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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
Sleek Money
28 Mar 15 10:20:38
Insider Selling: Burlington Stores EVP Sells $894,828.80 in Stock $BURL http://t.co/nwKLcergqL
Breaking News Now
28 Mar 15 10:20:03
$BURL: Insider Selling: Burlington Stores EVP Sells $894828.80 in Stock ...: http://t.co/KVnD9IwXq2
Energy Shots
28 Mar 15 02:48:36
RT @stocksecret99: Yesterday We Made $94,000 In Just One Trade More Info Here http://t.co/NovWYe2RAx .. $BUD $BUI $BURL
Wholesale MBA
28 Mar 15 02:11:33
RT @stocksecret99: Yesterday We Made $94,000 In Just One Trade More Info Here http://t.co/NovWYe2RAx .. $BUD $BUI $BURL
James P Worthy
27 Mar 15 06:35:36
$burl Burlington Stores Inc. (BURL) Is Pulling Back From The Highs http://t.co/hIoFIbJdsO
Breaking News
27 Mar 15 06:10:02
$OMED $BURL: Active Watch List: Conatus Pharmaceuticals Inc. (NASDAQ:CNAT ...: http://t.co/YejR0LU40C
ProVesting
27 Mar 15 05:50:03
$BURL: Insider Selling: Hobart Sichel Sells 14720 Shares of Burlington ...: http://t.co/lK35t2Z5KI
Capital Market Labs
27 Mar 15 01:12:18
$BURL Revenue is Expanding. Chart: http://t.co/iWUpZgz5wr
BreakingStocksNews
26 Mar 15 21:10:03
$BURL: Burlington Stores EVP Hobart Sichel Sells 14720 Shares (BURL): http://t.co/DpCI3ZGwV3
US Consumer News
26 Mar 15 19:47:32
Burlington Stores EVP Hobart Sichel Sells $894,829 in $BURL http://t.co/biSI2ssfog
US Banking News
26 Mar 15 19:47:30
Burlington Stores EVP Hobart Sichel Sells $894,829 in $BURL http://t.co/Q6z0zFIk97
US Banking News
26 Mar 15 19:36:31
Insider Selling: Burlington Stores EVP Sells 14,720 Shares of Stock $BURL http://t.co/dLY4TkY0u9
StockNewsWires
26 Mar 15 19:28:03
$BURL: Insider Selling: Burlington Stores EVP Sells 14720 Shares of Stock ...: http://t.co/TEtnaNkAk2
The Legacy News
26 Mar 15 19:27:35
Insider Selling: Burlington Stores EVP Sells 14,720 Shares of Stock $BURL http://t.co/2KxIs9XZEV
Ticker Report
26 Mar 15 19:26:41
Insider Selling: Burlington Stores EVP Sells 14,720 Shares of Stock $BURL http://t.co/nfxlRjotTB
TalkMarkets
26 Mar 15 15:39:01
7 Hot #Stocks $BURL $SWKS $AMAG $ZAGG $NLNK $PNK $NCLH http://t.co/Nh9vpzaqPK
Jack Trader
26 Mar 15 14:34:16
$burl Burlington Stores Inc. (BURL) Is Pulling Back From The Highs http://t.co/39R6Hz5HOE
Breaking News
26 Mar 15 12:59:02
$BURL: New Insider Transaction on BURL by Executive Vice President: http://t.co/2yslO64vCR
Insider Alerts
26 Mar 15 12:58:08
NEW insider transaction on $BURL reported a moment ago: http://t.co/UaNA6khE1t
NASDAQ
26 Mar 15 12:58:03
$BURL - Statement of Changes in Beneficial Ownership (4) http://t.co/d3m9Ezw8CV
Insider Filings
26 Mar 15 12:55:11
$BURL: Sichel Hobart sold a net $874,477 in Burlington Stores, Inc.. http://t.co/fqHj1RwqDp
InsiderTradingWire
26 Mar 15 12:55:07
Hobart Sichel Executive Vice Pres Sells $874,477 Worth of $BURL Burlington Stores, Inc. Common - #Form4 ... - ...
