UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
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(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (
N/A
(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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)) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class |
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Trading Symbol |
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Name of Each Exchange on which Registered |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On March 17, 2022, JOANN Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter and fiscal year ended January 29, 2022. A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information furnished pursuant to Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. Furthermore, the information furnished pursuant to Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit |
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Description |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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JOANN INC. |
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Dated: March 17, 2022 |
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By: |
/s/ Matt Susz |
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Name: |
Matt Susz |
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Title: |
Executive Vice President, Chief Financial Officer |
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Exhibit 99.1
JOANN ANNOUNCES FOURTH QUARTER AND FULL YEAR FISCAL 2022 RESULTS
HUDSON, OH (March 17, 2022) — JOANN Inc. (NASDAQ: JOAN) (“JOANN”), the nation’s category leader in sewing and one of the fastest growing competitors in the arts and crafts category, today reported results for its fourth quarter and full year ended January 29, 2022.
“We’ve now completed our first full year as a public company. During Fiscal 2022, we achieved a number of critical milestones which we expect will underpin our continued growth longer term. Despite significant supply chain headwinds and disruptions, our top-line improved by 8% compared to pre-pandemic levels. Even after fully absorbing close to $60 million of higher ocean freight costs this past year, our gross profit improved by 10% over Fiscal 2020,” noted JOANN’s President and Chief Executive Officer, Wade Miquelon. “I’m very proud of the contributions made by our team members at JOANN. As we head into Fiscal 2023, I’m excited about a number of new growth initiatives including our joint venture with Singer, our recent acquisition of WeaveUp, and our latest strategic partnership with the JDM group, through which we’ve launched a B2B platform that will enable us to sell products through wholesale and other retail channels.”
Fourth Quarter Highlights:
Fiscal 2022 Full Year Financial and Business Highlights:
Balance Sheet Highlights:
Webcast and Conference Call Information:
JOANN management will host a conference call and webcast to discuss the results today, Thursday, March 17, 2022 at 5:00 p.m. ET. The number to call for the live interactive teleconference is 1 (833) 398-1023 and the passcode is 3449457. The live broadcast of JOANN’s conference call will be available online at the Company's website, www.joann.com, under the Investor Relations section, on March 17, 2022, beginning at 5:00 p.m. ET. The online replay will follow shortly after the call and will be available for one year.
Table 1.
JOANN Inc.
Consolidated Statements of Income (Loss)
(Unaudited)
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Thirteen Weeks Ended |
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Fifty-Two Weeks Ended |
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January 29, |
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January 30, |
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February 1, |
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January 29, |
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January 30, |
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February 1, |
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(Dollars in millions except per share data) |
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Net sales |
$ |
735.3 |
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$ |
840.8 |
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$ |
695.6 |
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$ |
2,417.6 |
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$ |
2,762.3 |
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$ |
2,241.2 |
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Cost of sales |
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410.9 |
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446.3 |
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367.3 |
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1,204.9 |
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1,396.1 |
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1,135.9 |
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Gross profit |
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324.4 |
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394.5 |
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328.3 |
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1,212.7 |
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1,366.2 |
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1,105.3 |
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Selling, general and administrative expenses |
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278.4 |
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313.8 |
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254.4 |
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1,032.9 |
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1,132.0 |
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977.4 |
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Depreciation and amortization |
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20.0 |
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20.2 |
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20.2 |
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80.1 |
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80.0 |
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77.5 |
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Goodwill impairment |
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— |
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— |
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356.4 |
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— |
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— |
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486.8 |
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Operating profit (loss) |
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26.0 |
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60.5 |
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(302.7 |
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99.7 |
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154.2 |
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(436.4 |
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Interest expense, net |
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11.4 |
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14.0 |
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24.3 |
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51.2 |
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69.0 |
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101.9 |
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Debt related loss (gain) |
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0.3 |
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(2.2 |
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(3.8 |
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3.3 |
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(155.1 |
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(3.8 |
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Gain on sale leaseback |
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— |
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— |
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— |
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(24.5 |
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— |
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— |
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Income (loss) before income taxes |
