Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Feb. 27, 2016 | Apr. 22, 2016 | Aug. 28, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | Container Store Group, Inc. | ||
Entity Central Index Key | 1,411,688 | ||
Document Type | 10-K | ||
Document Period End Date | Feb. 27, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --02-27 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 285,096,211 | ||
Common Stock Outstanding | 47,986,975 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
Consolidated balance sheets
Consolidated balance sheets - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 |
Current assets: | ||
Cash | $ 13,609 | $ 24,994 |
Accounts receivable, net | 28,843 | 24,319 |
Inventory | 86,435 | 83,724 |
Prepaid expenses | 8,692 | 7,895 |
Income taxes receivable | 157 | 1,698 |
Deferred tax assets, net | 3,256 | |
Other current assets | 8,695 | 11,056 |
Total current assets | 146,431 | 156,942 |
Noncurrent assets: | ||
Property and equipment, net | 176,117 | 169,053 |
Goodwill | 202,815 | 202,815 |
Trade names | 228,368 | 229,433 |
Deferred financing costs, net | 6,068 | 7,742 |
Noncurrent deferred tax assets, net | 2,090 | 1,739 |
Other assets | 1,879 | 1,333 |
Total noncurrent assets | 617,337 | 612,115 |
Total assets | 763,768 | 769,057 |
Current liabilities: | ||
Accounts payable | 40,274 | 48,904 |
Accrued liabilities | 69,635 | 59,891 |
Revolving lines of credit | 721 | 2,834 |
Current portion of long-term debt | 5,373 | 5,319 |
Income taxes payable | 2,188 | |
Total current liabilities | 116,003 | 119,136 |
Noncurrent liabilities: | ||
Long-term debt | 321,784 | 326,775 |
Noncurrent deferred tax liabilities, net | 80,720 | 82,965 |
Deferred rent and other long-term liabilities | 38,193 | 38,319 |
Total noncurrent liabilities | 440,697 | 448,059 |
Total liabilities | $ 556,700 | $ 567,195 |
Commitments and contingencies (Note 12) | ||
Shareholders' equity: | ||
Common stock, $0.01 par value, 250,000,000 shares authorized; 47,986,975 shares issued and outstanding at February 27, 2016, 47,983,660 shares issued and outstanding at February 28, 2015 | $ 480 | $ 480 |
Additional paid-in capital | 856,879 | 855,322 |
Accumulated other comprehensive loss | (19,835) | (18,342) |
Retained deficit | (630,456) | (635,598) |
Total shareholders' equity | 207,068 | 201,862 |
Total liabilities and shareholders' equity | $ 763,768 | $ 769,057 |
Consolidated balance sheets (Pa
Consolidated balance sheets (Parenthetical) - $ / shares | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 02, 2013 |
Consolidated balance sheets | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 | |
Common stock, shares issued | 47,986,975 | 47,983,660 | |
Common stock, shares outstanding | 47,986,975 | 47,983,660 |
Consolidated statements of oper
Consolidated statements of operations - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Consolidated statements of operations | |||
Net sales | $ 794,630 | $ 781,866 | $ 748,538 |
Cost of sales (excluding depreciation and amortization) | 331,079 | 323,800 | 308,755 |
Gross profit | 463,551 | 458,066 | 439,783 |
Selling, general, and administrative expenses (excluding depreciation and amortization) | 393,810 | 372,867 | 354,271 |
Stock-based compensation | 1,556 | 1,289 | 15,137 |
Pre-opening costs | 9,033 | 8,283 | 6,672 |
Depreciation and amortization | 34,230 | 31,011 | 30,353 |
Restructuring charges | 532 | ||
Other expenses | 1,132 | 1,585 | |
Loss (gain) on disposal of assets | 61 | (3,487) | 206 |
Income from operations | 24,861 | 46,971 | 31,027 |
Interest expense | 16,810 | 17,105 | 21,185 |
Loss on extinguishment of debt | 1,229 | ||
Income before taxes | 8,051 | 29,866 | 8,613 |
Provision for income taxes | 2,909 | 7,193 | 447 |
Net income | 5,142 | 22,673 | 8,166 |
Less: Distributions accumulated to preferred shareholders | 0 | 0 | (59,747) |
Net income (loss) available to common shareholders | $ 5,142 | $ 22,673 | $ (51,581) |
Net income (loss) per common share - basic and diluted | $ 0.11 | $ 0.47 | $ (2.87) |
Weighted-average common shares outstanding - basic (in shares) | 47,985,717 | 47,971,243 | 17,955,757 |
Weighted-average common shares outstanding - diluted (in shares) | 47,985,717 | 48,520,865 | 17,955,757 |
Consolidated statements of comp
Consolidated statements of comprehensive income - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 27, 2016 | Nov. 28, 2015 | Aug. 29, 2015 | May. 30, 2015 | Feb. 28, 2015 | Nov. 29, 2014 | Aug. 30, 2014 | May. 31, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Other comprehensive loss, net of tax: | |||||||||||
Net income | $ 9,399 | $ (1,731) | $ 2,673 | $ (5,199) | $ 13,048 | $ 6,249 | $ 6,955 | $ (3,579) | $ 5,142 | $ 22,673 | $ 8,166 |
Unrealized gain (loss) on financial instruments, net of tax provision (benefit) of $606, $(604) and $(239) | 853 | (935) | (1,492) | ||||||||
Pension liability adjustment, net of tax provision (benefit) of $39, $(4) and $(51) | 175 | (14) | (181) | ||||||||
Foreign currency translation adjustment | (2,521) | (19,076) | 643 | ||||||||
Comprehensive income | $ 3,649 | $ 2,648 | $ 7,136 |
Consolidated statements of com6
Consolidated statements of comprehensive income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Consolidated statements of comprehensive income | |||
Unrealized gain (loss) on financial instruments, taxes | $ 606 | $ (604) | $ (239) |
Pension liability adjustment, taxes | $ 39 | $ (4) | $ (51) |
Consolidated statements of shar
Consolidated statements of shareholders' equity - USD ($) $ in Thousands | Senior Preferred Stock | Junior Preferred Stock | Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Retained deficit | Treasury stock | Total |
Balance beginning of period at Mar. 02, 2013 | $ 2 | $ 2 | $ 29 | $ 455,246 | $ 2,713 | $ (223,830) | $ (787) | $ 233,375 |
Balance (in shares) at Mar. 02, 2013 | 202,480 | 202,480 | 2,942,326 | (13,426) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 8,166 | 8,166 | ||||||
Payment of distribution to preferred shareholders | (295,813) | (295,813) | ||||||
Exchange preferred shares for common shares | $ (2) | $ (2) | $ 306 | 146,479 | (146,781) | |||
Exchange preferred shares for common shares (in shares) | (202,182) | (202,182) | 30,619,083 | |||||
Issuance of stock in initial public offering, net of costs | $ 144 | 236,869 | 237,013 | |||||
Issuance of stock in initial public offering, net of costs (in shares) | 14,375,000 | |||||||
Excess tax benefit from stock-based compensation | 70 | 70 | ||||||
Additions of treasury stock | $ (53) | (53) | ||||||
Additions of treasury stock (in shares) | (737) | |||||||
Retirement of treasury stock | (827) | (13) | $ 840 | |||||
Retirement of treasury stock (in shares) | (298) | (298) | (13,567) | 14,163 | ||||
Fractional shares payout | (1) | (1) | ||||||
Stock option exercises | 322 | $ 322 | ||||||
Stock option exercises (in shares) | 18,338 | 18,338 | ||||||
Stock-based compensation | 15,137 | $ 15,137 | ||||||
Foreign currency translation adjustment | 643 | 643 | ||||||
Unrealized gain (loss) on financial instruments, net of $239, $(604), and $606 tax provision (benefit) for the years ended March 1, 2014, February 28, 2015 and February 27, 2016, respectively | (1,492) | (1,492) | ||||||
Pension liability adjustment, net of $51, $4 and $(39) tax provision (benefit) for the years ended March 1, 2014, February 28, 2015 and February 27, 2016, respectively | (181) | (181) | ||||||
Balance end of period at Mar. 01, 2014 | $ 479 | 853,295 | 1,683 | (658,271) | 197,186 | |||
Balance (in shares) at Mar. 01, 2014 | 47,941,180 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 22,673 | 22,673 | ||||||
Excess tax provision from stock-based compensation | (4) | (4) | ||||||
Stock option exercises | $ 1 | 742 | $ 743 | |||||
Stock option exercises (in shares) | 42,480 | 42,480 | ||||||
Stock-based compensation | 1,289 | $ 1,289 | ||||||
Foreign currency translation adjustment | (19,076) | (19,076) | ||||||
Unrealized gain (loss) on financial instruments, net of $239, $(604), and $606 tax provision (benefit) for the years ended March 1, 2014, February 28, 2015 and February 27, 2016, respectively | (935) | (935) | ||||||
Pension liability adjustment, net of $51, $4 and $(39) tax provision (benefit) for the years ended March 1, 2014, February 28, 2015 and February 27, 2016, respectively | (14) | (14) | ||||||
Balance end of period at Feb. 28, 2015 | $ 480 | 855,322 | (18,342) | (635,598) | 201,862 | |||
Balance (in shares) at Feb. 28, 2015 | 47,983,660 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 5,142 | 5,142 | ||||||
Excess tax provision from stock-based compensation | (58) | (58) | ||||||
Stock option exercises | 59 | $ 59 | ||||||
Stock option exercises (in shares) | 3,315 | 3,315 | ||||||
Stock-based compensation | 1,556 | $ 1,556 | ||||||
Foreign currency translation adjustment | (2,521) | (2,521) | ||||||
Unrealized gain (loss) on financial instruments, net of $239, $(604), and $606 tax provision (benefit) for the years ended March 1, 2014, February 28, 2015 and February 27, 2016, respectively | 853 | 853 | ||||||
Pension liability adjustment, net of $51, $4 and $(39) tax provision (benefit) for the years ended March 1, 2014, February 28, 2015 and February 27, 2016, respectively | 175 | 175 | ||||||
Balance end of period at Feb. 27, 2016 | $ 480 | $ 856,879 | $ (19,835) | $ (630,456) | $ 207,068 | |||
Balance (in shares) at Feb. 27, 2016 | 47,986,975 |
Consolidated statements of sha8
Consolidated statements of shareholders' equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | Mar. 02, 2013 | |
Consolidated statements of shareholders' equity | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |
Unrealized gain (loss) on financial instruments, taxes | $ 606 | $ (604) | $ (239) | |
Pension liability adjustment, taxes | $ (39) | $ 4 | $ 51 |
Consolidated statements of cash
Consolidated statements of cash flows - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Operating activities | |||
Net income | $ 5,142 | $ 22,673 | $ 8,166 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 34,230 | 31,011 | 30,353 |
Stock-based compensation | 1,556 | 1,289 | 15,137 |
Excess tax provision (benefit) from stock-based compensation | 4 | (70) | |
Loss (gain) on disposal of assets | 61 | (3,487) | 206 |
Deferred tax expense (benefit) | 859 | 1,423 | (5,791) |
Noncash refinancing expense | 851 | ||
Noncash interest | 1,940 | 1,956 | 1,857 |
Other | 401 | (504) | 5 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (5,338) | 4,137 | (6,565) |
Inventory | (1,929) | (2,668) | (3,553) |
Prepaid expenses and other assets | 487 | 4,705 | (3,974) |
Accounts payable and accrued liabilities | 5,840 | 5,562 | 5,613 |
Income taxes | (1,330) | (2,582) | 1,648 |
Other noncurrent liabilities | 388 | 1,106 | 6,722 |
Net cash provided by operating activities | 42,307 | 64,625 | 50,605 |
Investing activities | |||
Additions to property and equipment | (46,431) | (48,740) | (48,408) |
Proceeds from investment grant | 479 | ||
Proceeds from sale of subsidiary, net | 3,846 | ||
Proceeds from sale of property and equipment | 202 | 950 | 739 |
Net cash used in investing activities | (45,750) | (43,944) | (47,669) |
Financing activities | |||
Borrowings on revolving lines of credit | 55,872 | 74,411 | 66,787 |
Payments on revolving lines of credit | (57,935) | (85,474) | (64,365) |
Borrowings on long-term debt | 33,000 | 34,389 | 126,000 |
Payments on long-term debt and capital leases | (38,246) | (36,591) | (76,260) |
Payment of debt issuance costs | (266) | (3,662) | |
Proceeds from issuance of common stock, net | 237,013 | ||
Payment of distributions to preferred shareholders | (295,826) | ||
Purchase of treasury shares | (53) | ||
Proceeds from the exercise of stock options | 59 | 742 | 322 |
Excess tax benefit from stock-based compensation | 70 | ||
Excess tax provision from stock-based compensation | (4) | ||
Net cash used in financing activities | (7,516) | (12,527) | (9,974) |
Effect of exchange rate changes on cash | (426) | (1,206) | (267) |
Net (decrease) increase in cash | (11,385) | 6,948 | (7,305) |
Cash at beginning of fiscal year | 24,994 | 18,046 | 25,351 |
Cash at end of fiscal year | 13,609 | 24,994 | 18,046 |
Cash paid during the year for: | |||
Interest | 14,850 | 15,255 | 20,339 |
Taxes | 891 | 7,192 | 5,498 |
Supplemental information for non-cash investing and financing activities: | |||
Purchases of property and equipment (included in accounts payable) | 1,386 | 4,918 | 4,616 |
Capital lease obligation incurred | $ 541 | $ 513 | |
Exchange of outstanding preferred shares for common shares | $ 551,145 |
Nature of business and summary
Nature of business and summary of significant accounting policies | 12 Months Ended |
Feb. 27, 2016 | |
Nature of business and summary of significant accounting policies | |
Nature of business and summary of significant accounting policies | 1. Nature of business and summary of significant accounting policies Description of business The Container Store, Inc. was founded in 1978 in Dallas, Texas, as a retailer with a mission to provide customers with storage and organization solutions through an assortment of innovative products and unparalleled customer service. In 2007, The Container Store, Inc. was sold to The Container Store Group, Inc. (the "Company"), a holding company, of which a majority stake was purchased by Leonard Green and Partners, L.P. ("LGP"), with the remainder held by certain employees of The Container Store, Inc. On November 6, 2013, the Company completed the initial public offering of its common stock (the "IPO"). As the majority shareholder, LGP retains controlling interest in the Company. The Container Store, Inc. consists of our retail stores, website and call center, as well as our installation and organizational services business. As of February 27, 2016, The Container Store, Inc. operated 79 stores with an average size of approximately 25,000 square feet (19,000 selling square feet) in 28 states and the District of Columbia. The Container Store, Inc. also offers all of its products directly to its customers through its website and call center. The Container Store, Inc.'s wholly owned Swedish subsidiary, Elfa International AB ("Elfa"), designs and manufactures component-based shelving and drawer systems that are customizable for any area of the home. elfa® branded products are sold exclusively in the United States in The Container Store® retail stores, website, and call center and Elfa sells to various retailers and distributors primarily in the Nordic region and throughout Europe on a wholesale basis. Basis of presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). Basis of consolidation The consolidated financial statements include our accounts and those of the Company's wholly owned subsidiaries. The Company eliminates all significant intercompany balances and transactions, including intercompany profits, in consolidation. Fiscal year The Company follows a 5-4-4 fiscal calendar, whereby each fiscal quarter consists of thirteen weeks grouped into one five-week "month" and two four-week "months," and its fiscal year ends on the Saturday closest to February 28 th . Elfa's fiscal year ends on the last day of the calendar month of February. Refer to Note 17 for a subsequent event affecting our fiscal year end. The fiscal years ended February 27, 2016 (fiscal 2015), February 28, 2015 (fiscal 2014), and March 1, 2014 (fiscal 2013) included 52 weeks. Management estimates The preparation of the Company's consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results could differ from those estimates. Significant accounting judgments and estimates include fair value estimates for indefinite-lived intangible assets, inventory loss reserve, assessments of long-lived asset impairments, gift card breakage, and assessment of valuation allowances on deferred tax assets. Revenue recognition Revenue from sales related to retail operations is recognized when the merchandise is delivered to the customer at the point of sale. Revenue from sales that are shipped or delivered directly to customers is recognized upon estimated delivery to the customer and includes applicable shipping or delivery revenue. Revenue from sales that are installed is recognized upon completion of the installation service to the customer and includes applicable installation revenue. Revenue from sales of other services is recognized upon the completion of the service. Revenue from sales related to manufacturing operations is recorded upon shipment. Sales are recorded net of sales taxes collected from customers. A sales return allowance is recorded for estimated returns of merchandise subsequent to the balance sheet date that relate to sales prior to the balance sheet date. The returns allowance is based on historical return patterns and reduces sales and cost of sales, accordingly. Merchandise exchanges of similar product and price are not considered merchandise returns and, therefore, are excluded when calculating the sales returns allowance. Gift cards and merchandise credits Gift cards are sold to customers in retail stores, through the call center and website, and through certain third parties. We issue merchandise credits in our stores and through our call center. Revenue from sales of gift cards and issuances of merchandise credits is recognized when the gift card is redeemed by the customer, or the likelihood of the gift card being redeemed by the customer is remote (gift card breakage). The gift card breakage rate is determined based upon historical redemption patterns. An estimate of the rate of gift card breakage is applied over the period of estimated performance (48 months as of the end of fiscal 2015) and the breakage amounts are included in net sales in the consolidated statement of operations. The Company recorded $948, $978, and $896 of gift card breakage in fiscal years 2015, 2014, and 2013, respectively. Cost of sales Cost of sales related to retail operations includes the purchase cost of inventory sold (net of vendor rebates), in-bound freight, as well as inventory loss reserves. Costs incurred to ship or deliver merchandise to customers, as well as direct installation costs, are also included in cost of sales. Cost of sales from manufacturing operations includes costs associated with production, including materials, wages, other variable production costs, and other applicable manufacturing overhead. Leases Rent expense on operating leases, including rent holidays and scheduled rent increases, is recorded on a straight-line basis over the term of the lease, commencing on the date the Company takes possession of the leased property. Rent expense is recorded in selling, general, and administrative expenses. Pre-opening rent expense is recorded in pre-opening costs in the consolidated income statement. The net excess of rent expense over the actual cash paid has been recorded as deferred rent in the accompanying consolidated balance sheets. Tenant improvement allowances are also included in the accompanying consolidated balance sheets as deferred rent liabilities and are amortized as a reduction of rent expense over the term of the lease from the possession date. Contingent rental payments, typically based on a percentage of sales, are recognized in rent expense when payment of the contingent rent is probable. Advertising All advertising costs of the Company are expensed when incurred, or upon the release of the initial advertisement, except for production costs related to catalogs and direct mailings to customers, which are initially capitalized. Production costs related to catalogs and direct mailings consist primarily of printing and postage and are expensed when mailed to the customer, except for direct mailings related to promotional campaigns, which are expensed over the period during which the promotional sales are expected to occur. Advertising costs are recorded in selling, general, and administrative expenses. Pre-opening advertising costs are recorded in pre-opening costs. Catalog and direct mailings costs capitalized at February 27, 2016 and February 28, 2015, amounted to $938 and $699 respectively, and are recorded in prepaid expenses on the accompanying consolidated balance sheets. Total advertising expense incurred for fiscal years 2015, 2014, and 2013, was $32,343, $35,388, and $33,786, respectively. Pre-opening costs Non-capital expenditures associated with opening new stores, including rent, marketing expenses, travel and relocation costs, and training costs, are expensed as incurred and are included in pre-opening costs in the consolidated statement of operations. Management fee In connection with the completion of the Company's IPO, the management fee was eliminated as of November 6, 2013. The Company paid $667 as a management fee to its majority shareholder, LGP, in fiscal year 2013. Income taxes We account for deferred income taxes utilizing Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740, Income Taxes . ASC 740 requires an asset and liability approach, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. We recognize interest and penalties related to unrecognized tax benefits in income tax expense. There were no uncertain tax positions requiring accrual as of February 27, 2016 and February 28, 2015. Valuation allowances are established against deferred tax assets when it is more-likely-than-not that the realization of those deferred tax assets will not occur. Valuation allowances are released as positive evidence of future taxable income sufficient to realize the underlying deferred tax assets becomes available. Deferred tax assets and liabilities are measured using the enacted tax rates in effect in the years when those temporary differences are expected to reverse. The effect on deferred taxes from a change in the tax rate is recognized through continuing operations in the period that includes the enactment of the change. