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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
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!!
Matt McCall
20 Nov 14 15:48:40
@cvpayne and I agree on this retailer. $BURL love the chart. Love the numbers. Watch now!!
rolly
20 Nov 14 11:42:41
$AMAG, $AGIO, $AMED, $AVGO, $BURL, $HBI, $MDVN, $RCPT, $SBAC, $SKX action looking good
PilotDog
20 Nov 14 10:47:57
@WallStJesus $BURL #popcorn now, thank you sir!
Day Trade Alerts
20 Nov 14 09:43:38
via #AlertTrade Price Action Alert $BURL - BURLINGTON STORES INC #stocks #intraday http://t.co/VS8RO1tb5N
4-traders.com
19 Nov 14 23:55:02
Burlington Stores : and the Leukemia & Lymphoma Society: A Powerful Partnership that Helps to Save Lives http://t.co/HVZ7Ldlewk $BURL
aviatelive
19 Nov 14 11:00:59
Is it blame the weather season again? http://t.co/Hm1ubWnbs2 #aviateUS $MCD $URI $CAT $VFC $YUM $BKW $GNRC $DECK $BURL
RB Trader
19 Nov 14 08:32:02
Yesterday 2,500 $BURL DEC $45 #Calls @ $0.85 $212,500.00 30X OI demo http://t.co/RtBtLgHChM
Grant Beasley
19 Nov 14 06:11:05
$FFIV $GPRO $RDWR $GIB $OTEX $CDW $BURL $FRGI $MFRM $APTO $LNKD CGX.TO $FL PPY.TO
Penny Stock Secret
18 Nov 14 20:39:19
Yesterday We Made $89,000 In Just One Trade More Info Here http://t.co/SVqoMlijqL .. $BUD $BUI $BURL
RB Trader
18 Nov 14 17:20:47
2,500 $BURL DEC $45 #Calls @ $0.85 $212,500.00 30X OI http://t.co/DFGjirkMrO
RB Options Scans
18 Nov 14 17:20:45
2,500 $BURL DEC $45 #Calls @ $0.85 $212,500.00 30X OI http://t.co/oPNgSvAClo
RB Trader
18 Nov 14 17:20:42
2,500 $BURL DEC $45 #Calls @ $0.85 $212,500.00 30X OI http://t.co/RtBtLgHChM http://t.co/AyzkE2lq0g
Grant Beasley
18 Nov 14 05:35:49
Watch list: $GIB $OTEX $FFIV $BBRY $RDWR $WMT $LNKD $CDW $BURL $FRGI $APTO $FL $BIDU CGX.TO $AAV
Irma Doucet
17 Nov 14 13:03:00
$burl Is It Time To Stop Thinking Of Burlington Stores As Overvalued? (BURL) http://t.co/Txio3YsTrb
Lucretia
17 Nov 14 10:31:17
$burl Burlington Stores Receives Average Recommendation of &quot;Buy&quot; from Brokerages ... http://t.co/GGs0RluboJ
Grant Beasley
17 Nov 14 05:55:34
Watchlist: $BBRY $FFIV $GPRO $RDWR $WDAY $WMT $LNKD $GIB $CDW $BURL $FRGI $APTO $SFS $FL $OTEX
				
				
By  +Follow October 1, 2013 9:27AM
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