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14.3 |
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48.7 |
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(323.2 |
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69.7 |
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240.3 |
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(534.5 |
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Income tax provision |
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0.7 |
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10.4 |
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34.9 |
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13.0 |
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28.0 |
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12.1 |
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Net income (loss) |
$ |
13.6 |
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$ |
38.3 |
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$ |
(358.1 |
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$ |
56.7 |
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$ |
212.3 |
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$ |
(546.6 |
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Earnings (loss) per common share: |
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Basic |
$ |
0.33 |
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$ |
1.10 |
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$ |
(10.26 |
) |
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$ |
1.39 |
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$ |
6.08 |
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$ |
(15.67 |
) |
Diluted |
$ |
0.32 |
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$ |
1.06 |
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$ |
(10.26 |
) |
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$ |
1.35 |
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$ |
5.93 |
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$ |
(15.67 |
) |
Weighted-average common shares outstanding: |
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Basic |
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40,931,817 |
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34,902,380 |
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34,902,380 |
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40,805,319 |
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34,902,380 |
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34,882,306 |
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Diluted |
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41,884,886 |
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36,288,050 |
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34,902,380 |
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42,075,986 |
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35,798,491 |
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34,882,306 |
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2
Table 2.
JOANN Inc.
Consolidated Balance Sheets
(Unaudited)
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January 29, |
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January 30, |
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(Dollars in millions) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ |
22.5 |
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$ |
27.4 |
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Inventories |
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658.6 |
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555.9 |
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Prepaid expenses and other current assets |
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39.2 |
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71.5 |
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Total current assets |
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720.3 |
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654.8 |
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Property, equipment and leasehold improvements, net |
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256.8 |
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280.5 |
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Operating lease assets |
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818.0 |
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837.0 |
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Goodwill, net |
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162.0 |
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162.0 |
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Intangible assets, net |
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370.3 |
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377.2 |
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Other assets |
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34.8 |
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25.8 |
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Total assets |
$ |
2,362.2 |
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$ |
2,337.3 |
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Liabilities and Shareholders’ Equity |
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Current liabilities: |
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Accounts payable |
$ |
253.8 |
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$ |
250.1 |
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Accrued expenses |
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142.4 |
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171.3 |
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Current portion of operating lease liabilities |
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173.8 |
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187.2 |
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Current portion of long-term debt |
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6.8 |
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— |
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Total current liabilities |
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576.8 |
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608.6 |
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Long-term debt, net |
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778.6 |
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786.3 |
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Long-term operating lease liabilities |
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733.0 |
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766.4 |
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Long-term deferred income taxes |
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87.7 |
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87.3 |
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Other long-term liabilities |
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36.3 |
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46.3 |
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Shareholders’ equity: |
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Common stock, stated value $0.01 per share |
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0.4 |
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0.3 |
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Additional paid-in capital |
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203.3 |
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124.7 |
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Retained deficit |
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(24.9 |
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(69.0 |
) |
Accumulated other comprehensive income (loss) |
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1.8 |
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(0.3 |
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Treasury stock at cost |
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(30.8 |
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(13.3 |
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Total shareholders’ equity |
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149.8 |
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42.4 |
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Total liabilities and shareholders’ equity |
$ |
2,362.2 |
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$ |
2,337.3 |
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3
Table 3.
JOANN Inc.
