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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
Colin Macleod
22 Aug 14 20:43:27
August 22 2014 P&F Bullish Catapult http://t.co/XvCCLPNu0T $IPG $HST $TSO $CCE $TV $BURL $BIOF $KYN
KeeneOnTheMarket.com
22 Aug 14 18:24:36
Trade take HUGE Bullish Bet in $BURL http://t.co/O5TF9G1Wi3
PennyStock Zone
22 Aug 14 17:41:00
Best day trading DVD by Fous Alerts check it out! http://t.co/HJ6WDp65fM #stocks #trading #nasdaq #nyse $XRS $MCHP $GS $BURL $VOD $IRF
Market News Desk
22 Aug 14 17:08:23
$BURL: Sears Holdings Q2 Loss Widens Y/Y, Revenue Slump Continues http://t.co/IShLwhraYC http://t.co/vrSKaMhBQF
PennyStock Zone
22 Aug 14 16:31:44
Best day trading DVD by Fous Alerts check it out! http://t.co/HJ6WDp65fM #stocks #trading #nasdaq #nyse $XRS $MCHP $GS $BURL $VOD $IRF
thehawaiiguy
22 Aug 14 12:14:50
RT @KeeneOnMarket: Took off LONG positions in $DVN $BURL $MCD
Sleek Money
22 Aug 14 11:38:20
Burlington Stores Reaches New 52-Week High at $35.84 $BURL http://t.co/3OmoiISr17
KeeneOnTheMarket.com
22 Aug 14 11:38:13
Took off LONG positions in $DVN $BURL $MCD
US Banking News
22 Aug 14 11:26:30
Burlington Stores Reaches New 52-Week High at $35.84 $BURL http://t.co/NoycsLsbpl
PennyStock Zone
22 Aug 14 10:30:49
Best day trading DVD by Fous Alerts check it out! http://t.co/HJ6WDp65fM #stocks #trading #nasdaq #nyse $XRS $MCHP $GS $BURL $VOD $IRF
Stock News Headlines
22 Aug 14 08:08:27
$BURL: Sears Holdings Q2 Loss Widens Y/Y, Revenue Slump Continues http://t.co/oWp6EJdGCX http://t.co/HPG56IflxI
Jonathan Guillou
22 Aug 14 07:59:40
RT @markminervini: $SCHW, $BURL - both moving to new highs following through after breaking out earlier this week - I have positions
Mark Minervini
22 Aug 14 07:45:32
$SCHW, $BURL - both moving to new highs following through after breaking out earlier this week - I have positions
Large Void Bot
22 Aug 14 07:02:12
New 52wk Highs: $BURL
Anthony
22 Aug 14 07:01:19
RT @OptionRunners: Bullish options activity today on $AVT, $BURL, $CIEN, $CNX, $ERIC, $FNSR, $GOGO, $ICE, $MCD, $RICE, $TV and $WMT.
Anthony
22 Aug 14 06:57:14
RT @WallStJesus: 🔥 $BURL TODAY'S STEAM »» 5737 BURL Dec-14 35.0 C  89% ASK (IV=42.2% +3.4)  OPENING -- 14.6x usual vol http://t.co/xXM3ei8h…
PennyStock Zone
22 Aug 14 04:17:42
Best day trading DVD by Fous Alerts check it out! http://t.co/HJ6WDp65fM #stocks #trading #nasdaq #nyse $XRS $MCHP $GS $BURL $VOD $IRF
EloiseArt
21 Aug 14 20:31:58
RT @optionsizzle: $BURL Dec $35 call traded about 4400x which controls about half the daily stock volume. Buyers coming in at & around $3.00
PennyStock Zone
21 Aug 14 19:17:49
Best day trading DVD by Fous Alerts check it out! http://t.co/AeQ95GG2rM #stocks #trading #nasdaq #nyse $XRS $MCHP $GS $BURL $VOD $IRF
Dr.Boblin
21 Aug 14 17:11:20
Aug 22 watchlist $ZBB $CMGE $ANET $DRAM $FICO $HY $SMLP $PERY $BBW $BURL $NCR $NVDQ $OCN $SCSC http://t.co/JJiVFdyYNa
Stocks in News
21 Aug 14 16:08:11
$BURL: Zacks Rank #1 Additions for Wednesday http://t.co/VFX48Xiril http://t.co/9OVkcVyI4O
Colin Macleod
21 Aug 14 15:37:35
August 21 2014 P&F Bullish Catapult http://t.co/ycdZh4jw4e $KNDI $IPG $HST $TSO $TV $APH $CCE $BURL $BIOF
JE$US
21 Aug 14 15:25:54
🔥 $BURL TODAY'S STEAM »» 5737 BURL Dec-14 35.0 C  89% ASK (IV=42.2% +3.4)  OPENING -- 14.6x usual vol http://t.co/xXM3ei8hS5
Option Runners
21 Aug 14 14:33:14
Bullish options activity today on $AVT, $BURL, $CIEN, $CNX, $ERIC, $FNSR, $GOGO, $ICE, $MCD, $RICE, $TV and $WMT.
