hhgregg, Inc. (NYSE: HGG) ("hhgregg" or the "Company") today
announced operating results for the third fiscal quarter ended
December 31, 2016.
Third Fiscal Quarter
Summary
- Net sales decreased 23.7% to $453
million compared to prior year third fiscal quarter.
- Comparable store sales decreased
22.2% compared to the prior year third fiscal quarter.
- Consumer electronics and
distribution center consolidations were the primary drivers of the
comparable store sales decrease.
- Gross margin decreased to 22.0%
compared to 26.1% in the prior year third fiscal quarter.
- Net loss per diluted share was
$2.10. Net loss per diluted share, as adjusted, was $1.70. In the
prior year third fiscal quarter, net loss per diluted share was
$0.97 and net loss per diluted share, as adjusted, was
$0.15.
Robert Riesbeck, President and CEO, commented, “During the
quarter, we were challenged by the competitive pressures in the
market, specifically in consumer electronics as it is a larger mix
of our business during the holidays. Additionally, the
consolidation of two existing distribution centers into one new
distribution center had a temporary negative impact on our sales
for the quarter, in the range of $20 to $25 million. Although we
are disappointed with our overall performance during the quarter,
we are pleased with our investments made to shift our focus to
appliances and furniture, through resetting store layouts, adding
Fine Lines departments and promotions focused on our successful
appliance business. Going forward, we will continue our focus on
our appliance and home products categories and will continue to
reposition our consumer electronics business to focus on the
premium models.”
Riesbeck continued, “We are correcting the issues at the new
distribution center, the new assortment of home products will be
fully rolled out during the fourth fiscal quarter, our consumer
electronics assortment will be more premium in the future and our
investments in Fine Lines departments continue to drive positive
sales and profits. Through these initiatives and additional
expected cost reductions, we are committed to improving our
results. We are pleased with how we have managed our balance sheet
to give us the liquidity position to drive these future
results.”
Three Months Ended
Nine Months Ended December 31,
December 31, (unaudited, amounts in thousands, except share
and per share data)
2016 2015
2016 2015 Net sales $ 452,791 $
593,219 $ 1,330,863 $ 1,521,158 Net sales % decrease (23.7 )% (10.9
)% (12.5 )% (7.5 )% Comparable store sales % decrease (1) (22.2 )%
(10.8 )% (11.8 )% (7.3 )% Gross profit as a % of net sales 22.0 %
26.1 % 27.2 % 28.1 % SG&A as a % of net sales 25.6 % 19.6 %
25.7 % 22.4 % Net advertising expense as a % of net sales 5.7 % 5.8
% 5.3 % 5.5 % Depreciation and amortization expense as a % of net
sales 1.5 % 1.4 % 1.6 % 1.7 % Asset impairment charges as a % of
net sales 1.7 % 3.5 % 0.7 % 1.4 % Loss from operations as a % of
net sales (12.6 )% (4.2 )% (6.1 )% (2.8 )% Net interest expense as
a % of net sales 0.2 % 0.1 % 0.2 % 0.1 % Net loss $ (58,269 ) $
(26,913 ) $ (83,873 ) $ (45,794 ) Net loss, as adjusted (2) $
(47,344 ) $ (4,286 ) $ (67,220 ) $ (18,847 ) Net loss per diluted
share $ (2.10 ) $ (0.97 ) $ (3.02 ) $ (1.65 ) Net loss per diluted
share, as adjusted (2) $ (1.70 ) $ (0.15 ) $ (2.42 ) $ (0.68 )
Adjusted EBITDA $ (39,227 ) $ 4,794 (43,358 ) 8,225 Weighted
average shares outstanding—diluted 27,806,460 27,707,978 27,783,216
27,698,789 Number of stores open at the end of period 220 227
(1) Comprised of net sales at stores in operation for at least
14 full months, including remodeled and relocated stores, as well
as net sales for the Company’s e-commerce site.(2) Amounts are
adjusted to exclude the asset impairment charges, impact of
severance and personnel costs related to organizational changes
related to our transformation efforts, consulting expenses paid to
outside parties to assist with our transformation efforts, costs
associated with our logistics optimization project and deferred
debt issuance costs written off with the June 2016 amendment to our
Facility. See the attached reconciliation of non-GAAP measures to
GAAP measures.
