Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 30, 2018 | Jul. 27, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Container Store Group, Inc. | |
Entity Central Index Key | 1,411,688 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Common Stock Outstanding | 48,848,665 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
Consolidated balance sheets
Consolidated balance sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Mar. 31, 2018 | Jul. 01, 2017 |
Current assets: | |||
Cash | $ 14,102 | $ 8,399 | $ 7,216 |
Accounts receivable, net | 24,840 | 25,528 | 27,490 |
Inventory | 104,135 | 97,362 | 105,006 |
Prepaid expenses | 10,842 | 11,281 | 16,131 |
Income taxes receivable | 812 | 15 | 668 |
Other current assets | 12,577 | 11,609 | 13,683 |
Total current assets | 167,308 | 154,194 | 170,194 |
Noncurrent assets: | |||
Property and equipment, net | 151,455 | 158,389 | 163,876 |
Goodwill | 202,815 | 202,815 | 202,815 |
Trade names | 226,613 | 229,401 | 229,009 |
Deferred financing costs, net | 294 | 312 | 297 |
Noncurrent deferred tax assets, net | 2,101 | 2,404 | 2,226 |
Other assets | 1,777 | 1,854 | 1,824 |
Total noncurrent assets | 585,055 | 595,175 | 600,047 |
Total assets | 752,363 | 749,369 | 770,241 |
Current liabilities: | |||
Accounts payable | 52,215 | 43,692 | 43,445 |
Accrued liabilities | 69,828 | 70,494 | 69,601 |
Revolving lines of credit | 889 | 2,729 | |
Current portion of long-term debt | 7,780 | 7,771 | 5,448 |
Income taxes payable | 2,019 | 4,580 | 1,297 |
Other current liabilities | 1,989 | ||
Total current liabilities | 134,720 | 126,537 | 122,520 |
Noncurrent liabilities: | |||
Long-term debt | 291,038 | 277,394 | 316,375 |
Noncurrent deferred tax liabilities, net | 49,378 | 54,839 | 77,712 |
Deferred rent and other long-term liabilities | 41,337 | 41,892 | 33,742 |
Total noncurrent liabilities | 381,753 | 374,125 | 427,829 |
Total liabilities | 516,473 | 500,662 | 550,349 |
Shareholders' equity: | |||
Common stock, $0.01 par value, 250,000,000 shares authorized; 48,138,907 shares issued at June 30, 2018; 48,072,187 shares issued at March 31, 2018; 48,052,900 shares issued at July 1, 2017 | 481 | 481 | 481 |
Additional paid-in capital | 861,726 | 861,263 | 859,638 |
Accumulated other comprehensive loss | (24,239) | (17,316) | (17,401) |
Retained deficit | (602,078) | (595,721) | (622,826) |
Total shareholders' equity | 235,890 | 248,707 | 219,892 |
Total liabilities and shareholders' equity | $ 752,363 | $ 749,369 | $ 770,241 |
Consolidated balance sheets (Pa
Consolidated balance sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Mar. 31, 2018 | Jul. 01, 2017 |
Consolidated balance sheets | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 |
Common stock, shares issued | 48,138,907 | 48,072,187 | 48,052,900 |
Consolidated statements of oper
Consolidated statements of operations - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Consolidated statements of operations | ||
Net sales | $ 195,823 | $ 183,068 |
Cost of sales (excluding depreciation and amortization) | 81,052 | 79,458 |
Gross profit | 114,771 | 103,610 |
Selling, general, and administrative expenses (excluding depreciation and amortization) | 106,605 | 96,640 |
Stock-based compensation | 586 | 494 |
Pre-opening costs | 346 | 1,386 |
Depreciation and amortization | 9,337 | 9,542 |
Other expenses | 193 | 3,534 |
Loss on disposal of assets | 40 | 51 |
Loss from operations | (2,336) | (8,037) |
Interest expense | 7,908 | 4,225 |
Loss before taxes | (10,244) | (12,262) |
Benefit for income taxes | (3,480) | (4,585) |
Net loss | $ (6,764) | $ (7,677) |
Net loss per common share - basic and diluted | $ (0.14) | $ (0.16) |
Weighted-average common shares - basic and diluted (in shares) | 48,138,907 | 48,047,937 |
Consolidated statements of comp
Consolidated statements of comprehensive income - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Consolidated statements of comprehensive income | ||
Net loss | $ (6,764) | $ (7,677) |
Unrealized (loss) gain on financial instruments, net of tax (benefit) provision of ($566) and $894 | (1,785) | 1,390 |
Pension liability adjustment | 153 | (110) |
Foreign currency translation adjustment | (5,291) | 3,962 |
Comprehensive loss | $ (13,687) | $ (2,435) |
Consolidated statements of com6
Consolidated statements of comprehensive income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Consolidated statements of comprehensive income | ||
Unrealized gain (loss) on financial instruments, tax provision (benefit) | $ (566) | $ 894 |
Consolidated statements of cash
Consolidated statements of cash flows - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Operating activities | ||
Net loss | $ (6,764) | $ (7,677) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 9,337 | 9,542 |
Stock-based compensation | 586 | 494 |
Loss on disposal of assets | 40 | 51 |
Tax benefit | (3,874) | (4,573) |
Noncash interest | 759 | 480 |
Other | 195 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 110 | 744 |
Inventory | (9,975) | (350) |
Prepaid expenses and other assets | (198) | (6,565) |
Accounts payable and accrued liabilities | 10,030 | 5,937 |
Income taxes | (3,303) | (2,120) |
Other noncurrent liabilities | (68) | (939) |
Net cash used in operating activities | (3,320) | (4,781) |
Investing activities | ||
Additions to property and equipment | (4,456) | (5,181) |
Proceeds from sale of property and equipment | 1 | 2 |
Net cash used in investing activities | (4,455) | (5,179) |
Financing activities | ||
Borrowings on revolving lines of credit | 7,581 | 4,876 |
Payments on revolving lines of credit | (6,663) | (2,261) |
Borrowings on long-term debt | 15,000 | 5,000 |
Payments on long-term debt and capital leases | (1,954) | (1,350) |
Payment of taxes with shares withheld upon restricted stock vesting | (122) | (39) |
Net cash provided by financing activities | 13,842 | 6,226 |
Effect of exchange rate changes on cash | (364) | 214 |
Net increase (decrease) in cash | 5,703 | (3,520) |
Cash at beginning of fiscal period | 8,399 | 10,736 |
Cash at end of fiscal period | 14,102 | 7,216 |
Supplemental information for non-cash investing and financing activities: | ||
Purchases of property and equipment (included in accounts payable) | 852 | 1,148 |
Capital lease obligation incurred | $ 4 | $ 36 |
Description of business and bas
Description of business and basis of presentationcies | 3 Months Ended |
Jun. 30, 2018 | |
Nature of business and summary of significant accounting policies | |