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. We operate in certain jurisdictions outside the United States. ASC 740-30 provides that the undistributed earnings of a foreign subsidiary be accounted for as a temporary difference under the presumption that all undistributed earnings will be distributed to the parent company as a dividend. Sufficient evidence of the intent to permanently reinvest the earnings in the jurisdiction where earned precludes a company from recording the temporary difference. For purposes of ASC 740-30, we are partially reinvested in our Swedish subsidiary Elfa and thus do not record a temporary difference. We are partially reinvested since we have permanently reinvested our past earnings at Elfa; however, we do not assert that all future earnings will be reinvested into Elfa. Stock-based compensation The Company accounts for stock-based compensation in accordance ASC 718, Compensation-Stock Compensation , which requires the fair value of stock-based payments to be recognized in the consolidated financial statements as compensation expense over the requisite service period. Compensation expense based upon the fair value of awards is recognized on a straight line basis, net of forfeitures, over the requisite service period for awards that actually vest. Stock-based compensation expense is recorded in the stock-based compensation line in the consolidated statements of operations. Prior to the IPO, because the Company was privately held and there was no public market for the common stock, the fair market value of the Company's common stock was determined by the Board at the time the option grants were awarded. In determining the fair value of the Company's common stock, the Board considered such factors as the Company's actual and projected financial results, valuations of the Company performed by third parties and other factors it believed were material to the valuation process. Following the IPO, the Board determines the exercise price of stock options based on the closing price of the Company's common stock as reported on The New York Stock Exchange on the grant date. The Company estimates the fair value of each stock option grant on the date of grant based upon the Black-Scholes option-pricing model. This model requires various significant judgmental assumptions in order to derive a final fair value determination for each type of award including: • Expected Term—The expected term of the options represents the period of time between the grant date of the options and the date the options are either exercised or canceled, including an estimate of options still outstanding. • Expected Volatility—The expected volatility incorporates historical and implied volatility of comparable public companies for a period approximating the expected term. • Expected Dividend Yield—The expected dividend yield is based on the Company's expectation of not paying dividends on its common stock for the foreseeable future. • Risk-Free Interest Rate—The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant and with a maturity that approximates the expected term. Accounts receivable Accounts receivable consist primarily of trade receivables, receivables from The Container Store, Inc.'s credit card processors for sales transactions, and tenant improvement allowances from The Container Store, Inc.'s landlords in connection with new leases. An allowance for doubtful accounts is established on trade receivables, if necessary, for estimated losses resulting from the inability of customers to make required payments. Factors such as payment terms, historical loss experience, and economic conditions are generally considered in determining the allowance for doubtful accounts. Accounts receivable are presented net of allowances for doubtful accounts of $128 and $230 at February 27, 2016 and February 28, 2015, respectively. Inventories Inventories at retail stores are comprised of finished goods and are valued at the lower of cost or market, with cost determined on a weighted-average cost method including associated freight costs, and market determined based on the estimated net realizable value. Manufacturing inventories are comprised of raw materials, work in process, and finished goods and are valued on a first-in, first out basis using full absorption accounting which includes material, labor, other variable costs, and other applicable manufacturing overhead. To determine if the value of inventory is recoverable at cost, we consider current and anticipated demand, customer preference and the merchandise age. The significant estimates used in inventory valuation are obsolescence (including excess and slow-moving inventory) and estimates of inventory shrinkage. We adjust our inventory for obsolescence based on historical trends, aging reports, specific identification and our estimates of future retail sales prices. Reserves for shrinkage are estimated and recorded throughout the period as a percentage of cost of sales based on historical shrinkage results and current inventory levels. Actual shrinkage is recorded throughout the year based upon periodic cycle counts. Actual inventory shrinkage can vary from estimates due to factors including the mix of our inventory and execution against loss prevention initiatives in our stores and distribution center. Property and equipment Property and equipment are recorded at cost less accumulated depreciation. Significant additions and improvements are capitalized, and expenditures for maintenance and repairs are expensed. Gains and losses on the disposition of property and equipment are recognized in the period incurred. Depreciation, including amortization of assets recorded under capital lease obligations, is provided using the straight-line method over the estimated useful lives of depreciable assets as follows: Buildings 30 years Furniture, fixtures, and equipment 3 to 10 years Computer software 2 to 5 years Leasehold improvements Shorter of useful life or lease term Capital leases Shorter of useful life or lease term Costs of developing or obtaining software for internal use or developing the Company's website, such as external direct costs of materials or services and internal payroll costs directly related to the software development projects are capitalized. For the fiscal years ended February 27, 2016, February 28, 2015, and March 1, 2014, the Company capitalized $3,272, $5,017, and $3,104, respectively, and amortized $3,258, $2,992, and $2,761, respectively, of costs in connection with the development of internally used software. Long-lived assets Long-lived assets, such as property and equipment and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of an asset, a product recall or an adverse action or assessment by a regulator. If the sum of the estimated undiscounted future cash flows related to the asset is less than the carrying value, we recognize a loss equal to the difference between the carrying value and the fair value, usually determined by the estimated discounted cash flow analysis of the asset. For our TCS segment, we generally evaluate long-lived tangible assets at a store level, or at the lowest level at which independent cash flows can be identified. We evaluate corporate assets or other long-lived assets that are not store-specific at the consolidated level. For our Elfa segment, we evaluate long-lived tangible assets at an individual subsidiary level. Since there is typically no active market for our long-lived tangible assets, we estimate fair values based on the expected future cash flows. We estimate future cash flows based on store-level historical results, current trends, and operating and cash flow projections. Our estimates are subject to uncertainty and may be affected by a number of factors outside our control, including general economic conditions and the competitive environment. While we believe our estimates and judgments about future cash flows are reasonable, future impairment charges may be required if the expected cash flow estimates, as projected, do not occur or if events change requiring us to revise our estimates. Foreign currency forward contracts We account for foreign currency forward contracts in accordance with ASC 815, Derivatives and Hedging . In the TCS segment, we may utilize foreign currency forward contracts in Swedish krona to stabilize our retail gross margins and to protect our domestic operations from downward currency exposure by hedging purchases of inventory from our wholly owned subsidiary, Elfa. In the Elfa segment, we may utilize foreign currency forward contracts to hedge purchases of raw materials that are transacted in currencies other than Swedish krona, which is the functional currency of Elfa. Generally, the Company's foreign currency forward contracts have terms from 1 to 12 months and require the Company to exchange currencies at agreed-upon rates at settlement. The Company does not hold or enter into financial instruments for trading or speculative purposes. The Company records all foreign currency forward contracts on its consolidated balance sheet at fair value. The Company records its foreign currency forward contracts on a gross basis. Forward contracts not designated as hedges are adjusted to fair value through income as selling, general and administrative expenses. The Company accounts for its foreign currency hedge instruments as cash flow hedges, as defined. Changes in the fair value of the foreign currency hedge instruments that are considered to be effective, as defined, are recorded in other comprehensive income (loss) until the hedged item (inventory) is sold to the customer, at which time the deferred gain or loss is recognized through cost of sales. Any portion of a change in the foreign currency hedge instrument's fair value that is considered to be ineffective, as defined, or that the Company has elected to exclude from its measurement of effectiveness, is immediately recorded in earnings as cost of sales. Self-insured liabilities We are primarily self-insured for workers' compensation, employee health benefits and general liability claims. We record self-insurance liabilities based on claims filed, including the development of those claims, and an estimate of claims incurred but not yet reported. Factors affecting these estimates include future inflation rates, changes in severity, benefit level changes, medical costs and claim settlement patterns. Should a different amount of claims occur compared to what was estimated, or costs of the claims increase or decrease beyond what was anticipated, reserves may need to be adjusted accordingly. We determine our workers' compensation liability and general liability claims reserves based on an analysis of historical claims data. Self-insurance reserves for employee health benefits, workers' compensation and general liability claims are recorded in the accrued liabilities line item of the consolidated balance sheet and were $3,471 and $2,522 as of February 27, 2016 and February 28, 2015, respectively. Goodwill We evaluate goodwill annually to determine whether it is impaired. Goodwill is also tested between annual impairment tests if an event occurs or circumstances change that would indicate that the fair value of a reporting unit is less than its carrying amount. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of an asset. If an impairment indicator exists, we test goodwill for recoverability. We have identified two reporting units and we have selected the fourth fiscal quarter to perform our annual goodwill impairment testing. Prior to testing goodwill for impairment, we perform a qualitative assessment to determine whether it is more likely than not that goodwill is impaired for each reporting unit. If the results of the qualitative assessment indicate that the likelihood of impairment is greater than 50%, then we perform a two-step impairment test on goodwill. In the first step, we compare the fair value of the reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is considered not impaired and we are not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit's goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then we would record an impairment loss equal to the difference. The fair value of each reporting unit is determined by using a discounted cash flow analysis using the income approach. We also use a market approach to compare the estimated fair value to comparable companies. The determination of fair value requires assumptions and estimates of many critical factors, including among others, our nature and our history, financial and economic conditions affecting us, our industry and the general economy, past results, our current operations and future prospects, sales of similar businesses or capital stock of publicly held similar businesses, as well as prices, terms and conditions affecting past sales of similar businesses. Forecasts of future operations are based, in part, on operating results and management's expectations as to future market conditions. These types of analyses contain uncertainties because they require management to make assumptions and to apply judgments to estimate industry economic factors and the profitability of future business strategies. If actual results are not consistent with our estimates and assumptions, we may be exposed to future impairment losses that could be material. Trade names We annually evaluate whether the trade names continue to have an indefinite life. Trade names are reviewed for impairment annually in the fourth quarter and may be reviewed more frequently if indicators of impairment are present. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of an asset, a product recall or an adverse action or assessment by a regulator. The impairment review is performed by comparing the carrying value to the estimated fair value, determined using a discounted cash flow methodology. If the recorded carrying value of the trade name exceeds its estimated fair value, an impairment charge is recorded to write the trade name down to its estimated fair value. Factors used in the valuation of intangible assets with indefinite lives include, but are not limited to, future revenue growth assumptions, estimated market royalty rates that could be derived from the licensing of our trade names to third parties, and a rate used to discount the estimated royalty cash flow projections. The valuation of trade names requires assumptions and estimates of many critical factors, which are consistent with the factors discussed under "Goodwill" above. Forecasts of future operations are based, in part, on operating results and management's expectations as to future market conditions. These types of analyses contain uncertainties because they require management to make assumptions and to apply judgments to estimate industry economic factors and the profitability of future business strategies. If actual results are not consistent with our estimates and assumptions, we may be exposed to future impairment losses that could be material. Foreign currency translation The Company operates foreign subsidiaries in the following countries: Sweden, Norway, Finland, Denmark, Germany, Poland, and France. The functional currency of the Company's foreign operations is the applicable country's currency. All assets and liabilities of foreign subsidiaries and affiliates are translated at year-end rates of exchange. Revenues and expenses of foreign subsidiaries and affiliates are translated at average rates of exchange for the year. Unrealized gains and losses on translation are reported as cumulative translation adjustments through other comprehensive income (loss). The functional currency for the Company's wholly owned subsidiary, Elfa, is the Swedish krona. During fiscal 2015, the rate of exchange from U.S. dollar to Swedish krona increased from 8.4 to 8.6. The carrying amount of assets related to Elfa and subject to currency fluctuation was $109,548 and $113,050 as of February 27, 2016 and February 28, 2015, respectively. Foreign currency realized losses of $241, realized gains of $171, and realized gains of $224 are included in selling, general, and administrative expenses in the consolidated statements of operations in fiscal 2015, fiscal 2014, and fiscal 2013, respectively. Recent accounting pronouncements In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , which outlines new provisions intended to simplify various aspects related to accounting for share-based payments, including the income tax consequences and classification on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. The Company is evaluating the impact of implementation of this standard on its financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , to revise lease accounting guidance. The update requires most leases to be recorded on the balance sheet as a lease liability, with a corresponding right-of-use asset, whereas these leases currently have an off-balance sheet classification. ASU 2016-02 must be applied on a modified retrospective basis and is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. The Company is still evaluating the impact of implementation of this standard on its financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes , to simplify the presentation of deferred income taxes. The update requires an entity to classify deferred tax liabilities and assets as noncurrent within a classified balance sheet. ASU 2015-17 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. This update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company elected to early adopt this guidance on a prospective basis at the end of its fourth quarter of fiscal year 2015, and presented both deferred tax assets and liabilities as noncurrent in the Consolidated Balance Sheet as of February 27, 2016. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory , which changes the measurement principle for inventory from the lower of cost or market to the lower of cost and net realizable value. ASU 2015-11 defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The new guidance must be applied on a prospective basis and is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. The Company does not believe the implementation of this standard will result in a material impact to its financial statements. In April 2015, the FASB issued ASU 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) : Customer's Accounting for Fees Paid in a Cloud Computing Arrangement . The amendments in ASU 2015-05 provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The amendments in ASU 2015-05 are effective for fiscal years beginning after December 15, 2015, and interim periods within those years, with early adoption permitted. The guidance may be applied either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. The Company does not believe the implementation of this standard will result in a material impact to its financial statements. In April 2015, the FASB issued ASU 2015-03 , Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs . The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. In addition, in August 2015, ASU 2015-15, Interest—Imputation of Interest , was released which added SEC paragraphs pursuant to the SEC Staff Announcement at the June 18, 2015 Emerging Issues Task Force (EITF) meeting about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, ASU 2015-15 states the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The impact of ASU 2015-03 and ASU 2015-15 on our consolidated financial statements will include a reclassification of net deferred financing costs related to our Senior Secured Term Loan Facility to be pr |
Goodwill and trade names
Goodwill and trade names | 12 Months Ended |
Feb. 27, 2016 | |
Goodwill and trade names | |
Goodwill and trade names | 2. Goodwill and trade names The estimated goodwill and trade name fair values are computed using estimates as of the measurement date, which is defined as the fiscal month-end of December. The Company makes estimates and assumptions about sales, gross margins, profit margins, and discount rates based on budgets and forecasts, business plans, economic projections, anticipated future cash flows, and marketplace data. Assumptions are also made for varying perpetual growth rates for periods beyond the long-term business plan period. There are inherent uncertainties related to these factors and management's judgment in applying these factors. Another estimate using different, but still reasonable, assumptions could produce different results. As there are numerous assumptions and estimations utilized to derive the estimated enterprise fair value of each reporting unit, it is possible that actual results may differ from estimated results requiring future impairment charges. The Company recorded no impairments during fiscal 2015, fiscal 2014, and fiscal 2013 as a result of the goodwill and trade names impairment tests performed. The changes in the carrying amount of goodwill and trade names were as follows in fiscal 2015 and fiscal 2014: Goodwill Trade names Balance at March 1, 2014 Gross balance Accumulated impairment charges ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total, net $ $ Impairment charge — — Foreign currency translation adjustments — ) Balance at February 28, 2015 Gross balance Accumulated impairment charges ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total, net $ $ Impairment charge — — Foreign currency translation adjustments — ) Balance at February 27, 2016 Gross balance Accumulated impairment charges ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Detail of certain balance sheet
Detail of certain balance sheet accounts | 12 Months Ended |
Feb. 27, 2016 | |
Detail of certain balance sheet accounts | |
Detail of certain balance sheet accounts | 3. Detail of certain balance sheet accounts February 27, 2016 February 28, 2015 Accounts receivable, net: Trade receivables, net $ $ Credit card receivables Tenant allowances Other receivables ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventory: Finished goods $ $ Raw materials Work in progress ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net: Land and buildings $ $ Furniture and fixtures Machinery and equipment Computer software and equipment Leasehold improvements Construction in progress Leased vehicles and other ​ ​ ​ ​ ​ ​ ​ ​ Less accumulated depreciation and amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accrued Liabilities: Accrued payroll, benefits and bonuses $ $ Unearned revenue Accrued transaction and property tax Gift cards and store credits outstanding Accrued lease liabilities Accrued interest Other accrued liabilities ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Long-term debt and revolving li
Long-term debt and revolving lines of credit | 12 Months Ended |
Feb. 27, 2016 | |
Long-term debt and revolving lines of credit | |
Long-term debt and revolving lines of credit | 4. Long-term debt and revolving lines of credit Long-term debt and revolving lines of credit consist of the following: February 27, 2016 February 28, 2015 Senior secured term loan facility $ $ 2014 Elfa term loan facility 2014 Elfa revolving credit facility Obligations under capital leases Other loans Revolving credit facility — — ​ ​ ​ ​ ​ ​ ​ ​ Total debt Less current portion ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total long-term debt $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Scheduled total revolving lines of credit and debt maturities for the fiscal years subsequent to February 27, 2016, are as follows: Within 1 year $ 2 years 3 years 4 years 5 years — Thereafter — ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ Senior Secured Term Loan Facility On April 6, 2012, The Container Store Group, Inc., The Container Store, Inc. and certain of its domestic subsidiaries entered into a $275,000 Senior Secured Term Loan Facility (the "Senior Secured Term Loan Facility") with JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent, and the lenders party thereto. In addition, a new $75,000 asset-based revolving credit facility (the "Revolving Credit Facility") was entered into replacing the previously existing $75,000 asset-based revolving credit facility (these transactions are referred to collectively as the "Refinancing Transaction"). The Senior Secured Term Loan Facility replaced the previously existing $125,000 secured term loan and $150,000 of senior subordinated notes. The Company recorded expenses of $7,333 in fiscal 2012 associated with the Refinancing Transaction. This amount consisted of $1,655 related to an early extinguishment fee on the senior subordinated notes and $4,843 of deferred financing costs where accelerated amortization was required. The Company also recorded legal fees and other associated costs of $835. Borrowings under the Senior Secured Loan Facility accrued interest at LIBOR + 5.00%, subject to a LIBOR floor of 1.25% and the maturity date was April 6, 2019. On April 8, 2013, The Container Store Group, Inc., The Container Store, Inc. and certain of its domestic subsidiaries entered into Amendment No. 1 to the Senior Secured Term Loan Facility, pursuant to which the borrowings under the Senior Secured Term Loan Facility were increased to $362,250 and the interest rate on such borrowings was decreased to a rate of LIBOR + 4.25%, subject to a LIBOR floor of 1.25% (the "Increase and Repricing Transaction"). The maturity date remained as April 6, 2019. Additionally, pursuant to the Increase and Repricing Transaction (i) the senior secured leverage ratio covenant was eliminated and (ii) we were required to make quarterly principal repayments of $906 through December 31, 2018, with a balloon payment for the remaining balance due on April 6, 2019. The additional $90,000 of borrowings was used to finance a distribution to holders of our Senior Preferred Stock in the amount of $90,000, which was paid on April 9, 2013. You may refer to Note 8 of these financial statements for a discussion of the $90,000 distribution payment to senior preferred shareholders that was funded by the increased borrowings. The Company recorded expenses of $1,101 during the first quarter of fiscal 2013 associated with the Increase and Repricing Transaction. The amount consisted of $723 of deferred financing costs where accelerated amortization was required. Legal fees and other associated costs of $378 were also recorded. On November 8, 2013, net proceeds of $31,000 from the IPO were used to repay a portion of the outstanding borrowings under the Senior Secured Term Loan Facility. On November 27, 2013, The Container Store Group, Inc., The Container Store, Inc. and certain of its domestic subsidiaries entered into Amendment No. 2 to the Senior Secured Term Loan Facility (the "Repricing Transaction"). Pursuant to the Repricing Transaction, borrowings accrue interest at a lower rate of LIBOR + 3.25%, subject to a LIBOR floor of 1.00%. The Company recorded expenses of $128, where accelerated amortization was required, during the third quarter of fiscal 2013 associated with the Repricing Transaction. The Senior Secured Term Loan Facility is secured by (a) a first priority security interest in substantially all of our assets (excluding stock in foreign subsidiaries in excess of 65%, assets of non-guarantors and subject to certain other exceptions) (other than the collateral that secures the Revolving Credit Facility described below on a first-priority basis) and (b) a second priority security interest in the assets securing the Revolving Credit Facility described below on a first-priority basis. Obligations under the Senior Secured Term Loan Facility are guaranteed by The Container Store Group, Inc. and each of The Container Store, Inc.'s U.S. subsidiaries. Under the Senior Secured Term Loan Facility, the Company is required to make quarterly principal repayments of $906 through December 31, 2018, with a balloon payment for the remaining balance of $310,421 due on April 6, 2019. The Senior Secured Term Loan Facility includes restrictions on the ability of the Company's subsidiaries to incur additional liens and indebtedness, make investments and dispositions, pay dividends or make other distributions, make loans, prepay certain indebtedness and enter into sale and lease back transactions, among other restrictions. Under the Senior Secured Term Loan Facility, provided no event of default has occurred and is continuing, The Container Store, Inc. is permitted to pay dividends to The Container Store Group, Inc. in an amount not to exceed the sum of $10,000 plus if after giving effect to such dividend on a pro forma basis, the Consolidated Leverage Ratio (as defined in the Senior Secured Term Loan Facility) does not exceed 2.0 to 1.0, the Available Amount (as defined in the Senior Secured Term Loan Facility) during the term of the Senior Secured Term Loan Facility, and pursuant to certain other limited exceptions. The restricted net