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(Unaudited)
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Thirteen Weeks Ended |
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Fifty-Two Weeks Ended |
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January 29, |
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January 30, |
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February 1, |
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January 29, |
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January 30, |
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February 1, |
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(Dollars in millions) |
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Net income (loss) |
$ |
13.6 |
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$ |
38.3 |
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$ |
(358.1 |
) |
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$ |
56.7 |
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$ |
212.3 |
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$ |
(546.6 |
) |
Income tax provision |
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0.7 |
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10.4 |
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34.9 |
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13.0 |
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28.0 |
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12.1 |
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Interest expense, net |
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11.4 |
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14.0 |
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24.3 |
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51.2 |
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69.0 |
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101.9 |
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Depreciation and amortization (1) |
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20.2 |
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20.4 |
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20.3 |
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80.8 |
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80.6 |
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78.0 |
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Debt related loss (gain) (2) |
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0.3 |
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(2.2 |
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(3.8 |
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3.3 |
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(155.1 |
) |
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(3.8 |
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Gain on sale leaseback (3) |
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— |
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— |
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— |
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(24.5 |
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— |
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— |
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Strategic initiatives (4) |
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2.3 |
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2.1 |
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1.2 |
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3.7 |
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6.2 |
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9.0 |
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Excess import freight costs (5) |
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35.3 |
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— |
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— |
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46.6 |
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— |
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— |
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Other COVID-19 costs (6) |
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0.2 |
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16.6 |
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— |
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1.5 |
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65.0 |
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— |
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Technology development expense (7) |
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2.8 |
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2.2 |
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2.7 |
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9.0 |
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5.8 |
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6.4 |
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Stock-based compensation expense |
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0.4 |
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0.4 |
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0.3 |
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2.5 |
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1.5 |
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1.2 |
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Loss on disposal and impairment of fixed and operating lease assets |
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1.2 |
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2.0 |
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0.6 |
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1.1 |
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5.6 |
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1.0 |
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Goodwill and trade name impairment (8) |
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— |
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— |
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356.4 |
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— |
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— |
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486.8 |
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Sponsor management fee (9) |
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— |
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0.5 |
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1.2 |
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0.4 |
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1.3 |
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5.0 |
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Other (10) |
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0.5 |
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1.4 |
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0.6 |
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(2.8 |
) |
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3.1 |
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2.4 |
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Adjusted EBITDA |
$ |
88.9 |
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$ |
106.1 |
