Customer relationships | 7-20 years | |
Non-competition agreements | 1-10 years | |
Trademarks and tradenames | 4-10 years |
July 29, 2017 | July 30, 2016 | August 1, 2015 | |||||||||
(In thousands) | |||||||||||
Income tax expense | $ | 84,268 | $ | 82,456 | $ | 91,035 | |||||
Stockholders' equity, difference between compensation expense for tax purposes and amounts recognized for financial statement purposes | 1,320 | 83 | (2,746 | ) | |||||||
Other comprehensive income | 3,222 | (2,050 | ) | (293 | ) | ||||||
$ | 88,810 | $ | 80,489 | $ | 87,996 |
July 29, 2017 | July 30, 2016 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | ||||||||||||||||||
Amortizing intangible assets: | |||||||||||||||||||||||
Customer relationships | $ | 197,852 | $ | 48,044 | $ | 149,808 | $ | 196,313 | $ | 33,447 | $ | 162,866 | |||||||||||
Non-compete agreements | 2,900 | 1,334 | 1,566 | 2,900 | 753 | 2,147 | |||||||||||||||||
Trademarks and tradenames | 1,700 | 548 | 1,152 | 1,700 | 115 | 1,585 | |||||||||||||||||
Total amortizing intangible assets | 202,452 | 49,926 | 152,526 | 200,913 | 34,315 | 166,598 | |||||||||||||||||
Indefinite lived intangible assets: | |||||||||||||||||||||||
Trademarks and tradenames | 55,763 | — | 55,763 | 55,716 | — | 55,716 | |||||||||||||||||
Total | $ | 258,215 | $ | 49,926 | $ | 208,289 | $ | 256,629 | $ | 34,315 | $ | 222,314 |
(in thousands) | July 29, 2017 | July 30, 2016 | |||||
Accrued salaries and employee benefits | $ | 63,937 | $ | 58,832 | |||
Workers' compensation and automobile liabilities | 22,774 | 23,448 | |||||
Interest rate swap liability | 308 | 5,917 | |||||
Other | 70,224 | 74,241 | |||||
Total accrued expenses and other current liabilities | $ | 157,243 | $ | 162,438 |
Fiscal year ended | ||||||||||||
July 29, 2017 | July 30, 2016 | August 1, 2015 | ||||||||||
(In thousands) | ||||||||||||
Balance at beginning of year | $ | 11,230 | $ | 8,493 | $ | 8,294 | ||||||
Additions charged to costs and expenses | 5,728 | 6,426 | 5,059 | |||||||||
Deductions | (2,449 | ) | (3,689 | ) | (4,590 | ) | ||||||
Other adjustments | — | — | (270 | ) | ||||||||
Balance at end of year | $ | 14,509 | $ | 11,230 | $ | 8,493 |
(in thousands) | Preliminary as of July 30, 2016 | Adjustments in Current Fiscal Year | Final Opening Balance Sheet as of July 29, 2017 | ||||||||
Accounts receivable | $ | 8,483 | $ | — | $ | 8,483 | |||||
Inventories | 1,902 | — | 1,902 | ||||||||
Property and equipment | 10,029 | — | 10,029 | ||||||||
Other assets | 125 | — | 125 | ||||||||
Customer relationships | 30,300 | — | 30,300 | ||||||||
Tradename | 1,000 | — | 1,000 | ||||||||
Non-compete | 500 | — | 500 | ||||||||
Goodwill | 40,342 | (3,825 | ) | 36,517 | |||||||
Total assets | $ | 92,681 | $ | (3,825 | ) | $ | 88,856 | ||||
Liabilities | 24,101 | (3,028 | ) | 21,073 | |||||||
Total purchase price | $ | 68,580 | $ | (797 | ) | $ | 67,783 |
(in thousands) | Preliminary as of July 30, 2016 | Adjustments in Current Fiscal Year | Final Opening Balance Sheet as of July 29, 2017 | ||||||||
Accounts receivable | $ | 40,434 | $ | (300 | ) | $ | 40,134 | ||||
Other receivable | 3,621 | — | 3,621 | ||||||||
Inventories | 46,138 | 302 | 46,440 | ||||||||
Prepaid expenses and other current assets | 1,645 | 99 | 1,744 | ||||||||
Property and equipment | 54,501 | — | 54,501 | ||||||||
Other assets | 280 | — | 280 | ||||||||
Customer relationships | 62,700 | — | 62,700 | ||||||||
Tradename | 700 | — | 700 | ||||||||
Non-compete | 700 | — | 700 | ||||||||
Other intangible assets | 2,000 | — | 2,000 | ||||||||
Goodwill | 45,851 | (2,266 | ) | 43,585 | |||||||
Total assets | $ | 258,570 | $ | (2,165 | ) | $ | 256,405 | ||||
Liabilities | 39,510 | (600 | ) | 38,910 | |||||||
Total purchase price | $ | 219,060 | $ | (1,565 | ) | $ | 217,495 |
Fiscal Year | (In thousands) | |||
2018 | $ | 63,212 | ||
2019 | 55,353 | |||
2020 | 44,223 | |||
2021 | 28,726 | |||
2022 | 25,334 | |||
2023 and thereafter | 38,443 | |||
$ | 255,291 |
Swap Maturity | Notional Value (in millions) | Pay Fixed Rate | Receive Floating Rate | Floating Rate Reset Terms | |||||||
June 9, 2019 | $ | 50.0 | 0.8725 | % | One-Month LIBOR | Monthly | |||||
June 24, 2019 | $ | 50.0 | 0.7265 | % | One-Month LIBOR | Monthly | |||||
April 29, 2021 | $ | 25.0 | 1.0650 | % | One-Month LIBOR | Monthly | |||||
April 29, 2021 | $ | 25.0 | 0.9260 | % | One-Month LIBOR | Monthly | |||||
August 3, 2022 | $ | 122.5 | 1.7950 | % | One-Month LIBOR | Monthly |
Number of Shares | Weighted Average Grant-Date Fair Value | |||||
Outstanding at July 30, 2016 | 733,797 | $ | 55.55 | |||
Granted | 1,107,526 | $ | 40.16 | |||
Vested | (420,098 | ) | $ | 50.14 | ||
