The Container Store(US:TCS)2024-10-30 12:07Financial Performance - Net sales for the thirteen weeks ended September 28, 2024, were $196,575, a decrease of 10.5% compared to $219,731 for the same period in 2023[10]. - Gross profit for the twenty-six weeks ended September 28, 2024, was $215,133, down 10.8% from $241,216 in the prior year[10]. - The net loss for the thirteen weeks ended September 28, 2024, was $16,106, compared to a net loss of $23,653 for the same period in 2023, representing a 31.8% improvement[12]. - The company reported a net loss of $30,838,000 for the twenty-six weeks ended September 28, 2024, compared to a net loss of $35,490,000 for the same period in the previous year, representing a 15.5% improvement in losses[15]. - Net cash provided by operating activities decreased to $4,702,000 from $20,691,000 year-over-year, indicating a decline of 77.3%[15]. - The company reported a comprehensive loss of $13,015 for the thirteen weeks ended September 28, 2024, compared to a loss of $25,280 in the same period last year, showing a 48.6% reduction[12]. - The company reported a comprehensive loss of $27,343 million for the twenty-six weeks ended September 28, 2024, compared to a loss of $38,721 million in the same period last year, indicating a 29.2% reduction in losses[12]. - Adjusted EBITDA for the thirteen weeks ended September 28, 2024, was $3,902, down from $17,026 for the same period in 2023[10]. - Adjusted EBITDA for the period was $19,945,000, compared to $15,052,000 previously[64]. - The net loss for the twenty-six weeks ended September 28, 2024, was $30,838 million, compared to a net loss of $35,490 million for the same period in 2023, representing a 13.5% improvement[15]. Assets and Liabilities - Total current assets increased to $273,150 as of September 28, 2024, from $231,756 as of September 30, 2023, reflecting a growth of 17.8%[6]. - Total liabilities rose to $836,372 as of September 28, 2024, compared to $745,096 as of September 30, 2023, indicating an increase of 12.2%[7]. - Long-term debt increased to $229,780 as of September 28, 2024, from $168,321 as of September 30, 2023, reflecting a rise of 36.5%[7]. - Total current liabilities increased to $211.653 million as of September 28, 2024, from $203.962 million as of September 30, 2023, reflecting a rise of 3.4%[7]. - The company reported total shareholders' equity of $132,832,000 as of September 28, 2024, down from $145,641,000 at the end of the previous fiscal period, a decrease of 8.8%[16]. - The company had $160,321,000 of borrowings outstanding on the Existing Term Loan Facility and $71,000,000 on the Revolving Credit Facility as of September 28, 2024[20]. - The company had $19,557,000 of unused borrowing availability under the Revolving Credit Facility as of September 28, 2024[161]. - Total borrowings outstanding under the Revolving Credit Facility were $80,000,000 as of September 28, 2024[161]. Cash and Investments - Cash reserves increased significantly to $66,123 as of September 28, 2024, from $10,195 as of September 30, 2023, marking a substantial increase of 548.5%[6]. - The company reported cash of $66,123,000 as of September 28, 2024, a significant increase from $21,000,000 as of March 30, 2024[6]. - The company incurred net cash used in investing activities of $14,504 for the twenty-six weeks ended September 28, 2024, compared to $21,741 for the same period in 2023[146]. - The company generated negative free cash flow of $10,568 for the twenty-six weeks ended September 28, 2024, compared to negative free cash flow of $1,346 for the same period in 2023[151][152]. Inventory and Sales - The company’s inventory decreased to $152,600 as of September 28, 2024, down from $173,438 as of September 30, 2023, a decline of 12.0%[6]. - The company’s finished goods inventory was $145,180 as of September 28, 2024, down from $150,493 as of March 30, 2024[40]. - Comparable store sales decreased by 12.5% for the period, compared to a 20.0% decline in the previous year[101]. - Net sales for the twenty-six weeks ended September 28, 2024, decreased by $48,407, or 11.3%, totaling $378,436[124]. - Net sales for the thirteen weeks ended September 28, 2024, were $196.575 million, a decrease of 10.5% compared to $219.731 million for the same period in 2023[10]. - Net sales to third parties for the thirteen weeks ended September 28, 2024, were $196,575, with TCS contributing $186,815 and Elfa contributing $9,760[9]. Strategic Initiatives - A strategic partnership was announced with Beyond, Inc., which includes a $40,000,000 investment in the company through a preferred equity transaction[21]. - The company initiated a formal review process in May 2024 to evaluate strategic alternatives aimed at maximizing business potential and shareholder returns[90]. - The company is actively working with lenders to amend or refinance its Credit Facilities to alleviate substantial doubt regarding its ability to continue as a going concern[22]. - The company opened one new store and closed one store during the second quarter of fiscal 2024, with plans to open two new stores and close one more by the end of the fiscal year[134]. Stock and Shareholder Information - The company approved a 1-for-15 reverse stock split on September 3, 2024, to comply with NYSE listing requirements[25]. - The average closing price of the company's common stock exceeded $1.00 per share for at least 30 trading days as of October 1, 2024, curing the minimum price condition[25]. - The company has $30,000 authorized for stock repurchase, with $25,000 remaining available as of September 28, 2024, but any repurchases require consent from Beyond[137]. Accounting and Compliance - The company does not anticipate that the adoption of recent accounting updates will result in a material impact on its financial position or results of operations[32][33]. - The company does not expect any current ordinary litigation proceedings to have a material adverse effect on its consolidated financial statements[14]. - The company has substantial doubt regarding its ability to continue as a going concern without additional liquidity or modifications to its existing credit facilities[20].