Delivers Fiscal 2021 Results Above
Outlook Provides Fiscal 2022 Outlook
Albertsons Companies, Inc. (NYSE: ACI) (the "Company") today
reported results for the fourth quarter of fiscal 2021 and full
year fiscal 2021, which ended February 26, 2022, and provided a
fiscal 2022 outlook.
Fourth Quarter of Fiscal 2021
Highlights
- Identical sales increased 7.5%; on a two-year stacked basis
identical sales growth was 19.3%
- Digital sales increased 5%; on a two-year stacked basis digital
sales growth was 287%
- Net income of $455 million, or $0.79 per share
- Adjusted net income of $437 million, or $0.75 per share
- Adjusted EBITDA of $1,074 million
Fiscal 2021 Highlights
- Identical sales decreased 0.1%; on a two-year stacked basis
identical sales growth was 16.8%
- Digital sales increased 5%; on a two-year stacked basis digital
sales growth was 263%
- Net income of $1,620 million, or $2.70 per share
- Adjusted net income of $1,781 million, or $3.07 per share
- Adjusted EBITDA of $4,398 million
"We are pleased with our fourth quarter and full-year 2021
results and the continuing momentum we are seeing as we enter
2022," said Vivek Sankaran, CEO. "Our strategy is working, and we
are executing well against industry-wide pressures. We want to
recognize and thank all of our retail, distribution and
manufacturing teams for their commitment to and care of our
customers and their communities."
Fourth Quarter of Fiscal 2021
Results
Net sales and other revenue was $17.4 billion during the 12
weeks ended February 26, 2022 ("fourth quarter of fiscal 2021")
compared to $15.8 billion during the 12 weeks ended February 27,
2021 ("fourth quarter of fiscal 2020"). The increase was driven by
the Company's 7.5% increase in identical sales and higher fuel
sales, with retail price inflation contributing to the identical
sales increase.
Gross margin rate decreased to 28.7% during the fourth quarter
of fiscal 2021 compared to 28.9% during the fourth quarter of
fiscal 2020. Excluding the impact of fuel, gross margin rate was
flat compared to the fourth quarter of fiscal 2020 primarily due to
productivity initiatives, improved pharmacy margins related to
administering COVID-19 vaccines and favorable product mix, offset
by lower gross margin rates across certain product categories due
to the rate impact of increased product costs, higher supply chain
costs and an increase in LIFO expense, all driven by the current
inflationary environment.
Selling and administrative expenses decreased to 24.9% of Net
sales and other revenue during the fourth quarter of fiscal 2021
compared to 30.0% of Net sales and other revenue during the fourth
quarter of fiscal 2020. Excluding the impacts of fuel and the
Combined Plan (as defined herein) withdrawal, Selling and
administrative expenses as a percentage of Net sales and other
revenue decreased 30 basis points. The decrease in Selling and
administrative expenses was primarily attributable to lower
COVID-19 related expenses and the execution of productivity
initiatives, which were offset by higher employee costs,
depreciation and other expenses related to the Company's
investments in its digital and omnichannel capabilities and other
strategic priorities. The increase in employee costs was the result
of additional labor to support the increase in fresh sales,
market-driven wage rate increases, incremental front-line associate
appreciation pay and higher equity-based compensation expense.
Interest expense, net was $108.0 million during the fourth
quarter of fiscal 2021 compared to $113.1 million during the fourth
quarter of fiscal 2020.
Other income, net was $47.5 million during the fourth quarter of
fiscal 2021 compared to Other income, net of $107.2 million during
the fourth quarter of fiscal 2020. The decrease in other income is
primarily attributable to lower unrealized gains on non-operating
investments in the fourth quarter of fiscal 2021 compared to the
fourth quarter of fiscal 2020.
Income tax expense was $148.7 million, representing a 24.6%
effective tax rate, during the fourth quarter of fiscal 2021.
Income tax benefit of $64.1 million, representing a 30.8% effective
tax rate, was the result of the loss before income taxes which was
driven by the $607.2 million Combined Plan withdrawal charge during
the fourth quarter of fiscal 2020.
Net income was $455.1 million or $0.79 per share during the
fourth quarter of fiscal 2021, which included the $78.7 million or
$0.14 per share gain, net of tax, related to the Combined Plan
withdrawal. Net loss was ($144.2 million) or ($0.37) per share
during the fourth quarter of fiscal 2020, which included the $449.4
million or $0.97 per share charge, net of tax, related to the
Combined Plan withdrawal.
Adjusted net income was $436.8 million, or $0.75 per share,
during the fourth quarter of fiscal 2021 compared to $347.2
million, or $0.60 per share, during the fourth quarter of fiscal
2020.
Adjusted EBITDA was $1,073.7 million during the fourth quarter
of fiscal 2021 compared to $916.9 million during the fourth quarter
of fiscal 2020.
