Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jan. 26, 2019 | Mar. 22, 2019 | Jul. 27, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | AT HOME GROUP INC. | ||
Entity Central Index Key | 0001646228 | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 26, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --01-26 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,202,740,687 | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 63,648,028 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 26, 2019 | Jan. 27, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 10,951 | $ 8,525 |
Inventories, net | 382,023 | 269,844 |
Prepaid expenses | 7,949 | 7,911 |
Other current assets | 13,626 | 14,653 |
Total current assets | 414,549 | 300,933 |
Property and equipment, net | 682,663 | 466,263 |
Goodwill | 569,732 | 569,732 |
Trade name | 1,458 | 1,458 |
Debt issuance costs, net | 1,539 | 1,978 |
Restricted cash | 2,515 | |
Noncurrent deferred tax asset | 52,805 | 33,561 |
Other assets | 945 | 316 |
Total assets | 1,726,206 | 1,374,241 |
Current liabilities: | ||
Accounts payable | 115,821 | 79,628 |
Accrued and other current liabilities | 117,508 | 89,499 |
Revolving line of credit | 221,010 | 162,000 |
Current portion of deferred rent | 11,364 | 9,072 |
Current portion of long-term debt and financing obligations | 4,049 | 3,474 |
Total current liabilities | 469,752 | 343,673 |
Long-term debt | 336,435 | 289,902 |
Financing obligations | 35,038 | 19,690 |
Deferred rent | 169,339 | 124,054 |
Other long-term liabilities | 4,556 | 6,043 |
Total liabilities | 1,015,120 | 783,362 |
Shareholders' Equity | ||
Common stock; $0.01 par value; 500,000,000 shares authorized; 63,609,684 and 61,423,398 shares issued and outstanding, respectively | 636 | 614 |
Additional paid-in capital | 643,677 | 572,488 |
Retained earnings | 66,773 | 17,777 |
Total shareholders' equity | 711,086 | 590,879 |
Total liabilities and shareholders' equity | $ 1,726,206 | $ 1,374,241 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jan. 26, 2019 | Jan. 27, 2018 |
Consolidated Balance Sheets | ||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 63,609,684 | 61,423,398 |
Common stock, outstanding shares | 63,609,684 | 61,423,398 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | |
Consolidated Statements of Income | |||
Net sales | $ 1,165,899 | $ 950,528 | $ 765,635 |
Cost of sales | 780,048 | 643,570 | 518,155 |
Gross profit | 385,851 | 306,958 | 247,480 |
Operating expenses | |||
Selling, general and administrative expenses | 303,453 | 211,057 | 170,556 |
Impairment charges | 0 | 2,422 | 0 |
Depreciation and amortization | 6,363 | 6,118 | 4,247 |
Total operating expenses | 309,816 | 219,597 | 174,803 |
Operating income | 76,035 | 87,361 | 72,677 |
Interest expense, net | 27,056 | 21,704 | 27,174 |
Loss on extinguishment of debt | 2,715 | ||
Income before income taxes | 48,979 | 65,657 | 42,788 |
Income tax (benefit) provision | (17) | 33,845 | 15,722 |
Net income | $ 48,996 | $ 31,812 | $ 27,066 |
Net income per common share: | |||
Basic (in dollars per share) | $ 0.78 | $ 0.53 | $ 0.49 |
Diluted (in dollars per share) | $ 0.74 | $ 0.50 | $ 0.48 |
Weighted average shares outstanding: | |||
Basic (in shares) | 62,936,959 | 60,503,860 | 55,414,037 |
Diluted (in shares) | 66,299,646 | 63,712,003 | 56,892,183 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Total |
Balance - Stockholder's Equity at Jan. 30, 2016 | $ 508 | $ 409,746 | $ (41,101) | $ 369,153 |
Balance - Stockholder's Equity (in shares) at Jan. 30, 2016 | 50,836,727 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Stock-based compensation | 9,384 | 9,384 | ||
Issuance of stock from initial public offering, net of costs | $ 96 | 126,815 | 126,911 | |
Issuance of stock from initial public offering, net of costs (in shares) | 9,530,041 | |||
Excess tax benefit from initial public offering expenses | 2,356 | 2,356 | ||
Net income | 27,066 | 27,066 | ||
Balance - Stockholder's Equity at Jan. 28, 2017 | $ 604 | 548,301 | (14,035) | 534,870 |
Balance - Stockholder's Equity (in shares) at Jan. 28, 2017 | 60,366,768 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Stock-based compensation | 13,764 | 13,764 | ||
Exercise of stock options and other awards | $ 10 | 10,423 | 10,433 | |
Exercise of stock options and other awards (in shares) | 1,056,630 | |||
Net income | 31,812 | 31,812 | ||
Balance - Stockholder's Equity at Jan. 27, 2018 | $ 614 | 572,488 | 17,777 | 590,879 |
Balance - Stockholder's Equity (in shares) at Jan. 27, 2018 | 61,423,398 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Stock-based compensation | 49,526 | 49,526 | ||
Exercise of stock options and other awards | $ 22 | 21,663 | 21,685 | |
Exercise of stock options and other awards (in shares) | 2,186,286 | |||
Net income | 48,996 | 48,996 | ||
Balance - Stockholder's Equity at Jan. 26, 2019 | $ 636 | $ 643,677 | $ 66,773 | $ 711,086 |
Balance - Stockholder's Equity (in shares) at Jan. 26, 2019 | 63,609,684 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | |
Operating Activities | |||
Net income | $ 48,996 | $ 31,812 | $ 27,066 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 56,529 | 48,777 | 36,925 |
Loss on disposal of fixed assets | 553 | 100 | 216 |
Impairment charges | 0 | 2,422 | 0 |
Non-cash interest expense | 2,181 | 2,060 | 2,664 |
Amortization of deferred gain on sale-leaseback | (8,751) | (6,267) | (4,721) |
Deferred income taxes | (19,244) | 7,174 | (26,008) |
Stock-based compensation | 49,526 | 13,764 | 9,384 |
Loss on extinguishment of debt | 2,715 | ||
Changes in operating assets and liabilities | |||
Inventories | (112,179) | (26,049) | (67,407) |
Prepaid expenses and other current assets | 989 | (13,495) | 1,352 |
Other assets | (629) | 233 | (2,624) |
Accounts payable | 29,261 | 25,247 | 27,690 |
Accrued liabilities | 19,156 | 14,285 | 16,317 |
Income taxes payable | (7,265) | 9,621 | |
Deferred rent | 19,946 | 13,220 | 10,308 |
Net cash provided by operating activities | 86,334 | 106,018 | 43,498 |
Investing Activities | |||
Purchase of property and equipment | (357,521) | (232,698) | (124,273) |
Purchase of intangible assets | (586) | ||
Net proceeds from sale of property and equipment | 148,398 | 62,422 | 62,141 |
Net cash used in investing activities | (209,123) | (170,276) | (62,718) |
Financing Activities | |||
Payments under lines of credit | (721,177) | (389,126) | (406,164) |
Proceeds from lines of credit | 780,187 | 449,551 | 431,139 |
Payment of debt issuance costs | (1,009) | (1,906) | (323) |
Proceeds from issuance of long-term debt | 50,000 | 6,162 | |
Payment of Second Lien Term Loan | (130,000) | ||
Payments on financing obligations | (265) | (176) | (128) |
Proceeds from financing obligations | 1,625 | ||
Payments on long-term debt | (3,316) | (9,729) | (6,128) |
Proceeds from exercise of stock options | 21,685 | 10,433 | |
Proceeds from issuance of common stock | 132,944 | ||
Net cash provided by financing activities | 127,730 | 65,209 | 21,340 |
Increase in cash, cash equivalents and restricted cash | 4,941 | 951 | 2,120 |
Cash, cash equivalents and restricted cash, beginning of period | 8,525 | 7,574 | 5,454 |
Cash, cash equivalents and restricted cash, end of period | 13,466 | 8,525 | 7,574 |
Supplemental Cash Flow Information | |||
Cash paid for interest | 23,297 | 19,284 | 21,058 |
Cash paid for income taxes | 17,013 | 42,979 | 30,760 |
Supplemental Information for Non-cash Investing and Financing Activities | |||
Increase (Decrease) in current liabilities of property and equipment | 14,297 | (1,210) | 2,941 |
Property and equipment reduction due to sale-leaseback | 111,932 | 46,184 | 30,910 |
Property and equipment acquired under capital lease | $ 1,006 | $ 8,613 | |
Property and equipment additions due to build-to-suit lease transactions | $ 13,679 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 26, 2019 | |
Nature of Operations and Summary of Significant Accounting Policies | |
Nature of Operations and Summary of Significant Accounting Policies | 1. Nature of Operations and Summary of Significant Accounting Policies Description of Business At Home is a home décor superstore focused exclusively on providing a broad assortment of products for any room, in any style, for any budget. As of January 26, 2019, we operated 180 home décor superstores in 37 states, primarily in the South Central, Southeastern, Mid-Atlantic and Midwestern regions of the United States. At Home is owned and operated by At Home Group Inc. and its wholly-owned subsidiaries. All references to “we”, “us”, “our” and the “Company” and similar expressions are references to At Home Group Inc. and our consolidated, wholly-owned subsidiaries, unless otherwise expressly stated or the context otherwise requires. Stock Split On July 22, 2016, the Company’s board of directors approved a 128.157393-for-one stock split of its existing Class A common stock, Class B common stock and Class C common stock and the conversion of such Class A common stock, Class B common stock and Class C common stock into a single class of common stock. All historical share and per share information has been retroactively adjusted to reflect the stock split and conversion. As of January 26, 2019, the Company's total authorized share capital is comprised of 500,000,000 shares of common stock and 50,000,000 shares of preferred stock. Initial and Secondary Public Offerings On August 3, 2016, our Registration Statement on Form S-1 relating to our initial public offering was declared effective by the SEC pursuant to which we registered an aggregate of 9,967,050 shares of our common stock (including 1,300,050 shares subject to the underwriters' over-allotment option). Our common stock began trading on the New York Stock Exchange (the “NYSE”) on August 4, 2016 under the ticker symbol “HOME”. On October 31, 2017, our Registration Statement on Form S-3, pursuant to which we registered 50,582,545 shares of our common stock owned by AEA Investors LP (collectively, “AEA”) and Starr Investment Holdings, LLC (“Starr Investments” and, together with AEA, the “Sponsors”), was declared effective by the SEC. On December 11, 2017, we completed a secondary offering in which our Sponsors sold an aggregate of 5,750,000 shares of our common stock (which included 750,000 shares subject to the underwriters’ over-allotment option). On April 2, 2018, we completed a secondary offering in which our Sponsors sold an aggregate of 6,900,000 shares of our common stock (which included 900,000 shares subject to the underwriters’ over-allotment option). On June 14, 2018, we completed a secondary offering in which our Sponsors sold an aggregate of 8,450,000 shares of our common stock (which included 450,000 shares subject to the underwriters’ over-allotment option). On September 11, 2018, we completed a secondary offering in which our Sponsors sold an aggregate of 10,000,000 shares of our common stock. We did not sell any shares of our common stock in, or receive any proceeds from, these secondary offerings. After giving effect to these secondary offerings, the Sponsors held approximately 26.5% of our outstanding common stock. Fiscal Year We report on the basis of a 52- or 53-week fiscal year, which ends on the last Saturday in January. References to a fiscal year mean the year in which that fiscal year ends. References herein to “fiscal year 2019” relate to the 52 weeks ended January 26, 2019, references herein to “fiscal year 2018” relate to the 52 weeks ended January 27, 2018 and references herein to “fiscal year 2017” relate to the 52 weeks ended January 28, 2017. Consolidation The accompanying consolidated financial statements include the accounts of At Home Group Inc. (“At Home Group”) and its consolidated wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company does not have any components of other comprehensive income recorded within its consolidated financial statements, and, therefore, does not separately present a statement of comprehensive income in its consolidated financial statements. Use of Estimates Preparing financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Because of the use of estimates inherent in the financial reporting process, actual results may differ from these estimates. Reclassification Certain prior period amounts have been reclassified to conform with the current period presentation within the consolidated financial statements and the accompanying notes. These reclassifications had no effect on previously reported results of operations or retained earnings. Segment Information Management has determined that we have one operating segment, and therefore, one reportable segment. Our chief operating decision maker (“CODM”) is our Chief Executive Officer; our CODM reviews financial performance and allocates resources at a consolidated level on a recurring basis. All of our assets are located in the United States. All of our revenue is derived in the United States. Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less as well as credit card receivables. At January 26, 2019 and January 27, 2018, our cash and cash equivalents were comprised primarily of credit card receivables. Restricted Cash Restricted cash consists of cash and cash equivalents reserved for a specific purpose that is not readily available for immediate or general business use. Our restricted cash balance as of January 26, 2019 consists primarily of cash equivalents held for use in the purchase of property and equipment. On January 28, 2018, we adopted ASU No. 2016-18, “ Restricted Cash ” (“ASU 2016-18”) using the required retrospective transition method. This ASU requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statements of cash flows. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands): January 26, 2019 January 27, 2018 January 28, 2017 January 30, 2016 Cash and cash equivalents $ 10,951 $ 8,525 $ 7,092 $ 5,428 Restricted cash 2,515 — 482 26 Cash, cash equivalents and restricted cash $ 13,466 $ 8,525 $ 7,574 $ 5,454 Inventories Inventories are comprised of finished merchandise and are stated at the lower of cost or net realizable value with cost determined using the weighted-average method. The cost of inventories include the actual landed cost of an item at the time it is received in our distribution center, or at the point of shipment for certain international shipments, as well as transportation costs to our distribution center and to our retail stores, if applicable. Net inventory cost is recognized through cost of sales when the inventory is sold. Physical inventory counts are performed for all of our stores at least once per year by a third-party inventory counting service for stores that have been in operation for at least one year. Inventory records are adjusted to reflect actual inventory counts and any resulting shortage (“shrinkage”) is recognized. Reserves for shrinkage are estimated and recorded throughout the fiscal year as a percentage of sales based on the most recent physical inventory, in combination with historical experience. We also evaluate our merchandise to ensure that the expected net realizable value of the merchandise held at the end of a fiscal year exceeds cost. In the event that the expected net realizable value is less than cost, we reduce the value of that inventory accordingly Consideration Received from Vendors We receive vendor support in the form of cash payments or allowances for a variety of vendor-sponsored programs, such as volume rebates, markdown allowances and advertising. We also receive consideration for certain compliance programs. We have agreements in place with each vendor setting forth the specific conditions for each allowance. Vendor support reduces our inventory costs based on the underlying provisions of the agreement. Vendor compliance charges are recorded as a reduction of the cost of merchandise inventories and a subsequent reduction in cost of sales when the inventory is sold. Property and Equipment Property and equipment is recorded at cost less accumulated depreciation and amortization. Depreciation of property and equipment other than leasehold improvements is recorded on a straight-line basis over the estimated useful lives of the assets ranging from 3 to 40 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the remaining lease term, including renewals determined to be reasonably assured, or the estimated useful life of the related improvement. Amortization of property under capital leases is on a straight-line basis over the lease term and is included in depreciation expense. We expense all internal-use software costs incurred in the preliminary project stage. Certain direct costs incurred at later stages and associated with the development and purchase of internal-use software, including external costs for services and internal payroll costs related to the software project, are capitalized within property and equipment in the accompanying consolidated balance sheets. Capitalized costs are amortized on a straight-line basis over the estimated useful lives of the software, generally between three and five years. For the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, we capitalized software costs of $3.1 million, $4.3 million and $7.7 million, respectively. Amortization expense related to capitalized software costs totaled $4.9 million, $4.4 million and $2.7 million during the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, respectively. We capitalize major replacements and improvements and expense routine maintenance and repairs as incurred. We remove the cost of assets sold or retired and the related accumulated depreciation or amortization from the consolidated balance sheets and include any resulting gain or loss in the accompanying consolidated statements of income. Capitalized Interest We capitalize interest on borrowings during the active construction period of major capital projects. Capitalized interest is added to the cost of the underlying assets and is amortized over the useful lives of the assets. Our capitalized interest cost was approximately $3.1 million, $1.3 million and $0.4 million for the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, respectively. Fair Value Measurements We follow the provisions of Accounting Standards Codification (“ASC”) 820 (Topic 820, “ Fair Value Measurements and Disclosures ”). ASC 820 establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. · Level 1 - Unadjusted quoted market prices for identical assets or liabilities in active markets that we have the ability to access. · Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable ( e.g. , interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data. · Level 3 - Valuations based on models where significant inputs are not observable. The unobservable inputs reflect our own assumptions about the assumptions that market participants would use. ASC 820 requires us to maximize the use of observable inputs and minimize the use of unobservable inputs. If a financial instrument uses inputs that fall in different levels of the hierarchy, the instrument is categorized based upon the lowest level of input that is significant to the fair value calculation. The fair value of all current financial instruments approximates carrying value because of the short-term nature of these instruments. We have variable and fixed rates on our long-term debt. The fair value of long-term debt with variable rates approximates carrying value as the interest rates of these amounts approximate market rates. We determine fair value on our fixed rate debt by using quoted market prices and current interest rates. At January 26, 2019, the fair value of our fixed rate mortgage due August 22, 2022 was $6.1 million, which was approximately $0.1 million above the carrying value of $6.0 million. Fair value for the fixed rate mortgage was determined using Level 2 inputs. Goodwill Goodwill is tested for impairment at least annually at the operating segment level; we have only one operating segment and we do not have a reporting unit that exists below our operating segment. If the implied fair value of goodwill is lower than its carrying amount, goodwill impairment is indicated and goodwill is written down to its implied fair value. We assess the business enterprise value using a combination of the income approach and market approach to determine the fair value of the Company to be compared against the carrying value of net assets. The income approach, using the discounted cash flow method, includes key factors used in the valuation of the Company (a Level 3 valuation) which include, but are not limited to, management's plans for future operations, recent operating results, income tax rates, and discounted projected future cash flows. We have the option to perform a qualitative assessment of goodwill rather than completing the two-step process to determine whether it is more likely than not that the fair value of an operating segment is less than its carrying amount, including goodwill and other intangible assets. If we conclude that this is the case, we must perform the two-step process. Otherwise, we may forego the two-step process and do not need to perform any further testing. We performed a qualitative assessment of goodwill for the fiscal year ended January 26, 2019. Based on that qualitative assessment, we concluded it was more likely than not that the fair value of our operating segment substantially exceeded its carrying value and, therefore, further quantitative analysis was not required. No impairment of goodwill was recognized during the fiscal years ended January 26, 2019, January 27, 2018 or January 28, 2017. However, the use of different assumptions, estimates or judgments with respect to the estimation of the projected future cash flows and the determination of the discount rate and sales growth rate used to calculate the net present value of projected future cash flows could materially increase or decrease our estimates of fair value. Additionally, future impairment charges could be required if we do not achieve our current net sales and profitability projections, which would occur if we are not able to meet our new store growth targets, or the weighted average cost of capital increases. Impairment of Long-Lived and Indefinite-Lived Assets We evaluate the recoverability of the carrying value of long-lived assets whenever events or changes in circumstances indicate their carrying amount may not be recoverable. Our evaluation compares the carrying value of the assets with their estimated future undiscounted cash flows expected to result from the use and eventual disposition of the assets. We evaluate long-lived intangible assets at an individual store level, which is the lowest level of identifiable cash flows. We evaluate corporate assets or other long-lived assets that are not store-specific at the consolidated level. To estimate store-specific future cash flows, we make assumptions about key store variables, including sales, growth rate, gross margin, payroll and other controllable expenses. Stores that are owned by us and do not meet the initial criteria are further evaluated taking into consideration the fair market value of the property compared to the carrying value of the assets. Furthermore, management considers other factors when evaluating stores for impairment, including the individual store's execution of its operating plan and other local market conditions. 