Forfeited | (151,114 | ) | $ | 50.16 | ||
Outstanding at July 29, 2017 | 1,270,111 | $ | 44.56 |
Fiscal year ended | ||||||
July 30, 2016 | August 1, 2015 | |||||
Expected volatility | 27.5 | % | 26.2 | % | ||
Dividend yield | — | % | — | % | ||
Risk free interest rate | 1.3 | % | 1.4 | % | ||
Expected term (in years) | 4.0 | 4.0 |
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||
Outstanding at beginning of year | 343,629 | $ | 49.13 | |||||||||
Exercised | (8,510 | ) | $ | 32.20 | ||||||||
Forfeited | (2,572 | ) | $ | 64.55 | ||||||||
Cancelled | (3,858 | ) | $ | 42.82 | ||||||||
Outstanding at end of year | 328,689 | $ | 49.52 | 5.0 years | $ | 868,658 | ||||||
Exercisable at end of year | 265,847 | $ | 47.05 | 4.4 years | $ | 868,658 |
July 29, 2017 | July 30, 2016 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Assets: | |||||||||||||||
Cash and cash equivalents | $ | 15,414 | $ | 15,414 | $ | 18,593 | $ | 18,593 | |||||||
Accounts receivable | 525,636 | 525,636 | 489,708 | 489,708 | |||||||||||
Notes receivable | 2,359 | 2,359 | 3,709 | 3,709 | |||||||||||
Liabilities: | |||||||||||||||
Accounts payable | 534,616 | 534,616 | 445,430 | 445,430 | |||||||||||
Notes payable | 223,612 | 223,612 | 426,519 | 426,519 | |||||||||||
Long-term debt, including current portion | 161,991 | 169,058 | 173,593 | 182,790 |
• | Level 1 Inputs—Unadjusted quoted prices in active markets for identical assets or liabilities. |
• | Level 2 Inputs—Inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data. |
• | Level 3 Inputs—One or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, and significant management judgment or estimation. |
Swap Maturity | Notional Value (in millions) | Pay Fixed Rate | Receive Floating Rate | Floating Rate Reset Terms | |||||||
June 9, 2019 | $ | 50.0 | 0.8725 | % | One-Month LIBOR | Monthly | |||||
June 24, 2019 | $ | 50.0 | 0.7265 | % | One-Month LIBOR | Monthly | |||||
April 29, 2021 | $ | 25.0 | 1.0650 | % | One-Month LIBOR | Monthly | |||||
April 29, 2021 | $ | 25.0 | 0.9260 | % | One-Month LIBOR | Monthly | |||||
August 3, 2022 | $ | 122.5 | 1.7950 | % | One-Month LIBOR | Monthly |
Fair Value at July 29, 2017 | Fair Value at July 30, 2016 | |||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets | ||||||||||||||||||||
Interest Rate Swap | — | $ | 2,491 | — | — | — | — | |||||||||||||
Liabilities: | ||||||||||||||||||||
Interest Rate Swap | — | (308 | ) | — | — | $ | (5,917 | ) | — |
July 29, 2017 | July 30, 2016 | |||||||||||||||
(In thousands) | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
Liabilities | ||||||||||||||||
Long term debt, including current portion | $ | 161,991 | $ | 169,058 | $ | 173,593 | $ | 182,790 |
July 29, 2017 | July 30, 2016 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Assets: | |||||||||||||||
Cash and cash equivalents | $ | 15,414 | $ | 15,414 | $ | 18,593 | $ | 18,593 | |||||||
Accounts receivable | 525,636 | 525,636 | 489,708 | 489,708 | |||||||||||
Notes receivable | 2,359 | 2,359 | 3,709 | 3,709 | |||||||||||
Liabilities: | |||||||||||||||
Accounts payable | 534,616 | 534,616 | 445,430 | 445,430 | |||||||||||
Notes payable | 223,612 | 223,612 | 426,519 | 426,519 | |||||||||||
Long-term debt, including current portion | 161,991 | 169,058 | 173,593 | 182,790 |
Customer relationships | 7-20 years | |
Non-competition agreements | 1-10 years | |
Trademarks and tradenames | 4-10 years |
Current | Deferred | Total | |||||||||
(In thousands) | |||||||||||
Fiscal year ended July 29, 2017 | |||||||||||
U.S. Federal | $ | 70,669 | $ | (1,874 | ) | $ | 68,795 | ||||
State & Local | 14,653 | (82 | ) | 14,571 | |||||||
Foreign | 837 | 65 | 902 | ||||||||
$ | 86,159 | $ | (1,891 | ) | $ | 84,268 | |||||
Fiscal year ended July 30, 2016 | |||||||||||
U.S. Federal | $ | 57,157 | $ | 11,383 | $ | 68,540 | |||||
State & Local | 12,718 | 1,310 | 14,028 | ||||||||
Foreign | 101 | (213 | ) | (112 | ) | ||||||
$ | 69,976 | $ | 12,480 | $ | 82,456 | ||||||
Fiscal year ended August 1, 2015 | |||||||||||
U.S. Federal | $ | 60,848 | $ | 13,209 | $ | 74,057 | |||||
State & Local | 14,119 | 2,098 | 16,217 | ||||||||
Foreign | 729 | 32 | 761 | ||||||||
$ | 75,696 | $ | 15,339 | $ | 91,035 |
Fiscal year ended | |||||||||||
July 29, 2017 | July 30, 2016 | August 1, 2015 | |||||||||
(In thousands) | |||||||||||
Computed \"expected\" tax expense | $ | 75,048 | $ | 72,878 | $ | 80,419 | |||||
State and local income tax, net of Federal income tax benefit | 9,694 | 9,412 | 10,547 | ||||||||
Non-deductible expenses | 1,951 | 1,549 | 1,551 | ||||||||
Tax effect of share-based compensation | 29 | 86 | 165 | ||||||||
General business credits | (915 | ) | (135 | ) | (365 | ) | |||||
