Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATED FINANCIAL INFORMATION

v3.19.3
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
9 Months Ended
Nov. 02, 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)

November 2,

February 2,

November 3,

ASSETS

    

2019

2019

2018

Current assets:

Cash and equivalents

$

117,597

$

245,108

$

101,895

Merchandise inventories

 

1,423,367

 

1,108,715

 

1,440,875

Prepaid expenses and other current assets

 

100,165

 

160,767

 

146,317

Total current assets

 

1,641,129

 

1,514,590

 

1,689,087

Property and equipment, net

 

431,932

 

439,077

 

453,396

Operating lease assets

1,613,527

Goodwill

 

94,290

 

112,069

 

119,074

Other assets

 

63,390

 

61,667

 

73,088

Total assets

$

3,844,268

$

2,127,403

$

2,334,645

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:

Accounts payable

$

658,182

$

485,004

$

645,469

Accrued liabilities and other

 

373,710

 

378,313

 

407,252

Current portion of operating lease liabilities

303,023

Current portion of long-term debt

 

24,900

 

24,900

 

240,261

Other current liabilities

 

22,520

 

43,907

 

41,948

Total current liabilities

 

1,382,335

 

932,124

 

1,334,930

Long-term debt

 

2,649,756

 

2,681,000

 

2,690,302

Long-term operating lease liabilities

1,374,555

Other liabilities

 

125,819

 

199,705

 

156,770

Total stockholders’ deficit

 

(1,688,197)

 

(1,685,426)

 

(1,847,357)

Total liabilities and stockholders’ deficit

$

3,844,268

$

2,127,403

$

2,334,645

Michaels Stores, Inc.

Condensed Consolidated Statements of Comprehensive Income

(in thousands)

13 Weeks Ended

39 Weeks Ended

November 2,

November 3,

November 2,

November 3,

    

2019

    

2018

    

2019

    

2018

Net sales

$

1,222,021

$

1,274,058

$

3,349,430

$

3,482,835

Cost of sales and occupancy expense

 

780,387

 

795,104

 

2,123,171

 

2,173,990

Gross profit

 

441,634

 

478,954

 

1,226,259

 

1,308,845

Selling, general and administrative

 

322,563

 

340,375

 

932,777

 

969,500

Restructure and impairment charges

41,376

48,332

44,278

Store pre-opening costs

 

1,402

 

1,196

 

4,370

 

3,995

Operating income

 

76,293

 

137,383

 

240,780

 

291,072

Interest and other expense, net

 

38,863

 

37,680

 

119,218

 

106,857

Losses on early extinguishment of debt and refinancing costs

 

161

 

1,316

1,835

Income before income taxes

 

37,269

 

99,703

 

120,246

 

182,380

Income taxes

 

8,381

 

15,771

 

28,780

 

43,722

Net income

$

28,888

$

83,932

$

91,466

$

138,658

Other comprehensive income, net of tax:

Foreign currency and interest rate swaps

 

1,230

 

3,016

 

(8,358)

 

(3,230)

Comprehensive income

$

30,118

$

86,948

$

83,108

$

135,428

Michaels Stores, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

39 Weeks Ended

November 2,

November 3,

2019

2018

Cash flows from operating activities:

Net cash provided by operating activities

$

104,014

$

22,855

Cash flows used in investing activities:

Additions to property and equipment

 

(89,632)

 

(119,553)

Cash flows from financing activities:

Net repayments of debt

 

(539,775)

 

(106,756)

Net borrowings of debt

511,100

307,400

Payment of debt refinancing costs

(8,158)

(1,117)

Payment of dividend to Michaels Funding, Inc.

(105,060)

(426,063)

Net cash used in financing activities

 

(141,893)

 

(226,536)

Net change in cash and equivalents

 

(127,511)

 

(323,234)

Cash and equivalents at beginning of period

 

245,108

 

425,129

Cash and equivalents at end of period

$

117,597

$

101,895