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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.

Results for burl
Andie Andrewson
24 Apr 14 06:25:05
$BURL Fundraiser to benefit Hope Walk of Burlington set for Saturday http://t.co/krp6vY6kBJ
Andie Andrewson
24 Apr 14 04:45:05
$BURL In suburbs, rents soar as vacancy rates plummet http://t.co/D5aghkTjFk
Andie Andrewson
24 Apr 14 04:39:34
$BURL Ralph J. Nocella Jr. http://t.co/zCPcFDdoDv
Andie Andrewson
24 Apr 14 04:33:35
$BURL Edward G. Remick http://t.co/lzvKOe7ldd
Informer
24 Apr 14 01:06:47
$BURL: After a Good Quarter, Is It Time to Bet on Burlington Stores? http://t.co/vTZLVKLmqU
StockNewsNet
24 Apr 14 01:00:29
$BURL - After a Good Quarter, Is It Time to Bet on Burlington Stores? -> http://t.co/nhgAG34VDU #stock #stocks #stockaction
Andie Andrewson
24 Apr 14 00:03:34
$BURL Qstream reaches 'millions of dollars' in revenue this year as Harvard ... http://t.co/KdKtJHDPpm
Andie Andrewson
23 Apr 14 23:08:04
$BURL City should formally oppose waterfront gasification plant: Morrow http://t.co/NUI0C3fjVC
Andie Andrewson
23 Apr 14 22:57:06
$BURL Trash Talk: Hanover considers transfer station privatization http://t.co/862kMESKH1
Andie Andrewson
23 Apr 14 22:34:33
$BURL Milestones looking for new board members http://t.co/YLK7Gxu2UY
Andie Andrewson
23 Apr 14 21:34:03
$BURL Houston-based investor buys Mesquite Town Centre http://t.co/FUEPgi3MbI
Andie Andrewson
23 Apr 14 20:33:08
$BURL News Release — The Vermont Women's Fund http://t.co/bljzaOKL2M
CPB24
23 Apr 14 20:11:52
@MarkYusko may be in belt tight theme (but then again, $FDO). Off-px'd retailers performing & $BURL 1/20 size $TJX & 1/7 $ROST. Growth opp
Mark Yusko
23 Apr 14 20:07:18
@cpb24 Thanks! Will look. Sector has been a mess this year, but $BURL looks like basing and like RelVal play vs $TJX http://t.co/iJndQU4pcm
Andie Andrewson
23 Apr 14 15:56:04
$BURL Five Corners project calls for 4-story building http://t.co/fYIcF8pSeg
Andie Andrewson
23 Apr 14 07:34:34
$BURL After a Good Quarter, Is It Time to Bet on Burlington Stores? http://t.co/exmhgsVhSi
Andie Andrewson
23 Apr 14 07:06:34
$BURL Robert W. Hecker http://t.co/kyYzMPa0cl
Andie Andrewson
23 Apr 14 05:48:07
$BURL Aldeyra Therapeutics IPO Looks Less Curative Than It Should http://t.co/JbiFdQOUXb
Andie Andrewson
23 Apr 14 02:03:44
$BURL DRPA's bond sale drew on connected firms - legally http://t.co/LdabdruvuW
CPB24
22 Apr 14 20:03:34
Not retail fan, but Bain selling =op here for $BURL. +s/s sales; expand margin; will refi exp debt. Fraction mkt cap of $TJX w big growth op
Andie Andrewson
22 Apr 14 04:02:16
$BURL US railroads show untapped value from delay in building oil pipeline http://t.co/JZeqjGIQUs
Andie Andrewson
22 Apr 14 00:38:04
$BURL Women to help build Habitat homes http://t.co/ORzHSP39OQ
Andie Andrewson
22 Apr 14 00:27:03
$BURL Garden club announces May meeting http://t.co/uZcP62fUqD
Andie Andrewson
21 Apr 14 21:49:04
$BURL US railroads show untapped value from delay in building oil pipeline http://t.co/Eu1rHcvu4f
