4.5 % $ 9,590,465 $ 9,198,600 4.3 %
�
Operating income

�

90,327

�

80,540 12.2 %

�

193,571

�

127,537 51.8 %
�
Income (loss) from continuing operations

�

54,568

�

22,873 138.6 %

�

63,379

�

(16,099 ) N/A
�
Adjusted EBITDA (a)

�

148,618

�

141,084 5.3 %

�

413,057

�

375,509 10.0 %
�
Net income (loss)

�

54,431

�

22,775 139.0 %

�

62,954

�

(16,407 ) N/A
EPS (b)

�

0.39

�

0.25 56.0 %

�

0.55

�

(0.18 ) N/A
�
Adjusted net income (c)

�

53,822

�

35,146 53.1 %

�

125,029

�

73,093 71.1 %
Adjusted EPS (c)

�

0.39

�

0.25 56.0 %

�

0.90

�

0.52 73.1 %

a) See “Note Regarding Non-GAAP Financial Information” beginning on Page 8
b) EPS represents earnings per diluted share
c) See “Note Regarding Non-GAAP Financial Information” beginning on Page 8

Additional Highlights:

Recent Developments

Fiscal Year (FY) 2018 Outlook

Outlook � � �
FY Ending February 2, 2019 � � Current Outlook Prior Outlook

Amounts in millions, except for per share amounts. Net Sales is in billions

FY 2018 FY 2018
�
Net Sales $12.65 - $12.75 $12.6 - $12.7
Merchandise Comparable Store Sales (a)

1.9% - 2.1%

1.8% - 2.1%
Income from Continuing Operations $109 - $116 $102 - $112
Adjusted EBITDA $558 - $565 $553 - $563
Interest expense (b) $114 - $117 $115 - $118
Tax Rate (c) 27% 27%
Net Income $108 - $114 $101 - $111
Adjusted Net Income $170 - $176 $163 - $173
EPS (d) $0.89 - $0.94 $0.83 - $0.91
Adjusted EPS (d) $1.22 - $1.26 $1.17 - $1.24
Capital Expenditures $160 - $170 $160 - $170
�

a) Merchandise comparable store sales excludes gasoline
b) Interest expense includes the anticipated benefit of the 2018 repricing transactions and excludes the expenses associated with the 2018 repricing, the expenses associated with the paydown of our second lien in the second quarter and interest expense incurred on our second lien prior to the paydown
c) Tax rate excludes any benefit from future windfall stock benefits
d) Per share metrics are based on estimated diluted weighted average shares outstanding of approximately 121.0 million and adjusted diluted weighted average shares outstanding of approximately 139.9 million, respectively.

Conference Call Details

A conference call to discuss the third quarter fiscal 2018 financial results is scheduled for today, November 20, 2018, at 4:30 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial 877-274-0290 (international callers please dial 647-689-5405) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available online at https://investors.bjs.com.

A recorded replay of the conference call will be available within two hours of the conclusion of the call and can be accessed both online at https://investors.bjs.com and by dialing 416-621-4642 and entering the access code 7493058. The recorded replay will be available until November 27, 2018 and an online archive of the webcast will be available for one year.

About BJ’s Wholesale Club Holdings, Inc.

Headquartered in Westborough, Massachusetts, BJ's Wholesale Club Holdings, Inc. and its wholly owned subsidiaries, is a leading operator of membership warehouse clubs in the Eastern United States. The company currently operates 216 clubs and 136 BJ's Gas® locations in 16 states.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding our strategic priorities; our anticipated fiscal 2018 outlook; and our future progress, as well as statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “forecast,” “estimate,” “may,” “should,” “anticipate” and similar statements of a future or forward-looking nature. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: uncertainties in the financial markets, consumer and small business spending patterns and debt levels; our dependence on having a large and loyal membership; domestic and international economic conditions, including exchange rates; our ability to procure the merchandise we sell at the best possible prices; the effects of competition and regulation; our dependence on vendors to supply us with quality merchandise at the right time and at the right price; breaches of security or privacy of member or business information; conditions affecting the acquisition, development, ownership or use of real estate; our capital spending; actions of vendors; our ability to attract and retain a qualified management team and other team members; costs associated with employees (generally including health care costs), energy and certain commodities, geopolitical conditions (including tariffs); changes in our product mix or in our revenues from gasoline sales; our failure to successfully maintain a relevant omnichannel experience for our members; risks related to our growth strategy to open new clubs; risks related to our�e-commerce�business; and other important factors discussed under the caption “Risk Factors” in our final prospectus under Rule 424(b) filed with the U.S. Securities and Exchange Commission (“SEC”) on September 27, 2018 in connection with the selling stockholders’ offering, as such factors may be updated from time to time in our other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, unless required by law, we disclaim any obligation to do so, even if subsequent events cause our views to change. Thus, one should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Non-GAAP Financial Measures

We refer to certain financial measures that are not recognized under U.S. generally accepted accounting principles (“GAAP”). Please see “Note Regarding Non-GAAP Financial Information and “Reconciliation of GAAP to Non-GAAP Financial Information” below for additional information and a reconciliation of the non-GAAP financial measures to the most comparable GAAP financial measures.