assets of the Company's consolidated subsidiaries was $194,568 as of February 27, 2016. As of February 27, 2016, we were in compliance with all Senior Secured Term Loan Facility covenants and no Event of Default (as such term is defined in the Senior Secured Term Loan Facility) has occurred. Revolving Credit Facility In connection with the Refinancing Transaction on April 6, 2012, The Container Store Group, Inc., The Container Store, Inc. and certain of its domestic subsidiaries entered into a $75,000 asset-based revolving credit agreement with the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent, and Wells Fargo Bank, National Association, as Syndication Agent (the "Revolving Credit Facility"). Borrowings under the Revolving Credit Facility accrued interest at LIBOR+1.25% to 1.75%, subject to adjustment based on average daily excess availability over the preceding quarter, and the maturity date was April 6, 2017. On October 8, 2015, The Container Store, Inc. executed an amendment to the Revolving Credit Facility ("Amendment No. 2"). Under the terms of Amendment No. 2, among other items, (i) the maturity date of the loan was extended from April 6, 2017 to the earlier of (x) October 8, 2020 and (y) January 6, 2019, if any of The Container Store, Inc.'s obligations under its term loan credit facility remain outstanding on such date and have not been refinanced with debt that has a final maturity date that is no earlier than April 6, 2019 or subordinated debt, (ii) the aggregate principal amount of the facility was increased from $75,000 to $100,000, (iii) the interest rate decreased from a range of LIBOR + 1.25% to 1.75% to LIBOR + 1.25% and (iv) the uncommitted incremental revolving facility was increased from $25,000 to $50,000, which is subject to receipt of lender commitments and satisfaction of specified conditions. As provided in Amendment No. 2, the Revolving Credit Facility will continue to be used for working capital and other general corporate purposes. Amendment No. 2 allows for swing line advances of up to $15,000 and the issuance of letters of credit of up to $40,000, increased from the previous swing line limits of $7,500 and letter of credit limits of $20,000. The availability of credit at any given time under the Revolving Credit Facility is limited by reference to a borrowing base formula, which is the sum of (i) 90% of eligible credit card receivables and (ii) 90% of the appraised value of eligible inventory; minus (iii) certain availability reserves and (iv) outstanding credit extensions including letters of credit and existing revolving loans. The Revolving Credit Facility is secured by (a) a first-priority security interest in substantially all of our personal property, consisting of inventory, accounts receivable, cash, deposit accounts, and other general intangibles, and (b) a second-priority security interest in the collateral that secures the Senior Secured Term Loan Facility on a first-priority basis, as described above (excluding stock in foreign subsidiaries in excess of 65%, and assets of non-guarantor subsidiaries and subject to certain other exceptions). Obligations under the Revolving Credit Facility are guaranteed by The Container Store Group, Inc. and each of The Container Store, Inc.'s U.S. subsidiaries. The Revolving Credit Facility contains a number of covenants that, among other things, restrict our ability, subject to specified exceptions, to incur additional debt; incur additional liens and contingent liabilities; sell or dispose of assets; merge with or acquire other companies; liquidate or dissolve ourselves, engage in businesses that are not in a related line of business; make loans, advances or guarantees; engage in transactions with affiliates; and make investments. In addition, the financing agreements contain certain cross-default provisions. We are required to maintain a consolidated fixed-charge coverage ratio of 1.0 to 1.0 if excess availability is less than $10,000 at any time. As of February 27, 2016, we were in compliance with all Revolving Credit Facility covenants and no Event of Default (as such term is defined in the Revolving Credit Facility) has occurred. Under the Revolving Credit Facility, provided no event of default has occurred and is continuing, The Container Store, Inc. is permitted to pay dividends to The Container Store Group, Inc., in an amount not to exceed the sum of $10,000 plus if after giving effect to such dividend on a pro forma basis, the Consolidated Fixed Charge Coverage Ratio (as defined in the Revolving Credit Facility) is not less than 1.25 to 1.0, the Available Amount (as defined in the Revolving Credit Facility) during the term of the Revolving Credit Facility, and pursuant to certain other limited exceptions. There was $75,159 available under the Revolving Credit Facility as of February 27, 2016, based on the factors described above. Maximum borrowings, including letters of credit issued under the Revolving Credit Facility during the period ended February 27, 2016, were $36,406. Elfa Senior Secured Credit Facilities and 2014 Elfa Senior Secured Credit Facilities On April 27, 2009, Elfa entered into the Elfa Senior Secured Credit Facilities with Tjustbygdens Sparbank AB, which we refer to as Sparbank, which consisted of a SEK 137.5 million term loan facility, which we refer to as the Elfa Term Loan Facility, and the SEK 175.0 million Elfa Revolving Credit Facility and, together with the Elfa Term Loan Facility, the Elfa Senior Secured Credit Facilities. On January 27, 2012, Sparbank transferred all of its commitments, rights and obligations under the Elfa Senior Secured Credit Facilities to Swedbank AB. Borrowings under the Elfa Senior Secured Credit Facilities accrued interest at a rate of STIBOR+1.775%. Elfa was required to make quarterly principal repayments under the Elfa Term Loan Facility of SEK 6.25 million through maturity. The Elfa Senior Secured Credit Facilities were secured by first priority security interests in substantially all of Elfa's assets. The Elfa Term Loan Facility and the Elfa Revolving Credit Facility matured on August 30, 2014 and were replaced with the 2014 Elfa Senior Secured Credit Facilities as discussed below On April 1, 2014, Elfa entered into a master credit agreement with Nordea Bank AB ("Nordea"), which consists of a SEK 60.0 million (approximately $7,000 as of February 27, 2016) term loan facility (the "2014 Elfa Term Loan Facility") and a SEK 140.0 million (approximately $16,334 as of February 27, 2016) revolving credit facility (the "2014 Elfa Revolving Credit Facility," and together with the 2014 Elfa Term Loan Facility, the "2014 Elfa Senior Secured Credit Facilities"). The 2014 Elfa Senior Secured Credit Facilities term began on August 29, 2014 and matures on August 29, 2019, or such shorter period as provided by the agreement. Elfa is required to make quarterly principal payments under the 2014 Elfa Term Loan Facility in the amount of SEK 3.0 million (approximately $350 as of February 27, 2016) through maturity. The 2014 Elfa Term Loan Facility bears interest at STIBOR + 1.7% and the 2014 Elfa Revolving Credit Facility bears interest at Nordea's base rate + 1.4%, and these rates are applicable until August 29, 2017, at which time the interest rates may be renegotiated at the request of either party to the agreement. Should the parties fail to agree on new interest rates, Elfa has the ability to terminate the agreement on August 29, 2017, at which time all borrowings under the agreement shall be paid in full to Nordea. As of February 27, 2016, the Company had $15,614 of additional availability under the 2014 Elfa Revolving Credit Facility. Under the 2014 Elfa Senior Secured Credit Facilities, Elfa's ability to pay dividends to its parent entity, The Container Store, Inc., is based on its future net income and on historical intercompany practices as between Elfa and The Container Store, Inc. The 2014 Elfa Senior Secured Credit Facilities are secured by the majority of assets of Elfa. The 2014 Elfa Senior Secured Credit Facilities contains a number of covenants that, among other things, restrict Elfa's ability, subject to specified exceptions, to incur additional liens, sell or dispose of assets, merge with other companies, engage in businesses that are not in a related line of business and make guarantees. In addition, Elfa is required to maintain (i) a consolidated equity ratio (as defined in the 2014 Elfa Senior Secured Credit Facilities) of not less than 30% in year one and not less than 32.5% thereafter and (ii) a consolidated ratio of net debt to EBITDA (as defined in the 2014 Elfa Senior Secured Credit Facilities) of less than 3.2, the consolidated equity ratio tested at the end of each calendar quarter and the ratio of net debt to EBITDA tested as of the end of each fiscal quarter. As of February 27, 2016, Elfa was in compliance with all covenants and no Event of Default (as defined in the 2014 Elfa Senior Secured Credit Facilities) had occurred. On May 13, 2014, Elfa entered into a credit facility with Nordea for SEK 15.0 million (the "Short Term Credit Facility"). The Short Term Credit Facility accrued interest at 2.53% and matured on August 28, 2014, at which time all borrowings under the agreement were paid in full to Nordea (approximately $2,152 as of August 28, 2014). The total amount of borrowings available under the Short Term Credit Facility was used to pay a mortgage owed on the Poland manufacturing facility in full in the first quarter of fiscal 2014. Deferred financing costs The Company capitalizes certain costs associated with issuance of various debt instruments. These deferred financing costs are amortized to interest expense on a straight-line method, which is materially consistent with the effective interest method, over the terms of the related debt agreements. The Company capitalized $258 of fees associated with Amendment No. 2 that will be amortized through October 8, 2020. In conjunction with the Refinancing Transaction, the Company capitalized $9,467 of fees associated with the Senior Secured Term Loan Facility that will be amortized through April 6, 2019, as well as $375 of fees associated with the Revolving Credit Facility that will be amortized through April 6, 2017. Amortization expense of deferred financing costs was $1,940, $1,956, and $1,857 in fiscal 2015, fiscal 2014, and fiscal 2013, respectively. The following is a schedule of amortization expense of deferred financing costs: Within 1 year $ 2 years 3 years 4 years 5 years Thereafter — ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ |
Income taxes
Income taxes | 12 Months Ended |
Feb. 27, 2016 | |
Income taxes | |
Income taxes | 5. Income taxes Components of the provision for income taxes are as follows: Fiscal year ended February 27, 2016 February 28, 2015 March 1, 2014 Income before income taxes: U.S. $ $ $ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Federal $ ) $ $ State Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current provision Deferred Federal ) State ) Foreign ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred provision (benefit) ) Total provision for income taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The differences between the actual provision for income taxes and the amounts computed by applying the statutory federal tax rate to income before taxes are as follows: Fiscal year ended February 27, 2016 February 28, 2015 March 1, 2014 Provision computed at federal statutory rate $ $ $ Permanent differences Change in valuation allowance ) ) State income taxes, net of federal benefit Effect of foreign income taxes ) ) ) Prior period error — ) — Non-taxable gain on sale of Norwegian subsidiary — ) — Economic zone credits ) ) ) Other, net ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Components of deferred tax assets and liabilities as of February 27, 2016 and February 28, 2015, are as follows: February 27, 2016 February 28, 2015 Deferred tax assets: Inventory $ $ Loss and credit carryforwards Stock compensation Accrued liabilities ​ ​ ​ ​ ​ ​ ​ ​ Subtotal Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets Deferred tax liabilities: Intangibles ) ) Capital assets ) ) Other ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax liabilities $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ The Company has recorded deferred tax assets and liabilities based upon estimates of their realizable value with such estimates based upon likely future tax consequences. In assessing the need for a valuation allowance, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets. If, based on the weight of available evidence, it is more-likely-than-not that a deferred tax asset will not be realized, the Company records a valuation allowance. By the end of fiscal year 2013, the Company's U.S. operations maintained a position of cumulative profits for the most recent three-year period. The cumulative domestic profits coupled with the fiscal year 2013 consolidated pre-tax income and the business plan for profitability in future periods provided assurance that certain domestic future tax benefits more-likely-than-not will be realized. Accordingly, in fiscal year 2013 the Company released a U.S. valuation allowance of $2,753 against certain domestic net deferred tax assets as compared to prior year. Prior to the fourth quarter of 2014, the Company maintained a partial valuation allowance against certain Polish deferred tax assets related to Special Economic Zone credits earned by the Company's Polish manufacturing business. During fiscal 2014, significant positive evidence provided assurance that these credits will more-likely-than-not be fully realized. Accordingly, in the fourth quarter of fiscal 2014, the Company released the remaining valuation allowance it had maintained against deferred tax assets related to these credits. The release resulted in a $680 benefit to the Company's provision for income taxes. During the quarter ended August 30, 2014, the Company identified a prior period error in its income tax provision and filed an amended tax return, which resulted in a $1,839 benefit to the provision for income taxes, as well as an increase to income taxes receivable. As a result of the amended return filing, the Company utilized a deferred tax asset and released a valuation allowance of $1,331 related to certain domestic tax credits. Foreign and domestic tax credits, net of valuation allowances, totaled approximately $1,661 at February 27, 2016 and approximately $1,602 at February 28, 2015. The various credits available at February 27, 2016 expire in the 2026 tax year. The Company had deferred tax assets for foreign and state net operating loss carryovers of $1,888 at February 27, 2016, and approximately $1,897 at February 28, 2015. Valuation allowances of $1,687 and $1,647 were recorded against the net operating loss deferred tax assets at February 27, 2016 and February 28, 2015, respectively. While the Company is not currently under IRS audit, tax years ending February 28, 2009 and forward remain open to examination by virtue of net operating loss carryovers created or utilized in those years. The Company accounts for the repatriation of foreign earnings in accordance with ASC 740-30. As such, the Company is partially reinvested based on the guidance provided in ASC 740-30. Undistributed earnings of approximately $33,149 at February 27, 2016 and approximately $33,227 at February 28, 2015 have been indefinitely reinvested; therefore, no provision has been made for taxes due upon remittance of those earnings. The decrease in undistributed earnings from fiscal 2014 to fiscal 2015 was primarily related to the translation of foreign earnings from Swedish krona to U.S. dollar. Determination of the unrecognized deferred tax liability related to these undistributed earnings is not practicable because of the complexities associated with its hypothetical calculation. The Company does not have any uncertain tax positions, according to ASC 740-10, as of February 28, 2015 and February 27, 2016. |
Employee benefit plans
Employee benefit plans | 12 Months Ended |
Feb. 27, 2016 | |
Employee benefit plans | |
Employee benefit plans | 6. Employee benefit plans 401(k) Plan All domestic employees of the Company who complete 11 months of service are eligible to participate in the Company's 401(k) Plan. Participants may contribute up to 80% of annual compensation, limited to eighteen thousand annually (twenty-four thousand for participants aged 50 years and over) as of January 1, 2015. During fiscal 2015, fiscal 2014, and fiscal 2013, the Company matched 100% of employee contributions up to 4% of compensation. The amount charged to expense for the Company's matching contribution was $3,165, $2,737, and $2,570 for fiscal years 2015, 2014, and 2013, respectively. Nonqualified retirement plan The Company has a nonqualified retirement plan whereby certain employees can elect to defer a portion of their compensation into retirement savings accounts. Under the plan, there is no requirement that the Company match contributions, although the Company may contribute matching payments at its sole discretion. No matching contributions were made to the plan during any of the periods presented. The total fair market value of the plan asset recorded in other current assets was $3,947 and $3,951 as of February 27, 2016 and February 28, 2015, respectively. The total fair value of the plan liability recorded in accrued liabilities was $3,962 and $3,966 as of February 27, 2016 and February 28, 2015, respectively. Pension plan The Company provides pension benefits to the employees of Elfa under collectively bargained pension plans in Sweden, which are recorded in other long-term liabilities. The defined benefit plan provides benefits for participating employees based on years of service and final salary levels at retirement. Certain employees also participate in defined contribution plans for which Company contributions are determined as a percentage of participant compensation. The defined benefit plans are unfunded and approximately 3% of Elfa employees are participants in the defined benefit pension plan. The following is a reconciliation of the changes in the defined benefit obligations, a statement of funded status, and the related weighted-average assumptions: February 27, 2016 February 28, 2015 Change in benefit obligation: Projected benefit obligation, beginning of year $ $ Service cost Interest cost Benefits paid ) ) Actuarial loss ) Exchange rate (gain) loss ) ) ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligation, end of year Fair value of plan assets, end of year — — ​ ​ ​ ​ ​ ​ ​ ​ Underfunded status, end of year $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ Discount rate % % Rate of pay increases % % ​ ​ ​ ​ ​ ​ ​ ​ The following table provides the components of net periodic benefit cost for fiscal years 2015, 2014, and 2013: Fiscal year ended February 27, 2016 February 28, 2015 March 1, 2014 Components of net periodic benefit cost: Defined benefit plans: Service cost $ $ $ Interest cost Amortization of unrecognized net loss ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic benefit cost for defined benefit plan Defined contribution plans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total net periodic benefit cost $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Stock-based compensation
Stock-based compensation | 12 Months Ended |
Feb. 27, 2016 | |
Stock-based compensation | |
Stock-based compensation | 7. Stock-based compensation In fiscal 2012, the Company implemented the 2012 Stock Option Plan of The Container Store Group, Inc. ("2012 Equity Plan"). The 2012 Equity Plan provided for grants of nonqualified stock options and incentive stock options. On October 31, 2013, the Company's board of directors (the "Board") approved the modification of 240,435 outstanding stock options granted under the 2012 Equity Plan to provide for immediate vesting. The Company recognized approximately $1,846 of compensation expense during fiscal 2013 related to the 2012 Equity Plan, of which $1,594 was due to the modification of these stock options. On October 16, 2013, the Board approved the 2013 Incentive Award Plan ("2013 Equity Plan"). The 2013 Equity Plan provides for grants of nonqualified stock options, incentive stock options, restricted stock, restricted stock units, deferred stock awards, deferred stock units, stock appreciation rights, dividends equivalents, performance awards, and stock payments. As of February 27, 2016, there are 3,616,570 shares authorized and 930,511 shares available for grant under the 2013 Equity Plan. Awards that are surrendered or terminated without issuance of shares are available for future grants. On October 31, 2013, the Company granted 2,622,721 nonqualified stock options under the 2013 Equity Plan to its directors and certain of its employees. The stock options granted were approved by the Board and consisted of nonqualified stock options as defined by the IRS for corporate and individual tax reporting purposes. There were 1,666,066 options granted that immediately vested upon closing of the IPO on November 6, 2013. The remaining stock options granted will vest in equal annual installments over 7 years. The Company recognized $13,291 of compensation expense in fiscal 2013 related to the 2013 Equity Plan options granted. On September 1, 2014, the Company granted 24,649 nonqualified stock options under the 2013 Equity Plan to certain employees. The stock options granted vest in equal annual installments over 7 years. The stock options granted were approved by the Board and consisted of nonqualified stock options as defined by the IRS for corporate and individual tax reporting purposes. On October 27, 2014, the Company granted 80,200 nonqualified stock options under the 2013 Equity Plan to non-employee directors of the Company. The stock options granted vest in equal annual installments over 3 years. The stock options granted were approved by the Board and consisted of nonqualified stock options as defined by the IRS for corporate and individual tax reporting purposes. On August 3, 2015, the Company granted 94,568 nonqualified stock options under the 2013 Equity Plan to non-employee directors of the Company. The stock options granted vest in equal annual installments over 3 years. The stock options granted were approved by the Board and consisted of nonqualified stock options as defined by the IRS for corporate and individual tax reporting purposes. In connection with our stock-based compensation plans, the Board considers the estimated fair value of the Company's stock when setting the stock option exercise price as of the date of each grant. Prior to the IPO, because the Company was privately held and there was no public market for the common stock, the fair market value of the Company's common stock was determined by the Board at the time the option grants were awarded. In determining the fair value of the Company's common stock, the Board considered such factors as the Company's actual and projected financial results, valuations of the Company performed by third parties and other factors it believed were material to the valuation process. Following the IPO, the Board determines the exercise price of stock options based on the closing price of the Company's common stock as reported on The New York Stock Exchange on the grant date. Stock-based compensation cost is measured at the grant date fair value and is recognized as an expense in the consolidated statements of operations, on a straight-line basis, over the employee's requisite service period (generally the vesting period of the equity grant). The Company estimates forfeitures for option grants that are not expected to vest. The Company issues new shares of common stock upon stock option exercise. Stock-based compensation cost was $1,556, $1,289, and $15,137 during the fiscal year 2015, 2014, and 2013, respectively. As of February 27, 2016, there was a remaining unrecognized compensation cost of $5,828 (net of estimated forfeitures) that the Company expects to be recognized on a straight-line basis over a weighted-average remaining service period of approximately 2.4 years. The intrinsic value of shares exercised was $2, $369, and $342 during fiscal 2015, 2014, and 2013, respectively. The fair value of shares vested was $1,367, $1,205, and $14,976 during fiscal 2015, 2014, and 2013, respectively. The following table summarizes the Company's stock option activity during fiscal 2015, 2014, and 2013: Fiscal Year 2015 2014 2013 Shares Weighted- average exercise price (per share) Weighted- average contractual term remaining (years) Aggregate intrinsic value (thousands) Shares Weighted- average exercise price (per share) Weighted- average contractual term remaining (years) Aggregate intrinsic value (thousands) Shares Weighted- average exercise price (per share) Weighted- average contractual term remaining (years) Aggregate intrinsic value (thousands) Beginning balance $ $ $ Granted $ $ $ Exercised ) $ ) $ ) $ Forfeited ) $ ) $ ) $ Expired ) $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance $ $ — $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Vested and exercisable at end of year $ $ — $ $ $ $ The fair value of stock options is estimated on the date of the grant using the Black-Scholes option pricing model with the following weighted-average assumptions: • Expected Term—The expected term of the options represents the period of time between the grant date of the options and the date the options are either exercised or canceled, including an estimate of options still outstanding. The Company utilized the simplified method for calculating the expected term for stock options as we do not have sufficient historical data to calculate based on actual exercise and forfeiture activity. • Expected Volatility—The expected volatility incorporates historical and implied volatility of comparable public companies for a period approximating the expected term. • Expected Dividend Yield—The expected dividend yield is based on the Company's expectation of not paying dividends on its common stock for the foreseeable future. • Risk-Free Interest Rate—The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant and with a maturity that approximates the expected term. Stock options granted during fiscal year 2015, 2014, and 2013 were granted at a weighted-average grant date fair value of $8.46, $8.14, and $8.26, respectively. Such amounts were estimated using the Black Scholes option pricing model with the following weighted-average assumptions: Fiscal Year 2015 2014 2013 Expected term 6.0 years 6.1 years 5.7 years Expected volatility 50.3% 50.4% 48.3% Risk-free interest rate 1.7% 1.8% 1.5% Dividend yield 0% 0% 0% |