HIGHLIGHTS FOR THE THIRD FISCAL QUARTER
Revenue Highlights
The Company's net sales performance for the quarter was driven
primarily by a comparable store sales decline. Net sales mix and
comparable store sales percentage changes by product category for
the three and nine month periods ended December 31, 2016 and
2015 were as follows:
Net Sales Mix Summary
Comparable Store Sales Summary
Three Months EndedDecember
31,
Nine Months EndedDecember
31,
Three Months EndedDecember
31,
Nine Months EndedDecember
31,
2016 2015 2016 2015
2016 2015 2016 2015
Appliances 53 % 43 % 60 % 52 % (4.2 )% (10.4 )% 1.8 % (4.1 )%
Consumer electronics (1) 41 % 52 % 34 % 42 % (38.6 )% (12.2 )%
(29.6 )% (12.3 )% Home products (2) 6 % 5 % 6 % 6 % (9.0 )% 3.3 %
(3.3 )% 6.2 % Total 100 % 100 % 100 % 100 % (22.2 )% (10.8 )% (11.8
)% (7.3 )%
(1) Primarily consists of televisions, audio, personal
electronics, computers and tablets and accessories.(2) Primarily
consists of furniture and mattresses.
The Company's comparable store sales drivers for the three
months ended December 31, 2016 are summarized below:
Comparable StoreSales
Average Selling Price Sales Unit Volume Appliances
(4.2)% Decrease Decrease Consumer electronics (1) (38.6)% Decrease
Decrease Home products (2) (9.0)% Decrease Decrease Total (22.2)%
(1) Primarily consists of televisions, audio, personal
electronics, computers and tablets and accessories.(2) Primarily
consists of furniture and mattresses.
Gross Margin Highlights
The Company's gross profit margin, expressed as gross profit as
a percentage of net sales, decreased for the three month period
ended December 31, 2016 to 22.0% from 26.1% for the comparable
prior year period.
- The Company's decrease in gross profit
margin for the period was due to lower gross margin rates in all
categories, primarily in consumer electronics, partially offset by
a favorable sales mix shift to product categories with higher gross
profit margin rates.
Cost Structure Highlights
The Company continues to manage its cost structure to align with
its expected sales levels and to keep the Company positioned for
EBITDA improvement.
- The decrease in advertising expense of
$8.2 million in the third fiscal quarter as compared to the
comparable prior year period was due to a reduction of gross
advertising spend driven by continued efficiency in our advertising
spend.
- SG&A increased as a percentage of
net sales to 25.6% from 19.6% for the three month comparable prior
year period. The increase in SG&A as a percentage of net sales
was primarily the results of the deleveraging effect of the net
sales decline.
- Wages and occupancy costs increased, as
a percentage of net sales, 186 basis points and 142 basis points,
respectively, in the third fiscal quarter as compared to the
comparable prior year period.
- Wages decreased $2.0 million in the
third fiscal quarter compared to the prior year period primarily
due to lower commissions paid as a result of decreased sales
partially offset by increased wages due to the unexpected
non-recurring costs relating to the distribution center
consolidation.
- Occupancy costs decreased $1.1 million
in the third fiscal quarter as compared to the prior year period.
This was primarily due to lower rents due to closing stores and
common annual maintenance adjustments for leased properties.
- Delivery services increased 138 basis
points, or $2.5 million, in the third fiscal quarter compared to
the prior year period primarily due to the increased number of
deliveries in all categories due to free delivery promotions.