Description of business and basis of presentation | The Container Store Group, Inc. Notes to consolidated financial statements (unaudited) (In thousands, except share amounts and unless otherwise stated) June 30, 2018 1. Description of business and basis of presentation These financial statements should be read in conjunction with the financial statement disclosures in our Annual Report on Form 10-K for the fiscal year ended March 31, 2018, filed with the Securities and Exchange Commission on May 31, 2018. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). We use the same accounting policies in preparing quarterly and annual financial statements. All adjustments necessary for a fair presentation of quarterly operating results are reflected herein and are of a normal, recurring nature. Description of business The Container Store, Inc. was founded in 1978 in Dallas, Texas, as a retailer with a mission to provide customers with storage and organization solutions through an assortment of innovative products and unparalleled customer service. In 2007, The Container Store, Inc. was sold to The Container Store Group, Inc. (the “Company”), a holding company, of which a majority stake was purchased by Leonard Green and Partners, L.P. (“LGP”), with the remainder held by certain employees of The Container Store, Inc. On November 6, 2013, the Company completed its initial public offering (the “IPO”). As the majority shareholder, LGP retains controlling interest in the Company. As of June 30, 2018, The Container Store, Inc. operates 91 stores with an average size of approximately 25,000 square feet (19,000 selling square feet) in 32 states and the District of Columbia. The Container Store, Inc. also offers all of its products directly to its customers, including business-to-business customers, through its website and call center. The Container Store, Inc.’s wholly-owned Swedish subsidiary, Elfa International AB (“Elfa”), designs and manufactures component-based shelving and drawer systems and made-to-measure sliding doors. elfa ® branded products are sold exclusively in the United States in The Container Store retail stores, website and call center, and Elfa sells to various retailers on a wholesale basis in approximately 30 countries around the world, with a concentration in the Nordic region of Europe. Seasonality The Company’s business is moderately seasonal in nature and, therefore, the results of operations for the thirteen weeks ended June 30, 2018 are not necessarily indicative of the operating results for the full year. The Company has historically realized a higher portion of net sales, operating income, and cash flows from operations in the fourth fiscal quarter, attributable primarily to the timing and impact of Our Annual elfa ® Sale, which traditionally starts on or about December 24 and runs into February. Revenue recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , an updated standard on revenue recognition. The Company adopted this standard in the first quarter of fiscal 2018 and elected to use the modified-retrospective approach for implementation of the standard. The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the Company expects to be entitled in exchange for those goods or services. The Company has identified certain impacts to our accounting for gift cards given away for promotional or marketing purposes. Under previous GAAP, the value of promotional gift cards was recorded as selling, general, and administrative expense. The new standard requires these types of gift cards to be accounted for as a reduction of revenue (i.e. a discount). Additionally, ASU 2014-09 disallows the capitalization of direct-response advertising costs which will impact the timing of recognition of certain advertising production and distribution costs. Upon transition on April 1, 2018, the Company recorded a cumulative adjustment to increase retained earnings/(deficit) and to decrease accrued liabilities by approximately $400. The Company also reclassified the asset balance for the estimate of future returned merchandise, which was approximately $900 as of March 31, 2018, from the "Inventory" line to the "Other current assets" line on the balance sheet. Overall, the adoption of ASU 2014-09 did not result in a material impact to the Company’s financial statements. Note 9 provides the related disaggregated revenue disclosures. We recognize revenues and the related cost of goods sold for our TCS segment when merchandise is received by our customers, which reflects an estimate of shipments that have not yet been received by the customer. This estimate is based on shipping terms and historical delivery times. We recognize revenues and the related cost of goods sold for our Elfa segment upon shipment. We recognize shipping and handling fees as revenue when the merchandise is shipped to the customer. Costs of shipping and handling are included in cost of goods sold. We recognize fees for installation and other services as revenue upon completion of the service to the customer. Costs of installation and other services are included in cost of goods sold. Sales tax collected is not recognized as revenue as it is ultimately remitted to governmental authorities. We reserve for projected merchandise returns based on historical experience and various other assumptions that we believe to be reasonable. The reserve reduces sales and cost of sales, accordingly. Merchandise exchanges of similar product and price are not considered merchandise returns and, therefore, are excluded when calculating the sales returns reserve. Contract Balances Contract balances as a result of transactions with customers primarily consist of trade receivables included in Accounts receivable, net, unearned revenue included in Accrued liabilities, and gift cards and store credits outstanding included in Accrued liabilities in the Company's Consolidated Balance Sheets. Note 2 provides the Company's trade receivables, unearned revenue, and gift cards and store credits outstanding with customers as of June 30, 2018, March 31, 2018, and July 1, 2017. Below is a rollforward of contract liability balances from March 31, 2018 to June 30, 2018, which illustrates the amount of contract liability as of March 31, 2018 which was subsequently recognized into revenue in the thirteen weeks ended June 30, 2018: Contract liability Revenue recognized Contract liabilities Contract liability balance at from beginning added during balance at March 31, 2018 (1) liability period (2) June 30, 2018 Unearned revenue $ 11,080 $ (10,028) $ 13,591 $ 14,643 Gift cards and store credits outstanding $ 8,470 $ (1,123) $ 1,338 $ 8,685 (1) Gift cards and store credits outstanding balance is net of revenue recognition transition adjustment (2) Net of estimated breakage Recent accounting pronouncements In October 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory , which requires entities to recognize the income tax effects of intercompany sales and transfers of assets, other than inventory, in the period in which the transfer occurs. This is a change from current GAAP, which requires entities to defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized (i.e. depreciated, amortized, impaired). The income tax effects of intercompany sales and transfers of inventory will continue to be deferred until the inventory is sold to an outside party. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. The Company adopted ASU 2016-16 in the first quarter of fiscal 2018. The adoption of this standard did not result in a material impact to the Company’s financial statements. In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which provides guidance that requires an employer to present the service cost component separate from the other components of net periodic benefit cost. The update requires that employers present the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered by participating employees during the period. The other components of the net periodic benefit cost are required to be presented separately from the line item that includes service cost and outside of the subtotal of income from operations. If a separate line item is not used, the line item used in the income statement must be disclosed. In addition, only the service cost component is eligible for capitalization in assets. The Company adopted ASU 2017-07 in the first quarter of fiscal 2018 on a restrospective basis. The adoption of this standard did not result in a material impact to the Company’s financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting , which clarifies when modification accounting should be applied for changes to terms or conditions of a share-based payment award. The Company adopted ASU 2017-09 in the first quarter of fiscal 2018 on a prospective basis. The adoption of this standard did not result in a material impact to the Company’s financial statements. In February 2016, the Financial Accounting Standard Board issued Accounting Standards Update 2016-02, Leases (Topic 842) , to revise lease accounting guidance. The update requires most leases to be recorded on the balance sheet as a lease liability, with a corresponding right-of-use asset, whereas these leases currently have an off-balance sheet classification. ASU 2016-02 must be applied on a modified retrospective basis and is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. The Company currently intends to adopt this standard in the first quarter of fiscal 2019. The Company is still evaluating the impact of implementation of this standard on its financial statements, but expects that adoption will have a material impact to the Company’s total assets and liabilities given the Company has a significant number of operating leases not currently recognized on its balance sheet. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , which is intended to improve and simplify hedge accounting and improve the disclosures of hedging arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting the new standard on its financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under this ASU, the guidance on share-based payments to nonemployees would be aligned with the requirements for share-based payments granted to employees, with certain exceptions. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact of adopting the new standard on its financial statements. |
Detail of certain balance sheet
Detail of certain balance sheet accounts | 3 Months Ended |
Jun. 30, 2018 | |
Detail of certain balance sheet accounts | |
Detail of certain balance sheet accounts | 2. Detail of certain balance sheet accounts June 30, March 31, July 1, 2018 2018 2017 Accounts receivable, net: Trade receivables, net $ 12,898 $ 15,968 $ 13,964 Credit card receivables 10,054 6,939 9,474 Tenant allowances 235 998 2,929 Other receivables 1,653 1,623 1,123 $ 24,840 $ 25,528 $ 27,490 Inventory: Finished goods $ 98,851 $ 91,970 $ 100,036 Raw materials 4,663 4,840 4,440 Work in progress 621 552 530 $ 104,135 $ 97,362 $ 105,006 Accrued liabilities: Accrued payroll, benefits and bonuses $ 25,177 $ 24,940 $ 25,207 Unearned revenue 14,643 11,080 12,284 Accrued transaction and property tax 9,366 12,846 10,859 Gift cards and store credits outstanding 8,685 8,891 9,394 Accrued lease liabilities 4,619 5,105 5,311 Accrued interest 258 292 182 Other accrued liabilities 7,080 7,340 6,364 $ 69,828 $ 70,494 $ 69,601 |
Net income (loss) per common sh
Net income (loss) per common share | 3 Months Ended |
Jun. 30, 2018 | |
Net income (loss) per common share | |
Net income (loss) per common share | 3. Net income (loss) per common share Basic net income (loss) per common share is computed as net income (loss) divided by the weighted-average number of common shares for the period. Diluted net income (loss) per share is computed as net income (loss) divided by the weighted-average number of common shares for the period plus common stock equivalents consisting of shares subject to stock-based awards with exercise prices less than or equal to the average market price of the Company’s common stock for the period, to the extent their inclusion would be dilutive. Potentially dilutive securities are excluded from the computation of diluted net income (loss) per share if their effect is anti-dilutive. The following is a reconciliation of net loss and the number of shares used in the basic and diluted net loss per share calculations: Thirteen Weeks Ended June 30, July 1, 2018 2017 Numerator: Net loss $ (6,764) $ (7,677) Denominator: Weighted-average common shares-basic and diluted 48,138,907 48,047,937 Net loss per common share-basic and diluted $ (0.14) $ (0.16) Antidilutive securities not included: Stock options outstanding 2,598,505 2,932,907 Nonvested restricted stock awards 123,001 83,509 |
Income taxes
Income taxes | 3 Months Ended |
Jun. 30, 2018 | |
Income taxes | |
Income taxes | 4. Income taxes The benefit for income taxes in the thirteen weeks ended June 30, 2018 was $3,480 as compared to a benefit of $4,585, in the thirteen weeks ended July 1, 2017. The effective tax rate for the thirteen weeks ended June 30, 2018 was 34.0%, as compared to 37.4% in the thirteen weeks ended July 1, 2017. During the thirteen weeks ended June 30, 2018, the effective tax rate rose above the U.S statutory rate primarily due to the recognition of a $604 tax benefit for the remeasurement of deferred tax balances as a result of a change in the Swedish tax rate with a pre-tax loss in the quarter, the impact of the global intangible low-taxed income (“GILTI”) provision from the Tax Cuts and Jobs Act enacted in fiscal 2017, and U.S state income taxes. During the thirteen weeks ended July 1, 2017, the effective tax rate rose above the U.S. statutory rate primarily due to U.S. state income taxes, partially offset by lower income taxes on earnings sourced in foreign jurisdictions. Tax Cuts and Jobs Act (the “Tax Act”) The Company recorded a net provisional tax benefit in fiscal 2017 related to the Tax Act of $15,689, which includes a provisional benefit of $24,210 related to the remeasurement of the Company’s deferred tax balances, partially offset by a provisional