Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATED FINANCIAL INFORMATION

v3.19.2
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
6 Months Ended
Aug. 03, 2019
CONDENSED CONSOLIDATED FINANCIAL INFORMATION  
CONDENSED CONSOLIDATED FINANCIAL INFORMATION

11. CONDENSED CONSOLIDATED FINANCIAL INFORMATION

Our debt covenants restrict MSI, and certain subsidiaries of MSI, from various activities including the incurrence of additional debt, payment of dividends and the repurchase of MSI’s capital stock (subject to certain exceptions), among other things. The following condensed consolidated financial information represents the financial information of MSI and its wholly-owned subsidiaries subject to these restrictions. The information is presented in accordance with the requirements of Rule 12-04 under the SEC’s Regulation S-X.

Michaels Stores, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

August 3,

February 2,

August 4,

ASSETS

    

2019

2019

2018

Current assets:

Cash and equivalents

$

130,194

$

245,108

$

122,419

Merchandise inventories

 

1,256,465

 

1,108,715

 

1,280,095

Prepaid expenses and other current assets

 

93,549

 

160,767

 

135,480

Total current assets

 

1,480,208

 

1,514,590

 

1,537,994

Property and equipment, net

 

437,491

 

439,077

 

445,130

Operating lease assets

1,611,029

Goodwill

 

112,069

 

112,069

 

119,074

Other assets

 

65,509

 

61,667

 

79,093

Total assets

$

3,706,306

$

2,127,403

$

2,181,291

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:

Accounts payable

$

533,473

$

485,004

$

555,270

Accrued liabilities and other

 

321,473

 

378,313

 

351,584

Current portion of operating lease liabilities

298,993

Current portion of long-term debt

 

24,900

 

24,900

 

140,261

Other current liabilities

 

11,974

 

43,907

 

35,020

Total current liabilities

 

1,190,813

 

932,124

 

1,082,135

Long-term debt

 

2,655,391

 

2,681,000

 

2,695,087

Long-term operating lease liabilities

1,377,039

Other liabilities

 

127,800

 

199,705

 

162,693

Total stockholders’ deficit

 

(1,644,737)

 

(1,685,426)

 

(1,758,624)

Total liabilities and stockholders’ deficit

$

3,706,306

$

2,127,403

$

2,181,291

Michaels Stores, Inc.

Condensed Consolidated Statements of Comprehensive Income

(in thousands)

13 Weeks Ended

26 Weeks Ended

August 3,

August 4,

August 3,

August 4,

    

2019

    

2018

    

2019

    

2018

Net sales

$

1,033,689

$

1,053,267

$

2,127,408

$

2,208,778

Cost of sales and occupancy expense

 

666,703

 

679,938

 

1,342,783

 

1,378,887

Gross profit

 

366,986

 

373,329

 

784,625

 

829,891

Selling, general and administrative

 

289,827

 

300,734

 

610,214

 

629,126

Restructure charges

3,869

(3,220)

6,956

44,278

Store pre-opening costs

 

1,743

 

1,295

 

2,969

 

2,799

Operating income

 

71,547

 

74,520

 

164,486

 

153,688

Interest and other expense, net

 

39,886

 

36,272

 

80,355

 

69,176

Losses on early extinguishment of debt and refinancing costs

 

1,155

 

1,835

1,155

1,835

Income before income taxes

 

30,506

 

36,413

 

82,976

 

82,677

Income taxes

 

5,774

 

8,740

 

20,398

 

27,951

Net income

$

24,732

$

27,673

$

62,578

$

54,726

Other comprehensive income, net of tax:

Foreign currency and interest rate swaps

 

(4,762)

 

807

 

(9,588)

 

(6,246)

Comprehensive income

$

19,970

$

28,480

$

52,990

$

48,480

Michaels Stores, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

26 Weeks Ended

August 3,

August 4,

2019

2018

Cash flows from operating activities:

Net cash used in operating activities

$

(3,839)

$

(87,943)

Cash flows used in investing activities:

Additions to property and equipment

 

(57,533)

 

(69,908)

Cash flows from financing activities:

Net repayments of debt

 

(522,450)

 

(27,390)

Net borrowings of debt

500,000

133,600

Payment of debt refinancing costs

(6,032)

(1,069)

Payment of dividend to Michaels Funding, Inc.

(25,060)

(250,000)

Net cash used in financing activities

 

(53,542)

 

(144,859)

Net change in cash and equivalents

 

(114,914)

 

(302,710)

Cash and equivalents at beginning of period

 

245,108

 

425,129

Cash and equivalents at end of period

$

130,194

$

122,419