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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Container Store Group Inc | NYSE:TCS | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.68 | 0 | 10:28:29 |
Third quarter consolidated net sales of $214.9 million, down 14.8% compared to the third quarter of fiscal 2022
Comparable store sales^ down 16.8% compared to the third quarter of fiscal 2022
Third quarter net loss per share of $0.13, compared to earnings per diluted share of $0.08 in the third quarter of fiscal 2022; Adjusted net loss per share* of $0.08 compared to adjusted net income per diluted share of $0.08 in the third quarter of fiscal 2022
Updates Fiscal 2023 Earnings Outlook
The Container Store Group, Inc. (NYSE: TCS) (the “Company”), today announced its financial results for the third quarter of fiscal 2023 ended December 30, 2023.
For the third quarter of fiscal 2023:
Satish Malhotra, Chief Executive Officer and President of The Container Store, commented, “As we discussed in our commentary ahead of the ICR Conference last month, our third quarter sales reflected similar trends to what we experienced in the second quarter as our general merchandise categories weighed on results while our Custom Spaces assortment relatively outperformed. In fact, Custom Spaces saw sequential improvement in comparable store sales declines from the second quarter driven by improved performance in our elfa® product line and strength in our premium, wood-based line, Preston®. Despite the sales shortfall from our original guidance, promotional discipline and tight cost management enabled us to deliver bottom line results within our original outlook range.”
Mr. Malhotra continued, “Given the landscape we are navigating, we plan to continue to manage expenses and capital allocation with great discipline. We continue to lean into our competitive strengths and differentiation in Custom Spaces and complementary premium general merchandise, where we see significant growth opportunity.
Third Quarter Fiscal 2023 Results
For the third quarter (thirteen weeks) ended December 30, 2023:
For the fiscal year-to-date (thirty-nine weeks) ended December 30, 2023:
New and Existing Stores
As of December 30, 2023, the Company store base was 100 as compared to 95 as of December 31, 2022. The Company opened two stores during the third quarter of fiscal 2023.
Balance sheet and liquidity highlights:
(In thousands)
December 30, 2023
December 31, 2022
Cash
$
16,007
$
5,760
Total debt, net of deferred financing costs
$
184,656
$
188,608
Liquidity 1
$
99,632
$
96,059
Net cash provided by operating activities
$
26,673
$
18,856
Free cash flow *
$
(6,703
)
$
(27,702
)
_________________________ (1)Cash plus availability on revolving credit facilities.
Share repurchase
There were no repurchases during the third quarter of fiscal 2023. The Company has $25 million remaining of the original $30 million authorization for share repurchases.
Outlook
The Company today provided the following financial outlook for the fiscal fourth quarter ending on March 30, 2024:
Current Outlook
Current Outlook
Prior Outlook
Fourth Quarter Ending March 30, 2024
Fiscal Year Ending March 30, 2024
Fiscal Year Ending March 30, 2024
Consolidated net sales
$200 - $205 million
$842 - $847 million
$870 - $885 million
Comparable store sales^ decline
Mid twenties
Low twenties
High teens
Net loss per diluted share
($0.12) - ($0.09)
($0.97) - ($0.94)
($0.82) - ($0.70)
Adjusted net loss per diluted share*
($0.12) - ($0.09)
($0.40) - ($0.37)
($0.24) - ($0.13)
Assumed dilutive shares
49.5 million
49.5 million
49 million
Capital expenditures
$40 to $45 million
$45 to $50 million
Effective tax rate (1)
21%
6% to 5%
0% to (4%)
(1) Effective tax rate for fiscal year ending March 30, 2024 includes $2.6 million of discrete income tax expense recorded in the third quarter of fiscal 2023 related to the expiration of certain stock options granted in connection with our initial public offering in 2013.
The Company plans to open two new small format stores in the remainder of fiscal 2023. Looking forward to fiscal 2024, we are planning to open four new stores and close one location. We also plan to relocate our San Francisco store to a nearby location in June 2024. The two new store openings planned before the end of fiscal 2023 are as follows:
Estimated Opening
Gaithersburg, MD
Spring calendar 2024
Huntington, NY
Spring calendar 2024
References
* See Reconciliation of GAAP to Non-GAAP Financial Measures table. + Custom Spaces includes metal-based and wood-based custom space products and in-home installation services. ^ Comparable store sales includes all net sales from our TCS segment, except for sales from stores open less than sixteen months, stores that have been closed permanently, stores that have been closed temporarily for more than seven days and Closet Works sales to third parties.