Shareholders' equity
Shareholders' equity | 12 Months Ended |
Feb. 27, 2016 | |
Shareholders' equity | |
Shareholders' equity | 8. Shareholders' equity Common stock On August 16, 2007, the Company issued 2,942,326 shares of common stock with a par value of $0.01 per share at a price of $17.01 per share, giving effect to the stock split discussed below. The holders of common stock are entitled to one vote per common share. The holders have no preemptive or other subscription rights and there are no redemptions or sinking fund provisions with respect to such shares. Common stock is subordinate to any preferred stock outstanding with respect to rights upon liquidation and dissolution of the Company. On October 31, 2013, the Company's board of directors retired 13,567 shares of common stock held in treasury, giving effect to the stock split discussed below. On October 31, 2013, the Company's board of directors approved an approximate 5.9-for-one stock split of its existing common shares. All share and per share information has been retroactively adjusted to reflect the stock split. On November 6, 2013, the Company completed its IPO. In connection with its IPO, the Company issued and sold 14,375,000 shares of its common stock at a price of $18.00 per share. Upon completion of the offering, the Company received net proceeds of approximately $237,013, after deducting the underwriting discount of $17,466 and offering expenses of $4,271. As of February 27, 2016, the Company had 250,000,000 shares of common stock authorized, with a par value of $0.01, of which 47,986,975 were issued and outstanding. Preferred stock On April 9, 2013, the Company paid a distribution to holders of its Senior Preferred Stock in the amount of $90,000. Refer to Note 4 for a discussion of the Increase and Repricing Transaction whereby $90,000 of additional secured term loans were executed to fund this distribution. On October 31, 2013, the Company's board of directors retired 298 shares of Senior Preferred Stock and 298 shares of Junior Preferred Stock held in treasury. On November 6, 2013, in connection with the completion of the Company's IPO, a distribution in the aggregate amount of $205,813 (the "Distribution") was paid from the net proceeds of the offering, (i) first, to all 140 holders of the Company's Senior Preferred Stock (including LGP and 130 current and former employees of the Company), which reduced the liquidation preference of such shares until such liquidation preference was reduced to $1,000.00 per share and (ii) second, the remainder was distributed to all 140 holders of the Company's Junior Preferred Stock (including LGP and 130 current and former employees of the Company), which reduced the liquidation preference of such shares. On November 6, 2013, the Company exchanged the liquidation preference per outstanding share of its Senior Preferred Stock and Junior Preferred Stock, after giving effect to the payment of the Distribution, for 30,619,083 shares of its common stock (the "Exchange"). The amount of common stock issued in the Exchange was determined by dividing (a) the liquidation preference amount of such preferred stock by (b) the IPO price of $18.00 per share. On an as adjusted basis to give effect to the Distribution and prior to the Exchange, the liquidation preference per share of its outstanding Senior Preferred Stock was $1,000.00 and the liquidation preference per share of its outstanding Junior Preferred Stock was $1,725.98. As of February 27, 2016, the Company had 5,000,000 shares of preferred stock authorized, with a par value of $0.01, of which no shares were issued or outstanding. |
Accumulated other comprehensive
Accumulated other comprehensive income | 12 Months Ended |
Feb. 27, 2016 | |
Accumulated other comprehensive income | |
Accumulated other comprehensive income | 9. Accumulated other comprehensive income Accumulated other comprehensive income ("AOCI") consists of changes in our foreign currency hedge contracts, pension liability adjustment, and foreign currency translation. The components of AOCI, net of tax, were as follows: Foreign currency hedge instruments Pension liability adjustment Foreign currency translation Total Balance at March 1, 2014 $ $ ) $ $ Other comprehensive income (loss) before reclassifications, net of tax ) ) ) ) Amounts reclassified to earnings, net of tax — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current period other comprehensive (loss) income ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at February 28, 2015 $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive (loss) income before reclassifications, net of tax ) ) ) Amounts reclassified to earnings, net of tax — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current period other comprehensive (loss) income ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at February 27, 2016 $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The unrecognized net actuarial loss included in accumulated other comprehensive income as of February 27, 2016 and February 28, 2015 was $992 and $1,167, respectively. Amounts reclassified from AOCI to earnings for the pension liability adjustment category are generally included in cost of sales and selling, general and administrative expenses in the Company's consolidated statements of operations. For a description of the Company's employee benefit plans, refer to Note 6. Amounts reclassified from AOCI to earnings for the foreign currency hedge instruments category are generally included in cost of sales in the Company's consolidated statements of operations. For a description of the Company's use of foreign currency forward contracts, refer to Note 10. |
Foreign currency forward contra
Foreign currency forward contracts | 12 Months Ended |
Feb. 27, 2016 | |
Foreign currency forward contracts. | |
Foreign currency forward contracts | 10. Foreign currency forward contracts The Company's international operations and purchases of its significant product lines from foreign suppliers are subject to certain opportunities and risks, including foreign currency fluctuations. In the TCS segment, we utilize foreign currency forward contracts in Swedish krona to stabilize our retail gross margins and to protect our domestic operations from downward currency exposure by hedging purchases of inventory from our wholly owned subsidiary, Elfa. Forward contracts in the TCS segment are designated as cash flow hedges, as defined by ASC 815. In the Elfa segment, we utilize foreign currency forward contracts to hedge purchases, primarily of raw materials, that are transacted in currencies other than Swedish krona, which is the functional currency of Elfa. Forward contracts in the Elfa segment are economic hedges, and are not designated as cash flow hedges as defined by ASC 815. In fiscal 2015, fiscal 2014, and fiscal 2013, the TCS segment used forward contracts for 54%, 54%, and 64% of inventory purchases in Swedish krona each year, respectively. In fiscal 2015, fiscal 2014, and fiscal 2013, the Elfa segment used forward contracts to purchase U.S. dollars in the amount of $5,495, $4,300, and $3,500, which represented 67%, 64%, and 67% of the Elfa segment's U.S. dollar purchases each year, respectively. Generally, the Company's foreign currency forward contracts have terms from 1 to 12 months and require the Company to exchange currencies at agreed-upon rates at settlement. The counterparties to the contracts consist of a limited number of major domestic and international financial institutions. The Company does not hold or enter into financial instruments for trading or speculative purposes. The Company records its foreign currency forward contracts on a gross basis and generally does not require collateral from these counterparties because it does not expect any losses from credit exposure. The Company records all foreign currency forward contracts on its consolidated balance sheet at fair value. The Company accounts for its foreign currency hedge instruments in the TCS segment as cash flow hedges, as defined. Changes in the fair value of the foreign currency hedge instruments that are considered to be effective, as defined, are recorded in other comprehensive income (loss) until the hedged item (inventory) is sold to the customer, at which time the deferred gain or loss is recognized through cost of sales. Any portion of a change in the foreign currency hedge instrument's fair value that is considered to be ineffective, as defined, or that the Company has elected to exclude from its measurement of effectiveness, is immediately recorded in earnings as cost of sales. The Company assessed the effectiveness of the foreign currency hedge instruments and determined the foreign currency hedge instruments were highly effective during the fiscal years ended February 27, 2016, February 28, 2015, and March 1, 2014. Forward contracts not designated as hedges in the Elfa segment are adjusted to fair value as selling, general, and administrative expenses on the consolidated statements of operations. During fiscal 2015, the Company recognized a net unrealized loss of $371 associated with the change in fair value of forward contracts not designated as hedge instruments. The Company had $29 in accumulated other comprehensive loss related to foreign currency hedge instruments at February 27, 2016. The entire $29 represents an unrealized loss for settled foreign currency hedge instruments related to inventory on hand as of February 27, 2016. The Company expects the unrealized loss of $29, net of taxes, to be reclassified into earnings over the next 12 months as the underlying inventory is sold to the end customer. The change in fair value of the Company's foreign currency hedge instruments that qualify as cash flow hedges and are included in accumulated other comprehensive income (loss), net of taxes, are presented in Note 9 of these financial statements. |
Leases
Leases | 12 Months Ended |
Feb. 27, 2016 | |
Leases | |
Leases | 11. Leases The Company conducts all of its U.S. operations from leased facilities that include a corporate headquarters/warehouse facility and 79 store locations. The corporate headquarters/warehouse and stores are under operating leases that will expire over the next 1 to 20 years. The Company also leases computer hardware under operating leases that expire over the next few years. In most cases, management expects that in the normal course of business, leases will be renewed or replaced by other leases. Most of the operating leases for the stores contain a renewal option at predetermined rental payments for periods of 5 to 20 years. This option enables the Company to retain use of facilities in desirable operating areas. The rental payments under certain store leases are based on a minimum rental plus a percentage of the sales in excess of a stipulated amount. These payments are accounted for as contingent rent and expensed when incurred. The following is a schedule of future minimum lease payments due under noncancelable operating and capital leases: Operating leases Capital leases Within 1 year $ $ 2 years 3 years 4 years 5 years — Thereafter — ​ ​ ​ ​ ​ ​ ​ ​ Total minimum lease payments $ $ ​ ​ ​ ​ ​ ​ ​ ​ Less amount representing interest ) ​ ​ ​ ​ ​ ​ ​ ​ Present value of minimum lease payments $ ​ ​ ​ ​ ​ ​ ​ ​ Rent expense for fiscal years 2015, 2014, and 2013 was $75,834, $72,643, and $68,184, respectively. Included in rent expense is percentage-of-sales rent expense of $450, $633, and $819 for fiscal years 2015, 2014, and 2013, respectively. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Feb. 27, 2016 | |
Commitments and contingencies | |
Commitments and contingencies | 12. Commitments and contingencies In connection with insurance policies and other contracts, the Company has outstanding standby letters of credit totaling $3,594 as of February 27, 2016. The Company is subject to ordinary litigation and routine reviews by regulatory bodies that are incidental to its business, none of which is expected to have a material adverse effect on the Company's consolidated financial statements on an individual basis or in the aggregate. |
Fair value measurements
Fair value measurements | 12 Months Ended |
Feb. 27, 2016 | |
Fair value measurements | |
Fair value measurements | 13. Fair value measurements Under generally accepted accounting principles, the Company is required to a) measure certain assets and liabilities at fair value or b) disclose the fair values of certain assets and liabilities recorded at cost. Accounting standards define fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. Fair value is calculated assuming the transaction occurs in the principal or most advantageous market for the asset or liability and includes consideration of non-performance risk and credit risk of both parties. Accounting standards pertaining to fair value establish a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value. These tiers include: • Level 1—Valuation inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. • Level 2—Valuation inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—Valuation inputs are unobservable and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are determined using model-based techniques that include option pricing models, discounted cash flow models and similar techniques. As of February 27, 2016 and February 28, 2015, the Company held certain items that are required to be measured at fair value on a recurring basis. These included the nonqualified retirement plan and foreign currency forward contracts. The nonqualified retirement plan consists of investments purchased by employee contributions to retirement savings accounts. The Company's international operations and purchases of its significant product lines from foreign suppliers are subject to certain opportunities and risks, including foreign currency fluctuations. The Company utilizes foreign currency forward exchange contracts to stabilize its retail gross margins and to protect its operations from downward currency exposure. Foreign currency hedge instruments are related to the Company's attempts to hedge foreign currency fluctuation on purchases of inventory in Swedish krona. The Company's foreign currency hedge instruments consist of over-the-counter (OTC) contracts, which are not traded on a public exchange. See Note 10 for further information on the Company's hedging activities. The fair values of the nonqualified retirement plan and foreign currency forward contracts are determined based on the market approach which utilizes inputs that are readily available in public markets or can be derived from information available in publicly quoted markets for comparable assets. Therefore, the Company has categorized these items as Level 2. The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values. The Company has consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the types of contracts it holds. The following items are measured at fair value on a recurring basis, subject to the disclosure requirements of ASC 820, Fair Value Measurements, at February 27, 2016 and February 28, 2015: Description Balance Sheet Location February 27, 2016 February 28, 2015 Assets Nonqualified retirement plan Level 2 Other current assets $ $ Foreign currency forward contracts Level 2 Other current assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Nonqualified retirement plan Level 2 Accrued liabilities Foreign currency hedge instruments Level 2 Accrued liabilities — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The fair value of long-term debt was estimated using quoted prices as well as recent transactions for similar types of borrowing arrangements (level 2 valuations). As of February 27, 2016 and February 28, 2015, the estimated fair value of the Company's long-term debt, including current maturities, was $221,534 and $327,830, respectively. |
Segment reporting
Segment reporting | 12 Months Ended |
Feb. 27, 2016 | |
Segment reporting | |
Segment reporting | 14. Segment reporting The Company's operating segments were determined on the same basis as how it evaluates the performance internally. The Company's two operating segments consist of TCS and Elfa. The TCS segment includes the Company's retail stores, website and call center, as well as the installation and organization services business. The Elfa segment includes the manufacturing business that produces the elfa® brand products that are sold domestically, exclusively through the TCS segment, as well as throughout Europe. The intersegment sales in the Elfa column represent elfa® product sales to the TCS segment. These sales and the related gross margin on merchandise recorded in TCS inventory balances at the end of the period are eliminated for consolidation purposes in the Corporate/Other column. The net sales to third parties in the Elfa column represent sales to customers outside of the United States. Amounts in the Corporate/Other column include unallocated corporate expenses and assets, intersegment eliminations and other adjustments to segment results necessary for the presentation of consolidated financial results in accordance with generally accepted accounting principles. In general, the Company uses the same measurements to calculate earnings or loss before income taxes for operating segments as it does for the consolidated company. However, interest expense related to the Senior Secured Term Loan Facility, the Revolving Credit Facility and senior subordinated notes is recorded in the Corporate/Other column. Fiscal year 2015 TCS Elfa Corporate/ Other Total Net sales to third parties $ $ $ — $ Intersegment sales — ) — Interest expense, net Income (loss) before taxes(1) ) Capital expenditures(2) Depreciation and amortization Goodwill — — Trade names — Assets(2) Fiscal year 2014 TCS Elfa Corporate/ Other Total Net sales to third parties $ $ $ — $ Intersegment sales — ) — Interest expense, net Income (loss) before taxes(1) ) Capital expenditures(2) Depreciation and amortization Goodwill — — Trade names — Assets(2) Fiscal year 2013 TCS Elfa Corporate/ Other Total Net sales to third parties $ $ $ — $ Intersegment sales — ) — Interest expense, net Income (loss) before taxes(1)(3) ) Capital expenditures(2) Depreciation and amortization Goodwill — — Trade names — Assets(2) (1) The TCS segment includes stock-based compensation expense of $1,556, $1,289, and $15,137 for fiscal 2015, fiscal 2014, and fiscal 2013, respectively. (2) Tangible assets and trade names in the Elfa column are located outside of the United States. Assets and capital expenditures in Corporate/Other include assets located in the corporate headquarters and distribution center. Assets in Corporate/Other also include deferred tax assets and the fair value of foreign currency hedge instruments. (3) The Corporate/Other column includes $1,229 of loss on extinguishment of debt in fiscal 2013. The following table shows sales by merchandise category as a percentage of total net sales for fiscal years 2015, 2014, and 2013: Fiscal year ended February 27, 2016 February 28, 2015 March 1, 2014 Custom Closets(1) % % % Closet, Bath, Travel, Laundry % % % Storage, Box, Shelving % % % Kitchen, Food Storage, Trash % % % Office, Collections, Hooks % % % Containers, Gift Packaging, Seasonal, Impulse % % % Services & Other % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Includes elfa® and TCS Closets™ product sold by the TCS segment and Elfa segment sales to third parties |
Net income (loss) per common sh
Net income (loss) per common share | 12 Months Ended |
Feb. 27, 2016 | |
Net income (loss) per common share | |
Net income (loss) per common share | 15. Net income (loss) per common share Basic net income (loss) per common share is computed as net income (loss) available to common shareholders divided by the weighted-average number of common shares outstanding for the period. Net income (loss) available to common shareholders is computed as net income (loss) less accumulated distributions to preferred shareholders for the period. Diluted net income (loss) per share is computed as net income (loss) available to common shareholders divided by the weighted-average number of common shares outstanding for the period plus common stock equivalents consisting of shares subject to stock-based awards with exercise prices less than or equal to the average market price of the Company's common stock for the period, to the extent their inclusion would be dilutive. Potential dilutive securities are excluded from the computation of diluted net income (loss) per share if their effect is anti-dilutive. The following is a reconciliation of net income (loss) available to common shareholders and the number of shares used in the basic and diluted net income (loss) per share calculations: Fiscal year ended February 27, 2016 February 28, 2015 March 1, 2014 Numerator: Net income $ $ $ Less: Distributions accumulated to preferred shareholders — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) available to common shareholders $ $ $ ) Denominator: Weighted-average common shares outstanding—basic Options and other dilutive securities — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average common shares outstanding—diluted Net income (loss) per common share—basic and diluted $ $ $ ) Antidilutive securities not included: Stock options outstanding |
Quarterly results of operations
Quarterly results of operations (unaudited) | 12 Months Ended |
Feb. 27, 2016 | |
Quarterly results of operations (unaudited) | |
Quarterly results of operations (unaudited) | 16. Quarterly results of operations (unaudited) Due to the seasonal nature of our business, fourth quarter operating results historically represent a larger share of annual net sales and operating income primarily due to Our Annual elfa® Sale. We follow the same accounting policies for preparing quarterly and annual financial data. The table below summarizes quarterly results for fiscal 2015 and 2014: Fiscal 2015 Fourth Quarter Third Quarter Second Quarter First Quarter Net sales(1) $ $ $ $ Gross profit(1) Income (loss) from operations(1) ) Net income (loss)(1) ) ) Weighted-average shares used in computing basic net income (loss) per share Weighted-average shares used in computing diluted net income (loss) per share Basic and diluted net income (loss) per common share $ $ ) $ $ ) Fiscal 2014 Fourth Quarter Third Quarter Second Quarter First Quarter Net sales(1) $ $ $ $ Gross profit(1) Income (loss) from operations(1) ) Net income (loss)(1) ) Weighted-average shares used in computing basic net income (loss) per share Weighted-average shares used in computing diluted net income (loss) per share Basic and diluted net income (loss) per common share $ $ $ $ ) (1) The sum of the quarters may not equal the total fiscal year due to rounding. |
Subsequent events
Subsequent events | 12 Months Ended |
Feb. 27, 2016 | |
Subsequent Events [Abstract] | |