Asset Impairment
Due to declining sales and overall declines in profitability in
the third fiscal quarter, the Company performed a detailed store
impairment analysis as of December 31, 2016. As a result of this
impairment analysis, property and equipment at 21 locations with a
net book value of $7.2 million were reduced to estimated aggregate
fair value of $0.8 million based on their projected cash flows,
discounted at 15%. The Company continues to invest in its store
layouts to better showcase its selections of appliances, consumer
electronics and home products. For certain remodeled locations that
were previously evaluated and fully impaired due to declining sales
and profitability, the Company performed another evaluation of
these locations as of December 31, 2016. Thirty-one stores with an
aggregate net book value of $1.7 million were reduced to an
estimated aggregate fair value of $0.2 million based on their
projected cash flows, discounted at 15%. As a result of these
analyses, the Company recorded a non-cash asset impairment charge
of $7.9 million for the three months ended December 31, 2016. The
fair values were determined using a probability based cash flow
analysis based on management's estimates of future store-level
sales, gross margins, and direct expenses and capital
expenditures.
Teleconference and Webcast
hhgregg will be conducting a conference call to discuss
operating results for the three months ended December 31,
2016, on Thursday, January 26, 2017 at 9:00 a.m. (Eastern
Time). Our call will be hosted by Robert Riesbeck, our President
and CEO, Kevin Kovacs, our Senior Vice President, Chief Financial
Officer and Lance Peterson, our Vice President, Finance and
Planning.
Interested investors and other parties may listen to a
simultaneous webcast of the conference call by logging onto
hhgregg’s website at www.hhgregg.com. The on-line replay will be
available for a limited time immediately following the call. The
call can also be accessed live over the phone by dialing (877)
304-8963. Callers should reference the hhgregg earnings call.
About hhgregg
hhgregg is an appliance, electronics and furniture retailer that
is committed to providing customers with a truly differentiated
purchase experience through superior customer service,
knowledgeable sales associates and the highest quality product
selections. Founded in 1955, hhgregg is a multi-regional retailer
currently with 220 stores in 19 states that also offers
market-leading global and local brands at value prices nationwide
via hhgregg.com.
Forward Looking Statements
The following is a Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995:
This press release includes forward-looking statements,
including with respect to the Company’s financial performance,
including, but not limited to, improvements in EBITDA and the
impact of investments in Fine Lines departments, ability to manage
costs, ability to execute the Company's 2017 initiatives,
innovation in the video industry, the impact and amount of non-cash
charges, and shifts in the Company’s sales mix. hhgregg has based
these forward-looking statements on its current expectations,
assumptions, estimates and projections. While hhgregg believes
these expectations, assumptions, estimates and projections are
reasonable, these forward-looking statements are only predictions
and involve known and unknown risks and uncertainties, many of
which are beyond its control. These and other important factors may
cause hhgregg’s actual results, performance or achievements to
differ materially from any future results, performance or
achievements expressed or implied by these forward-looking
statements. Some of the key factors that could cause actual results
to differ from hhgregg’s expectations are: the ability to
successfully execute the Company's strategies and initiatives,
particularly in returning the Company to profitable growth; the
Company's ability to increase customer traffic and conversion;
competition in the retail industry; the Company's ability to
maintain a positive brand perception and recognition; the Company's
ability to attract and retain qualified personnel; the Company's
ability to maintain the security of customer, associate and Company
information; rules, regulations, contractual obligations,
compliance requirements and fees associated with accepting a
variety of payment methods; the Company's ability to effectively
achieve cost cutting initiatives; the Company's ability to generate
strong cash flows to support its operating activities; the
Company's relationships and operations of its key suppliers; the
Company's ability to generate sufficient cash flows to recover the
fair value of long-lived assets; the Company's ability to maintain
and upgrade its information technology systems; the fluctuation of
the Company's comparable store sales; the effect of general and
regional economic and employment conditions on the Company's net
sales; the Company's ability to meet financial performance
guidance; disruption in the Company's supply chain; changes in
trade regulation, currency fluctuations and prevailing interest
rates; and the potential for litigation.
