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Share Name | Share Symbol | Market | Type |
---|---|---|---|
HHGREGG Inc (CE) | USOTC:HGGGQ | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0012 | 0.00 | 01:00:00 |
Indiana | 47-4850538 | |
(State or other jurisdiction of incorporation) | (IRS Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition |
Item 9.01. | Financial Statements and Exhibits |
Exhibit No. | Description | |
99.1 | Press release of hhgregg, Inc. dated November 5, 2015. |
hhgregg, Inc. | ||||
Date: November 5, 2015 | By: | /s/ Robert J. Riesbeck | ||
Robert J. Riesbeck | ||||
Chief Financial Officer |
Exhibit No. | Description | |
99.1 | Press release of hhgregg, Inc. dated November 5, 2015. |
• | Net sales decreased 3.8% to $487 million compared to prior year second quarter, but improved by 280 basis points as compared to the first quarter of fiscal 2016. |
• | Comparable store sales decreased 3.5% compared to the prior year second quarter, but improved by 280 basis points as compared to the first quarter of fiscal 2016. |
• | 21.9% increase in comparable sales on the e-commerce site for the second quarter |
• | Gross margin decreased to 28.5% compared to 29.1% in the prior year second quarter |
• | Net loss per diluted share was $0.37 which did not include an income tax benefit. In prior year second quarter, net loss per diluted share was $0.37 which included a $0.22 benefit related to income taxes. |
• | EBITDA improved to $(1.1) million compared to $(5.1) million in the prior year second quarter |
Three Months Ended | Six Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(unaudited, amounts in thousands, except share and per share data) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Net sales | $ | 486,876 | $ | 505,862 | $ | 927,939 | $ | 978,154 | ||||||||
Net sales % decrease | (3.8 | )% | (11.0 | )% | (5.1 | )% | (10.5 | )% | ||||||||
Comparable store sales % decrease (1) | (3.5 | )% | (11.4 | )% | (4.8 | )% | (10.9 | )% | ||||||||
Gross profit as a % of net sales | 28.5 | % | 29.1 | % | 29.4 | % | 29.4 | % | ||||||||
SG&A as a % of net sales | 23.3 | % | 23.5 | % | 24.2 | % | 24.1 | % | ||||||||
Net advertising expense as a % of net sales | 5.4 | % | 6.5 | % | 5.3 | % | 6.2 | % | ||||||||
Depreciation and amortization expense as a % of net sales | 1.7 | % | 2.1 | % | 1.8 | % | 2.2 | % | ||||||||
Loss from operations as a % of net sales | (1.9 | )% | (3.2 | )% | (1.9 | )% | (3.1 | )% | ||||||||
Net interest expense as a % of net sales | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | ||||||||
Income tax expense as a % of net sales | — | % | (1.2 | )% | — | % | (1.1 | )% | ||||||||
Net loss | $ | (10,126 | ) | $ | (10,384 | ) | $ | (18,881 | ) | $ | (20,653 | ) | ||||
Net loss per diluted share | $ | (0.37 | ) | $ | (0.37 | ) | $ | (0.68 | ) | $ | (0.73 | ) | ||||
EBITDA | $ | (1,088 | ) | $ | (5,116 | ) | (889 | ) | (8,590 | ) | ||||||
Weighted average shares outstanding—diluted | 27,707,978 | 28,394,164 | 27,694,169 | 28,419,417 | ||||||||||||
Number of stores open at the end of period | 227 | 228 |
(1) | Comprised of net sales at stores in operation for at least 14 full months, including remodeled and relocated stores, as well as net sales for the Company’s e-commerce site. |
Net Sales Mix Summary | Comparable Store Sales Summary | |||||||||||||||||||||||
Three Months Ended September 30, | Six Months Ended September 30, | Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Appliances | 56 | % | 53 | % | 57 | % | 55 | % | 0.8 | % | (5.8 | )% | (0.7 | )% | (3.9 | )% | ||||||||
Consumer electronics (1) | 33 | % | 34 | % | 32 | % | 33 | % | (6.3 | )% | (16.0 | )% | (7.2 | )% | (17.2 | )% | ||||||||
Home products (2) | 6 | % | 6 | % | 6 | % | 5 | % | 4.4 | % | 5.0 | % | 7.8 | % | 2.5 | % | ||||||||
