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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. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for burl
Capital Market Labs
4 Sep 15 05:32:59
$BURL High Fundamental Rating http://t.co/Fvn5PDTWJH http://t.co/YMdfFVh35m
Breaking News
4 Sep 15 05:11:03
$OMC $THC $LM $BURL: Stocks Highlights: Omnicom Group Inc. (NYSE:OMC), Tenet …: http://t.co/EdR6eL5YXO
Jason Olive
4 Sep 15 01:22:04
RT @SeekingAlpha: Burlington Stores Set To Soar With Significant Growth Expectations http://t.co/4pnb1GMEWa $BURL
Cheryl Campbell
4 Sep 15 01:21:02
RT @SeekingAlpha: Burlington Stores Set To Soar With Significant Growth Expectations http://t.co/4pnb1GMEWa $BURL
StockNewsWires
4 Sep 15 01:14:03
$BURL: Burlington Stores Set To Soar With Significant Growth Expectations: http://t.co/AJnOwtOhT1
Seeking Alpha Alerts
4 Sep 15 01:13:01
@pentradnews $burl Burlington Stores Set To Soar With Significant Growth Expectations http://t.co/KUQxXgNEXo
Long & Short Ideas
4 Sep 15 01:11:51
Burlington Stores Set To Soar With Significant Growth Expectations http://t.co/ekb8aKBNy5 $BURL
Seeking Alpha
4 Sep 15 01:11:51
Burlington Stores Set To Soar With Significant Growth Expectations http://t.co/4pnb1GMEWa $BURL
Breaking News
3 Sep 15 20:57:02
$BURL: Burlington Stores, Inc. Price Target Update: http://t.co/kpMup5mVkF
The Legacy News
3 Sep 15 19:26:32
Burlington Stores CEO Thomas Kingsbury Sells 30,000 Shares $BURL http://t.co/Y1a2dr5VS8
Sleek Money
3 Sep 15 19:21:24
Burlington Stores CEO Thomas Kingsbury Sells 30,000 Shares $BURL http://t.co/ahn06UFi5t
BreakingStocksNews
3 Sep 15 19:20:02
$BURL: Burlington Stores CEO Thomas Kingsbury Sells 30000 Shares (BURL): http://t.co/b1fYQAp1ul
Brad Porter
3 Sep 15 18:51:00
Weak Back-To-School, Costco Gas Send Retail Down 1% http://t.co/syLo11nh86 $COST $RAD $BKE $LB $ROST $CATO $GPS $TJX $BURL $M $SMRT
Media Sentiment
3 Sep 15 18:29:55
$BURL received a new alert. Find out why at http://t.co/nZwqReM0tj #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 570
Ticker Report
3 Sep 15 18:27:18
Insider Selling: Thomas Kingsbury Sells 30,000 Shares of Burlington Stores Stock $BURL http://t.co/ZM9kqqqcYr
US Banking News
3 Sep 15 18:26:05
Insider Selling: Thomas Kingsbury Sells 30,000 Shares of Burlington Stores Stock $BURL http://t.co/D1WjoUEnDk
Dakota Financial
3 Sep 15 18:24:05
Insider Selling: Thomas Kingsbury Sells 30,000 Shares of Burlington Stores Stock $BURL http://t.co/Gc567OpUUx
BreakingStocksNews
3 Sep 15 18:22:03
$BURL: Insider Selling: Thomas Kingsbury Sells 30000 Shares of Burlington …: http://t.co/fSD06LJIpL
dailystockplays.com
3 Sep 15 15:07:07
Stochastic Overbought http://t.co/uwaWXFSTeN $TRVN $BLDR $VVUS $SM $VNTV $AMRN $INTC $FBR $ISIS $WPZ $JBLU $RSPP $BURL $PLNT $IDTI $OCN
InsiderTradingWire
3 Sep 15 13:11:14
Thomas Kingsbury Pres & CEO Sells $1,600,855 Worth of $BURL Burlington Stores, Inc. Common - #Form4 ...