Conference Call Information
A conference call to discuss third quarter fiscal 2023 financial results is scheduled for today, February 6, 2024, at 4:30 PM Eastern Time. Investors and analysts interested in participating in the call are invited to dial 877-407-3982 (international callers please dial 201-493-6780) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available online at investor.containerstore.com.
A taped replay of the conference call will be available within three hours of the conclusion of the call and can be accessed both online and by dialing 844-512-2921 (international callers please dial 412-317-6671). The pin number to access the telephone replay is 13742837. The replay will be available until March 6, 2024.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding our goals, strategies, priorities and initiatives including future store openings and closures; expected expense management; future opportunities; the impact of macroeconomic conditions and our anticipated financial performance and long-term targets.
These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: a decline in the health of the economy and the purchase of discretionary items; results of operations and financial condition; our ability to continue to lease space on favorable terms; costs and risks relating to new store openings; quarterly and seasonal fluctuations in our operating results; cost increases that are beyond our control; our inability to protect our brand; our failure or inability to protect our intellectual property rights; our inability to source and market new products to meet consumer preferences; failure to successfully anticipate, or manage inventory commensurate with, consumer preferences and demand; competition from other stores and internet-based competition; our inability to obtain merchandise from our vendors on a timely basis and at competitive prices; vendors may sell similar or identical products to our competitors; our and our vendors’ vulnerability to natural disasters and other unexpected events; disruptions at our manufacturing facilities; product recalls and/or product liability, as well as changes in product safety and other consumer protection laws; risks relating to operating multiple distribution centers; our dependence on foreign imports for our merchandise; our reliance upon independent third party transportation providers; our inability to effectively manage our online sales; effects of a security breach or cyber-attack of our website or information technology systems, including relating to our use of third-party web service providers; damage to, or interruptions in, our information systems as a result of external factors, working from home arrangements, staffing shortages and difficulties in updating our existing software or developing or implementing new software; failure to comply with laws and regulations relating to privacy, data protection, and consumer protection; our indebtedness may restrict our current and future operations, and we may not be able to refinance our debt on favorable terms, or at all; fluctuations in currency exchange rates; our inability to maintain sufficient levels of cash flow to meet growth expectations; our fixed lease obligations; disruptions in the global financial markets leading to difficulty in borrowing sufficient amounts of capital to finance the carrying costs of inventory to pay for capital expenditures and operating costs; changes to global markets and inability to predict future interest expenses; our reliance on key executive management; our inability to find, train and retain key personnel; labor relations difficulties; increases in health care costs and labor costs; violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery and anti-kickback laws; impairment charges and effects of changes in estimates or projections used to assess the fair value of our assets; effects of tax reform and other tax fluctuations; significant fluctuations in the price of our common stock; substantial future sales of our common stock, or the perception that such sales may occur, which could depress the price of our common stock; risks related to being a public company; our performance meeting guidance provided to the public; anti-takeover provisions in our governing documents, which could delay or prevent a change in control; acquisition-related risks and our failure to establish and maintain effective internal controls.
These and other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10‑K filed with the Securities and Exchange Commission, (the “SEC”) on May 26, 2023 and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.
About The Container Store
The Container Store Group, Inc. (NYSE: TCS) is the nation’s leading specialty retailer of organizing solutions, custom spaces, and in-home services – a concept they originated in 1978. Today, with locations nationwide, the retailer offers more than 10,000 products designed to transform lives through the power of organization.
Visit www.containerstore.com for more information about products, store locations, services offered and real-life inspiration.
Follow The Container Store on Facebook, X, Instagram, TikTok, YouTube, Pinterest and LinkedIn.
The Container Store Group, Inc.