Computers and tablets | 5 | % | 7 | % | 5 | % | 7 | % | (29.8 | )% | (33.7 | )% | (35.9 | )% | (31.6 | )% | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | (3.5 | )% | (11.4 | )% | (4.8 | )% | (10.9 | )% |
(1) | Primarily consists of televisions, audio, personal electronics and accessories. |
(2) | Primarily consists of furniture and mattresses. |
Comparable Store Sales | Comparable Store Sales Excluding Mobile and Fitness | Average Selling Price | Sales Unit Volume | |||||||
Appliances | 0.8 | % | 0.8 | % | Increase | Decrease | ||||
Consumer electronics (1) | (6.3 | )% | (6.3 | )% | Increase | Decrease | ||||
Home products (2) | 4.4 | % | 7.0 | % | Decrease | Increase | ||||
Computers and tablets | (29.8 | )% | (29.5 | )% | Decrease | Decrease | ||||
Total | (3.5 | )% | (3.3 | )% |
(1) | Primarily consists of televisions, audio, personal electronics and accessories. |
(2) | Primarily consists of furniture and mattresses. |
• | The Company's decrease in gross profit margin for the period was primarily a result of lower gross profit margin rates in all categories except home products, partially offset by a favorable product sales mix to categories with higher gross margin rates. |
• | During the second quarter, hhgregg realized $16.1 million of its expected $50 million of annual cost savings for fiscal 2016. For the first six months of fiscal 2016, the Company realized $27.2 million of the targeted $50 million projected annual cost savings. This has partially been offset by the increased fees associated with customer financing described below. |
• | The decrease in advertising expense of $6.8 million was due to a reduction of gross advertising spend primarily driven by reductions in print media along with rebalancing of spending among the more efficient advertising mediums. |
• | The decrease in SG&A as a percentage of net sales to 23.3% from 23.5% for the comparable prior year period was a result of: |
▪ | 105 basis points decrease, or $6.9 million, in wages due to our continuing effort to drive efficiencies in the Company's labor structure; and |
▪ | 24 basis points decrease, or $1.8 million, in delivery services due to efficiencies in routing and lower fuel prices. |
▪ | a 79 basis points increase, or $3.7 million, in fees associated with higher cost customer financing options and higher private label credit card penetration. |
Contact: | Lance Peterson, Director, Finance & Investor Relations |
investorrelations@hhgregg.com | |
(317) 848-8710 |
Three Months Ended | Six Months Ended | ||||||||||||||
September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | ||||||||||||
(In thousands, except share and per share data) | |||||||||||||||
Net sales | $ | 486,876 | $ | 505,862 | $ | 927,939 | $ | 978,154 | |||||||
Cost of goods sold | 348,231 | 358,817 | 654,937 | 690,770 | |||||||||||
Gross profit | 138,645 | 147,045 | 273,002 | 287,384 | |||||||||||
Selling, general and administrative expenses | 113,479 | 119,112 | 224,583 | 235,701 | |||||||||||
Net advertising expense | 26,254 | 33,049 | 49,308 | 60,273 | |||||||||||
Depreciation and amortization expense | 8,391 | 10,823 | 16,760 | 21,298 | |||||||||||
Loss from operations | (9,479 | ) | (15,939 | ) | (17,649 | ) | (29,888 | ) | |||||||
Other expense (income): | |||||||||||||||
Interest expense | 649 | 678 | 1,239 | 1,307 | |||||||||||
Interest income | (2 | ) | (2 | ) | (7 | ) | (7 | ) | |||||||
Total other expense | 647 | 676 | 1,232 | 1,300 | |||||||||||
Loss before income taxes | (10,126 | ) | (16,615 | ) | (18,881 | ) | (31,188 | ) | |||||||
Income tax benefit | — | (6,231 | ) | — | (10,535 | ) | |||||||||
Net loss | $ | (10,126 | ) | $ | (10,384 | ) | $ | (18,881 | ) | $ | (20,653 | ) | |||
Net loss per share | |||||||||||||||
Basic and diluted | $ | (0.37 | ) | $ | (0.37 | ) | $ | (0.68 | ) | $ | (0.73 | ) | |||
