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IPO Report: Burlington Holdings (BURL)

By  +Follow October 1, 2013 9:27AM
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Founded in 1972, Burlington Holdings ($BURL) is a national off-price retailer of high quality branded apparel, operating 503 stores, inclusive of an internet store, in 44 states and Puerto Rico.  BURL’s goal is to open 25 new stores annually

Six IPOs are scheduled for this week. The full IPO calendar can be found at IPOpremium.

Based in Burlington, NJ, FURL scheduled a $200 million IPO with a market capitalization of $1 billion at a price range mid-point of $15, for Wednesday, October 2, 2013.

S-1 filed September 19, 2013.  Manager, Joint Managers:  J.P. Morgan; Morgan Stanley; BofA Merrill;  Goldman; Wells Fargo Securities.  Co-Managers:  BMO Capital; Guggenheim; Telsey Advisory; Cowen; SunTrust Robinson Humphrey; Ramirez

Summary

Founded in 1972, BURL is a national off-price retailer of high quality branded apparel, operating 503 stores, inclusive of an internet store, in 44 states and Puerto Rico.

BURL’s goal is to open 25 new stores annually and BURL believes the U.S. market can support at least 1,000 stores, which is only a doubling from the current base of 503 stores.

BURL is highly leveraged: since February 2011 BURL paid out $636 million in cash dividends to its private equity owner, paid for by increased debt.

Valuation

Valuation Ratios

Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing june 6 mos

Cap (MM)

Sls

Erngs

BkVlue

TanBV

in IPO

Burlington Holdings

$1,074

0.3

42.5

-4.0

-0.7

19%

Seasonal business, p/e based on ’12 yr

 

 

 

 

 

P/E adjusted for interest savings from debt repayment

38.4

 

 

 

Glossary

BURL is highly leveraged (big debt burden), with a negative price-to-book value of -4.  It operates on razor then margins.  For the year ended December 2012, profit was only .6% of sales.

As demonstrated by J.C. Penny, the retail channel can be unforgiving when mistakes are made.

Conclusion

Neutral to positive because investors like the10% sales increase for the June six months.

Business

Founded in 1972, BURL is a national off-price retailer of high quality branded apparel, operating 503 stores, inclusive of an internet store, in 44 states and Puerto Rico.

BURL believes it is a market leader in the fast growing off-price retail channel.

Off-Price retail channel

BURL offers merchandise using an Every Day Low Price (“EDLP”) model with savings up to 60-70% off department and specialty store regular prices.  BURL features merchandise from over 3,500 vendors, with a focus on major nationally-recognized brands.

The average store size is 80,000 square feet, which is two to three times the size of the largest off-price competitors’ stores. BURL’s  larger store size has allowed the company to offer more categories and substantially more breadth in each product category than off-price competitors.

Growth history

BURL has opened an average of 23 new stores per year since 2006 and new stores have an average payback period of less than three years. Over 98% of the stores are profitable on a store-level cash flow basis, and BURL believes it has considerable room to grow profitability

Growth plan

By the end of Fiscal 2013 BURL anticipates that 66% of its stores will either be new, refreshed, remodeled or relocated since 2006.

Under BURL’s enhanced real estate selection process, BURL opened 15 new stores in Fall 2011 and 6 new stores in Spring 2012, which, on average, have performed in line with their initial sales projections during their first full year of operation.

BURL’s goal is to open 25 new stores annually and BURL believes the U.S. market can support at least 1,000 stores, which is only a doubling from the current base of 503 stores.

Competition

Competitors include national chains such as the following: JCPenney, Sears and Kohl’s.   BURL define national chains as retail stores with an average store size of 60,000 to 100,000 square feet that offer a range of moderately priced goods across multiple categories.

Department stores competition includes, among others, the following retailers: Macy’s, Neiman Marcus and Saks Fifth Avenue.  BURL defines department stores as retail stores with an average store size of 100,000 to 150,000 plus square feet that feature an array of nationally recognized, moderate and better priced goods.