Subsequent events | 17. Subsequent events On March 30, 2016, the Board of Directors of the Company approved a change in the Company's fiscal year end from the 52- or 53-week period ending on the Saturday closest to February 28 to the 52- or 53-week period ending on the Saturday closest to March 31. The fiscal year change is effective beginning with the Company's 2016 fiscal year, which began April 3, 2016 and will end April 1, 2017 (the "New Fiscal Year"). As a result of the change, the Company had a March 2016 fiscal month transition period which began February 28, 2016 and ended April 2, 2016. The results of the transition period are expected to be reported in the Company's Form 10-Q to be filed for the first quarter of the New Fiscal Year, which will end on July 2, 2016 and in the Company's Form 10-K to be filed for the New Fiscal Year. Additionally, as part of the Company's long-term succession plan, on May 9, 2016, the Company announced that Melissa Reiff, current President and Chief Operating Officer, will become the retailer's Chief Executive Officer, succeeding William A. ("Kip") Tindell, III, and Sharon Tindell will add President to her current Chief Merchandising Officer title. Kip Tindell, current Chairman and Chief Executive Officer, will retain his role as Chairman of the Company's Board of Directors. In addition, Jodi Taylor, Chief Financial Officer and Secretary, will add Chief Administrative Officer to her current title. These changes will be effective July 1, 2016. In connection with the management changes occurring, the Company has entered into amended and restated employment agreements with Mr. Tindell, Ms. Reiff, and Ms. Tindell, and has also entered into an employment agreement with Ms. Taylor, each to be effective July 1, 2016. The amended and restated employment agreements with Ms. Reiff and Ms. Tindell, as well as the employment agreement with Ms. Taylor, provide for annual grants of equity awards subject to the Company's 2013 Incentive Award Plan and award agreements thereunder. In fiscal 2016, Ms. Reiff, Ms. Tindell and Ms. Taylor will receive time-based restricted shares and performance-based restricted shares as outlined in the agreements. The amended and restated employment agreement with Mr. Tindell will provide him with the same type and amount of equity-based compensation awards provided generally to the Company's non-employee directors from time to time. The amended and restated employment agreements also remove certain deferred compensation provisions that were in the original employment agreements. As of February 27, 2016, the Company had approximately $4,080 of deferred compensation recorded on the balance sheet in the other long-term liabilities line item associated with the original employment agreements. |
Schedule I-Condensed Financial
Schedule I-Condensed Financial Information of registrant | 12 Months Ended |
Feb. 27, 2016 | |
Schedule I-Condensed Financial Information of registrant | |
Schedule I-Condensed Financial Information of registrant | Schedule I—Condensed Financial Information of registrant— The Container Store Group, Inc. (parent company only) Condensed balance sheets (in thousands) February 27, 2016 February 28, 2015 Assets Current assets: Accounts receivable from subsidiaries $ $ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets Noncurrent assets: Investment in subsidiaries ​ ​ ​ ​ ​ ​ ​ ​ Total noncurrent assets ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ Liabilities and shareholders' equity Current liabilities: Accounts payable to subsidiaries $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities — — Noncurrent liabilities — — ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — — Shareholders' equity: Common stock Additional paid-in capital Retained deficit ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total shareholders' equity ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and shareholders' equity $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Schedule I—The Container Store Group, Inc. (parent company only) Condensed statements of operations (in thousands) February 27, 2016 February 28, 2015 March 1, 2014 Net sales — — — Cost of sales (excluding depreciation and amortization) — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit — — — Selling, general, and administrative expenses (excluding depreciation and amortization) — — — Stock-based compensation — — — Pre-opening costs — — — Depreciation and amortization — — — Restructuring charges — — — Other expenses — — — Loss (gain) on disposal of assets — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from operations — — — Interest expense — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before taxes and equity in net income of subsidiaries — — — Provision for income taxes — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before equity in net income of subsidiaries — — — Net income of subsidiaries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Schedule I—The Container Store Group, Inc. (parent company only) Condensed statements of comprehensive income Fiscal year ended (In thousands) February 27, 2016 February 28, 2015 March 1, 2014 Net income $ $ $ Unrealized gain (loss) on financial instruments, net of tax provision (benefit) of $606, $(604) and $(239) ) ) Pension liability adjustment, net of tax provision (benefit) of $39, $(4) and $(51) ) ) Foreign currency translation adjustment ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Schedule I—The Container Store Group, Inc. (parent company only) Notes to Condensed Financial Statements (In thousands, except share amounts and unless otherwise stated) February 27, 2016 Note 1: Basis of presentation In the parent-company-only financial statements, The Container Store Group, Inc.'s investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since the date of acquisition. The parent-company-only financial statements should be read in conjunction with the Company's consolidated financial statements. A condensed statement of cash flows was not presented because The Container Store Group, Inc. had no cash flow activities during fiscal 2015, fiscal 2014, or fiscal 2013. Note 2: Guarantees and restrictions The Container Store Inc., a subsidiary of the Company, has $321,288 of long-term debt outstanding under the Senior Secured Term Loan Facility, as of February 27, 2016. Under the terms of the Senior Secured Term Loan Facility, The Container Store Group, Inc. and the domestic subsidiaries of The Container Store, Inc. have guaranteed the payment of all principal and interest. In the event of a default under the Senior Secured Term Loan Facility, The Container Store Group, Inc. and the domestic subsidiaries of The Container Store, Inc. will be directly liable to the debt holders. The Senior Secured Term Loan Facility matures on April 6, 2019. The Senior Secured Term Loan Facility also includes restrictions on the ability of The Container Store Group, Inc. and its subsidiaries to incur additional liens and indebtedness, make investments and dispositions, pay dividends or make other distributions, make loans, prepay certain indebtedness and enter into sale and lease back transactions, among other restrictions. Under the Senior Secured Term Loan Facility, provided no event of default has occurred and is continuing, The Container Store, Inc. is permitted to pay dividends to The Container Store Group, Inc. in an amount not to exceed the sum of $10,000 plus if after giving effect to such dividend on a pro forma basis, the Consolidated Leverage Ratio (as defined in the Senior Secured Term Loan Facility) does not exceed 2.0 to 1.0, the Available Amount (as defined in the Senior Secured Term Loan Facility) during the term of the Senior Secured Term Loan Facility, and pursuant to certain other limited exceptions. The restricted net assets of the Company's consolidated subsidiaries was $194,568 as of February 27, 2016. As of February 27, 2016, The Container Store, Inc. also has $75,159 of available credit on the Revolving Credit Facility that provides commitments of up to $100,000 for revolving loans and letters of credit. The Container Store Group, Inc. and the domestic subsidiaries of The Container Store, Inc. have guaranteed all obligations under the Revolving Credit Facility. In the event of default under the Revolving Credit Facility, The Container Store Group, Inc. and the domestic subsidiaries of The Container Store, Inc. will be directly liable to the debt holders. The Revolving Credit Facility includes restrictions on the ability of The Container Store Group, Inc. and its subsidiaries to incur additional liens and indebtedness, make investments and dispositions, pay dividends or make other transactions, among other restrictions. On October 8, 2015, The Container Store, Inc. executed an amendment to the Revolving Credit Facility ("Amendment No. 2"). Under the terms of Amendment No. 2, among other items, the maturity date of the loan was extended from April 6, 2017 to the earlier of (x) October 8, 2020 and (y) January 6, 2019, if any of The Container Store, Inc.'s obligations under its term loan credit facility remain outstanding on such date and have not been refinanced with debt that has a final maturity date that is no earlier than April 6, 2019 or subordinated debt. Under the Revolving Credit Facility, provided no event of default has occurred and is continuing, The Container Store, Inc. is permitted to pay dividends to The Container Store Group, Inc., in an amount not to exceed the sum of $10,000 plus if after giving effect to such dividend on a pro forma basis, the Consolidated Fixed Charge Coverage Ratio (as defined in the Revolving Credit Facility) is not less than 1.25 to 1.0, the Available Amount (as defined in the Revolving Credit Facility) during the term of the Revolving Credit Facility, and pursuant to certain other limited exceptions. |
Nature of business and summar28
Nature of business and summary of significant accounting policies (Policies) | 12 Months Ended |
Feb. 27, 2016 | |
Nature of business and summary of significant accounting policies | |
Basis of presentation | Basis of presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). |
Basis of consolidation | Basis of consolidation The consolidated financial statements include our accounts and those of the Company's wholly owned subsidiaries. The Company eliminates all significant intercompany balances and transactions, including intercompany profits, in consolidation. |
Fiscal year | Fiscal year The Company follows a 5-4-4 fiscal calendar, whereby each fiscal quarter consists of thirteen weeks grouped into one five-week "month" and two four-week "months," and its fiscal year ends on the Saturday closest to February 28 th . Elfa's fiscal year ends on the last day of the calendar month of February. Refer to Note 17 for a subsequent event affecting our fiscal year end. The fiscal years ended February 27, 2016 (fiscal 2015), February 28, 2015 (fiscal 2014), and March 1, 2014 (fiscal 2013) included 52 weeks. |
Management estimates | Management estimates The preparation of the Company's consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results could differ from those estimates. Significant accounting judgments and estimates include fair value estimates for indefinite-lived intangible assets, inventory loss reserve, assessments of long-lived asset impairments, gift card breakage, and assessment of valuation allowances on deferred tax assets. |
Revenue recognition | Revenue recognition Revenue from sales related to retail operations is recognized when the merchandise is delivered to the customer at the point of sale. Revenue from sales that are shipped or delivered directly to customers is recognized upon estimated delivery to the customer and includes applicable shipping or delivery revenue. Revenue from sales that are installed is recognized upon completion of the installation service to the customer and includes applicable installation revenue. Revenue from sales of other services is recognized upon the completion of the service. Revenue from sales related to manufacturing operations is recorded upon shipment. Sales are recorded net of sales taxes collected from customers. A sales return allowance is recorded for estimated returns of merchandise subsequent to the balance sheet date that relate to sales prior to the balance sheet date. The returns allowance is based on historical return patterns and reduces sales and cost of sales, accordingly. Merchandise exchanges of similar product and price are not considered merchandise returns and, therefore, are excluded when calculating the sales returns allowance. |
Gift cards and merchandise credits | Gift cards and merchandise credits Gift cards are sold to customers in retail stores, through the call center and website, and through certain third parties. We issue merchandise credits in our stores and through our call center. Revenue from sales of gift cards and issuances of merchandise credits is recognized when the gift card is redeemed by the customer, or the likelihood of the gift card being redeemed by the customer is remote (gift card breakage). The gift card breakage rate is determined based upon historical redemption patterns. An estimate of the rate of gift card breakage is applied over the period of estimated performance (48 months as of the end of fiscal 2015) and the breakage amounts are included in net sales in the consolidated statement of operations. The Company recorded $948, $978, and $896 of gift card breakage in fiscal years 2015, 2014, and 2013, respectively. |
Cost of sales | Cost of sales Cost of sales related to retail operations includes the purchase cost of inventory sold (net of vendor rebates), in-bound freight, as well as inventory loss reserves. Costs incurred to ship or deliver merchandise to customers, as well as direct installation costs, are also included in cost of sales. Cost of sales from manufacturing operations includes costs associated with production, including materials, wages, other variable production costs, and other applicable manufacturing overhead. |
Leases | Leases Rent expense on operating leases, including rent holidays and scheduled rent increases, is recorded on a straight-line basis over the term of the lease, commencing on the date the Company takes possession of the leased property. Rent expense is recorded in selling, general, and administrative expenses. Pre-opening rent expense is recorded in pre-opening costs in the consolidated income statement. The net excess of rent expense over the actual cash paid has been recorded as deferred rent in the accompanying consolidated balance sheets. Tenant improvement allowances are also included in the accompanying consolidated balance sheets as deferred rent liabilities and are amortized as a reduction of rent expense over the term of the lease from the possession date. Contingent rental payments, typically based on a percentage of sales, are recognized in rent expense when payment of the contingent rent is probable. |
Advertising | Advertising All advertising costs of the Company are expensed when incurred, or upon the release of the initial advertisement, except for production costs related to catalogs and direct mailings to customers, which are initially capitalized. Production costs related to catalogs and direct mailings consist primarily of printing and postage and are expensed when mailed to the customer, except for direct mailings related to promotional campaigns, which are expensed over the period during which the promotional sales are expected to occur. Advertising costs are recorded in selling, general, and administrative expenses. Pre-opening advertising costs are recorded in pre-opening costs. Catalog and direct mailings costs capitalized at February 27, 2016 and February 28, 2015, amounted to $938 and $699 respectively, and are recorded in prepaid expenses on the accompanying consolidated balance sheets. Total advertising expense incurred for fiscal years 2015, 2014, and 2013, was $32,343, $35,388, and $33,786, respectively. |
Pre-opening costs | Pre-opening costs Non-capital expenditures associated with opening new stores, including rent, marketing expenses, travel and relocation costs, and training costs, are expensed as incurred and are included in pre-opening costs in the consolidated statement of operations. |
Management fee | Management fee In connection with the completion of the Company's IPO, the management fee was eliminated as of November 6, 2013. The Company paid $667 as a management fee to its majority shareholder, LGP, in fiscal year 2013. |
Income taxes | Income taxes We account for deferred income taxes utilizing Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740, Income Taxes . ASC 740 requires an asset and liability approach, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. We recognize interest and penalties related to unrecognized tax benefits in income tax expense. There were no uncertain tax positions requiring accrual as of February 27, 2016 and February 28, 2015. Valuation allowances are established against deferred tax assets when it is more-likely-than-not that the realization of those deferred tax assets will not occur. Valuation allowances are released as positive evidence of future taxable income sufficient to realize the underlying deferred tax assets becomes available. Deferred tax assets and liabilities are measured using the enacted tax rates in effect in the years when those temporary differences are expected to reverse. The effect on deferred taxes from a change in the tax rate is recognized through continuing operations in the period that includes the enactment of the change. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. We operate in certain jurisdictions outside the United States. ASC 740-30 provides that the undistributed earnings of a foreign subsidiary be accounted for as a temporary difference under the presumption that all undistributed earnings will be distributed to the parent company as a dividend. Sufficient evidence of the intent to permanently reinvest the earnings in the jurisdiction where earned precludes a company from recording the temporary difference. For purposes of ASC 740-30, we are partially reinvested in our Swedish subsidiary Elfa and thus do not record a temporary difference. We are partially reinvested since we have permanently reinvested our past earnings at Elfa; however, we do not assert that all future earnings will be reinvested into Elfa. |
Stock-based compensation | Stock-based compensation The Company accounts for stock-based compensation in accordance ASC 718, Compensation-Stock Compensation , which requires the fair value of stock-based payments to be recognized in the consolidated financial statements as compensation expense over the requisite service period. Compensation expense based upon the fair value of awards is recognized on a straight line basis, net of forfeitures, over the requisite service period for awards that actually vest. Stock-based compensation expense is recorded in the stock-based compensation line in the consolidated statements of operations. Prior to the IPO, because the Company was privately held and there was no public market for the common stock, the fair market value of the Company's common stock was determined by the Board at the time the option grants were awarded. In determining the fair value of the Company's common stock, the Board considered such factors as the Company's actual and projected financial results, valuations of the Company performed by third parties and other factors it believed were material to the valuation process. Following the IPO, the Board determines the exercise price of stock options based on the closing price of the Company's common stock as reported on The New York Stock Exchange on the grant date. The Company estimates the fair value of each stock option grant on the date of grant based upon the Black-Scholes option-pricing model. This model requires various significant judgmental assumptions in order to derive a final fair value determination for each type of award including: • Expected Term—The expected term of the options represents the period of time between the grant date of the options and the date the options are either exercised or canceled, including an estimate of options still outstanding. • Expected Volatility—The expected volatility incorporates historical and implied volatility of comparable public companies for a period approximating the expected term. • Expected Dividend Yield—The expected dividend yield is based on the Company's expectation of not paying dividends on its common stock for the foreseeable future. • Risk-Free Interest Rate—The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant and with a maturity that approximates the expected term. |
Accounts receivable | Accounts receivable Accounts receivable consist primarily of trade receivables, receivables from The Container Store, Inc.'s credit card processors for sales transactions, and tenant improvement allowances from The Container Store, Inc.'s landlords in connection with new leases. An allowance for doubtful accounts is established on trade receivables, if necessary, for estimated losses resulting from the inability of customers to make required payments. Factors such as payment terms, historical loss experience, and economic conditions are generally considered in determining the allowance for doubtful accounts. Accounts receivable are presented net of allowances for doubtful accounts of $128 and $230 at February 27, 2016 and February 28, 2015, respectively. |
Inventories | Inventories Inventories at retail stores are comprised of finished goods and are valued at the lower of cost or market, with cost determined on a weighted-average cost method including associated freight costs, and market determined based on the estimated net realizable value. Manufacturing inventories are comprised of raw materials, work in process, and finished goods and are valued on a first-in, first out basis using full absorption accounting which includes material, labor, other variable costs, and other applicable manufacturing overhead. To determine if the value of inventory is recoverable at cost, we consider current and anticipated demand, customer preference and the merchandise age. The significant estimates used in inventory valuation are obsolescence (including excess and slow-moving inventory) and estimates of inventory shrinkage. We adjust our inventory for obsolescence based on historical trends, aging reports, specific identification and our estimates of future retail sales prices. Reserves for shrinkage are estimated and recorded throughout the period as a percentage of cost of sales based on historical shrinkage results and current inventory levels. Actual shrinkage is recorded throughout the year based upon periodic cycle counts. Actual inventory shrinkage can vary from estimates due to factors including the mix of our inventory and execution against loss prevention initiatives in our stores and distribution center. |
Property and equipment | Property and equipment Property and equipment are recorded at cost less accumulated depreciation. Significant additions and improvements are capitalized, and expenditures for maintenance and repairs are expensed. Gains and losses on the disposition of property and equipment are recognized in the period incurred. Depreciation, including amortization of assets recorded under capital lease obligations, is provided using the straight-line method over the estimated useful lives of depreciable assets as follows: Buildings 30 years Furniture, fixtures, and equipment 3 to 10 years Computer software 2 to 5 years Leasehold improvements Shorter of useful life or lease term Capital leases Shorter of useful life or lease term Costs of developing or obtaining software for internal use or developing the Company's website, such as external direct costs of materials or services and internal payroll costs directly related to the software development projects are capitalized. For the fiscal years ended February 27, 2016, February 28, 2015, and March 1, 2014, the Company capitalized $3,272, $5,017, and $3,104, respectively, and amortized $3,258, $2,992, and $2,761, respectively, of costs in connection with the development of internally used software. |
Long-lived assets | Long-lived assets Long-lived assets, such as property and equipment and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of an asset, a product recall or an adverse action or assessment by a regulator. If the sum of the estimated undiscounted future cash flows related to the asset is less than the carrying value, we recognize a loss equal to the difference between the carrying value and the fair value, usually determined by the estimated discounted cash flow analysis of the asset. For our TCS segment, we generally evaluate long-lived tangible assets at a store level, or at the lowest level at which independent cash flows can be identified. We evaluate corporate assets or other long-lived assets that are not store-specific at the consolidated level. For our Elfa segment, we evaluate long-lived tangible assets at an individual subsidiary level. Since there is typically no active market for our long-lived tangible assets, we estimate fair values based on the expected future cash flows. We estimate future cash flows based on store-level historical results, current trends, and operating and cash flow projections. Our estimates are subject to uncertainty and may be affected by a number of factors outside our control, including general economic conditions and the competitive environment. While we believe our estimates and judgments about future cash flows are reasonable, future impairment charges may be required if the expected cash flow estimates, as projected, do not occur or if events change requiring us to revise our estimates. |