expense of $8,521 related to the one-time transition tax on foreign earnings. Pursuant to Staff Accounting Bulletin (“SAB”) No. 118 (“SAB 118”), the Company’s measurement period for implementing the accounting changes required by the Tax Act will close before December 22, 2018 and the Company anticipates completing the accounting under Accounting Standards Codification (“ASC”) Topic 740, Income Taxes (“ASC 740”) in a subsequent reporting period within the measurement period. The Company believes the remeasurement of its deferred tax balances is complete, except for changes in estimates that may result from finalizing the filing of its 2017 U.S. income tax return and changes that may be a direct impact of changes to other provisional amounts due to the enactment of the Tax Act. In addition, the estimate may be impacted as the Company further analyzes state tax conformity to the federal tax changes and guidance issued by regulatory bodies that provide interpretive guidance of the Tax Act. Any adjustments to the provisional amounts will be recognized as a component of the provision for income taxes in the period in which such adjustments are determined within the measurement period. Additionally, the Company is continuing to gather additional information to be able to more precisely compute the final amount of the one-time transition tax on foreign earnings. The Tax Act creates a new requirement that certain GILTI earned by controlled foreign corporations ("CFC") must be included currently in the taxable income of the CFC's U.S. shareholder. The Company became subject to the GILTI provisions beginning in fiscal 2018. Because of the complexity of the new GILTI tax rules, the Company is continuing to evaluate this provision of the Tax Act and the application of ASC 740. The Company has not yet elected an accounting policy to determine whether it will recognize GILTI as a period cost when incurred or to recognize deferred taxes for basis differences expected to reverse. For purposes of calculating the estimated annual effective tax rate at quarter end, the Company has used the period cost method. The Company will continue to assess the appropriateness of this method during the period allowed for under SAB 118. |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Jun. 30, 2018 | |
Commitments and contingencies | |
Commitments and contingencies | 5. Commitments and contingencies In connection with insurance policies and other contracts, the Company has outstanding standby letters of credit totaling $3,817 as of June 30, 2018. The Company is subject to ordinary litigation and routine reviews by regulatory bodies that are incidental to its business, none of which is expected to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows on an individual basis or in the aggregate. |
Accumulated other comprehensive
Accumulated other comprehensive income | 3 Months Ended |
Jun. 30, 2018 | |
Accumulated other comprehensive income | |
Accumulated other comprehensive income | 6. Accumulated other comprehensive loss Accumulated other comprehensive loss (“AOCL”) consists of changes in our foreign currency forward contracts, pension liability adjustment, and foreign currency translation. The components of AOCL, net of tax, are shown below for the thirteen weeks ended June 30, 2018: Foreign currency Pension Foreign hedge liability currency instruments adjustment translation Total Balance at March 31, 2018 $ (102) $ (1,793) $ (15,421) $ (17,316) Other comprehensive (loss) income before reclassifications, net of tax (1,356) 153 (5,291) (6,494) Amounts reclassified to earnings, net of tax (429) — — (429) Net current period other comprehensive loss (1,785) 153 (5,291) (6,923) Balance at June 30, 2018 $ (1,887) $ (1,640) $ (20,712) $ (24,239) Amounts reclassified from AOCL to earnings for the foreign currency forward contracts category are generally included in cost of sales in the Company’s consolidated statements of operations. For a description of the Company’s use of foreign currency forward contracts, refer to Note 7. |
Foreign currency forward contra
Foreign currency forward contracts | 3 Months Ended |
Jun. 30, 2018 | |
Foreign currency forward contracts. | |
Foreign currency forward contracts | 7. Foreign currency forward contracts The Company’s international operations and purchases of inventory products from foreign suppliers are subject to certain opportunities and risks, including foreign currency fluctuations. In the TCS segment, we utilize foreign currency forward contracts in Swedish krona to stabilize our retail gross margins and to protect our domestic operations from downward currency exposure by hedging purchases of inventory from our wholly-owned subsidiary, Elfa. Forward contracts in the TCS segment are designated as cash flow hedges, as defined by ASC 815. In the Elfa segment, we utilize foreign currency forward contracts to hedge purchases, primarily of raw materials, that are transacted in currencies other than Swedish krona, which is the functional currency of Elfa. Forward contracts in the Elfa segment are economic hedges and are not designated as cash flow hedges as defined by ASC 815. During the thirteen weeks ended June 30, 2018 and July 1, 2017, the TCS segment used forward contracts for 100% and 100% of inventory purchases in Swedish krona, respectively. During the thirteen weeks ended June 30, 2018 and July 1, 2017, the Elfa segment used forward contracts to purchase U.S. dollars in the amount of zero and $1,200, which represented zero and 72% of the Elfa segment’s U.S. dollar purchases, respectively. Generally, the Company’s foreign currency forward contracts have terms from 10 to 12 months and require the Company to exchange currencies at agreed-upon rates at settlement. The counterparties to the contracts consist of a limited number of major domestic and international financial institutions. The Company does not hold or enter into financial instruments for trading or speculative purposes. The Company records its foreign currency forward contracts on a gross basis and generally does not require collateral from these counterparties because it does not expect any losses from credit exposure. The Company records all foreign currency forward contracts on its consolidated balance sheet at fair value. The Company accounts for its foreign currency hedging instruments in the TCS segment as cash flow hedges, as defined. Changes in the fair value of the foreign currency hedging instruments that are considered to be effective, as defined, are recorded in other comprehensive income (loss) until the hedged item (inventory) is sold to the customer, at which time the deferred gain or loss is recognized through cost of sales. Any portion of a change in the foreign currency hedge instrument’s fair value that is considered to be ineffective, as defined, or that the Company has elected to exclude