Other factors that could cause actual results to differ from
those implied by the forward-looking statements in this press
release are more fully described in the “Risk Factors” section in
the Company’s Annual Report on Form 10-K for fiscal year 2016 filed
May 19, 2016 and the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended December 31, 2016 filed on January 26,
2017. Given these risks and uncertainties, you are cautioned not to
place undue reliance on these forward-looking statements. The
forward-looking statements included in this press release are made
only as of the date hereof. hhgregg does not undertake, and
specifically declines, any obligation to update any of these
statements or to publicly announce the results of any revisions to
any of these statements to reflect future events or
developments.
HHGREGG, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
December 31, 2016 December 31,
2015 December 31, 2016
December 31, 2015 (In thousands, except share and
per share data) Net sales $ 452,791 $ 593,219 $
1,330,863 $ 1,521,158 Cost of goods sold 353,011
438,189 969,187 1,093,126 Gross profit
99,780 155,030 361,676 428,032 Selling, general and administrative
expenses 116,077 116,533 341,812 341,116 Net advertising expense
26,005 34,168 70,637 83,476 Depreciation and amortization expense
7,013 8,355 21,059 25,115 Asset impairment charges 7,850
20,910 9,238 20,910 Loss from operations
(57,165 ) (24,936 ) (81,070 ) (42,585 ) Other expense (income):
Interest expense 1,106 727 2,827 1,966 Interest income (2 ) (2 )
(24 ) (9 ) Total other expense 1,104 725 2,803
1,957 Loss before income taxes (58,269 ) (25,661 ) (83,873 )
(44,542 ) Income taxes — 1,252 — 1,252
Net loss $ (58,269 ) $ (26,913 ) $ (83,873 ) $ (45,794 ) Net loss
per share Basic and diluted $ (2.10 ) $ (0.97 ) $ (3.02 ) $ (1.65 )
Weighted average shares outstanding-basic and diluted 27,806,460
27,707,978 27,783,216 27,698,789
HHGREGG, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(AS A PERCENTAGE OF NET SALES)
(UNAUDITED)
Three Months Ended Nine Months Ended
December 31, 2016 December 31,
2015 December 31, 2016
December 31, 2015 Net sales 100.0 %
100.0 % 100.0 % 100.0 % Cost of goods sold
78.0 73.9 72.8 71.9 Gross profit 22.0
26.1 27.2 28.1 Selling, general and administrative expenses 25.6
19.6 25.7 22.4 Net advertising expense 5.7 5.8 5.3 5.5 Depreciation
and amortization expense 1.5 1.4 1.6 1.7 Asset impairment charges
1.7 3.5 0.7 1.4 Loss from operations
(12.6 ) (4.2 ) 6.1 (2.8 ) Other expense (income): Interest expense
0.2 0.1 0.2 0.1 Interest income — — — —
Total other expense 0.2 0.1 0.2 0.1
Loss before income taxes (12.9 ) (4.3 ) (6.3 ) (2.9 ) Income taxes
— 0.2 — 0.1
Net loss
(12.9 ) (4.5 ) (6.3 ) (3.0 )
Certain percentage amounts do not sum due
to rounding
HHGREGG, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2016, MARCH 31,
2016 AND DECEMBER 31, 2015
(UNAUDITED)
December 31,2016
March 31,2016
December 31,2015
(In thousands, except share data) Assets Current
assets: Cash $ 1,953 $ 3,703 $ 7,036
Accounts receivable—trade, less allowances
of $11, $5 and $31 as ofDecember 31, 2016, March 31, 2016 and
December 31, 2015, respectively
20,653 11,106 14,937 Accounts receivable—other 19,764 14,937 17,435
Merchandise inventories, net 210,820 256,559 340,323 Prepaid
expenses and other current assets 5,545 6,333 6,947 Income tax
receivable 68 1,130 462 Total current assets
258,803 293,768 387,140 Net property and
equipment 74,365 87,472 91,241 Deferred financing costs, net 2,192
1,257 1,392 Other assets 2,930 2,855 2,990
Total long-term assets 79,487 91,584 95,623
Total assets $ 338,290 $ 385,352 $ 482,763
Liabilities and Stockholders’ Equity Current liabilities:
Accounts payable $ 99,037 $ 107,474 $ 173,017 Line of credit 30,250
— — Customer deposits 61,970 43,235 48,185 Accrued liabilities
42,765 43,370 57,935 Income tax payable — — 1,129