� � � �
BJ'S WHOLESALE CLUB HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
(Unaudited)
13 Weeks Ended 13 Weeks Ended 39 Weeks Ended 39 Weeks Ended
November 3, 2018 October 28, 2017 November 3, 2018 October 28, 2017
Net sales $ 3,150,234 $ 3,019,389 $ 9,380,640 $ 9,006,022
Membership fee income � 71,429 � � 64,856 � � 209,825 � � 192,578 �
Total revenues 3,221,663 3,084,245 9,590,465 9,198,600
Cost of sales 2,629,575 2,523,297 7,858,515 7,578,790
Selling, general and administrative expenses 499,554 480,285 1,534,314 1,490,117
Preopening expense � 2,207 � � 123 � � 4,065 � � 2,156 �

Operating income

90,327 80,540 193,571 127,537
Interest expense, net � 33,029 � � 42,321 � � 137,787 � � 150,211 �
Income (loss) from continuing operations before income taxes 57,298 38,219 55,784 (22,674 )
Provision (benefit) for income taxes � 2,730 � � 15,346 � � (7,595 ) � (6,575 )
Income (loss) from continuing operations 54,568 22,873 63,379 (16,099 )
Loss from discontinued operations, net of income taxes � (137 ) � (98 ) � (425 ) � (308 )
Net income (loss) $ 54,431 � $ 22,775 � $ 62,954 � $ (16,407 )
Income (loss) per share attributable to common stockholders - basic:
Income (loss) from continuing operations

$

0.40

$

0.26

$

0.58

$

(0.18 )
Loss from discontinued operations � - � � - � � - � � - �
Net income

$

0.40 �

$

0.26 �

$

0.58 �

$

(0.18 )
Income (loss) per share attributable to common stockholders - diluted:
Income (loss) from continuing operations

$

0.39

$

0.25

$

0.55

$

(0.18 )
Loss from discontinued operations � - � � - � � - � � - �
Net income

$

0.39 �

$

0.25 �

$

0.55 �

$

(0.18 )
Weighted average number of common shares outstanding:
Basic 135,010 88,442 110,159 88,363
Diluted 139,360 92,285 114,941 88,363
�
� � � � �
BJ'S WHOLESALE CLUB HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
November 3, 2018 October 28, 2017
ASSETS
Current assets:
Cash and cash equivalents $ 31,502 $ 31,745
Accounts receivable, net 179,091 179,776
Merchandise inventories 1,245,110 1,183,562
Prepaid expenses and other current assets 78,179 35,534
Prepaid federal and state income taxes � 26,079 � � 4,043 �
Total current assets 1,559,961 1,434,660
�
Property and equipment, net 745,889 744,763
Goodwill 924,134 924,134
Intangibles, net 206,706 231,736
Other assets � 28,265 � � 30,911 �
Total assets $ 3,464,955 � $ 3,366,204 �
�
LIABILITIES
Current liabilities:
Current portion of long-term debt $ 389,377 $ 231,250
Accounts payable 976,518 891,134
Accrued expenses and other current liabilities 485,786 445,975
Closed store obligations due within one year � 2,126 � � 2,013 �
Total current liabilities 1,853,807 1,570,372
�
Long-term debt 1,549,406 2,529,380
Noncurrent closed store obligations 5,344 5,044
Deferred income taxes 51,810 77,142
Other noncurrent liabilities 261,206 267,351
�
STOCKHOLDERS' DEFICIT � (256,618 ) � (1,092,060 )
Total liabilities and stockholders' deficit $ 3,464,955 � $ 3,366,204 �
�

�

� � � � �

BJ'S WHOLESALE CLUB HOLDINGS,��INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

39 Weeks Ended 39 Weeks Ended
November 3, 2018 October 28, 2017
�
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 62,954 $ (16,407 )
Adjustments to reconcile net income to net cash provided by operating activities:
Charges for discontinued operations 590 523
Depreciation and amortization 122,434 123,404