from its measurement of effectiveness, is immediately recorded in earnings as cost of sales. The Company assessed the effectiveness of the foreign currency hedge instruments and determined the foreign currency hedge instruments were highly effective during the thirteen weeks ended June 30, 2018 and July 1, 2017. Forward contracts not designated as hedges in the Elfa segment are adjusted to fair value as selling, general, and administrative expenses on the consolidated statements of operations; however, during the thirteen weeks ended June 30, 2018, the Company did not recognize any amount associated with the change in fair value of forward contracts not designated as hedging instruments, as the Company had none of these instruments outstanding. The Company had a $1,887 loss in accumulated other comprehensive loss related to foreign currency hedge instruments at June 30, 2018, of which $415 represents an unrealized loss for settled foreign currency hedge instruments related to inventory on hand as of June 30, 2018. The Company expects the unrealized loss of $415, net of taxes, to be reclassified into earnings over the next 12 months as the underlying inventory is sold to the end customer. The change in fair value of the Company’s foreign currency hedge instruments that qualify as cash flow hedges and are included in accumulated other comprehensive loss, net of taxes, are presented in Note 6 of these financial statements. |
Fair value measurements
Fair value measurements | 3 Months Ended |
Jun. 30, 2018 | |
Fair value measurements | |
Fair value measurements | 8. Fair value measurements Under GAAP, the Company is required to a) measure certain assets and liabilities at fair value or b) disclose the fair values of certain assets and liabilities recorded at cost. Accounting standards define fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. Fair value is calculated assuming the transaction occurs in the principal or most advantageous market for the asset or liability and includes consideration of non-performance risk and credit risk of both parties. Accounting standards pertaining to fair value establish a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value. These tiers include: · Level 1—Valuation inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. · Level 2—Valuation inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3—Valuation inputs are unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are determined using model-based techniques that include option pricing models, discounted cash flow models and similar techniques. As of June 30, 2018, March 31, 2018 and July 1, 2017, the Company held certain items that are required to be measured at fair value on a recurring basis. These included the nonqualified retirement plan and foreign currency forward contracts. The nonqualified retirement plan consists of investments purchased by employee contributions to retirement savings accounts. The Company’s foreign currency hedging instruments consist of over-the-counter (OTC) contracts, which are not traded on a public exchange. See Note 7 for further information on the Company’s hedging activities. The fair values of the nonqualified retirement plan and foreign currency forward contracts are determined based on the market approach which utilizes inputs that are readily available in public markets or can be derived from information available in publicly quoted markets for comparable assets. Therefore, the Company has categorized these items as Level 2. The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values. The Company has consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the types of contracts it holds. The following items are measured at fair value on a recurring basis, subject to the disclosure requirements of ASC 820, Fair Value Measurements : June 30, March 31, July 1, Description Balance Sheet Location 2018 2018 2017 Assets Nonqualified retirement plan (1) N/A Other current assets $ 5,999 $ 5,848 $ 5,138 Foreign currency forward contracts Level 2 Other current assets — — 2,434 Total assets $ 5,999 $ 5,848 $ 7,572 (1) The fair value amount of the nonqualified retirement plan is measured at fair value using the net asset value per share practical expedient, and therefore, is not classified in the fair value hierarchy. The fair value of long-term debt was estimated using quoted prices as well as recent transactions for similar types of borrowing arrangements (Level 2 valuations). As of June 30, 2018, March 31, 2018 and July 1, 2017, the estimated fair value of the Company’s long-term debt, including current maturities, was $312,876, $295,605, and $315,359, respectively. |
Segment reporting
Segment reporting | 3 Months Ended |
Jun. 30, 2018 | |
Segment reporting | |
Segment reporting | 9. Segment reporting The Company’s reportable segments were determined on the same basis as how management evaluates performance internally by the Chief Operating Decision Maker (“CODM”). The Company has determined that the Chief Executive Officer is the CODM and the Company’s two reportable segments consist of TCS and Elfa. The TCS segment includes the Company’s retail stores, website and call center, as well as the installation and organization services business. The Elfa segment includes the manufacturing business that produces the elfa ® brand products that are sold domestically exclusively through the TCS segment, as well as on a wholesale basis in approximately 30 countries around the world with a concentration in the Nordic region of Europe. The intersegment sales in the Elfa column represent elfa ® product sales to the TCS segment. These sales and the related gross margin on merchandise recorded in TCS inventory balances at the end of the period are eliminated for consolidation purposes in the Eliminations column. The net sales to third parties in the Elfa column represent sales to customers outside of the United States. The Company has determined that adjusted earnings before interest, tax, depreciation, and amortization (“Adjusted EBITDA”) is the profit or loss measure that the CODM uses to make resource allocation decisions and evaluate segment performance. Adjusted EBITDA assists management in comparing our performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect our core operations and, therefore, are not included in measuring segment performance. Adjusted EBITDA is calculated in accordance with the Senior Secured Term Loan Facility and the Revolving Credit Facility and we define Adjusted EBITDA as net income before interest, taxes, depreciation and amortization, certain non cash items, and other adjustments that we do not consider in our evaluation of ongoing operating performance from period to period. Fiscal thirteen weeks ended June 30, 2018 TCS Elfa Eliminations Total Net sales to third parties $ 180,082 $ 15,741 $ — $ 195,823 Intersegment sales — 10,395 (10,395) — Adjusted EBITDA 10,103 1,599 689 12,391 Interest expense, net 7,845 63 — 7,908 Assets (1) 649,190 106,446 (3,273) 752,363 Fiscal thirteen weeks ended July 1, 2017 TCS Elfa Eliminations Total Net sales to third parties $ 167,059 $ 16,009 $ — $ 183,068 Intersegment sales — 9,044 (9,044) — Adjusted EBITDA 5,764 1,143 (477) 6,430 Interest expense, net 4,157 68 — 4,225 Assets (1) 660,095 113,495 (3,349) 770,241 (1) Tangible assets in the Elfa column are located outside of the United States. A reconciliation of loss before taxes to Adjusted EBITDA is set forth below: Thirteen Weeks Ended June 30, July 1, 2018 2017 Loss before taxes $ (10,244) $ (12,262) Add: Depreciation and amortization 9,337 9,542 Interest expense, net 7,908 4,225 Pre-opening costs (a) 346 1,386 Non-cash rent (b) (637) (461) Stock-based compensation (c) 586 494 Foreign exchange losses (gains) (d) 38 (76) Optimization Plan implementation charges (e) 4,864 3,534 Other adjustments (f) 193 48 Total Adjusted EBITDA $ 12,391 $ 6,430 (a) Non-capital expenditures associated with opening new stores and relocating stores, including rent, 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 rent expense has been above or below our cash rent payment due to lease accounting adjustments. The adjustment varies depending on the average age of our lease portfolio (weighted for size), as our GAAP rent expense on younger leases typically exceeds our cash cost, while our GAAP rent expense on older leases is typically less than our cash cost. (c) 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. (d) Realized foreign exchange transactional gains/losses our management does not consider in our evaluation of our ongoing operations. (e) Charges incurred to implement our Optimization Plan, which include certain consulting costs recorded in selling, general and administrative expenses in the first quarter of fiscal 2018, cash severance payments associated with the elimination of certain full-time positions at the TCS segment recorded in other expenses in the first quarter of fiscal 2017, and cash severance payments associated with organizational realignment at the Elfa segment recorded in other expenses in the first quarter of fiscal 2017, which we do not consider in our evaluation of ongoing performance. (f) Other adjustments include amounts our management does not consider in our evaluation of our ongoing operations, including certain severance and other charges. |
Stock-based compensation
Stock-based compensation | 3 Months Ended |
Jun. 30, 2018 | |
Stock-based compensation | |
Stock-based compensation | 10. Stock-based compensation On June 1, 2018, the Company granted time-based and performance-based restricted stock awards under the Company’s Amended and Restated 2013 Incentive Award Plan to certain officers and employees of the Company. The total number of restricted shares granted was 551,453 with a grant-date fair value of $7.68. The time-based restricted stock awards will vest over 3 years. The performance-based restricted stock awards vest based on achievement of fiscal 2018 performance targets and are also subject to time-based vesting requirements over 3 years. Unrecognized compensation expense related to outstanding restricted stock awards to employees as of June 30, 2018 is expected to be $3,543 to be recognized over a weighted average period of 1.9 years. As of June 30, 2018, the total number of nonvested restricted stock awards was 701,106. |
Description of business and b18
Description of business and basis of presentation | 3 Months Ended |
Jun. 30, 2018 | |
Nature of business and summary of significant accounting policies | |
Contract with Customer, Asset and Liability [Table Text Block] | Below is a rollforward of contract liability balances from March 31, 2018 to June 30, 2018, which illustrates the amount of contract liability as of March 31, 2018 which was subsequently recognized into revenue in the thirteen weeks ended June 30, 2018: Contract liability Revenue recognized Contract liabilities Contract liability balance at from beginning added during balance at March 31, 2018 (1) liability period (2) June 30, 2018 Unearned revenue $ 11,080 $ (10,028) $ 13,591 $ 14,643 Gift cards and store credits outstanding $ 8,470 $ (1,123) $ 1,338 $ 8,685 (1) Gift cards and store credits outstanding balance is net of revenue recognition transition adjustment (2) Net of estimated breakage |
Detail of certain balance she19
Detail of certain balance sheet accounts (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Detail of certain balance sheet accounts | |
Schedule of detail of certain balance sheet accounts | June 30, March 31, July 1, 2018 2018 2017 Accounts receivable, net: Trade receivables, net $ 12,898 $ 15,968 $ 13,964 Credit card receivables 10,054 6,939 9,474 Tenant allowances 235 998 2,929 Other receivables 1,653 1,623 1,123 $ 24,840 $ 25,528 $ 27,490 Inventory: Finished goods $ 98,851 $ 91,970 $ 100,036 Raw materials 4,663 4,840 4,440 Work in progress 621 552 530 $ 104,135 $ 97,362 $ 105,006 Accrued liabilities: Accrued payroll, benefits and bonuses $ 25,177 $ 24,940 $ 25,207 Unearned revenue 14,643 11,080 12,284 Accrued transaction and property tax 9,366 12,846 10,859 Gift cards and store credits outstanding 8,685 8,891 9,394 Accrued lease liabilities 4,619 5,105 5,311 Accrued interest 258 292 182 Other accrued liabilities 7,080 7,340 6,364 $ 69,828 $ 70,494 $ 69,601 |
Net income (loss) per common 20
Net income (loss) per common share (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Net income (loss) per common share | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Thirteen Weeks Ended June 30, July 1, 2018 2017 Numerator: Net loss $ (6,764) $ (7,677) Denominator: Weighted-average common shares-basic and diluted 48,138,907 48,047,937 Net loss per common share-basic and diluted $ (0.14) $ (0.16) Antidilutive securities not included: Stock options outstanding 2,598,505 2,932,907 Nonvested restricted stock awards 123,001 83,509 |
Accumulated other comprehensi21
Accumulated other comprehensive income (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Accumulated other comprehensive income | |
Schedule of components of AOCI, net of tax | Foreign currency Pension Foreign hedge liability currency instruments adjustment translation Total Balance at March 31, 2018 $ (102) $ (1,793) $ (15,421) $ (17,316) Other comprehensive (loss) income before reclassifications, net of tax (1,356) 153 (5,291) (6,494) Amounts reclassified to earnings, net of tax (429) — — (429) Net current period other comprehensive loss (1,785) 153 (5,291) (6,923) Balance at June 30, 2018 $ (1,887) $ (1,640) $ (20,712) $ (24,239) |
Fair value measurements (Tables
Fair value measurements (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Fair value measurements | |
