BJ’s Wholesale Club, Inc. (BJ) today reported net income for the first quarter of 2008 of $17.2 million, or $.29 per diluted share. For the first quarter of 2007, the Company reported net income of $13.7 million, or $.21 per diluted share. Last year’s results included income of $0.6 million post-tax, or $.01 per diluted share, in connection with the closing of the Company’s in-club pharmacies.
The Company also announced that it expects to report earnings for fiscal 2008 in the range of $2.04 to $2.14 per diluted share, an increase of $0.06 versus prior guidance of $1.98 to $2.08 per diluted share.
Net sales for the first quarter of 2008 increased by 12.3% to $2.26 billion and comparable club sales increased by 9.6%, including a contribution from sales of gasoline of 3.9%. For the first quarter of 2007, net sales increased by 7.5% and comparable club sales increased by 2.3%, including a contribution from sales of gasoline of 1.4%.
During the first quarter, the Company purchased approximately 925,000 shares of BJ’s common stock at an average cost of $31.95 per share, or approximately $30 million, leaving approximately $145 million remaining under the current authorization as of May 3, 2008.
Conference Call Information for First Quarter Financial Results
As previously announced, at 8:30 a.m. Eastern Time today, BJ’s management plans to hold a conference call to review first quarter results and to discuss its outlook for the remainder of 2008. To access the webcast, visit www.bjsinvestor.com/medialist.cfm to hear the call live, or to listen to an archive of the call, which will be available for approximately ninety days following the call.
About BJ’s Wholesale Club
BJ’s introduced the wholesale club concept to New England in 1984, and has since expanded to become a leading warehouse club chain in the eastern United States. The Company currently operates 178 BJ’s Wholesale Clubs in 16 states. BJ’s press releases and filings with the SEC are available on the Internet at www.bjsinvestor.com.
Forward-Looking Statements
Statements contained in this press release, including earnings guidance, that are not purely historical are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements. Factors that may cause or contribute to such differences include, without limitation, levels of gasoline profitability, levels of customer demand, economic and weather conditions, state and local regulation in the Company’s markets, and competitive conditions and other factors discussed in the Company’s Annual Report on SEC Form 10-K for the fiscal year ended February 2, 2008. Any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.
| BJ's Wholesale Club, Inc. and Consolidated Subsidiaries | ||||||||||
| STATEMENTS OF INCOME (Unaudited) | ||||||||||
| (Dollars in Thousands Except Per Share Amounts) | ||||||||||
| Thirteen Weeks Ended | ||||||||||
| May 3, | May 5, | |||||||||
| 2008 | 2007 | |||||||||
| Net sales | $ | 2,258,911 | $ | 2,011,139 | ||||||
| Membership fees and other | 47,507 | 46,872 | ||||||||
| Total revenues | 2,306,418 | 2,058,011 | ||||||||
| Cost of sales, including buying and occupancy costs | 2,095,724 | 1,868,513 | ||||||||
| Selling, general and administrative expenses | 181,113 | 165,051 | ||||||||
| Preopening expenses | 532 | 1,294 | ||||||||
| Operating income | 29,049 | 23,153 | ||||||||
| Interest income, net | 121 | 245 | ||||||||
| Income from continuing operations before income taxes | 29,170 | 23,398 | ||||||||
| Provision for income taxes | 11,872 | 9,593 | ||||||||
| Income from continuing operations | 17,298 | 13,805 | ||||||||
| Loss from discontinued operations, net of income taxes | (109 | ) | (151 | ) | ||||||
| Net income | $ | 17,189 | $ | 13,654 | ||||||
| Basic earnings per common share: | ||||||||||
| Income from continuing operations | $ | 0.29 | $ | 0.21 | ||||||
| Loss from discontinued operations | - | - | ||||||||
| Net income | $ | 0.29 | $ | 0.21 | ||||||
| Diluted earnings per common share: | ||||||||||