Supplemental Two-Year
Results
The following table provides a comparison of the fourth quarter
of fiscal 2021 and 52 weeks ended February 26, 2022 ("fiscal 2021")
to the 13 weeks ended February 29, 2020 ("fourth quarter of fiscal
2019") and 53 weeks ended February 29, 2020 ("fiscal 2019") for
certain financial measures, including a compounded annual growth
rate ("CAGR"), to demonstrate the two-year growth in the Company's
business. The Company believes these supplemental comparisons
provide meaningful and useful information to investors about the
trends in its business relative to pre-COVID-19 pandemic
periods.
Fourth Quarter of Fiscal
2021 Supplemental Two-Year Results
Fiscal 2021
Supplemental Two-Year Results
Identical sales two-year stacked (1)
19.3 %
16.8 %
Net income per Class A common share
two-year CAGR
156.6 %
83.7 %
Adjusted net income per Class A common
share two-year CAGR
50.8 %
71.8 %
Net income two-year CAGR
159.1 %
86.3 %
Adjusted net income two-year CAGR
50.0 %
70.6 %
Adjusted EBITDA two-year CAGR
19.2 %
24.6 %
% of net sales and other revenue:
Gross margin (1)
Increased 10 basis points
Increased 60 basis points
Selling and administrative expenses
(2)
Decreased 110 basis points
Decreased 115 basis points
(1) Excluding fuel.
(2) Excluding fuel and the Combined Plan
withdrawal.
Net sales and other revenue was $17.4 billion during the fourth
quarter of fiscal 2021 compared to $15.4 billion during the fourth
quarter of fiscal 2019. The increase in sales compared to the
fourth quarter of fiscal 2019 was primarily due to the 19.3%
increase in two-year stacked identical sales.
Gross margin rate increased to 28.7% during fourth quarter of
fiscal 2021 compared to 28.6% during the fourth quarter of fiscal
2019. Excluding the impact of fuel, gross margin rate increased by
approximately 10 basis points compared to the fourth quarter of
fiscal 2019, primarily driven by productivity initiatives and
improved pharmacy margins related to administering COVID-19
vaccines, partially offset by an increase in product and supply
chain costs, including LIFO expense, as well as growth in digital
sales.
Selling and administrative expenses decreased to 24.9% of net
sales and other revenue during the fourth quarter of fiscal 2021
compared to 26.5% of net sales and other revenue for the fourth
quarter of fiscal 2019. Excluding the impact of fuel and the
Combined Plan withdrawal, selling and administrative expenses as a
percentage of net sales and other revenue decreased approximately
110 basis points primarily due to sales leverage and the execution
of productivity initiatives, partially offset by increases in
employee costs and other expenses related to the Company's
investments in its digital and omnichannel capabilities and
strategic priorities, as well as incremental COVID-19 expenses.
Capital Allocation
During fiscal 2021, capital expenditures were $1,606.5 million,
which primarily included investments in the modernization of our
store fleet, including 236 remodels and the opening of 10 new
stores, and the building of our digital and technology platforms.
During the fourth quarter of fiscal 2021, the Company paid a
quarterly dividend of $0.12 per share of Class A common stock on
February 10, 2022 to stockholders of record as of January 26, 2022.
Today the Company announced the next quarterly dividend of $0.12
per share of Class A common stock payable on May 10, 2022 to
stockholders of record as of April 26, 2022.
Strategic Alternatives
On February 28, 2022, the Board of Directors of the Company
announced that it had commenced a Board-led review of potential
strategic alternatives aimed at enhancing the Company's growth and
maximizing shareholder value. The review will include an assessment
of various balance sheet optimization and capital return
strategies, potential strategic or financial transactions and
development of other strategic initiatives to complement the
Company's existing businesses, as well as responding to inquiries.
The Board has not set a timetable for the conclusion of this
review, nor has it made any decisions related to any further
actions or potential strategic alternatives at this time. There can
be no assurance that the review will result in any transaction or
other strategic change or outcome.
Convertible Preferred
Stock
As of April 8, 2022, subsequent to the end of the fourth quarter
of fiscal 2021, certain holders of the Company's convertible
preferred stock converted 239,445 shares of convertible preferred
stock into 13,903,134 shares of the Company's Class A common stock
("Common Stock") and as of such date, the Company has issued, in
the aggregate, 34,272,716 shares of Common Stock to holders of
preferred stock, representing approximately 34% of the originally
issued convertible preferred stock. As a result, there are
67,339,284 shares of Common Stock reserved for issuance upon the
potential conversion of the remaining outstanding convertible
preferred stock.
Fiscal 2022 Outlook
The Company is providing its fiscal 2022 outlook as follows:
- Identical sales in fiscal 2022 of approximately 2% to 3%
- Adjusted EBITDA in the range of $4.15 billion to $4.25
billion
- Adjusted net income per share in the range of $2.70 to $2.85
per share
- Effective tax rate in the range of 23% to 24% excluding
discrete items
- Capital expenditures in the range of $2.0 billion to $2.1
billion
The Company is unable to provide a full reconciliation of the
GAAP and Non-GAAP Measures (as defined below) used in the fiscal
2022 outlook without unreasonable effort because it is not possible
to predict certain of the adjustment items with a reasonable degree
of certainty. This information is dependent upon future events and
may be outside of the Company's control and could have a
significant impact on its GAAP financial results for fiscal 2022.