Schedule of items measured at fair value on a recurring basis, subject to the disclosure requirements of ASC 820 | June 30, March 31, July 1, Description Balance Sheet Location 2018 2018 2017 Assets Nonqualified retirement plan (1) N/A Other current assets $ 5,999 $ 5,848 $ 5,138 Foreign currency forward contracts Level 2 Other current assets — — 2,434 Total assets $ 5,999 $ 5,848 $ 7,572 (1) The fair value amount of the nonqualified retirement plan is measured at fair value using the net asset value per share practical expedient, and therefore, is not classified in the fair value hierarchy. |
Segment reporting (Tables)
Segment reporting (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Segment reporting | |
Schedule of segment reporting | Fiscal thirteen weeks ended June 30, 2018 TCS Elfa Eliminations Total Net sales to third parties $ 180,082 $ 15,741 $ — $ 195,823 Intersegment sales — 10,395 (10,395) — Adjusted EBITDA 10,103 1,599 689 12,391 Interest expense, net 7,845 63 — 7,908 Assets (1) 649,190 106,446 (3,273) 752,363 Fiscal thirteen weeks ended July 1, 2017 TCS Elfa Eliminations Total Net sales to third parties $ 167,059 $ 16,009 $ — $ 183,068 Intersegment sales — 9,044 (9,044) — Adjusted EBITDA 5,764 1,143 (477) 6,430 Interest expense, net 4,157 68 — 4,225 Assets (1) 660,095 113,495 (3,349) 770,241 (1) Tangible assets in the Elfa column are located outside of the United States. |
Summary of reconciliation of Adjusted EBITDA by segment to income before taxes | Thirteen Weeks Ended June 30, July 1, 2018 2017 Loss before taxes $ (10,244) $ (12,262) Add: Depreciation and amortization 9,337 9,542 Interest expense, net 7,908 4,225 Pre-opening costs (a) 346 1,386 Non-cash rent (b) (637) (461) Stock-based compensation (c) 586 494 Foreign exchange losses (gains) (d) 38 (76) Optimization Plan implementation charges (e) 4,864 3,534 Other adjustments (f) 193 48 Total Adjusted EBITDA $ 12,391 $ 6,430 (a) Non-capital expenditures associated with opening new stores and relocating stores, including rent, 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 rent expense has been above or below our cash rent payment due to lease accounting adjustments. The adjustment varies depending on the average age of our lease portfolio (weighted for size), as our GAAP rent expense on younger leases typically exceeds our cash cost, while our GAAP rent expense on older leases is typically less than our cash cost. (c) 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. (d) Realized foreign exchange transactional gains/losses our management does not consider in our evaluation of our ongoing operations. (e) Charges incurred to implement our Optimization Plan, which include certain consulting costs recorded in selling, general and administrative expenses in the first quarter of fiscal 2018, cash severance payments associated with the elimination of certain full-time positions at the TCS segment recorded in other expenses in the first quarter of fiscal 2017, and cash severance payments associated with organizational realignment at the Elfa segment recorded in other expenses in the first quarter of fiscal 2017, which we do not consider in our evaluation of ongoing performance. (f) Other adjustments include amounts our management does not consider in our evaluation of our ongoing operations, including certain severance and other charges. |
Description of business and b24
Description of business and basis of presentation (Details) | Jun. 30, 2018ft²storestatecountry |
Description of business and basis of presentation | |
Number of stores | store | 91 |
Average size of stores (in square feet) | 25,000 |
Average selling square feet in stores (in square feet) | 19,000 |
Number of states | state | 32 |
Elfa | |
Description of business and basis of presentation | |
Number of countries in which products are sold on wholesale basis | country | 30 |
Description of business and b25
Description of business and basis of presentation - Recent accounting pronouncements (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Apr. 01, 2018 | Mar. 31, 2018 | Jul. 01, 2017 |
Recent accounting pronouncements | ||||
Retained Earnings (Accumulated Deficit) | $ (602,078) | $ (595,721) | $ (622,826) | |
Accrued Liabilities, Current | 69,828 | 70,494 | 69,601 | |
Inventory, Net | 104,135 | 97,362 | 105,006 | |
Other Assets, Current | $ 12,577 | 11,609 | $ 13,683 | |
ASU 2014-09 | ||||
Recent accounting pronouncements | ||||
Retained Earnings (Accumulated Deficit) | $ 400 | |||
Accrued Liabilities, Current | $ (400) | |||
Inventory, Net | (900) | |||
Other Assets, Current | $ 900 |
Description of business and b26
Description of business and basis of presentation - Contract Balances (Details) $ in Thousands | 3 Months Ended |
Jun. 30, 2018USD ($) | |
Unearned revenue | |
Rollforward of contract liability balances | |
Contract liability beginning balance | $ 11,080 |
Revenue recognized from beginning liability | (10,028) |
Contract liabilities added during period | 13,591 |
Contract liability balance ending balance | 14,643 |
Gift card and store credits outstanding | |
Rollforward of contract liability balances | |
Contract liability beginning balance | 8,470 |
Revenue recognized from beginning liability | (1,123) |
Contract liabilities added during period | 1,338 |
Contract liability balance ending balance | $ 8,685 |
Detail of certain balance she27
Detail of certain balance sheet accounts (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Mar. 31, 2018 | Jul. 01, 2017 |
Accounts receivable, net: | |||
Trade receivables, net | $ 12,898 | $ 15,968 | $ 13,964 |
Credit card receivables | 10,054 | 6,939 | 9,474 |
Tenant allowances | 235 | 998 | 2,929 |
Other receivables | 1,653 | 1,623 | 1,123 |
Accounts receivable, net | 24,840 | 25,528 | 27,490 |
Inventory: | |||
Finished goods | 98,851 | 91,970 | 100,036 |
Raw materials | 4,663 | 4,840 | 4,440 |
Work in progress | 621 | 552 | 530 |
Inventory | 104,135 | 97,362 | 105,006 |
Accrued Liabilities: | |||
Accrued payroll, benefits and bonuses | 25,177 | 24,940 | 25,207 |
Unearned revenue | 14,643 | 11,080 | 12,284 |
Accrued transaction and property tax | 9,366 | 12,846 | 10,859 |
Gift cards and store credits outstanding | 8,685 | 8,891 | 9,394 |
Accrued lease liabilities | 4,619 | 5,105 | 5,311 |
Accrued interest | 258 | 292 | 182 |
Other accrued liabilities | 7,080 | 7,340 | 6,364 |
Accrued liabilities | $ 69,828 | $ 70,494 | $ 69,601 |
Net income (loss) per common 28
Net income (loss) per common share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Numerator: | ||
Net loss | $ (6,764) | $ (7,677) |
Denominator: | ||
Weighted-average common shares - basic and diluted (in shares) | 48,138,907 | 48,047,937 |
Net loss per common share - basic and diluted | $ (0.14) | $ (0.16) |
Stock options outstanding | ||
Antidilutive securities not included: | ||
Antidilutive securities | 2,598,505 | 2,932,907 |
Nonvested restricted stock awards | ||
Antidilutive securities not included: | ||
