Acquisition Expected to be Approximately 10% Accretive to Earnings
Post Integration
Conference Call Scheduled for 8:30 a.m.
Eastern Today
IRVINE, Calif.--(BUSINESS WIRE)--
Boot Barn Holdings, Inc. (NYSE:BOOT) today announced it has entered into
a definitive agreement to acquire Sheplers, Inc. (“Sheplers”), a
116-year old western lifestyle company with 25 retail locations across
the United States and an industry-leading e-commerce business, for a
purchase price of $147 million in cash. For the twelve months ended
March 28, 2015, Sheplers had net sales of approximately $157 million,
which included $66 million of e-commerce sales, and Adjusted EBITDA of
$14.9 million (see reconciliation to Adjusted EBITDA).
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The Sheplers acquisition represents a significant step forward for Boot
Barn’s omni-channel strategy, growing Boot Barn’s e-commerce penetration
from 4% to 15%, based on the twelve months ending March 28, 2015. The
addition of Sheplers’ industry leading e-commerce platform provides
opportunities to create a dual brand online offering, leverage Sheplers’
domestic and international customer traffic, and create operating
efficiencies across the combined online businesses. By rebranding the
Sheplers stores to the Boot Barn banner, consistent with the strategies
of its prior two acquisitions, Boot Barn will enhance its store
footprint by adding eight new retail markets and build its position in
Texas and Colorado. The businesses are highly complementary, with a
similar western lifestyle focus, customer base, and store experience,
which will allow Boot Barn to extend key merchandise categories and
brands across the chain and access a combined database of more than five
million customers.
The acquisition is expected to generate $6 million to $8 million of
annual synergies and be immediately accretive to earnings, excluding
estimated one-time transaction and integration expenses of $14 million,
and approximately 10% accretive post integration, which is expected to
be completed in calendar year 2016. Sales synergies are expected from
expanded assortments, enhanced marketing activities, including rollout
of Boot Barn’s B Rewarded loyalty program, and transfer of
digital best practices across the e-commerce businesses. Margin
synergies are expected to be achieved through scale purchasing,
increased private brands penetration, and vendor direct and
container-load sourcing. Cost savings are expected from consolidation of
select corporate functions and efficiencies in e-commerce distribution.
Jim Conroy, Chief Executive Officer of Boot Barn, stated, “The
acquisition of Sheplers enhances Boot Barn’s position as the largest,
fastest-growing western and work chain in the United States and creates
the leading omni-channel business in the industry. We have great respect
for Bob Myers and his management team and the focus they have had on
building the retail and e-commerce businesses. Sheplers’ commitment to
the industry and to superb customer service aligns well with Boot Barn’s
philosophy of providing excellent customer service and offering a wide
selection of merchandise. I would also like to acknowledge the ongoing
efforts of the entire Boot Barn team as we continue to grow our business
organically while looking forward to integrating the Sheplers business.”
Bob Myers, Chief Executive Officer of Sheplers, commented, “Our ability
to grow the largest online business in the industry started with
building upon our loyal customer base from our long-standing catalog
format. Joining the Boot Barn family will allow Sheplers to provide
value to a larger customer base through both in-store and online
channels and provide more opportunities for many of our associates both
in the field and in our corporate office.”
The transaction has been approved by Boards of Directors of both
companies, as well as the required majority of Shepler’s
stockholders, and is expected to close by the week of June 29, 2015,
subject to customary closing conditions. The Company expects to finance
the acquisition with third party debt.
Boot Barn has also issued a full detailed presentation relating to the
acquisition of Sheplers, which can be viewed at http://investor.bootbarn.com.
Conference Call and Webcast
The Company will conduct a conference call in conjunction with today’s
announcement. The teleconference begins at 8:30 a.m. ET (5:30 a.m. PT)
today, June 1, 2015. Investors and analysts interested in participating
in the call are invited to dial (877) 407-4018. The conference call will
also be available to interested parties through a live webcast at www.bootbarn.com.
Please visit the website and select the “Investor Relations” 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 15, 2015, by dialing (877) 870-5176 (domestic) or (858)
384-5517 (international) and entering the conference identification
number: 13611345. 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
more than 200 work and lifestyle brands. With the addition of Sheplers,
Boot Barn will operate 200 stores in 29 states, in addition to an
e-commerce channel, including both www.bootbarn.com
and www.sheplers.com.
For more information, call 888-Boot-Barn or visit www.bootbarn.com.
About Sheplers
Sheplers was founded in 1899 in Wichita, Kansas under the name J.W.
Gibson Harness Shop, which was later purchased by Harry L. Shepler and
subsequently renamed Sheplers. The business developed into a major
direct-to-consumer catalog business that grew for decades before adding
stores in 1961 and launching e-commerce in 1999. With a 116 year
history, Sheplers has a proven commitment to customer service and to
providing a wide selection of footwear, apparel and accessories for the
western lifestyle.
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. You can identify forward-looking statements by the fact that
they generally include words such as "anticipate," "estimate," "expect,"
"project," "plan,“ "intend," "believe," “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 failure
to consummate the Sheplers acquisition; declines in consumer spending or
changes in consumer preferences and the Company’s ability to effectively
execute on its growth strategy; 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.
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Sheplers
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Supplemental Information - Reconciliation of Net loss to
Adjusted EBITDA
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(In thousands, except per share amounts)
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(Unaudited)
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Non-GAAP Financial Measures
The Company has included in this press release Sheplers’ Adjusted EBITDA
for the twelve months ended March 28, 2015. This is a non-GAAP financial
measure and should not be construed in isolation or as an alternative to
actual net income in accordance with generally accepted accounting
principles in the United States, or GAAP, or as a better indicator of
operating performance or as a measure of liquidity. This non-GAAP
financial measure may not be comparable to similar non-GAAP financial
measures presented by other companies. The Company’s management believes
that this non-GAAP financial measures provides investors with
transparency and helps illustrate Sheplers’ financial results by
excluding items that may not be indicative of, or are unrelated to, its
core operating results, thereby providing a better baseline for
analyzing trends in the underlying business. See the table below for a
reconciliation of Sheplers’ net loss under GAAP to Adjusted EBITDA.
SHEPLERS
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(Unaudited)
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(in thousands)
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12 months ended
March 28, 2015
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EBITDA Reconciliation:
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Net loss
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$
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(2,609
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)
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Income tax benefit
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(1,487
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)
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Interest expense, net
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9,153
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Depreciation and intangible asset amortization
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4,999
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EBITDA
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10,056
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Store pre-opening and closing expenses(a)
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|
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1,166
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Other unusual non-recurring expenses(b)
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3,694
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Adjusted EBITDA Reconciliation
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$
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14,916
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(a) Includes store pre-opening costs for new stores opened in the
year ended March 28, 2015.
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(b) Includes non-recurring legal and other professional fees,
transaction and settlement costs.
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View source version on businesswire.com: http://www.businesswire.com/news/home/20150601005587/en/
Source: Boot Barn Holdings, Inc.