| 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)
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October 31, |
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February 1, |
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November 2, |
ASSETS |
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2020 |
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2020 |
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2019 |
Current assets: |
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Cash and equivalents |
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$ |
851,203 |
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$ |
409,173 |
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$ |
117,597 |
Merchandise inventories |
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1,170,504 |
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1,097,109 |
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|
1,423,367 |
Prepaid expenses and other current assets |
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93,872 |
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92,601 |
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|
100,165 |
Total current assets |
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2,115,579 |
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1,598,883 |
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1,641,129 |
Property and equipment, net |
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415,528 |
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430,432 |
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431,932 |
Operating lease assets |
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1,542,059 |
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1,610,013 |
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1,613,527 |
Goodwill |
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94,290 |
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94,290 |
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94,290 |
Other intangible assets, net |
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58,666 |
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66,417 |
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|
5,043 |
Other assets |
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36,392 |
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37,146 |
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58,347 |
Total assets |
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$ |
4,262,514 |
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$ |
3,837,181 |
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$ |
3,844,268 |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current liabilities: |
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Accounts payable |
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$ |
895,200 |
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$ |
476,298 |
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$ |
658,182 |
Accrued liabilities and other |
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452,267 |
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346,657 |
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|
373,710 |
Current portion of operating lease liabilities |
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321,868 |
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306,796 |
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303,023 |
Current portion of long-term debt |
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16,700 |
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24,900 |
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24,900 |
Income taxes payable |
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48,064 |
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41,236 |
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|
22,520 |
Total current liabilities |
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1,734,099 |
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1,195,887 |
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1,382,335 |
Long-term debt |
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2,483,702 |
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2,644,460 |
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2,649,756 |
Long-term operating lease liabilities |
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1,314,987 |
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1,357,821 |
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1,374,555 |
Other liabilities |
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173,616 |
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141,582 |
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125,819 |
Total stockholders’ deficit |
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(1,443,890) |
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(1,502,569) |
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(1,688,197) |
Total liabilities and stockholders’ deficit |
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$ |
4,262,514 |
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$ |
3,837,181 |
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$ |
3,844,268 |
Michaels Stores, Inc.
Condensed Consolidated Statements of Comprehensive Income
(in thousands)
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13 Weeks Ended |
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39 Weeks Ended |
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October 31, |
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November 2, |
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October 31, |
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November 2, |
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2020 |
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2019 |
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2020 |
|
2019 |
Net sales |
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$ |
1,406,212 |
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$ |
1,222,021 |
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$ |
3,354,270 |
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$ |
3,349,430 |
Cost of sales and occupancy expense |
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824,496 |
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780,387 |
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2,208,220 |
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2,123,171 |
Gross profit |
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581,716 |
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441,634 |
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1,146,050 |
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1,226,259 |
Selling, general and administrative |
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372,167 |
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322,563 |
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942,075 |
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932,777 |
Restructure and impairment charges |
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9,388 |
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41,376 |
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9,388 |
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48,332 |
Store pre-opening costs |
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184 |
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1,402 |
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1,528 |
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4,370 |
Operating income |
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199,977 |
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76,293 |
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193,059 |
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|
240,780 |
Interest and other expense, net |
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37,502 |
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38,863 |
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110,810 |
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119,218 |
Losses on early extinguishment of debt and refinancing costs |
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22,044 |
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161 |
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22,044 |
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1,316 |
Income before income taxes |
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140,431 |
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37,269 |
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60,205 |
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120,246 |
Income taxes |
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28,530 |
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8,381 |
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19,198 |
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28,780 |
Net income |
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$ |
111,901 |
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$ |
28,888 |
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$ |
41,007 |
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$ |
91,466 |
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Other comprehensive income, net of tax: |
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Foreign currency and cash flow hedges |
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3,910 |
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1,230 |
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(1,466) |
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(8,358) |
Comprehensive income |
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$ |
115,811 |
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$ |
30,118 |
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$ |
39,541 |
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$ |
83,108 |
Michaels Stores, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
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39 Weeks Ended |
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October 31, |
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November 2, |
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2020 |
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2019 |
Cash flows from operating activities: |
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Net cash provided by operating activities |
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$ |
711,860 |
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$ |
104,014 |
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Cash flows from investing activities: |
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Additions to property and equipment |
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(79,545) |
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(89,632) |
Proceeds from sale of building |
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875 |
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— |
Net cash used in investing activities |
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(78,670) |
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(89,632) |
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Cash flows from financing activities: |
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Net repayments of debt |
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(1,141,775) |
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(539,775) |
Net borrowings of debt |
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975,000 |
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511,100 |
Payment of debt refinancing costs |
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(24,267) |
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(8,158) |
Payment of dividend to Michaels Funding, Inc. |
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— |
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(105,060) |
Other financing activities |
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(118) |
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— |
Net cash used in financing activities |
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(191,160) |
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(141,893) |
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Net change in cash and equivalents |
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442,030 |
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(127,511) |
Cash and equivalents at beginning of period |
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409,173 |
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|
245,108 |
Cash and equivalents at end of period |
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$ |
851,203 |
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$ |
117,597 |
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