Christian Walter
21 Aug 14 14:13:16
High Volume - $BURL Dec 35 Calls - thinking about a sept / dec calendar call 35
Anthony
21 Aug 14 13:45:52
RT @optionsizzle: $BURL Dec $35 call traded about 4400x which controls about half the daily stock volume. Buyers coming in at & around $3.00
Anthony
21 Aug 14 10:10:00
RT @OptionRunners: $BURL buyer of 2,091 December 35x calls at 3.10.
Large Void Bot
21 Aug 14 10:00:14
Popular: $DGLY, $GLD, $INO, $SLV, $TRUE, $OLED, $HMSY, $BURL
Anthony
21 Aug 14 09:25:11
RT @WallStJesus: $BURL Unusual buyer of 2199 Dec $35 calls 3.09 OPENING
Anthony
21 Aug 14 09:25:03
RT @WallStJesus: $BURL STEAM running 7.6x usual
Market Compass
21 Aug 14 09:08:31
$BURL: Where Is Sears Holdings Headed with Its Turnaround? http://t.co/LI66e4J8aW http://t.co/P5fgmMu9tQ
Option Hacker
21 Aug 14 09:07:26
Bullish Signal: Trader bought 2199 $BURL Dec 35 Calls for $3.10
Option Runners
21 Aug 14 09:06:07
$BURL buyer of 2,091 December 35x calls at 3.10.
Anthony
21 Aug 14 08:59:06
RT @OptionsFlux: $BURL DEC CALL 35 #UOA detected at 3.1$
JE$US
21 Aug 14 08:58:08
$BURL STEAM running 7.6x usual
Cutlass
21 Aug 14 08:56:23
RT @WallStJesus: $BURL Unusual buyer of 2199 Dec $35 calls 3.09 OPENING
JE$US
21 Aug 14 08:54:50
$BURL Unusual buyer of 2199 Dec $35 calls 3.09 OPENING
OptionsFlux
21 Aug 14 08:54:48
$BURL DEC CALL 35 #UOA detected at 3.1$
4-traders.com
20 Aug 14 11:25:03
Exclusive - Bain Capital to invest in shoemaker TOMS: sources http://t.co/zNlKhlgUTZ $COF $ADS $BURL $MIK
Stock Headlines
19 Aug 14 11:08:26
$BURL: On The Fly: Analyst Initiation Summary http://t.co/mefOPq9AR7 http://t.co/ES61UbMzCh
Mitchell Warren
19 Aug 14 09:59:12
Smart Money Report for unusual options activity http://t.co/izRwiSFtDA $BURL $DKS $EXAS $KNDI $TASR
Business News Watch
19 Aug 14 09:08:27
$BURL: Is Burlington Stores (BURL) a Great Growth Stock? http://t.co/jnvlcF47s7 http://t.co/2kskBwqytu
Livevol Community
19 Aug 14 08:58:55
HIGH PUT VOLU $MPO 14762% $CNVR 5154% $SE 3442% $ALV 2777% $GSAT 2124% $AMT 1793% $BURL 1697% $DEPO 1446% http://t.co/gwzPxh6wrr
Blue Horseshoe
19 Aug 14 08:20:17
@NedKhouri ...expansion plans from other off-price $ROST $BURL $JWN Rack
Blue Horseshoe
19 Aug 14 08:17:47
@Slicyman Yes, correct. That's key! $TJX $ROST $BURL
Blue Horseshoe
19 Aug 14 05:52:28
$TJX U.S. Marmaxx division comp of +2% still below $BURL +3-4% preannounced 2Q comp. Low expectations though.
iHangout
18 Aug 14 18:41:11
http://t.co/jYcEVui7Op chartguy89: Stock Charts: BURL 34.27 Stock Charts $BURL Burlington Stores http://t.co/BWvMTZEyyL
D
18 Aug 14 12:39:18
RT @markminervini: $BURL - bought some this morning coming out of a "Primary Base"; refer to pg. 259 of my book for detailed explan. http:/…
Livermore's Lounge
18 Aug 14 10:26:23
RT @markminervini: $BURL - bought some this morning coming out of a "Primary Base"; refer to pg. 259 of my book for detailed explan. http:/…
Mark Minervini
18 Aug 14 10:15:17
$BURL - bought some this morning coming out of a "Primary Base"; refer to pg. 259 of my book for detailed explan. http://t.co/EhGSyjsl36
				
				
By  +Follow October 1, 2013 9:27AM
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