TalkMarkets Recap
26 Mar 15 09:39:01
7 Hot #Stocks $BURL $SWKS $AMAG $ZAGG $NLNK $PNK $NCLH http://t.co/nbtMmW96Z4
BreakingStocksNews
26 Mar 15 08:11:03
$BURL: Hobart Sichel Sells 13189 Shares of Burlington Stores Stock (BURL): http://t.co/3ALCQpFGc2
The Legacy News
26 Mar 15 05:42:16
Hobart Sichel Sells 13,189 Shares of Burlington Stores Stock $BURL http://t.co/GwkRACXTEG
Beverage Consulting
26 Mar 15 04:25:29
RT @stocksecret99: Yesterday We Made $94,000 In Just One Trade More Info Here http://t.co/NovWYe2RAx .. $BUD $BUI $BURL
TalkMarkets
26 Mar 15 02:48:40
7 Hot #Stocks $BURL $SWKS $AMAG $ZAGG $NLNK $PNK $NCLH http://t.co/Nh9vpySPra
Seeking Alpha Alerts
26 Mar 15 01:44:13
@pentradnews Subscribed to $BURL To add another, tweet: $SYMBOL @sa_alerts To unsubscribe: unsubscribe $SYMBOL @sa_alerts
pentradnewsletters
26 Mar 15 01:43:18
@sa_alerts $HLF $ISIS $LBIO $QCOM $LL $ZFGN $ANET $ABBV $AKRX $CTRP $KR $AMBA $BURL $CRM
Seeking Alpha Alerts
26 Mar 15 01:39:12
@pentradnews Subscribed to $BURL To add another, tweet: $SYMBOL @sa_alerts To unsubscribe: unsubscribe $SYMBOL @sa_alerts
pentradnewsletters
26 Mar 15 01:38:48
@sa_alerts $SONC $EL $AAL $CTAS $TWTR $CERN $PBF $MBLY $BURL $VBLT $STLD $NVDA $NKE $SBGI
TradersChat.org
25 Mar 15 19:25:30
Mar 26 #research $SEED $OTIV $GMAN $REPH $NETE $CUR $VBLT $JOEZ $ORMP $RADA $FXCM $IWM $SPY $TVIX $UWTI $BURL $MEIP http://t.co/sMLe3B3gFZ
Small Cap Strategist
25 Mar 15 17:08:12
Small-cap stocks with strong volume declines, Wed Mar 25th - $BURL $CBK $HPY $LNN $LQ $SXC $FRAN - More: http://t.co/1znvSOr8xj - #smallcap
dailystockplays.com
25 Mar 15 16:31:45
Bearish Engulfing http://t.co/h4uUTFmAff $IWM $SUNE $VWO $KGC $AUY $TNA $WU $ALU $EWG $TLT $BURL $DHI $LOW $TRQ $TXT $YUM $LQD $EWY $TSL
Instrumental Data
25 Mar 15 14:33:01
Burlington Stores, Inc. $BURL 10-K now available
NASDAQ
25 Mar 15 14:32:02
$BURL - Annual Report (10-k) http://t.co/wErM8F224w
ProTradersNews
25 Mar 15 14:30:02
$BURL: New SEC Filing for BURL: Form 10-K (No. 0001193125-15-105212): http://t.co/tvc8ocHScx
New SEC Filings
25 Mar 15 14:29:21
NEW SEC Filing for $BURL filed a moment ago: http://t.co/RrbHBWzCgE http://t.co/tgfM2Tv0nW
Harris Market Trends
25 Mar 15 14:28:02
$BURL chart http://t.co/lqATLAtsdV via http://t.co/pcfoqlmieR one of the few that reversed almost 3.00 from the low of the day
ProTradersNews
25 Mar 15 14:09:06
$BURL: Burlington Stores EVP Hobart Sichel Sells 13189 Shares (BURL): http://t.co/5vowaHNXM9
WKRB News
25 Mar 15 13:53:16
Burlington Stores EVP Hobart Sichel Sells 13,189 Shares $BURL http://t.co/NXMpZzmSh2
Breaking News Now
25 Mar 15 13:25:04
$BURL: Burlington Stores EVP Hobart Sichel Sells 13189 Shares (BURL): http://t.co/1V438QU009
Jim Van Meerten
25 Mar 15 11:27:45
7 Hot Stocks $BURL $SWKS $AMAG $ZAGG $NLKN $PNK $NCLH http://t.co/nbf6ByJWCZ http://t.co/EH1yBtINvh
Alexander Sommer
25 Mar 15 11:10:37
@SJosephBurns $BURL - http://t.co/0Jhv0GB1Nm http://t.co/E64IPohl3E #stockcharts
Jim Van Meerten
25 Mar 15 11:02:31
$BURL 32% Barchart technical buy signals - 16 new highs and up 7.89% in the last month - Relative Strength Index 57.45%
Breaking News
25 Mar 15 10:50:03
$BURL: Burlington Stores (BURL) Thesis Intact Despite Unexpected ...: http://t.co/y1t30KL0tK
InsiderTradingWire
25 Mar 15 10:40:16
Hobart Sichel Executive Vice Pres Sells $795,123 Worth of $BURL Burlington Stores, Inc. Common - #Form4 ... - ...
NASDAQ
25 Mar 15 10:40:06
$BURL - Statement of Changes in Beneficial Ownership (4) http://t.co/Kq6FwGHjrn
ProTradersNews
25 Mar 15 10:39:01
$BURL: New Insider Transaction on BURL by Executive Vice President: http://t.co/1dM5yAvyBQ
Insider Alerts
25 Mar 15 10:38:09
NEW insider transaction on $BURL reported a moment ago: http://t.co/hET6NoBPAr
				
				
By  +Follow October 1, 2013 9:27AM
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