5% stockholders pre-IPO

Bain Capital and related funds, 93.3%

Dividends

No future dividends anticipated.

In February 2013, BURL declared a cash dividend of $336 million, paid for by borrowings.  In February 2011, BURL  paid a $300 million cash dividend, paid for by borrowings.

Use of proceeds

BURL  expects to net $181.5 million from its IPO.

BURL intends to use the proceeds, together with cash on hand, to redeem $170.6 million aggregate principal amount of 9.00%/9.75% Senior Notes due 2018, to pay an advisory  termination fee with an affiliate of Bain Capital of $11.0 million, and for other general corporate purposes.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for burl
Maleah
25 Nov 14 21:18:04
http://t.co/zCIhFKskLd <-- New 'Spikeability' DVD Tim Sykes! Pre-Sale 50% off! $UGAZ $XLF $WAB $BG $BURL $GSK $DE
Maleah
25 Nov 14 20:11:44
http://t.co/zCIhFKskLd <-- New 'Spikeability' DVD Tim Sykes! Pre-Sale 50% off! $UGAZ $XLF $WAB $BG $BURL $GSK $DE
BlackCabbieTrader
25 Nov 14 18:33:53
26/11/14 Long Watch List Part 1 $ABC $ACN $ALSN $AMAG $AON $AOS $APH $BC $BMRN $BURL $CCL $CENX $CFN $CHKP $CPRT $CRI $CST $CSX $CTAS
Maleah
25 Nov 14 18:29:19
http://t.co/zCIhFKskLd <-- New 'Spikeability' DVD Tim Sykes! Pre-Sale 50% off! $UGAZ $XLF $WAB $BG $BURL $GSK $DE
Maleah
25 Nov 14 15:42:18
http://t.co/zCIhFKskLd <-- New 'Spikeability' DVD Tim Sykes! Pre-Sale 50% off! $UGAZ $XLF $WAB $BG $BURL $GSK $DE
Maleah
25 Nov 14 14:35:34
http://t.co/zCIhFKskLd <-- New 'Spikeability' DVD Tim Sykes! Pre-Sale 50% off! $UGAZ $XLF $WAB $BG $BURL $GSK $DE
Jeffrey Blake
25 Nov 14 05:32:18
$burl Burlington Stores Continues To Look Like A Winner http://t.co/oJcseskDz3
Sandman
25 Nov 14 04:44:25
RT @chartsmarter: ChartSmarter Tuesday Game Plan: http://t.co/ctsHaMI68o "select retail" $XRT $BURL $CASY $HSNI $ZUMZ http://t.co/QSETxfUI0w
iuubob
25 Nov 14 04:15:17
RT @chartsmarter: ChartSmarter Tuesday Game Plan: http://t.co/ctsHaMI68o "select retail" $XRT $BURL $CASY $HSNI $ZUMZ http://t.co/QSETxfUI0w
equities.com
25 Nov 14 04:15:11
Burlington Stores (BURL) Hits New 52-week High During November 24 Session $burl http://t.co/Jj5x1Sq62N
Douglas Busch
25 Nov 14 04:14:24
ChartSmarter Tuesday Game Plan: http://t.co/ctsHaMI68o "select retail" $XRT $BURL $CASY $HSNI $ZUMZ http://t.co/QSETxfUI0w
Jrtrader1998
24 Nov 14 23:38:04
RT $BURL stream a bit active tonight (11/2314). Reasons? Monday 11/24/14- ah,now I see- new highytd - been long at 42 via call options
A. Leach
24 Nov 14 22:31:05
RT @_JohnWalsh_: 25/11/14 Long Watch List Part 1 $ABC $ACN $AGNC $AIV $ALL $ALSN $AMAG $AON $BMRN $BURL $CBG $CSX $DFT $DLPH $DLTR $DPLO $E…
Mr. Breakout
24 Nov 14 18:08:20