Other, net | (1,539 | ) | (1,334 | ) | (1,282 | ) | |||||
Total income tax expense | $ | 84,268 | $ | 82,456 | $ | 91,035 |
July 29, 2017 | July 30, 2016 | August 1, 2015 | |||||||||
(In thousands) | |||||||||||
Income tax expense | $ | 84,268 | $ | 82,456 | $ | 91,035 | |||||
Stockholders' equity, difference between compensation expense for tax purposes and amounts recognized for financial statement purposes | 1,320 | 83 | (2,746 | ) | |||||||
Other comprehensive income | 3,222 | (2,050 | ) | (293 | ) | ||||||
$ | 88,810 | $ | 80,489 | $ | 87,996 |
July 29, 2017 | July 30, 2016 | ||||||
(In thousands) | |||||||
Deferred tax assets: | |||||||
Inventories, principally due to additional costs inventoried for tax purposes | $ | 9,416 | $ | 10,682 | |||
Compensation and benefits related | 35,482 | 25,453 | |||||
Accounts receivable, principally due to allowances for uncollectible accounts | 5,639 | 4,734 | |||||
Accrued expenses | 4,466 | 7,519 | |||||
Net operating loss carryforwards | 940 | 1,059 | |||||
Interest rate swap agreements | — | 2,343 | |||||
Other deferred tax assets | — | 29 | |||||
Total gross deferred tax assets | 55,943 | 51,819 | |||||
Less valuation allowance | — | — | |||||
Net deferred tax assets | $ | 55,943 | $ | 51,819 | |||
Deferred tax liabilities: | |||||||
Plant and equipment, principally due to differences in depreciation | $ | 59,414 | $ | 62,030 | |||
Intangible assets | 53,633 | 48,996 | |||||
Interest rate swap agreements | 876 | — | |||||
Other | 218 | 785 | |||||
Total deferred tax liabilities | 114,141 | 111,811 | |||||
Net deferred tax liabilities | $ | (58,198 | ) | $ | (59,992 | ) | |
Current deferred income tax assets | $ | 40,635 | $ | 35,228 | |||
Non-current deferred income tax liabilities | (98,833 | ) | (95,220 | ) | |||
$ | (58,198 | ) | $ | (59,992 | ) |
July 29, 2017 | July 30, 2016 | ||||||
(In thousands) | |||||||
Financing obligation, due monthly, and maturing in October 2028 at an effective interest rate of 7.32% | $ | 30,368 | $ | 31,502 | |||
Capital lease, Providence, Rhode Island corporate headquarters, due monthly, and maturing in April 2025 at an effective interest rate of 12.38% | 13,074 | 13,643 | |||||
Real-estate backed Term Loan Agreement, due quarterly (1) | 118,549 | 128,448 | |||||
$ | 161,991 | $ | 173,593 | ||||
Less: current installments | 12,128 | 11,854 | |||||
Long-term debt, excluding current installments | $ | 149,863 | $ | 161,739 |
Year | (In thousands) | |||
2018 | $ | 12,128 | ||
2019 | 12,441 | |||
2020 | 12,816 | |||
2021 | 93,203 | |||
2022 | 3,552 | |||
2023 and thereafter | 29,302 | |||
$ | 163,442 |
(a) | Nature of Business |
(b) | Basis of Presentation |
(c) | Use of Estimates |
(d) | Cash Equivalents |
(e) | Inventories and Cost of Sales |
(f) | Property and Equipment |
Original Estimated Useful Lives (Years) | 2017 | 2016 | |||||||
(In thousands, except years) | |||||||||
Land | $ | 52,989 | $ | 52,641 | |||||
Buildings and improvements | 20-40 | 396,733 | 403,822 | ||||||
Leasehold improvements | 5-20 | 138,466 | 136,758 | ||||||
Warehouse equipment | 3-30 | 173,591 | 163,494 | ||||||
Office equipment | 3-10 | 95,794 | 55,915 | ||||||
Computer software | 3-7 | 147,647 | 146,766 | ||||||
Motor vehicles | 3-7 | 4,657 | 4,597 | ||||||
Construction in progress | 17,968 | 15,018 | |||||||
1,027,845 | 979,011 | ||||||||
Less accumulated depreciation and amortization | 425,755 | 362,406 | |||||||
Net property and equipment | $ | 602,090 | $ | 616,605 |
(g) | Income Taxes |
(h) | Long-Lived Assets |
(i) | Goodwill and Intangible Assets |
Customer relationships | 7-20 years | |
Non-competition agreements | 1-10 years | |
Trademarks and tradenames | 4-10 years |
Wholesale | Other | Total | |||||||||
Goodwill as of August 2, 2015 | $ | 248,909 | $ | 17,731 | $ | 266,640 | |||||
Goodwill from prior fiscal year business combinations | 99,142 | 294 | 99,436 | ||||||||
Change in foreign exchange rates | 92 | — | 92 | ||||||||
Goodwill as of July 30, 2016 | $ | 348,143 | $ | 18,025 | $ | 366,168 | |||||
Goodwill from current fiscal year business combinations | 10,102 | — | 10,102 | ||||||||
Goodwill adjustment for prior fiscal year business combinations | (6,093 | ) | — | (6,093 | ) | ||||||
Change in foreign exchange rates | 1,082 | — | 1,082 | ||||||||
Goodwill as of July 29, 2017 | $ | 353,234 | $ | 18,025 | $ | 371,259 |
July 29, 2017 | July 30, 2016 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | ||||||||||||||||||
Amortizing intangible assets: | |||||||||||||||||||||||
Customer relationships | $ | 197,852 | $ | 48,044 | $ | 149,808 | $ | 196,313 | $ | 33,447 | $ | 162,866 | |||||||||||
