Business Wire | May 12, 2021 04:10PM EDT

Boot Barn Holdings, Inc. Announces Fourth Quarter and Fiscal Year 2021 Financial Results

May 12, 2021

IRVINE, Calif.--(BUSINESS WIRE)--May 12, 2021--Boot Barn Holdings, Inc. (NYSE: BOOT) today announced its financial results for the fourth fiscal quarter and fiscal year ended March 27, 2021.

For the quarter ended March 27, 2021:

* Net sales increased 37.2% to $258.9 million. * Same store sales increased 26.9%, comprised of an increase in retail store same store sales of 28.5% and an increase in e-commerce sales of 19.5%. * Net income was $24.6 million, or $0.82 per diluted share, compared to net income of $5.7 million, or $0.20 per diluted share in the prior-year period. Net income per diluted share in the current-year period includes an approximately $0.07 per share benefit due to income tax accounting for share-based compensation. Net income per diluted share in the prior-year period includes a $0.01 per share benefit due to income tax accounting for share-based compensation and a $0.01 per share benefit from the realization of a state tax operating loss. Excluding the tax benefit in both periods, net income per diluted share in the current-year period was $0.75, compared to $0.18 in the prior-year period. * The Company opened 8 new stores.

For the fiscal year ended March 27, 2021:

* Net sales increased 5.7% to $893.5 million. * Same store sales increased 3.1%, comprised of a decrease in retail store same store sales of 1.1% and an increase in e-commerce sales of 23.6%. * Net income was $59.4 million, or $2.01 per diluted share, compared to net income of $47.9 million, or $1.64 per diluted share in the prior-year period. Net income per diluted share in the current-year period includes an approximately $0.09 per share benefit due to income tax accounting for share-based compensation. Net income per diluted share in the prior-year period includes a $0.07 per share benefit due to income tax accounting for share-based compensation and a $0.01 per share benefit from the realization of a state tax operating loss. Excluding the tax benefit in both periods, net income per diluted share in the current-year period grew 23% to $1.92, when compared to $1.56 in the prior-year period. * The Company opened 15 new stores.

Jim Conroy, Chief Executive Officer, commented, "I am extremely pleased with the strong finish to fiscal 2021. The pace of our business has been accelerating throughout the year, which along with a recent boost from government stimulus, culminated in record fourth quarter and fiscal year results. Our merchandise, marketing and omni-channel initiatives drove better full-priced selling, fueling margin expansion and solid profitability. At the same time, we increased our store footprint in existing and new geographies, bringing the full Boot Barn experience to a wider consumer audience."

Mr. Conroy continued, "I am very proud of the entire Boot Barn team, and particularly the stores organization, who have demonstrated incredible resolve throughout the pandemic and have served our customers on the frontline every day. The circumstances of the past year have highlighted the strengths of our business model, enhanced our operational capabilities, and fortified our leadership position in the industry. The combination of solid execution across the organization and macro tailwinds has created tremendously strong topline sales growth in the first six weeks of fiscal 2022. We believe we have started the year with great momentum and sound strategies in place to capitalize on the numerous growth opportunities we believe exist for Boot Barn over the near and long term."

Operating Results for the Fourth Quarter Ended March 27, 2021

* Net sales increased 37.2% to $258.9 million from $188.6 million in the prior-year period. Consolidated same store sales increased 26.9% with retail store same store sales up 28.5% and e-commerce same store sales up 19.5%. The increase in net sales was the result of an increase of 26.9% in same store sales, the sales contribution from temporarily closed stores that were excluded from the comp base, and the incremental sales from new stores opened over the past twelve months.

* Gross profit was $92.4 million, or 35.7% of net sales, compared to $58.0 million, or 30.7% of net sales, in the prior-year period. Gross profit increased primarily due to increased sales. The increase in gross profit rate of 500 basis points was driven by a 300-basis point increase in merchandise margin and 200 basis points of leverage in buying and occupancy costs. Merchandise margin increased 300 basis points primarily as a result ofbetter full price selling and a 120-basis point benefit from lower shrink.