Consolidated statements of operations
Thirteen Weeks Ended
Thirty-Nine Weeks Ended
December 30,
December 31,
December 30,
December 31,
(In thousands, except share and per share amounts) (unaudited)
2023
2022
2023
2022
Net sales
$
214,899
$
252,236
$
641,742
$
787,542
Cost of sales (excluding depreciation and amortization)
89,682
108,795
275,308
339,583
Gross profit
125,217
143,441
366,434
447,959
Selling, general, and administrative expenses (excluding depreciation and amortization)
111,820
121,540
332,471
362,104
Impairment charges
—
—
23,447
—
Stock-based compensation
515
825
1,605
2,562
Pre-opening costs
849
430
1,583
1,049
Depreciation and amortization
11,532
9,952
32,427
28,507
Other expenses
130
—
2,589
—
Loss on disposal of assets
—
10
221
91
Income (loss) from operations
371
10,684
(27,909
)
53,646
Interest expense, net
5,151
4,389
15,356
11,395
(Loss) income before taxes
(4,780
)
6,295
(43,265
)
42,251
Provision (benefit) for income taxes
1,651
2,127
(1,344
)
11,857
Net (loss) income
$
(6,431
)
$
4,168
$
(41,921
)
$
30,394
Net (loss) income per common share — basic
$
(0.13
)
$
0.08
$
(0.85
)
$
0.61
Net (loss) income per common share — diluted
$
(0.13
)
$
0.08
$
(0.85
)
$
0.61
Weighted-average common shares — basic
49,591,111
49,263,122
49,435,182
49,661,209
Weighted-average common shares — diluted
49,591,111
49,452,980
49,435,182
50,024,589
The Container Store Group, Inc.
Consolidated balance sheets
December 30,
April 1,
December 31,
(In thousands)
2023
2023
2022
Assets
(unaudited)
(unaudited)
Current assets:
Cash
$
16,007
$
6,958
$
5,760
Accounts receivable, net
27,489
25,870
30,790
Inventory
163,090
170,637
190,307
Prepaid expenses
15,515
14,989
15,596
Income taxes receivable
1,235
858
1,357
Other current assets
10,343
10,914
9,941
Total current assets
233,679
230,226
253,751
Noncurrent assets:
Property and equipment, net
159,879
158,702
152,282
Noncurrent operating lease right-of-use assets
340,883
347,959
357,607
Goodwill
—
23,447
221,159
Trade names
222,285
221,278
221,046
Deferred financing costs, net
110
150
163
Noncurrent deferred tax assets, net
352
568
690
Other assets
3,589
2,844
2,323
Total noncurrent assets
727,098
754,948
955,270
Total assets
$
960,777
$
985,174
$
1,209,021
The Container Store Group, Inc.
Consolidated balance sheets (continued)
December 30,
April 1,
December 31,
(In thousands, except share and per share amounts)
2023
2023
2022
Liabilities and shareholders’ equity
(unaudited)
(unaudited)
Current liabilities:
Accounts payable
$
49,325
$
52,637
$
57,704
Accrued liabilities
72,587
74,673
75,338
Current borrowings on revolving lines of credit
3,300
2,423
8,131
Current portion of long-term debt
2,068
2,063
2,061
Current operating lease liabilities
62,525
57,201
58,309
Income taxes payable
2,994
1,318
276
Total current liabilities
192,799
190,315
201,819
Noncurrent liabilities:
Long-term debt
179,288
163,385
178,416
Noncurrent operating lease liabilities
315,327
314,100
322,243
Noncurrent deferred tax liabilities, net
42,746
49,338
50,050
Other long-term liabilities
5,731
5,851
6,983
Total noncurrent liabilities
543,092
532,674
557,692
Total liabilities
735,891
722,989
759,511
Commitments and contingencies
Shareholders’ equity:
Common stock, $0.01 par value, 250,000,000 shares authorized; 49,591,111 shares issued at December 30, 2023; 49,181,562 shares issued at April 1, 2023; 49,164,862 shares issued at December 31, 2022
496
492
492
Additional paid-in capital
873,664
872,204
871,384
Accumulated other comprehensive loss
(29,351
)
(32,509
)
(33,614
)
Retained deficit
(619,923
)
(578,002
)
(388,752
)
Total shareholders’ equity
224,886
262,185
449,510
Total liabilities and shareholders’ equity
$
960,777
$
985,174
$
1,209,021
The Container Store Group, Inc.
