Higher sales and reduced costs allowed Burlington Coat Factory Investments Holdings Inc. to reduce its fourth-quarter losses despite higher impairment charges.
This story first appeared in the September 17, 2009 issue of WWD. Subscribe Today.
In the three months ended May 30, the Burlington, N.J.-based off-price retailer reported a net loss of $26.4 million versus red ink of $48.5 million in the year-ago quarter. Pretax impairment charges and restructuring and separation costs totaled $25.4 million in the most recent period versus $17.4 million in its 2008 counterpart.
Sales rose 3.9 percent to $811.4 million from $781 million a year ago.
Burlington Coat, privately held since its acquisition by Bain Capital Partners for $2.06 billion in 2006, didn’t provide fourth-quarter data. Results were derived by subtracting nine-month figures from those provided for the full fiscal year.
For the year, the net loss grew to $191.6 million from $49 million as impairment and separation items mushroomed to $339 million from $25.3 million a year ago. Stripping out interest, taxes, depreciation and amortization and various other special items, Burlington Coat said adjusted EBITDA, a non-GAAP (generally accepted accounting principles) measure, rose 8.4 percent to $294.8 million from $272 million in fiscal 2008.
Sales increased 4.4 percent to $3.54 billion from $3.39 billion but fell 2.5 percent on a same-store basis.
The firm achieved the year-on-year improvement in adjusted EBITDA because of $70 million in expense reductions during the last two quarters of the year. Sales growth came from the addition of 36 stores, net of closures. As of Sept. 4, Burlington Coat operated 433 stores in 44 states and Puerto Rico.
“As we transition into fiscal 2010, the ongoing success of our expense reduction and inventory management initiatives provides us with significant financial flexibility,” said Tom Kingsbury, who joined the firm as president and chief executive officer in December. “For example, our available [asset-based lending] borrowing capacity is at the highest level since the Bain acquisition.”