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. An impairment is recognized once all the factors noted above are taken into consideration and it is determined that the carrying amount of the store's assets are not recoverable. The impairment loss would be recognized in the amount by which the carrying amount of a long-lived asset exceeds its fair value, excluding assets that can be redeployed. Based upon the review of our store-level assets, we identified impairment in connection with certain property and equipment following the resolution of a legal matter and recognized a charge of $2.4 million for the fiscal year ended January 27, 2018. No impairment of long-term assets was recognized during the fiscal years ended January 26, 2019 and January 28, 2017. We test indefinite-lived trade name intangible assets annually for impairment or more frequently if impairment indicators arise. If the fair value of the indefinite-lived intangible asset is lower than its carrying amount, the asset is written down to its fair value. The fair value of our trade name (a Level 3 valuation) was calculated using a relief-from-royalty approach, which assumes the value of the trade name is the discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the trade name and instead licensed the trade name from another company. The carrying value of the At Home trade name as of January 26, 2019 is approximately $1.5 million. No impairment of our indefinite-lived trade name intangible asset was recognized during the fiscal years ended January 26, 2019, January 27, 2018 or January 28, 2017. Debt Issuance Costs Debt issuance costs are costs incurred in connection with obtaining or modifying financing arrangements. These costs are capitalized as a direct deduction from the carrying value of the debt, other than costs incurred in conjunction with our line of credit, which are capitalized as an asset, and amortized over the term of the respective debt agreements. Total amortization expense related to debt issuance costs was approximately $1.8 million, $1.9 million and $1.8 million for the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, respectively. Deferred Rent We record rent expense on a straight-line basis over the term of the lease beginning with the date we take possession of or control the physical access to the premises. We record tenant improvement allowances as a liability and adjust the liability on a straight-line basis as a reduction to rent expense over the lease term beginning with the date we take possession of or control the physical access to the premises. We recognize free rent periods, tenant improvement allowances and standard rent increases contained in our leases on a straight-line basis over the expected lease term, beginning when we first take possession of the property and including renewal option periods in those instances where exercising such options is reasonably assured. For leases where we are considered to be the owner of the construction project and receive tenant improvement allowances, we record the amounts received as a component of the financing obligation liability. See Note 7—Financing Obligations. Insurance Liabilities For the period from December 1, 2013 through January 26, 2019, we were fully insured for workers' compensation and commercial general liability claims. Prior to that period, we used a combination of commercial insurance and self-insurance for workers' compensation and commercial general liability claims and purchased insurance coverage that limited our aggregate exposure for individual claims to $250,000 per workers' compensation and commercial general liability claim. We utilize a combination of commercial insurance and self-insurance for employee-related health care plans. The cost of our health care plan is borne in part by our employees. We purchase insurance coverage that limits our aggregate exposure for individual claims to $175,000 per employee-related health care claim. Health care reserves are based on actual claims experience and an estimate of claims incurred but not reported. Reserves for commercial general liability and workers' compensation are determined through the use of actuarial studies. Due to the judgments and estimates utilized in determining these reserves, they are subject to a high degree of variability. In the event our insurance carriers are unable to pay claims submitted to them, we would record a liability for such estimated payments we expect to incur. Revenue Recognition Revenue from sales of our merchandise is recognized when the customer takes possession of the merchandise. Revenue is presented net of sales taxes collected. We allow for merchandise to be returned within 60 days from the purchase date and provide a reserve for estimated returns. See Note 2—Revenue Recognition. Cost of Sales Cost of sales are included in merchandise inventories and expensed as the merchandise is sold. We include the following expenses in cost of sales: · cost of merchandise, net of inventory shrinkage, damages and vendor allowances; · inbound freight and internal transportation costs such as distribution center-to-store freight costs; · costs of operating our distribution center, including labor, occupancy costs, supplies and depreciation; and · store occupancy costs including rent, insurance, taxes, common area maintenance, utilities, repairs, maintenance and depreciation. Selling, General and Administrative Expenses Selling, general and administrative expenses include payroll, benefits and other personnel expenses for corporate and store employees, including stock-based compensation expense, consulting, legal and other professional services expenses, advertising expenses, occupancy costs for our corporate headquarters and various other expenses. Store Pre-Opening Costs We expense pre-opening costs for new stores as they are incurred. During the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, store pre-opening costs were approximately $21.7 million, $17.9 million and $13.9 million, respectively. Store pre-opening costs, such as occupancy expenses, advertising and labor are primarily included in selling, general and administrative expenses. Marketing and Advertising Marketing and advertising costs, exclusive of store pre-opening marketing and advertising expenses discussed above, include billboard, newspaper, radio, digital and other advertising mediums. Marketing and advertising costs are expensed as incurred and included in selling, general and administrative expenses. Total marketing and advertising expenses were approximately $34.9 million, $24.3 million and $17.4 million for the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, respectively. Stock-Based Compensation We account for stock-based compensation in accordance with ASC 718 (Topic 718, “ Compensation—Stock Compensation ”), which requires all stock-based payments to employees, including grants of employee stock options and restricted stock units, to be recognized in the consolidated financial statements over the requisite service period. Compensation expense based upon the fair value of awards is recognized on a straight-line basis over the requisite service period for awards that actually vest. Stock-based compensation expense is recorded in selling, general and administrative expenses in the consolidated statements of income. We estimate fair value of each stock option grant on the date of grant based upon the Black-Scholes option pricing model, with the exception of a special one-time initial public offering transaction bonus grant which was valued on the date of grant using the Monte Carlo simulation method. For restricted stock unit awards, grant date fair value is determined based upon the closing trading value of our common stock on the NYSE on the date of grant and our forfeiture assumptions are estimated based on historical experience. The Black-Scholes option pricing model requires various significant judgmental assumptions in order to derive a final fair value determination for each type of award including the following: · 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. · Expected volatility —The expected volatility is calculated based on the historical volatility of the common stock of comparable companies. · Expected dividend yield —The expected dividend yield is based on our expectation of not paying dividends on its common stock for the foreseeable future. · Risk-free interest rate —The risk-free interest rate is the average of the 3-year and 5-year U.S. Treasury rate in effect at the time of grant and with a maturity that approximates the expected term. We used a Monte Carlo simulation model to determine the fair value of the special one-time initial public offering transaction bonus grant subject to market-based conditions. The stock option grants subject to market-based conditions have cliff vesting that began in the third quarter of fiscal year 2017 and continued into the third quarter of fiscal year 2019 subject to the achievement of market conditions. We valued the stock option grants as a single award with the related compensation cost recognized using a straight-line method over the derived service period. The expected volatility is based on a combination of historical and implied volatilities of the common stock for comparable companies. All grants of our stock options have an exercise price equal to or greater than the fair market value of our common stock on the date of grant, based on the foregoing estimates and assumptions. Because we were a privately held company prior to August 4, 2016 and there was no public market for our common stock, the fair value of our equity was approved by our Board at the time option grants were awarded. In estimating the fair value of our common stock, we considered factors we believed to be material to the valuation process including, but not limited to, our actual and projected financial results, risks and prospects and economic and market conditions. Our valuations utilized projections of our future performance, estimates of our weighted average cost of capital and metrics based on the performance of a peer group of similar companies, including valuation multiples and stock price volatility. We believe the combination of these methods provided an appropriate estimate of our expected fair value prior to our IPO. We considered the valuation analyses to determine the best estimate of the fair value of our common stock at each stock option grant date. Following our IPO, these estimates are no longer needed to determine fair value for new awards due to a publicly-available trading price for our common stock. Income Taxes The provision for income taxes is accounted for under the asset and liability method prescribed by ASC 740 (Topic 740, “ Income Taxes ”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the tax rate changes are enacted. When necessary, a valuation allowance may be recorded against deferred tax assets in order to properly reflect the amount that is more likely than not to be realized. We recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. On December 22, 2017, federal tax reform legislation was adopted into law by the U.S. government (the “Tax Act”). The Tax Act makes broad and complex changes to the Internal Revenue Code of 1986, including, but not limited to, (i) reducing the U.S. federal corporate tax rate from 35% to 21%; (ii) eliminating the corporate alternative minimum tax (“AMT”) and changing how existing AMT credits are realized; (iii) creating a new limitation on deductible interest expense; and (iv) changing rules related to the use and limitation of net operating loss carryforwards created in tax years beginning after December 31, 2017. As a result of the adoption of the Tax Act, for our fiscal year ended January 27, 2018, the statutory federal corporate tax rate was prorated to 34.0%, with the statutory rate for the fiscal year ended January 26, 2019 and beyond at 21.0%. In December of 2017, the Securities and Exchange Commission staff issued State Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which allowed us to record provisional amounts during a measurement period not to extend beyond one year from the enactment date. We recorded provisional amounts for the impact of the Tax Act during the fourth fiscal quarter 2018. During fiscal year 2019, we completed our accounting for the income tax effects of the Tax Act, and no material adjustments were required to the provisional amounts recorded in fiscal year 2018. Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 “ Leases ”, which supersedes ASC 840 “ Leases ” and creates a new topic, ASC 842 “ Leases ” (“ASU 2016-02”). Under ASU 2016-02, an entity will be required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early adoption permitted. At adoption, this update will be applied using a modified retrospective approach. The standard provides a number of optional practical expedients in transition. We will elect the package of three practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carryforward the historical lease classification. We will not elect the hindsight practical expedient. We will not separate non-lease components from lease components by class of underlying assets and we will not apply the recognition requirements of the standard to short-term leases, as allowed by the standard. While we are in the process of finalizing our initial impact assessment on the adoption of ASU 2016-02, we estimate the following material impacts to our financial statements: (i) the recognition of right-of use liabilities of approximately $1.0 billion and the recognition of corresponding right-of-use assets; (ii) the derecognition of deferred gains on sale-leasebacks as a c |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Jan. 26, 2019 | |
Revenue Recognition | |
Revenue Recognition | 2. Revenue Recognition On January 28, 2018, we adopted ASU 2014-09 using the retrospective transition method. ASU 2014-09 requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. Results for all reporting periods presented include the impact of the new guidance under ASU 2014-09, including prior periods that have been recast to reflect the estimated cost of returned assets within other current assets rather than netted with our sales returns reserve within other current liabilities. The adoption of ASU 2014-09 did not impact opening retained earnings as of January 28, 2018 and did not have a material impact on revenues recognized for the fiscal years ended January 27, 2018 and January 28, 2017. The adoption of ASU 2014-09 had the following impact on our consolidated balance sheets as of January 27, 2018 (in thousands): Consolidated Balance Sheet as of January 27, 2018 New Revenue As Reported Standard As Recast Other current assets $ 13,701 $ 952 $ 14,653 Total current assets 299,981 952 300,933 Total assets 1,373,289 952 1,374,241 Accrued and other current liabilities 88,547 952 89,499 Total current liabilities 342,721 952 343,673 Total liabilities 782,410 952 783,362 Total liabilities and shareholders' equity 1,373,289 952 1,374,241 The adoption of ASU 2014-09 had the following impact on our consolidated statement of cash flows for the fiscal years ended January 27, 2018 and January 28, 2017 (in thousands): Consolidated Statement of Cash Flows Fiscal Year Ended January 27, 2018 New Revenue As Reported (a) Standard As Recast Prepaid expenses and other current assets $ (13,621) $ 126 $ (13,495) Accrued liabilities 14,411 (126) 14,285 Net cash provided by operating activities 106,018 — 106,018 Consolidated Statement of Cash Flows Fiscal Year Ended January 28, 2017 New Revenue As Reported (a) Standard As Recast Prepaid expenses and other current assets $ 1,600 $ (248) $ 1,352 Accrued liabilities 16,069 248 16,317 Net cash provided by operating activities 43,498 — 43,498 (a) Accrued liabilities have been reclassified in the prior period to conform with the current period presentation as discussed in Note 1 – Nature of Operations and Summary of Significant Accounting Policies. We sell a broad assortment of home décor, including home furnishings and accent décor, and recognize revenue when the customer takes possession or control of goods at the time the sale is completed at the store register. Accordingly, we implicitly enter into a contract with customers at the point of sale. In addition to retail store sales, we also generate revenue through the sale of gift cards and through incentive arrangements associated with our credit card program. As noted in Note 1 – Nature of Operations and Summary of Significant Accounting Policies, our business consists of one reportable segment. In accordance with ASC 606, we disaggregate net sales into the following product categories: Fiscal Year Ended January 26, 2019 January 27, 2018 January 28, 2017 Home furnishings 45 % 46 % 48 % Accent décor 51 50 49 Other 4 4 3 Total 100 % 100 % 100 % Contract liabilities are recognized primarily for gift card sales. Cash received from the sale of gift cards is recorded as a contract liability in accrued and other current liabilities, and we recognize revenue upon the customer’s redemption of the gift card. Gift card breakage is recognized as revenue in proportion to the pattern of customer redemptions by applying an estimated breakage rate that takes into account historical patterns of redemptions and deactivations of gift cards. We recognized approximately $16.3 million, $12.9 million and $9.8 million in gift card redemption revenue for the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, respectively, and recognized an immaterial amount in gift card breakage revenue for each of the Fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017. Of the total gift card redemption revenue, $3.0 million, $2.2 million and $1.6 million for the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, respectively, related to gift cards issued in prior periods. We had outstanding gift card liabilities of $7.8 million and $5.8 million as of January 26, 2019 and January 27, 2018, respectively, which are included in accrued and other current liabilities. Gift card redemption and breakage revenue for the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017 and gift card liabilities as of January 26, 2019 and January 27, 2018 reported under ASC 606 were not materially different from amounts that would have been reported under the previous revenue guidance of ASC 605. In fiscal year 2018, we launched a credit card program by which credit is extended to eligible customers through At Home branded credit cards with Synchrony Bank (“Synchrony”). Through the launch of the credit card program, we received reimbursement of costs associated with the launch of the credit card program as well as a one-time payment which has been deferred over the initial seven-year term of the agreement with Synchrony. We receive ongoing payments from Synchrony based on sales transacted on our credit cards and for reimbursement of joint marketing and advertising activities. During the fiscal years ended January 26, 2019 and January 27, 2018, we recognized approximately $3.2 million and $1.2 million, respectively, in revenue from our credit card program within net sales when earned. Customers may return purchased items for an exchange or refund. Historically, the sales returns reserve was presented net of cost of sales in other current liabilities and based primarily on historical trends and sales performance. ASU 2014-09 also specifies that the balance sheets should reflect both a liability with respect to the refund obligation and an asset representing the right to the returned goods on a gross basis. In adopting ASU 2014-09, we utilized the expected value methodology in which different scenarios including current sales return data and historical quarterly sales return rates are used to develop an estimated sales return rate. During the fiscal year ended January 27, 2018, we utilized the practical expedient provided under ASU 2014-09 to assess all sales on a portfolio basis, as this did not yield materially different results from the actual sales returns. As such, we now present the sales returns reserve within other current liabilities and the estimated value of the inventory that will be returned within other current assets in the consolidated balance sheets. The components of the sales returns reserve reflected in the consolidated balance sheets consist of the following (in thousands): January 26, January 27, 2019 2018 Accrued and other current liabilities $ 2,448 $ 2,023 Other current assets 1,129 952 Sales returns reserve, net $ 1,319 $ 1,071 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jan. 26, 2019 | |
Property and Equipment | |
Property and Equipment | 3. Property and Equipment Property and equipment consists of the following (in thousands): January 26, January 27, 2019 2018 Land $ 53,025 $ 42,378 Buildings 132,881 117,429 Computer hardware and software 50,016 40,096 Equipment, furniture and fixtures 148,562 115,539 Leasehold improvements 365,099 253,570 Construction in progress 125,051 40,739 874,634 609,751 Less: accumulated depreciation and amortization (191,971) (143,488) Property and equipment, net $ 682,663 $ 466,263 Depreciation and amortization expense for the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017 totaled approximately $56.5 million, $48.8 million and $36.9 million, respectively. Approximately $50.2 million, $42.7 million and $32.7 million of depreciation and amortization expense is included in cost of sales for the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, respectively. In addition, we recorded $2.4 million in impairment charges for property and equipment following the resolution of a legal matter for the fiscal year ended January 27, 2018. |
Sale-Leaseback Transactions
Sale-Leaseback Transactions | 12 Months Ended |
Jan. 26, 2019 | |
Sale-Leaseback Transactions | |