Total current liabilities 234,022 194,079
280,266 Long-term liabilities: Deferred rent 50,438 59,101
61,546 Other long-term liabilities 15,224 10,818
10,798 Total long-term liabilities 65,662 69,919
72,344 Total liabilities 299,684 263,998
352,610 Stockholders’ equity:
Preferred stock, par value $.0001;
10,000,000 shares authorized; no sharesissued and outstanding as of
December 31, 2016, March 31, 2016 andDecember 31, 2015,
respectively
— — —
Common stock, par value $.0001;
150,000,000 shares authorized;41,303,240, 41,204,660 and 41,204,660
shares issued; and 27,806,558,27,707,978 and 27,707,978 outstanding
as of December 31, 2016,March 31, 2016, and December 31, 2015,
respectively
4 4 4 Additional paid-in capital 305,450 304,325 304,039
Accumulated deficit (116,620 ) (32,747 ) (23,662 )
Common stock held in treasury at cost;
13,496,682 shares as ofDecember 31, 2016, March 31, 2016, and
December 31, 2015
(150,228 ) (150,228 ) (150,228 ) Total stockholders’ equity 38,606
121,354 130,153 Total liabilities and
stockholders’ equity $ 338,290 $ 385,352 $ 482,763
HHGREGG, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
NINE MONTHS ENDED DECEMBER 31,
2016 AND 2015
(UNAUDITED)
Nine Months Ended December 31, 2016
December 31, 2015 (In thousands) Cash flows
from operating activities: Net loss $ (83,873 ) $ (45,794 )
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization
21,059 25,115 Amortization of deferred financing costs 378 404
Stock-based compensation 1,169 2,423 Excess tax benefit from stock
based compensation 126 — Gain on sales of property and equipment
147 60 Asset impairment charges 9,238 20,910 Tenant allowances
received from landlords — 812 Changes in operating assets and
liabilities: Accounts receivable—trade (9,547 ) (3,036 ) Accounts
receivable—other (4,827 ) (1,512 ) Merchandise inventories 45,739
(82,854 ) Income tax receivable 1,062 4,864 Prepaid expenses and
other assets 923 (352 ) Accounts payable 3,681 62,456 Customer
deposits 18,735 (557 ) Income tax payable — 1,129 Accrued
liabilities (649 ) 11,148 Deferred rent (8,663 ) (6,409 ) Other
long-term liabilities 4,606 (1,010 )
Net cash used in operating activities
(696 ) (12,203 ) Cash flows from investing activities: Purchases of
property and equipment (18,533 ) (10,406 ) Proceeds from sales of
property and equipment 69 80 Purchases of corporate-owned life
insurance (210 ) (160 ) Net cash used in investing activities
(18,674 ) (10,486 ) Cash flows from financing activities: Net
borrowings on line of credit 30,250 — Net repayments on inventory
financing facility (11,191 ) (676 ) Payment of financing costs
(1,439 ) — Net cash provided by (used in) financing
activities 17,620 (676 ) Net decrease in cash and cash
equivalents (1,750 ) (23,365 ) Cash and cash equivalents Beginning
of period 3,703 30,401 End of period $ 1,953 $
7,036 Supplemental disclosure of cash flow information:
Interest paid $ 2,496 $ 1,572 Income taxes received $ (1,067 ) $
(4,721 ) Capital expenditures included in accounts payable $ 338 $
503
The Company believes that the non-GAAP measures described below
provide meaningful information to assist shareholders in
understanding its financial results and assessing its prospects for
future performance. Management believes adjusted net loss, adjusted
net loss per diluted share, EBITDA, and Adjusted EBITDA are
important indicators of its operations because they exclude items
that may not be indicative of or are unrelated to its core
operating results and provide a baseline for analyzing trends in
our underlying businesses. Management makes adjustments for items
such as non-cash asset impairments, consulting fees, severance
costs, costs associated with its logistics optimization, store
closure costs, as well as adjustments for other items that may
arise during the period and have a meaningful impact on
comparability.