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$ |
80.6 |
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$ |
242.5 |
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$ |
323.3 |
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$ |
153.4 |
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4
Table 4.
JOANN Inc.
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss)
(Unaudited)
|
Thirteen Weeks Ended |
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|
Fifty-Two Weeks Ended |
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January 29, |
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January 30, |
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February 1, |
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January 29, |
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January 30, |
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February 1, |
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(Dollars in millions except per share data) |
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Net income (loss) |
$ |
13.6 |
|
|
$ |
38.3 |
|
|
$ |
(358.1 |
) |
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$ |
56.7 |
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$ |
212.3 |
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|
$ |
(546.6 |
) |
Debt related loss (gain) |
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0.3 |
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(2.2 |
) |
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(3.8 |
) |
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3.3 |
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(155.1 |
) |
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(3.8 |
) |
Gain on sale leaseback |
|
— |
|
|
|
— |
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|
— |
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$ |
(24.5 |
) |
|
|
— |
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|
— |
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Strategic initiatives |
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2.3 |
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2.1 |
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1.2 |
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3.7 |
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6.2 |
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9.0 |
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Excess import freight costs |
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35.3 |
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|
— |
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— |
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46.6 |
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|
— |
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|
— |
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Other COVID-19 costs |
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0.2 |
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16.6 |
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|
— |
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1.5 |
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65.0 |
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|
— |
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Technology development expense |
|
2.8 |
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2.2 |
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2.7 |
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9.0 |
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5.8 |
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6.4 |
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Stock-based compensation expense |
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0.4 |
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0.4 |
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0.3 |
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2.5 |
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1.5 |
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|
1.2 |
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Loss on disposal and impairment of fixed and operating lease assets |
|
1.2 |
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2.0 |
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0.6 |
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|
1.1 |
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5.6 |
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|
1.0 |
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Goodwill and trade name impairment |
|
— |
|
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|
— |
|
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|
356.4 |
|
|
|
— |
|
|
|
— |
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|
486.8 |
|
Sponsor management fee |
|
— |
|
|
|
0.5 |
|
|
|
1.2 |
|
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|
0.4 |
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1.3 |
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|
5.0 |
|
Other |
|
0.5 |
|
|
|
1.4 |
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|
0.6 |
|
|
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(2.8 |
) |
|
|
3.1 |
|
|
|
2.4 |
|
Tax impact of adjustments (11) |
|
(8.1 |
) |
|
|
(1.3 |
) |
|
|
(0.3 |
) |
|
|
(7.6 |
) |
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|
17.2 |
|
|
|
(4.7 |
) |
Adjusted net income (loss) |
$ |
48.5 |
|
|
$ |
60.0 |
|
|
$ |
0.8 |
|
|
$ |
89.9 |
|
|
$ |
162.9 |
|
|
$ |
(43.3 |
) |
|
|
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|
||||||
Diluted earnings (loss) per share |
$ |
0.32 |
|
|
$ |
1.06 |
|
|
$ |
(10.26 |
) |
|
$ |
1.35 |
|
|
$ |
5.93 |
|
|
$ |
(15.67 |
) |
Adjusted diluted earnings (loss) per share |
$ |
1.16 |
|
|
$ |
1.65 |
|
|
$ |
0.02 |
|
|
$ |
2.14 |
|
|
$ |
4.55 |
|
|
$ |
(1.24 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted-average shares outstanding - basic |
|
40,931,817 |
|
|
|
34,902,380 |
|
|
|
34,902,380 |
|
|
|
40,805,319 |
|
|
|
34,902,380 |
|
|
|
34,882,306 |
|
Weighted-average shares outstanding - diluted |
|
41,884,886 |
|
|
|
36,288,050 |
|
|
|
35,003,830 |
|
|
|
42,075,986 |
|
|
|
35,798,491 |
|
|
|
34,882,306 |
|
5
Table 5.
JOANN Inc.
Reconciliation of Gross Profit to Adjusted Gross Profit
(Unaudited)
|
Thirteen Weeks Ended |
|
|
Fifty-Two Weeks Ended |
|
||||||||||||||||||
|
January 29, |
|
|
January 30, |
|
|
February 1, |
|
|
January 29, |
|
|
January 30, |
|
|
February 1, |
|
||||||
|
(Dollars in millions) |
|
|||||||||||||||||||||
Net sales |
$ |
735.3 |
|
|
$ |
840.8 |
|
|
$ |
695.6 |
|
|
$ |
2,417.6 |
|
|
$ |
2,762.3 |
|
|
$ |
2,241.2 |
|
Cost of sales |
|
410.9 |
|
|
|
446.3 |
|
|
|
367.3 |
|
|
|
1,204.9 |
|
|
|
1,396.1 |
|
|
|
1,135.9 |
|
Gross profit |
|
324.4 |
|
|
|
394.5 |
|
|
|
328.3 |
|
|
|
1,212.7 |
|
|
|
1,366.2 |
|
|
|
1,105.3 |
|
Excess import freight costs |
|
35.3 |
|
|
|
— |
|
|
|
— |
|
|
|
46.6 |
|
|
|
— |
|
|
|
— |
|
Other COVID-19 costs |
|
— |
|
|
|
0.8 |
|
|
|
— |
|
|
|
— |
|
|
|
14.0 |
|
|
|
— |
|
Adjusted gross profit |
$ |
359.7 |
|
|
$ |
395.3 |
|
|
$ |
328.3 |
|
|
$ |
1,259.3 |
|
|
$ |
1,380.2 |
|
|
$ |
1,105.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted gross margin |
|
48.9 |
% |
|
|
47.0 |
% |
|
|
47.2 |
% |
|
|
52.1 |
% |
|
|
50.0 |
% |
|
|
49.3 |
% |
6
Table 6.
JOANN Inc.