Sale-Leaseback Transactions | 4. Sale-Leaseback Transactions In October 2018, we sold four of our properties in Gilbert, Arizona; Pearland, Texas; Richmond, Texas; and Rogers, Arkansas for a total of $56.5 million, resulting in a net gain of $3.1 million. Contemporaneously with the closing of the sale, we entered into two leases pursuant to which we leased back the properties for cumulative initial annual rent of $3.8 million, subject to annual escalations. The leases are being accounted for as operating leases. The net gain on the sale of the properties has been deferred and is included in deferred rent liabilities in the accompanying consolidated balance sheets. The gain will be amortized to rent expense on a straight-line basis through the lease term, which ends in October 2033, subject to renewal options. In July 2018, we sold three of our properties in Clarksville, Tennessee; Shreveport, Louisiana; and Wixom, Michigan for a total of $43.6 million, resulting in a net gain of $10.7 million. Contemporaneously with the closing of the sale, we entered into a lease pursuant to which we leased back the properties for cumulative initial annual rent of $3.0 million, subject to annual escalations. The lease is being accounted for as an operating lease. The net gain on the sale of the properties has been deferred and is included in deferred rent liabilities in the accompanying consolidated balance sheets. The gain will be amortized to rent expense on a straight-line basis through the lease term, which ends in July 2033, subject to renewal options. In February 2018, we sold four of our properties in Blaine, Minnesota; Fort Worth, Texas; Jackson, Mississippi; and Memphis, Tennessee for a total of $50.3 million, resulting in a net gain of $22.6 million. Contemporaneously with the closing of the sale, we entered into a lease pursuant to which we leased back the properties for cumulative initial annual rent of $3.4 million, subject to annual escalations. The lease is being accounted for as an operating lease. The net gain on the sale of the properties has been deferred and is included in deferred rent liabilities in the accompanying consolidated balance sheets. The gain will be amortized to rent expense on a straight-line basis through the lease term, which ends in February 2033, subject to renewal options. In August 2017, we sold six of our properties in Hoover, Alabama; Lafayette, Louisiana; Moore, Oklahoma; Olathe, Kansas; Orange Park, Florida; and Wichita, Kansas for a total of $62.6 million resulting in a net gain of $15.4 million. Contemporaneously with the closing of the sale, we entered into a lease pursuant to which we leased back the properties for cumulative initial annual rent of $4.2 million, subject to annual escalations. The lease is being accounted for as an operating lease. The net gain on the sale of the properties has been deferred and is included in deferred rent liabilities in the accompanying consolidated balance sheets. The gain will be amortized to rent expense on a straight-line basis through the lease term, or September 2032. In September 2016, we sold three of our properties in Colorado Springs, Colorado; Kissimmee, Florida; and O’Fallon, Illinois for a total of $30.6 million resulting in a net gain of $16.9 million. Contemporaneously with the closing of the sale, we entered into a lease pursuant to which we leased back the properties for cumulative initial annual rent of $2.1 million, subject to annual escalations. The lease is being accounted for as an operating lease. The net gain on the sale of the properties has been deferred and is included in deferred rent liabilities in the accompanying consolidated balance sheets. The gain will be amortized to rent expense on a straight-line basis through the lease term, or September 2031. In August 2016, we sold four of our properties in Broomfield, Colorado; Corpus Christi, Texas; Jenison, Michigan; and Buford, Georgia for a total of $32.6 million resulting in a net gain of $14.2 million. Contemporaneously with the closing of the sale, we entered into a lease pursuant to which we leased back the properties for cumulative initial annual rent of $2.2 million, subject to annual escalations. The lease is being accounted for as an operating lease. The net gain on the sale of the properties has been deferred and is included in deferred rent liabilities in the accompanying consolidated balance sheets. The gain will be amortized to rent expense on a straight-line basis through the lease term, or July 2031. Approximately $3.7 million of the proceeds from the sale were used to pay off a note payable related to the Corpus Christi property. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Jan. 26, 2019 | |
Accrued Liabilities | |
Accrued Liabilities | 5. Accrued Liabilities Accrued liabilities consist of the following (in thousands): January 26, January 27, 2019 2018 Inventory in-transit $ 20,591 $ 14,618 Accrued payroll and other employee-related liabilities 18,306 16,917 Accrued taxes, other than income 14,194 11,680 Accrued interest 5,756 4,173 Insurance liabilities 539 3,391 Gift card liability 7,784 5,787 Construction costs 14,548 9,661 Accrued inbound freight 15,236 10,796 Other 20,554 12,476 Total accrued liabilities $ 117,508 $ 89,499 |
Revolving Line of Credit
Revolving Line of Credit | 12 Months Ended |
Jan. 26, 2019 | |
Revolving Line of Credit | |
Revolving Line of Credit | 6. Revolving Line of Credit In October 2011, At Home Holding III Inc. (“At Home III”) and At Home Stores LLC (collectively, the “ABL Borrowers”), entered into an asset-based revolving line of credit (the “ABL Facility”), which originally provided for cash borrowings or issuances of letters of credit of up to $80.0 million based on defined percentages of eligible inventory and credit card receivable balances. We have subsequently amended the ABL Credit Agreement from time to time. After giving effect to such amendments, as of January 26, 2019, the aggregate revolving commitments under the ABL Facility are $350.0 million, with a sublimit for the issuance of letters of credit of $50.0 million and a sublimit for the issuance of swingline loans of $20.0 million. In July 2017, in connection with the Seventh Amendment to the ABL Credit Agreement, the maturity of the ABL Facility was extended to the earlier of July 27, 2022 and the date that is 91 days prior to the maturity date of the term loan entered into on June 5, 2015 under a first lien credit agreement (the “First Lien Agreement”) (as such date may be extended). Interest on borrowings under our ABL Facility is computed based on our average daily availability, at our option, of: (x) the higher of (i) the Federal Funds Rate plus 1/2 of 1.00%, (ii) the agent bank's prime rate and (iii) LIBOR plus 1.00%, plus in each case, an applicable margin of 0.25% to 0.75% or (y) the agent bank's LIBOR rate plus an applicable margin of 1.25% to 1.75%. The effective interest rate was approximately 3.80%, 2.90% and 2.00% for the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, respectively. As of January 26, 2019, approximately $221.0 million was outstanding under the ABL Facility, approximately $0.5 million in face amount of letters of credit had been issued and we had availability of approximately $120.5 million. The ABL Facility includes restrictions customarily found in such agreements on the ability of the ABL Borrowers and the subsidiary guarantors to incur additional liens and indebtedness, make investments and dispositions, pay dividends to At Home Holding II Inc. (“At Home II”) or enter into other transactions, among other restrictions, in each case subject to certain exceptions. Under the ABL Facility, the ABL Borrowers and the subsidiary guarantors are permitted to pay dividends to At Home II, (a) so long as after giving effect to such payment, (i) availability is equal to or greater than 15% of the loan cap (i.e., the lesser of (x) the aggregate lender commitments under the ABL Facility and (y) the borrowing base) and (ii) if availability is less than 20% of the loan cap, the consolidated fixed charge coverage ratio is equal to or greater than 1.0 to 1.0, and (b) pursuant to certain other limited exceptions. As of January 26, 2019 and January 27, 2018, we were in compliance with all covenants prescribed in the ABL Facility. The ABL Facility is secured by (a) a first priority lien on our (i) cash, cash equivalents, deposit accounts, accounts receivable, other receivables, tax refunds and inventory, (ii) to the extent relating to, arising from, evidencing or governing any of the items referred to in the preceding clause (i), chattel paper, documents, instruments, general intangibles, and securities accounts related thereto, (iii) books and records relating to the foregoing and (iv) supporting obligations and all products and proceeds of the foregoing and all collateral security and guarantees given by any person with respect to any of the foregoing, in each case subject to certain exceptions (collectively, “ABL Priority Collateral”) and (b) a second priority lien on our remaining assets not constituting ABL Priority Collateral, subject to certain exceptions (collectively, “Term Priority Collateral”); provided, however that since our amendment of the ABL Facility in July 2017, real property that may secure the Term Loan from time to time no longer forms part of the collateral under the ABL Facility. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Jan. 26, 2019 | |
Long-Term Debt | |
Long-Term Debt | 7. Long-Term Debt Long-term debt consists of the following (in thousands): January 26, January 27, 2019 2018 Term Loan $ 339,500 $ 292,500 Note payable, bank (a) 5,969 6,108 Obligations under capital leases 733 911 Total debt 346,202 299,519 Less: current maturities 3,846 3,316 Less: unamortized deferred debt issuance costs 5,921 6,301 Long-term debt $ 336,435 $ 289,902 (a) Matures August 22, 2022; $34,483 payable monthly, including interest at 4.50% with the remaining balance due at maturity; secured by the location’s land and building. Aggregate annual maturities of long-term debt, excluding capital lease obligations, are as follows (in thousands): January 26, 2019 2020 $ 3,663 2021 4,548 2022 2,797 2023 334,461 2024 — Thereafter — $ 345,469 Term Loan Facilities On June 5, 2015, our indirect wholly owned subsidiary, At Home Holding III Inc. (the “Borrower”), entered into the First Lien Agreement, by and among the Borrower, At Home Holding II Inc. (“At Home II”), a direct wholly owned subsidiary of ours, as guarantor, certain indirect subsidiaries of At Home II, various lenders and Bank of America, N.A., as administrative agent and collateral agent. We have subsequently amended our First Lien Agreement from time to time. After giving effect to such amendments, the First Lien Agreement provides for a term loan in an aggregate principal amount of $350.0 million (the “Term Loan”). The Term Loan will mature on June 3, 2022, and is repayable in equal quarterly installments of approximately $0.9 million for an annual aggregate amount equal to 1% of the original principal amount. The Borrower has the option of paying interest on a 1-month, 2-month or quarterly basis on the Term Loan at an annual rate of LIBOR (subject to a 1% floor) plus 4.00%, subject to a 0.50% reduction if the Borrower achieves a specified secured net leverage ratio level, which was met during the fiscal year ended January 28, 2017 and for which the Borrower has continued to qualify during the fiscal year ended January 26, 2019. The Term Loan is prepayable at our option, in whole or in part, subject to a prepayment premium equal to 1% of the aggregate principal amount of the Term Loan then outstanding until May 27, 2019 (inclusive). After May 27, 2019, the Term Loan may be prepaid without premium. The Term Loan has various non-financial covenants, customary representations and warranties, events of defaults and remedies, substantially similar to those described in respect of the ABL Facility. There are no financial maintenance covenants in the Term Loan. As of January 26, 2019 and January 27, 2018, we were in compliance with all covenants prescribed under the Term Loan. The Term Loan is secured by (a) a first priority lien on the Term Priority Collateral and (b) a second priority lien on the ABL Priority Collateral. On June 5, 2015, the Borrower also entered into a second lien credit agreement (the “Second Lien Agreement”), by and among the Borrower, At Home II and Dynasty Financial II, LLC, as administrative agent, collateral agent and lender. The Second Lien Agreement provided for the Second Lien Term Loan, which amount was borrowed on June 5, 2015. The Second Lien Term Loan had a maturity date of June 5, 2023 and did not require periodic principal payments, with the total amount outstanding, plus accrued interest, due at maturity. The Borrower had the option of paying interest on a 1-month, 2-month or quarterly basis on the Second Lien Term Loan at an annual rate of LIBOR (subject to a 1% floor) plus 8.00%. We refer to the Term Loan and, until the Second Lien Repayment (as defined below), the Second Lien Term Loan, collectively as the “Term Loan Facilities”. During the fiscal year ended January 28, 2017, we used the net proceeds from our initial public offering and partial exercise of the over-allotment option, after deducting underwriters’ discounts and commissions, to repay in full the $130.0 million of principal amount of indebtedness outstanding under our Second Lien Term Loan (the “Second Lien Repayment”). The repayment resulted in a loss on extinguishment of debt in the amount of $2.7 million, which was recognized during the fiscal year ended January 28, 2017. On November 27, 2018, At Home II and the Borrower entered into the Second Amendment (the “Term Loan Amendment”) with the lenders party thereto and Bank of America, N.A., as administrative agent and as collateral agent, which amended the First Lien Agreement, as amended by the First Amendment dated July 27, 2017. Pursuant to the Term Loan Amendment, among other things, the Borrower borrowed an additional $50.0 million in incremental term loans, increasing the principal amount outstanding under the First Lien Agreement on such date to $339.5 million. Net proceeds from the incremental term loans were used to repay approximately $49.6 million of borrowings under the ABL Facility. The restricted net assets of At Home Group's consolidated subsidiaries was $711.1 million as of January 26, 2019. |
Financing Obligations
Financing Obligations | 12 Months Ended |
Jan. 26, 2019 | |
Financing Obligations | |
Financing Obligations | 8. Financing Obligations In some cases, the assets we lease require construction in order to ready the space for its intended use and, in certain cases, we are involved in the construction of leased assets. The construction period typically begins when we execute our lease agreement with the landlord and continues until the space is substantially complete and ready for its intended use. In accordance with ASC 840-40-55, we must consider the nature and extent of our involvement during the construction period and, in some cases, our involvement results in our being considered the accounting owner of the construction project. By completing the construction of key structural components of a leased building, we are deemed to have participated in the construction of the landlord asset. In such cases, we capitalize the landlord's construction costs, including the value of costs incurred up to the date we execute our lease and costs incurred during the remainder of construction period, as such costs are incurred. Additionally, ASC 840-40-55 requires us to recognize a financing obligation for construction costs incurred by the landlord. Once construction is complete, we are required to perform a sale-leaseback analysis pursuant to ASC 840-40 to determine if we can remove the landlord's assets and associated financing obligations from our consolidated balance sheet. In certain leases, we maintain various forms of “prohibited continuing involvement” in the property, thereby precluding us from derecognizing the asset and associated financing obligations following the construction completion. In those cases, we will continue to account for the landlord's asset as if we are the legal owner, and the financing obligation, similar to other debt, until the lease expires or is modified to remove the continuing involvement that prohibits derecognition. Once derecognition is permitted, we would be required to account for the lease as either operating or capital in accordance with ASC 840. As of January 26, 2019, we have not derecognized any landlord assets or associated financing obligations. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jan. 26, 2019 | |
Related Party Transactions | |
Related Party Transactions | 9. Related Party Transactions Merry Mabbett Inc. (“MMI”) is owned by Merry Mabbett Dean, who is the mother of Lewis L. Bird III, our Chief Executive Officer. During the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, through MMI, we purchased certain fixtures, furniture and equipment that is now owned and used by us in our home office, new store offices or in the product vignettes in the stores. In addition, Ms. Dean, through MMI, provided certain design services to us, including design for our home office, as well as design in our stores. |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 26, 2019 | |
Income Taxes | |
Income Taxes | 10. Income Taxes Our income tax provision is as follows (in thousands): Fiscal Year Ended January 26, January 27, January 28, 2019 2018 2017 Current income tax expense Federal $ 16,620 $ 23,786 $ 36,956 State 2,607 2,885 4,756 Deferred income tax (benefit) expense Federal (16,343) 9,208 (22,261) State (2,901) (2,034) (3,729) Income tax (benefit) provision $ (17) $ 33,845 $ 15,722 On December 22, 2017, the Tax Act was adopted into law. The Tax Act makes broad and complex changes to the Internal Revenue Code of 1986, including, but not limited to, (i) reducing the U.S. federal corporate tax rate from 35% to 21%; (ii) eliminating the corporate alternative minimum tax (AMT) and changing how existing AMT credits are realized; (iii) creating a new limitation on deductible interest expense; and (iv) changing rules related to the use and limitation of net operating loss carryforwards created in tax years beginning after December 31, 2017. As a result of the adoption of the Tax Act, for the fiscal year ended January 27, 2018, the statutory federal corporate tax rate was prorated to 34.0%, with the statutory rate for the fiscal year ended January 26, 2019 and beyond at 21.0%. In December of 2017, the Securities and Exchange Commission staff issued State Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which allowed us to record provisional amounts during a measurement period not to extend beyond one year from the enactment date. We recorded provisional amounts for the impact of the Tax Act during the fourth fiscal quarter 2018. During fiscal year 2019, we completed our accounting for the income tax effects of the Tax Act, and no material adjustments were required to the provisional amounts recorded in fiscal year 2018. Deferred tax assets and liabilities are determined based on the estimated future tax effects of the difference between the financial statement and tax basis of asset and liability balances using statutory tax rates. Tax effects of temporary differences that give rise to significant components of the deferred tax assets and liabilities are as follows (in thousands): January 26, January 27, 2019 2018 Deferred tax assets Inventory $ 9,283 $ 5,385 Accruals 3,835 2,291 Deferred rent 11,311 7,830 Net operating losses 290 333 Deferred gains 33,181 26,288 Deferred compensation 16,400 7,325 Financing obligations 5,636 1,845 Deferred revenue 1,200 44 Prepaid rent 1,514 1,710 Other, net 1,663 1,296 Total deferred tax assets 84,313 54,347 Deferred tax liabilities Property and equipment (31,420) (19,980) Debt cancellation income — (742) Trade name (88) (64) Total deferred tax liabilities (31,508) (20,786) Net deferred tax asset $ 52,805 $ 33,561 We are required to assess the available positive and negative evidence to estimate if sufficient future income will be generated to utilize deferred tax assets. We believe the cumulative pre-tax income is a significant piece of positive evidence that allows us to consider other subjective evidence such as future forecasted pre-tax income. For the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, we continued to have three years of cumulative pre-tax income. In addition, taxable income exceeded pre-tax income for the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017. We concluded that because of this positive evidence, as well as cumulative pre-tax income in recent fiscal years, it was more likely than not that our deferred tax assets would be realized in future years. Accordingly, during fiscal year 2019, we determined no valuation allowance was required. Our valuation allowances totaled $0.3 million as of January 28, 2017. During fiscal year 2018, while analyzing our ability to utilize state net operating losses, it was determined that the positive evidence outweighed the negative evidence and the remaining valuation allowance was released. We had approximately $6.4 million and $7.4 million of state net operating loss carryforwards at January 26, 2019 and January 27, 2018, respectively. The state net operating losses begin to expire in fiscal year 2024. During fiscal year 2018, we determined that the valuation allowance for state net operating losses was no longer necessary as we expect to fully utilize all net operating loss carryforward prior to expiration. The reconciliation between the actual income tax provision and the income tax provision calculated at the federal statutory tax rate is as follows (dollars in thousands): Fiscal Year Ended January 26, January 27, January 28, 2019 2018 2017 Income tax provision at the federal statutory rate $ 10,286 $ 22,297 $ 14,976 Permanent differences 340 325 625 State income taxes, net of federal income tax effect (307) 482 924 Change in unrecognized tax benefits (300) (16) (378) Change in valuation allowance — (314) (257) Effect of the Tax Act (524) 16,694 — Net federal excess tax benefit related to options exercised (9,293) (5,826) — Tax credits (278) (208) (141) Deferred adjustment 59 411 (23) Other — — (4) Income tax (benefit) provision $ (17) $ 33,845 $ 15,722 Effective tax rate (0.0) % 51.5 % 36.7 % Uncertain Tax Positions We operate in a number of tax jurisdictions and are subject to examination of its income tax returns by tax authorities in those jurisdictions who may challenge any item on these returns. Because the tax matters challenged by tax authorities are typically complex, the ultimate outcome of these challenges is uncertain. In accordance with ASC 740 (Topic 740, “ Income Taxes ”), we recognize the benefits of uncertain tax positions in our consolidated financial statements only after determining that it is more likely than not that the uncertain tax positions will be sustained. The total amount of unrecognized tax benefits as of January 26, 2019 was $0.7 million, $0.5 million of which would favorably impact the effective tax rate if resolved in our favor. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): January 26, January 27, 2019 2018 Balance, beginning of period $ 1,688 $ 2,553 Additions based on tax positions related to the current year — — Subtractions based on tax positions related to the prior year (443) (604) Settlements (5) (108) Expiration of statute of limitations (524) (153) Balance, end of period $ 716 $ 1,688 We recognize accrued interest and penalties related to unrecognized tax benefits in our provision for income taxes. As of January 26, 2019 and January 27, 2018, there was approximately $0.1 million in accrued penalties. As of January 26, 2019 and January 27, 2018, there was approximately $0.1 million and $0.2 million, respectively, in accrued interest. In addition, we released approximately $0.1 million in interest expense and penalties during the fiscal year ended January 26, 2019 and recognized an immaterial amount of interest expense and penalties during the fiscal year ended January 27, 2018. In the normal course of business, we are subject to examination by taxing authorities in U.S. Federal and U.S. state jurisdictions. The period subject to examination for our federal return is fiscal year 2016 and later and fiscal year 2015 and later for all major state tax returns. We believe that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are resolved in a manner not consistent with management's expectations, we could be required to adjust the provision for income tax in the period such resolution occurs. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 26, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 11. Commitments and Contingencies Leases We lease space for certain of our retail properties, our distribution center and corporate office pursuant to leases that expire at various dates through 2037. A number of the leases have renewal options for various periods of time at our discretion. We are typically responsible for taxes, utilities, insurance, repairs and maintenance for these properties. Certain leases require the payment of contingent rent based on a specified percentage of stores' gross sales, as defined in the lease agreement, and are subject to certain limitations. An immaterial amount of contingent rent was paid during the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017. Rent expense for the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017 totaled approximately $108.0 million, $83.4 million and $68.1 million, respectively. Amortization of deferred gains on sale-leasebacks is approximately $9.3 million for fiscal year 2020 and each of the four subsequent fiscal years. Future minimum annual rental commitments for all leases are as follows (in thousands): Capital Operating Financing Leases Leases Obligations Total 2020 $ 203 $ 115,210 $ 2,932 $ 118,345 2021 203 120,876 3,037 124,116 2022 203 119,202 3,069 122,474 2023 168 116,985 2,635 119,788 2024 — 116,782 2,639 119,421 Thereafter — 980,221 20,796 1,001,017 Total minimum lease payments $ 777 $ 1,569,276 $ 35,108 $ 1,605,161 Less: amount representing interest (44) Present value of minimum lease payments $ 733 Minimum future annual rent receivable under operating subleases as of January 26, 2019 was immaterial. We recognized a nominal amount of lease rental income for each of the fiscal years ended January 26, 2019, January 27, 2018, and January 28, 2017. Litigation We are subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on our consolidated financial position, results of operations or liquidity. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Jan. 26, 2019 | |
Employee Benefit Plan | |
Employee Benefit Plan | 12. Employee Benefit Plan Effective October 1, 2014, we sponsor a 401(k) Savings Plan for eligible employees. Participation in the 401(k) Savings Plan is voluntary and available to any employee who is at least 18 years of age and has completed six months of service. Participants may elect to contribute up to 100% of their compensation on a pre-tax basis subject to Internal Revenue Service (“IRS”) limitations. In accordance with the provisions of the 401(k) Savings Plan, we make a safe harbor matching cash contribution to the account of each participant in an amount equal to 100% of the participant's pre-tax contributions that do not exceed 3% of the participant's considered annual compensation plus 50% of the participant's pre-tax contributions between 3% and 5% of the participant's considered annual compensation, which are also subject to regulatory limits. Matching contributions, and any actual earnings thereon, vest to the participants immediately. Our matching contribution expenses were $1.3 million, $1.0 million and $0.8 million for the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, respectively. |
Capital Stock
Capital Stock | 12 Months Ended |
Jan. 26, 2019 | |
Capital Stock | |
Capital Stock | 13. Capital Stock On July 22, 2016, our board of directors approved a 128.157393-for-one stock split of its existing Class A common stock, Class B common stock and Class C common stock and the conversion of such Class A common stock, Class B common stock and Class C common stock into a single class of common stock. All historical share and per share information has been retroactively adjusted to reflect the stock split and conversion. Effective July 22, 2016, our total authorized share capital is comprised of 500,000,000 shares of common stock and 50,000,000 shares of preferred stock. On August 3, 2016, our Registration Statement on Form S-1 relating to our initial public offering was declared effective by the SEC pursuant to which we issued and sold 8,667,000 of the shares registered at a price of $15.00 per share on August 9, 2016. On September 8, 2016, we issued and sold a further 863,041 shares of our common stock at a price of $15.00 per share pursuant to the underwriters’ partial exercise of the over-allotment option. As of January 26, 2019, we had 500,000,000 shares of common stock authorized with a par value of $0.01, of which 63,609,684 were issued and outstanding. Additionally, as of January 26, 2019, we had 50,000,000 shares of preferred stock authorized with a par value of $0.01, of which no shares were issued and outstanding. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Jan. 26, 2019 | |
Earnings Per Share | |
Earnings Per Share | 14. Earnings Per Share In accordance with ASC 260, (Topic 260, “ Earnings Per Share ”), basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income available to common stockholders by the weighted average shares outstanding for the period and include the dilutive impact of potential shares from the exercise of stock options. Potentially dilutive securities are excluded from the computation of diluted net income per share if their effect is anti-dilutive. The following table sets forth the calculation of basic and diluted earnings per share as follows (dollars in thousands, except share and per share data): Fiscal Year Ended January 26, 2019 January 27, 2018 January 28, 2017 Numerator: Net income $ 48,996 $ 31,812 $ 27,066 Denominator: Weighted average common shares outstanding-basic 62,936,959 60,503,860 55,414,037 Effect of dilutive securities: Stock options and restricted stock units 3,362,687 3,208,143 1,478,146 Weighted average common shares outstanding-diluted 66,299,646 63,712,003 56,892,183 Per common share: Basic net income per common share $ 0.78 $ 0.53 $ 0.49 Diluted net income per common share $ 0.74 $ 0.50 $ 0.48 For the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, approximately 2,029,602, 146,457 and 1,514,168, respectively, of stock options and restricted stock units (“RSU”) were excluded from the calculation of diluted net income per common share since their effect was anti-dilutive. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jan. 26, 2019 | |
Stock-Based Compensation | |
Stock-Based Compensation | 15. Stock-Based Compensation We account for stock-based compensation in accordance with ASC 718 (Topic 718, “ Compensation—Stock Compensation ”), which requires all stock-based payments to employees, including grants of employee stock options and RSUs, to be recognized in the consolidated financial statements over the requisite service period. Compensation expense based upon the fair value of awards is recognized on a straight-line basis over the requisite service period for awards that actually vest. Stock-based compensation expense is recorded in selling, general and administrative expenses in the consolidated statements of income. We have two equity compensation plans (the “Equity Plans”) under which we grant equity awards: the GRD Holding I Corporation Stock Option Plan, as may be amended from time to time (the “2012 Option Plan”), and the At Home Group Inc. Equity Incentive Plan, which was subsequently amended and restated and approved by the Board in July 2016 (the “2016 Equity Plan”). Pursuant to the 2012 Option Plan, we have 5,648,525 shares of common stock reserved for the issuance of options to purchase shares. Any shares issued under the 2012 Option Plan that expire, are cancelled, or otherwise terminate without issuance of the shares shall again be available for issuance. At January 26, 2019, there were no shares available for future grant under the 2012 Option Plan. In September 2015, we adopted the 2016 Equity Plan, which was subsequently amended and restated and approved by the Board in July 2016. Under the 2016 Equity Plan, equity awards may be made for up to 6,196,755 shares of our common stock. Subject to any adjustment as provided in the 2016 Plan, (i) up to 2,478,702 shares (the “IPO Bonus Pool”) were issuable pursuant to awards granted under the 2016 Equity Plan to senior executives of the Company in connection with the consummation of our initial public offering and (ii) up to 3,718,053 shares may be issued pursuant to awards granted under the 2016 Equity Plan (other than the IPO Bonus Pool) (the “Post-IPO Share Pool”). In June 2018, the 2016 Equity Plan was amended to increase the number of shares authorized to be granted within the Post-IPO Share Pool by 3,500,000 shares. At January 26, 2019, there were 3,923,952 shares available for future grant under the 2016 Plan. On June 12, 2018, we made a grant of 1,988,255 options to Chairman and Chief Executive Officer, Lewis L. Bird III. The options vested immediately upon the June 12, 2018 grant date. However, the shares resulting from the exercise of the options are generally subject to transfer restrictions that lapse on the fourth anniversary of the date of grant or earlier change in control (as defined in the 2016 Equity Plan), subject to certain service conditions that could affect the transferability. As a result of the immediate vesting of these awards, non-cash stock-based compensation expense in the amount of approximately $41.5 million was fully recognized in the second fiscal quarter 2019. On August 3, 2016, we made a special one-time initial public offering transaction bonus grant of 2,478,702 options to certain members of our senior management team under the 2016 Equity Plan (the “IPO Grant”). On August 3, 2016 we also granted to one employee an option to purchase 28,326 shares of common stock under the 2012 Option Plan at the initial public offering price. Option awards are granted with an exercise price equal to the fair market value of our common stock at the date of grant. Option awards under the 2012 Option Plans generally vest based on four years of continuous service and have 10-year contractual terms. The IPO Grant is subject to market conditions in which vesting occurs if the closing price of the Company’s common stock achieves the pre-established targets at any time during the specified performance period of seven years from the date of the grant and exceeds the targets for twenty consecutive trading days, disregarding the six-month period immediately following August 3, 2016. Certain option and share awards provide for accelerated vesting if there is a change in control (as defined in the Equity Plans). We determined the fair value of the IPO Grant subject to market conditions using a Monte Carlo simulation method. The IPO Grant had a grant date fair value of approximately $20.0 million, which was incremental to our ongoing stock-based compensation expense. The stock-based compensation expense for the IPO Grant was expensed over the derived service period, which began in the third fiscal quarter 2017 and continued through the following eight quarters. We estimate the fair value of each service condition stock option grant under the Equity Plans on the date of grant based upon the Black-Scholes option-pricing model which includes the following variables: 1) exercise price of the instrument, 2) fair market value of the underlying stock on date of grant, 3) expected term, 4) expected volatility and 5) the risk-free interest rate. We utilized the following assumptions in estimating the fair value of the option grants: January 26, January 27, January 28, 2019 2018 2017 Weighted-average expected volatility 58.6 % 57.7 % 57.7 % Expected dividend yield — % — % — % Weighted-average expected term (in years) 5.0 4.0 4.0 Weighted-average risk-free interest rate 2.8 % 2.0 % 2.3 % A summary of option activity under the Equity Plans as of January 26, 2019, and changes during the fiscal year then ended, is presented below: Weighted- Weighted- Average Average Remaining Exercise Contractual Options Price Term Outstanding, beginning of year 7,040,894 $ 11.92 Granted 3,032,708 36.39 Exercised (2,120,672) 10.33 Forfeited or expired (194,098) 31.56 Outstanding, end of year 7,758,832 $ 21.43 4.96 Exercisable, end of year 6,811,511 $ 20.06 4.75 RSUs are issued at a value not less than the fair market value of the common stock on the date of the grant. RSUs granted to date vest ratably over one to four years. Awards are subject to employment for vesting and are not transferable other than upon death. A summary of the Company’s RSU activity and related information as of January 26, 2019, and changes during the fiscal year then ended, is presented below: Weighted- Average Number of Grant Date Shares Fair Value Nonvested, beginning of year 200,660 $ 21.37 Granted 220,451 32.88 Vested (72,019) 19.13 Forfeited (35,065) 26.54 Nonvested, end of year 314,027 $ 29.39 We recognized stock-based compensation expense related to stock options and RSUs of approximately $49.5 million, $13.8 million and $9.4 million during the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, respectively. As of January 26, 2019, there was approximately $15.7 million of total unrecognized compensation expense related to nonvested share-based compensation arrangements granted under the Plans that is expected to be recognized over a weighted-average period of 3.0 years and 2.9 years for option awards and RSUs, respectively. |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Jan. 26, 2019 | |
Quarterly Results of Operations (Unaudited) | |
Quarterly Results of Operations (Unaudited) | 16. Quarterly Results of Operations (Unaudited) Unaudited quarterly results of operations for the fiscal years ended January 26, 2019 and January 27, 2018 were as follows (in thousands, except per share data): Fiscal Year 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 256,161 $ 288,493 $ 267,180 $ 354,065 Gross profit (1) 85,244 97,378 85,991 117,239 Operating income (loss) (1)(2) 24,200 (11,828) 19,096 44,568 Net income (loss) 18,361 (10,068) 11,090 29,613 Basic net income (loss) per common share (1) 0.30 (0.16) 0.17 0.47 Diluted net income (loss) per common share $ 0.28 $ (0.16) $ 0.17 $ 0.45 Fiscal Year 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 211,841 $ 232,065 $ 212,954 $ 293,668 Gross profit (1) 71,878 73,033 62,662 99,386 Operating income 21,319 20,256 9,316 36,470 Net income 10,049 9,533 2,375 9,855 Basic net income per common share 0.17 0.16 0.04 0.16 Diluted net income per common share $ 0.16 $ 0.15 $ 0.04 $ 0.15 (1) The sum of the quarters does not equal the total fiscal year due to rounding. (2) Includes $41.5 million of stock-based compensation expense associated with a grant of stock options to our Chairman and Chief Executive Officer that vested and was fully recognized in the second fiscal quarter 2019. |
Schedule I _ Condensed Financia
Schedule I – Condensed Financial Information of Registrant | 12 Months Ended |
Jan. 26, 2019 | |
Condensed Financial Information of Registrant | |
Condensed Financial Information of Registrant | Schedule I – Condensed Financial Information of Registrant AT HOME GROUP INC. (parent company only) Condensed Balance Sheets (in thousands, except share and per share data) January 26, 2019 January 27, 2018 Assets Current assets: Receivable from subsidiaries $ — $ — Other current assets 3,529 7,486 Total current assets 3,529 7,486 Investment in subsidiaries 711,086 590,879 Total assets $ 714,615 $ 598,365 Liabilities and Shareholders' Equity Current liabilities: Income taxes payable $ — $ — Payable to subsidiaries 3,529 7,486 Total current liabilities 3,529 7,486 Noncurrent liabilities — — Total liabilities 3,529 7,486 Shareholders' Equity Common stock; $0.01 par value; 500,000,000 shares authorized; 63,609,684 and 61,423,398 shares issued and outstanding, respectively 636 614 Additional paid-in capital 643,677 572,488 Retained earnings 66,773 17,777 Total shareholders' equity 711,086 590,879 Total liabilities and shareholders' equity $ 714,615 $ 598,365 See Notes to Condensed Financial Statements. Schedule I – Condensed Financial Information of Registrant AT HOME GROUP INC. (parent company only) Condensed Statements of Income (in thousands) Fiscal Year Ended January 26, 2019 January 27, 2018 January 28, 2017 Net sales $ — $ — $ — Cost of sales — — — Gross profit — — — Operating expenses Selling, general and administrative expenses — — — Depreciation and amortization — — — Total operating expenses — — — Operating income — — — Interest expense, net — — — Income before income taxes — — — Income tax provision — — — Income before equity in net income of subsidiaries — — — Net income from subsidiaries 48,996 31,812 27,066 Net income $ 48,996 $ 31,812 $ 27,066 See Notes to Condensed Financial Statements. 1. Basis of Presentation In the parent-company-only financial statements, At Home Group Inc.'s (“Parent”) 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 At Home Group Inc.'s net operating activities have no cash impact and there were no investing or financing cash flow activities during the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017. 2. Guarantees and Restrictions At Home Holding III Inc. (“At Home III”), a subsidiary of the Parent, and its indirect wholly-owned subsidiary, At Home Stores LLC, are co-borrowers (in such capacities, the “ABL Borrowers”) under the ABL Facility. As of January 26, 2019, we had $11.0 million of cash and cash equivalents and $120.5 million in borrowing availability under our ABL Facility, which provides commitments of up to $350.0 million for revolving loans and letters of credit, as of January 26, 2019. At Home Holding II Inc. (“Holdings”), the direct parent of At Home III, and its direct and indirect domestic subsidiaries (other than the ABL Borrowers and certain immaterial subsidiaries)(the “ABL Subsidiary Guarantors” and, together with Holdings, the “ABL Guarantors”) have guaranteed all obligations of the ABL Borrowers under the ABL Facility. In the event of a default under the ABL Facility, the ABL Borrowers and the Guarantors will be directly liable to the lenders under the ABL Facility. The ABL Facility, which matures on the earlier of July 27, 2022 and the date that is 91 days prior to the maturity date (as such date may be extended) of the term loan entered into on June 5, 2015 under a first lien credit agreement, includes restrictions on the ability of ABL Borrowers and ABL Subsidiary Guarantors to incur additional liens and indebtedness, make investments and dispositions, pay dividends to Holdings or enter into other transactions, among other restrictions, in each case subject to certain exceptions. Under the ABL Facility, the ABL Borrowers and the ABL Subsidiary Guarantors are permitted to pay dividends to Holdings, (a) so long as after giving effect to such payment, (i) availability is equal to or greater than 15% of the loan cap (i.e., the lesser of (x) the aggregate lender commitments under the ABL Facility and (y) the borrowing base) and (ii) if availability is less than 20% of the loan cap, the consolidated fixed charge coverage ratio is equal to or greater than 1.0 to 1.0, and (b) pursuant to certain other limited exceptions. As of January 26, 2019 and January 27, 2018, we were in compliance with all covenants under the ABL Facility. On June 5, 2015, our indirect wholly owned subsidiary, At Home Holding III Inc. (the “Borrower”), entered into a first lien credit agreement (the “First Lien Agreement”), by and among the Borrower, At Home Holding II Inc. (“At Home II”), a direct wholly owned subsidiary of ours, as guarantor, certain indirect subsidiaries of At Home II, various lenders and Bank of America, N.A., as administrative agent and collateral agent. We have subsequently amended our First Lien Agreement from time to time. After giving effect to such amendments, the First Lien Agreement provides for a term loan in an aggregate principal amount of $350.0 million (the “Term Loan”). The Term Loan will mature on June 3, 2022 and is repayable in equal quarterly installments of approximately $0.9 million for an annual aggregate amount equal to 1% of the original principal amount. The Borrower has the option of paying interest on a 1-month, 2-month or quarterly basis on the Term Loan at an annual rate of LIBOR (subject to a 1% floor) plus 4.00%, subject to a 0.50% reduction if the Borrower achieves a specified secured net leverage ratio level, which was met during the fiscal year ended January 28, 2017 and for which the Borrower has continued to qualify during the fiscal year ended January 26, 2019. The Term Loan is prepayable at our option, in whole or in part, subject to a prepayment premium equal to 1% of the aggregate principal amount of the Term Loan then outstanding until May 27, 2019 (inclusive). After May 27, 2019, the Term Loan may be prepaid without premium. The Term Loan includes restrictions on the ability of the Borrower and its restricted subsidiaries to incur additional liens and indebtedness, make investments and dispositions, pay dividends to