Non-compete agreements | 2,900 | 1,334 | 1,566 | 2,900 | 753 | 2,147 | |||||||||||||||||
Trademarks and tradenames | 1,700 | 548 | 1,152 | 1,700 | 115 | 1,585 | |||||||||||||||||
Total amortizing intangible assets | 202,452 | 49,926 | 152,526 | 200,913 | 34,315 | 166,598 | |||||||||||||||||
Indefinite lived intangible assets: | |||||||||||||||||||||||
Trademarks and tradenames | 55,763 | — | 55,763 | 55,716 | — | 55,716 | |||||||||||||||||
Total | $ | 258,215 | $ | 49,926 | $ | 208,289 | $ | 256,629 | $ | 34,315 | $ | 222,314 |
Fiscal Year: | (In thousands) | ||
2018 | $ | 14,981 | |
2019 | 14,440 | ||
2020 | 13,813 | ||
2021 | 12,908 | ||
2022 | 11,582 | ||
2023 and thereafter | 84,802 | ||
$ | 152,526 |
(j) | Investments |
(k) | Revenue Recognition and Concentration of Credit Risk |
(l) | Accounts Receivable and Related Allowance for Doubtful Accounts |
(m) | Fair Value of Financial Instruments |
July 29, 2017 | July 30, 2016 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Assets: | |||||||||||||||
Cash and cash equivalents | $ | 15,414 | $ | 15,414 | $ | 18,593 | $ | 18,593 | |||||||
Accounts receivable | 525,636 | 525,636 | 489,708 | 489,708 | |||||||||||
Notes receivable | 2,359 | 2,359 | 3,709 | 3,709 | |||||||||||
Liabilities: | |||||||||||||||
Accounts payable | 534,616 | 534,616 | 445,430 | 445,430 | |||||||||||
Notes payable | 223,612 | 223,612 | 426,519 | 426,519 | |||||||||||
Long-term debt, including current portion | 161,991 | 169,058 | 173,593 | 182,790 |
(n) | Notes Receivable, Trade |
(o) | Share-Based Compensation |
(p) | Earnings Per Share |
Fiscal year ended | ||||||||
July 29, 2017 | July 30, 2016 | August 1, 2015 | ||||||
(In thousands) | ||||||||
Basic weighted average shares outstanding | 50,570 | 50,313 | 50,021 | |||||
Net effect of dilutive common stock equivalents based upon the treasury stock method | 205 | 86 | 246 | |||||
Diluted weighted average shares outstanding | 50,775 | 50,399 | 50,267 | |||||
Potential anti-dilutive share-based payment awards excluded from the computation above | 44 | 84 | 7 |
(q) | Comprehensive Income (Loss) |
(r) | Derivative Financial Instruments |
(s) | Shipping and Handling Fees and Costs |
(t) | Reserves for Self-Insurance |
(u) | Operating Lease Expenses |
(v) | Recently Issued Accounting Pronouncements |
Fiscal Year | (In thousands) | |||
2018 | $ | 1,067 | ||
2019 | 1,146 | |||
2020 | 940 | |||
2021 | 787 | |||
2022 | 696 | |||
2023 and thereafter | 3,070 | |||
$ | 7,706 |
Original Estimated Useful Lives (Years) | 2017 | 2016 | |||||||
(In thousands, except years) | |||||||||
Land | $ | 52,989 | $ | 52,641 | |||||
Buildings and improvements | 20-40 | 396,733 | 403,822 | ||||||
Leasehold improvements | 5-20 | 138,466 | 136,758 | ||||||
Warehouse equipment | 3-30 | 173,591 | 163,494 | ||||||
Office equipment | 3-10 | 95,794 | 55,915 | ||||||
Computer software | 3-7 | 147,647 | 146,766 | ||||||
Motor vehicles | 3-7 | 4,657 | 4,597 | ||||||
Construction in progress | 17,968 | 15,018 | |||||||
1,027,845 | 979,011 | ||||||||
Less accumulated depreciation and amortization | 425,755 | 362,406 | |||||||
Net property and equipment | $ | 602,090 | $ | 616,605 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||||||
(In thousands except per share data) | ||||||||||||||||||||
2017 | ||||||||||||||||||||
Net sales | $ | 2,278,364 | $ | 2,285,518 | $ | 2,369,556 | $ | 2,341,033 | $ | 9,274,471 | ||||||||||
Gross profit | 349,016 | 344,945 | 366,361 | 368,599 | 1,428,921 | |||||||||||||||
Income before income taxes | 48,533 | 42,028 | 60,325 | 63,537 | 214,423 | |||||||||||||||
Net income | 29,217 | 25,482 | 36,587 | 38,869 | 130,155 | |||||||||||||||
Per common share income | ||||||||||||||||||||
Basic: | $ | 0.58 | $ | 0.50 | $ | 0.72 | $ | 0.77 | $ | 2.57 | ||||||||||
Diluted: | $ | 0.58 | $ | 0.50 | $ | 0.72 | $ | 0.76 | $ | 2.56 | ||||||||||
Weighted average basic | ||||||||||||||||||||
Shares outstanding | 50,475 | 50,587 | 50,601 | 50,617 | 50,570 | |||||||||||||||
Weighted average diluted | ||||||||||||||||||||
Shares outstanding | 50,599 | 50,755 | 50,801 | 50,947 | 50,775 | |||||||||||||||
Market Price | ||||||||||||||||||||
High | $ | 50.06 | $ | 49.39 | $ | 45.99 | $ | 42.38 | $ | 50.06 | ||||||||||
Low | $ | 38.55 | $ | 40.81 | $ | 39.47 | $ | 34.60 | $ | 34.60 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||||||
(In thousands except per share data) | ||||||||||||||||||||
2016 | ||||||||||||||||||||
Net sales | $ | 2,076,649 | $ | 2,047,712 | $ | 2,132,104 | $ | 2,213,821 | $ | 8,470,286 | ||||||||||
Gross profit | 313,937 | 297,518 | 322,433 | 345,463 | 1,279,351 | |||||||||||||||
Income before income taxes | 50,135 | 37,742 | 62,676 | 57,669 | 208,222 | |||||||||||||||