Reconciliation of Net Cash Used for Operating Activities to Credit Facility Adjusted EBITDA
(Unaudited)
(in millions) |
|
Fiscal |
|
|
Net cash used for operating activities |
|
$ |
(23.6 |
) |
Non-cash operating lease expense |
|
|
(162.6 |
) |
Depreciation and amortization excluding content cost amortization |
|
|
(80.1 |
) |
Deferred income taxes |
|
|
0.4 |
|
Stock-based compensation expense |
|
|
(2.5 |
) |
Amortization of deferred financing costs and original issue discount |
|
|
(2.5 |
) |
Debt related loss |
|
|
(3.3 |
) |
Gain on sale leaseback |
|
|
24.5 |
|
Loss on disposal and impairment of other fixed assets |
|
|
(0.9 |
) |
Change in operating assets and liabilities |
|
|
307.3 |
|
Net income |
|
$ |
56.7 |
|
Income tax provision |
|
|
13.0 |
|
Interest expense, net |
|
|
51.2 |
|
Debt related loss |
|
|
3.3 |
|
Gain on sale leaseback |
|
|
(24.5 |
) |
Depreciation and amortization |
|
|
80.8 |
|
Strategic initiatives |
|
|
3.7 |
|
Excess import freight costs |
|
|
46.6 |
|
Other COVID-19 costs |
|
|
1.5 |
|
Technology development expense |
|
|
9.0 |
|
Stock-based compensation expense |
|
|
2.5 |
|
Loss on disposal and impairment of fixed and operating lease assets |
|
|
1.1 |
|
Sponsor management fee |
|
|
0.4 |
|
Other |
|
|
(2.8 |
) |
Adjusted EBITDA |
|
$ |
242.5 |
|
Pre-opening and closing costs excluding loss on disposal of fixed assets |
|
|
8.8 |
|
Credit Facility Adjusted EBITDA |
|
$ |
251.3 |
|
7
Non-GAAP Financial Measures
Adjusted EBITDA
JOANN presents Adjusted EBITDA, which is not a recognized financial measure under accounting principles generally accepted in the United States of America (“GAAP”), because it believes it assists investors and analysts in comparing JOANN’s performance across reporting periods on a consistent basis by excluding items that management does not believe are indicative of JOANN’s core operating performance. Management believes Adjusted EBITDA is helpful in highlighting trends in JOANN’s core operating performance compared to other measures, which can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. JOANN also uses Adjusted EBITDA in connection with establishing discretionary annual incentive compensation; supplementing GAAP measures of performance in the evaluation of the effectiveness of its business strategies; making budgeting decisions; comparing its performance against that of other peer companies using similar measures; and because its credit facilities use measures similar to Adjusted EBITDA to measure its compliance with certain covenants.
JOANN defines Adjusted EBITDA as net income (loss) plus income tax provision, interest expense, net and depreciation and amortization, as further adjusted to eliminate the impact of certain non-cash items and other items that management does not consider indicative of its ongoing operating performance, including debt related loss (gain), sale leaseback gains, costs related to strategic initiatives, COVID-19 costs, technology development expense, stock-based compensation expense, loss on disposal and impairment of fixed and operating lease assets, goodwill and trade name impairment, sponsor management fees and other one-time costs. Its adjustments for COVID-19 related costs include, as a separate line item, excess import freight costs. The excess import freight costs are directly attributable to surging market demand for shipping capacity as economies begin to recover from the COVID-19 pandemic, as well as actions taken by government and industry leaders designed to protect against further spread of the virus, which have disrupted the efficient operation of domestic and international supply chains. These COVID-19 related conditions have produced an imbalance of ocean freight capacity and related demand, as well as port congestion and other supply chain disruptions that are adding significant cost to JOANN’s procurement of imported merchandise. JOANN believes that these excess import freight costs include significantly higher rates paid per container to ocean carriers, as well as fees paid due to congested ports that JOANN does not normally incur. In a normative operating environment, JOANN would procure 70% to 80% of its needs for ocean freight under negotiated contract rates, with the balance procured in a brokered market, typically at no more than a 10% - 15% premium to its contract rates. Accordingly, JOANN established a standard cost (“standard cost”) assuming those contract capacities, established rates and typical premium in the