Foreign currency forward contracts | Foreign currency forward contracts We account for foreign currency forward contracts in accordance with ASC 815, Derivatives and Hedging . In the TCS segment, we may utilize foreign currency forward contracts in Swedish krona to stabilize our retail gross margins and to protect our domestic operations from downward currency exposure by hedging purchases of inventory from our wholly owned subsidiary, Elfa. In the Elfa segment, we may utilize foreign currency forward contracts to hedge purchases of raw materials that are transacted in currencies other than Swedish krona, which is the functional currency of Elfa. Generally, the Company's foreign currency forward contracts have terms from 1 to 12 months and require the Company to exchange currencies at agreed-upon rates at settlement. The Company does not hold or enter into financial instruments for trading or speculative purposes. The Company records all foreign currency forward contracts on its consolidated balance sheet at fair value. The Company records its foreign currency forward contracts on a gross basis. Forward contracts not designated as hedges are adjusted to fair value through income as selling, general and administrative expenses. The Company accounts for its foreign currency hedge instruments as cash flow hedges, as defined. Changes in the fair value of the foreign currency hedge instruments that are considered to be effective, as defined, are recorded in other comprehensive income (loss) until the hedged item (inventory) is sold to the customer, at which time the deferred gain or loss is recognized through cost of sales. Any portion of a change in the foreign currency hedge instrument's fair value that is considered to be ineffective, as defined, or that the Company has elected to exclude from its measurement of effectiveness, is immediately recorded in earnings as cost of sales. |
Self-insured liabilities | Self-insured liabilities We are primarily self-insured for workers' compensation, employee health benefits and general liability claims. We record self-insurance liabilities based on claims filed, including the development of those claims, and an estimate of claims incurred but not yet reported. Factors affecting these estimates include future inflation rates, changes in severity, benefit level changes, medical costs and claim settlement patterns. Should a different amount of claims occur compared to what was estimated, or costs of the claims increase or decrease beyond what was anticipated, reserves may need to be adjusted accordingly. We determine our workers' compensation liability and general liability claims reserves based on an analysis of historical claims data. Self-insurance reserves for employee health benefits, workers' compensation and general liability claims are recorded in the accrued liabilities line item of the consolidated balance sheet and were $3,471 and $2,522 as of February 27, 2016 and February 28, 2015, respectively. |
Goodwill | Goodwill We evaluate goodwill annually to determine whether it is impaired. Goodwill is also tested between annual impairment tests if an event occurs or circumstances change that would indicate that the fair value of a reporting unit is less than its carrying amount. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of an asset. If an impairment indicator exists, we test goodwill for recoverability. We have identified two reporting units and we have selected the fourth fiscal quarter to perform our annual goodwill impairment testing. Prior to testing goodwill for impairment, we perform a qualitative assessment to determine whether it is more likely than not that goodwill is impaired for each reporting unit. If the results of the qualitative assessment indicate that the likelihood of impairment is greater than 50%, then we perform a two-step impairment test on goodwill. In the first step, we compare the fair value of the reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is considered not impaired and we are not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit's goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then we would record an impairment loss equal to the difference. The fair value of each reporting unit is determined by using a discounted cash flow analysis using the income approach. We also use a market approach to compare the estimated fair value to comparable companies. The determination of fair value requires assumptions and estimates of many critical factors, including among others, our nature and our history, financial and economic conditions affecting us, our industry and the general economy, past results, our current operations and future prospects, sales of similar businesses or capital stock of publicly held similar businesses, as well as prices, terms and conditions affecting past sales of similar businesses. Forecasts of future operations are based, in part, on operating results and management's expectations as to future market conditions. These types of analyses contain uncertainties because they require management to make assumptions and to apply judgments to estimate industry economic factors and the profitability of future business strategies. If actual results are not consistent with our estimates and assumptions, we may be exposed to future impairment losses that could be material. |
Trade names | Trade names We annually evaluate whether the trade names continue to have an indefinite life. Trade names are reviewed for impairment annually in the fourth quarter and may be reviewed more frequently if indicators of impairment are present. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of an asset, a product recall or an adverse action or assessment by a regulator. The impairment review is performed by comparing the carrying value to the estimated fair value, determined using a discounted cash flow methodology. If the recorded carrying value of the trade name exceeds its estimated fair value, an impairment charge is recorded to write the trade name down to its estimated fair value. Factors used in the valuation of intangible assets with indefinite lives include, but are not limited to, future revenue growth assumptions, estimated market royalty rates that could be derived from the licensing of our trade names to third parties, and a rate used to discount the estimated royalty cash flow projections. The valuation of trade names requires assumptions and estimates of many critical factors, which are consistent with the factors discussed under "Goodwill" above. Forecasts of future operations are based, in part, on operating results and management's expectations as to future market conditions. These types of analyses contain uncertainties because they require management to make assumptions and to apply judgments to estimate industry economic factors and the profitability of future business strategies. If actual results are not consistent with our estimates and assumptions, we may be exposed to future impairment losses that could be material. |
Foreign currency translation | Foreign currency translation The Company operates foreign subsidiaries in the following countries: Sweden, Norway, Finland, Denmark, Germany, Poland, and France. The functional currency of the Company's foreign operations is the applicable country's currency. All assets and liabilities of foreign subsidiaries and affiliates are translated at year-end rates of exchange. Revenues and expenses of foreign subsidiaries and affiliates are translated at average rates of exchange for the year. Unrealized gains and losses on translation are reported as cumulative translation adjustments through other comprehensive income (loss). The functional currency for the Company's wholly owned subsidiary, Elfa, is the Swedish krona. During fiscal 2015, the rate of exchange from U.S. dollar to Swedish krona increased from 8.4 to 8.6. The carrying amount of assets related to Elfa and subject to currency fluctuation was $109,548 and $113,050 as of February 27, 2016 and February 28, 2015, respectively. Foreign currency realized losses of $241, realized gains of $171, and realized gains of $224 are included in selling, general, and administrative expenses in the consolidated statements of operations in fiscal 2015, fiscal 2014, and fiscal 2013, respectively. |
Recent accounting pronouncements | Recent accounting pronouncements In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , which outlines new provisions intended to simplify various aspects related to accounting for share-based payments, including the income tax consequences and classification on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. The Company is evaluating the impact of implementation of this standard on its financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , to revise lease accounting guidance. The update requires most leases to be recorded on the balance sheet as a lease liability, with a corresponding right-of-use asset, whereas these leases currently have an off-balance sheet classification. ASU 2016-02 must be applied on a modified retrospective basis and is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. The Company is still evaluating the impact of implementation of this standard on its financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes , to simplify the presentation of deferred income taxes. The update requires an entity to classify deferred tax liabilities and assets as noncurrent within a classified balance sheet. ASU 2015-17 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. This update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company elected to early adopt this guidance on a prospective basis at the end of its fourth quarter of fiscal year 2015, and presented both deferred tax assets and liabilities as noncurrent in the Consolidated Balance Sheet as of February 27, 2016. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory , which changes the measurement principle for inventory from the lower of cost or market to the lower of cost and net realizable value. ASU 2015-11 defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The new guidance must be applied on a prospective basis and is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. The Company does not believe the implementation of this standard will result in a material impact to its financial statements. In April 2015, the FASB issued ASU 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) : Customer's Accounting for Fees Paid in a Cloud Computing Arrangement . The amendments in ASU 2015-05 provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The amendments in ASU 2015-05 are effective for fiscal years beginning after December 15, 2015, and interim periods within those years, with early adoption permitted. The guidance may be applied either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. The Company does not believe the implementation of this standard will result in a material impact to its financial statements. In April 2015, the FASB issued ASU 2015-03 , Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs . The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. In addition, in August 2015, ASU 2015-15, Interest—Imputation of Interest , was released which added SEC paragraphs pursuant to the SEC Staff Announcement at the June 18, 2015 Emerging Issues Task Force (EITF) meeting about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, ASU 2015-15 states the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The impact of ASU 2015-03 and ASU 2015-15 on our consolidated financial statements will include a reclassification of net deferred financing costs related to our Senior Secured Term Loan Facility to be presented in the balance sheet as a direct deduction from the carrying amount of the Senior Secured Term Loan Facility, while net deferred financing costs related to our Revolving Credit Facility will remain an asset. As of February 27, 2016, the Company had $5,649 of net deferred financing costs related to our Senior Secured Term Loan Facility. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , an updated standard on revenue recognition. ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using IFRS and GAAP. The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple-element arrangements. In July 2015, the FASB deferred the effective date of ASU 2014-09. Accordingly, this standard is effective for reporting periods beginning after December 15, 2017, including interim periods within that fiscal year, with early adoption permitted for interim and annual periods beginning after December 15, 2016. The Company is still evaluating the impact of implementation of this standard on its financial statements. |
Nature of business and summar29
Nature of business and summary of significant accounting policies (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Nature of business and summary of significant accounting policies | |
Schedule of estimated useful lives of depreciable assets | Buildings 30 years Furniture, fixtures, and equipment 3 to 10 years Computer software 2 to 5 years Leasehold improvements Shorter of useful life or lease term Capital leases Shorter of useful life or lease term |
Goodwill and trade names (Table
Goodwill and trade names (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Goodwill and trade names | |
Schedule of changes in the carrying amount of goodwill and trade names | Goodwill Trade names Balance at March 1, 2014 Gross balance Accumulated impairment charges ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total, net $ $ Impairment charge — — Foreign currency translation adjustments — ) Balance at February 28, 2015 Gross balance Accumulated impairment charges ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total, net $ $ Impairment charge — — Foreign currency translation adjustments — ) Balance at February 27, 2016 Gross balance Accumulated impairment charges ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Detail of certain balance she31
Detail of certain balance sheet accounts (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Detail of certain balance sheet accounts | |
Schedule of detail of certain balance sheet accounts | February 27, 2016 February 28, 2015 Accounts receivable, net: Trade receivables, net $ $ Credit card receivables Tenant allowances Other receivables ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventory: Finished goods $ $ Raw materials Work in progress ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net: Land and buildings $ $ Furniture and fixtures Machinery and equipment Computer software and equipment Leasehold improvements Construction in progress Leased vehicles and other ​ ​ ​ ​ ​ ​ ​ ​ Less accumulated depreciation and amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accrued Liabilities: Accrued payroll, benefits and bonuses $ $ Unearned revenue Accrued transaction and property tax Gift cards and store credits outstanding Accrued lease liabilities Accrued interest Other accrued liabilities ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Long-term debt and revolving 32
Long-term debt and revolving lines of credit (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Long-term debt and revolving lines of credit | |
Schedule of long-term debt and revolving lines of credit | February 27, 2016 February 28, 2015 Senior secured term loan facility $ $ 2014 Elfa term loan facility 2014 Elfa revolving credit facility Obligations under capital leases Other loans Revolving credit facility — — ​ ​ ​ ​ ​ ​ ​ ​ Total debt Less current portion ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total long-term debt $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of total revolving lines of credit and debt maturities | Scheduled total revolving lines of credit and debt maturities for the fiscal years subsequent to February 27, 2016, are as follows: Within 1 year $ 2 years 3 years 4 years 5 years — Thereafter — ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ |
Schedule of amortization expense of deferred financing costs | Within 1 year $ 2 years 3 years 4 years 5 years Thereafter — ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Income taxes | |
Schedule of components of the provision for income taxes | Fiscal year ended February 27, 2016 February 28, 2015 March 1, 2014 Income before income taxes: U.S. $ $ $ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Federal $ ) $ $ State Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current provision Deferred Federal ) State ) Foreign ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred provision (benefit) ) Total provision for income taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of differences between the actual provision for income taxes and the amounts computed by applying the statutory federal tax rate to income before taxes | Fiscal year ended February 27, 2016 February 28, 2015 March 1, 2014 Provision computed at federal statutory rate $ $ $ Permanent differences Change in valuation allowance ) ) State income taxes, net of federal benefit Effect of foreign income taxes ) ) ) Prior period error — ) — Non-taxable gain on sale of Norwegian subsidiary — ) — Economic zone credits ) ) ) Other, net ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of components of deferred tax assets and liabilities | February 27, 2016 February 28, 2015 Deferred tax assets: Inventory $ $ Loss and credit carryforwards Stock compensation Accrued liabilities ​ ​ ​ ​ ​ ​ ​ ​ Subtotal Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets Deferred tax liabilities: Intangibles ) ) Capital assets ) ) Other ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax liabilities $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ |
Employee benefit plans (Tables)
Employee benefit plans (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Employee benefit plans | |
Schedule of reconciliation of the changes in the defined benefit obligations, a statement of funded status, and the related weighted-average assumptions | February 27, 2016 February 28, 2015 Change in benefit obligation: Projected benefit obligation, beginning of year $ $ Service cost Interest cost Benefits paid ) ) Actuarial loss ) Exchange rate (gain) loss ) ) ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligation, end of year Fair value of plan assets, end of year — — ​ ​ ​ ​ ​ ​ ​ ​ Underfunded status, end of year $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ Discount rate % % Rate of pay increases % % ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of components of net periodic benefit cost | Fiscal year ended February 27, 2016 February 28, 2015 March 1, 2014 Components of net periodic benefit cost: Defined benefit plans: Service cost $ $ $ Interest cost Amortization of unrecognized net loss ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic benefit cost for defined benefit plan Defined contribution plans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total net periodic benefit cost $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Stock-based compensation (Table
Stock-based compensation (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Stock-based compensation | |
Summary of the Company's stock option activity | Fiscal Year 2015 2014 2013 Shares Weighted- average exercise price (per share) Weighted- average contractual term remaining (years) Aggregate intrinsic value (thousands) Shares Weighted- average exercise price (per share) Weighted- average contractual term remaining (years) Aggregate intrinsic value (thousands) Shares Weighted- average exercise price (per share) Weighted- average contractual term remaining (years) Aggregate intrinsic value (thousands) Beginning balance $ $ $ Granted $ $ $ Exercised ) $ ) $ ) $ Forfeited ) $ ) $ ) $ Expired ) $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance $ $ — $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Vested and exercisable at end of year $ $ — $ $ $ $ |
Summary of the weighted-average grant date fair value of using the Black Scholes option pricing model | Fiscal Year 2015 2014 2013 Expected term 6.0 years 6.1 years 5.7 years Expected volatility 50.3% 50.4% 48.3% Risk-free interest rate 1.7% 1.8% 1.5% Dividend yield 0% 0% 0% |
Accumulated other comprehensi36
Accumulated other comprehensive income (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Accumulated other comprehensive income | |
Schedule of components of AOCI, net of tax | Foreign currency hedge instruments Pension liability adjustment Foreign currency translation Total Balance at March 1, 2014 $ $ ) $ $ Other comprehensive income (loss) before reclassifications, net of tax ) ) ) ) Amounts reclassified to earnings, net of tax — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current period other comprehensive (loss) income ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at February 28, 2015 $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive (loss) income before reclassifications, net of tax ) ) ) Amounts reclassified to earnings, net of tax — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current period other comprehensive (loss) income ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at February 27, 2016 $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Leases | |
Schedule of future minimum lease payments due under noncancellable operating leases | Operating leases Capital leases Within 1 year $ $ 2 years 3 years 4 years 5 years — Thereafter — ​ ​ ​ ​ ​ ​ ​ ​ Total minimum lease payments $ $ ​ ​ ​ ​ ​ ​ ​ ​ Less amount representing interest ) ​ ​ ​ ​ ​ ​ ​ ​ Present value of minimum lease payments $ ​ ​ ​ ​ ​ ​ ​ ​ |
Fair value measurements (Tables
Fair value measurements (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Fair value measurements | |
Schedule of items measured at fair value on a recurring basis, subject to the disclosure requirements of ASC 820 | Description Balance Sheet Location February 27, 2016 February 28, 2015 Assets Nonqualified retirement plan Level 2 Other current assets $ $ Foreign currency forward contracts Level 2 Other current assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Nonqualified retirement plan Level 2 Accrued liabilities Foreign currency hedge instruments Level 2 Accrued liabilities — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Segment reporting (Tables)
Segment reporting (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Segment reporting | |
Schedule of segment reporting | Fiscal year 2015 TCS Elfa Corporate/ Other Total Net sales to third parties $ $ $ — $ Intersegment sales — ) — Interest expense, net Income (loss) before taxes(1) ) Capital expenditures(2) Depreciation and amortization Goodwill — — Trade names — Assets(2) Fiscal year 2014 TCS Elfa Corporate/ Other Total Net sales to third parties $ $ $ — $ Intersegment sales — ) — Interest expense, net Income (loss) before taxes(1) ) Capital expenditures(2) Depreciation and amortization Goodwill — — Trade names — Assets(2) Fiscal year 2013 TCS Elfa Corporate/ Other Total Net sales to third parties $ $ $ — $ Intersegment sales — ) — Interest expense, net Income (loss) before taxes(1)(3) ) Capital expenditures(2) Depreciation and amortization Goodwill — — Trade names — Assets(2) (1) The TCS segment includes stock-based compensation expense of $1,556, $1,289, and $15,137 for fiscal 2015, fiscal 2014, and fiscal 2013, respectively. (2) Tangible assets and trade names in the Elfa column are located outside of the United States. Assets and capital expenditures in Corporate/Other include assets located in the corporate headquarters and distribution center. Assets in Corporate/Other also include deferred tax assets and the fair value of foreign currency hedge instruments. (3) The Corporate/Other column includes $1,229 of loss on extinguishment of debt in fiscal 2013. |
Schedule of sales by merchandise category as a percentage of total net sales | Fiscal year ended February 27, 2016 February 28, 2015 March 1, 2014 Custom Closets(1) % % % Closet, Bath, Travel, Laundry % % % Storage, Box, Shelving % % % Kitchen, Food Storage, Trash % % % Office, Collections, Hooks % % % Containers, Gift Packaging, Seasonal, Impulse % % % Services & Other % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Includes elfa® and TCS Closets™ product sold by the TCS segment and Elfa segment sales to third parties |
Net income (loss) per common 40
Net income (loss) per common share (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Net income (loss) per common share | |
Schedule of reconciliation of net loss and the number of shares used in the basic and diluted net loss per common share calculations | Fiscal year ended February 27, 2016 February 28, 2015 March 1, 2014 Numerator: Net income $ $ $ Less: Distributions accumulated to preferred shareholders — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) available to common shareholders $ $ $ ) Denominator: Weighted-average common shares outstanding—basic Options and other dilutive securities — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average common shares outstanding—diluted Net income (loss) per common share—basic and diluted $ $ $ ) Antidilutive securities not included: Stock options outstanding |
Quarterly results of operatio41
Quarterly results of operations (unaudited) (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Quarterly results of operations (unaudited) | |
Schedule of quarterly results of operations | Fiscal 2015 Fourth Quarter Third Quarter Second Quarter First Quarter Net sales(1) $ $ $ $ Gross profit(1) Income (loss) from operations(1) ) Net income (loss)(1) ) ) Weighted-average shares used in computing basic net income (loss) per share Weighted-average shares used in computing diluted net income (loss) per share Basic and diluted net income (loss) per common share $ $ ) $ $ ) Fiscal 2014 Fourth Quarter Third Quarter Second Quarter First Quarter Net sales(1) $ $ $ $ Gross profit(1) Income (loss) from operations(1) ) Net income (loss)(1) ) Weighted-average shares used in computing basic net income (loss) per share Weighted-average shares used in computing diluted net income (loss) per share Basic and diluted net income (loss) per common share $ $ $ $ ) (1) The sum of the quarters may not equal the total fiscal year due to rounding. |