Amortization of debt issuance costs and accretion of original issues discount

5,233 6,347
Debt extinguishment and refinancing charges 23,602 9,788
Impairment charges for assets held for sale 3,962 -
Other non cash items, net 18,714 (1,334 )
Stock-based compensation expense 54,746 7,649
Deferred income tax provision (2,729 ) (15,758 )
Changes in operating assets and liabilities:
Accounts receivable 11,233 (13,527 )
Merchandise inventories (225,972 ) (151,718 )
Accounts payable 202,630 168,042
Accrued expenses 9,355 (14,480 )
Accrued income taxes (33,773 ) (3,810 )
Other operating assets and liabilities, net � (2,086 ) � 1,640 �
Net cash provided by operating activities $ 250,893 � $ 100,359 �
�
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment, net of disposals $ (103,340 ) $ (86,122 )
Net cash used in investing activities $ (103,340 ) $ (86,122 )
�
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long term debt $ - $ 547,544
Principal payments on long term debt (30,546 ) (9,625 )
Extinguishment of First and Second Lien Term Loan (977,410 ) -
Net proceeds from ABL facility 207,000 207,000
Debt issuance costs paid (982 ) (24,635 )
Dividends paid - (735,492 )
Net cash received (paid) from stock option exercises (15,277 ) 741
Acquistion of treasury stock (19,149 ) -
Proceeds from Initial Public Offering, net of underwriters discount and commission 690,970 -
Payment of Initial Public Offering costs (5,081 ) -
Other financing activities � (530 ) � 11 �
Net cash used in financing activities $ (151,005 ) $ (14,456 )
�
Net decrease in cash and cash equivalents $ (3,452 ) $ (219 )
Cash and cash equivalents at beginning of period � 34,954 � � 31,964 �
Cash and cash equivalents at end of period $ 31,502 � $ 31,745 �
�

Note�Regarding Non-GAAP Financial Information

This press release includes financial measures that are not calculated in accordance with GAAP, including adjusted net income, adjusted net income per diluted share, and adjusted EBITDA.

We define adjusted net income (loss) as net income (loss) attributable to common stockholders adjusted for: stock-based compensation related to the IPO; offering costs; management fees; charges incurred in the 2017 dividend recapitalization; compensatory payments related to options; club asset impairment; charges related to extinguishing the second lien term loan; interest and amortization on the second lien term loan; charges and write-off fees related to the 2018 debt refinancings; the windfall tax benefit from stock exercises; and the tax impact of the foregoing adjustments on net income (loss).

We define adjusted net income per diluted share as adjusted net income divided by the diluted shares outstanding on the last day of the latest period presented.

We define adjusted EBITDA as income (loss) from continuing operations before interest expense, net, provision (benefit) for income taxes and depreciation and amortization, adjusted for the impact of certain other items, including: compensatory payments related to options; stock-based compensation expense; preopening expenses; management fees; noncash rent; strategic consulting, severance; offering costs; and other adjustments.

We present adjusted net income, adjusted net income per diluted share and adjusted EBITDA, which are not recognized financial measures under GAAP, because we believe it assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.

Management believes that adjusted net income, adjusted net income per diluted share and adjusted EBITDA are helpful in highlighting trends in our core operating performance compared to other measures, which can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. We use adjusted net income, adjusted net income per diluted share and adjusted EBITDA to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies; to make budgeting decisions; and to compare our performance against that of other peer companies using similar measures. We also use adjusted EBITDA in connection with establishing discretionary annual incentive compensation.

You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating adjusted net income, adjusted net income per diluted share and adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or like some of the adjustments in our presentation of these metrics. Our presentation of adjusted net income, adjusted net income per diluted share and adjusted EBITDA should not be considered as alternatives any other performance measure derived in accordance with GAAP and they should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items. There can be no assurance that we will not modify the presentation of adjusted net income, adjusted net income per diluted share, or adjusted EBITDA in the future, and any such modification may be material. In addition, adjusted net income, adjusted net income per diluted share, or adjusted EBITDA may not be comparable to similarly titled measures used by other companies in our industry or across different industries. Additionally, adjusted net income, adjusted net income per diluted share and adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP.

