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The Michaels Companies Announces Fourth Quarter and Full Year Fiscal 2020 Results

IRVING, Texas , March 04 /Businesswire/ - The Michaels Companies, Inc. (NASDAQ: MIK) today announced financial results for the fourth quarter and full year fiscal 2020 ended January 30, 2021.

Key Financial Results:

 

13 Weeks Ended

January 30, 2021

13 Weeks Ended

February 1, 2020

52 Weeks Ended

January 30, 2021

52 Weeks Ended

February 1, 2020

Net Sales

$1,916.8M

$1,722.6M

$5,271.1M

$5,072.0M

Comp. Store Sales

12.9%

-2.4%

4.8%

-1.9%

Operating Income

$342.0M

$275.0M

$533.5M

$515.0M

Net Income

$255.1M

$181.7M

$294.9M

$272.6M

Diluted Earnings per Share

$1.72

$1.24

$1.98

$1.78

Adjusted Operating Income1

$361.0M

$278.6M

$607.6M

$572.6M

Adjusted Net Income 1

$249.3M

$185.1M

$347.0M

$323.8M

Adjusted Diluted Earnings per Share1

$1.69

$1.26

$2.33

$2.11

1 See additional information in this release for a reconciliation of non-GAAP financial measures to the respective GAAP measures.



Conference Call

Given the recently announced agreement for Michaels to be acquired by funds affiliated with Apollo Global Management, the Company will not be hosting a conference call to discuss its financial results.

Non-GAAP Information

This press release includes non-GAAP measures including adjusted operating income, adjusted net income, adjusted diluted earnings per share, EBITDA and adjusted EBITDA. The Company has reconciled these non-GAAP financial measures with the most directly comparable GAAP financial measures in a table accompanying this release. The Company believes that these non-GAAP financial measures not only provide its management with comparable financial data for internal financial analysis but also provide meaningful supplemental information to investors. Specifically, these non-GAAP financial measures allow investors to better understand the performance of the Company's business and facilitate a meaningful evaluation of its quarterly and fiscal 2020 results on a comparable basis with its quarterly and fiscal 2019 results.

The Company has provided this information as a means to evaluate the results of its ongoing operations. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results as reported under GAAP. The Company's presentation of non-GAAP financial measures should not be construed to imply that its future results will be unaffected by any such adjustments. Other companies in the Company's industry may calculate these items differently than it does.

IMPORTANT INFORMATION

The tender offer for the outstanding shares of The Michaels Companies, Inc. (“Michaels”) common stock has not yet commenced. This communication is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares of Michaels common stock. The solicitation and offer to buy shares of Michaels common stock will only be made pursuant to the tender offer materials that Magic MergeCo, Inc. (“Merger Sub”) intends to file with the U.S. Securities and Exchange Commission (the “SEC”). Merger Sub is beneficially owned by certain equity funds managed by Apollo Management IX, L.P. At the time the tender offer is commenced, Merger Sub will file a tender offer statement on Schedule TO with the SEC, and Michaels will file a solicitation/recommendation statement on Schedule 14D-9 with respect to the tender offer. MICHAELS’ STOCKHOLDERS ARE ADVISED TO READ THE SCHEDULE TO (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER DOCUMENTS) AND THE SCHEDULE 14D-9, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BEFORE THEY MAKE ANY DECISION WITH RESPECT TO THE TENDER OFFER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES THERETO. Both the tender offer statement and the solicitation/recommendation statement will be mailed to Michaels’ stockholders free of charge. Investors and stockholders may obtain free copies of the Schedule TO and Schedule 14D-9, as each may be amended or supplemented from time to time, and other documents filed by the parties (when available) at the SEC’s web site at www.sec.gov, by contacting Michaels’ Investor Relations either by telephone at 972-409-1393, e-mail at james.mathias@Michaels.com or on Michaels’ website at www.Michaels.com.

About The Michaels Companies, Inc.:

The Michaels Companies, Inc. is North America's largest specialty provider of arts, crafts, framing, floral, wall décor, and seasonal merchandise for Makers and do-it-yourself home decorators. The Company operates more than 1,250 Michaels stores in 49 states and Canada. Additionally, the Company serves customers through digital platforms including Michaels.com and Canada.michaels.com. The Michaels Companies, Inc., also owns Artistree, a manufacturer of high-quality custom and specialty framing merchandise. For a list of store locations or to shop online, visit www.michaels.com or download the Michaels app.

 
 

The Michaels Companies, Inc.

Consolidated Statements of Comprehensive Income

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

13 Weeks Ended

 

52 Weeks Ended

 

January 30,

 

February 1,

 

January 30,

 

February 1,

(in thousands, except per share data)

2021

 

2020

 

2021

 

2020

Net sales $

1,916,842

 

$

1,722,608

 

$

5,271,112

 

$

5,072,037

 

Cost of sales and occupancy expense

1,106,815

 

1,076,610

 

3,315,035

 

3,199,780

 

Gross profit

810,027

 

645,998

 

1,956,077

 

1,872,257

 

Selling, general and administrative

447,032

 

370,803

 

1,390,620

 

1,304,280

 

Restructure and impairment charges

19,447

 

 

28,835

 

48,332

 

Store pre-opening costs

1,554

 

238

 

3,082

 

4,608

 

Operating income

341,994

 

274,957

 

533,540

 

515,037

 

Interest expense

40,209

 

37,816

 

152,442

 

154,090

 

Losses on early extinguishments of debt and refinancing costs

 

 

22,044

 

1,316

 

Other (income) expense, net

(124

)

(1,671

)

(1,550

)

1,260

 

Income before income taxes

301,909

 

238,812

 

360,604

 

358,371

 

Income taxes

46,834

 

57,161

 

65,669

 

85,776

 

Net income $

255,075

 

$

181,651

 

$

294,935

 

$

272,595

 

 
Other comprehensive income, net of tax:
Foreign currency and cash flow hedges

10,853

 

85

 

9,387

 

(8,273

)

Comprehensive income $

265,928

 

$

181,736

 

$

304,322

 

$

264,322

 

 
Earnings per common share:
Basic $

1.76

 

$

1.24

 

$

2.01

 

$

1.78

 

Diluted $

1.72

 

$

1.24

 

$

1.98

 

$

1.78

 

Weighted-average common shares outstanding:
Basic

144,598

 

146,638

 

146,541

 

153,134

 

Diluted

147,844

 

146,701

 

148,531

 

153,202

 

 
The following table sets forth the percentage relationship to net sales of each line item of our unaudited consolidated statements of comprehensive income:

13 Weeks Ended

 

 

52 Weeks Ended

January 30,

 

 

February 1,

 

 

January 30,

 

 

February 1,

2021

 

 

2020

 

 

2021

 

 

2020

Net sales

100.0

%

100.0

%

100.0

%

100.0

%

Cost of sales and occupancy expense

57.7

 

62.5

 

62.9

 

63.1

 

Gross profit

42.3

 

STORY TAGS: Home Goods, Other Retail, Other Manufacturing, Specialty, Consumer, Other Consumer, Manufacturing, Retail, Webcast, Conference Call, Earnings, Texas, United States, North America,

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