The below information provides reconciliations from net loss,
the most comparable financial measure calculated and presented in
accordance with accounting principles generally accepted in U.S.
(“GAAP”), to non-GAAP financial measures. The Company has provided
non-GAAP financial measures, which are not calculated or presented
in accordance with GAAP, as information supplemental and in
addition to the financial measures presented in the accompanying
earnings release that are calculated and presented in accordance
with GAAP. Such non-GAAP financial measures should not be
considered superior to, as a substitute for, or as an alternative
to, and should be considered in conjunction with, the GAAP
financial measures presented in the earnings release. The non-GAAP
financial measures in the accompanying earnings release may differ
from similar measures used by other companies.
EBITDA represents net loss before income tax expense, interest
income, interest expense, depreciation and amortization. The
Company has presented EBITDA because it considers it an important
supplemental measure of its performance and believes it is
frequently used by analysts, investors and other interested parties
in the evaluation of companies in its industry. Management uses
EBITDA as a measurement tool for evaluating its actual operating
performance compared to budget and prior periods. EBITDA is not a
measure of performance under US GAAP and should not be considered
as a substitute for net loss prepared in accordance with GAAP.
EBITDA has limitations as an analytical tool, and you should not
consider these in isolation or as a substitute for analysis of the
Company's results as reported under GAAP.
Some of the limitations of EBITDA measures are:
- EBITDA does not reflect the Company's
cash expenditures, or future requirements, for capital expenditures
or contractual commitments;
- EBITDA does not reflect interest
expense or the cash requirements necessary to service interest
payments on the Company's debt;
- EBITDA does not reflect tax expense or
the cash requirements necessary to pay for tax obligations;
and
- Although depreciation and amortization
are non-cash charges, the asset being depreciated and amortized
will often have to be replaced in the future, and EBITDA does not
reflect any cash requirements for such replacements.
The Company compensates for these limitations by relying
primarily on its GAAP results and using EBITDA only as a
supplement.
HHGREGG, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION OF NET LOSS, AS
ADJUSTED AND
DILUTED NET LOSS PER SHARE, AS
ADJUSTED,
(UNAUDITED)
Three Months EndedDecember
31,
Nine Months EndedDecember
31,
(Amounts in thousands, except share data) 2016
2015 2016 2015 Net loss
as reported $ (58,269 ) $ (26,913 ) $ (83,873 ) $ (45,794 )
Adjustments to net loss: Non-cash asset impairment charges 7,850
20,910 9,238 20,910 Severance and personnel costs (1) 433 331 2,025
311 Logistics optimization (2) 2,946 — 5,652 — Other (3) (304 )
1,386 (262 ) 5,726 Net loss, as adjusted $ (47,344 )
$ (4,286 ) $ (67,220 ) $ (18,847 ) Weighted average shares
outstanding – Diluted 27,806,460 27,707,978 27,783,216 27,698,789
Net loss per diluted share as reported $ (2.10 ) $ (0.97 ) $ (3.02
) $ (1.65 ) Net loss per diluted share, as adjusted $ (1.70 ) $
(0.15 ) $ (2.42 ) $ (0.68 )
(1) Expenses incurred related to our organizational changes
resulting from our transformation efforts.(2) Includes consulting
expenses, payroll expenses and retention bonuses for key employees
assisting in the transition and pre-opening expenses for the new
logistic facility.(3) Current year consists of deferred debt
issuance costs written off with the June 2016 amendment to our
Facility, costs incurred for the closing of stores including
deferred rent written off and costs paid to consultants to assist
with the Company's transformation. See breakout below. Prior year
amounts are for costs paid to consultants to assist with the
Company's transformation efforts and income tax expense associated
with the Internal Revenue Service's settlement of prior year tax
matter.