Today's IIC 100 New Highs ►►► http://t.co/abEQt6L8uU including $TQNT $CTRN $BURL etc
jim iuorio
24 Nov 14 17:45:30
RT @chartsmarter: ChartSmarter Tuesday Game Plan: http://t.co/8930zcq6Lj "select retail" $XRT $BURL $CASY $HSNI $ZUMZ http://t.co/YAyvsDsMSN
Douglas Busch
24 Nov 14 15:27:18
ChartSmarter Tuesday Game Plan: http://t.co/8930zcq6Lj "select retail" $XRT $BURL $CASY $HSNI $ZUMZ http://t.co/YAyvsDsMSN
Mutasem Abu Remaileh
24 Nov 14 15:02:25
@markminervini Why did you pick $BURL when earning and sales don't look that good? I do realize its an IPO and doing well
BlackCabbieTrader
24 Nov 14 13:12:32
25/11/14 Long Watch List Part 1 $ABC $ACN $AGNC $AIV $ALL $ALSN $AMAG $AON $BMRN $BURL $CBG $CSX $DFT $DLPH $DLTR $DPLO $EFX $EQR $GGP $GPN
Mark Minervini
24 Nov 14 13:08:18
Note: I sold $BURL on 9/9 and then bought it back on 10/30... sorry... I thought I posted the re-buy.
Mark Minervini
24 Nov 14 12:53:50
Still holding $BURL, $MFRM, $FRGI, $TNET -- sm. pos. in $PANW (earnings today). Sold $MIK @ nice profit - $GMCR cut last week bef. earnings
rolly
24 Nov 14 12:12:45
$RCPT, $CYBR moving hard $BURL added some today same to $CDW
Peter Bardens
24 Nov 14 10:01:23
$burl Why Burlington Stores Inc Stock Jumped http://t.co/wdP52WYy5B
PilotDog
24 Nov 14 09:56:10
@WallStJesus $BURL HOD!
Gordon Gekko
24 Nov 14 09:05:14
Winter and retail. Cold came relatively quickly with last month warmer than normal. Ways to play is winter retailers? $VFC $BURL
David Avery
24 Nov 14 08:28:05
Anybody shop at Burlington Coat Factory check out the stock $BURL it is doing well right...
Ivan B. Beljan
24 Nov 14 07:12:02
Watching $BURL for another leg up http://t.co/nYTWNcgnO7
Maleah
24 Nov 14 06:57:18
http://t.co/zCIhFKskLd <-- New 'Spikeability' DVD Tim Sykes! Pre-Sale 50% off! $UGAZ $XLF $WAB $BG $BURL $GSK $DE
iuubob
24 Nov 14 06:03:14
RT @chartsmarter: ChartSmarter Monday Game Plan: http://t.co/SCd6gjjLie "new traded retail names looked at" $MIK $BURL http://t.co/NI91YBB0…
Douglas Busch
24 Nov 14 05:59:18
ChartSmarter Monday Game Plan: http://t.co/SCd6gjjLie "new traded retail names looked at" $MIK $BURL http://t.co/NI91YBB0QE
Roger
24 Nov 14 03:48:41
RT @_JohnWalsh_: 24/11/14 Long Watch List Part 1 $AA $ADM $AGNC $ALL $AON $AXS $BG $BMY $BPL $BURL $CFN $CHD $CHKP $CST $CSX $CTAS $DD $DG …
Maleah
24 Nov 14 03:42:28
http://t.co/zCIhFKskLd <-- New 'Spikeability' DVD Tim Sykes! Pre-Sale 50% off! $UGAZ $XLF $WAB $BG $BURL $GSK $DE
Jrtrader1998
23 Nov 14 19:39:57
$BURL $BURL stream a bit active tonight. Reasons?
Roger
23 Nov 14 18:48:32
RT @_JohnWalsh_: 24/11/14 Long Watch List Part 1 $AA $ADM $AGNC $ALL $AON $AXS $BG $BMY $BPL $BURL $CFN $CHD $CHKP $CST $CSX $CTAS $DD $DG …