The expected effective tax rate does not reflect potential rate
adjustments for the resolution of tax audits or potential changes
in tax laws, which cannot be predicted with reasonable
certainty.
Conference Call
The Company will hold a conference call today at 8:30 a.m.
Eastern Time, which will be hosted by Vivek Sankaran, CEO, and
Sharon McCollam, President & CFO. The call will be webcast and
can be accessed at
https://albertsonscompanies.com/investors/events-and-presentations.
A replay of the webcast will be available for at least two weeks
following the completion of the call.
About Albertsons
Companies
Albertsons Companies is a leading food and drug retailer in the
United States. As of February 26, 2022, the Company operated 2,276
retail stores with 1,722 pharmacies, 402 associated fuel centers,
22 dedicated distribution centers and 20 manufacturing facilities.
The Company operates stores across 34 states and the District of
Columbia with 24 banners including Albertsons, Safeway, Vons,
Jewel-Osco, Shaw's, Acme, Tom Thumb, Randalls, United Supermarkets,
Pavilions, Star Market, Haggen, Carrs, Kings Food Markets and
Balducci's Food Lovers Market. The Company is committed to helping
people across the country live better lives by making a meaningful
difference, neighborhood by neighborhood. In 2021, along with the
Albertsons Companies Foundation, the Company contributed nearly
$200 million in food and financial support, including approximately
$40 million through our Nourishing Neighbors Program to ensure
those living in our communities have enough to eat.
Forward-Looking Statements and Factors
That Impact Our Operating Results and Trends
This press release includes "forward-looking statements" within
the meaning of the federal securities laws. The "forward-looking
statements" include our current expectations, assumptions,
estimates and projections about our business and our industry. They
include statements relating to our future operating or financial
performance which the Company believes to be reasonable at this
time. You can identify forward-looking statements by the use of
words such as "outlook," "may," "should," "could," "estimates,"
"predicts," "potential," "continue," "anticipates," "believes,"
"plans," "expects," "future" and "intends" and similar expressions
which are intended to identify forward-looking statements.
These statements are not guarantees of future performance and
are subject to risks, uncertainties and other factors, some of
which are beyond our control and difficult to predict, including,
among others:
- changes in macroeconomic conditions and uncertainty regarding
the geopolitical environment;
- retail consumer behavior and environment and the Company's
industry;
- ability to attract and retain qualified associates and
negotiate acceptable contracts with labor unions;
- failure to achieve productivity initiatives;
- increased rates of food price inflation, as well as fuel and
commodity prices;
- availability of agricultural commodities and raw materials used
in our food products; and
- factors related to the continued impact of the COVID-19
pandemic, about which there are still many unknowns, including its
duration, recurrence, new variants, status and effectiveness of
vaccinations, duration and scope of related government orders,
financial assistance programs, mandates and regulations and the
extent of the overall impact to our business and the communities we
serve.
All forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety by
these cautionary statements and risk factors. Forward-looking
statements contained in this press release reflect our view only as
of the date of this press release. We undertake no obligation,
other than as required by law, to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
While certain aspects of our financial results have been
favorably impacted by increased demand during the COVID-19
pandemic, in addition to favorable consumer conditions including
incremental financial assistance provided by various government
agencies, our business continues to experience challenges to meet
customer demand. We have experienced increased labor shortages due
to COVID-19 variants resulting in transportation and retail store
disruptions. Together with labor shortages and higher demand for
talent, the current economic environment is driving higher wages.
Labor shortages could also impact our ability to negotiate
acceptable contracts with labor unions which could result in
strikes by affected workers and thereby significantly disrupt our
operations. Our ability to meet labor needs, control wage and
labor-related costs and minimize labor disruptions will be key to
our success of operating our business and executing our business
strategies. Furthermore, our business is experiencing an
inflationary environment and food price inflation, which has
benefited our sales and gross margin growth but has negatively
impacted our gross margin rates. We are unable to predict how long
the current inflationary environment, including increased energy
costs, will continue. We expect the economic environment to remain
uncertain as we navigate the current geopolitical environment, the
COVID-19 pandemic, labor challenges, supply chain constraints and
the current inflationary environment, including increasing energy
and commodity prices.
Such risks and uncertainties could cause actual results to
differ materially from those expressed or forecasted by us. In
evaluating our financial results and forward-looking statements,
you should carefully consider the risks and uncertainties more
fully described in the "Risk Factors" section or other sections in
our reports filed with the SEC including the most recent annual
report on Form 10-K and any subsequent periodic reports on Form
10-Q and current reports on Form 8-K.