Net income | 30,131 | 22,683 | 38,271 | 34,681 | 125,766 | |||||||||||||||
Per common share income | ||||||||||||||||||||
Basic: | $ | 0.60 | $ | 0.45 | $ | 0.76 | $ | 0.69 | $ | 2.50 | ||||||||||
Diluted: | $ | 0.60 | $ | 0.45 | $ | 0.76 | $ | 0.69 | $ | 2.50 | ||||||||||
Weighted average basic | ||||||||||||||||||||
Shares outstanding | 50,194 | 50,326 | 50,350 | 50,381 | 50,313 | |||||||||||||||
Weighted average diluted | ||||||||||||||||||||
Shares outstanding | 50,313 | 50,388 | 50,379 | 50,516 | 50,399 | |||||||||||||||
Market Price | ||||||||||||||||||||
High | $ | 55.69 | $ | 52.07 | $ | 43.02 | $ | 52.18 | $ | 55.69 | ||||||||||
Low | $ | 44.05 | $ | 33.85 | $ | 29.75 | $ | 33.16 | $ | 29.75 |
Restructuring Costs Recorded in Fiscal 2017 | Payments and Other Adjustments | Restructuring Cost Liability as of July 29, 2017 | ||||||||||
Severance and other employee separation and transition costs | $ | 6,606 | $ | (2,308 | ) | $ | 4,298 | |||||
Early lease termination and facility closing costs | 258 | (258 | ) | — | ||||||||
Total | $ | 6,864 | $ | (2,566 | ) | $ | 4,298 |
(in thousands) | Restructuring Costs Recorded in Fiscal 2016 | ||
Cost saving measures: | |||
Severance | $ | 3,443 | |
Early lease termination and facility closing costs | 368 | ||
Operational transfer costs | 570 | ||
Earth Origins: | |||
Severance | 41 | ||
Store closing costs | 443 | ||
Total | $ | 4,865 |
(in thousands) | Impairment Costs | ||
Canadian facility closure | $ | 413 | |
Earth Origins store | 274 | ||
Total | $ | 687 |
July 29, 2017 | July 30, 2016 | |||||||||||||||
(In thousands) | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
Liabilities | ||||||||||||||||
Long term debt, including current portion | $ | 161,991 | $ | 169,058 | $ | 173,593 | $ | 182,790 |
Current | Deferred | Total | |||||||||
(In thousands) | |||||||||||
Fiscal year ended July 29, 2017 | |||||||||||
U.S. Federal | $ | 70,669 | $ | (1,874 | ) | $ | 68,795 | ||||
State & Local | 14,653 | (82 | ) | 14,571 | |||||||
Foreign | 837 | 65 | 902 | ||||||||
$ | 86,159 | $ | (1,891 | ) | $ | 84,268 | |||||
Fiscal year ended July 30, 2016 | |||||||||||
U.S. Federal | $ | 57,157 | $ | 11,383 | $ | 68,540 | |||||
State & Local | 12,718 | 1,310 | 14,028 | ||||||||
Foreign | 101 | (213 | ) | (112 | ) | ||||||
$ | 69,976 | $ | 12,480 | $ | 82,456 | ||||||
Fiscal year ended August 1, 2015 | |||||||||||
U.S. Federal | $ | 60,848 | $ | 13,209 | $ | 74,057 | |||||
State & Local | 14,119 | 2,098 | 16,217 | ||||||||
Foreign | 729 | 32 | 761 | ||||||||
$ | 75,696 | $ | 15,339 | $ | 91,035 |
July 29, 2017 | July 30, 2016 | ||||||
(In thousands) | |||||||
Financing obligation, due monthly, and maturing in October 2028 at an effective interest rate of 7.32% | $ | 30,368 | $ | 31,502 | |||
Capital lease, Providence, Rhode Island corporate headquarters, due monthly, and maturing in April 2025 at an effective interest rate of 12.38% | 13,074 | 13,643 | |||||
Real-estate backed Term Loan Agreement, due quarterly (1) | 118,549 | 128,448 | |||||
$ | 161,991 | $ | 173,593 | ||||
Less: current installments | 12,128 | 11,854 | |||||
Long-term debt, excluding current installments | $ | 149,863 | $ | 161,739 |
July 29, 2017 | July 30, 2016 | ||||||
(In thousands) | |||||||
Deferred tax assets: | |||||||
Inventories, principally due to additional costs inventoried for tax purposes | $ | 9,416 | $ | 10,682 | |||
Compensation and benefits related | 35,482 | 25,453 | |||||
Accounts receivable, principally due to allowances for uncollectible accounts | 5,639 | 4,734 | |||||
Accrued expenses | 4,466 | 7,519 | |||||
Net operating loss carryforwards | 940 | 1,059 | |||||
Interest rate swap agreements | — | 2,343 | |||||
Other deferred tax assets | — | 29 | |||||
Total gross deferred tax assets | 55,943 | 51,819 | |||||
Less valuation allowance | — | — | |||||
Net deferred tax assets | $ | 55,943 | $ | 51,819 | |||
Deferred tax liabilities: | |||||||
Plant and equipment, principally due to differences in depreciation | $ | 59,414 | $ | 62,030 | |||
Intangible assets | 53,633 | 48,996 | |||||
Interest rate swap agreements | 876 | — | |||||
Other | 218 | 785 | |||||
Total deferred tax liabilities | 114,141 | 111,811 | |||||
Net deferred tax liabilities | $ | (58,198 | ) | $ | (59,992 | ) | |
Current deferred income tax assets | $ | 40,635 | $ | 35,228 | |||
Non-current deferred income tax liabilities | (98,833 | ) | (95,220 | ) | |||
$ | (58,198 | ) | $ | (59,992 | ) |
Fiscal year ended | |||||||||||
July 29, 2017 | July 30, 2016 | August 1, 2015 | |||||||||
(In thousands) | |||||||||||
Computed \"expected\" tax expense | $ | 75,048 | $ | 72,878 | $ | 80,419 | |||||
