What changed in this filing

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Item 1. Financial Statements

2021-08-26 compared with 2021-05-27 · 149 added, 90 removed, 478 unchanged (33% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Other revenue

24 unchanged sentences

Three Months Ended

Six Months Ended

Net income (loss)

1 unchanged sentence

Interest rate derivative contracts:

Net unrealized gains (losses) arising during the period

Net unrealized losses arising during the period

Net reclassification into earnings during the period

45 unchanged sentences

(All amounts in thousands)

Three Months Ended

Six Months Ended

OPERATING ACTIVITIES

6 unchanged sentences

Deferred income taxes

Non-cash loss on extinguishment of debt

Loss on extinguishment of debt

Non-cash stock compensation expense

12 unchanged sentences

Cash paid for property and equipment

Lease acquisition costs

Proceeds from sale of property and equipment and assets held for sale

Other investing activities

3 unchanged sentences

Principal payments on long term debt—ABL Line of Credit

Proceeds from long term debt—Term B-6 Loans

Principal payments on long term debt—Term B-5 Loans

Proceeds from long term debt—Convertible Note

Proceeds from long term debt—Secured Note

Principal payments on long term debt—Secured Note

Purchase of treasury shares

3 unchanged sentences

Net cash (used in) provided by financing activities

Increase in cash, cash equivalents, restricted cash and restricted cash equivalents

(Decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period

8 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2021

Summary of Significant Accounting Policies

Basis of Presentation

As of May 1, 2021, Burlington Stores, Inc., a Delaware corporation (collectively with its subsidiaries, the Company), through its indirect subsidiary Burlington Coat Factory Warehouse Corporation (BCFWC), operated 784 retail stores.

As of July 31, 2021, Burlington Stores, Inc., a Delaware corporation (collectively with its subsidiaries, the Company), through its indirect subsidiary Burlington Coat Factory Warehouse Corporation (BCFWC), operated 792 retail stores.

These unaudited Condensed Consolidated Financial Statements include the accounts of Burlington Stores, Inc.

5 unchanged sentences

The balance sheet at January 30, 2021 presented herein has been derived from the audited Consolidated Financial Statements contained in the Fiscal 2020 10-K.

Because of the COVID-19 pandemic discussed below, and because the Company’s business is seasonal in nature, the operating results for the three month period ended May 1, 2021 are not necessarily indicative of results for the fiscal year.

Because of the COVID-19 pandemic discussed below, and because the Company’s business is seasonal in nature, the operating results for the three and six month periods ended July 31, 2021 are not necessarily indicative of results for the fiscal year.

Accounting policies followed by the Company are described in Note 1, “Summary of Significant Accounting Policies,” included in Part II, Item 8 of the Fiscal 2020 10-K.

12 unchanged sentences

In April 2020, the Company issued $ 805 million of 2.25 % Convertible Senior Notes due 2025 (the Convertible Notes), and BCFWC issued $ 300 million of 6.25 % Senior Secured Notes due 2025 (the Secured Notes).

The Secured Notes were redeemed in full during the second quarter of Fiscal 2021.

Refer to Note 4, “Long Term Debt,” for further discussion regarding these debt transactions.

3 unchanged sentences

Negotiated rent deferral agreements with landlords.

Suspended the Company’s share repurchase program.

Temporarily suspended the Company’s share repurchase program.

The Company’s CEO voluntarily agreed to not take a salary;

8 unchanged sentences

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) was signed into law, which provides emergency economic assistance for American workers, families and businesses affected by the COVID-19 pandemic.

For the year ended January 30, 2021 the Company estimated it would obtain a one-time tax refund of $ 219.7 million from the carryback of federal net operating losses (NOLs) as a result of the CARES Act, which is included in the line item “Prepaid and other current assets” on the Company’s Condensed Consolidated Balance Sheet.

For the year ended January 30, 2021, the Company will obtain a one-time tax refund of $ 245.5 million from the carryback of federal net operating losses (NOLs) as a result of the CARES Act, which is included in the line item “Prepaid and other current assets” on the Company’s Condensed Consolidated Balance Sheet.

Recently Adopted Accounting Standards

6 unchanged sentences

As of the beginning of Fiscal 2021, this ASU resulted in a reduction in the line item “Additional paid-in capital” of $ 176.0 million, net of deferred financing costs, and an increase in the line item “Long term debt” of $ 153.0 million, which eliminated the debt discount and reallocated deferred financing costs that were previously allocated to the equity component.

The changes noted above caused a decrease in the effective interest rate on the Convertible Notes from 8.2 % to 2.8 %, resulting in a cumulative-effect adjustment to retained earnings of $ 23.0 million related to Fiscal 2020 interest expense, as well as a $ 7.6 million reduction in interest expense for the three month period ended May 1, 2021.

The changes noted above caused a decrease in the effective interest rate on the Convertible Notes from 8.2 % to 2.8 %, resulting in a cumulative-effect adjustment to retained earnings of $ 23.0 million related to Fiscal 2020 interest expense, as well as a $ 7.7 million and $ 15.3 million reduction in interest expense for the three and six month periods ended July 31, 2021, respectively.

As of the beginning of Fiscal 2021, the tax effect of adopting this guidance resulted in a $ 44.1 million increase in the line item “Additional paid-in-capital,” a $ 38.3 million reduction in the line item “Deferred tax liabilities” and a $ 5.9 million reduction to retained earnings.

1 unchanged sentence

The Company used the treasury stock method prior to adoption of the ASU.

The impact of this ASU on net income and weighted average diluted shares resulted in an increase to diluted net income per share of $ 0.05 during the three month period ended May 1, 2021.