Consolidated statements of cash flows
Thirty-Nine Weeks Ended
December 30,
December 31,
(In thousands) (unaudited)
2023
2022
Operating activities
Net (loss) income
$
(41,921
)
$
30,394
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization
32,427
28,507
Stock-based compensation
1,605
2,562
Impairment charges
23,447
—
Loss on disposal of assets
221
91
Deferred tax (benefit) expense
(6,619
)
(1,018
)
Non-cash interest
1,413
1,413
Other
5
855
Changes in operating assets and liabilities:
Accounts receivable
(904
)
(2,955
)
Inventory
8,585
511
Prepaid expenses and other assets
(1,111
)
(3,303
)
Accounts payable and accrued liabilities
(4,622
)
(33,126
)
Net change in lease assets and liabilities
13,641
607
Income taxes
1,329
(5,539
)
Other noncurrent liabilities
(823
)
(143
)
Net cash provided by operating activities
26,673
18,856
Investing activities
Additions to property and equipment
(33,376
)
(46,558
)
Investments in non-qualified plan trust
(220
)
(1,049
)
Proceeds from non-qualified plan trust redemptions
642
811
Proceeds from sale of property and equipment
1
36
Net cash used in investing activities
(32,953
)
(46,760
)
Financing activities
Borrowings on revolving lines of credit
54,492
64,790
Payments on revolving lines of credit
(53,733
)
(58,243
)
Borrowings on long-term debt
31,000
35,000
Payments on long-term debt
(16,550
)
(16,572
)
Repurchases of common stock
—
(5,000
)
Payment of taxes with shares withheld upon restricted stock vesting
(144
)
(712
)
Proceeds from the exercise of stock options
—
340
Net cash provided by financing activities
15,065
19,603
Effect of exchange rate changes on cash
264
(191
)
Net increase (decrease) in cash
9,049
(8,492
)
Cash at beginning of fiscal period
6,958
14,252
Cash at end of fiscal period
$
16,007
$
5,760
Note Regarding Non-GAAP Information
This press release includes financial measures that are not calculated in accordance with GAAP, including adjusted net income (loss), adjusted net income (loss) per common share - diluted, Adjusted EBITDA, and free cash flow. The Company has reconciled these non-GAAP financial measures with the most directly comparable GAAP financial measures in a table accompanying this release. These non-GAAP measures should not be considered as alternatives to net income (loss) as a measure of financial performance or cash flows from operations as a measure of liquidity, or any other performance measure derived in accordance with GAAP and they should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items. These non-GAAP measures are key metrics used by management, the Company’s board of directors, and Leonard Green and Partners, L.P., to assess its financial performance.
The Company presents adjusted net income (loss), adjusted net income (loss) per common share - diluted, and Adjusted EBITDA because it believes they assist investors in comparing the Company’s performance across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance and because the Company believes it is useful for investors to see the measures that management uses to evaluate the Company. These non-GAAP measures are also frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s industry. In evaluating these non-GAAP measures, you should be aware that in the future the Company will incur expenses that are the same as or similar to some of the adjustments in this presentation. The Company’s presentation of these non-GAAP measures should not be construed to imply that its future results will be unaffected by any such adjustments. Management compensates for these limitations by relying on our GAAP results in addition to using non-GAAP measures supplementally. These non-GAAP measures are not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation.
The Company defines adjusted net income (loss) as net income (loss) before restructuring charges, severance charges, acquisition-related costs, impairment charges related to intangible assets, loss on extinguishment of debt, certain losses (gains) on disposal of assets, legal settlements and the tax impact of these adjustments and other unusual or infrequent tax items. We define adjusted net income (loss) per common share - diluted as adjusted net income (loss) divided by the diluted weighted average common shares outstanding. We use adjusted net income (loss) and adjusted net income (loss) per common share - diluted to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions and to compare our performance against that of other peer companies using similar measures. We present adjusted net income (loss) and adjusted net income (loss) per common share - diluted because we believe they assist investors in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance and because we believe it is useful for investors to see the measures that management uses to evaluate the Company.
The Company defines EBITDA as net income (loss) before interest, taxes, depreciation, and amortization. Adjusted EBITDA is calculated in accordance with the Company’s credit facilities and is one of the components for performance evaluation under its executive compensation programs. Adjusted EBITDA reflects further adjustments to EBITDA to eliminate the impact of certain items, including certain non-cash and other items that the Company does not consider in its evaluation of ongoing operating performance from period to period. The Company uses Adjusted EBITDA in connection with covenant compliance and executive performance evaluations, and to supplement GAAP measures of performance to evaluate the effectiveness of its business strategies, to make budgeting decisions and to compare its performance against that of other peer companies using similar measures. The Company believes it is useful for investors to see the measures that management uses to evaluate the Company, its executives and its covenant compliance. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s industry.