* Selling, general and administrative expenses were $59.5 million, or 23.0% of net sales, compared to $48.3 million, or 25.6% of net sales, in the prior-year period. The increase in selling, general and administrative expenses was primarily a result of additional costs to support higher sales and increased incentive-based compensation. Selling, general and administrative expenses as a percentage of net sales decreased by 260 basis points primarily as a result of expense leverage on higher sales.

* Income from operations increased 238.9% to $32.9 million, or 12.7% of net sales, compared to $9.7 million, or 5.1% of net sales, in the prior-year period. This increase represents approximately 760 basis points of improvement in operating profit margin.

* Net income was $24.6 million, or $0.82 per diluted share, compared to net income of $5.7 million, or $0.20 per diluted share in the prior-year period. Net income per diluted share in the current-year period includes an approximately $0.07 per share benefit due to income tax accounting for share-based compensation. Net income per diluted share in the prior-year period includes a $0.01 per share benefit due to income tax accounting for share-based compensation and a $0.01 per share benefit from the realization of a state tax operating loss. Excluding the tax benefit in both periods, net income per diluted share in the current-year period was $0.75, compared to $0.18 in the prior-year period.

Operating Results for the Fiscal Year Ended March 27, 2021

* Net sales increased 5.7% to $893.5 million from $845.6 million in the prior-year period. Consolidated same store sales increased 3.1% with retail store same store sales declining 1.1% and e-commerce same store sales up 23.6%. The decrease in retail store sales was primarily due to decreased traffic in our stores in the first half of our fiscal year that resulted from customers staying at home in response to the COVID-19 crisis and temporary store closures. The increase in net sales was the result of incremental sales from new stores opened during the past twelve months and an increase of 3.1% in same store sales.

* Gross profit was $294.9 million, or 33.0% of net sales, compared to $276.5 million, or 32.7% of net sales, in the prior-year period. Gross profit increased primarily due to increased sales. The increase in gross profit rate of 30 basis points was driven by a 90-basis point increase in merchandise margin, partially offset by 60 basis points of deleverage in buying and occupancy costs. Merchandise margin increased 90 basis points primarily as a result of better full-price selling, lower shrink and increased exclusive brand penetration.

* Selling, general and administrative expenses were $208.6 million, or 23.3% of net sales, compared to $202.8 million, or 24.0% of net sales, in the prior-year period. The increase in selling, general and administrative expenses was primarily a result of higher store labor and increased incentive-based compensation, partially offset by reduced marketing spend. Selling, general and administrative expenses as a percentage of net sales decreased 70 basis points primarily as a result of expense leverage on higher sales.

* Income from operations increased 17.2% to $86.3 million, or 9.7% of net sales, compared to $73.7 million, or 8.7% of net sales, in the prior-year period. This increase represents approximately 100 basis points of improvement in operating profit margin.

* Net income was $59.4 million, or $2.01 per diluted share, compared to net income of $47.9 million, or $1.64 per diluted share in the prior-year period. Net income per diluted share in the current-year period includes an approximately $0.09 per share benefit due to income tax accounting for share-based compensation. Net income per diluted share in the prior-year period includes a $0.07 per share benefit due to income tax accounting for share-based compensation and a $0.01 per share benefit from the realization of a state tax operating loss. Excluding the tax benefit in both periods, net income per diluted share in the current-year period was $1.92, compared to $1.56 in the prior-year period.

Current Business

The following table includes retail store sales, e-commerce sales, and total net sales for the periods indicated below. It also includes the year-over-year change in retail store sales, e-commerce sales, and total net sales for each of the periods indicated below:

% Change % Change Four Weeks Four Weeks Four Weeks Fiscal Fiscal(all $ in Ended Ended Ended April 2022 April 2022thousands) April April April vs. vs. Fiscal 2022 Fiscal 2021 Fiscal 2020 Fiscal Fiscal April 2021 April 2020Retail $ 84,934 $ 16,763 $ 50,562 407 % 68 %StoresE-commerce $ 14,149 $ 10,414 $ 7,902 36 % 79 %