Antidilutive securities | 123,001 | 83,509 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Income taxes | ||
Remeasurement of deferred tax balances | $ 604 | |
Effective income tax rate (as a percent) | 34.00% | 37.40% |
Income taxes - Tax Cuts and Job
Income taxes - Tax Cuts and Jobs Act (Details) $ in Thousands | 12 Months Ended |
Mar. 31, 2018USD ($) | |
Income taxes | |
Net provisional tax benefit | $ (15,689) |
Provisional benefit related to the remeasurement of deferred tax balances | (24,210) |
Provisional expense related to the one-time transition tax on foreign earnings | $ 8,521 |
Commitments and contingencies (
Commitments and contingencies (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Standby letters of credit | |
Commitments and contingencies | |
Amount outstanding | $ 3,817 |
Accumulated other comprehensi32
Accumulated other comprehensive income (Details) $ in Thousands | 3 Months Ended |
Jun. 30, 2018USD ($) | |
Rollforward of the amounts included in AOCI, net of taxes | |
Balance beginning of period | $ (17,316) |
Other comprehensive income (loss) before reclassifications, net of tax | (6,494) |
Amounts reclassified to earnings, net of tax | (429) |
Net current period other comprehensive income (loss) | (6,923) |
Balance end of period | (24,239) |
Pension liability adjustment | |
Rollforward of the amounts included in AOCI, net of taxes | |
Balance beginning of period | (1,793) |
Other comprehensive income (loss) before reclassifications, net of tax | 153 |
Net current period other comprehensive income (loss) | 153 |
Balance end of period | (1,640) |
Foreign currency translation | |
Rollforward of the amounts included in AOCI, net of taxes | |
Balance beginning of period | (15,421) |
Other comprehensive income (loss) before reclassifications, net of tax | (5,291) |
Net current period other comprehensive income (loss) | (5,291) |
Balance end of period | (20,712) |
Foreign currency hedge instruments | |
Rollforward of the amounts included in AOCI, net of taxes | |
Balance beginning of period | (102) |
Other comprehensive income (loss) before reclassifications, net of tax | (1,356) |
Amounts reclassified to earnings, net of tax | (429) |
Net current period other comprehensive income (loss) | (1,785) |
Balance end of period | $ (1,887) |
Foreign currency forward cont33
Foreign currency forward contracts (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Foreign Currency Forward Contracts | ||
Purchase of inventory from use of forward contracts in Swedish krona (as a percent) | 100.00% | 100.00% |
Purchase of U.S. dollars from use of forward contracts | $ 0 | $ 1,200 |
Purchase of U.S. dollars from use of forward contracts as a percent of Elfa's U.S. Dollar purchases | 0.00% | 72.00% |
Foreign currency forward contracts | Not Designated as Hedging Instrument | ||
Foreign Currency Forward Contracts | ||
Loss associated with the change in fair value of forward contracts not designated as hedging instruments | $ 0 | |
Foreign currency hedge instruments | Designated as Hedging Instrument | Cash Flow Hedging | ||
Foreign Currency Forward Contracts | ||
Gain in accumulated other comprehensive loss related to foreign currency hedge instruments | 1,887 | |
Unrealized gain for settled foreign currency hedge instruments | 415 | |
Unrealized gain to be reclassified into earnings over the next 12 months | $ 415 | |
Minimum | Foreign currency forward contracts | ||
Foreign Currency Forward Contracts | ||
Term of contract | 10 months | |
Maximum | Foreign currency forward contracts | ||
Foreign Currency Forward Contracts | ||
Term of contract | 12 months |
Fair value measurements (Detail
Fair value measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Mar. 31, 2018 | Jul. 01, 2017 |
Fair value | |||
Liabilities | |||
Estimated fair value of long-term debt, including current maturities | $ 312,876 | $ 295,605 | $ 315,359 |
Recurring | |||
Assets | |||
Total assets | 5,999 | 5,848 | 7,572 |
Recurring | Other current assets | |||
Assets | |||
Nonqualified retirement plan | $ 5,999 | $ 5,848 | 5,138 |
Not Designated as Hedging Instrument | Recurring | Foreign currency forward contracts | Level 2 | Other current assets | |||
Assets | |||
Foreign currency forward contracts | $ 2,434 |
Segment reporting (Details)
Segment reporting (Details) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2018USD ($)segmentcountry | Jul. 01, 2017USD ($) | Mar. 31, 2018USD ($) | |
Segment reporting | |||
Number of reportable segments | segment | 2 | ||
Segment reporting | |||
Sales | $ 195,823 | $ 183,068 | |
Adjusted EBITDA | 12,391 | 6,430 | |
Interest expense, net | (7,908) | (4,225) | |
Assets | $ 752,363 | 770,241 | $ 749,369 |
Elfa | |||
Segment reporting | |||
Number of countries in which products are sold on wholesale basis | country | 30 | ||
Operating segments | TCS | |||
Segment reporting | |||
Sales | $ 180,082 | 167,059 | |
Adjusted EBITDA | 10,103 | 5,764 | |
Interest expense, net | (7,845) | (4,157) | |
Assets | 649,190 | 660,095 | |
Operating segments | Elfa | |||
Segment reporting | |||
Sales | 15,741 | 16,009 | |
Adjusted EBITDA | 1,599 | 1,143 | |
Interest expense, net | (63) | (68) | |
Assets | 106,446 | 113,495 | |
lntersegment | |||
Segment reporting | |||
Sales | (10,395) | (9,044) | |
Adjusted EBITDA | 689 | (477) | |
Assets | (3,273) | (3,349) | |
lntersegment | Elfa | |||
Segment reporting | |||
Sales | $ 10,395 | $ 9,044 |
Segment reporting - Reconciliat
Segment reporting - Reconciliation of Adjusted EBITDA by segment to income before taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Segment reporting | ||
Loss before taxes | $ (10,244) | $ (12,262) |
Depreciation and amortization | 9,337 | 9,542 |
Interest expense, net | 7,908 | 4,225 |
Pre-opening costs | (346) | (1,386) |
Non-cash rent | (637) | (461) |
Stock-based compensation | (586) | (494) |
Foreign exchange (gains) losses | (38) | 76 |
Optimization Plan implementation charges | (4,864) | (3,534) |
Other adjustments | 193 | 48 |
Total Adjusted EBITDA | $ 12,391 | $ 6,430 |
Stock-based compensation (Detai
Stock-based compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 01, 2018 | Jun. 30, 2018 |
Time-based restricted shares granted on December 12, 2017 | ||
Stock-based compensation | ||
Vesting period | 3 years | |
Performance-based restricted shares granted on December 12, 2017 | ||
Stock-based compensation | ||
Vesting period | 3 years | |
Nonvested resricted stock awards | ||
Stock-based compensation | ||
Unrecognized compensation cost (in dollars) | $ 3,543 | |
Weighted average period | 1 year 10 months 24 days | |
Nonvested restricted shares | 701,106 | |
2013 Equity Plan | Time-based restricted shares granted on December 12, 2017 | ||
Stock-based compensation | ||
Total number of restricted shares granted (in shares) | 551,453 | |
Grant-date fair value (in dollars per share) | $ 7.68 |