The Company presents free cash flow, which the Company defines as net cash provided by operating activities in a period minus payments for property and equipment made in that period, because it believes it is a useful indicator of the Company’s overall liquidity, as the amount of free cash flow generated in any period is representative of cash that is available for debt repayment, investment, and other discretionary and non-discretionary cash uses. Accordingly, we believe that free cash flow provides useful information to investors in understanding and evaluating our liquidity in the same manner as management. Our definition of free cash flow is limited in that it does not solely represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our Consolidated Statements of Cash Flows. Although other companies report their free cash flow, numerous methods may exist for calculating a company’s free cash flow. As a result, the method used by our management to calculate our free cash flow may differ from the methods used by other companies to calculate their free cash flow.
Additionally, this press release refers to the change in Elfa third-party net sales after the conversion of Elfa’s net sales from Swedish krona to U.S. dollars using the prior year’s conversion rate, which is a financial measure not calculated in accordance with GAAP. The Company believes the disclosure of the change in Elfa third-party net sales without the effects of currency exchange rate fluctuations helps investors understand the Company’s underlying performance.
The Container Store Group, Inc. Supplemental Information - Reconciliation of GAAP to Non-GAAP Financial Measures (In thousands, except share and per share amounts) (unaudited)
The table below reconciles the non-GAAP financial measures of adjusted net income (loss) and adjusted net income (loss) per common share - diluted with the most directly comparable GAAP financial measures of GAAP net income (loss) and GAAP net income (loss) per common share - diluted.
Thirteen Weeks Ended
Thirty-Nine Weeks Ended
Q4 2023 Outlook
FY 2023 Outlook
December 30,
December 31,
December 30,
December 31,
2023
2022
2023
2022
Low
High
Low
High
Numerator:
Net (loss) income
$
(6,431
)
$
4,168
$
(41,921
)
$
30,394
$
(6,000
)
$
(4,400
)
$
(47,921
)
$
(46,321
)
Impairment charges (a)
—
—
23,447
—
—
—
23,447
23,447
Severance charges (b)
—
—
2,462
—
—
—
2,462
2,462
Elfa restructuring (c)
130
—
130
—
—
—
130
130
Acquisition-related costs (d)
—
—
—
63
—
—
—
—
Legal settlement (e)
—
—
—
(2,600
)
—
—
—
—
Taxes (f)
2,238
(59
)
2,051
545
—
—
2,051
2,051
Adjusted net (loss) income
$
(4,063
)
$
4,109
$
(13,831
)
$
28,402
$
(6,000
)
$
(4,400
)
$
(19,831
)
$
(18,231
)
Denominator:
Weighted-average common shares outstanding — basic
49,591,111
49,263,122
49,435,182
49,661,209
49,500,000
49,500,000
49,500,000
49,500,000
Weighted-average common shares outstanding — diluted
49,591,111
49,452,980
49,435,182
50,024,589
49,500,000
49,500,000
49,500,000
49,500,000
Net (loss) income per common share — basic
$
(0.13
)
$
0.08
$
(0.85
)
$
0.61
$
(0.12
)
$
(0.09
)
$
(0.97
)
$
(0.94
)
Net (loss) income per common share — diluted
$
(0.13
)
$
0.08
$
(0.85
)
$
0.61
$
(0.12
)
$
(0.09
)
$
(0.97
)
$
(0.94
)
Adjusted net (loss) income per common share — basic
$
(0.08
)
$
0.08
$
(0.28
)
$
0.57
$
(0.12
)
$
(0.09
)
$
(0.40
)
$
(0.37
)
Adjusted net (loss) income per common share — diluted
$
(0.08
)
$
0.08
$
(0.28
)
$
0.57
$
(0.12
)
$
(0.09
)
$
(0.40
)
$
(0.37
)
_________________________________ (a)Non-cash goodwill impairment charge incurred in the second quarter of fiscal 2023, which we do not consider in our evaluation of ongoing performance.
(b)Severance charges associated with the elimination of certain positions recorded in other expenses in the first and second quarters of fiscal 2023, which we do not consider in our evaluation of ongoing performance.
(c)Charges associated with the close-down of Elfa segment sales operations in Poland in the third quarter of fiscal 2023, which we do not consider in our evaluation of ongoing performance.