Total Net $ 99,083 $ 27,177 $ 58,464 265 % 69 %Sales Preliminary Preliminary % Change % Change Preliminary Preliminary Preliminary First 2 First 2(all $ in First 2 First 2 First 2 Weeks May Weeks Maythousands) Weeks May Weeks May Weeks May 2022 vs. 2022 vs. Fiscal 2022 Fiscal 2021 Fiscal 2020 First 2 First 2 Weeks May Weeks May 2021 2020Retail $ 38,650 $ 13,241 $ 24,386 192 % 58 %StoresE-commerce $ 7,249 $ 6,871 $ 3,992 6 % 82 %

Total Net $ 45,899 $ 20,112 $ 28,378 128 % 62 %Sales Balance Sheet Highlights as of March 27, 2021

* Cash of $73.1 million. * Average inventory per store decreased approximately 8.7% on a same store basis compared to March 28, 2020. * Total debt of $111.5 million, including zero balance drawn under the $165 million revolving credit facility.

Subsequent to March 27, 2021, the Company made a voluntary prepayment of $41.5 million on the term loan facility, reducing the outstanding principal balance to $70.0 million.

Fiscal Year 2022 Outlook

The Company is not providing complete full-year fiscal 2022 guidance, but is providing the following outlook for the full fiscal year:

* New unit growth of 10%. * Exclusive brand penetration growth of 250 basis points. * Effective tax rate of 26.0%. * Capital expenditures between $33.0 to $36.0 million.

Conference Call Information

A conference call to discuss the financial results for the fourth quarter and fiscal year 2021 is scheduled for today, May 12, 2021, at 4:30 p.m. ET (1:30 p.m. PT). Investors and analysts interested in participating in the call are invited to (877) 451-6152. The conference call will also be available to interested parties through a live webcast at investor.bootbarn.com. Please visit the website and select the "Events and Presentations" link at least 15 minutes prior to the start of the call to register and download any necessary software. A telephone replay of the call will be available until June 12, 2021, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the conference identification number: 13719472. Please note participants must enter the conference identification number in order to access the replay.

About Boot Barn

Boot Barn is the nation's leading lifestyle retailer of western and work-related footwear, apparel and accessories for men, women and children. The Company offers its loyal customer base a wide selection of work and lifestyle brands. As of the date of this release, Boot Barn operates 275 stores in 36 states, in addition to an e-commerce channel www.bootbarn.com. The Company also operates www.sheplers.com, the nation's leading pure play online western and work retailer and www.countryoutfitter.com, an e-commerce site selling to customers who live a country lifestyle. For more information, call 888-Boot-Barn or visit www.bootbarn.com.

Forward Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this press release are forward-looking statements. Forward-looking statements refer to our current expectations and projections relating to, by way of example and without limitation, our financial condition, liquidity, profitability, results of operations, margins, plans, objectives, strategies, future performance, business and industry. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate", "estimate", "expect", "project", "plan", "intend", "believe", "may", "might", "will", "could", "should", "can have", "likely", "outlook" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events, but not all forward-looking statements contain these identifying words. These forward-looking statements are based on assumptions that the Company's management has made in light of their industry experience and on their perceptions of historical trends, current conditions, expected future developments and other factors they believe are appropriate under the circumstances. As you consider this press release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond the Company's control) and assumptions. These risks, uncertainties and assumptions include, but are not limited to, the following: the effect of COVID-19 on our business operations, growth strategies, store traffic, employee availability, financial condition, liquidity and cash flow; decreases in consumer spending due to declines in consumer confidence, local economic conditions or changes in consumer preferences; the Company's ability to effectively execute on its growth strategy; and the Company's failure to maintain and enhance its strong brand image, to compete effectively, to maintain good relationships with its key suppliers, and to improve and expand its exclusive product offerings. The Company discusses the foregoing risks and other risks in greater detail under the heading "Risk factors" in the periodic reports filed by the Company with the Securities and Exchange Commission. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect the Company's actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. Because of these factors, the Company cautions that you should not place undue reliance on any of these forward-looking statements. New risks and uncertainties arise from time to time, and it is impossible for the Company to predict those events or how they may affect the Company. Further, any forward-looking statement speaks only as of the date on which it is made. Except as required by law, the Company does not intend to update or revise the forward-looking statements in this press release after the date of this press release.