brokered market for peak volume needs not covered under its contracts. Negotiation of its current contact rates were finalized in May 2021. In the current COVID-19 impacted operating environment, its contracted capacity has consistently not been met by its carriers, and rates paid on the open market have escalated to up to an average of nearly 200% above its contract rates and in some cases over 300% greater. The amount of excess import freight costs included as an adjustment to arrive at Adjusted EBITDA is calculated by subtracting, from its actual import freight costs, its standard cost for the applicable period. JOANN is identifying these COVID-19 related excess import freight costs as a separate line item in the table above due to their magnitude and to distinguish them from other COVID-19 related costs JOANN has previously excluded in calculating Adjusted EBITDA.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of JOANN’s results as reported under GAAP. Some of these limitations include:
JOANN compensates for these limitations by relying primarily on JOANN’s GAAP results and using Adjusted EBITDA only as supplemental information.
8
Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) per Share
JOANN presents adjusted net income (loss) and adjusted diluted earnings (loss) per share, which are not recognized financial measures under GAAP, because it believes these additional key measures assist investors and analysts in comparing JOANN’s performance across reporting periods on a consistent basis by excluding items that management does not believe are indicative of JOANN’s core operating performance. Management believes that adjusted net income (loss) and adjusted diluted earnings (loss) per share are helpful in highlighting trends in JOANN’s core operating performance compared to other measures, which can differ significantly depending on long-term strategic decisions regarding capital structure and capital investments. JOANN also uses adjusted net income (loss) and adjusted diluted earnings (loss) per share to supplement GAAP measures of performance in the evaluation of the effectiveness of its business strategies; to make budgeting decisions; and to compare its performance against that of other peer companies using similar measures.
JOANN defines adjusted net income (loss) as net income (loss) adjusted to eliminate the impact of certain non-cash items and other items that management does not consider indicative of its ongoing operating performance, including debt related loss (gain), sale leaseback gains, costs related to strategic initiatives, COVID-19 costs, technology development expense, stock-based compensation expense, loss on disposal and impairment of fixed and operating lease assets, goodwill and trade name impairment, sponsor management fees and other one-time costs. The adjustments are itemized in the table above. Adjusted diluted earnings (loss) per share is defined as adjusted net income (loss) divided by the weighted-average number of common shares outstanding assuming dilution in periods in which there is an adjusted net income.
Adjusted Gross Profit and Adjusted Gross Margin
JOANN presents adjusted gross profit and adjusted gross margin, which are not recognized financial measures under GAAP, because it believes they assist investors and analysts in comparing JOANN’s performance across reporting periods on a consistent basis by excluding items that management does not believe are indicative of JOANN’s core operating performance.
JOANN defines adjusted gross profit as gross profit excluding COVID-19 costs and adjusted gross margin as adjusted gross profit divided by net sales.
Credit Facility Adjusted EBITDA
JOANN presents Credit Facility Adjusted EBITDA because it is a measure that is calculated in accordance with JOANN’s asset-based revolving credit facility agreement, as amended, and senior secured term loan facility (collectively “Credit Facilities”) and used to determine compliance with certain ratios in the Credit Facilities, tested each quarter on the basis of the preceding four quarters. Accordingly, management believes that Credit Facility Adjusted EBITDA is material to an investor’s understanding of JOANN’s financial condition and liquidity.
JOANN defines Credit Facility Adjusted EBITDA as Adjusted EBITDA (as defined above) plus pre-opening and closing costs excluding loss on disposal of fixed assets, which is calculated consistently with the calculation of Adjusted EBITDA under the Credit Facilities.