(d)Includes legal costs incurred in the second quarter of fiscal 2022 associated with the acquisition of Closet Works, all of which are recorded as selling, general and administrative expenses, which we do not consider in our evaluation of ongoing performance.
(e)The Company received a legal settlement, net of legal fees, in the second quarter of fiscal 2022, which we do not consider in our evaluation of ongoing performance. The amount is recorded as selling, general and administrative expenses.
(f)Tax impact of adjustments to net income (loss) that are considered to be unusual or infrequent tax items. For fiscal 2023, also includes $2.6 million of discrete income tax expense recorded in the third quarter of fiscal 2023 related to the expiration of certain stock options granted in connection with our initial public offering in 2013, all of which we do not consider in our evaluation of ongoing performance.
The table below reconciles the non-GAAP financial measure Adjusted EBITDA with the most directly comparable GAAP financial measure of GAAP net income (loss).
Thirteen Weeks Ended
Thirty-Nine Weeks Ended
December 30,
December 31,
December 30,
December 31,
2023
2022
2023
2022
Net (loss) income
$
(6,431
)
$
4,168
$
(41,921
)
$
30,394
Depreciation and amortization
11,532
9,952
32,427
28,507
Interest expense, net
5,151
4,389
15,356
11,395
Provision (benefit) for income taxes
1,651
2,127
(1,344
)
11,857
EBITDA
$
11,903
$
20,636
$
4,518
$
82,153
Pre-opening costs (a)
849
430
1,583
1,049
Non-cash lease expense (b)
(573
)
232
(902
)
403
Impairment charges (c)
—
—
23,447
—
Stock-based compensation (d)
515
825
1,605
2,562
Foreign exchange losses (gains) (e)
(29
)
38
(102
)
30
Severance charges (f)
—
—
2,462
—
Elfa restructuring (g)
130
—
130
—
Acquisition-related costs (h)
—
—
—
63
Adjusted EBITDA
$
12,795
$
22,161
$
32,741
$
86,260
__________________________________ (a)Non-capital expenditures associated with opening new stores and relocating stores, including marketing expenses, travel and relocation costs, and training costs. We adjust for these costs to facilitate comparisons of our performance from period to period.
(b)Reflects the extent to which our annual GAAP operating lease expense has been above or below our cash operating lease payments. The amount varies depending on the average age of our lease portfolio (weighted for size), as our GAAP operating lease expense on younger leases typically exceeds our cash operating lease payments, while our GAAP operating lease expense on older leases is typically less than our cash operating lease payments.
(c)Non-cash goodwill impairment charge incurred in the second quarter of fiscal 2023, which we do not consider in our evaluation of ongoing performance.
(d)Non-cash charges related to stock-based compensation programs, which vary from period to period depending on volume and vesting timing of awards. We adjust for these charges to facilitate comparisons from period to period.
(e)Realized foreign exchange transactional gains/losses our management does not consider in our evaluation of our ongoing performance.
(f)Severance charges associated with the elimination of certain positions recorded in other expenses in the first and second quarters of fiscal 2023, which we do not consider in our evaluation of ongoing performance.
(g)Charges associated with the close-down of Elfa segment sales operations in Poland in the third quarter of fiscal 2023, which we do not consider in our evaluation of ongoing performance.
(h)Includes legal costs incurred in the second quarter of fiscal 2022 associated with the acquisition of Closet Works, all of which are recorded as selling, general and administrative expenses, which we do not consider in our evaluation of ongoing performance.
The table below reconciles the non-GAAP financial measure of free cash flow with the most directly comparable GAAP financial measure of net cash provided by operating activities.
Thirty-Nine Weeks Ended
December 30,
December 31,
2023
2022
Net cash provided by operating activities
$
26,673
$
18,856
Less: Additions to property and equipment
(33,376
)
(46,558
)
Free cash flow
$
(6,703
)
$
(27,702
)
View source version on businesswire.com: https://www.businesswire.com/news/home/20240206216439/en/
Investors: ICR, Inc. Farah Soi/Caitlin Churchill 203-682-8200 Farah.Soi@icrinc.com Caitlin.Churchill@icrinc.com or Media: The Container Store Group, Inc. Katelyn Clinton, 972-538-6491 publicrelations@containerstore.com
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