Reconciliation of GAAP to Non-GAAP Financial Information

� � � � � � � �
BJ'S WHOLESALE CLUB HOLDINGS, INC.
Reconciliation of net income (loss) to adjusted net income and adjusted net income per diluted share
(Amounts in thousands, except per share amounts)
(Unaudited)
�
Thirteen Weeks Ended Thirty-Nine Weeks Ended
November 3, 2018 � � October 28, 2017 November 3, 2018 � � October 28, 2017
�
Net income (loss) as reported $ 54,431 $ 22,775 $ 62,954 $ (16,407 )
Adjustments:
Stock-based compensation related to IPO (a) - - 48,927 -
Offering costs (b) 2,382 - 3,143 -
Management fees (c) - 2,005 3,333 6,073
Charges incurred in the 2017 dividend recapitalization (d) - - - 22,110
Compensatory payments related to options (e) - 4,253 - 77,953
Club asset impairment (f) 962 - 3,962 -
Charges related to extinguishing Second Lien Term Loan (g) - - 19,159 -
Interest and amortization on Second Lien Term Loan (h) - 14,190 24,341 41,798
Charges and write-offs related to the 2018 debt refinancings (i) 6,240 - 6,240 -
Windfall tax benefit from stock exercises (j) (7,586 ) - (17,353 ) -
Tax impact of adjustments to net income (loss) (k) � (2,607 ) � � � (8,077 ) � (29,677 ) � � � (58,434 )
Adjusted net income $ 53,822 � � � $ 35,146 � $ 125,029 � � � $ 73,093 �
�
Weighted average fully diluted shares outstanding 139,360 92,285

114,941

88,363
Fully diluted shares outstanding at November 3, 2018 139,360 139,360 139,360 139,360
Adjusted net income per diluted share (l) $ 0.39 $ 0.25 $ 0.90 $ 0.52
�

(a) Represents one-time stock-based compensation expense for certain restricted stock and stock option awards issued in connection with our IPO.
(b) Represents one-time costs related to our IPO and secondary offering.
(c) Represents management fees paid to our sponsors (or advisory affiliates thereof) in accordance with our management services agreement, which terminated upon closing of the IPO.
(d) Represents the write-off of certain deferred financing charges and other amounts in connection with the 2017 dividend recapitalization.
(e) Represents payments to holders of our stock options made pursuant to antidilutive provisions in connection with dividends paid to our shareholders.
(f) Represents the impairment charges related to a club relocated in 2018.
(g) Represents the write-off of certain deferred financing charges and a prepayment penalty associated with the payoff of our second lien term loan.
(h) Represents the historical interest expense associated with the second lien term loan that was paid in full with proceeds from our IPO.
(i) Represents fees and the write-off of deferred fees associated with the repricing of the Company’s first lien term loan and ABL facility.
(j) Represents the windfall tax benefit to the Company due to the exercise of stock options in connection with the secondary offering and of certain stock options by former employees of the Company.
(k) Represents the tax effect of the above adjustments at an effective tax rate of approximately 27%, as applicable.
(l) Adjusted net income per diluted share is measured using the fully diluted shares outstanding at November 3, 2018 of 139.4 million shares for all periods presented.

� � � � � � � � �
BJ'S WHOLESALE CLUB HOLDINGS, INC.
RECONCILIATION OF ADJUSTED EBITDA
(Amounts in thousands) �
(Unaudited)
�
Thirteen Weeks Ended Thirty-Nine Weeks Ended
November 3, 2018 � � October 28, 2017 November 3, 2018 � � October 28, 2017
Income (loss) from continuning operations $ 54,568 $ 22,873 $ 63,379 $ (16,099 )
Interest expense, net 33,029 42,321 137,787 150,211
Provision (benefit) for income taxes 2,730 15,346 (7,595 ) (6,575 )
Depreciation and amortization 39,936 41,117 122,434 123,404
Compensatory payments related to options (a) - 4,253 - 77,953
Stock-based compensation expense (b) 2,620 1,909 55,984 7,649
Preopening expenses (c) 2,207 123 4,065 2,156
Management fees (d) - 2,005 3,335 6,073
Noncash rent (e ) 1,150 1,384 3,591 4,381
Strategic consulting (f) 9,321 7,448 22,569 24,402
Severance (g) - - 960 -
Offering costs (h) 2,382 - 3,143 -
Other adjustments (i) � 675 � � � 2,305 � 3,405 � � � � 1,954 �
Adjusted EBITDA $ 148,618 � � $ 141,084 $ 413,057 � � � $ 375,509 �
�

(a) Represents payments to holders of our stock options made pursuant to antidilutive provisions in connection with dividends paid to our shareholders.
(b) Represents total stock-based compensation expense and includes one-time expense related to certain restricted stock and stock option awards issued in connection with our IPO.
(c) Represents direct incremental costs of opening or relocating a facility that are charged to operations as incurred.
(d) Represents management fees paid to our sponsors (or advisory affiliates thereof) in accordance with our management services agreement, which terminated upon closing of the IPO.
(e) Consists of an adjustment to remove the non-cash portion of rent expense, which has been recorded on a straight-line basis in accordance with GAAP.
(f) Represents fees paid to external consultants for strategic initiatives of limited duration.
(g) Represents termination costs to a former executive.
(h) Represents one-time costs related to our IPO and secondary offering.
(i) Other non-cash items, including amortization of a deferred gain from sale lease back transactions in 2013, non-cash accretion on asset retirement obligations, obligations associated with our post-retirement medical plan and impairment charges related to a club that was relocated in 2018.