Non-GAAP Measures, Identical Sales and
the Combined Plan
Non-GAAP Measures. EBITDA, Adjusted EBITDA, Adjusted net income
and Adjusted net income per Class A common share (collectively, the
"Non-GAAP Measures") are performance measures that provide
supplemental information the Company believes is useful to analysts
and investors to evaluate its ongoing results of operations, when
considered alongside other GAAP measures such as net income,
operating income, gross margin, and net income per Class A common
share. These Non-GAAP Measures exclude the financial impact of
items management does not consider in assessing the Company's
ongoing operating performance, and thereby provide useful measures
of its operating performance on a period-to-period basis. Other
companies may have different definitions of Non-GAAP Measures and
provide for different adjustments, and comparability to the
Company's results of operations may be impacted by such
differences. The Company also uses Adjusted EBITDA and Net debt
ratio for board of director and bank compliance reporting. The
Company's presentation of Non-GAAP Measures should not be construed
as an implication that its future results will be unaffected by
unusual or non-recurring items.
Identical Sales. As used in this earnings release, the term
"identical sales" includes stores operating during the same period
in both the current fiscal year and the prior fiscal year,
comparing sales on a daily basis. Direct to consumer digital sales
are included in identical sales, and fuel sales are excluded from
identical sales.
Combined Plan. During the fourth quarter of 2020, the Company
withdrew from the Food Employers Labor Relations Association and
United Food and Commercial Workers Pension Fund ("FELRA") and the
Mid-Atlantic UFCW and Participating Pension Fund ("MAP" and
together with FELRA, the "Combined Plan"). As a result, commencing
February 2021, the Company is required to annually pay $23.2
million to the Combined Plan for the next 25 years. In addition,
upon insolvency of the Combined Plan, the Company will begin to
contribute to a new multiemployer pension plan limited to providing
benefits to the former participants in MAP and FELRA in excess of
the benefits the PBGC insures under law (the "Excess Plan"). The
Excess Plan contributions were expected to commence in June 2022
and were estimated to be $13.7 million annually for 10 years. As a
result, the Company recorded a non-cash pre-tax charge of $607.2
million in the fourth quarter of fiscal 2020 to record the pension
obligation for these benefits earned for prior service.
The Combined Plan was eligible to receive one-time special
financial assistance under the American Rescue Plan Act ("ARP Act")
and qualified to submit its application for $1.2 billion in special
financial assistance in the fourth quarter of fiscal 2021. The $1.2
billion in special financial assistance is expected to provide
funding for the Combined Plan to remain solvent for approximately
25 years. Although the $1.2 billion special financial assistance
will have no impact on the $23.2 million payment obligation, the
Company’s estimated funding requirements for the Excess Plan were
reduced as the contributions are now not expected to commence until
approximately 2045. Consequently, the Company recorded a non-cash
pre-tax gain of $106.3 million to reduce the pension obligation for
the Excess Plan.
Albertsons Companies, Inc. and
Subsidiaries
Consolidated Statements of
Operations
(dollars in millions, except
per share data)
(unaudited)
Fourth Quarter
Fiscal 2021
Fourth Quarter
Fiscal 2020
Fiscal
2021
Fiscal
2020
Net sales and other revenue
$
17,383.5
$
15,772.3
$
71,887.0
$
69,690.4
Cost of sales
12,399.2
11,212.8
51,164.6
49,275.9
Gross margin
4,984.3
4,559.5
20,722.4
20,414.5
Selling and administrative
expenses
4,321.7
4,726.1
18,300.5
18,835.8
(Gain) loss on property dispositions
and impairment losses, net
(1.7
)
8.2
(15.0
)
(38.8
)
Operating income (loss)
664.3
(174.8
)
2,436.9
1,617.5
Interest expense, net
108.0
113.1
481.9
538.2
Loss on debt extinguishment
—
27.6
3.7
85.3
Other income, net
(47.5
)
(107.2
)
(148.2
)
(134.7
)
Income (loss) before income
taxes
603.8
(208.3
)
2,099.5
1,128.7
Income tax expense (benefit)
148.7
(64.1
)
479.9
278.5
Net income (loss)
$
455.1
$
(144.2
)
$
1,619.6
$
850.2
Net income (loss) per Class A common
share
Basic net income (loss) per Class A common
share
$
0.83
$
(0.37
)
$
2.73
$
1.53
Diluted net income (loss) per Class A
common share
0.79
(0.37
)
2.70
1.47
Weighted average Class A common shares
outstanding (in millions)
Basic
482.5
464.1
469.6
500.3
Diluted
573.9
464.1
475.3
578.1
% of net sales
and other revenue
Gross margin
28.7
%
28.9
%
28.8
%
29.3
%
Selling and administrative expenses