Three Months EndedDecember
31,
Nine Months EndedDecember
31,
(Amounts in thousands) 2016 2015
2016 2015 Deferred Debt Issuance Costs
Written Off $ — $ — $ 126 $ — Income Tax Expense — 1,252 — 1,252
Store Closing Costs (304 ) — (609 ) — Consulting Costs — 134
221 4,474 $ (304 ) $ 1,386 $ (262 ) $ 5,726
HHGREGG, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION OF EBITDA
AND
ADJUSTED EBITDA (UNAUDITED)
Three Months Ended December 31, Nine Months Ended
December 31, (Amounts in thousands) 2016
2015 2016 2015 Net
loss as reported $ (58,269 ) $ (26,913 ) $ (83,873 ) $ (45,794 )
Adjustments: Depreciation and amortization 7,013 8,355 21,059
25,115 Interest expense, net 1,104 725 2,803 1,957 Income tax
expense — 1,252 — 1,252 EBITDA $
(50,152 ) $ (16,581 ) $ (60,011 ) $ (17,470 ) Non-cash asset
impairment charges 7,850 20,910 9,238 20,910 Severance and
personnel costs (1) 433 331 2,025 311 Logistics optimization (2)
2,946 — 5,652 — Other (3) (304 ) 134 (262 ) 4,474
Adjusted EBITDA $ (39,227 ) $ 4,794 $ (43,358 ) $ 8,225
(1) Expenses incurred related to our organizational changes
resulting from our transformation efforts.(2) Includes consulting
expenses, payroll expenses and retention bonuses for key employees
assisting in the transition and pre-opening expenses for the new
logistic facility.(3) Current year consists of deferred debt
issuance costs written off with the June 2016 amendment to our
Facility, costs incurred for the closing of stores including
deferred rent written off and costs paid to consultants to assist
with the Company's transformation. See breakout below. Prior year
amounts are for costs paid to consultants to assist with the
Company's transformation efforts.
Three Months EndedDecember
31,
Nine Months EndedDecember
31,
(Amounts in thousands) 2016 2015
2016 2015 Deferred Debt Issuance Costs
Written Off $ — $ — $ 126 $ — Store Closing Costs (304 ) — (609 ) —
Consulting Costs — 134 221 4,474 $ (304 ) $
134 $ (262 ) $ 4,474
HHGREGG, INC. AND SUBSIDIARIES
Store Count by Quarter for Fiscal Years
2015, 2016 and 2017
(Unaudited)
FY2015 FY2016 FY2017 Q1
Q2 Q3 Q4
Q1 Q2 Q3
Q4 Q1 Q2
Q3 Beginning Store Count 228 229 228 228 228 227 227 227 226
226 221 Store Openings 1 — — — 1 — — — — — — Store Closings —
(1 ) — — (2 ) — — (1 ) —
(5 ) (1 ) Ending Store Count 229 228 228 228
227 227 227 226 226 221
220
Note: hhgregg, Inc.’s fiscal year is comprised of four quarters
ending
June 30th, September 30th, December 31st
and March 31st.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170126005286/en/
hhgregg, Inc.Lance Peterson, 317-848-8710Vice President, Finance
and Planninginvestorrelations@hhgregg.com
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