State and local income tax, net of Federal income tax benefit | 9,694 | 9,412 | 10,547 | ||||||||
Non-deductible expenses | 1,951 | 1,549 | 1,551 | ||||||||
Tax effect of share-based compensation | 29 | 86 | 165 | ||||||||
General business credits | (915 | ) | (135 | ) | (365 | ) | |||||
Other, net | (1,539 | ) | (1,334 | ) | (1,282 | ) | |||||
Total income tax expense | $ | 84,268 | $ | 82,456 | $ | 91,035 |
Fiscal Year | (In thousands) | |||
2018 | $ | 1,067 | ||
2019 | 1,146 | |||
2020 | 940 | |||
2021 | 787 | |||
2022 | 696 | |||
2023 and thereafter | 3,070 | |||
$ | 7,706 |
Fair Value at July 29, 2017 | Fair Value at July 30, 2016 | |||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets | ||||||||||||||||||||
Interest Rate Swap | — | $ | 2,491 | — | — | — | — | |||||||||||||
Liabilities: | ||||||||||||||||||||
Interest Rate Swap | — | (308 | ) | — | — | $ | (5,917 | ) | — |
Fiscal Year | (In thousands) | |||
2018 | $ | 63,212 | ||
2019 | 55,353 | |||
2020 | 44,223 | |||
2021 | 28,726 | |||
2022 | 25,334 | |||
2023 and thereafter | 38,443 | |||
$ | 255,291 |
Wholesale | Other | Total | |||||||||
Goodwill as of August 2, 2015 | $ | 248,909 | $ | 17,731 | $ | 266,640 | |||||
Goodwill from prior fiscal year business combinations | 99,142 | 294 | 99,436 | ||||||||
Change in foreign exchange rates | 92 | — | 92 | ||||||||
Goodwill as of July 30, 2016 | $ | 348,143 | $ | 18,025 | $ | 366,168 | |||||
Goodwill from current fiscal year business combinations | 10,102 | — | 10,102 | ||||||||
Goodwill adjustment for prior fiscal year business combinations | (6,093 | ) | — | (6,093 | ) | ||||||
Change in foreign exchange rates | 1,082 | — | 1,082 | ||||||||
Goodwill as of July 29, 2017 | $ | 353,234 | $ | 18,025 | $ | 371,259 |
Year | (In thousands) | |||
2018 | $ | 12,128 | ||
2019 | 12,441 | |||
2020 | 12,816 | |||
2021 | 93,203 | |||
2022 | 3,552 | |||
2023 and thereafter | 29,302 | |||
$ | 163,442 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||||||
(In thousands except per share data) | ||||||||||||||||||||
2017 | ||||||||||||||||||||
Net sales | $ | 2,278,364 | $ | 2,285,518 | $ | 2,369,556 | $ | 2,341,033 | $ | 9,274,471 | ||||||||||
Gross profit | 349,016 | 344,945 | 366,361 | 368,599 | 1,428,921 | |||||||||||||||
Income before income taxes | 48,533 | 42,028 | 60,325 | 63,537 | 214,423 | |||||||||||||||
Net income | 29,217 | 25,482 | 36,587 | 38,869 | 130,155 | |||||||||||||||
Per common share income | ||||||||||||||||||||
Basic: | $ | 0.58 | $ | 0.50 | $ | 0.72 | $ | 0.77 | $ | 2.57 | ||||||||||
Diluted: | $ | 0.58 | $ | 0.50 | $ | 0.72 | $ | 0.76 | $ | 2.56 | ||||||||||
Weighted average basic | ||||||||||||||||||||
Shares outstanding | 50,475 | 50,587 | 50,601 | 50,617 | 50,570 | |||||||||||||||
Weighted average diluted | ||||||||||||||||||||
Shares outstanding | 50,599 | 50,755 | 50,801 | 50,947 | 50,775 | |||||||||||||||
Market Price | ||||||||||||||||||||
High | $ | 50.06 | $ | 49.39 | $ | 45.99 | $ | 42.38 | $ | 50.06 | ||||||||||
Low | $ | 38.55 | $ | 40.81 | $ | 39.47 | $ | 34.60 | $ | 34.60 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||||||
(In thousands except per share data) | ||||||||||||||||||||
2016 | ||||||||||||||||||||
Net sales | $ | 2,076,649 | $ | 2,047,712 | $ | 2,132,104 | $ | 2,213,821 | $ | 8,470,286 | ||||||||||
Gross profit | 313,937 | 297,518 | 322,433 | 345,463 | 1,279,351 | |||||||||||||||
Income before income taxes | 50,135 | 37,742 | 62,676 | 57,669 | 208,222 | |||||||||||||||
Net income | 30,131 | 22,683 | 38,271 | 34,681 | 125,766 | |||||||||||||||
Per common share income | ||||||||||||||||||||
Basic: | $ | 0.60 | $ | 0.45 | $ | 0.76 | $ | 0.69 | $ | 2.50 | ||||||||||
Diluted: | $ | 0.60 | $ | 0.45 | $ | 0.76 | $ | 0.69 | $ | 2.50 | ||||||||||
Weighted average basic | ||||||||||||||||||||
Shares outstanding | 50,194 | 50,326 | 50,350 | 50,381 | 50,313 | |||||||||||||||
Weighted average diluted | ||||||||||||||||||||
Shares outstanding | 50,313 | 50,388 | 50,379 | 50,516 | 50,399 | |||||||||||||||
Market Price | ||||||||||||||||||||
High | $ | 55.69 | $ | 52.07 | $ | 43.02 | $ | 52.18 | $ | 55.69 | ||||||||||
Low | $ | 44.05 | $ | 33.85 | $ | 29.75 | $ | 33.16 | $ | 29.75 |
(in thousands) | Preliminary as of July 30, 2016 | Adjustments in Current Fiscal Year | Final Opening Balance Sheet as of July 29, 2017 | ||||||||
Accounts receivable | $ | 8,483 | $ | — | $ | 8,483 | |||||
Inventories | 1,902 | — | 1,902 | ||||||||
Property and equipment | 10,029 | — | 10,029 | ||||||||
Other assets | 125 | — | 125 | ||||||||
Customer relationships | 30,300 | — | 30,300 | ||||||||
Tradename | 1,000 | — | 1,000 | ||||||||
Non-compete | 500 | — | 500 | ||||||||