24.9
%
30.0
%
25.5
%
27.0
%
Store
data
Number of stores at end of
quarter/year
2,276
2,277
Albertsons Companies, Inc. and
Subsidiaries
Consolidated Balance
Sheets
(in millions)
(unaudited)
February 26,
2022
February 27,
2021
ASSETS
Current assets
Cash and cash equivalents
$
2,902.0
$
1,717.0
Receivables, net
560.6
550.9
Inventories, net
4,500.8
4,301.3
Prepaid assets
301.6
317.2
Other current assets
101.4
101.6
Total current assets
8,366.4
6,988.0
Property and equipment, net
9,349.6
9,412.7
Operating lease right-of-use assets
5,908.4
6,015.6
Intangible assets, net
2,285.0
2,108.8
Goodwill
1,201.0
1,183.3
Other assets
1,012.6
889.6
TOTAL ASSETS
$
28,123.0
$
26,598.0
LIABILITIES
Current liabilities
Accounts payable
$
4,236.8
$
3,487.3
Accrued salaries and wages
1,554.9
1,474.7
Current maturities of long-term debt and
finance lease obligations
828.8
212.4
Current operating lease obligations
640.6
605.3
Current portion of self-insurance
liability
333.3
321.4
Taxes other than income taxes
344.6
339.1
Other current liabilities
409.5
392.0
Total current liabilities
8,348.5
6,832.2
Long-term debt and finance lease
obligations
7,136.3
8,101.2
Long-term operating lease obligations
5,419.9
5,548.0
Deferred income taxes
799.8
533.7
Long-term self-insurance liability
837.8
837.7
Other long-term liabilities
1,277.6
1,821.8
Commitments and contingencies
Series A convertible preferred stock
681.1
844.3
Series A-1 convertible preferred stock
597.4
754.8
STOCKHOLDERS' EQUITY
Class A common stock
5.9
5.9
Additional paid-in capital
2,032.2
1,898.9
Treasury stock, at cost
(1,647.4
)
(1,907.0
)
Accumulated other comprehensive income
69.0
63.5
Retained earnings
2,564.9
1,263.0
Total stockholders' equity
3,024.6
1,324.3
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
28,123.0
$
26,598.0
Albertsons Companies, Inc. and
Subsidiaries
Consolidated Statements of
Cash Flows
(in millions)
(unaudited)
Fiscal
2021
Fiscal
2020
Cash flows from operating
activities:
Net income
$
1,619.6
$
850.2
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on property dispositions and
impairment losses, net
(15.0
)
(38.8
)
Depreciation and amortization
1,681.3
1,536.9
Operating lease right-of-use assets
amortization
623.9
581.5
LIFO expense
115.2
58.7
Deferred income tax
219.0
(112.3
)
Pension and post-retirement benefits
income
(54.7
)
(36.4
)
Contributions to pension and
post-retirement benefit plans
(29.8
)
(60.0
)
(Gain) loss on interest rate swaps and
commodity hedges, net
(22.8
)
16.9
Deferred financing costs
23.4
20.9
Loss on debt extinguishment
3.7
85.3
Equity-based compensation expense
101.2
59.0
Other operating activities
(77.0
)
(143.0
)
Changes in operating assets and
liabilities, net of effects of acquisition of businesses:
Receivables, net
(22.4
)
0.4
Inventories, net
(313.8
)
9.2
Accounts payable, accrued salaries and
wages and other accrued liabilities
679.5
787.4
Operating lease liabilities
(604.6
)
(563.3
)
Pension withdrawal liabilities
(131.0
)
672.3
Self-insurance assets and liabilities
18.6
6.5
Other operating assets and liabilities
(300.9
)
171.1
Net cash provided by operating
activities
3,513.4
3,902.5
Cash flows from investing
activities:
Business acquisitions, net of cash
acquired
(25.4
)
(97.9
)
Payments for property, equipment and
intangibles, including lease buyouts
(1,606.5
)
(1,630.2
)
Proceeds from sale of assets
51.9
161.6
Other investing activities
41.1
(5.5
)
Net cash used in investing
activities
(1,538.9
)
(1,572.0
)
Fiscal
2021
Fiscal
2020
Cash flows from financing
activities:
Proceeds from issuance of long-term
debt
—
4,094.0
Payments on long-term borrowings
(330.9
)
(4,446.7
)
Payments of obligations under finance
leases
(78.0
)
(79.9
)
Payment of redemption premium on debt
extinguishment
(2.9
)
(71.6
)
Payments for debt financing costs
(11.0
)
(21.9
)
Dividends paid on common stock
(207.4
)
(93.7
)
Dividends paid on convertible preferred
stock
(114.6
)
(66.0
)
Proceeds from convertible preferred
stock
—
1,680.0
Third party issuance costs on convertible
preferred stock
—
(80.9
)
Treasury stock purchase, at cost
—
(1,881.2
)
Employee tax withholding on vesting of
restricted stock units
(29.4
)
(14.1
)
Other financing activities
(15.3
)
(59.8
)
Net cash used in financing
activities
(789.5
)
(1,041.8
)
Net increase in cash and cash
equivalents and restricted cash
1,185.0
1,288.7
Cash and cash equivalents and
restricted cash at beginning of period
1,767.6
478.9
Cash and cash equivalents and
restricted cash at end of period
$
2,952.6
$
1,767.6
Albertsons Companies, Inc. and
Subsidiaries
Reconciliation of Non-GAAP
Measures
(in millions, except per share
data)
The following tables reconcile Net income
(loss) to Adjusted net income, and Net income per Class A common