Nature of business and summar42
Nature of business and summary of significant accounting policies (Details) | Feb. 27, 2016ft²storestate |
Nature of business and summary of significant accounting policies | |
Number of stores | store | 79 |
Average size of stores (in square feet) | 25,000 |
Average selling square feet in stores (in square feet) | 19,000 |
Number of states | state | 28 |
Nature of business and summar43
Nature of business and summary of significant accounting policies - Fiscal year (Details) - item | 12 Months Ended | |
Feb. 28, 2015 | Mar. 01, 2014 | |
Fiscal year | ||
Length of fiscal quarter | 91 days | |
Number of five week months | 1 | |
Number of four week months | 2 | |
Length of fiscal year | 364 days | 364 days |
Nature of business and summar44
Nature of business and summary of significant accounting policies - Gift cards and merchandise credits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Gift cards and merchandise credits | |||
Period of estimated performance | 48 months | ||
Gift card breakage recorded | $ 948 | $ 978 | $ 896 |
Advertising | |||
Catalog and direct mailings costs capitalized | 938 | 699 | |
Advertising expense incurred | 32,343 | 35,388 | 33,786 |
Management fee | |||
Management fee paid to majority shareholder, LGP | $ 667 | ||
Income taxes | |||
Uncertain tax positions requiring accrual | 0 | 0 | |
Accounts receivable | |||
Allowances for doubtful accounts | $ 128 | $ 230 |
Nature of business and summar45
Nature of business and summary of significant accounting policies - Property, plant, and equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Property and equipment ,net: | |||
Cost capitalized in connection with the development of internally used software | $ 3,272 | $ 5,017 | $ 3,104 |
Cost amortized in connection with the development of internally used software | $ 3,258 | $ 2,992 | $ 2,761 |
Buildings | |||
Property and equipment ,net: | |||
Estimated useful lives | 30 years | ||
Furniture, fixtures, and equipment | Minimum | |||
Property and equipment ,net: | |||
Estimated useful lives | 3 years | ||
Furniture, fixtures, and equipment | Maximum | |||
Property and equipment ,net: | |||
Estimated useful lives | 10 years | ||
Computer software | Minimum | |||
Property and equipment ,net: | |||
Estimated useful lives | 2 years | ||
Computer software | Maximum | |||
Property and equipment ,net: | |||
Estimated useful lives | 5 years |
Nature of business and summar46
Nature of business and summary of significant accounting policies - Foreign currency forward contracts (Details) $ in Thousands | 12 Months Ended | |
Feb. 27, 2016USD ($)item | Feb. 28, 2015USD ($) | |
Foreign currency forward contracts | ||
Minimum term period of currency-related hedge instruments | 1 month | 1 month |
Maximum term period of currency-related hedge instruments | 12 months | 12 months |
Self-insured liabilities | ||
Self-insurance reserves recorded in accrued liabilities | $ | $ 3,471 | $ 2,522 |
Goodwill | ||
Number of reporting units | item | 2 |
Nature of business and summar47
Nature of business and summary of significant accounting policies - Foreign currency translation (Details) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016USD ($) | Feb. 28, 2015USD ($) | Mar. 01, 2014USD ($) | |
Foreign currency translation | |||
Realized gains/losses | $ (241) | $ 171 | $ 224 |
Elfa | |||
Foreign currency translation | |||
Exchange rate from Swedish Krona to U.S. Dollar | 8.6 | 8.4 | |
Carrying amounts of net assets | $ 109,548 | $ 113,050 |
Nature of business and summar48
Nature of business and summary of significant accounting policies - Recent accounting pronouncements (Details) - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 |
Recent accounting pronouncements | ||
Deferred Finance Costs, Noncurrent, Net | $ 6,068 | $ 7,742 |
Senior secured term loan facility | ||
Recent accounting pronouncements | ||
Deferred Finance Costs, Noncurrent, Net | $ 5,649 |
Goodwill and trade names (Detai
Goodwill and trade names (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Goodwill and trade names | |||
Impairment charges for goodwill | $ 0 | $ 0 | $ 0 |
Changes in the carrying amount of goodwill | |||
Gross balance at the beginning of the period | 410,467 | 410,467 | |
Accumulated impairment charges at the beginning of the period | (207,652) | (207,652) | |
Total, net balance at the beginning of the period | 202,815 | 202,815 | |
Gross balance at the end of the period | 410,467 | 410,467 | 410,467 |
Accumulated impairment charges at the end of the period | (207,652) | (207,652) | (207,652) |
Total, net balance at the end of the period | 202,815 | 202,815 | 202,815 |
Trade names | |||
Goodwill and trade names | |||
Impairment charges | 0 | 0 | 0 |
Changes in the carrying amount of trade names | |||
Gross balance at the beginning of the period | 260,967 | 273,824 | |
Accumulated impairment charges at the beginning of the period | (31,534) | (31,534) | |
Total, net balance at the beginning of the period | 229,433 | 242,290 | |
Gross balance at the end of the period | 259,902 | 260,967 | 273,824 |
Accumulated impairment charges at the end of the period | (31,534) | (31,534) | (31,534) |
Total, net balance at the end of the period | 228,368 | 229,433 | 242,290 |
Impairment charges | 0 | 0 | $ 0 |
Foreign currency translation adjustments | $ (1,065) | $ (12,857) |
Detail of certain balance she50
Detail of certain balance sheet accounts (Details) - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 |
Accounts receivable, net: | ||
Trade receivables, net | $ 14,748 | $ 13,629 |
Credit card receivables | 10,630 | 7,892 |
Tenant allowances | 1,721 | 1,241 |
Other receivables | 1,744 | 1,557 |
Accounts receivable, net | 28,843 | 24,319 |
Inventory: | ||
Finished goods | 81,496 | 79,073 |
Raw materials | 3,363 | 3,501 |
Work in progress | 1,576 | 1,150 |
Inventory | 86,435 | 83,724 |
Property and equipment | ||
Property and equipment, gross | 397,411 | 360,423 |
Less accumulated depreciation and amortization | (221,294) | (191,370) |
Property and equipment, net | 176,117 | 169,053 |
Accrued Liabilities: | ||
Accrued payroll, benefits and bonuses | 22,483 | 20,155 |
Unearned revenue | 16,034 | 11,385 |
Accrued transaction and property tax | 9,655 | 8,503 |
Gift cards and store credits outstanding | 8,564 | 7,683 |
Accrued lease liabilities | 4,384 | 3,920 |
Accrued interest | 2,270 | 2,333 |
Other accrued liabilities | 6,245 | 5,912 |
Accrued Liabilities | 69,635 | 59,891 |
Land and buildings | ||
Property and equipment | ||
Property and equipment, gross | 20,699 | 21,170 |
Furniture and fixtures | ||
Property and equipment | ||
Property and equipment, gross | 63,375 | 49,219 |
Machinery and equipment | ||
Property and equipment | ||
Property and equipment, gross | 73,218 | 70,208 |
Computer software and equipment | ||
Property and equipment | ||
Property and equipment, gross | 72,619 | 60,934 |
Leasehold improvements | ||
Property and equipment | ||
Property and equipment, gross | 147,347 | 140,805 |
Construction in progress | ||
Property and equipment | ||
Property and equipment, gross | 19,377 | 17,560 |
Leased vehicles and other | ||
Property and equipment | ||
Property and equipment, gross | $ 776 | $ 527 |
Long-term debt and revolving 51
Long-term debt and revolving lines of credit (Details) - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 |
Long-term debt and revolving lines of credit | ||
Total debt | $ 327,878 | $ 334,928 |
Less current portion | (6,094) | (8,153) |
Total long-term debt | 321,784 | 326,775 |
Senior secured term loan facility | ||
Long-term debt and revolving lines of credit | ||
Total debt | 321,288 | 324,911 |
Obligations under capital leases | ||
Long-term debt and revolving lines of credit | ||
Total debt | 745 | 397 |
Other loans | ||
Long-term debt and revolving lines of credit | ||
Total debt | 224 | 323 |
2014 Elfa term loan facility | ||
Long-term debt and revolving lines of credit | ||
Total debt | 4,900 | 6,463 |
2014 Elfa revolving credit facility | ||
Long-term debt and revolving lines of credit | ||
Total debt | $ 721 | $ 2,834 |
Long-term debt and revolving 52
Long-term debt and revolving lines of credit - Scheduled total revolving lines of credit and debt maturities (Details) - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 |
Scheduled total revolving lines of credit and debt maturities | ||
Within 1 year | $ 6,094 | |
2 years | 5,444 | |
3 years | 5,213 | |
4 years | 311,127 | |
Total debt | $ 327,878 | $ 334,928 |
Long-term debt and revolving 53
Long-term debt and revolving lines of credit - Senior secured term loan facility & Revolving credit facility (Details) $ in Thousands | Oct. 08, 2015USD ($) | Oct. 07, 2015USD ($) | Nov. 27, 2013 | Nov. 08, 2013USD ($) | Apr. 09, 2013USD ($) | Apr. 08, 2013USD ($) | Apr. 06, 2012USD ($) | Nov. 30, 2013USD ($) | Jun. 01, 2013USD ($) | Feb. 27, 2016USD ($) | Feb. 28, 2015USD ($) | Mar. 02, 2013USD ($) |
Long-term debt and revolving lines of credit | ||||||||||||
Restricted net assets of consolidated subsidiaries | $ 194,568 | |||||||||||
Senior Preferred Stock | ||||||||||||
Long-term debt and revolving lines of credit | ||||||||||||
Distributions paid | $ 90,000 | |||||||||||
Revolving credit facility | ||||||||||||
Long-term debt and revolving lines of credit | ||||||||||||
Maximum borrowing capacity | $ 100,000 | $ 75,000 | $ 75,000 | |||||||||
Deferred financing costs | 258 | $ 375 | ||||||||||
Amount of increase in commitments upon such request from the Company | 50,000 | 25,000 | ||||||||||
Swing line advances limit | 15,000 | 7,500 | ||||||||||
Letter of credit facility sub-limit | $ 40,000 | $ 20,000 | ||||||||||
Percentage of eligible credit card receivables used for determining total amount of availability | 90.00% | |||||||||||
Consolidated fixed-charge coverage ratio to be maintained if excess availability is less than $10,000 at any time | 1 | |||||||||||
Amount of availability under facility | $ 75,159 | |||||||||||
Maximum borrowings, including letters of credit issued | $ 36,406 | |||||||||||
Percentage of appraised value of eligible inventory used for determining total amount of availability | 90.00% | |||||||||||
Revolving credit facility | Minimum | ||||||||||||
Long-term debt and revolving lines of credit | ||||||||||||
Threshold fixed charge coverage ratio for payment of dividend | 1.25 | |||||||||||
Revolving credit facility | Maximum | ||||||||||||
Long-term debt and revolving lines of credit | ||||||||||||
Amount of dividend payable during term of debt | $ 10,000 | |||||||||||
First priority security interest in stock in foreign subsidiaries (as a percent) | 65.00% | |||||||||||
Threshold amount of excess availability for which consolidated fixed-charge coverage ratio of 1.0 to 1.0 is to be maintained | $ 10,000 | |||||||||||
Revolving credit facility | LIBOR | ||||||||||||
Long-term debt and revolving lines of credit | ||||||||||||
Interest rate margin (as a percent) | 1.25% | |||||||||||
Revolving credit facility | LIBOR | Minimum | ||||||||||||
Long-term debt and revolving lines of credit | ||||||||||||
Interest rate margin (as a percent) | 1.25% | 1.25% | ||||||||||
Revolving credit facility | LIBOR | Maximum | ||||||||||||
Long-term debt and revolving lines of credit | ||||||||||||
Interest rate margin (as a percent) | 1.75% | 1.75% | ||||||||||
Previously existing asset-based revolving credit facility | ||||||||||||
Long-term debt and revolving lines of credit | ||||||||||||
Maximum borrowing capacity | 75,000 | |||||||||||
Senior secured term loan facility | ||||||||||||
Long-term debt and revolving lines of credit | ||||||||||||
Face amount | $ 362,250 | $ 275,000 | ||||||||||
Expenses recorded | $ 128 | $ 1,101 | $ 7,333 | |||||||||
Legal fees and other associated costs | 378 | 835 | ||||||||||
Deferred financing costs | $ 723 | $ 9,467 | 4,843 | |||||||||
Quarterly principal repayments | 906 | $ 906 | ||||||||||
Additional amount used to fund distribution | $ 90,000 | |||||||||||
Net proceeds from IPO used to repay outstanding borrowings | $ 31,000 | |||||||||||
Balloon payment for the remaining balance | 310,421 | |||||||||||
Senior secured term loan facility | Maximum | ||||||||||||
Long-term debt and revolving lines of credit | ||||||||||||
Amount of dividend payable during term of debt | $ 10,000 | |||||||||||
Threshold consolidated net leverage ratio for payment of dividend | 2 | |||||||||||
First priority security interest in stock in foreign subsidiaries (as a percent) | 65.00% | |||||||||||
Senior secured term loan facility | LIBOR | ||||||||||||
Long-term debt and revolving lines of credit | ||||||||||||
Interest rate margin (as a percent) | 3.25% | 4.25% | 5.00% | |||||||||
Floor interest rate for reference rate (as a percent) | 1.00% | 1.25% | 1.25% | |||||||||
Previously existing secured term loan | ||||||||||||
Long-term debt and revolving lines of credit | ||||||||||||
Face amount | $ 125,000 | |||||||||||
Previously existing senior subordinated notes | ||||||||||||
Long-term debt and revolving lines of credit | ||||||||||||
Face amount | $ 150,000 | |||||||||||
Senior subordinated notes | ||||||||||||
Long-term debt and revolving lines of credit | ||||||||||||
Amount of an early extinguishment fee | $ 1,655 |
Long-term debt and revolving 54
Long-term debt and revolving lines of credit - Elfa Senior Secured Credit Facilities and 2014 Elfa Senior Secured Credit Facilities (Details) SEK in Thousands, $ in Thousands | May. 13, 2014SEK | Apr. 01, 2014SEK | Apr. 27, 2009SEK | Feb. 27, 2016SEK | Feb. 27, 2016USD ($) | Aug. 28, 2014USD ($) |
Elfa senior secured credit facilities | ||||||
Long-term debt and revolving lines of credit | ||||||
Frequency of principal payments | quarterly | |||||
Quarterly principal repayments | SEK 6,250 | |||||
Elfa senior secured credit facilities | STIBOR | ||||||
Long-term debt and revolving lines of credit | ||||||
Interest rate margin (as a percent) | 1.775% | |||||
Elfa term loan facility | ||||||
Long-term debt and revolving lines of credit | ||||||
Maximum borrowing capacity | SEK 137,500 | |||||
Elfa revolving credit facility | ||||||
Long-term debt and revolving lines of credit | ||||||
Face amount | SEK 175,000 | |||||
Short Term Credit Facility | ||||||
Long-term debt and revolving lines of credit | ||||||
Maximum borrowing capacity | SEK 15,000 | |||||
Interest rate (as a percent) | 2.53% | |||||
Amount outstanding at time of payoff | $ | $ 2,152 | |||||
2014 Elfa term loan facility | ||||||
Long-term debt and revolving lines of credit | ||||||
Face amount | SEK 60,000 | $ 7,000 | ||||
Quarterly principal repayments | SEK 3,000 | 350 | ||||
2014 Elfa term loan facility | STIBOR | ||||||
Long-term debt and revolving lines of credit | ||||||
Interest rate margin (as a percent) | 1.70% | |||||
2014 Elfa revolving credit facility | ||||||
Long-term debt and revolving lines of credit | ||||||
Maximum borrowing capacity | SEK 140,000 | 16,334 | ||||
Amount of availability under facility | $ | $ 15,614 | |||||
2014 Elfa revolving credit facility | Nordea's base rate | ||||||
Long-term debt and revolving lines of credit | ||||||
Interest rate margin (as a percent) | 1.40% | |||||
Minimum | Elfa senior secured credit facilities | ||||||
Long-term debt and revolving lines of credit | ||||||
Consolidated equity ratio in year one | 30.00% | |||||
Consolidated equity ratio after year one | 32.50% | |||||
Maximum | Elfa senior secured credit facilities | ||||||
Long-term debt and revolving lines of credit | ||||||
Consolidated ratio of net debt to EBITDA at end of each calendar quarter | 3.2 | 3.2 |
Long-term debt and revolving 55
Long-term debt and revolving lines of credit - Deferred financing costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | Oct. 08, 2015 | Jun. 01, 2013 | Mar. 02, 2013 | |
Long-term debt and revolving lines of credit | ||||||
Amortization expense of deferred financing costs | $ 1,940 | $ 1,956 | $ 1,857 | |||
Amortization expense of deferred financing costs: | ||||||
Within 1 year | 1,923 | |||||
2 years | 1,923 | |||||
3 years | 1,923 | |||||
4 years | 245 | |||||
5 years | 54 | |||||
Total | 6,068 | $ 7,742 | ||||
Senior secured term loan facility | ||||||
Long-term debt and revolving lines of credit | ||||||
Deferred financing costs | 9,467 | $ 723 | $ 4,843 | |||
Amortization expense of deferred financing costs: | ||||||
Total | 5,649 | |||||
Revolving credit facility | ||||||
Long-term debt and revolving lines of credit | ||||||
Deferred financing costs | $ 375 | $ 258 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Aug. 30, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Income before income taxes: | ||||
U.S. | $ 4,830 | $ 20,597 | $ 4,100 | |
Foreign | 3,221 | 9,269 | 4,513 | |
Income before taxes | 8,051 | 29,866 | 8,613 | |
Current | ||||
Federal | (385) | 3,438 | 3,394 | |
State | 585 | 1,483 | 1,006 | |
Foreign | 1,850 | 849 | 1,838 | |
Total current provision | 2,050 | 5,770 | 6,238 | |
Deferred | ||||
Federal | 1,881 | 1,263 | (2,398) | |
State | 57 | 646 | (3,651) | |
Foreign | (1,079) | (486) | 258 | |
Total deferred provision (benefit) | 859 | 1,423 | (5,791) | |
Total provision for income taxes | $ 1,839 | $ 2,909 | $ 7,193 | $ 447 |
Income taxes - Differences betw
Income taxes - Differences between the actual provision for income taxes and the amounts computed by applying the statutory federal tax rate to income before taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Aug. 30, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Differences between the actual (benefit) provision for income taxes and the amounts computed by applying the statutory federal tax rate to income before taxes | ||||
Provision computed at federal statutory rate | $ 2,818 | $ 10,453 | $ 3,014 | |
Permanent differences | 192 | 163 | 292 | |
Change in valuation allowance | 248 | (815) | (1,992) | |
State income taxes, net of federal benefit | 402 | 1,296 | 68 | |
Effect of foreign income taxes | (384) | (1,131) | (547) | |
Prior period error | (1,839) | |||
Non-taxable gain on sale of Norwegian subsidiary | (690) | |||
Economic zone credits | (292) | (255) | (200) | |
Other, net | (75) | 11 | (188) | |
Total provision for income taxes | $ 1,839 | $ 2,909 | $ 7,193 | $ 447 |
Income taxes - Components of de
Income taxes - Components of deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 | Aug. 30, 2014 |
Deferred tax assets: | |||
Inventory | $ 1,745 | $ 1,420 | |
Loss and credit carryforwards | 4,334 | 3,499 | |
Stock compensation | 6,878 | 6,341 | |
Accrued liabilities | 5,363 | 4,887 | |
Subtotal | 18,320 | 16,147 | |
Valuation allowance | (1,880) | (1,688) | $ (1,331) |
Total deferred tax assets | 16,440 | 14,459 | |
Deferred tax liabilities: | |||
Intangibles | (83,200) | (83,454) | |
Capital assets | (7,920) | (4,291) | |
Other | (3,950) | (4,684) | |
Total deferred tax liabilities | (95,070) | (92,429) | |
Net deferred tax liabilities | $ (78,630) | $ (77,970) |
Income taxes - Valuation allowa
Income taxes - Valuation allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Feb. 28, 2015 | Aug. 30, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Valuation allowance | |||||
Provision for income taxes | $ 1,839 | $ 2,909 | $ 7,193 | $ 447 | |
Deferred tax assets, valuation allowance | $ 1,688 | $ 1,331 | $ 1,880 | $ 1,688 | |
US | |||||
Valuation allowance | |||||
Term for which position of cumulative profits is maintained | 3 years | ||||
Valuation allowance | $ 2,753 | ||||
Poland | |||||
Valuation allowance | |||||
Tax benefit from a release of valuation allowance | $ 680 |
Income taxes - Operating loss c
Income taxes - Operating loss carryovers (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Feb. 27, 2016 | Feb. 28, 2015 | |
Operating loss carryovers | ||
Provision for taxes due upon remittance of foreign earnings | $ 0 | $ 0 |
Foreign and Domestic | ||
Operating loss carryovers | ||
Tax credits | 1,661 | 1,602 |
Foreign and State | ||
Operating loss carryovers | ||
Deferred tax assets for net operating loss carryovers | 1,888 | 1,897 |
Valuation allowances | $ 1,687 | $ 1,647 |
Income taxes - ASC 740-30 (Deta
Income taxes - ASC 740-30 (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Feb. 27, 2016 | Feb. 28, 2015 | |
Income taxes | ||
Undistributed foreign earnings that have been indefinitely reinvested | $ 33,149 | $ 33,227 |
Provision for taxes due upon remittance of foreign earnings | $ 0 | $ 0 |
Employee benefit plans (Details
Employee benefit plans (Details) - USD ($) $ in Thousands | Jan. 01, 2015 | Jan. 01, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 |
401(k) Plan | |||||
Number of months of service required to be completed by employees to be eligible to participate in plan | 11 months | ||||
Maximum contribution by participants (as a percent) | 80.00% | ||||
Maximum contribution by participants | $ 18 | ||||
Percentage of employee contributions matched by the company | 100.00% | 100.00% | 100.00% | ||
Total net periodic benefit cost | $ 3,165 | $ 2,737 | $ 2,570 | ||
Maximum | |||||
401(k) Plan | |||||
Matching contribution by the company as a percentage of compensation | 4.00% | 4.00% | 4.00% | ||
Participants aged 50 years and over | |||||
401(k) Plan | |||||
Maximum contribution by participants | $ 24 |
Employee benefit plans - Nonqua
Employee benefit plans - Nonqualified retirement plan (Details) - Nonqualified retirement plan - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Employee benefit plans | |||
Matching Contribution | $ 0 | $ 0 | $ 0 |
Other current assets | |||
Employee benefit plans | |||
Fair market value of the plan asset | 3,947 | 3,951 | |
Accrued liabilities | |||
Employee benefit plans | |||
Fair value of the plan liability | $ 3,962 | $ 3,966 |
Employee benefit plans - Pensio
Employee benefit plans - Pension plan (Details) - Pension plan - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Change in benefit obligation: | |||
Projected benefit obligation, beginning of year | $ 3,610 | $ 4,083 | |
Service cost | 86 | 62 | $ 54 |
Interest cost | 103 | 131 | 132 |
Benefits paid | (90) | (97) | |
Actuarial loss | (133) | 462 | |
Exchange rate (gain) loss | (90) | (1,031) | |
Projected benefit obligation, end of year | 3,486 | 3,610 | 4,083 |
Underfunded status, end of year | $ (3,486) | $ (3,610) | |
Discount rate (as a percent) | 3.40% | 3.60% | |
Rate of pay increases (as a percent) | 3.00% | 3.00% | |
Components of net periodic benefit cost: | |||
Service cost | $ 86 | $ 62 | 54 |
Interest cost | 103 | 131 | 132 |
Amortization of unrecognized net loss | 45 | 38 | 35 |
Net periodic benefit cost for defined benefit plan | 234 | 231 | 221 |
Defined contribution plans | 2,246 | 2,292 | 2,243 |
Total net periodic benefit cost | $ 2,480 | $ 2,523 | $ 2,464 |
Elfa | |||
Employee benefit plans | |||
Percentage of employees who are plan participants | 3.00% |
Stock-based compensation (Detai
Stock-based compensation (Details) - USD ($) $ in Thousands | Aug. 03, 2015 | Oct. 27, 2014 | Sep. 01, 2014 | Nov. 06, 2013 | Oct. 31, 2013 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 |
Stock-based compensation | ||||||||
Stock-based compensation cost | $ 1,556 | $ 1,289 | $ 15,137 | |||||
Unrecognized compensation cost (in dollars) | $ 5,828 | |||||||
Average remaining service period for recognition of unrecognized compensation cost | 2 years 4 months 24 days | |||||||
Intrinsic value | $ 2 | 369 | 342 | |||||
Fair value of shares vested | $ 1,367 | $ 1,205 | 14,976 | |||||
2012 Equity Plan | Outstanding stock options | ||||||||
Stock-based compensation | ||||||||
Awards modified for immediate vesting (in shares) | 240,435 | |||||||
Stock-based compensation cost | 1,846 | |||||||
Compensation expense related to the modification of outstanding stock options | 1,594 | |||||||
2013 Equity Plan | ||||||||
Stock-based compensation | ||||||||
Number of shares reserved for issuance | 3,616,570 | |||||||
Number of shares available for grant | 930,511 | |||||||
2013 Equity Plan | Nonqualified stock options | ||||||||
Stock-based compensation | ||||||||
Stock-based compensation cost | $ 13,291 | |||||||
Awards granted (in shares) | 94,568 | 80,200 | 24,649 | 2,622,721 | ||||
Awards vested (in shares) | 1,666,066 | |||||||
Vesting period of awards | 3 years | 3 years | 7 years | 7 years |
Stock-based compensation - Stoc
Stock-based compensation - Stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Shares | |||
Beginning balance (in shares) | 2,856,005 | 2,827,492 | 244,064 |
Granted (in shares) | 94,568 | 104,849 | 2,622,721 |
Exercised (in shares) | (3,315) | (42,480) | (18,338) |
Forfeited (in shares) | (41,791) | (32,202) | (20,745) |
Expired (in shares) | (14,991) | (1,654) | (210) |
Ending balance (in shares) | 2,890,476 | 2,856,005 | 2,827,492 |
Vested and exercisable at end of year (in shares) | 2,110,661 | 1,975,068 | 1,887,679 |
Weighted-average exercise price | |||
Balance at the beginning of the period (in dollars per share) | $ 18.04 | $ 17.92 | $ 17.01 |
Granted (in dollars per share) | 17.28 | 21.02 | 18 |
Exercised (in dollars per share) | 17.71 | 17.47 | 17.54 |
Forfeited (in dollars per share) | 18 | 18 | 17.81 |
Expired (in dollars per share) | 17.80 | 17.67 | 18 |
Balance at the end of the period (in dollars per share) | 18.02 | 18.04 | 17.92 |