Goodwill | 40,342 | (3,825 | ) | 36,517 | |||||||
Total assets | $ | 92,681 | $ | (3,825 | ) | $ | 88,856 | ||||
Liabilities | 24,101 | (3,028 | ) | 21,073 | |||||||
Total purchase price | $ | 68,580 | $ | (797 | ) | $ | 67,783 |
(in thousands) | Preliminary as of July 30, 2016 | Adjustments in Current Fiscal Year | Final Opening Balance Sheet as of July 29, 2017 | ||||||||
Accounts receivable | $ | 40,434 | $ | (300 | ) | $ | 40,134 | ||||
Other receivable | 3,621 | — | 3,621 | ||||||||
Inventories | 46,138 | 302 | 46,440 | ||||||||
Prepaid expenses and other current assets | 1,645 | 99 | 1,744 | ||||||||
Property and equipment | 54,501 | — | 54,501 | ||||||||
Other assets | 280 | — | 280 | ||||||||
Customer relationships | 62,700 | — | 62,700 | ||||||||
Tradename | 700 | — | 700 | ||||||||
Non-compete | 700 | — | 700 | ||||||||
Other intangible assets | 2,000 | — | 2,000 | ||||||||
Goodwill | 45,851 | (2,266 | ) | 43,585 | |||||||
Total assets | $ | 258,570 | $ | (2,165 | ) | $ | 256,405 | ||||
Liabilities | 39,510 | (600 | ) | 38,910 | |||||||
Total purchase price | $ | 219,060 | $ | (1,565 | ) | $ | 217,495 |
(in thousands) | Impairment Costs | ||
Canadian facility closure | $ | 413 | |
Earth Origins store | 274 | ||
Total | $ | 687 |
Restructuring Costs Recorded in Fiscal 2017 | Payments and Other Adjustments | Restructuring Cost Liability as of July 29, 2017 | ||||||||||
Severance and other employee separation and transition costs | $ | 6,606 | $ | (2,308 | ) | $ | 4,298 | |||||
Early lease termination and facility closing costs | 258 | (258 | ) | — | ||||||||
Total | $ | 6,864 | $ | (2,566 | ) | $ | 4,298 |
(in thousands) | Restructuring Costs Recorded in Fiscal 2016 | ||
Cost saving measures: | |||
Severance | $ | 3,443 | |
Early lease termination and facility closing costs | 368 | ||
Operational transfer costs | 570 | ||
Earth Origins: | |||
Severance | 41 | ||
Store closing costs | 443 | ||
Total | $ | 4,865 |
Wholesale | Other | Eliminations | Unallocated (Income)/ Expenses | Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Fiscal year ended July 29, 2017 | |||||||||||||||||||
Net sales | $ | 9,210,815 | $ | 232,192 | $ | (168,536 | ) | $ | — | $ | 9,274,471 | ||||||||
Restructuring and asset impairment expenses | 2,922 | 3,942 | — | — | 6,864 | ||||||||||||||
Operating income (loss) | 247,419 | (21,857 | ) | 463 | — | 226,025 | |||||||||||||
Interest expense | — | — | — | 17,114 | 17,114 | ||||||||||||||
Interest income | — | — | — | (360 | ) | (360 | ) | ||||||||||||
Other, net | — | — | — | (5,152 | ) | (5,152 | ) | ||||||||||||
Income before income taxes | 214,423 | ||||||||||||||||||
Depreciation and amortization | 83,063 | 2,988 | — | — | 86,051 | ||||||||||||||
Capital expenditures | 53,328 | 2,784 | — | — | 56,112 | ||||||||||||||
Goodwill | 353,234 | 18,025 | — | — | 371,259 | ||||||||||||||
Total assets | 2,724,069 | 203,154 | (40,660 | ) | — | 2,886,563 | |||||||||||||
Fiscal year ended July 30, 2016 | |||||||||||||||||||
Net sales | 8,395,821 | 238,691 | (164,226 | ) | — | 8,470,286 | |||||||||||||
Restructuring and asset impairment expenses | 2,811 | 2,741 | — | — | 5,552 | ||||||||||||||
Operating income (loss) | 228,476 | (3,488 | ) | (879 | ) | — | 224,109 | ||||||||||||
Interest expense | — | — | — | 16,259 | 16,259 | ||||||||||||||
Interest income | — | — | — | (1,115 | ) | (1,115 | ) | ||||||||||||
Other, net | — | — | — | 743 | 743 | ||||||||||||||
Income before income taxes | 208,222 | ||||||||||||||||||
Depreciation and amortization | 68,278 | 2,728 | — | — | 71,006 | ||||||||||||||
Capital expenditures | 39,464 | 1,911 | — | — | 41,375 | ||||||||||||||
Goodwill | 348,143 | 18,025 | — | — | 366,168 | ||||||||||||||
Total assets | 2,672,620 | 201,603 | (22,068 | ) | — | 2,852,155 | |||||||||||||
Fiscal year ended August 1, 2015 | |||||||||||||||||||
Net sales | 8,099,818 | 225,520 | (140,360 | ) | — | 8,184,978 | |||||||||||||
Restructuring and asset impairment expenses | 803 | — | — | — | 803 | ||||||||||||||
Operating income (loss) | 234,525 | 8,394 | (962 | ) | — | 241,957 | |||||||||||||
Interest expense | — | — | — | 14,498 | 14,498 | ||||||||||||||
Interest income | — | — | — | (356 | ) | (356 | ) | ||||||||||||
Other, net | — | — | — | (1,954 | ) | (1,954 | ) | ||||||||||||
Income before income taxes | 229,769 | ||||||||||||||||||
Depreciation and amortization | 64,452 | (652 | ) | — | — | 63,800 | |||||||||||||
Capital expenditures | 125,217 | 3,917 | — | — | 129,134 | ||||||||||||||
Goodwill | 248,909 | 17,731 | — | — | 266,640 | ||||||||||||||
Total assets | 2,369,490 | 189,149 | (17,645 | ) | — | 2,540,994 |
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||