share to Adjusted net income per Class A common share for the
fourth quarter of fiscal 2021, fourth quarter of fiscal 2020 and
fourth quarter of fiscal 2019:
Fourth Quarter
Fiscal 2021
Fourth Quarter
Fiscal 2020
Supplemental
Fourth Quarter Fiscal
2019
Numerator:
Net income (loss)
$
455.1
$
(144.2
)
$
67.8
Adjustments:
(Gain) loss on interest rate and commodity
hedges, net (d)
(14.0
)
(7.1
)
50.2
Facility closures and transformation
(1)(b)
10.8
23.5
7.3
Acquisition and integration costs
(2)(b)
0.5
2.1
9.5
Equity-based compensation expense (b)
25.8
15.6
8.0
(Gain) loss on property dispositions and
impairment losses, net
(1.7
)
8.2
(2.1
)
LIFO expense (a)
56.6
21.2
(0.5
)
Government-mandated incremental COVID-19
pandemic related pay (3)(b)
4.9
1.8
—
Transaction and reorganization costs
related to convertible preferred stock issuance and initial public
offering (b)
—
0.4
0.3
Amortization of debt discount and deferred
financing costs (c)
7.3
4.2
5.0
Loss on debt extinguishment
—
27.6
45.6
Amortization of intangible assets
resulting from acquisitions (b)
11.4
12.3
46.6
Combined Plan (b)
(106.3
)
607.2
—
Miscellaneous adjustments (4)(f)
(22.8
)
(53.6
)
(2.7
)
Tax impact of adjustments to Adjusted net
income
9.2
(172.0
)
(40.8
)
Adjusted net income
$
436.8
$
347.2
$
194.2
Denominator:
Weighted average Class A common shares
outstanding - diluted
573.9
464.1
580.6
Adjustments:
Convertible preferred stock (5)
—
101.6
—
Restricted stock units and awards (6)
7.7
10.4
6.8
Adjusted weighted average Class A common
shares outstanding - diluted
581.6
576.1
587.4
Adjusted net income per Class A common
share - diluted
$
0.75
$
0.60
$
0.33
Supplemental Two-Year CAGR:
Net income (loss) two-year CAGR
159.1
%
Adjusted net income two-year CAGR
50.0
%
Albertsons Companies, Inc. and
Subsidiaries
Reconciliation of Non-GAAP
Measures
(in millions, except per share
data)
Fourth Quarter
Fiscal 2021
Fourth Quarter
Fiscal 2020
Supplemental
Fourth Quarter Fiscal
2019
Net income (loss) per Class A common share
- diluted
$
0.79
$
(0.37
)
$
0.12
Convertible preferred stock (5)
—
0.12
—
Non-GAAP adjustments (7)
(0.03
)
0.86
0.22
Restricted stock units and awards (6)
(0.01
)
(0.01
)
(0.01
)
Adjusted net income per Class A common
share - diluted
$
0.75
$
0.60
$
0.33
Supplemental Two-Year CAGR:
Net income (loss) per Class A common share
two-year CAGR
156.6
%
Adjusted net income per Class A common
share two-year CAGR
50.8
%
(1)
Includes costs related to closures of
operating facilities and third-party consulting fees related to our
strategic priorities and associated business transformation.
(2)
Related to conversion activities and
related costs associated with integrating acquired businesses. Also
includes expenses related to management fees paid in prior periods
in connection with acquisition and financing activities.
(3)
Represents pay that is legislatively
required in certain municipalities in which we operate.
(4)
Primarily includes lease adjustments
related to non-cash rent expense and costs incurred on leased
surplus properties, net realized and unrealized gains and losses
related to non-operating investments, certain legal and regulatory
accruals and settlements and adjustments for unconsolidated equity
investments.
(5)
Represents the conversion of convertible
preferred stock to the fully outstanding as-converted Class A
common shares as of the end of each respective period, for periods
in which the convertible preferred stock is antidilutive under
GAAP.
(6)
Represents incremental unvested restricted
stock units ("RSUs") and unvested restricted stock awards ("RSAs")
to adjust the diluted weighted average Class A common shares
outstanding during each respective period to the fully outstanding
RSUs and RSAs as of the end of each respective period.
(7)
Reflects the per share impact of Non-GAAP
adjustments for each period. See the reconciliation of Net income
(loss) to Adjusted net income above for further details.
The following table is a reconciliation of Adjusted net income
to Adjusted EBITDA:
Fourth Quarter
Fiscal 2021
Fourth Quarter
Fiscal 2020
Supplemental
Fourth Quarter Fiscal
2019
Adjusted net income (1)
$
436.8
$
347.2
$
194.2
Tax impact of adjustments to Adjusted net
income
(9.2
)
172.0
40.8
Income tax expense (benefit)
148.7
(64.1
)
22.3
Amortization of debt discount and deferred
financing costs (c)
(7.3
)
(4.2
)
(5.0
)
Interest expense, net
108.0
113.1
140.5
Amortization of intangible assets
resulting from acquisitions (b)
(11.4
)
(12.3
)
(46.6
)
Depreciation and amortization (e)
408.1
365.2
409.4
Adjusted EBITDA
$
1,073.7
$
916.9
$
755.6
Supplemental Two-Year CAGR:
Adjusted EBITDA two-year CAGR
19.2
%
(1)
See the reconciliation of Net income
(loss) to Adjusted net income above for further details.