Andie Andrewson
21 Apr 14 17:51:05
$BURL US railroads show untapped value from delay in building oil pipeline http://t.co/aVHcbRaJ5x
Andie Andrewson
21 Apr 14 17:34:05
$BURL Winery license makes splash in Moorestown http://t.co/i0kpi6K1hB
Large Void Bot
21 Apr 14 12:28:08
Daily Reversal (15:28): $BURL Last: 27.34; pHigh: 27.31; rVol: 0.934; pClose: 27.00; LOD: 26.83; Perf: 1.3%
Andie Andrewson
21 Apr 14 12:23:33
$BURL To develop stronger pecs, change training sequence http://t.co/8n6PXpurle
Andie Andrewson
21 Apr 14 10:17:03
$BURL Ash: We're after market share http://t.co/2cP1bds9Xf
Andie Andrewson
21 Apr 14 05:55:04
$BURL 4 US IPOs planned for the week of Apr 21 http://t.co/J8BbLfsZUi
Andie Andrewson
20 Apr 14 22:28:03
$BURL Courier Times Community Calendar for April 21 http://t.co/NnG43zllEh
Andie Andrewson
20 Apr 14 21:22:05
$BURL The Intelligencer Community Calendar April 21 http://t.co/gcScX2ZQCc
Andie Andrewson
20 Apr 14 17:47:04
$BURL Unshackle our local school system http://t.co/4hjhHfeW0e
Andie Andrewson
20 Apr 14 17:14:02
$BURL READER SUBMITTED: Thank You http://t.co/fIMwVfZM8Q
Andie Andrewson
20 Apr 14 16:09:03
$BURL The Ledger Line http://t.co/8WlUvfFSsI
Andie Andrewson
20 Apr 14 15:30:03
$BURL Saratoga County property transactions published April 21, 2014 http://t.co/puVXExsB6a
Stock_Tracker
20 Apr 14 08:51:27
Burlington Stores Inc (BURL) 27.00 $BURL Updated Research Report on Big Lots - Analyst Blog Zacks Equity Resea http://t.co/4PLQQqt3Sz
Andie Andrewson
20 Apr 14 01:47:33
$BURL Do corporate incentives work? It's a matter of opinion http://t.co/MflajmGPZ3
Andie Andrewson
20 Apr 14 00:19:03
$BURL Reliance Industries divests Peru oil block stake http://t.co/LBwonXOhkF
Andie Andrewson
19 Apr 14 22:29:12
$BURL Community news http://t.co/KT9Nk2vgs6
Andie Andrewson
19 Apr 14 15:29:33
$BURL Planned waste-to-energy plant a threat to city's image: councillor http://t.co/1AVyN5aV1Y
Josiah Balderasne
19 Apr 14 02:53:41
$BURL BURLINGTON STORES, INC. Financials http://t.co/V9axPdcDYh
Andie Andrewson
18 Apr 14 16:51:34
$BURL Flying high to help fight autism http://t.co/BH5TdizzlJ
Andie Andrewson
18 Apr 14 14:35:36
$BURL VBT Bicycling and Walking Vacations has new owner http://t.co/TeoDoF5fYa
Andie Andrewson
18 Apr 14 02:42:06
$BURL Beverly Jean Hill Jackson http://t.co/pbqIwTZekc
Andie Andrewson
18 Apr 14 02:31:04
$BURL Carl L. Young Jr. http://t.co/eOypR2Ggi6
Andie Andrewson
17 Apr 14 02:52:36
$BURL Federal parties scramble to keep the peace as nomination battles heat up http://t.co/fTjNILp4NC
Andie Andrewson
17 Apr 14 02:16:37
$BURL Local author, artist to sign books http://t.co/HnosjREyhq
Andie Andrewson
17 Apr 14 00:18:32
$BURL A young artist portrays his 'ideal world' on canvas http://t.co/FuV95Dn3Hp
Andie Andrewson
16 Apr 14 23:39:33
$BURL Healthy living program offered http://t.co/kyITW4Si4b
				
				
By  +Follow October 1, 2013 9:27AM
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