BJ's Wholesale Club Inc. Reports Operating Results (10-Q)
Bj Wholesale Club Inc. has a market cap of $2.7 billion; its shares were traded at around $49.55 with a P/E ratio of 19.8 and P/S ratio of 0.3. Bj Wholesale Club Inc. had an annual average earning growth of 44.3% over the past 10 years.
Highlight of Business Operations: Loss from discontinued operations (net of income tax benefit) was $0.5 million in this years first quarter versus $0.8 million in last years first quarter. This years results include $0.3 million of post-tax accretion expense on BJs closed club and ProFoods lease obligations, and $0.2 million of post-tax expense to repair insured property damage at one of our clubs closed in 2010. Last years results include the post-tax operating loss of the five BJs clubs closed in 2010 of $0.7 million and $0.1 million of post-tax accretion expense on BJs closed club and ProFoods lease obligations.
Net income increased 29.0% to $33.7 million, or $0.62 per diluted share in this years first quarter, compared to $26.1 million, or $0.49 per diluted share in last years first quarter.
Net cash used in investing activities totaled $31.8 million in the first quarter of 2011 compared to $38.1 million in the first quarter of 2010, a decrease of $6.2 million. This decrease was due to lower spending on property additions of $6.7 million. One new club was opened in this years first quarter while the remainder of our expected 2011 club openings are weighted toward the second half of the year. We opened one club in last years first quarter and opened two clubs in the second quarter, including one club relocation. Our full-year capital expenditures are expected to total approximately $180 million to $200 million, based on plans to open six to eight new clubs, including one relocation, spend approximately $54 million on technology projects, and approximately $25 million on club renovations. The timing of actual openings and renovations and the amount of related expenditures could vary from these estimates due, among other things, to the complexity of the real estate development process. Spending on IT projects could vary due to the complexity of the projects and the availability of resources needed to complete projects.
Net cash provided by financing activities totaled $8.4 million in the first quarter of 2011 compared to net cash used in financing activities of $4.9 million in the first quarter of 2010, an increase of $13.3 million. The increase was primarily attributable to a $10.0 million decrease in cash expended for treasury stock purchases in 2011 and a $2.6 million increase in proceeds from stock option exercises. In last years first quarter we repurchased 122,800 shares under our existing repurchase program for $4.2 million. We did not repurchase shares in this years first quarter. All of our treasury stock expenditures in 2011 related to the reacquisition of treasury shares upon the vesting of employees restricted stock awards.
In addition to the credit agreement, we maintain a $25.0 million uncommitted credit line for short-term borrowings. We also maintain two separate facilities totaling $72.0 million for letters of credit, primarily to support the purchase of inventories, of which $15.6 million was outstanding at April 30, 2011.
In twelve separate authorizations beginning August 26, 1998, with the most recent authorization being announced on March 29, 2010 for an additional $200 million, the Board of Directors has authorized a total of $1.35 billion of common stock repurchases. Under the program, repurchases may be made at managements discretion, in the open market or in privately negotiated transactions. No expiration dates were set under any of the Boards authorizations. From the inception of the program through April 30, 2011, we have repurchased approximately 34.6 million shares for a total of $1.08 billion, leaving a remaining authorization of $272.0 million.
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