Non-GAAP adjustment classifications within the Consolidated
Statement of Operations:
(a)
Cost of sales
(b)
Selling and administrative expenses
(c)
Interest expense, net
(d)
(Gain) loss on interest rate and commodity
hedges, net:
Albertsons Companies, Inc. and
Subsidiaries
Reconciliation of Non-GAAP
Measures
(in millions, except per share
data)
Fourth Quarter
Fiscal 2021
Fourth Quarter
Fiscal 2020
Supplemental
Fourth Quarter Fiscal
2019
Cost of sales
$
(11.1
)
$
(6.9
)
$
2.3
Other income, net
(2.9
)
(0.2
)
47.9
Total (Gain) loss on interest rate and
commodity hedges, net
$
(14.0
)
$
(7.1
)
$
50.2
(e) Depreciation and amortization:
Fourth Quarter
Fiscal 2021
Fourth Quarter
Fiscal 2020
Supplemental
Fourth Quarter Fiscal
2019
Cost of sales
$
39.1
$
40.7
$
43.2
Selling and administrative expenses
369.0
324.5
366.2
Total Depreciation and amortization
$
408.1
$
365.2
$
409.4
(f) Miscellaneous adjustments:
Fourth Quarter
Fiscal 2021
Fourth Quarter
Fiscal 2020
Supplemental
Fourth Quarter Fiscal
2019
Selling and administrative expenses
$
(1.9
)
$
29.1
$
(7.6
)
Other income, net
(20.9
)
(82.7
)
4.9
Total Miscellaneous adjustments
$
(22.8
)
$
(53.6
)
$
(2.7
)
Albertsons Companies, Inc. and
Subsidiaries
Reconciliation of Non-GAAP
Measures
(in millions, except per share
data)
The following tables reconcile Net income
to Adjusted net income, and Net income per Class A common share to
Adjusted net income per Class A common share for fiscal 2021,
fiscal 2020 and fiscal 2019:
Fiscal
2021
Fiscal
2020
Supplemental Fiscal
2019
Numerator:
Net income
$
1,619.6
$
850.2
$
466.4
Adjustments:
(Gain) loss on interest rate and commodity
hedges, net (d)
(22.8
)
16.9
50.6
Facility closures and transformation
(1)(b)
56.6
58.0
18.3
Acquisition and integration costs
(2)(b)
8.6
12.6
60.5
Equity-based compensation expense (b)
101.2
59.0
32.8
Gain on property dispositions and
impairment losses, net (3)
(15.0
)
(38.8
)
(484.8
)
LIFO expense (a)
115.2
58.7
18.4
Discretionary COVID-19 pandemic related
costs (4)(b)
—
134.6
—
Government-mandated incremental COVID-19
pandemic related pay (5)(b)
57.9
1.8
—
Civil disruption related costs (6)(b)
—
13.0
—
Transaction and reorganization costs
related to convertible preferred stock issuance and initial public
offering (b)
—
23.8
3.7
Amortization of debt discount and deferred
financing costs (c)
23.2
20.3
73.9
Loss on debt extinguishment
3.7
85.3
111.4
Amortization of intangible assets
resulting from acquisitions (b)
48.5
55.8
273.6
Combined Plan and UFCW National Fund
withdrawal (7)(b)
(106.3
)
892.9
—
Miscellaneous adjustments (8)(f)
(63.4
)
2.4
35.0
Tax impact of adjustments to Adjusted net
income
(46.0
)
(355.1
)
(47.7
)
Adjusted net income
$
1,781.0
$
1,891.4
$
612.1
Denominator:
Weighted average Class A common shares
outstanding - diluted
475.3
578.1
580.3
Adjustments:
Convertible preferred stock (9)
97.7
—
—
Restricted stock units and awards (10)
7.4
6.3
6.6
Adjusted weighted average Class A common
shares outstanding - diluted
580.4
584.4
586.9
Adjusted net income per Class A common
share - diluted
$
3.07
$
3.24
$
1.04
Supplemental Two-Year CAGR:
Net income two-year CAGR
86.3
%
Adjusted net income two-year CAGR
70.6
%
Albertsons Companies, Inc. and
Subsidiaries
Reconciliation of Non-GAAP
Measures
(in millions, except per share
data)
Fiscal
2021
Fiscal
2020
Supplemental Fiscal
2019
Net income per Class A common share -
diluted
$
2.70
$
1.47
$
0.80
Convertible preferred stock (9)
0.13
—
—
Non-GAAP adjustments (11)
0.28
1.80
0.25
Restricted stock units and awards (10)
(0.04
)
(0.03
)
(0.01
)
Adjusted net income per Class A common
share - diluted
$
3.07
$
3.24
$
1.04
Supplemental Two-Year CAGR:
Net income per Class A common share
two-year CAGR
83.7
%
Adjusted net income per Class A common
share two-year CAGR
71.8
%
(1)
Includes costs related to closures of
operating facilities and third-party consulting fees related to our
strategic priorities and associated business transformation.