Outstanding at beginning of year | 343,629 | $ | 49.13 | |||||||||
Exercised | (8,510 | ) | $ | 32.20 | ||||||||
Forfeited | (2,572 | ) | $ | 64.55 | ||||||||
Cancelled | (3,858 | ) | $ | 42.82 | ||||||||
Outstanding at end of year | 328,689 | $ | 49.52 | 5.0 years | $ | 868,658 | ||||||
Exercisable at end of year | 265,847 | $ | 47.05 | 4.4 years | $ | 868,658 |
Fiscal year ended | ||||||
July 30, 2016 | August 1, 2015 | |||||
Expected volatility | 27.5 | % | 26.2 | % | ||
Dividend yield | — | % | — | % | ||
Risk free interest rate | 1.3 | % | 1.4 | % | ||
Expected term (in years) | 4.0 | 4.0 |
Number of Shares | Weighted Average Grant-Date Fair Value | |||||
Outstanding at July 30, 2016 | 733,797 | $ | 55.55 | |||
Granted | 1,107,526 | $ | 40.16 | |||
Vested | (420,098 | ) | $ | 50.14 | ||
Forfeited | (151,114 | ) | $ | 50.16 | ||
Outstanding at July 29, 2017 | 1,270,111 | $ | 44.56 |
Fiscal year ended | ||||||||||||
July 29, 2017 | July 30, 2016 | August 1, 2015 | ||||||||||
(In thousands) | ||||||||||||
Balance at beginning of year | $ | 11,230 | $ | 8,493 | $ | 8,294 | ||||||
Additions charged to costs and expenses | 5,728 | 6,426 | 5,059 | |||||||||
Deductions | (2,449 | ) | (3,689 | ) | (4,590 | ) | ||||||
Other adjustments | — | — | (270 | ) | ||||||||
Balance at end of year | $ | 14,509 | $ | 11,230 | $ | 8,493 |
Fiscal year ended | ||||||||
July 29, 2017 | July 30, 2016 | August 1, 2015 | ||||||
(In thousands) | ||||||||
Basic weighted average shares outstanding | 50,570 | 50,313 | 50,021 | |||||
Net effect of dilutive common stock equivalents based upon the treasury stock method | 205 | 86 | 246 | |||||
Diluted weighted average shares outstanding | 50,775 | 50,399 | 50,267 | |||||
Potential anti-dilutive share-based payment awards excluded from the computation above | 44 | 84 | 7 |
Fiscal Year: | (In thousands) | ||
2018 | $ | 14,981 | |
2019 | 14,440 | ||
2020 | 13,813 | ||
2021 | 12,908 | ||
2022 | 11,582 | ||
2023 and thereafter | 84,802 | ||
$ | 152,526 |
Wholesale | Other | Eliminations | Unallocated (Income)/ Expenses | Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Fiscal year ended July 29, 2017 | |||||||||||||||||||
Net sales | $ | 9,210,815 | $ | 232,192 | $ | (168,536 | ) | $ | — | $ | 9,274,471 | ||||||||
Restructuring and asset impairment expenses | 2,922 | 3,942 | — | — | 6,864 | ||||||||||||||
Operating income (loss) | 247,419 | (21,857 | ) | 463 | — | 226,025 | |||||||||||||
Interest expense | — | — | — | 17,114 | 17,114 | ||||||||||||||
Interest income | — | — | — | (360 | ) | (360 | ) | ||||||||||||
Other, net | — | — | — | (5,152 | ) | (5,152 | ) | ||||||||||||
Income before income taxes | 214,423 | ||||||||||||||||||
Depreciation and amortization | 83,063 | 2,988 | — | — | 86,051 | ||||||||||||||
Capital expenditures | 53,328 | 2,784 | — | — | 56,112 | ||||||||||||||
Goodwill | 353,234 | 18,025 | — | — | 371,259 | ||||||||||||||
Total assets | 2,724,069 | 203,154 | (40,660 | ) | — | 2,886,563 | |||||||||||||
Fiscal year ended July 30, 2016 | |||||||||||||||||||
Net sales | 8,395,821 | 238,691 | (164,226 | ) | — | 8,470,286 | |||||||||||||
Restructuring and asset impairment expenses | 2,811 | 2,741 | — | — | 5,552 | ||||||||||||||
Operating income (loss) | 228,476 | (3,488 | ) | (879 | ) | — | 224,109 | ||||||||||||
Interest expense | — | — | — | 16,259 | 16,259 | ||||||||||||||
Interest income | — | — | — | (1,115 | ) | (1,115 | ) | ||||||||||||
Other, net | — | — | — | 743 | 743 | ||||||||||||||
Income before income taxes | 208,222 | ||||||||||||||||||
Depreciation and amortization | 68,278 | 2,728 | — | — | 71,006 | ||||||||||||||
Capital expenditures | 39,464 | 1,911 | — | — | 41,375 | ||||||||||||||
Goodwill | 348,143 | 18,025 | — | — | 366,168 | ||||||||||||||
Total assets | 2,672,620 | 201,603 | (22,068 | ) | — | 2,852,155 | |||||||||||||
Fiscal year ended August 1, 2015 | |||||||||||||||||||
Net sales | 8,099,818 | 225,520 | (140,360 | ) | — | 8,184,978 | |||||||||||||
Restructuring and asset impairment expenses | 803 | — | — | — | 803 | ||||||||||||||
Operating income (loss) | 234,525 | 8,394 | (962 | ) | — | 241,957 | |||||||||||||
Interest expense | — | — | — | 14,498 | 14,498 | ||||||||||||||
Interest income | — | — | — | (356 | ) | (356 | ) | ||||||||||||
Other, net | — | — | — | (1,954 | ) | (1,954 | ) | ||||||||||||
Income before income taxes | 229,769 | ||||||||||||||||||
Depreciation and amortization | 64,452 | (652 | ) | — | — | 63,800 | |||||||||||||
Capital expenditures | 125,217 | 3,917 | — | — | 129,134 | ||||||||||||||
Goodwill | 248,909 | 17,731 | — | — | 266,640 | ||||||||||||||
Total assets | 2,369,490 | 189,149 | (17,645 | ) | — | 2,540,994 |