Boot Barn Holdings, Inc.Consolidated Balance Sheets(In thousands, except per share data)(Unaudited)

March 27, March 28, 2021 2020

AssetsCurrent assets:Cash and cash equivalents $ 73,148 $ 69,563

Accounts receivable, net 12,771 12,087

Inventories 275,760 288,717

Prepaid expenses and other current assets 12,777 14,284

Total current assets 374,456 384,651

Property and equipment, net 110,444 109,603

Right-of-use assets, net 186,827 170,243

Goodwill 197,502 197,502

Intangible assets, net 60,885 60,974

Other assets 3,467 1,738

Total assets $ 933,581 $ 924,711

Liabilities and stockholders' equityCurrent liabilities:Line of credit $ - $ 129,900

Accounts payable 104,641 95,334

Accrued expenses and other current liabilities 77,615 52,612

Short-term lease liabilities 39,400 34,779

Total current liabilities 221,656 312,625

Deferred taxes 21,993 19,801

Long-term portion of notes payable, net 109,781 109,022

Long-term lease liabilities 181,836 160,935

Other liabilities 3,424 635

Total liabilities 538,690 603,018

Stockholders' equity:Common stock, $0.0001 par value; March 27, 2021 - 100,000shares authorized, 29,348 shares 3 3issued; March 28, 2020 - 100,000 shares authorized,28,880 shares issuedPreferred stock, $0.0001 par value; 10,000 shares - -authorized, no shares issued or outstandingAdditional paid-in capital 183,815 169,249

Retained earnings 213,027 153,641

Less: Common stock held in treasury, at cost, 96 and 71 (1,954) (1,200)shares at March 27, 2021 and March 28,2020, respectivelyTotal stockholders' equity 394,891 321,693

Total liabilities and stockholders' equity $ 933,581 $ 924,711

Boot Barn Holdings, Inc.Consolidated Statements of Operations(In thousands, except per share data)(Unaudited)

Thirteen Thirteen Fifty-Two Fifty-Two Weeks Weeks Weeks Weeks Ended Ended Ended Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Net sales $ 258,872 $ 188,628 $ 893,491 $ 845,575

Cost of goods sold 166,493 130,667 598,612 569,084

Gross profit 92,379 57,961 294,879 276,491

Selling, general and administrative 59,519 48,265 208,553 202,823expensesIncome from operations 32,860 9,696 86,326 73,668

Interest expense 2,115 2,941 9,442 13,310

Other income/(loss), net 71 (96) 366 (45)

Income before income taxes 30,816 6,659 77,250 60,313

Income tax expense 6,264 930 17,864 12,364

Net income $ 24,552 $ 5,729 $ 59,386 $ 47,949

Earnings per share:Basic shares $ 0.84 $ 0.20 $ 2.05 $ 1.68

Diluted shares $ 0.82 $ 0.20 $ 2.01 $ 1.64

Weighted average shares outstanding:Basic shares 29,122 28,786 28,930 28,583

Diluted shares 30,033 29,310 29,477 29,220

Boot Barn Holdings, Inc.Consolidated Statements of Cash Flows(In thousands)(Unaudited)

Fiscal Year Ended March 27, March 28, March 30, 2021 2020 2019

Cash flows from operating activitiesNet income $ 59,386 $ 47,949 $ 39,022

Adjustments to reconcile net income to netcash provided by operating activities:Depreciation 24,059 21,211 18,256

Stock-based compensation 7,158 4,908 2,873

Amortization of intangible assets 89 172 646

Amortization of right-of-use assets 34,231 31,091 -

Amortization of debt issuance fees and debt 884 946 1,235discountLoss on disposal of property and equipment 87 417 23

Gain/(loss) on adjustment of right-of-use 295 (186) -assets and lease liabilitiesDamaged asset write-off - - 312