(2)
Related to conversion activities and
related costs associated with integrating acquired businesses. Also
includes expenses related to management fees paid in prior periods
in connection with acquisition and financing activities.
(3)
Primarily due to gains related to sale
leaseback transactions in the second quarter of fiscal 2019.
(4)
Includes $44.7 million in bonus payments
to front-line associates during the third quarter of fiscal 2020.
Also includes $53 million of charitable contributions to our
communities for hunger relief and $36.9 million in final reward
payments to front-line associates at the end of the first quarter
of fiscal 2020.
(5)
Represents incremental pay that is
legislatively required in certain municipalities in which we
operate.
(6)
Primarily includes costs related to store
damage, inventory losses and community support as a result of the
civil disruption during late May 2020 and early June 2020 in
certain markets.
(7)
Includes the Combined Plan and the $285.7
million charge in the third quarter of fiscal 2020 related to the
withdrawal from the United Food and Commercial Workers
International Union ("UFCW") Union-Industry Pension Fund ("National
Fund")
(8)
Primarily includes lease adjustments
related to non-cash rent expense and costs incurred on leased
surplus properties, net realized and unrealized gains and losses
related to non-operating investments, certain legal and regulatory
accruals and settlements, pension settlement gain and adjustments
for unconsolidated equity investments.
(9)
Represents the conversion of convertible
preferred stock to the fully outstanding as-converted Class A
common shares as of the end of each respective period, for periods
in which the convertible preferred stock is antidilutive under
GAAP.
(10)
Represents incremental unvested RSUs and
unvested RSAs to adjust the diluted weighted average Class A common
shares outstanding during each respective period to the fully
outstanding RSUs and RSAs as of the end of each respective
period.
(11)
Reflects the per share impact of Non-GAAP
adjustments for each period. See the reconciliation of Net income
to Adjusted net income above for further details.
Albertsons Companies, Inc. and
Subsidiaries
Reconciliation of Non-GAAP
Measures
(in millions, except per share
data)
The following table is a reconciliation of
Adjusted net income to Adjusted EBITDA:
Fiscal
2021
Fiscal
2020
Supplemental Fiscal
2019
Adjusted net income (1)
$
1,781.0
$
1,891.4
$
612.1
Tax impact of adjustments to Adjusted net
income
46.0
355.1
47.7
Income tax expense
479.9
278.5
132.8
Amortization of debt discount and deferred
financing costs (c)
(23.2
)
(20.3
)
(73.9
)
Interest expense, net
481.9
538.2
698.0
Amortization of intangible assets
resulting from acquisitions (b)
(48.5
)
(55.8
)
(273.6
)
Depreciation and amortization (e)
1,681.3
1,536.9
1,691.3
Adjusted EBITDA (2)
$
4,398.4
$
4,524.0
$
2,834.4
Supplemental Two-Year CAGR:
Adjusted EBITDA two-year CAGR
24.6
%
(1)
See the reconciliation of Net income to
Adjusted net income above for further details.
(2)
Fiscal 2019 includes an estimated $54
million of incremental Adjusted EBITDA due to the impact of the
additional week in fiscal 2019.
Non-GAAP adjustment classifications within the Consolidated
Statement of Operations:
(a)
Cost of sales
(b)
Selling and administrative expenses
(c)
Interest expense, net
(d)
(Gain) loss on interest rate and commodity
hedges, net:
Fiscal
2021
Fiscal
2020
Supplemental Fiscal
2019
Cost of sales
$
(19.5
)
$
(2.6
)
$
2.7
Other income, net
(3.3
)
19.5
47.9
Total (Gain) loss on interest rate and
commodity hedges, net
$
(22.8
)
$
16.9
$
50.6
(e) Depreciation and amortization:
Fiscal
2021
Fiscal
2020
Supplemental Fiscal
2019
Cost of sales
$
164.7
$
172.6
$
171.5
Selling and administrative expenses
1,516.6
1,364.3
1,519.8
Total Depreciation and amortization
$
1,681.3
$
1,536.9
$
1,691.3
(f) Miscellaneous adjustments:
Fiscal
2021
Fiscal
2020
Supplemental Fiscal
2019
Selling and administrative expenses
$
(6.9
)
$
73.8
$
21.0
Other income, net
(56.5
)
(71.4
)
14.0
Total Miscellaneous adjustments
$
(63.4
)
$
2.4
$
35.0
Albertsons Companies, Inc. and
Subsidiaries
Reconciliation of Non-GAAP
Measures
(in millions, except per share
data)
The following table is a reconciliation of
Net debt ratio:
Fiscal
2021
Fiscal
2020
Total debt (including finance leases)
$
7,965.1
$
8,313.6
Cash and cash equivalents
2,902.0
1,717.0
Total debt net of cash
5,063.1
6,596.6
Adjusted EBITDA
$
4,398.4
$
4,524.0
Total Net debt ratio
1.15
1.46
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220412005200/en/
Melissa Plaisance melissa.plaisance@albertsons.com
Albertsons Companies (NYSE:ACI)
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