Weighted average shares outstanding-basic and diluted | 27,707,978 | 28,394,164 | 27,694,169 | 28,419,417 |
Three Months Ended | Six Months Ended | |||||||||||
September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||
Cost of goods sold | 71.5 | 70.9 | 70.6 | 70.6 | ||||||||
Gross profit | 28.5 | 29.1 | 29.4 | 29.4 | ||||||||
Selling, general and administrative expenses | 23.3 | 23.5 | 24.2 | 24.1 | ||||||||
Net advertising expense | 5.4 | 6.5 | 5.3 | 6.2 | ||||||||
Depreciation and amortization expense | 1.7 | 2.1 | 1.8 | 2.2 | ||||||||
Loss from operations | (1.9 | ) | (3.2 | ) | (1.9 | ) | (3.1 | ) | ||||
Other expense (income): | ||||||||||||
Interest expense | 0.1 | 0.1 | 0.1 | 0.1 | ||||||||
Interest income | — | — | — | — | ||||||||
Total other expense | 0.1 | 0.1 | 0.1 | 0.1 | ||||||||
Loss before income taxes | (2.1 | ) | (3.3 | ) | (2.0 | ) | (3.2 | ) | ||||
Income tax benefit | — | (1.2 | ) | — | (1.1 | ) | ||||||
Net loss | (2.1 | ) | (2.1 | ) | (2.0 | ) | (2.1 | ) |
September 30, 2015 | March 31, 2015 | September 30, 2014 | ||||||||||
(In thousands, except share data) | ||||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 34,877 | $ | 30,401 | $ | 40,557 | ||||||
Accounts receivable—trade, less allowances of $5, $19 and $106 as of September 30, 2015, March 31, 2015 and September 30, 2014, respectively | 11,556 | 11,901 | 15,450 | |||||||||
Accounts receivable—other | 14,383 | 16,715 | 17,922 | |||||||||
Merchandise inventories, net | 288,690 | 257,469 | 335,699 | |||||||||
Prepaid expenses and other current assets | 5,381 | 6,581 | 6,745 | |||||||||
Income tax receivable | 706 | 5,326 | 9,724 | |||||||||
Total current assets | 355,593 | 328,393 | 426,097 | |||||||||
Net property and equipment | 118,463 | 128,107 | 183,326 | |||||||||
Deferred financing costs, net | 1,526 | 1,796 | 2,065 | |||||||||
Deferred income taxes | 7,816 | 6,489 | 45,463 | |||||||||
Other assets | 2,905 | 2,844 | 2,431 | |||||||||
Total long-term assets | 130,710 | 139,236 | 233,285 | |||||||||
Total assets | $ | 486,303 | $ | 467,629 | $ | 659,382 | ||||||
Liabilities and Stockholders’ Equity | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 143,840 | $ | 112,143 | $ | 185,026 | ||||||
Customer deposits | 50,851 | 48,742 | 48,806 | |||||||||
Accrued liabilities | 52,454 | 46,723 | 51,375 | |||||||||
Deferred income taxes | 7,816 | 6,489 | 4,531 | |||||||||
Total current liabilities | 254,961 | 214,097 | 289,738 | |||||||||
Long-term liabilities: | ||||||||||||
Deferred rent | 63,887 | 67,935 | 70,330 | |||||||||
Other long-term liabilities | 11,128 | 12,009 | 11,389 | |||||||||
Total long-term liabilities | 75,015 | 79,944 | 81,719 | |||||||||
Total liabilities | 329,976 | 294,041 | 371,457 | |||||||||
Stockholders’ equity: | ||||||||||||
Preferred stock, par value $.0001; 10,000,000 shares authorized; no shares issued and outstanding as of September 30, 2015, March 31, 2015 and September 30, 2014, respectively | — | — | — | |||||||||
Common stock, par value $.0001; 150,000,000 shares authorized; 41,204,660, 41,161,753 and 41,158,041 shares issued; and 27,707,978, 27,665,071 and 28,394,164 outstanding as of September 30, 2015, March 31, 2015, and September 30, 2014, respectively | 4 | 4 | 4 | |||||||||
Additional paid-in capital | 303,300 | 301,680 | 299,619 | |||||||||
Retained earnings | 3,251 | 22,132 | 134,225 | |||||||||
Common stock held in treasury at cost 13,496,682, 13,496,682 and 12,763,877 shares as of September 30, 2015, March 31, 2015, and September 30, 2014, respectively | (150,228 | ) | (150,228 | ) | (145,923 | ) | ||||||
Total stockholders’ equity | 156,327 | 173,588 | 287,925 | |||||||||
Total liabilities and stockholders’ equity | $ | 486,303 | $ | 467,629 | $ | 659,382 |