| Income from continuing operations | $ | 0.29 | $ | 0.21 | ||||||
| Loss from discontinued operations | - | - | ||||||||
| Net income | $ | 0.29 | $ | 0.21 | ||||||
Number of common shares for earnings per share computations: | ||||||||||
| Basic | 58,719,799 | 64,468,254 | ||||||||
| Diluted | 59,638,296 | 65,524,573 | ||||||||
| BJ's clubs in operation - end of period | 177 | 173 | ||||||||
| BJ's Wholesale Club, Inc. and Consolidated Subsidiaries | ||||||||
| CONDENSED BALANCE SHEETS (Unaudited) | ||||||||
| (Dollars in Thousands) | ||||||||
| May 3, | May 5, | |||||||
| 2008 | 2007 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 96,689 | $ | 83,965 | ||||
| Accounts receivable | 115,210 | 97,615 | ||||||
| Merchandise inventories | 865,174 | 840,341 | ||||||
| Current deferred income taxes | 27,297 | 34,211 | ||||||
| Prepaid expenses | 28,702 | 26,773 | ||||||
| Total current assets | 1,133,072 | 1,082,905 | ||||||
| Property, net of depreciation | 867,385 | 892,778 | ||||||
| Deferred income taxes | 4,289 | - | ||||||
| Other assets | 22,377 | 22,801 | ||||||
| TOTAL ASSETS | $ | 2,027,123 | $ | 1,998,484 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current installments of long-term debt | $ | 538 | $ | 502 | ||||
| Accounts payable | 635,357 | 556,897 | ||||||
| Closed store lease obligations | 1,923 | 4,359 | ||||||
| Accrued expenses and other current liabilities | 288,056 | 283,263 | ||||||
| Total current liabilities | 925,874 | 845,021 | ||||||
| Long-term debt, less portion due within one year | 1,577 | 2,115 | ||||||
| Noncurrent closed store lease obligations | 10,108 | 13,975 | ||||||
| Other noncurrent liabilities | 109,883 | 101,840 | ||||||
| Deferred income taxes | - | 908 | ||||||
| Stockholders' equity | 979,681 | 1,034,625 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 2,027,123 | $ | 1,998,484 | ||||
| BJ's Wholesale Club, Inc. and Consolidated Subsidiaries | |||||||||
| CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||||
| (Dollars in Thousands) | |||||||||
| Thirteen Weeks Ended | |||||||||
| May 3, | May 5, | ||||||||
| 2008 | 2007 | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||
| Net income | $ | 17,189 | $ | 13,654 | |||||
| Provision for store closing costs | 185 | 255 | |||||||
| Depreciation and amortization | 26,499 | 26,523 | |||||||
| Share-based compensation expense | 4,264 | 4,795 | |||||||
| Deferred income taxes | (925 | ) | (1,303 | ) | |||||
Decrease in merchandise inventories, net of accounts payable | 31,955 | 29,238 | |||||||
| Decrease in closed store lease obligations | (484 | ) | (877 | ) | |||||
| Other | (27,028 | ) | (13,944 | ) | |||||
| Net cash provided by operating activities | 51,655 | 58,341 | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||
| Property additions | (25,843 | ) | (32,723 | ) | |||||
| Property disposals | 67 | 50 | |||||||
| Purchase of marketable securities | (245 | ) | (608 | ) | |||||
| Sale of marketable securities | 349 | 727 | |||||||
| Net cash used in investing activities | (25,672 | ) | (32,554 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||
| Excess tax benefit from exercise of stock options | 627 | 830 | |||||||
| Purchase of treasury stock | (33,621 | ) | (15,729 | ) | |||||
| Proceeds from issuance of common stock | 6,515 | 17,319 | |||||||
| Repayment of long-term debt | (129 | ) | (119 | ) | |||||
Net cash provided by (used in) financing activities | (26,608 | ) | 2,301 | ||||||
| Net increase (decrease) in cash and cash equivalents | $ | (625 | ) | $ | 28,088 | ||||
| NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS | ||
| 1. | During last year's first quarter ended May 5, 2007, the Company recorded pretax income of $1.0 million in connection with the closing of its in-club pharmacies. On a post-tax basis, this income was $0.6 million, or $.01 per diluted share. | |
| 2. | Certain amounts in the prior year's financial statements have been reclassified for comparative purposes. | |
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