Debby Gerald
3 Sep 15 10:09:14
RT @BlastOffStocks: Soulja Boy repping the same Stock Justin Bieber is in http://t.co/uoJzUv0Mdf $VSTM $CENX $NQ $CRZO $BURL $LINE $HEES $E…
Venky Srinivasan
3 Sep 15 08:36:44
$BURL Another one that looks ready. Above 56.10, this can run. Momentum indicators are supportive. http://t.co/uSVLvcjtjf
wsnewspublishers
3 Sep 15 08:34:12
Stocks Highlights: http://t.co/iDOJLGCFif $BURL $ACM $MUR $HOT
The Legacy News
3 Sep 15 08:27:29
Burlington Stores Downgraded by Zacks $BURL http://t.co/b7MvPsdkbG
Capital Market Labs
3 Sep 15 02:50:40
$BURL High Fundamental Rating http://t.co/Fvn5PDTWJH http://t.co/STE4uFBMpO
Kylan Hodson
2 Sep 15 11:05:44
RT @BlastOffStocks: Soulja Boy repping the same Stock Justin Bieber is in http://t.co/uoJzUv0Mdf $VSTM $CENX $NQ $CRZO $BURL $LINE $HEES $E…
Dakota Financial
2 Sep 15 09:38:47
Burlington Stores Given Average Rating of “Buy” by Analysts $BURL http://t.co/3p8e05KfDj
US Banking News
2 Sep 15 09:37:54
Burlington Stores Given Average Rating of “Buy” by Analysts $BURL http://t.co/ZW5pwI8Mee
Ticker Report
2 Sep 15 09:25:17
Burlington Stores Given Average Rating of “Buy” by Analysts $BURL http://t.co/rIlsdILL2S
Jason Olive
1 Sep 15 12:39:29
RT @SeekingAlpha: Burlington Stores Still Looks A Tad Expensive http://t.co/9Wz5MEpqEO $BURL
Ilham Benhamou
1 Sep 15 12:22:52
RT @SeekingAlpha: Burlington Stores Still Looks A Tad Expensive http://t.co/9Wz5MEpqEO $BURL
Seeking Alpha
1 Sep 15 12:19:03
Burlington Stores Still Looks A Tad Expensive http://t.co/9Wz5MEpqEO $BURL
Seeking Alpha Alerts
1 Sep 15 12:19:01
@pentradnews $burl Burlington Stores Still Looks A Tad Expensive http://t.co/O8BgJOR5un
King of investments
1 Sep 15 08:53:13
Burlington: Q2/15 Confirms Core Position Candidacy http://t.co/qDkP3f0zwg $BURL
Seeking Alpha Alerts
1 Sep 15 08:53:01
@pentradnews $burl Burlington: Q2/15 Confirms Core Position Candidacy http://t.co/qrAfjC94k0
Quick Stock Ideas
1 Sep 15 08:52:49
Burlington: Q2/15 Confirms Core Position Candidacy http://t.co/TuleVDz3pc $BURL
Seeking Alpha
1 Sep 15 08:52:49
Burlington: Q2/15 Confirms Core Position Candidacy http://t.co/LJyMwGapLK $BURL
wsnewspublishers
1 Sep 15 08:06:06
Stocks Roundup: http://t.co/msyPXzL6eP $OII $AMTD $BURL $PCG
The Legacy News
1 Sep 15 07:43:59
Cowen and Company Reaffirms “Buy” Rating for Burlington Stores $BURL http://t.co/0PPuiPPGRG
The Legacy News
1 Sep 15 06:41:57
Burlington Stores Upgraded to Buy at Zacks $BURL http://t.co/lVwlF24l9S
Breaking News
1 Sep 15 05:40:03
$OII $AMTD $BURL: Stocks Roundup: Oceaneering International(NYSE:OII), TD …: http://t.co/ipNYzAo9cT
StockNewsWires
1 Sep 15 02:46:03
$BURL: Burlington Stores, Inc. Analyst Rating Update: http://t.co/aOzoJsPwmh
Capital Market Labs
31 Aug 15 20:37:50
$BURL High Fundamental Rating -> http://t.co/yBPNMuhsOq http://t.co/eukQzER59o
beryl crisman
31 Aug 15 18:54:08
RT @BlastOffStocks: Soulja Boy repping the same Stock Justin Bieber is in http://t.co/uoJzUv0Mdf $VSTM $CENX $NQ $CRZO $BURL $LINE $HEES $E…
Brad Porter
31 Aug 15 18:47:12
Nike, Foot Locker Get Back-To-School Athleisure Jolt http://t.co/cJYubqAnGE #IBDNews via @IBDinvestors $NKE $FL $TGT $AEO $TJX $BURL $UA
US Banking News
31 Aug 15 15:25:11
$BURL - Burlington Stores Lowered to "Hold" at Zacks #BURL http://t.co/PepDNVJZLI
Consumer News
31 Aug 15 15:24:35
Burlington Stores Lowered to “Hold” at Zacks $BURL http://t.co/kr1Qd1rsVc #acn
Average Joe
31 Aug 15 15:07:19
RT @debweinswig: Q2 #retail earnings are in! See our report covering 32 companies Beats: $BURL $COH $EXPR $CHS Misses: $WMT $M $KATE http:…
Deborah Weinswig
31 Aug 15 15:05:18
Q2 #retail earnings are in! See our report covering 32 companies Beats: $BURL $COH $EXPR $CHS Misses: $WMT $M $KATE http://t.co/HaED1muzvD
FBIC Retail & Tech
31 Aug 15 14:55:10
Q2 #retail earnings are in! See our report covering 32 companies Beats: $BURL $COH $EXPR $CHS Misses: $WMT $M $KATE http://t.co/yGWCTiKIH0
				
				
By  +Follow October 1, 2013 9:27AM
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