Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATED FINANCIAL INFORMATION

v3.20.2
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
6 Months Ended
Aug. 01, 2020
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 1,

February 1,

August 3,

ASSETS

    

2020

2020

2019

Current assets:

Cash and equivalents

$

650,324

$

409,173

$

130,194

Merchandise inventories

 

1,021,691

 

1,097,109

 

1,256,465

Prepaid expenses and other current assets

 

91,706

 

92,601

 

93,549

Total current assets

 

1,763,721

 

1,598,883

 

1,480,208

Property and equipment, net

 

412,263

 

430,432

 

437,491

Operating lease assets

1,552,626

1,610,013

1,611,029

Goodwill

 

94,290

 

94,290

 

112,069

Other intangible assets, net

59,839

66,417

14,082

Other assets

 

39,768

 

37,146

 

51,427

Total assets

$

3,922,507

$

3,837,181

$

3,706,306

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:

Accounts payable

$

627,619

$

476,298

$

533,473

Accrued liabilities and other

 

367,681

 

346,657

 

321,473

Current portion of operating lease liabilities

329,465

306,796

298,993

Current portion of long-term debt

 

24,900

 

24,900

 

24,900

Income taxes payable

 

29,141

 

41,236

 

11,974

Total current liabilities

 

1,378,806

 

1,195,887

 

1,190,813

Long-term debt

 

2,633,643

 

2,644,460

 

2,655,391

Long-term operating lease liabilities

1,317,378

1,357,821

1,377,039

Other liabilities

 

157,729

 

141,582

 

127,800

Total stockholders’ deficit

 

(1,565,049)

 

(1,502,569)

 

(1,644,737)

Total liabilities and stockholders’ deficit

$

3,922,507

$

3,837,181

$

3,706,306

Michaels Stores, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

13 Weeks Ended

26 Weeks Ended

August 1,

August 3,

August 1,

August 3,

    

2020

    

2019

    

2020

    

2019

Net sales

$

1,148,170

$

1,033,689

$

1,948,058

$

2,127,408

Cost of sales and occupancy expense

 

805,658

666,703

 

1,383,724

 

1,342,783

Gross profit

 

342,512

 

366,986

 

564,334

 

784,625

Selling, general and administrative

 

288,803

289,827

 

569,908

 

610,214

Restructure charges

3,869

6,956

Store pre-opening costs

 

186

1,743

 

1,345

 

2,969

Operating income (loss)

 

53,523

 

71,547

 

(6,919)

 

164,486

Interest and other expense, net

 

38,106

39,886

 

73,307

 

80,355

Losses on early extinguishment of debt and refinancing costs

 

1,155

1,155

Income (loss) before income taxes

 

15,417

 

30,506

 

(80,226)

 

82,976

Income taxes

 

22,985

5,774

 

(9,332)

 

20,398

Net (loss) income

$

(7,568)

$

24,732

$

(70,894)

$

62,578

Other comprehensive income (loss), net of tax:

Foreign currency and cash flow hedges

 

8,960

 

(4,762)

 

(5,376)

 

(9,588)

Comprehensive income (loss)

$

1,392

$

19,970

$

(76,270)

$

52,990

Michaels Stores, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

26 Weeks Ended

August 1,

August 3,

2020

2019

Cash flows from operating activities:

Net cash provided by (used in) operating activities

$

299,175

$

(3,839)

Cash flows from investing activities:

Additions to property and equipment

 

(46,449)

 

(57,533)

Proceeds from sale of building

875

Net cash used in investing activities

(45,574)

(57,533)

Cash flows from financing activities:

Net repayments of debt

 

(612,450)

 

(522,450)

Net borrowings of debt

600,000

500,000

Payment of debt refinancing costs

(6,032)

Payment of dividend to Michaels Funding, Inc.

(25,060)

Net cash used in financing activities

 

(12,450)

 

(53,542)

Net change in cash and equivalents

 

241,151

 

(114,914)

Cash and equivalents at beginning of period

 

409,173

 

245,108

Cash and equivalents at end of period

$

650,324

$

130,194