Six Months Ended | |||||||
September 30, 2015 | September 30, 2014 | ||||||
(In thousands) | |||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (18,881 | ) | $ | (20,653 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 16,760 | 21,298 | |||||
Amortization of deferred financing costs | 270 | 269 | |||||
Stock-based compensation | 1,684 | 2,547 | |||||
Gain on sales of property and equipment | 52 | 166 | |||||
Deferred income taxes | — | 470 | |||||
Tenant allowances received from landlords | 721 | 306 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable—trade | 345 | (329 | ) | ||||
Accounts receivable—other | 1,631 | (1,262 | ) | ||||
Merchandise inventories | (31,221 | ) | (37,157 | ) | |||
Income tax receivable | 4,620 | (8,344 | ) | ||||
Prepaid expenses and other assets | 1,217 | (121 | ) | ||||
Accounts payable | 29,461 | 30,350 | |||||
Customer deposits | 2,109 | 7,288 | |||||
Income tax payable | — | (122 | ) | ||||
Accrued liabilities | 5,667 | 350 | |||||
Deferred rent | (4,068 | ) | (3,662 | ) | |||
Other long-term liabilities | (747 | ) | (469 | ) | |||
Net cash provided by (used in) operating activities | 9,620 | (9,075 | ) | ||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (8,118 | ) | (11,059 | ) | |||
Proceeds from sales of property and equipment | 62 | 43 | |||||
Purchases of corporate-owned life insurance | (78 | ) | (384 | ) | |||
Net cash used in investing activities | (8,134 | ) | (11,400 | ) | |||
Cash flows from financing activities: | |||||||
Purchases of treasury stock | — | (976 | ) | ||||
Net borrowings on inventory financing facility | 2,990 | 13,844 | |||||
Net cash provided by financing activities | 2,990 | 12,868 | |||||
Net increase (decrease) in cash and cash equivalents | 4,476 | (7,607 | ) | ||||
Cash and cash equivalents | |||||||
Beginning of period | 30,401 | 48,164 | |||||
End of period | $ | 34,877 | $ | 40,557 | |||
Supplemental disclosure of cash flow information: | |||||||
Interest paid | $ | 966 | $ | 552 | |||
Income taxes received | $ | (4,600 | ) | $ | (2,510 | ) | |
Capital expenditures included in accounts payable | $ | 655 | $ | 1,094 |
Three Months Ended | Six Months Ended | |||||||||||||||
(Amounts in thousands) | September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | ||||||||||||
Net loss as reported | $ | (10,126 | ) | $ | (10,384 | ) | $ | (18,881 | ) | $ | (20,653 | ) | ||||
Adjustments: | ||||||||||||||||
Depreciation and amortization | 8,391 | 10,823 | 16,760 | 21,298 | ||||||||||||
Interest expense, net | 647 | 676 | 1,232 | 1,300 | ||||||||||||
Income tax expense (benefit) | — | (6,231 | ) | — | (10,535 | ) | ||||||||||
EBITDA | $ | (1,088 | ) | $ | (5,116 | ) | $ | (889 | ) | $ | (8,590 | ) |
• | EBITDA does not reflect the Company's cash expenditures, or future requirements, for capital expenditures or contractual commitments; |
• | EBITDA does not reflect interest expense or the cash requirements necessary to service interest payments on the Company's debt; |
• | EBITDA does not reflect tax expense or the cash requirements necessary to pay for tax obligations; and |
• | Although depreciation and amortization are non-cash charges, the asset being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements. |
FY2014 | FY2015 | FY2016 | |||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | ||||||||||||||||||||
Beginning Store Count | 228 | 228 | 228 | 228 | 228 | 229 | 228 | 228 | 228 | 227 | |||||||||||||||||||
Store Openings | — | — | — | — | 1 | — | — | — | 1 | — | |||||||||||||||||||
Store Closings | — | — | — | — | — | (1 | ) | — | — | (2 | ) | — | |||||||||||||||||
Ending Store Count | 228 | 228 | 228 | 228 | 229 | 228 | 228 | 228 | 227 | 227 |
1 Year HHGREGG (CE) Chart |
1 Month HHGREGG (CE) Chart |
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