Exercisable at the end of the period (in dollars per share) | $ 17.95 | $ 17.90 | $ 17.88 |
Weighted-average contractual term remaining | |||
Balance at end of year | 7 years 7 months 28 days | 8 years 7 months 6 days | 9 years 6 months 22 days |
Exercisable at the end of the period | 7 years 6 months 18 days | 8 years 6 months 11 days | 9 years 6 months |
Aggregate intrinsic value | |||
Balance at the end of the period | $ 1,376 | $ 50,587 | |
Exercisable at the end of the period | $ 1,036 | $ 33,849 |
Stock-based compensation - Fair
Stock-based compensation - Fair value of stock options (Details) - $ / shares | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Stock-based compensation | |||
Weighted average grant date fair value (in dollars per share) | $ 8.46 | $ 8.14 | $ 8.26 |
Weighted-average assumptions used to measure the grant date fair value of the non-qualified stock options granted under the 2013 Equity Plan using the Black Scholes option pricing model | |||
Expected term | 6 years | 6 years 1 month 6 days | 5 years 8 months 12 days |
Expected volatility (as a percent) | 50.30% | 50.40% | 48.30% |
Risk-free interest rate (as a percent) | 1.70% | 1.80% | 1.50% |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Shareholders' equity - Common s
Shareholders' equity - Common stock (Details) $ / shares in Units, $ in Thousands | Nov. 06, 2013USD ($)$ / sharesshares | Oct. 31, 2013shares | Oct. 31, 2013 | Aug. 16, 2007USD ($)Vote$ / sharesshares | Mar. 01, 2014shares | Feb. 27, 2016$ / sharesshares | Feb. 28, 2015$ / sharesshares | Mar. 02, 2013$ / shares |
Shareholders' equity | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Common stock, shares authorized | 250,000,000 | 250,000,000 | ||||||
Common stock, shares issued | 47,986,975 | 47,983,660 | ||||||
Common stock, shares outstanding | 47,986,975 | 47,983,660 | ||||||
Common stock | ||||||||
Shareholders' equity | ||||||||
Shares issued | 14,375,000 | 2,942,326 | 14,375,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||
Issue price (in dollars per share) | $ / shares | $ 18 | $ 17.01 | ||||||
Number of votes per share entitled to holders | Vote | 1 | |||||||
Redemptions or sinking fund provisions | $ | $ 0 | |||||||
Treasury shares retired | 13,567 | 13,567 | ||||||
Stock split ratio | 5.9 | |||||||
Net proceeds from initial public offering | $ | $ 237,013 | |||||||
Underwriting discount | $ | 17,466 | |||||||
Offering expenses | $ | $ 4,271 |
Shareholders' equity - Preferre
Shareholders' equity - Preferred stock (Details) $ / shares in Units, $ in Thousands | Nov. 06, 2013USD ($)itememployee$ / sharesshares | Oct. 31, 2013shares | Apr. 09, 2013USD ($) | Mar. 01, 2014shares | Feb. 27, 2016$ / sharesshares |
Shareholders' equity | |||||
Number of current and former employees of the Company | employee | 130 | ||||
Preferred stock, shares authorized | 5,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | ||||
Preferred stock, shares issued | 0 | ||||
Preferred stock, shares outstanding | 0 | ||||
Senior secured term loan facility | |||||
Shareholders' equity | |||||
Additional amount executed to fund distribution | $ | $ 90,000 | ||||
Senior Preferred Stock | |||||
Shareholders' equity | |||||
Amount paid as distribution to holders | $ | $ 90,000 | ||||
Treasury shares retired | 298 | 298 | |||
Number of holders of the Company's stock | item | 140 | ||||
Liquidation preference amount up to which first distribution was to be made from proceeds of initial public offering | $ / shares | $ 1,000 | ||||
Liquidation preference (in dollars per share) | $ / shares | $ 1,000 | ||||
Junior Preferred Stock | |||||
Shareholders' equity | |||||
Treasury shares retired | 298 | 298 | |||
Number of holders of the Company's stock | item | 140 | ||||
Liquidation preference (in dollars per share) | $ / shares | $ 1,725.98 | ||||
Common stock | |||||
Shareholders' equity | |||||
Treasury shares retired | 13,567 | 13,567 | |||
Net proceeds from the initial public offering used to make distribution to preferred shareholders | $ | $ 205,813 | ||||
Stock issued on conversion of preferred stock | 30,619,083 |
Accumulated other comprehensi70
Accumulated other comprehensive income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Feb. 27, 2016 | Feb. 28, 2015 | |
Rollforward of the amounts included in AOCI, net of taxes | ||
Balance at the beginning of the period | $ (18,342) | |
Other comprehensive (loss) income before reclassifications, net of tax | (2,430) | $ (20,447) |
Amounts reclassified to earnings, net of tax | 937 | 422 |
Net current period other comprehensive (loss) income | (1,493) | (20,025) |
Balance at the end of the period | (19,835) | (18,342) |
Unrecognized net actuarial loss included in accumulated other comprehensive income | 992 | 1,167 |
Pension liability adjustment | ||
Rollforward of the amounts included in AOCI, net of taxes | ||
Balance at the beginning of the period | (1,167) | (1,153) |
Other comprehensive (loss) income before reclassifications, net of tax | 138 | (14) |
Amounts reclassified to earnings, net of tax | 37 | |
Net current period other comprehensive (loss) income | 175 | (14) |
Balance at the end of the period | (992) | (1,167) |
Foreign currency translation | ||
Rollforward of the amounts included in AOCI, net of taxes | ||
Balance at the beginning of the period | (16,293) | 2,783 |
Other comprehensive (loss) income before reclassifications, net of tax | (2,521) | (19,076) |
Net current period other comprehensive (loss) income | (2,521) | (19,076) |
Balance at the end of the period | (18,814) | (16,293) |
Accumulated other comprehensive income (loss) | ||
Rollforward of the amounts included in AOCI, net of taxes | ||
Balance at the beginning of the period | (18,342) | 1,683 |
Balance at the end of the period | (19,835) | (18,342) |
Foreign currency hedge instruments | ||
Rollforward of the amounts included in AOCI, net of taxes | ||
Balance at the beginning of the period | (882) | 53 |
Other comprehensive (loss) income before reclassifications, net of tax | (47) | (1,357) |
Amounts reclassified to earnings, net of tax | 900 | 422 |
Net current period other comprehensive (loss) income | 853 | (935) |
Balance at the end of the period | $ (29) | $ (882) |
Foreign currency forward cont71
Foreign currency forward contracts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Purchase of inventory from use of forward contracts in Swedish krona (as a percent) | 54.00% | 54.00% | 64.00% |
Purchase of U.S. dollars from use of forward contracts | $ 5,495 | $ 4,300 | $ 3,500 |
Purchase of U.S. dollars from use of forward contracts as a percent of Elfa's U.S. Dollar purchases | 67.00% | 64.00% | 67.00% |
Minimum term period of currency-related hedge instruments | 1 month | 1 month | |
Maximum term period of currency-related hedge instruments | 12 months | 12 months | |
Accumulated other comprehensive loss | $ 19,835 | $ 18,342 | |
Foreign currency forward contracts | Not Designated as Hedging Instrument | |||
Loss associated with forward contracts not designated as hedge instruments | 371 | ||
Foreign currency hedge instruments | |||
Accumulated other comprehensive loss | 29 | $ 882 | $ (53) |
Foreign currency hedge instruments | Designated as Hedging Instrument | Cash Flow Hedging | |||
Unrealized loss to be reclassified into earnings over the next 12 months | $ 29 |
Leases (Details)
Leases (Details) | 12 Months Ended |
Feb. 27, 2016store | |
Leases | |
Number of stores | 79 |
Minimum | |
Leases | |
Lease term | 1 year |
Renewal period for the stores | 5 years |
Maximum | |
Leases | |
Lease term | 20 years |
Renewal period for the stores | 20 years |
Leases (Details)73
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Future minimum lease payments due under noncancellable operating leases: | |||
Within 1 year | $ 77,160 | ||
2 years | 77,683 | ||
3 years | 70,476 | ||
4 years | 56,357 | ||
5 years | 52,338 | ||
Thereafter | 202,163 | ||
Total minimum lease payments | 536,177 | ||
Future minimum lease payments due under noncancellable capital leases: | |||
within 1 year | 261 | ||
2 years | 328 | ||
3 years | 167 | ||
4 years | 4 | ||
Total minimum lease payments | 760 | ||
Less: Amount representing interest | (15) | ||
Present value of minimum lease payments | 745 | ||
Rent expense | 75,834 | $ 72,643 | $ 68,184 |
Percentage-of-sales rent expense included in rent expense | $ 450 | $ 633 | $ 819 |
Commitments and contingencies (
Commitments and contingencies (Details) $ in Thousands | Feb. 27, 2016USD ($) |
Standby letters of credit | |
Commitments and contingencies | |
Amount outstanding | $ 3,594 |
Fair value measurements (Detail
Fair value measurements (Details) - Recurring - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 |
Assets | ||
Total assets | $ 4,053 | $ 4,437 |
Liabilities | ||
Total liabilities | 3,962 | 4,281 |
Level 2 | Other current assets | ||
Assets | ||
Nonqualified retirement plan | 3,947 | 3,951 |
Level 2 | Accrued liabilities | ||
Liabilities | ||
Nonqualified retirement plan | 3,962 | 3,966 |
Designated as Hedging Instrument | Cash Flow Hedging | Foreign currency hedge instruments | Level 2 | Accrued liabilities | ||
Liabilities | ||
Foreign currency hedge instruments | 315 | |
Not Designated as Hedging Instrument | Foreign currency forward contracts | Level 2 | Other current assets | ||
Assets | ||
Foreign currency forward contracts | $ 106 | $ 486 |
Fair value measurements - Estim
Fair value measurements - Estimated fair value of long-term debt, including current maturities (Details) - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 |
Fair value | ||
Fair value measurements | ||
Estimated fair value of long-term debt, including current maturities | $ 221,534 | $ 327,830 |
Segment reporting (Details)
Segment reporting (Details) | 12 Months Ended |
Feb. 27, 2016segment | |
Segment reporting | |
Number of reportable segments | 2 |
Segment reporting - Earnings or
Segment reporting - Earnings or loss before income taxes for operating segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 27, 2016 | Nov. 28, 2015 | Aug. 29, 2015 | May. 30, 2015 | Feb. 28, 2015 | Nov. 29, 2014 | Aug. 30, 2014 | May. 31, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Segment reporting | |||||||||||
Sales | $ 232,074 | $ 197,241 | $ 195,482 | $ 169,833 | $ 224,259 | $ 190,922 | $ 193,247 | $ 173,438 | $ 794,630 | $ 781,866 | $ 748,538 |
Interest expense, net | 16,810 | 17,105 | 21,185 | ||||||||
Income (loss) before taxes | 8,051 | 29,866 | 8,613 | ||||||||
Capital expenditures(2) | 46,431 | 48,740 | 48,408 | ||||||||
Depreciation and amortization | 34,230 | 31,011 | 30,353 | ||||||||
Goodwill | 202,815 | 202,815 | 202,815 | 202,815 | 202,815 | ||||||
Trade names | 228,368 | 229,433 | 228,368 | 229,433 | 242,290 | ||||||
Assets2 | 763,768 | 769,057 | 763,768 | 769,057 | 783,149 | ||||||
Stock-based compensation expense (in dollars) | 1,556 | 1,289 | 15,137 | ||||||||
Loss on extinguishment of debt | 1,229 | ||||||||||
TCS | |||||||||||
Segment reporting | |||||||||||
Stock-based compensation expense (in dollars) | 1,556 | 1,289 | 15,137 | ||||||||
Operating segments | TCS | |||||||||||
Segment reporting | |||||||||||
Sales | 724,079 | 697,699 | 660,365 | ||||||||
Interest expense, net | 11 | 14 | 55 | ||||||||
Income (loss) before taxes | 29,367 | 45,035 | 33,482 | ||||||||
Capital expenditures(2) | 20,063 | 29,889 | 31,324 | ||||||||
Depreciation and amortization | 20,704 | 17,035 | 15,479 | ||||||||
Goodwill | 202,815 | 202,815 | 202,815 | 202,815 | 202,815 | ||||||
Trade names | 187,048 | 187,048 | 187,048 | 187,048 | 187,048 | ||||||
Assets2 | 624,686 | 627,120 | 624,686 | 627,120 | 611,565 | ||||||
Operating segments | Elfa | |||||||||||
Segment reporting | |||||||||||
Sales | 70,551 | 84,167 | 88,173 | ||||||||
Interest expense, net | 326 | 562 | 932 | ||||||||
Income (loss) before taxes | 3,046 | 9,221 | 6,235 | ||||||||
Capital expenditures(2) | 4,019 | 7,955 | 7,477 | ||||||||
Depreciation and amortization | 5,463 | 6,066 | 6,374 | ||||||||
Trade names | 41,320 | 42,385 | 41,320 | 42,385 | 55,242 | ||||||
Assets2 | 105,046 | 111,015 | 105,046 | 111,015 | 144,432 | ||||||
lntersegment | |||||||||||
Segment reporting | |||||||||||
Sales | (47,010) | (51,291) | (55,856) | ||||||||
lntersegment | Elfa | |||||||||||
Segment reporting | |||||||||||
Sales | 47,010 | 51,291 | 55,856 | ||||||||
Corporate/other | |||||||||||
Segment reporting | |||||||||||
Interest expense, net | 16,473 | 16,529 | 20,198 | ||||||||
Income (loss) before taxes | (24,361) | (24,390) | (31,104) | ||||||||
Capital expenditures(2) | 22,349 | 10,896 | 9,607 | ||||||||
Depreciation and amortization | 8,063 | 7,910 | 8,500 | ||||||||
Assets2 | $ 34,036 | $ 30,922 | $ 34,036 | $ 30,922 | 27,152 | ||||||
Loss on extinguishment of debt | $ 1,229 |
Segment reporting - Sales by me
Segment reporting - Sales by merchandise category as a percentage of total net sales (Details) | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Sales by merchandise category as a percentage of total net sales | |||
Merchandise category as a percentage of total net sales | 100.00% | 100.00% | 100.00% |
Net sales | Sales by merchandise category | Custom Closets | |||
Sales by merchandise category as a percentage of total net sales | |||
Merchandise category as a percentage of total net sales | 32.00% | 32.00% | 33.00% |
Net sales | Sales by merchandise category | Closet, Bath, Travel, Laundry | |||
Sales by merchandise category as a percentage of total net sales | |||
Merchandise category as a percentage of total net sales | 21.00% | 21.00% | 21.00% |
Net sales | Sales by merchandise category | Storage, Box, Shelving | |||
Sales by merchandise category as a percentage of total net sales | |||
Merchandise category as a percentage of total net sales | 14.00% | 14.00% | 13.00% |
Net sales | Sales by merchandise category | Kitchen, Food Storage, Trash | |||
Sales by merchandise category as a percentage of total net sales | |||
Merchandise category as a percentage of total net sales | 13.00% | 13.00% | 13.00% |
Net sales | Sales by merchandise category | Office, Collections, Hooks | |||
Sales by merchandise category as a percentage of total net sales | |||
Merchandise category as a percentage of total net sales | 9.00% | 9.00% | 9.00% |
Net sales | Sales by merchandise category | Containers, Gift Packaging, Seasonal, Impulse | |||
Sales by merchandise category as a percentage of total net sales | |||
Merchandise category as a percentage of total net sales | 8.00% | 8.00% | 8.00% |
Net sales | Sales by merchandise category | Services & Other | |||
Sales by merchandise category as a percentage of total net sales | |||
Merchandise category as a percentage of total net sales | 3.00% | 3.00% | 2.00% |
Net income (loss) per common 80
Net income (loss) per common share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 27, 2016 | Nov. 28, 2015 | Aug. 29, 2015 | May. 30, 2015 | Feb. 28, 2015 | Nov. 29, 2014 | Aug. 30, 2014 | May. 31, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Numerator: | |||||||||||
Net income | $ 9,399 | $ (1,731) | $ 2,673 | $ (5,199) | $ 13,048 | $ 6,249 | $ 6,955 | $ (3,579) | $ 5,142 | $ 22,673 | $ 8,166 |
Less: Distributions accumulated to preferred shareholders | (59,747) | ||||||||||
Net income (loss) available to common shareholders | $ 5,142 | $ 22,673 | $ (51,581) | ||||||||
Denominator: | |||||||||||
Weighted-average common shares outstanding - basic (in shares) | 47,986,975 | 47,986,975 | 47,985,181 | 47,983,738 | 47,982,276 | 47,979,581 | 47,976,500 | 47,946,616 | 47,985,717 | 47,971,243 | 17,955,757 |
Options and other dilutive securities | $ 549,622 | ||||||||||
Weighted-average common shares outstanding - diluted (in shares) | 47,986,975 | 47,986,975 | 48,027,676 | 47,983,738 | 48,372,125 | 48,432,143 | 48,539,762 | 47,946,616 | 47,985,717 | 48,520,865 | 17,955,757 |
Net income (loss) per common share - basic and diluted | $ 0.20 | $ (0.04) | $ 0.06 | $ (0.11) | $ 0.27 | $ 0.13 | $ 0.14 | $ (0.07) | $ 0.11 | $ 0.47 | $ (2.87) |
Antidilutive securities not included: | |||||||||||
Stock options outstanding | 2,875,900 | 830,740 | 373,414 |
Quarterly results of operatio81
Quarterly results of operations (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 27, 2016 | Nov. 28, 2015 | Aug. 29, 2015 | May. 30, 2015 | Feb. 28, 2015 | Nov. 29, 2014 | Aug. 30, 2014 | May. 31, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Quarterly results of operations | |||||||||||
Net sales | $ 232,074 | $ 197,241 | $ 195,482 | $ 169,833 | $ 224,259 | $ 190,922 | $ 193,247 | $ 173,438 | $ 794,630 | $ 781,866 | $ 748,538 |
Gross profit | 134,294 | 116,104 | 113,825 | 99,328 | 129,689 | 113,859 | 113,666 | 100,852 | 463,551 | 458,066 | 439,783 |
Income (loss) from operations | 18,420 | 1,788 | 8,692 | (4,039) | 21,606 | 13,756 | 12,814 | (1,205) | 24,861 | 46,971 | 31,027 |
Net income | $ 9,399 | $ (1,731) | $ 2,673 | $ (5,199) | $ 13,048 | $ 6,249 | $ 6,955 | $ (3,579) | $ 5,142 | $ 22,673 | $ 8,166 |
Weighted-average shares used in computing basic net income (loss) per share | 47,986,975 | 47,986,975 | 47,985,181 | 47,983,738 | 47,982,276 | 47,979,581 | 47,976,500 | 47,946,616 | 47,985,717 | 47,971,243 | 17,955,757 |
Weighted-average shares used in computing diluted net income (loss) per share | 47,986,975 | 47,986,975 | 48,027,676 | 47,983,738 | 48,372,125 | 48,432,143 | 48,539,762 | 47,946,616 | 47,985,717 | 48,520,865 | 17,955,757 |
Basic and diluted net income (loss) per common share (in dollars per share) | $ 0.20 | $ (0.04) | $ 0.06 | $ (0.11) | $ 0.27 | $ 0.13 | $ 0.14 | $ (0.07) | $ 0.11 | $ 0.47 | $ (2.87) |
Subsequent events (Details)
Subsequent events (Details) - USD ($) $ in Thousands | Mar. 30, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | Feb. 27, 2016 |
Fiscal year | ||||
Length of fiscal year | 364 days | 364 days | ||
Other long-term liabilities | ||||
Deferred compensation | ||||
Deferred compensation | $ 4,080 | |||
Subsequent event | ||||
Fiscal year | ||||
Length of fiscal year | 364 days |
Schedule I-Condensed Financia83
Schedule I-Condensed Financial Information of registrant (Details) - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | Mar. 02, 2013 |
Current assets: | ||||
Accounts receivable from subsidiaries | $ 28,843 | $ 24,319 | ||
Total current assets | 146,431 | 156,942 | ||
Noncurrent assets: | ||||
Total noncurrent assets | 617,337 | 612,115 | ||
Total assets | 763,768 | 769,057 | $ 783,149 | |
Current liabilities: | ||||
Accounts payable to subsidiaries | 40,274 | 48,904 | ||
Total current liabilities | 116,003 | 119,136 | ||
Noncurrent liabilities | 440,697 | 448,059 | ||
Total liabilities | 556,700 | 567,195 | ||
Shareholders' equity: | ||||
Common stock | 480 | 480 | ||
Additional paid-in capital | 856,879 | 855,322 | ||
Retained deficit | (630,456) | (635,598) | ||
Total shareholders' equity | 207,068 | 201,862 | $ 197,186 | $ 233,375 |
Total liabilities and shareholders' equity | 763,768 | 769,057 | ||
The Container Store Group, Inc. | ||||
Current assets: | ||||
Accounts receivable from subsidiaries | 850 | 791 | ||
Total current assets | 850 | 791 | ||
Noncurrent assets: | ||||
Investment in subsidiaries | 206,218 | 201,071 | ||
Total noncurrent assets | 206,218 | 201,071 | ||
Total assets | 207,068 | 201,862 | ||
Shareholders' equity: | ||||
Common stock | 480 | 480 | ||
Additional paid-in capital | 856,879 | 855,322 | ||
Retained deficit | (650,291) | (653,940) | ||
Total shareholders' equity | 207,068 | 201,862 | ||
Total liabilities and shareholders' equity | $ 207,068 | $ 201,862 |
Schedule I-Condensed Financia84
Schedule I-Condensed Financial Information of registrant - Condensed statements of operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 27, 2016 | Nov. 28, 2015 | Aug. 29, 2015 | May. 30, 2015 | Feb. 28, 2015 | Nov. 29, 2014 | Aug. 30, 2014 | May. 31, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Condensed statements of operations | |||||||||||
Net sales | $ 232,074 | $ 197,241 | $ 195,482 | $ 169,833 | $ 224,259 | $ 190,922 | $ 193,247 | $ 173,438 | $ 794,630 | $ 781,866 | $ 748,538 |
Cost of sales (excluding depreciation and amortization) | 331,079 | 323,800 | 308,755 | ||||||||
Gross profit | 134,294 | 116,104 | 113,825 | 99,328 | 129,689 | 113,859 | 113,666 | 100,852 | 463,551 | 458,066 | 439,783 |
Selling, general, and administrative expenses (excluding depreciation and amortization) | 393,810 | 372,867 | 354,271 | ||||||||
Stock-based compensation | 1,556 | 1,289 | 15,137 | ||||||||
Pre-opening costs | 9,033 | 8,283 | 6,672 | ||||||||
Depreciation and amortization | 34,230 | 31,011 | 30,353 | ||||||||
Restructuring charges | 532 | ||||||||||
Other expenses | 1,132 | 1,585 | |||||||||
Loss (gain) on disposal of assets | 61 | (3,487) | 206 | ||||||||
Income from operations | 18,420 | 1,788 | 8,692 | (4,039) | 21,606 | 13,756 | 12,814 | (1,205) | 24,861 | 46,971 | 31,027 |
Interest expense | 16,810 | 17,105 | 21,185 | ||||||||
Income before taxes and equity in net income of subsidiaries | 8,051 | 29,866 | 8,613 | ||||||||
Provision for income taxes | 1,839 | 2,909 | 7,193 | 447 | |||||||
Net income | $ 9,399 | $ (1,731) | $ 2,673 | $ (5,199) | $ 13,048 | $ 6,249 | $ 6,955 | $ (3,579) | 5,142 | 22,673 | 8,166 |
The Container Store Group, Inc. | |||||||||||
Condensed statements of operations | |||||||||||
Net income of subsidiaries | 5,142 | 22,673 | 8,166 | ||||||||
Net income | $ 5,142 | $ 22,673 | $ 8,166 |
Schedule I-Condensed Financia85
Schedule I-Condensed Financial Information of registrant - Condensed statements of comprehensive income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 27, 2016 | Nov. 28, 2015 | Aug. 29, 2015 | May. 30, 2015 | Feb. 28, 2015 | Nov. 29, 2014 | Aug. 30, 2014 | May. 31, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Condensed statements of comprehensive income (loss) | |||||||||||
Net income | $ 9,399 | $ (1,731) | $ 2,673 | $ (5,199) | $ 13,048 | $ 6,249 | $ 6,955 | $ (3,579) | $ 5,142 | $ 22,673 | $ 8,166 |
Unrealized gain (loss) on financial instruments, net of tax provision (benefit) of $606, $(604) and $(239) | 853 | (935) | (1,492) | ||||||||
Unrealized loss on financial instruments, taxes | 606 | (604) | (239) | ||||||||
Pension liability adjustment, net of tax provision (benefit) of $39, $(4) and $(51) | 175 | (14) | (181) | ||||||||
Pension liability adjustment, taxes | 39 | (4) | (51) | ||||||||
Foreign currency translation adjustment | (2,521) | (19,076) | 643 | ||||||||
Comprehensive income | 3,649 | 2,648 | 7,136 | ||||||||
The Container Store Group, Inc. | |||||||||||
Condensed statements of comprehensive income (loss) | |||||||||||
Net income | 5,142 | 22,673 | 8,166 | ||||||||
Unrealized gain (loss) on financial instruments, net of tax provision (benefit) of $606, $(604) and $(239) | 853 | (935) | (1,492) | ||||||||
Pension liability adjustment, net of tax provision (benefit) of $39, $(4) and $(51) | 175 | (14) | (181) | ||||||||
Foreign currency translation adjustment | (2,521) | (19,076) | 643 | ||||||||
Comprehensive income | $ 3,649 | $ 2,648 | $ 7,136 |
Schedule I-Condensed Financia86
Schedule I-Condensed Financial Information of registrant - Disclosure (Details) $ in Thousands | 12 Months Ended | ||||
Feb. 27, 2016USD ($) | Feb. 28, 2015USD ($) | Oct. 08, 2015USD ($) | Oct. 07, 2015USD ($) | Apr. 06, 2012USD ($) | |
Guarantees and restrictions | |||||
Long-term debt outstanding | $ 327,878 | $ 334,928 | |||
Restricted net assets of consolidated subsidiaries | 194,568 | ||||
Revolving credit facility | |||||
Guarantees and restrictions | |||||
Available credit | $ 75,159 | ||||
Borrowings through the Revolving Credit Facility | $ 100,000 | $ 75,000 | $ 75,000 | ||
Minimum | Revolving credit facility | |||||
Guarantees and restrictions | |||||
Threshold fixed charge coverage ratio for payment of dividend | 1.25 | ||||
Maximum | Revolving credit facility | |||||
Guarantees and restrictions | |||||
Amount of dividend payable during term of debt | $ 10,000 | ||||
Senior secured term loan facility | |||||
Guarantees and restrictions | |||||
Long-term debt outstanding | $ 321,288 | $ 324,911 | |||
Senior secured term loan facility | Maximum | |||||
Guarantees and restrictions | |||||
Threshold consolidated net leverage ratio for payment of dividend | 2 | ||||
Amount of dividend payable during term of debt | $ 10,000 | ||||
The Container Store Group, Inc. | |||||
Guarantees and restrictions | |||||
Restricted net assets of consolidated subsidiaries | 194,568 | ||||
The Container Store Group, Inc. | Revolving credit facility | |||||
Guarantees and restrictions | |||||
Available credit | 75,159 | ||||
Borrowings through the Revolving Credit Facility | 100,000 | ||||
The Container Store Group, Inc. | Minimum | Revolving credit facility | |||||
Guarantees and restrictions | |||||
Threshold fixed charge coverage ratio for payment of dividend | 1.25 | ||||
The Container Store Group, Inc. | Maximum | Revolving credit facility | |||||
Guarantees and restrictions | |||||
Amount of dividend payable during term of debt | 10,000 | ||||
The Container Store Group, Inc. | Senior secured term loan facility | |||||
Guarantees and restrictions | |||||
Long-term debt outstanding | $ 321,288 | ||||
The Container Store Group, Inc. | Senior secured term loan facility | Maximum | |||||
Guarantees and restrictions | |||||
Threshold consolidated net leverage ratio for payment of dividend | 2 |