Holdings or enter into other transactions, among other restrictions, in each case subject to certain exceptions. Under the First Lien Agreement, the Borrower is permitted to pay dividends to Holdings (a) up to an amount equal to, so long as immediately after giving effect thereto, no default or event of default has occurred and is continuing, (i) $10 million, plus (ii) a basket that builds based on $30 million, plus 50% of the Borrower's and its restricted subsidiaries' Consolidated Net Income (as defined in the First Lien Agreement) and certain other amounts, subject to various conditions including compliance with a minimum cash interest coverage ratio of 2.0 to 1.0, plus (iii) an unlimited amount, subject to pro forma compliance with a 3.0 to 1.0 total leverage ratio and (b) in certain additional limited amounts, subject to certain limited exceptions. As of January 26, 2019 and January 27, 2018, we were in compliance with all covenants prescribed under the Term Loan. On June 5, 2015, the Borrower entered into a second lien credit agreement (the “Second Lien Agreement”), by and among the Borrower, At Home II and Dynasty Financial II, LLC, as administrative agent, collateral agent and lender. The Second Lien Agreement provided for the Second Lien Term Loan (together with the Term Loan, the “Term Loan Facilities”), which amount was borrowed on June 5, 2015. The Second Lien Term Loan had a maturity date of June 5, 2023 and did not require periodic principal payments, with the total amount outstanding, plus accrued interest, due at maturity. The Borrower had the option of paying interest on a 1-month, 2-month or quarterly basis on the Second Lien Term Loan at an annual rate of LIBOR (subject to a 1% floor) plus 8.00%. We refer to the Term Loan and, until the repayment of the Second Lien Term Loan as described below, the Second Lien Term Loan, collectively as the “Term Loan Facilities”. On August 3, 2016, our Registration Statement on Form S-1 relating to our initial public offering was declared effective by the SEC pursuant to which we registered an aggregate of 9,967,050 shares of our common stock (including 1,300,050 shares subject to the underwriters' over-allotment option). We issued and sold 8,667,000 of the shares registered at a price of $15.00 per share on August 9, 2016, resulting in net proceeds of $120.9 million after deducting underwriters' discounts and commissions of $9.1 million. We also incurred offering expenses of $6.0 million in connection with the initial public offering, which were included in additional paid-in capital. On September 8, 2016, we issued and sold a further 863,041 shares of our common stock pursuant to the underwriters’ partial exercise of the over-allotment option. This exercise of the over-allotment option resulted in net proceeds to us of $12.0 million after deducting underwriters’ discounts and commissions of $0.9 million. During the fiscal year ended January 28, 2017, we used the net proceeds from our initial public offering and the exercise of the over-allotment option, after deducting underwriters’ discounts and commissions, to repay in full the $130.0 million of principal amount of indebtedness outstanding under the Second Lien Term Loan. The repayment resulted in a loss on extinguishment of debt in the amount of $2.7 million, which was recognized during the fiscal year ended January 28, 2017. On October 31, 2017, our Registration Statement on Form S-3, pursuant to which we registered 50,582,545 shares of our common stock owned by our Sponsors, was declared effective by the SEC. On December 11, 2017, we completed a secondary offering in which our Sponsors sold an aggregate of 5,750,000 shares of our common stock (which included 750,000 shares subject to the underwriters’ over-allotment option). On April 2, 2018, we completed a secondary offering in which our Sponsors sold an aggregate of 6,900,000 shares of our common stock (which included 900,000 shares subject to the underwriters’ over-allotment option). On June 14, 2018, we completed a secondary offering in which our Sponsors sold an aggregate of 8,450,000 shares of our common stock (which included 450,000 shares subject to the underwriters’ over-allotment option). On September 11, 2018, we completed a secondary offering in which our Sponsors sold an aggregate of 10,000,000 shares of our common stock. We did not sell any shares of our common stock in, or receive any proceeds from, these secondary offerings. After giving effect to these secondary offerings, the Sponsors held approximately 26.5% of our outstanding common stock. On November 27, 2018, At Home II and the Borrower entered into the Second Amendment (the “Term Loan Amendment”) with the lenders party thereto and Bank of America, N.A., as administrative agent and as collateral agent, which amended the First Lien Agreement, as amended by the First Amendment dated July 27, 2017. Pursuant to the Term Loan Amendment, among other things, the Borrower borrowed an additional $50.0 million in incremental term loans, increasing the principal amount outstanding under the First Lien Agreement on such date to $339.5 million. |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 26, 2019 | |
Nature of Operations and Summary of Significant Accounting Policies | |
Description of Business | Description of Business At Home is a home décor superstore focused exclusively on providing a broad assortment of products for any room, in any style, for any budget. As of January 26, 2019, we operated 180 home décor superstores in 37 states, primarily in the South Central, Southeastern, Mid-Atlantic and Midwestern regions of the United States. At Home is owned and operated by At Home Group Inc. and its wholly-owned subsidiaries. All references to “we”, “us”, “our” and the “Company” and similar expressions are references to At Home Group Inc. and our consolidated, wholly-owned subsidiaries, unless otherwise expressly stated or the context otherwise requires. |
Stock Split | Stock Split On July 22, 2016, the Company’s board of directors approved a 128.157393-for-one stock split of its existing Class A common stock, Class B common stock and Class C common stock and the conversion of such Class A common stock, Class B common stock and Class C common stock into a single class of common stock. All historical share and per share information has been retroactively adjusted to reflect the stock split and conversion. As of January 26, 2019, the Company's total authorized share capital is comprised of 500,000,000 shares of common stock and 50,000,000 shares of preferred stock. |
Initial and Secondary Public Offerings | Initial and Secondary Public Offerings On August 3, 2016, our Registration Statement on Form S-1 relating to our initial public offering was declared effective by the SEC pursuant to which we registered an aggregate of 9,967,050 shares of our common stock (including 1,300,050 shares subject to the underwriters' over-allotment option). Our common stock began trading on the New York Stock Exchange (the “NYSE”) on August 4, 2016 under the ticker symbol “HOME”. On October 31, 2017, our Registration Statement on Form S-3, pursuant to which we registered 50,582,545 shares of our common stock owned by AEA Investors LP (collectively, “AEA”) and Starr Investment Holdings, LLC (“Starr Investments” and, together with AEA, the “Sponsors”), was declared effective by the SEC. On December 11, 2017, we completed a secondary offering in which our Sponsors sold an aggregate of 5,750,000 shares of our common stock (which included 750,000 shares subject to the underwriters’ over-allotment option). On April 2, 2018, we completed a secondary offering in which our Sponsors sold an aggregate of 6,900,000 shares of our common stock (which included 900,000 shares subject to the underwriters’ over-allotment option). On June 14, 2018, we completed a secondary offering in which our Sponsors sold an aggregate of 8,450,000 shares of our common stock (which included 450,000 shares subject to the underwriters’ over-allotment option). On September 11, 2018, we completed a secondary offering in which our Sponsors sold an aggregate of 10,000,000 shares of our common stock. We did not sell any shares of our common stock in, or receive any proceeds from, these secondary offerings. After giving effect to these secondary offerings, the Sponsors held approximately 26.5% of our outstanding common stock. |
Fiscal Year | Fiscal Year We report on the basis of a 52- or 53-week fiscal year, which ends on the last Saturday in January. References to a fiscal year mean the year in which that fiscal year ends. References herein to “fiscal year 2019” relate to the 52 weeks ended January 26, 2019, references herein to “fiscal year 2018” relate to the 52 weeks ended January 27, 2018 and references herein to “fiscal year 2017” relate to the 52 weeks ended January 28, 2017. |
Consolidation | Consolidation The accompanying consolidated financial statements include the accounts of At Home Group Inc. (“At Home Group”) and its consolidated wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company does not have any components of other comprehensive income recorded within its consolidated financial statements, and, therefore, does not separately present a statement of comprehensive income in its consolidated financial statements. |
Use of Estimates | Use of Estimates Preparing financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Because of the use of estimates inherent in the financial reporting process, actual results may differ from these estimates. |
Reclassification | Reclassification Certain prior period amounts have been reclassified to conform with the current period presentation within the consolidated financial statements and the accompanying notes. These reclassifications had no effect on previously reported results of operations or retained earnings. |
Segment Information | Segment Information Management has determined that we have one operating segment, and therefore, one reportable segment. Our chief operating decision maker (“CODM”) is our Chief Executive Officer; our CODM reviews financial performance and allocates resources at a consolidated level on a recurring basis. All of our assets are located in the United States. All of our revenue is derived in the United States. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less as well as credit card receivables. At January 26, 2019 and January 27, 2018, our cash and cash equivalents were comprised primarily of credit card receivables. |
Restricted Cash | Restricted Cash Restricted cash consists of cash and cash equivalents reserved for a specific purpose that is not readily available for immediate or general business use. Our restricted cash balance as of January 26, 2019 consists primarily of cash equivalents held for use in the purchase of property and equipment. On January 28, 2018, we adopted ASU No. 2016-18, “ Restricted Cash ” (“ASU 2016-18”) using the required retrospective transition method. This ASU requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statements of cash flows. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands): January 26, 2019 January 27, 2018 January 28, 2017 January 30, 2016 Cash and cash equivalents $ 10,951 $ 8,525 $ 7,092 $ 5,428 Restricted cash 2,515 — 482 26 Cash, cash equivalents and restricted cash $ 13,466 $ 8,525 $ 7,574 $ 5,454 |
Inventories | Inventories Inventories are comprised of finished merchandise and are stated at the lower of cost or net realizable value with cost determined using the weighted-average method. The cost of inventories include the actual landed cost of an item at the time it is received in our distribution center, or at the point of shipment for certain international shipments, as well as transportation costs to our distribution center and to our retail stores, if applicable. Net inventory cost is recognized through cost of sales when the inventory is sold. Physical inventory counts are performed for all of our stores at least once per year by a third-party inventory counting service for stores that have been in operation for at least one year. Inventory records are adjusted to reflect actual inventory counts and any resulting shortage (“shrinkage”) is recognized. Reserves for shrinkage are estimated and recorded throughout the fiscal year as a percentage of sales based on the most recent physical inventory, in combination with historical experience. We also evaluate our merchandise to ensure that the expected net realizable value of the merchandise held at the end of a fiscal year exceeds cost. In the event that the expected net realizable value is less than cost, we reduce the value of that inventory accordingly |
Consideration Received from Vendors | Consideration Received from Vendors We receive vendor support in the form of cash payments or allowances for a variety of vendor-sponsored programs, such as volume rebates, markdown allowances and advertising. We also receive consideration for certain compliance programs. We have agreements in place with each vendor setting forth the specific conditions for each allowance. Vendor support reduces our inventory costs based on the underlying provisions of the agreement. Vendor compliance charges are recorded as a reduction of the cost of merchandise inventories and a subsequent reduction in cost of sales when the inventory is sold. |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost less accumulated depreciation and amortization. Depreciation of property and equipment other than leasehold improvements is recorded on a straight-line basis over the estimated useful lives of the assets ranging from 3 to 40 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the remaining lease term, including renewals determined to be reasonably assured, or the estimated useful life of the related improvement. Amortization of property under capital leases is on a straight-line basis over the lease term and is included in depreciation expense. We expense all internal-use software costs incurred in the preliminary project stage. Certain direct costs incurred at later stages and associated with the development and purchase of internal-use software, including external costs for services and internal payroll costs related to the software project, are capitalized within property and equipment in the accompanying consolidated balance sheets. Capitalized costs are amortized on a straight-line basis over the estimated useful lives of the software, generally between three and five years. For the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, we capitalized software costs of $3.1 million, $4.3 million and $7.7 million, respectively. Amortization expense related to capitalized software costs totaled $4.9 million, $4.4 million and $2.7 million during the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, respectively. We capitalize major replacements and improvements and expense routine maintenance and repairs as incurred. We remove the cost of assets sold or retired and the related accumulated depreciation or amortization from the consolidated balance sheets and include any resulting gain or loss in the accompanying consolidated statements of income. |
Capitalized Interest | Capitalized Interest We capitalize interest on borrowings during the active construction period of major capital projects. Capitalized interest is added to the cost of the underlying assets and is amortized over the useful lives of the assets. Our capitalized interest cost was approximately $3.1 million, $1.3 million and $0.4 million for the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, respectively. |
Fair Value Measurements | Fair Value Measurements We follow the provisions of Accounting Standards Codification (“ASC”) 820 (Topic 820, “ Fair Value Measurements and Disclosures ”). ASC 820 establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. · Level 1 - Unadjusted quoted market prices for identical assets or liabilities in active markets that we have the ability to access. · Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable ( e.g. , interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data. · Level 3 - Valuations based on models where significant inputs are not observable. The unobservable inputs reflect our own assumptions about the assumptions that market participants would use. ASC 820 requires us to maximize the use of observable inputs and minimize the use of unobservable inputs. If a financial instrument uses inputs that fall in different levels of the hierarchy, the instrument is categorized based upon the lowest level of input that is significant to the fair value calculation. The fair value of all current financial instruments approximates carrying value because of the short-term nature of these instruments. We have variable and fixed rates on our long-term debt. The fair value of long-term debt with variable rates approximates carrying value as the interest rates of these amounts approximate market rates. We determine fair value on our fixed rate debt by using quoted market prices and current interest rates. At January 26, 2019, the fair value of our fixed rate mortgage due August 22, 2022 was $6.1 million, which was approximately $0.1 million above the carrying value of $6.0 million. Fair value for the fixed rate mortgage was determined using Level 2 inputs. |
Goodwill | Goodwill Goodwill is tested for impairment at least annually at the operating segment level; we have only one operating segment and we do not have a reporting unit that exists below our operating segment. If the implied fair value of goodwill is lower than its carrying amount, goodwill impairment is indicated and goodwill is written down to its implied fair value. We assess the business enterprise value using a combination of the income approach and market approach to determine the fair value of the Company to be compared against the carrying value of net assets. The income approach, using the discounted cash flow method, includes key factors used in the valuation of the Company (a Level 3 valuation) which include, but are not limited to, management's plans for future operations, recent operating results, income tax rates, and discounted projected future cash flows. We have the option to perform a qualitative assessment of goodwill rather than completing the two-step process to determine whether it is more likely than not that the fair value of an operating segment is less than its carrying amount, including goodwill and other intangible assets. If we conclude that this is the case, we must perform the two-step process. Otherwise, we may forego the two-step process and do not need to perform any further testing. We performed a qualitative assessment of goodwill for the fiscal year ended January 26, 2019. Based on that qualitative assessment, we concluded it was more likely than not that the fair value of our operating segment substantially exceeded its carrying value and, therefore, further quantitative analysis was not required. No impairment of goodwill was recognized during the fiscal years ended January 26, 2019, January 27, 2018 or January 28, 2017. However, the use of different assumptions, estimates or judgments with respect to the estimation of the projected future cash flows and the determination of the discount rate and sales growth rate used to calculate the net present value of projected future cash flows could materially increase or decrease our estimates of fair value. Additionally, future impairment charges could be required if we do not achieve our current net sales and profitability projections, which would occur if we are not able to meet our new store growth targets, or the weighted average cost of capital increases. |
Impairment of Long-Lived and Indefinite-Lived Assets | Impairment of Long-Lived and Indefinite-Lived Assets We evaluate the recoverability of the carrying value of long-lived assets whenever events or changes in circumstances indicate their carrying amount may not be recoverable. Our evaluation compares the carrying value of the assets with their estimated future undiscounted cash flows expected to result from the use and eventual disposition of the assets. We evaluate long-lived intangible assets at an individual store level, which is the lowest level of identifiable cash flows. We evaluate corporate assets or other long-lived assets that are not store-specific at the consolidated level. To estimate store-specific future cash flows, we make assumptions about key store variables, including sales, growth rate, gross margin, payroll and other controllable expenses. Stores that are owned by us and do not meet the initial criteria are further evaluated taking into consideration the fair market value of the property compared to the carrying value of the assets. Furthermore, management considers other factors when evaluating stores for impairment, including the individual store's execution of its operating plan and other local market conditions. 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. An impairment is recognized once all the factors noted above are taken into consideration and it is determined that the carrying amount of the store's assets are not recoverable. The impairment loss would be recognized in the amount by which the carrying amount of a long-lived asset exceeds its fair value, excluding assets that can be redeployed. Based upon the review of our store-level assets, we identified impairment in connection with certain property and equipment following the resolution of a legal matter and recognized a charge of $2.4 million for the fiscal year ended January 27, 2018. No impairment of long-term assets was recognized during the fiscal years ended January 26, 2019 and January 28, 2017. We test indefinite-lived trade name intangible assets annually for impairment or more frequently if impairment indicators arise. If the fair value of the indefinite-lived intangible asset is lower than its carrying amount, the asset is written down to its fair value. The fair value of our trade name (a Level 3 valuation) was calculated using a relief-from-royalty approach, which assumes the value of the trade name is the discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the trade name and instead licensed the trade name from another company. The carrying value of the At Home trade name as of January 26, 2019 is approximately $1.5 million. No impairment of our indefinite-lived trade name intangible asset was recognized during the fiscal years ended January 26, 2019, January 27, 2018 or January 28, 2017. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs are costs incurred in connection with obtaining or modifying financing arrangements. These costs are capitalized as a direct deduction from the carrying value of the debt, other than costs incurred in conjunction with our line of credit, which are capitalized as an asset, and amortized over the term of the respective debt agreements. Total amortization expense related to debt issuance costs was approximately $1.8 million, $1.9 million and $1.8 million for the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, respectively. |