chartguy89
23 Nov 14 17:05:47
BURL 42.23 Burlington Stores Inc Stock Charts $BURL Last Updated: 11/21/14 Last price: 42.23 Total volume: 602 http://t.co/t31gokc5dW
Maleah
23 Nov 14 16:52:45
http://t.co/zCIhFKskLd <-- New 'Spikeability' DVD Tim Sykes! Pre-Sale 50% off! $UGAZ $XLF $WAB $BG $BURL $GSK $DE
Jake13
23 Nov 14 16:46:48
BURL Year to date has changed +31.97% percent. +6.70% in the last 30 days. $BURL Burlington Stores Inc Full br http://t.co/g1A7RLD94c
DennyT
23 Nov 14 15:28:17
BURL Stock 42.23 Burlington Stores Inc $BURL Hit a 52 week high of 43.15 Closing the day 11/21/14 at 42.23 -0. http://t.co/2uUjOdV1Ze
Douglas Busch
23 Nov 14 15:27:48
ChartSmarter Monday Game Plan: http://t.co/vZuxWWFhS9 "new traded retail names looked at" $MIK $BURL http://t.co/3V0G0wTllm
BlackCabbieTrader
23 Nov 14 14:48:11
24/11/14 Long Watch List Part 1 $AA $ADM $AGNC $ALL $AON $AXS $BG $BMY $BPL $BURL $CFN $CHD $CHKP $CST $CSX $CTAS $DD $DG $DHI $DHR $DLPH
Sandman
22 Nov 14 08:30:18
RT @chartsmarter: ChartSmarter Monday Game Plan: http://t.co/Qq4UA99xwc "new traded retail names looked at" $MIK $BURL http://t.co/kBTxURW5…
Douglas Busch
22 Nov 14 05:10:19
ChartSmarter Monday Game Plan: http://t.co/Qq4UA99xwc "new traded retail names looked at" $MIK $BURL http://t.co/kBTxURW52H
equities.com
22 Nov 14 02:32:57
Burlington Stores (BURL) Hits New 52-week High During November 21 Session $burl http://t.co/KlKeGHY001
Paula Karenna
21 Nov 14 15:45:16
@Nathan_pear Yah, they are crazy charging $70 for a white blouse. I will go to $burl and get a similar one for $20 lol.
The Legacy News
21 Nov 14 11:30:56
Burlington Stores Hits New 52-Week High at $43.13 $BURL http://t.co/jxjEOi2aJZ
US Banking News
21 Nov 14 11:24:20
Burlington Stores Hits New 52-Week High at $43.13 $BURL http://t.co/LLbC8dZCx1
Christopher W. Haick
21 Nov 14 10:57:16
RT @MarketSmith: 15 Companies That Will Make A Ton Of Money From Millennials: http://t.co/YN1g89dHmD $CMG $SBUX $ULTA $NKE $UA $BURL http:/…
Top Stocks
21 Nov 14 10:36:03
15 Companies That Will Make A Ton Of Money From Millennials: http://t.co/ZrnWQfpNRo $CMG $SBUX $ULTA $NKE $UA $BURL http://t.co/mepJxaG4IQ
MarketSmith
21 Nov 14 10:36:03
15 Companies That Will Make A Ton Of Money From Millennials: http://t.co/YN1g89dHmD $CMG $SBUX $ULTA $NKE $UA $BURL http://t.co/cE1iDSdrdy
Andy
20 Nov 14 17:46:13
RT @MatthewMcCall: @cvpayne and I agree on this retailer. $BURL love the chart. Love the numbers. Watch now!!
Stu
20 Nov 14 16:54:40
RT @MatthewMcCall: @cvpayne and I agree on this retailer. $BURL love the chart. Love the numbers. Watch now!!
				
				
By  +Follow October 1, 2013 9:27AM
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