Store impairment charges 384 191 455

Accretion of above market leases - - (28)

Deferred taxes 2,192 2,599 4,172

Changes in operating assets andliabilities, net of acquisitions:Accounts receivable, net 8,050 5,721 (3,706)

Inventories 12,957 (45,622) (27,702)

Prepaid expenses and other current assets 1,382 (2,351) 4,179

Other assets (1,729) (548) (254)

Accounts payable 12,360 (13,810) 14,191

Accrued expenses and other current 25,003 6,310 6,882liabilitiesOther liabilities 2,789 (3,611) 2,704

Operating leases (33,655) (30,070) -

Net cash provided by operating activities $ 155,922 $ 25,317 $ 63,260

Cash flows from investing activitiesPurchases of property and equipment $ (28,424) $ (37,195) $ (27,525)

Insurance recoveries for property and - 717 184equipmentAcquisition of business, net of cash - (3,688) (4,424)acquiredNet cash used in investing activities $ (28,424) $ (40,166) $ (31,765)

Cash flows from financing activities(Payments)/borrowings on line of credit - $ (129,900) $ 129,900 $ (21,006)netRepayments on debt and finance lease (667) (65,553) (10,554)obligationsDebt issuance fees paid - (1,221) -

Tax withholding payments for net share (754) (532) (474)settlementProceeds from the exercise of stock options 7,408 5,204 8,137

Net cash (used in)/provided by financing $ (123,913) $ 67,798 $ (23,897)activities Net increase in cash and cash equivalents 3,585 52,949 7,598

Cash and cash equivalents, beginning of 69,563 16,614 9,016periodCash and cash equivalents, end of period $ 73,148 $ 69,563 $ 16,614

Supplemental disclosures of cash flowinformation:Cash paid for income taxes $ 11,458 $ 13,391 $ 649

Cash paid for interest $ 8,795 $ 11,958 $ 14,947

Supplemental disclosure of non-cashactivities:Unpaid purchases of property and equipment $ 2,642 $ 6,066 $ 1,877

Equipment acquired through capital lease $ - $ - $ 171

Boot Barn Holdings, Inc.Store Count

Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Ended Ended Ended Ended Ended Ended Ended Ended March December September June March December September June 27, 26, 26, 27, 28, 28, 28, 29, 2021 2020 2020 2020 2020 2019 2019 2019

Store 266 265 264 259 251 248 240 240Count(BOP)Opened/ 8 1 1 5 8 3 8 1AcquiredClosed (1) - - - - - - (1)

Store 273 266 265 264 259 251 248 240Count(EOP)Boot Barn Holdings, Inc. Selected Store Data

Thirteen Weeks EndedMarch 27,December 26,September 26,June 27,March 28,December 28,September 28,June 29,2021

2020

2020

2020

2020

2019

2019

2019

Selected Store Data:Same Store Sales growth/(decline)26.9

%

4.6

%

(5.1)

%

(14.9)

%

(4.7)

%

6.7

%

7.8

%

9.4

%

Stores operating at end of period273

266

265

264

259

251

248

240

Total retail store square footage, end of period (in thousands)2,854

2,787

2,779

2,770

2,722

2,639

2,616

2,537

Average store square footage, end of period10,455

10,477

10,486

10,491

10,508

10,514

10,549

10,570

Average net sales per store (in thousands)$792

$889

$565

$410

$590

$903

$635

$660

Boot Barn Holdings, Inc.Selected Store Data

Thirteen Weeks Ended March December September June March December September June 27, 26, 26, 27, 28, 28, 28, 29, 2021 2020 2020 2020 2020 2019 2019 2019

Selected StoreData:Same Store 26.9 % 4.6 % (5.1) % (14.9) % (4.7) % 6.7 % 7.8 % 9.4 %Sales growth/(decline)Stores 273 266 265 264 259 251 248 240operating atend of periodTotal retailstore square 2,854 2,787 2,779 2,770 2,722 2,639 2,616 2,537footage, endof period (inthousands)Average storesquare 10,455 10,477 10,486 10,491 10,508 10,514 10,549 10,570footage, endof periodAverage netsales per $ 792 $ 889 $ 565 $ 410 $ 590 $ 903 $ 635 $ 660 store (inthousands)Debt Covenant EBITDA Reconciliation(Unaudited)