Deferred Rent | Deferred Rent We record rent expense on a straight-line basis over the term of the lease beginning with the date we take possession of or control the physical access to the premises. We record tenant improvement allowances as a liability and adjust the liability on a straight-line basis as a reduction to rent expense over the lease term beginning with the date we take possession of or control the physical access to the premises. We recognize free rent periods, tenant improvement allowances and standard rent increases contained in our leases on a straight-line basis over the expected lease term, beginning when we first take possession of the property and including renewal option periods in those instances where exercising such options is reasonably assured. For leases where we are considered to be the owner of the construction project and receive tenant improvement allowances, we record the amounts received as a component of the financing obligation liability. See Note 7—Financing Obligations. |
Insurance Liabilities | Insurance Liabilities For the period from December 1, 2013 through January 26, 2019, we were fully insured for workers' compensation and commercial general liability claims. Prior to that period, we used a combination of commercial insurance and self-insurance for workers' compensation and commercial general liability claims and purchased insurance coverage that limited our aggregate exposure for individual claims to $250,000 per workers' compensation and commercial general liability claim. We utilize a combination of commercial insurance and self-insurance for employee-related health care plans. The cost of our health care plan is borne in part by our employees. We purchase insurance coverage that limits our aggregate exposure for individual claims to $175,000 per employee-related health care claim. Health care reserves are based on actual claims experience and an estimate of claims incurred but not reported. Reserves for commercial general liability and workers' compensation are determined through the use of actuarial studies. Due to the judgments and estimates utilized in determining these reserves, they are subject to a high degree of variability. In the event our insurance carriers are unable to pay claims submitted to them, we would record a liability for such estimated payments we expect to incur. |
Revenue Recognition | Revenue Recognition Revenue from sales of our merchandise is recognized when the customer takes possession of the merchandise. Revenue is presented net of sales taxes collected. We allow for merchandise to be returned within 60 days from the purchase date and provide a reserve for estimated returns. See Note 2—Revenue Recognition. |
Cost of Sales | Cost of Sales Cost of sales are included in merchandise inventories and expensed as the merchandise is sold. We include the following expenses in cost of sales: · cost of merchandise, net of inventory shrinkage, damages and vendor allowances; · inbound freight and internal transportation costs such as distribution center-to-store freight costs; · costs of operating our distribution center, including labor, occupancy costs, supplies and depreciation; and · store occupancy costs including rent, insurance, taxes, common area maintenance, utilities, repairs, maintenance and depreciation. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expenses include payroll, benefits and other personnel expenses for corporate and store employees, including stock-based compensation expense, consulting, legal and other professional services expenses, advertising expenses, occupancy costs for our corporate headquarters and various other expenses. |
Store Pre-Opening Costs | Store Pre-Opening Costs We expense pre-opening costs for new stores as they are incurred. During the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, store pre-opening costs were approximately $21.7 million, $17.9 million and $13.9 million, respectively. Store pre-opening costs, such as occupancy expenses, advertising and labor are primarily included in selling, general and administrative expenses. |
Marketing and Advertising | Marketing and Advertising Marketing and advertising costs, exclusive of store pre-opening marketing and advertising expenses discussed above, include billboard, newspaper, radio, digital and other advertising mediums. Marketing and advertising costs are expensed as incurred and included in selling, general and administrative expenses. Total marketing and advertising expenses were approximately $34.9 million, $24.3 million and $17.4 million for the fiscal years ended January 26, 2019, January 27, 2018 and January 28, 2017, respectively. |
Stock-Based Compensation | Stock-Based Compensation We account for stock-based compensation in accordance with ASC 718 (Topic 718, “ Compensation—Stock Compensation ”), which requires all stock-based payments to employees, including grants of employee stock options and restricted stock units, to be recognized in the consolidated financial statements over the requisite service period. Compensation expense based upon the fair value of awards is recognized on a straight-line basis over the requisite service period for awards that actually vest. Stock-based compensation expense is recorded in selling, general and administrative expenses in the consolidated statements of income. We estimate fair value of each stock option grant on the date of grant based upon the Black-Scholes option pricing model, with the exception of a special one-time initial public offering transaction bonus grant which was valued on the date of grant using the Monte Carlo simulation method. For restricted stock unit awards, grant date fair value is determined based upon the closing trading value of our common stock on the NYSE on the date of grant and our forfeiture assumptions are estimated based on historical experience. The Black-Scholes option pricing model requires various significant judgmental assumptions in order to derive a final fair value determination for each type of award including the following: · 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. · Expected volatility —The expected volatility is calculated based on the historical volatility of the common stock of comparable companies. · Expected dividend yield —The expected dividend yield is based on our expectation of not paying dividends on its common stock for the foreseeable future. · Risk-free interest rate —The risk-free interest rate is the average of the 3-year and 5-year U.S. Treasury rate in effect at the time of grant and with a maturity that approximates the expected term. We used a Monte Carlo simulation model to determine the fair value of the special one-time initial public offering transaction bonus grant subject to market-based conditions. The stock option grants subject to market-based conditions have cliff vesting that began in the third quarter of fiscal year 2017 and continued into the third quarter of fiscal year 2019 subject to the achievement of market conditions. We valued the stock option grants as a single award with the related compensation cost recognized using a straight-line method over the derived service period. The expected volatility is based on a combination of historical and implied volatilities of the common stock for comparable companies. All grants of our stock options have an exercise price equal to or greater than the fair market value of our common stock on the date of grant, based on the foregoing estimates and assumptions. Because we were a privately held company prior to August 4, 2016 and there was no public market for our common stock, the fair value of our equity was approved by our Board at the time option grants were awarded. In estimating the fair value of our common stock, we considered factors we believed to be material to the valuation process including, but not limited to, our actual and projected financial results, risks and prospects and economic and market conditions. Our valuations utilized projections of our future performance, estimates of our weighted average cost of capital and metrics based on the performance of a peer group of similar companies, including valuation multiples and stock price volatility. We believe the combination of these methods provided an appropriate estimate of our expected fair value prior to our IPO. We considered the valuation analyses to determine the best estimate of the fair value of our common stock at each stock option grant date. Following our IPO, these estimates are no longer needed to determine fair value for new awards due to a publicly-available trading price for our common stock. |
Income Taxes | Income Taxes The provision for income taxes is accounted for under the asset and liability method prescribed by ASC 740 (Topic 740, “ Income Taxes ”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the tax rate changes are enacted. When necessary, a valuation allowance may be recorded against deferred tax assets in order to properly reflect the amount that is more likely than not to be realized. We recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. On December 22, 2017, federal tax reform legislation was adopted into law by the U.S. government (the “Tax Act”). The Tax Act makes broad and complex changes to the Internal Revenue Code of 1986, including, but not limited to, (i) reducing the U.S. federal corporate tax rate from 35% to 21%; (ii) eliminating the corporate alternative minimum tax (“AMT”) and changing how existing AMT credits are realized; (iii) creating a new limitation on deductible interest expense; and (iv) changing rules related to the use and limitation of net operating loss carryforwards created in tax years beginning after December 31, 2017. As a result of the adoption of the Tax Act, for our fiscal year ended January 27, 2018, the statutory federal corporate tax rate was prorated to 34.0%, with the statutory rate for the fiscal year ended January 26, 2019 and beyond at 21.0%. In December of 2017, the Securities and Exchange Commission staff issued State Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which allowed us to record provisional amounts during a measurement period not to extend beyond one year from the enactment date. We recorded provisional amounts for the impact of the Tax Act during the fourth fiscal quarter 2018. During fiscal year 2019, we completed our accounting for the income tax effects of the Tax Act, and no material adjustments were required to the provisional amounts recorded in fiscal year 2018. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 “ Leases ”, which supersedes ASC 840 “ Leases ” and creates a new topic, ASC 842 “ Leases ” (“ASU 2016-02”). Under ASU 2016-02, an entity will be required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early adoption permitted. At adoption, this update will be applied using a modified retrospective approach. The standard provides a number of optional practical expedients in transition. We will elect the package of three practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carryforward the historical lease classification. We will not elect the hindsight practical expedient. We will not separate non-lease components from lease components by class of underlying assets and we will not apply the recognition requirements of the standard to short-term leases, as allowed by the standard. While we are in the process of finalizing our initial impact assessment on the adoption of ASU 2016-02, we estimate the following material impacts to our financial statements: (i) the recognition of right-of use liabilities of approximately $1.0 billion and the recognition of corresponding right-of-use assets; (ii) the derecognition of deferred gains on sale-leasebacks as a cumulative-effect adjustment to opening retained earnings for the fiscal year ended January 25, 2020 (“fiscal year 2020”), which had previously resulted in amortization that reduced occupancy costs by $8.8 million for fiscal year 2019; (iii) the recognition of immediate gains and losses on sale-leasebacks within operating income beginning in fiscal year 2020; (iv) the reclassification of our financing obligations in the amount of $35.2 million to operating leases and corresponding right-of-use assets and liabilities as noted above with the difference recorded as a cumulative-effect adjustment to opening retained earnings, the nonrecurrence of financing obligation interest expense of $2.4 million in fiscal year 2020 and a related increase in occupancy costs for fiscal year 2020; and (v) the recognition of additional expense of certain initial direct costs incurred prior to the existence of a lease beginning in fiscal year 2020. In January 2017, the FASB issued ASU No. 2017-04, “ Simplifying the Test for Goodwill Impairment ” (“ASU 2017-04”). ASU 2017-04 simplifies the measurement of goodwill impairment by removing the second step of the goodwill impairment test, which requires the determination of the fair value of individual assets and liabilities of a reporting unit. Under ASU 2017-04, goodwill impairment is to be measured as the amount by which a reporting unit’s carrying value exceeds its fair value with the loss recognized not to exceed the total amount of goodwill allocated to the reporting unit. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed after January 1, 2017. The standard is to be applied on a prospective basis. We are currently evaluating the impact of ASU 2017-04 and do not anticipate a material impact to the consolidated financial statements once implemented. In August 2018, the FASB issued ASU No. 2018-15, “Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract” (“ASU 2018-15”). ASU 2018-15 was issued to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The amendments in ASU 2018-15 are effective for annual periods beginning after December 15, 2019, including interim periods within that reporting period, with early adoption permitted. We expect to adopt this new guidance using the prospective method in the first quarter of fiscal year 2020 and are currently evaluating the impact it will have on our consolidated financial statements once implemented. |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 26, 2019 | |
Nature of Operations and Summary of Significant Accounting Policies | |
Schedule of cash, cash equivalents and restricted cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands): January 26, 2019 January 27, 2018 January 28, 2017 January 30, 2016 Cash and cash equivalents $ 10,951 $ 8,525 $ 7,092 $ 5,428 Restricted cash 2,515 — 482 26 Cash, cash equivalents and restricted cash $ 13,466 $ 8,525 $ 7,574 $ 5,454 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Jan. 26, 2019 | |
Revenue Recognition | |
Schedule of impact on financial statements on adoption of ASU 2014-09 | The adoption of ASU 2014-09 had the following impact on our consolidated balance sheets as of January 27, 2018 (in thousands): Consolidated Balance Sheet as of January 27, 2018 New Revenue As Reported Standard As Recast Other current assets $ 13,701 $ 952 $ 14,653 Total current assets 299,981 952 300,933 Total assets 1,373,289 952 1,374,241 Accrued and other current liabilities 88,547 952 89,499 Total current liabilities 342,721 952 343,673 Total liabilities 782,410 952 783,362 Total liabilities and shareholders' equity 1,373,289 952 1,374,241 The adoption of ASU 2014-09 had the following impact on our consolidated statement of cash flows for the fiscal years ended January 27, 2018 and January 28, 2017 (in thousands): Consolidated Statement of Cash Flows Fiscal Year Ended January 27, 2018 New Revenue As Reported (a) Standard As Recast Prepaid expenses and other current assets $ (13,621) $ 126 $ (13,495) Accrued liabilities 14,411 (126) 14,285 Net cash provided by operating activities 106,018 — 106,018 Consolidated Statement of Cash Flows Fiscal Year Ended January 28, 2017 New Revenue As Reported (a) Standard As Recast Prepaid expenses and other current assets $ 1,600 $ (248) $ 1,352 Accrued liabilities 16,069 248 16,317 Net cash provided by operating activities 43,498 — 43,498 (a) Accrued liabilities have been reclassified in the prior period to conform with the current period presentation as discussed in Note 1 – Nature of Operations and Summary of Significant Accounting Policies. |
Schedule of disaggregation of revenue | In accordance with ASC 606, we disaggregate net sales into the following product categories: Fiscal Year Ended January 26, 2019 January 27, 2018 January 28, 2017 Home furnishings 45 % 46 % 48 % Accent décor 51 50 49 Other 4 4 3 Total 100 % 100 % 100 % |
Schedule of components of the sale returns | The components of the sales returns reserve reflected in the consolidated balance sheets consist of the following (in thousands): January 26, January 27, 2019 2018 Accrued and other current liabilities $ 2,448 $ 2,023 Other current assets 1,129 952 Sales returns reserve, net $ 1,319 $ 1,071 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jan. 26, 2019 | |
Property and Equipment | |
Schedule of property and equipment | Property and equipment consists of the following (in thousands): January 26, January 27, 2019 2018 Land $ 53,025 $ 42,378 Buildings 132,881 117,429 Computer hardware and software 50,016 40,096 Equipment, furniture and fixtures 148,562 115,539 Leasehold improvements 365,099 253,570 Construction in progress 125,051 40,739 874,634 609,751 Less: accumulated depreciation and amortization (191,971) (143,488) Property and equipment, net $ 682,663 $ 466,263 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Jan. 26, 2019 | |
Accrued Liabilities | |
Schedule of accrued liabilities | Accrued liabilities consist of the following (in thousands): January 26, January 27, 2019 2018 Inventory in-transit $ 20,591 $ 14,618 Accrued payroll and other employee-related liabilities 18,306 16,917 Accrued taxes, other than income 14,194 11,680 Accrued interest 5,756 4,173 Insurance liabilities 539 3,391 Gift card liability 7,784 5,787 Construction costs 14,548 9,661 Accrued inbound freight 15,236 10,796 Other 20,554 12,476 Total accrued liabilities $ 117,508 $ 89,499 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Jan. 26, 2019 | |
Long-Term Debt | |
Schedule of long-term debt | Long-term debt consists of the following (in thousands): January 26, January 27, 2019 2018 Term Loan $ 339,500 $ 292,500 Note payable, bank (a) 5,969 6,108 Obligations under capital leases 733 911 Total debt 346,202 299,519 Less: current maturities 3,846 3,316 Less: unamortized deferred debt issuance costs 5,921 6,301 Long-term debt $ 336,435 $ 289,902 (a) Matures August 22, 2022; $34,483 payable monthly, including interest at 4.50% with the remaining balance due at maturity; secured by the location’s land and building. |
Schedule of aggregate annual maturities of long-term debt, excluding capital lease obligations | Aggregate annual maturities of long-term debt, excluding capital lease obligations, are as follows (in thousands): January 26, 2019 2020 $ 3,663 2021 4,548 2022 2,797 2023 334,461 2024 — Thereafter — $ 345,469 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 26, 2019 | |
Income Taxes | |
Schedule of income tax provision | Our income tax provision is as follows (in thousands): Fiscal Year Ended January 26, January 27, January 28, 2019 2018 2017 Current income tax expense Federal $ 16,620 $ 23,786 $ 36,956 State 2,607 2,885 4,756 Deferred income tax (benefit) expense Federal (16,343) 9,208 (22,261) State (2,901) (2,034) (3,729) Income tax (benefit) provision $ (17) $ 33,845 $ 15,722 |
Schedule of tax effects of temporary differences give rise to significant components of deferred tax assets and liabilities | Tax effects of temporary differences that give rise to significant components of the deferred tax assets and liabilities are as follows (in thousands): January 26, January 27, 2019 2018 Deferred tax assets Inventory $ 9,283 $ 5,385 Accruals 3,835 2,291 Deferred rent 11,311 7,830 Net operating losses 290 333 Deferred gains 33,181 26,288 Deferred compensation 16,400 7,325 Financing obligations 5,636 1,845 Deferred revenue 1,200 44 Prepaid rent 1,514 1,710 Other, net 1,663 1,296 Total deferred tax assets 84,313 54,347 Deferred tax liabilities Property and equipment (31,420) (19,980) Debt cancellation income — (742) Trade name (88) (64) Total deferred tax liabilities (31,508) (20,786) Net deferred tax asset $ 52,805 $ 33,561 |
Schedule of reconciliation between the actual income tax provision and the income tax provision calculated at the federal statutory tax rate | The reconciliation between the actual income tax provision and the income tax provision calculated at the federal statutory tax rate is as follows (dollars in thousands): Fiscal Year Ended January 26, January 27, January 28, 2019 2018 2017 Income tax provision at the federal statutory rate $ 10,286 $ 22,297 $ 14,976 Permanent differences 340 325 625 State income taxes, net of federal income tax effect (307) 482 924 Change in unrecognized tax benefits (300) (16) (378) Change in valuation allowance — (314) (257) Effect of the Tax Act (524) 16,694 — Net federal excess tax benefit related to options exercised (9,293) (5,826) — Tax credits (278) (208) (141) Deferred adjustment 59 411 (23) Other — — (4) Income tax (benefit) provision $ (17) $ 33,845 $ 15,722 Effective tax rate (0.0) % 51.5 % 36.7 % |
Schedule of reconciliation of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): January 26, January 27, 2019 2018 Balance, beginning of period $ 1,688 $ 2,553 Additions based on tax positions related to the current year — — Subtractions based on tax positions related to the prior year (443) (604) Settlements (5) (108) Expiration of statute of limitations (524) (153) Balance, end of period $ 716 $ 1,688 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jan. 26, 2019 | |
Contractual Obligation, Fiscal Year Maturity Schedule [Abstract] | |
Schedule of future minimum annual rental commitments for all leases | Future minimum annual rental commitments for all leases are as follows (in thousands): Capital Operating Financing Leases Leases Obligations Total 2020 $ 203 $ 115,210 $ 2,932 $ 118,345 2021 203 120,876 3,037 124,116 2022 203 119,202 3,069 122,474 2023 168 116,985 2,635 119,788 2024 — 116,782 2,639 119,421 Thereafter — 980,221 20,796 1,001,017 Total minimum lease payments $ 777 $ 1,569,276 $ 35,108 $ 1,605,161 Less: amount representing interest (44) Present value of minimum lease payments $ 733 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Jan. 26, 2019 | |