�

BJ'S WHOLESALE CLUB HOLDINGS, INC.

Reconciliation of GAAP to Non-GAAP Financial Measures

Fiscal Year 2018 Outlook for Adjusted Net Income and Adjusted Earnings per Share - Diluted

(Amounts in millions, except per share amounts)

(Unaudited)

� � � � �
Fiscal Year 2018 Outlook
Low End � � High End
�
Net income $ 108 $ 114
Adjustments:
Stock-based compensation related to IPO (a) 49 49
Offering costs (b) 3 3
Management fees (c) 3 3
Club asset impairment (d) 4 4
Charges related to extinguishing Second Lien Term Loan (e) 19 19
Interest and amortization on Second Lien Term Loan (f) 24 24
Charges and write-offs related to the 2018 debt refinancings (g) 6 6
Windfall tax benefit from stock exercises (h) (17 ) (17 )
Tax impact of adjustments to net income (loss) (i) � (30 ) � � � (30 )
Adjusted net income $ 170 � � � $ 176 �
�
Estimated fully diluted shares outstanding 140 140
Adjusted earrnings per share $ 1.22 $ 1.26
�

(a) Represents stock-based compensation expense for certain restricted stock and stock option awards issued in connection with our IPO.
(b) Represents one-time costs related to our IPO and secondary offering.
(c) Represents management fees paid to our sponsors (or advisory affiliates thereof) in accordance with our management services agreement, which terminated upon closing of the IPO.
(d) Represents the impairment charges related to a club relocated in 2018
(e) Represents the write-off of certain deferred financing charges and a prepayment penalty associated with the payoff of our second lien term loan.
(f) Represents the historical interest expense associated with the second lien term loan that was paid in full with proceeds from our IPO.
(g) Represents fees and write-off of deferred fees associated with the repricing of the Company’s first lien term loan and ABL facility.
(h) Represents the windfall tax benefit to the Company due to the exercise of stock options in connection with the secondary offering and certain stock options by former employees of the Company.
(i) Represents the tax effect of the above adjustments at an effective tax rate of approximately 27%, as applicable.

� � �
BJ'S WHOLESALE CLUB HOLDINGS, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
Fiscal Year 2018 Outlook for Adjusted EBITDA
(Amounts in millions)
(Unaudited)
�
Fiscal Year 2018 Outlook
Low High
Income (loss) from continuning operations $ 109 $ 116
Interest expense, net 165 165
Provision (benefit) for income taxes 11 11
Depreciation and amortization 163 163
Compensatory payments related to options (a) 2 2
Stock-based compensation expense (b) 57 57
Preopening expenses (c) 5 5
Management fees (d) 3 3
Noncash rent (e ) 5 5
Strategic consulting (f) 29 29
Severance (g) 1 1
Offering costs (h) 3 3
Other adjustments (i) � 3 � 3
Adjusted EBITDA $ 558 $ 565
�

(a) Represents payments to holders of our stock options made pursuant to antidilutive provisions in connection with dividends paid to our Sponsors.
(b) Represents non-cash-based compensation expense and includes expense related to certain restricted stock and stock option awards issued in connection with our IPO
(c) Represents direct incremental costs of opening or relocating a facility that are charged to operations as incurred.
(d) Represents management fees paid to our sponsors (or advisory affiliates thereof) in accordance with our management services agreement, which terminated upon closing of the IPO.
(e) Consists of an adjustment to remove the non-cash portion of rent expense, which has been recorded on a straight-line basis in accordance with GAAP.
(f) Represents fees paid to external consultants for strategic initiatives of limited duration.
(g) Represents termination costs to a former executive.
(h) Represents one-time costs related to our IPO and secondary offering.
(i) Other non-cash items, including amortization of a deferred gain from sale lease back transactions in 2013, non-cash accretion on asset retirement obligations, obligations associated with our post-retirement medical plan and impairment charges related to a club that was relocated in 2018.

Faten Freiha, BJ's Wholesale Club

(774) 512-6320

[email protected]

Media Contact:

Kirk Saville, BJ’s Wholesale Club

(774) 512-7425

[email protected]

Source: BJ’s Wholesale Club Holdings, Inc.

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