Thirteen Weeks EndedMarch 27,2021December 26,2020September 26,2020June 27,2020March 28,2020Boot Barn's Net Income/(Loss)$24,552

$29,566

$5,758

$(490)

$5,729

Income tax expense/(benefit)6,264

9,909

1,979

(289)

930

Interest expense2,115

2,303

2,383

2,641

2,941

Depreciation and intangible asset amortization (a)6,162

5,994

6,282

5,710

5,872

Boot Barn's EBITDA$39,093

$47,772

$16,402

$7,572

$15,472

Non-cash stock-based compensation (b)$2,147

$1,482

$1,705

$1,824

$1,582

Non-cash accrual for future award redemptions (c)(255)

697

372

(302)

(447)

Loss/(gain) on disposal of assets (d)64

(19)

46

(4)

28

Loss on adjustment of right-of-use assets and lease liabilities (e)-

-

295

-

-

Store impairment charge (f)-

-

384

-

191

Boot Barn's Adjusted EBITDA$41,049

$49,932

$19,204

$9,090

$16,826

Additional adjustments (g)673

165

1,115

1,590

2,269

Consolidated EBITDA per Loan Agreements$41,722

$50,097

$20,319

$10,680

$19,095

Debt Covenant EBITDA Reconciliation(Unaudited)

Thirteen Weeks Ended March December September June 27, March 27, 26, 26, 2020 28, 2021 2020 2020 2020Boot Barn's Net Income/(Loss) $ 24,552 $ 29,566 $ 5,758 $ (490) $ 5,729

Income tax expense/(benefit) 6,264 9,909 1,979 (289) 930

Interest expense 2,115 2,303 2,383 2,641 2,941

Depreciation and intangible 6,162 5,994 6,282 5,710 5,872asset amortization (a)Boot Barn's EBITDA $ 39,093 $ 47,772 $ 16,402 $ 7,572 $ 15,472

Non-cash stock-based $ 2,147 $ 1,482 $ 1,705 $ 1,824 $ 1,582compensation (b)Non-cash accrual for future (255) 697 372 (302) (447)award redemptions (c)Loss/(gain) on disposal of 64 (19) 46 (4) 28assets (d)Loss on adjustment of - - 295 - -right-of-use assets and leaseliabilities (e)Store impairment charge (f) - - 384 - 191

Boot Barn's Adjusted EBITDA $ 41,049 $ 49,932 $ 19,204 $ 9,090 $ 16,826

Additional adjustments (g) 673 165 1,115 1,590 2,269

Consolidated EBITDA per Loan $ 41,722 $ 50,097 $ 20,319 $ 10,680 $ 19,095Agreements(a) Excludes below-market lease amortization and certain asset depreciation expenses no longer recorded as amortization expense, but as rent expense under ASC 842.(b) Represents non-cash compensation expenses related to stock options, restricted stock units and performance share units granted to certain of our employees and directors.(c) Represents the non-cash accrual for future award redemptions in connection with our customer loyalty program.(d) Represents loss/(gain) on disposal of assets.(e) Represents loss on adjustment of right-of-use assets and lease liabilities.(f) Represents store impairment charges recorded in order to reduce the carrying amount of the assets to their estimated fair values.(g) Adjustments to Boot Barn's Adjusted EBITDA as provided in the 2015 Golub Term Loan and June 2015 Wells Fargo Revolver include pre-opening costs, franchise and state taxes, and other miscellaneous adjustments. View source version on businesswire.com: https://www.businesswire.com/news/home/20210512005970/en/

CONTACT: Investors: ICR, Inc. Brendon Frey, 203-682-8216 BootBarnIR@icrinc.com or Media: Boot Barn Holdings, Inc. Jim Watkins, 949-453-4428 Senior Vice President, Finance & Investor Relations BootBarnIRMedia@bootbarn.com