Earnings Per Share | |
Schedule of calculation of basic and diluted earnings per share | The following table sets forth the calculation of basic and diluted earnings per share as follows (dollars in thousands, except share and per share data): Fiscal Year Ended January 26, 2019 January 27, 2018 January 28, 2017 Numerator: Net income $ 48,996 $ 31,812 $ 27,066 Denominator: Weighted average common shares outstanding-basic 62,936,959 60,503,860 55,414,037 Effect of dilutive securities: Stock options and restricted stock units 3,362,687 3,208,143 1,478,146 Weighted average common shares outstanding-diluted 66,299,646 63,712,003 56,892,183 Per common share: Basic net income per common share $ 0.78 $ 0.53 $ 0.49 Diluted net income per common share $ 0.74 $ 0.50 $ 0.48 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jan. 26, 2019 | |
Stock-Based Compensation | |
Schedule of assumptions in estimating the fair value of option grants | We utilized the following assumptions in estimating the fair value of the option grants: January 26, January 27, January 28, 2019 2018 2017 Weighted-average expected volatility 58.6 % 57.7 % 57.7 % Expected dividend yield — % — % — % Weighted-average expected term (in years) 5.0 4.0 4.0 Weighted-average risk-free interest rate 2.8 % 2.0 % 2.3 % |
Schedule of option activity under Equity Plans | A summary of option activity under the Equity Plans as of January 26, 2019, and changes during the fiscal year then ended, is presented below: Weighted- Weighted- Average Average Remaining Exercise Contractual Options Price Term Outstanding, beginning of year 7,040,894 $ 11.92 Granted 3,032,708 36.39 Exercised (2,120,672) 10.33 Forfeited or expired (194,098) 31.56 Outstanding, end of year 7,758,832 $ 21.43 4.96 Exercisable, end of year 6,811,511 $ 20.06 4.75 |
Schedule of RSU activity and related information | A summary of the Company’s RSU activity and related information as of January 26, 2019, and changes during the fiscal year then ended, is presented below: Weighted- Average Number of Grant Date Shares Fair Value Nonvested, beginning of year 200,660 $ 21.37 Granted 220,451 32.88 Vested (72,019) 19.13 Forfeited (35,065) 26.54 Nonvested, end of year 314,027 $ 29.39 |
Quarterly Results of Operatio_2
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Jan. 26, 2019 | |
Quarterly Results of Operations (Unaudited) | |
Schedule of quarterly financial information | 16. Quarterly Results of Operations (Unaudited) Unaudited quarterly results of operations for the fiscal years ended January 26, 2019 and January 27, 2018 were as follows (in thousands, except per share data): Fiscal Year 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 256,161 $ 288,493 $ 267,180 $ 354,065 Gross profit (1) 85,244 97,378 85,991 117,239 Operating income (loss) (1)(2) 24,200 (11,828) 19,096 44,568 Net income (loss) 18,361 (10,068) 11,090 29,613 Basic net income (loss) per common share (1) 0.30 (0.16) 0.17 0.47 Diluted net income (loss) per common share $ 0.28 $ (0.16) $ 0.17 $ 0.45 Fiscal Year 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 211,841 $ 232,065 $ 212,954 $ 293,668 Gross profit (1) 71,878 73,033 62,662 99,386 Operating income 21,319 20,256 9,316 36,470 Net income 10,049 9,533 2,375 9,855 Basic net income per common share 0.17 0.16 0.04 0.16 Diluted net income per common share $ 0.16 $ 0.15 $ 0.04 $ 0.15 (1) The sum of the quarters does not equal the total fiscal year due to rounding. (2) Includes $41.5 million of stock-based compensation expense associated with a grant of stock options to our Chairman and Chief Executive Officer that vested and was fully recognized in the second fiscal quarter 2019. |
Nature of Operations and Summ_4
Nature of Operations and Summary of Significant Accounting Policies (Details) | Sep. 11, 2018shares | Jun. 14, 2018shares | Apr. 02, 2018shares | Dec. 11, 2017shares | Sep. 08, 2016shares | Aug. 03, 2016shares | Jul. 22, 2016shares | Jan. 25, 2020USD ($) | Jan. 26, 2019USD ($)storestatesegmentshares | Jan. 27, 2018USD ($)shares | Jan. 28, 2017USD ($)shares | Oct. 31, 2017shares |
Number of home decor superstores | store | 180 | |||||||||||
Number of states operated | state | 37 | |||||||||||
Authorized share capital, Common stock | shares | 500,000,000 | 500,000,000 | ||||||||||
Authorized share capital, Preferred stock | shares | 50,000,000 | |||||||||||
Repayments of debt | $ 130,000,000 | |||||||||||
Number of operating segment | segment | 1 | |||||||||||
Number of reportable segment | segment | 1 | |||||||||||
Capitalized interest cost | $ 3,100,000 | $ 1,300,000 | 400,000 | |||||||||
Carrying value of fixed rate mortgage | 345,469,000 | |||||||||||
Goodwill impairment | 0 | 0 | 0 | |||||||||
Impairment charges | 2,400,000 | |||||||||||
Impairment of long lived asset | 0 | 2,422,000 | 0 | |||||||||
Carrying value of trade name | 1,500,000 | |||||||||||
Impairment of indefinite-lived asset, trade name | 0 | 0 | 0 | |||||||||
Amortization of debt issuance cost | 1,800,000 | 1,900,000 | 1,800,000 | |||||||||
Aggregate exposure for individual claims per workers' compensation and commercial general liability claim | 250,000 | |||||||||||
Aggregate exposure for individual claims per employee-related health care claim | 175,000 | |||||||||||
Store pre-operating cost | 21,700,000 | 17,900,000 | 13,900,000 | |||||||||
Advertising expense | $ 34,900,000 | $ 24,300,000 | 17,400,000 | |||||||||
U.S. federal corporate tax rate | 21.00% | 34.00% | ||||||||||
Financing obligations | $ 35,038,000 | $ 19,690,000 | ||||||||||
ASU 2016-02 | Adjustment | ||||||||||||
Right of use assets | $ 1,000,000,000 | |||||||||||
Right of use liabilities | 1,000,000,000 | |||||||||||
Decrease in occupancy costs due to derecognition of deferred gain on sale-leasebacks and amortization | $ (8,800,000) | |||||||||||
Financing obligations | 35,200,000 | |||||||||||
Reduction in financing obligation interest expense | $ (2,400,000) | |||||||||||
Minimum | ||||||||||||
Estimated useful life | 3 years | |||||||||||
Maximum | ||||||||||||
Estimated useful life | 40 years | |||||||||||
Fixed rate mortgage | Level 2 | ||||||||||||
Fair value of fixed rate mortgage | $ 6,100,000 | |||||||||||
Difference of carrying value and fair value | 100,000 | |||||||||||
Carrying value of fixed rate mortgage | 6,000,000 | |||||||||||
Internal use software | ||||||||||||
Capitalized computer software, additions | 3,100,000 | 4,300,000 | 7,700,000 | |||||||||
Amortization expense related to capitalized software costs | $ 4,900,000 | $ 4,400,000 | $ 2,700,000 | |||||||||
Internal use software | Minimum | ||||||||||||
Capitalized cost amortization period of software | 3 years | |||||||||||
Internal use software | Maximum | ||||||||||||
Capitalized cost amortization period of software | 5 years | |||||||||||
IPO | ||||||||||||
Shares registered | shares | 9,967,050 | |||||||||||
Issuance of stock (in shares) | shares | 8,667,000 | |||||||||||
Over-allotment | ||||||||||||
Shares registered | shares | 1,300,050 | |||||||||||
Issuance of stock (in shares) | shares | 450,000 | 900,000 | 750,000 | 863,041 | ||||||||
Secondary offering | ||||||||||||
Issuance of stock (in shares) | shares | 10,000,000 | 8,450,000 | 6,900,000 | 5,750,000 | ||||||||
Number of shares registered for offering | shares | 50,582,545 | |||||||||||
Percentage of outstanding common stock held by sponsors | 26.50% | |||||||||||
Common Stock | ||||||||||||
Stock split ratio | 128.157393 | |||||||||||
Authorized share capital, Common stock | shares | 500,000,000 | 500,000,000 | ||||||||||
Issuance of stock (in shares) | shares | 9,530,041 | |||||||||||
Preferred stock | ||||||||||||
Authorized share capital, Preferred stock | shares | 50,000,000 | 50,000,000 | ||||||||||
Term Loan | Second Lien Agreement | ||||||||||||
Repayments of debt | $ 130,000,000 |
Nature of Operations and Summ_5
Nature of Operations and Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | Jan. 30, 2016 |
Nature of Operations and Summary of Significant Accounting Policies | ||||
Cash and cash equivalents | $ 10,951 | $ 8,525 | $ 7,092 | $ 5,428 |
Restricted cash | 2,515 | 482 | 26 | |
Cash, cash equivalents and restricted cash | $ 13,466 | $ 8,525 | $ 7,574 | $ 5,454 |
Revenue Recognition - Impact on
Revenue Recognition - Impact on Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Jan. 26, 2019 | Jan. 27, 2018 |
Revenue Recognition | ||
Other current assets | $ 13,626 | $ 14,653 |
Total current assets | 414,549 | 300,933 |
Total assets | 1,726,206 | 1,374,241 |
Accrued and other current liabilities | 117,508 | 89,499 |
Total current liabilities | 469,752 | 343,673 |
Total liabilities | 1,015,120 | 783,362 |
Total liabilities and shareholders' equity | $ 1,726,206 | 1,374,241 |
As Reported | ASU 2014-09 | ||
Revenue Recognition | ||
Other current assets | 13,701 | |
Total current assets | 299,981 | |
Total assets | 1,373,289 | |
Accrued and other current liabilities | 88,547 | |
Total current liabilities | 342,721 | |
Total liabilities | 782,410 | |
Total liabilities and shareholders' equity | 1,373,289 | |
New Revenue Standard | ASU 2014-09 | ||
Revenue Recognition | ||
Other current assets | 952 | |
Total current assets | 952 | |
Total assets | 952 | |
Accrued and other current liabilities | 952 | |
Total current liabilities | 952 | |
Total liabilities | 952 | |
Total liabilities and shareholders' equity | $ 952 |
Revenue Recognition - Impact _2
Revenue Recognition - Impact on Condensed Consolidated Statement of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | |
Revenue Recognition | |||
Prepaid expenses and other current assets | $ 989 | $ (13,495) | $ 1,352 |
Accrued liabilities | 19,156 | 14,285 | 16,317 |
Net cash provided by operating activities | $ 86,334 | 106,018 | 43,498 |
ASU 2014-09 | As Reported | |||
Revenue Recognition | |||
Prepaid expenses and other current assets | (13,621) | 1,600 | |
Accrued liabilities | 14,411 | 16,069 | |
Net cash provided by operating activities | 106,018 | 43,498 | |
ASU 2014-09 | New Revenue Standard | |||
Revenue Recognition | |||
Prepaid expenses and other current assets | 126 | (248) | |
Accrued liabilities | $ (126) | $ 248 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of revenue (Details) | 12 Months Ended | ||
Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | |
Revenue Recognition | |||
Number of reportable segments | 1 | ||
Revenue percentage | 100.00% | 100.00% | 100.00% |
Home furnishings | |||
Revenue Recognition | |||
Revenue percentage | 45.00% | 46.00% | 48.00% |
Accent decor | |||
Revenue Recognition | |||
Revenue percentage | 51.00% | 50.00% | 49.00% |
Other | |||
Revenue Recognition | |||
Revenue percentage | 4.00% | 4.00% | 3.00% |
Revenue Recognition - Narrative
Revenue Recognition - Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 26, 2019 | Oct. 27, 2018 | Jul. 28, 2018 | Apr. 28, 2018 | Jan. 27, 2018 | Oct. 28, 2017 | Jul. 29, 2017 | Apr. 29, 2017 | Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | |
Revenue Recognition | |||||||||||
Revenue | $ 354,065 | $ 267,180 | $ 288,493 | $ 256,161 | $ 293,668 | $ 212,954 | $ 232,065 | $ 211,841 | $ 1,165,899 | $ 950,528 | $ 765,635 |
Revenue recognized | 3,000 | 2,200 | 1,600 | ||||||||
Gift card liability | $ 7,784 | $ 5,787 | $ 7,784 | 5,787 | |||||||
Amortization period of capitalized contract costs | 7 years | 7 years | |||||||||
Gift Card Redemption | |||||||||||
Revenue Recognition | |||||||||||
Revenue | $ 16,300 | 12,900 | $ 9,800 | ||||||||
Credit Card Program | |||||||||||
Revenue Recognition | |||||||||||
Revenue | $ 3,200 | $ 1,200 |
Revenue Recognition - Component
Revenue Recognition - Components of Sales Returns Reserve (Details) - USD ($) $ in Thousands | Jan. 26, 2019 | Jan. 27, 2018 |
Contract with Customer, Right of Return | ||
Accrued and other current liabilities | $ 2,448 | $ 2,023 |
Other current assets | 1,129 | 952 |
Sales returns reserve, net | $ 1,319 | $ 1,071 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 874,634 | $ 609,751 | |
Less: accumulated depreciation and amortization | (191,971) | (143,488) | |
Property and equipment, net | 682,663 | 466,263 | |
Depreciation and amortization expense | 56,529 | 48,777 | $ 36,925 |
Impairment charges | 0 | 2,422 | 0 |
Cost of Sales | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | 50,200 | 42,700 | $ 32,700 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 53,025 | 42,378 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 132,881 | 117,429 | |
Computer hardware and software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 50,016 | 40,096 | |
Equipment, furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 148,562 | 115,539 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 365,099 | 253,570 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 125,051 | $ 40,739 |
Sale -Lease Back Transactions (
Sale -Lease Back Transactions (Details) $ in Millions | 1 Months Ended | |||||
Oct. 31, 2018USD ($)property | Jul. 31, 2018USD ($)property | Feb. 28, 2018USD ($)property | Aug. 31, 2017USD ($)property | Sep. 30, 2016USD ($)property | Aug. 31, 2016USD ($)property | |
Sale Leaseback Transaction [Line Items] | ||||||
Number of properties sold | property | 4 | 3 | 4 | 6 | 3 | 4 |
Proceeds from sale of properties | $ 56.5 | $ 43.6 | $ 50.3 | $ 62.6 | $ 30.6 | $ 32.6 |
Net gain | 3.1 | 10.7 | 22.6 | 15.4 | 16.9 | 14.2 |
Cumulative initial annual rent | $ 3.8 | $ 3 | $ 3.4 | $ 4.2 | $ 2.1 | 2.2 |
Note payable | Corpus Christi | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Payments of note payable | $ 3.7 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Jan. 26, 2019 | Jan. 27, 2018 |
Accrued Liabilities | ||
Inventory in-transit | $ 20,591 | $ 14,618 |
Accrued payroll and other employee-related liabilities | 18,306 | 16,917 |
Accrued taxes, other than income | 14,194 | 11,680 |
Accrued interest | 5,756 | 4,173 |
Insurance liabilities | 539 | 3,391 |
Gift card liability | 7,784 | 5,787 |
Construction costs | 14,548 | 9,661 |
Accrued inbound freight | 15,236 | 10,796 |
Other | 20,554 | 12,476 |
Total accrued liabilities | $ 117,508 | $ 89,499 |
Revolving Line of Credit (Detai
Revolving Line of Credit (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | Oct. 31, 2011 | |
Revolving Line of Credit | ||||
Outstanding under the ABL credit agreement | $ 221,010 | $ 162,000 | ||
Minimum | ||||
Revolving Line of Credit | ||||
Loan cap rate | 15.00% | |||
Fixed charge coverage ratio | 1 | |||
Maximum | ||||
Revolving Line of Credit | ||||
Loan cap rate | 20.00% | |||
ABL Credit Facility | ||||
Revolving Line of Credit | ||||
Maximum borrowing capacity | $ 350,000 | $ 80,000 | ||
Effective interest rate (as a percent) | 3.80% | 2.90% | 2.00% | |
Outstanding under the ABL credit agreement | $ 221,000 | |||
Available borrowing capacity | $ 120,500 | |||
ABL Credit Facility | Federal Funds Rate | ||||
Revolving Line of Credit | ||||
Basis spread on variable rate | 0.50% | |||
ABL Credit Facility | Federal Funds Rate | Minimum | ||||
Revolving Line of Credit | ||||
Applicable margin | 0.25% | |||
ABL Credit Facility | Federal Funds Rate | Maximum | ||||
Revolving Line of Credit | ||||
Applicable margin | 0.75% | |||
ABL Credit Facility | LIBOR | ||||
Revolving Line of Credit | ||||
Basis spread on variable rate | 1.00% | |||
ABL Credit Facility | LIBOR | Minimum | ||||
Revolving Line of Credit | ||||
Applicable margin | 0.25% | |||
Applicable margin on bank's LIBOR | 1.25% | |||
ABL Credit Facility | LIBOR | Maximum | ||||
Revolving Line of Credit | ||||
Applicable margin | 0.75% | |||
Applicable margin on bank's LIBOR | 1.75% | |||
ABL Credit Facility | Bank's Prime rate | Minimum | ||||
Revolving Line of Credit | ||||
Applicable margin | 0.25% | |||
ABL Credit Facility | Bank's Prime rate | Maximum | ||||
Revolving Line of Credit | ||||
Applicable margin | 0.75% | |||
Letters of Credit | ||||
Revolving Line of Credit | ||||
Maximum borrowing capacity | $ 50,000 | |||
Outstanding under the ABL credit agreement | 500 | |||
Swingline loan | ||||
Revolving Line of Credit | ||||
Maximum borrowing capacity | $ 20,000 |
Long-Term Debt - Summary (Detai
Long-Term Debt - Summary (Details) - USD ($) | 12 Months Ended | |
Jan. 26, 2019 | Jan. 27, 2018 | |
Long-Term Debt | ||
Total debt | $ 346,202,000 | $ 299,519,000 |
Less: current maturities | 3,846,000 | 3,316,000 |
Less: unamortized deferred debt issuance costs | 5,921,000 | 6,301,000 |
Long-term debt | 336,435,000 | 289,902,000 |
Term Loan | ||
Long-Term Debt | ||
Total debt | 339,500,000 | 292,500,000 |
Note payable, bank | ||
Long-Term Debt | ||
Total debt | 5,969,000 | 6,108,000 |
Installment payable | $ 34,483 | |
Interest rate, stated percentage | 4.50% | |
Obligations under capital leases | ||
Long-Term Debt | ||
Total debt | $ 733,000 | $ 911,000 |
Long-Term Debt - Maturities (De
Long-Term Debt - Maturities (Details) $ in Thousands | Jan. 26, 2019USD ($) |
Aggregate annual maturities of long-term debt | |
2020 | $ 3,663 |
2021 | 4,548 |
2022 | 2,797 |
2023 | 334,461 |
Total | $ 345,469 |
Long-Term Debt - First Lien and
Long-Term Debt - First Lien and Second Lien Agreement (Details) - USD ($) $ in Thousands | Jun. 05, 2015 | May 27, 2019 | Jan. 28, 2017 |
Long-Term Debt | |||
Payment of Second Lien Term Loan | $ 130,000 | ||
Loss on extinguishment of debt | (2,715) | ||
First Lien Agreement | Term Loan | |||
Long-Term Debt | |||
Prepayment premium | 1.00% | ||
Second Lien Agreement | Term Loan | |||
Long-Term Debt | |||
Payment of Second Lien Term Loan | 130,000 | ||
Loss on extinguishment of debt | $ (2,700) | ||
Term Loan | First Lien Agreement | |||
Long-Term Debt | |||
Debt instrument, face value | $ 350,000 | ||
Installment payable | $ 900 | ||
Percentage of annual aggregate amount of principal amount | 1.00% | ||
Interest rate reduction, related to net leverage ratio | 0.50% | ||
Term Loan | First Lien Agreement | LIBOR | |||
Long-Term Debt | |||
Floor rate | 1.00% | ||
Basis spread (as a percent) | 4.00% | ||
Term Loan | Second Lien Agreement | LIBOR | |||
Long-Term Debt | |||
Floor rate | 1.00% | ||
Basis spread (as a percent) | 8.00% |
Long-Term Debt - Senior Notes (
Long-Term Debt - Senior Notes (Details) - USD ($) $ in Thousands | Nov. 27, 2018 | Jan. 28, 2017 | Jan. 26, 2019 | Jan. 27, 2018 | Jun. 05, 2015 |
Long-term Debt, by Current and Noncurrent [Abstract] | |||||
Loss on extinguishment of debt | $ 2,715 | ||||
Outstanding principal amount | $ 346,202 | $ 299,519 | |||
Restricted net assets | 711,100 | ||||
First Lien Agreement | |||||
Long-term Debt, by Current and Noncurrent [Abstract] | |||||
Outstanding principal amount | $ 339,500 | ||||
Term Loan | |||||
Long-term Debt, by Current and Noncurrent [Abstract] | |||||
Additional borrowings | 50,000 | ||||
Outstanding principal amount | $ 339,500 | $ 292,500 | |||
Repayment of borrowings | $ 49,600 | ||||
Term Loan | First Lien Agreement | |||||
Long-term Debt, by Current and Noncurrent [Abstract] | |||||
Debt instrument, face value | $ 350,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | |
MMI | |||
Related Party Transactions | |||
Payments to related party | $ 0.6 | $ 0.6 | $ 0.2 |
Income Taxes - Provision (Detai
Income Taxes - Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | |
Current income tax expense | |||
Federal | $ 16,620 | $ 23,786 | $ 36,956 |
State | 2,607 | 2,885 | 4,756 |
Deferred income tax (benefit) expense | |||
Federal | (16,343) | 9,208 | (22,261) |
State | (2,901) | (2,034) | (3,729) |
Income tax (benefit) provision | $ (17) | $ 33,845 | $ 15,722 |
Income Taxes - Tax Cuts and Job
Income Taxes - Tax Cuts and Jobs Act (Benefit) (Details) | 12 Months Ended | |
Jan. 26, 2019 | Jan. 27, 2018 | |
Income Taxes | ||
U.S. federal corporate tax rate | 21.00% | 34.00% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets And Liabilities (Details) - USD ($) $ in Thousands | Jan. 26, 2019 | Jan. 27, 2018 |
Deferred tax assets | ||
Inventory | $ 9,283 | $ 5,385 |
Accruals | 3,835 | 2,291 |
Deferred rent | 11,311 | 7,830 |
Net operating losses | 290 | 333 |
Deferred gains | 33,181 | 26,288 |
Deferred compensation | 16,400 | 7,325 |
Financing obligations | 5,636 | 1,845 |
Deferred revenue | 1,200 | 44 |
Prepaid rent | 1,514 | 1,710 |
Other, net | 1,663 | 1,296 |
Total deferred tax assets | 84,313 | 54,347 |
Deferred tax liabilities | ||
Property and equipment | (31,420) | (19,980) |
Debt cancellation income | (742) | |
Trade name | (88) | (64) |
Total deferred tax liabilities | (31,508) | (20,786) |
Net deferred tax asset | $ 52,805 | $ 33,561 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 |
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance | $ 0 | $ 300,000 | |
State | |||
Operating Loss Carryforwards [Line Items] | |||
Operating Loss Carryforwards | $ 6,400,000 | $ 7,400,000 |
Income Taxes - Federal Statutor
Income Taxes - Federal Statutory Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | |
Reconciliation between the actual income tax provision (benefit) and income tax provision (benefit) calculated at federal statutory tax rate: | |||
Income tax provision at the federal statutory rate | $ 10,286 | $ 22,297 | $ 14,976 |
Permanent differences | 340 | 325 | 625 |
State income taxes, net of federal income tax effect | (307) | 482 | 924 |
Change in unrecognized tax benefits | (300) | (16) | (378) |
Change in valuation allowance | (314) | (257) | |
Effect of the Tax Act | (524) | 16,694 | |
Net federal excess tax benefit related to options exercised | (9,293) | (5,826) | |
Tax credits | (278) | (208) | (141) |
Deferred adjustment | 59 | 411 | (23) |
Other | (4) | ||
Income tax (benefit) provision | $ (17) | $ 33,845 | $ 15,722 |
Effective tax rate (as a percent) | 0.00% | 51.50% | 36.70% |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 26, 2019 | Jan. 27, 2018 | |
Income Taxes | ||
Unrecognized tax benefits, which would favorably impact the effective tax rate | $ 500 | |
Reconciliation unrecognized tax benefits: | ||
Balance, beginning of period | 1,688 | $ 2,553 |
Subtractions based on tax positions related to the prior year | (443) | (604) |
Settlements | (5) | (108) |
Expiration of statue of limitations | (524) | (153) |
Balance, end of period | 716 | 1,688 |
Accrued penalties and interest | ||
Accrued penalties | 100 | 100 |
Accrued interest | 100 | $ 200 |
Interest expense | $ 100 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | Jan. 25, 2020 | |
Leases | ||||
Rent expense | $ 108,000 | $ 83,400 | $ 68,100 | |
Capital Leases | ||||
2020 | 203 | |||
2021 | 203 | |||
2022 | 203 | |||
2023 | 168 | |||
Total minimum lease payments | 777 | |||
Less: amount representing interest | (44) | |||
Present value of minimum lease payments | 733 | |||
Operating Leases | ||||