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. JOANN intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Readers can generally identify forward-looking statements by the use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “seek,” “vision,” or “should,” or the negative thereof or other variations thereon or comparable terminology. Many factors could affect JOANN’s actual financial results and cause them to vary materially from the expectations contained in forward-looking statements, including those set forth in this document. These risks, uncertainties, and factors include, among other things: inflationary pressures and their impact on JOANN’s ability to control costs and on its customers level of discretionary income to spend on Creative Products; JOANN’s ability to anticipate and effectively respond to disruptions or inefficiencies in its distribution network, e-commerce fulfillment function and transportation system, including availability and cost of import and domestic freight; the effects of potential changes to U.S. trade regulations and policies, including tariffs, on JOANN’s business; developments involving JOANN’s competitors and its industry; potential future impacts of the COVID-19 pandemic, including effects on supply chain costs and capacity; JOANN’s ability to timely identify or effectively respond to consumer trends, and the potential effects of that ability on its relationship with its customers, the demand for JOANN’s products and its market share; JOANN’s expectations regarding the seasonality of its business; JOANN’s ability to manage the distinct risks facing its e-commerce business and maintain a relevant omni-channel experience for its customers; JOANN’s ability to maintain or negotiate
9
favorable lease terms; JOANN’s ability to execute on its growth strategy to renovate and improve the performance of its existing store locations; JOANN’s ability to attract and retain a qualified management team and other team members while controlling its labor costs; the impact of JOANN’s debt and lease obligations on its ability to raise additional capital to fund its operations and maintain flexibility in operating its business; JOANN’s reliance on and relationships with third party service providers; JOANN’s reliance on and relationships with foreign suppliers and their ability to supply it with adequate, timely, and cost-effective product supplies; JOANN’s ability, and its third party service providers’ ability, to maintain security and prevent unauthorized access to electronic and other confidential information; the impacts of potential disruptions to JOANN’s information systems, including its websites and mobile applications; JOANN’s ability to respond to risks associated with existing and future payment options; JOANN’s ability to maintain and enhance a strong brand image; JOANN’s ability to maintain adequate insurance coverage; JOANN’s status as a “controlled company” and control of JOANN as a public company by affiliates of Leonard Green & Partners, L.P.; the impact of evolving governmental laws and regulations and the outcomes of legal proceedings; and the amount and timing of repurchases of JOANN’s common stock, if any.
The preceding list is not intended to be an exhaustive list of all of JOANN’s forward-looking statements. JOANN has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While JOANN believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond JOANN’s control. Furthermore, the potential impact of the COVID-19 pandemic on JOANN’s business operations and financial results and on the world economy as a whole may heighten the risks and uncertainties that affect JOANN’s forward-looking statements. Given these risks and uncertainties, Readers are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included elsewhere in this document are not guarantees of future performance and JOANN’s actual results of operations, financial condition and liquidity, and the development of the industry in which it operates, may differ materially from the forward-looking statements included elsewhere in this document. In addition, even if JOANN’s results of operations, financial condition and liquidity, and events in the industry in which it operates, are consistent with the forward-looking statements included elsewhere in this document, they may not be predictive of results or developments in future periods. Any forward-looking statement that JOANN makes in this document speaks only as of the date of such statement. Except as required by law, JOANN does not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this document.
About JOANN
For more than 75 years, JOANN has inspired creativity in the hearts, hands, and minds of its customers. From a single storefront in Cleveland, Ohio, the nation’s category leader in sewing and fabrics and one of the fastest growing competitors in the arts and crafts industry has grown to include 848 stores across 49 states and robust e-commerce business. With the goal of helping every customer find their creative Happy Place, JOANN serves as a convenient single source for all of the supplies, guidance, and inspiration needed to achieve any project or passion.
Investor Relations Contact:
Ajay Jain
ajay.jain@joann.com
330-463-8585
Corporate Communications:
Amanda Hayes
amanda.hayes@joann.com
216-296-5887
10