2020 | 115,210 | |||
2021 | 120,876 | |||
2022 | 119,202 | |||
2023 | 116,985 | |||
2024 | 116,782 | |||
Thereafter | 980,221 | |||
Total minimum lease payments | 1,569,276 | |||
Financing Obligations | ||||
2020 | 2,932 | |||
2021 | 3,037 | |||
2022 | 3,069 | |||
2023 | 2,635 | |||
2024 | 2,639 | |||
Thereafter | 20,796 | |||
Total minimum lease payments | 35,108 | |||
Total | ||||
2020 | 118,345 | |||
2021 | 124,116 | |||
2022 | 122,474 | |||
2023 | 119,788 | |||
2024 | 119,421 | |||
Thereafter | 1,001,017 | |||
Total minimum lease payments | $ 1,605,161 | |||
Forecast | ||||
Leases | ||||
Deferred gain on sale-leaseback for fiscal year 2020 and the four subsequent fiscal years | $ 9,300 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | Oct. 01, 2014 | Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 |
Defined Contribution Plan Disclosure [Line Items] | ||||
Minimum age limit | 18 years | |||
Minimum service period | 6 months | |||
Participants contribution (as a percent) | 100.00% | |||
Matching contribution expense | $ 1.3 | $ 1 | $ 0.8 | |
Matching on up to first 3% of participant's annual compensation | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Employer's matching percentage | 100.00% | |||
Matching on up to first 3% of participant's annual compensation | Maximum | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Percentage of eligible employee compensation matched | 3.00% | |||
Matching between 3% and 5% of participant's annual compensation | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Employer's matching percentage | 50.00% | |||
Matching between 3% and 5% of participant's annual compensation | Minimum | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Percentage of eligible employee compensation matched | 3.00% | |||
Matching between 3% and 5% of participant's annual compensation | Maximum | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Percentage of eligible employee compensation matched | 5.00% |
Capital Stock (Details)
Capital Stock (Details) | Sep. 11, 2018shares | Jun. 14, 2018shares | Apr. 02, 2018shares | Dec. 11, 2017shares | Sep. 08, 2016$ / sharesshares | Aug. 03, 2016$ / sharesshares | Jul. 22, 2016shares | Jan. 28, 2017shares | Jan. 26, 2019$ / sharesshares | Jan. 27, 2018$ / sharesshares |
Capital Stock | ||||||||||
Common stock, authorized | 500,000,000 | 500,000,000 | ||||||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | ||||||||
Common stock, issued | 63,609,684 | 61,423,398 | ||||||||
Common stock, outstanding | 63,609,684 | 61,423,398 | ||||||||
Preferred stock, authorized | 50,000,000 | |||||||||
Preferred stock, par value | $ / shares | $ 0.01 | |||||||||
Preferred stock, issued | 0 | |||||||||
Preferred stock, outstanding | 0 | |||||||||
Common Stock | ||||||||||
Capital Stock | ||||||||||
Issuance of stock (in shares) | 9,530,041 | |||||||||
Stock split | 128.157393 | |||||||||
Common stock, authorized | 500,000,000 | 500,000,000 | ||||||||
Preferred stock | ||||||||||
Capital Stock | ||||||||||
Preferred stock, authorized | 50,000,000 | 50,000,000 | ||||||||
IPO | ||||||||||
Capital Stock | ||||||||||
Issuance of stock (in shares) | 8,667,000 | |||||||||
Share price (in dollars per share) | $ / shares | $ 15 | |||||||||
Over-allotment | ||||||||||
Capital Stock | ||||||||||
Issuance of stock (in shares) | 450,000 | 900,000 | 750,000 | 863,041 | ||||||
Share price (in dollars per share) | $ / shares | $ 15 | |||||||||
Secondary offering | ||||||||||
Capital Stock | ||||||||||
Issuance of stock (in shares) | 10,000,000 | 8,450,000 | 6,900,000 | 5,750,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 26, 2019 | Oct. 27, 2018 | Jul. 28, 2018 | Apr. 28, 2018 | Jan. 27, 2018 | Oct. 28, 2017 | Jul. 29, 2017 | Apr. 29, 2017 | Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | |
Numerator: | |||||||||||
Net income | $ 29,613 | $ 11,090 | $ (10,068) | $ 18,361 | $ 9,855 | $ 2,375 | $ 9,533 | $ 10,049 | $ 48,996 | $ 31,812 | $ 27,066 |
Denominator: | |||||||||||
Weighted average common shares outstanding-basic | 62,936,959 | 60,503,860 | 55,414,037 | ||||||||
Effect of dilutive securities: | |||||||||||
Stock options and restricted stock units | 3,362,687 | 3,208,143 | 1,478,146 | ||||||||
Weighted average common shares outstanding-diluted | 66,299,646 | 63,712,003 | 56,892,183 | ||||||||
Per common share: | |||||||||||
Basic net income (loss) per common share (in dollars per share) | $ 0.47 | $ 0.17 | $ (0.16) | $ 0.30 | $ 0.16 | $ 0.04 | $ 0.16 | $ 0.17 | $ 0.78 | $ 0.53 | $ 0.49 |
Diluted net income (loss) per common share (in dollars per share) | $ 0.45 | $ 0.17 | $ (0.16) | $ 0.28 | $ 0.15 | $ 0.04 | $ 0.15 | $ 0.16 | $ 0.74 | $ 0.50 | $ 0.48 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 12 Months Ended | ||
Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | |
Stock option | |||
Antidilutive securities excluded from computation of earnings per share | |||
Antidilutive shares excluded from calculation of diluted net income per common share | 2,029,602 | 146,457 | 1,514,168 |
RSUs | |||
Antidilutive securities excluded from computation of earnings per share | |||
Antidilutive shares excluded from calculation of diluted net income per common share | 2,029,602 | 146,457 | 1,514,168 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) $ in Millions | Jun. 12, 2018USD ($)shares | Aug. 03, 2016USD ($)employeeshares | Jun. 30, 2018shares | Jul. 28, 2018USD ($) | Jan. 26, 2019USD ($)itemplanshares | Jan. 27, 2018USD ($) | Jan. 28, 2017USD ($) | Jul. 31, 2016shares |
Stock-Based Compensation | ||||||||
Number of equity compensation plans | plan | 2 | |||||||
Stock-based compensation expense | $ | $ 49.5 | $ 13.8 | $ 9.4 | |||||
Chairman and Chief Executive Officer | ||||||||
Stock-Based Compensation | ||||||||
Stock-based compensation expense | $ | $ 41.5 | |||||||
IPO Bonus Pool | ||||||||
Stock-Based Compensation | ||||||||
Number of units granted | 2,478,702 | |||||||
Vesting period (in years) | 7 years | |||||||
Trading days | 20 days | |||||||
Total grant date fair value | $ | $ 20 | |||||||
Expense period | item | 8 | |||||||
2012 stock option plan | ||||||||
Stock-Based Compensation | ||||||||
Common stock reserved for issuance | 5,648,525 | |||||||
Share available for future grant | 0 | |||||||
Vesting period (in years) | 4 years | |||||||
Contractual terms | 10 years | |||||||
2012 stock option plan | IPO | ||||||||
Stock-Based Compensation | ||||||||
Number of units granted | 28,326 | |||||||
Number of employees, Option granted | employee | 1 | |||||||
2016 Equity Plan | ||||||||
Stock-Based Compensation | ||||||||
Common stock reserved for issuance | 6,196,755 | |||||||
Share available for future grant | 3,923,952 | |||||||
Number of units granted | 3,032,708 | |||||||
2016 Equity Plan | IPO Bonus Pool | ||||||||
Stock-Based Compensation | ||||||||
Common stock reserved for issuance | 2,478,702 | |||||||
2016 Equity Plan | Post IPO Share Pool | ||||||||
Stock-Based Compensation | ||||||||
Common stock reserved for issuance | 3,718,053 | |||||||
Additional number of shares authorized to be granted | 3,500,000 | |||||||
Stock option | Chairman and Chief Executive Officer | ||||||||
Stock-Based Compensation | ||||||||
Number of units granted | 1,988,255 | |||||||
Stock-based compensation expense | $ | $ 41.5 | |||||||
RSUs | Minimum | ||||||||
Stock-Based Compensation | ||||||||
Vesting period (in years) | 1 year | |||||||
RSUs | Maximum | ||||||||
Stock-Based Compensation | ||||||||
Vesting period (in years) | 4 years |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details) - 2016 Equity Plan | 12 Months Ended | ||
Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | |
Assumptions: | |||
Weighted-average expected volatility (as a percent) | 58.60% | 57.70% | 57.70% |
Weighted-average expected term (in years) | 5 years | 4 years | 4 years |
Weighted-average risk-free interest rate (as a percent) | 2.80% | 2.00% | 2.30% |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details) | 12 Months Ended |
Jan. 26, 2019$ / sharesshares | |
Weighted Average Remaining Contractual Term | |
Outstanding, end of year (in years) | 4 years 11 months 16 days |
Exercisable, end of year (in years) | 4 years 9 months |
2016 Equity Plan | |
Options | |
Outstanding, beginning of year (in shares) | shares | 7,040,894 |
Granted (in shares) | shares | 3,032,708 |
Exercised (in shares) | shares | (2,120,672) |
Forfeited or expired (in shares) | shares | (194,098) |
Outstanding, end of year (in shares) | shares | 7,758,832 |
Exercisable, end of year (in shares) | shares | 6,811,511 |
Weighted Average Exercise Price | |
Outstanding, beginning of year (in dollars per share) | $ / shares | $ 11.92 |
Granted (in dollars per share) | $ / shares | 36.39 |
Exercised (in dollars per share) | $ / shares | 10.33 |
Forfeited or expired (in dollars per share) | $ / shares | 31.56 |
Outstanding, end of year (in dollars per share) | $ / shares | 21.43 |
Exercisable, end of year (in dollars per share) | $ / shares | $ 20.06 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock (Details) | 12 Months Ended |
Jan. 26, 2019$ / sharesshares | |
Number of Shares | |
Nonvested, beginning of year (in shares) | shares | 200,660 |
Granted (in shares) | shares | 220,451 |
Vested (in shares) | shares | (72,019) |
Forfeited (in shares) | shares | (35,065) |
Nonvested, end of year (in shares) | shares | 314,027 |
Weighted Average Grant Date Fair Value | |
Nonvested, beginning of year (in dollars per share) | $ / shares | $ 21.37 |
Granted (in dollars per share) | $ / shares | 32.88 |
Vested (in dollars per share) | $ / shares | 19.13 |
Forfeited (in dollars per share) | $ / shares | 26.54 |
Nonvested, end of year (in dollars per share) | $ / shares | $ 29.39 |
RSUs | Minimum | |
Vesting period (in years) | 1 year |
RSUs | Maximum | |
Vesting period (in years) | 4 years |
Stock-Based Compensation (Det_4
Stock-Based Compensation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | |
Stock-based compensation expense | $ 49.5 | $ 13.8 | $ 9.4 |
Total unrecognized compensation expense | $ 15.7 | ||
Stock option | |||
Expense period | 3 years | ||
RSUs | |||
Expense period | 2 years 10 months 24 days |
Quarterly Results of Operatio_3
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 26, 2019 | Oct. 27, 2018 | Jul. 28, 2018 | Apr. 28, 2018 | Jan. 27, 2018 | Oct. 28, 2017 | Jul. 29, 2017 | Apr. 29, 2017 | Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | |
Net sales | $ 354,065 | $ 267,180 | $ 288,493 | $ 256,161 | $ 293,668 | $ 212,954 | $ 232,065 | $ 211,841 | $ 1,165,899 | $ 950,528 | $ 765,635 |
Gross profit | 117,239 | 85,991 | 97,378 | 85,244 | 99,386 | 62,662 | 73,033 | 71,878 | 385,851 | 306,958 | 247,480 |
Operating income (loss) | 44,568 | 19,096 | (11,828) | 24,200 | 36,470 | 9,316 | 20,256 | 21,319 | 76,035 | 87,361 | 72,677 |
Net income (loss) | $ 29,613 | $ 11,090 | $ (10,068) | $ 18,361 | $ 9,855 | $ 2,375 | $ 9,533 | $ 10,049 | $ 48,996 | $ 31,812 | $ 27,066 |
Basic net income (loss) per common share (in dollars per share) | $ 0.47 | $ 0.17 | $ (0.16) | $ 0.30 | $ 0.16 | $ 0.04 | $ 0.16 | $ 0.17 | $ 0.78 | $ 0.53 | $ 0.49 |
Diluted net income (loss) per common share (in dollars per share) | $ 0.45 | $ 0.17 | $ (0.16) | $ 0.28 | $ 0.15 | $ 0.04 | $ 0.15 | $ 0.16 | $ 0.74 | $ 0.50 | $ 0.48 |
Stock-based compensation expense | $ 49,500 | $ 13,800 | $ 9,400 | ||||||||
Chairman and Chief Executive Officer | |||||||||||
Stock-based compensation expense | $ 41,500 |
Schedule I _ Condensed Financ_2
Schedule I – Condensed Financial Information of Registrant (Condensed Balance Sheets) (Details) - USD ($) $ in Thousands | Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | Jan. 30, 2016 |
Condensed Balance Sheets | ||||
Other current assets | $ 13,626 | $ 14,653 | ||
Total current assets | 414,549 | 300,933 | ||
Total assets | 1,726,206 | 1,374,241 | ||
Current liabilities: | ||||
Total current liabilities | 469,752 | 343,673 | ||
Total liabilities | 1,015,120 | 783,362 | ||
Shareholders' Equity | ||||
Common stock; $0.01 par value; 500,000,000 shares authorized; 63,609,684 and 61,423,398 shares issued and outstanding, respectively | 636 | 614 | ||
Additional paid-in capital | 643,677 | 572,488 | ||
Retained earnings | 66,773 | 17,777 | ||
Total shareholders' equity | 711,086 | 590,879 | $ 534,870 | $ 369,153 |
Total liabilities and shareholders' equity | 1,726,206 | 1,374,241 | ||
Parent company | ||||
Condensed Balance Sheets | ||||
Other current assets | 3,529 | 7,486 | ||
Total current assets | 3,529 | 7,486 | ||
Investment in subsidiaries | 711,086 | 590,879 | ||
Total assets | 714,615 | 598,365 | ||
Current liabilities: | ||||
Payable to subsidiaries | 3,529 | 7,486 | ||
Total current liabilities | 3,529 | 7,486 | ||
Total liabilities | 3,529 | 7,486 | ||
Shareholders' Equity | ||||
Common stock; $0.01 par value; 500,000,000 shares authorized; 63,609,684 and 61,423,398 shares issued and outstanding, respectively | 636 | 614 | ||
Additional paid-in capital | 643,677 | 572,488 | ||
Retained earnings | 66,773 | 17,777 | ||
Total shareholders' equity | 711,086 | 590,879 | ||
Total liabilities and shareholders' equity | $ 714,615 | $ 598,365 |
Schedule I _ Condensed Financ_3
Schedule I – Condensed Financial Information of Registrant (Parenthetical) (Details) - $ / shares | Jan. 26, 2019 | Jan. 27, 2018 |
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 63,609,684 | 61,423,398 |
Common stock, outstanding shares | 63,609,684 | 61,423,398 |
Parent company | ||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 63,609,684 | 61,423,398 |
Common stock, outstanding shares | 63,609,684 | 61,423,398 |
Schedule I _ Condensed Financ_4
Schedule I – Condensed Financial Information of Registrant (Condensed Statements of Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 26, 2019 | Oct. 27, 2018 | Jul. 28, 2018 | Apr. 28, 2018 | Jan. 27, 2018 | Oct. 28, 2017 | Jul. 29, 2017 | Apr. 29, 2017 | Jan. 26, 2019 | Jan. 27, 2018 | Jan. 28, 2017 | |
Cost of sales | $ 780,048 | $ 643,570 | $ 518,155 | ||||||||
Gross profit | $ 117,239 | $ 85,991 | $ 97,378 | $ 85,244 | $ 99,386 | $ 62,662 | $ 73,033 | $ 71,878 | 385,851 | 306,958 | 247,480 |
Operating expenses | |||||||||||
Selling, general and administrative expenses | 303,453 | 211,057 | 170,556 | ||||||||
Depreciation and amortization | 6,363 | 6,118 | 4,247 | ||||||||
Operating income | 44,568 | 19,096 | (11,828) | 24,200 | 36,470 | 9,316 | 20,256 | 21,319 | 76,035 | 87,361 | 72,677 |
Interest expense, net | 27,056 | 21,704 | 27,174 | ||||||||
Income tax (benefit) provision | (17) | 33,845 | 15,722 | ||||||||
Net income | $ 29,613 | $ 11,090 | $ (10,068) | $ 18,361 | $ 9,855 | $ 2,375 | $ 9,533 | $ 10,049 | 48,996 | 31,812 | 27,066 |
Parent company | |||||||||||
Operating expenses | |||||||||||
Net income from subsidiaries | 48,996 | 31,812 | 27,066 | ||||||||
Net income | $ 48,996 | $ 31,812 | $ 27,066 |
Schedule I _ Condensed Financ_5
Schedule I – Condensed Financial Information of Registrant (Notes to Condensed Financial Statements) (Details) $ / shares in Units, $ in Thousands | Nov. 27, 2018USD ($) | Sep. 11, 2018shares | Jun. 14, 2018shares | Apr. 02, 2018shares | Dec. 11, 2017shares | Sep. 08, 2016USD ($)$ / sharesshares | Aug. 09, 2016USD ($)$ / sharesshares | Aug. 03, 2016$ / sharesshares | Jun. 05, 2015USD ($) | May 27, 2019 | Jan. 26, 2019USD ($) | Jan. 27, 2018USD ($) | Jan. 28, 2017USD ($)shares | Oct. 31, 2017shares | Jan. 30, 2016USD ($) | Oct. 31, 2011USD ($) |
Basis of Presentation | ||||||||||||||||
Net Cash Provided by (Used in) Operating Activities, Continuing Operations | $ 86,334 | $ 106,018 | $ 43,498 | |||||||||||||
Net Cash Provided by (Used in) Investing Activities, Continuing Operations | (209,123) | (170,276) | (62,718) | |||||||||||||
Net Cash Provided by (Used in) Financing Activities, Continuing Operations | 127,730 | 65,209 | 21,340 | |||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Cash and cash equivalents | 10,951 | 8,525 | 7,092 | $ 5,428 | ||||||||||||
Repayments of debt | 130,000 | |||||||||||||||
Loss on extinguishment of debt | $ 2,715 | |||||||||||||||
Outstanding principal amount | $ 346,202 | 299,519 | ||||||||||||||
Common Stock | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Issuance of stock (in shares) | shares | 9,530,041 | |||||||||||||||
Minimum | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Fixed charge coverage ratio | 1 | |||||||||||||||
Loan cap rate | 15.00% | |||||||||||||||
Maximum | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Loan cap rate | 20.00% | |||||||||||||||
IPO | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Shares registered | shares | 9,967,050 | |||||||||||||||
Issuance of stock (in shares) | shares | 8,667,000 | |||||||||||||||
Share price (in dollars per share) | $ / shares | $ 15 | |||||||||||||||
Over-allotment | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Shares registered | shares | 1,300,050 | |||||||||||||||
Issuance of stock (in shares) | shares | 450,000 | 900,000 | 750,000 | 863,041 | ||||||||||||
Share price (in dollars per share) | $ / shares | $ 15 | |||||||||||||||
Secondary offering | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Issuance of stock (in shares) | shares | 10,000,000 | 8,450,000 | 6,900,000 | 5,750,000 | ||||||||||||
Number of shares registered for offering | shares | 50,582,545 | |||||||||||||||
Percentage of outstanding common stock held by sponsors | 26.50% | |||||||||||||||
First Lien Agreement | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Outstanding principal amount | $ 339,500 | |||||||||||||||
Term Loan | First Lien Agreement | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Prepayment premium | 1.00% | |||||||||||||||
Term Loan | Second Lien Agreement | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Repayments of debt | $ 130,000 | |||||||||||||||
Loss on extinguishment of debt | 2,700 | |||||||||||||||
ABL Credit Facility | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Available borrowing capacity | $ 120,500 | |||||||||||||||
Maximum borrowing capacity | $ 350,000 | $ 80,000 | ||||||||||||||
ABL Credit Facility | LIBOR | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Basis spread (as a percent) | 1.00% | |||||||||||||||
Term Loan | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Additional borrowings | $ 50,000 | |||||||||||||||
Outstanding principal amount | $ 339,500 | 292,500 | ||||||||||||||
Term Loan | First Lien Agreement | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Debt instrument, face value | $ 350,000 | |||||||||||||||
Installment payable | $ 900 | |||||||||||||||
Percentage of annual aggregate amount of principal amount | 1.00% | |||||||||||||||
Interest rate reduction, related to net leverage ratio | 0.50% | |||||||||||||||
Term Loan | First Lien Agreement | LIBOR | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Floor rate | 1.00% | |||||||||||||||
Basis spread (as a percent) | 4.00% | |||||||||||||||
Term Loan | Second Lien Agreement | LIBOR | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Floor rate | 1.00% | |||||||||||||||
Basis spread (as a percent) | 8.00% | |||||||||||||||
Parent company | ||||||||||||||||
Basis of Presentation | ||||||||||||||||
Net Cash Provided by (Used in) Operating Activities, Continuing Operations | 0 | 0 | 0 | |||||||||||||
Net Cash Provided by (Used in) Investing Activities, Continuing Operations | 0 | 0 | 0 | |||||||||||||
Net Cash Provided by (Used in) Financing Activities, Continuing Operations | 0 | $ 0 | 0 | |||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Cash and cash equivalents | 11,000 | |||||||||||||||
Parent company | Common Stock | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Number of shares registered for offering | shares | 50,582,545 | |||||||||||||||
Parent company | IPO | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Shares registered | shares | 9,967,050 | |||||||||||||||
Issuance of stock (in shares) | shares | 8,667,000 | |||||||||||||||
Share price (in dollars per share) | $ / shares | $ 15 | |||||||||||||||
Net proceeds | $ 120,900 | |||||||||||||||
Underwriting fees | 9,100 | |||||||||||||||
Offering expenses | $ 6,000 | |||||||||||||||
Parent company | Over-allotment | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Shares registered | shares | 1,300,050 | |||||||||||||||
Issuance of stock (in shares) | shares | 450,000 | 900,000 | 750,000 | 863,041 | ||||||||||||
Net proceeds | $ 12,000 | |||||||||||||||
Underwriting fees | $ 900 | |||||||||||||||
Parent company | Secondary offering | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Issuance of stock (in shares) | shares | 10,000,000 | 8,450,000 | 6,900,000 | 5,750,000 | ||||||||||||
Percentage of outstanding common stock held by sponsors | 26.50% | |||||||||||||||
Parent company | ABL Credit Facility | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Available borrowing capacity | 120,500 | |||||||||||||||
Maximum borrowing capacity | $ 350,000 | |||||||||||||||
Fixed charge coverage ratio | 1 | |||||||||||||||
Parent company | ABL Credit Facility | Minimum | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Loan cap rate | 15.00% | |||||||||||||||
Parent company | ABL Credit Facility | Maximum | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Loan cap rate | 20.00% | |||||||||||||||
Parent company | Term Loan | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Threshold percentage on net income to pay dividend | 50.00% | |||||||||||||||
Minimum cash interest coverage ratio to pay dividend | 2 | |||||||||||||||
Total leverage ratio to pay dividend | 3 | |||||||||||||||
Parent company | Term Loan | First Lien Agreement | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Debt instrument, face value | $ 350,000 | |||||||||||||||
Installment payable | $ 900 | |||||||||||||||
Percentage of annual aggregate amount of principal amount | 1.00% | |||||||||||||||
Interest rate reduction, related to net leverage ratio | 0.50% | |||||||||||||||
Prepayment premium | 1.00% | |||||||||||||||
Threshold amount to pay dividend | $ 10,000 | |||||||||||||||
Threshold additional amount to pay dividend | $ 30,000 | |||||||||||||||
Parent company | Term Loan | First Lien Agreement | LIBOR | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Floor rate | 1.00% | |||||||||||||||
Basis spread (as a percent) | 4.00% | |||||||||||||||
Parent company | Term Loan | Second Lien Agreement | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Repayments of debt | 130,000 | |||||||||||||||
Loss on extinguishment of debt | $ 2,700 | |||||||||||||||
Parent company | Term Loan | Second Lien Agreement | LIBOR | ||||||||||||||||
Guarantees and Restrictions | ||||||||||||||||
Floor rate | 1.00% | |||||||||||||||
Basis spread (as a percent) | 8.00% |