There were no other new accounting standards that had a material impact on the Company’s Condensed Consolidated Financial Statements and notes thereto during the three month period ended May 1, 2021, and there were no other new accounting standards or pronouncements that were issued but not yet effective as of May 1, 2021 that the Company expects to have a material impact on its financial position or results of operations upon becoming effective.

The impact of this ASU on net income and weighted average diluted shares resulted in an increase to diluted net income per share of $ 0.07 and $ 0.12 during the three and six month periods ended July 31, 2021, respectively.

There were no other new accounting standards that had a material impact on the Company’s Condensed Consolidated Financial Statements and notes thereto during the three and six month periods ended July 31, 2021, and there were no other new accounting standards or pronouncements that were issued but not yet effective as of July 31, 2021 that the Company expects to have a material impact on its financial position or results of operations upon becoming effective.

Stockholders’ Equity

Activity for the three month periods ended May 1, 2021 and May 2, 2020 in the Company’s stockholders’ equity are summarized below:

Activity for the three and six month periods ended July 31, 2021 and August 1, 2020 in the Company’s stockholders’ equity are summarized below:

(in thousands, except share data)

9 unchanged sentences

Amount reclassified into earnings, net of related taxes of $ 0.8 million

Adoption of Accounting Standards Update 2020-06 (Note 1)

Adoption of ASU 2020-06 (Note 1)

Balance at May 1, 2021

Stock options exercised

Shares used for tax withholding

Vesting of restricted shares, net of forfeitures of 1,101 restricted shares

Stock based compensation

Unrealized losses on interest rate derivative contracts, net of related taxes of $ 1.9 million

Amount reclassified into earnings, net of related taxes of $ 0.9 million

Balance at July 31, 2021

(in thousands, except share data)

11 unchanged sentences

Balance at May 2, 2020

Stock options exercised

Shares used for tax withholding

Vesting of restricted shares, net of forfeitures of 2,499 restricted shares

Stock based compensation

Unrealized losses on interest rate derivative contracts, net of related taxes of $ 0.7 million

Amount reclassified into earnings, net of related taxes of $ 0.8 million

Balance at August 1, 2020

Lease Commitments

26 unchanged sentences

Three Months Ended

Six Months Ended

July 31, 2021

August 1, 2020

July 31, 2021

August 1, 2020

Finance lease cost:

14 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

July 31, 2021

August 1, 2020

Cash paid for amounts included in the measurement of lease liabilities:

9 unchanged sentences

(in thousands)

$ 1,200,000 senior secured term loan facility (Term B-5 Loans), LIBOR (with a floor of 0.00 %) plus 1.75 % , matures on November 17, 2024

Senior secured term loan facility (Term B-6 Loans), LIBOR (with a floor of 0.00 %) plus 2.00 %, matures on June 24, 2028

Senior secured term loan facility (Term B-5 Loans), LIBOR (with a floor of 0.00 %) plus 1.75 %, repaid in full on June 24, 2021

$ 805,000 convertible senior notes, 2.25 %, matures on April 15, 2025

$ 300,000 senior secured notes, 6.25 %, matures on April 15, 2025

$ 300,000 senior secured notes, 6.25 %, redeemed in full on June 11, 2021

$ 600,000 ABL senior secured revolving facility, LIBOR plus spread based on average outstanding balance, matures on June 29, 2023

4 unchanged sentences

Term Loan Facility

On February 26, 2020, the Company entered into Amendment No.

On February 26, 2020, BCFWC entered into Amendment No.

8 (the Eighth Amendment) to the Term Loan Credit Agreement governing its senior secured credit term loan facility (the Term Loan Facility).

2 unchanged sentences

Additionally, the Company recognized a non-cash loss on the extinguishment of debt of $ 0.2 million, representing the write-off of unamortized deferred financing costs and original issue discount, which was recorded in the line item “Loss on extinguishment of debt” in the Company’s Condensed Consolidated Statement of Income (Loss).

At May 1, 2021 and May 2, 2020, the Company’s interest rate related to the Term Loan Facility was 1.9 % and 2.6 %, respectively.

On June 24, 2021, BCFWC entered into Amendment No.

9 (the Ninth Amendment) to the Term Loan Credit Agreement governing the Term Loan Facility.

The Ninth Amendment, among other things, extended the maturity date from November 17, 2024 to June 24, 2028 , and changed the interest rate margins applicable to the Term Loan Facility from 0.75 % to 1.00 %, in the case of prime rate loans, and from 1.75 % to 2.00 %, in the case of LIBOR loans, with a 0.00 % LIBOR floor.

This amendment also requires quarterly principal payments of $ 2.4 million.

In connection with the execution of the Ninth Amendment, the Company incurred fees of $ 3.3 million, primarily related to legal and placement fees, which were recorded in the line item “Costs related to debt issuances and amendments” in the Company’s Condensed Consolidated Statement of Income (Loss).

Additionally, the Company recognized a loss on the extinguishment of debt of $ 1.2 million, representing the write-off of unamortized deferred financing costs and original issue discount, which was recorded in the line item “Loss on extinguishment of debt” in the Company’s Condensed Consolidated Statement of Income (Loss).

At July 31, 2021 and August 1, 2020, the interest rate related to the Term Loan Facility was 2.1 % and 1.9 %, respectively.

Convertible Notes

34 unchanged sentences

Three Months Ended

Six Months Ended

July 31, 2021

August 1, 2020

July 31, 2021

August 1, 2020

Coupon interest

4 unchanged sentences

On April 16, 2020, BCFWC issued $ 300 million of Secured Notes.

The Secured Notes are senior, secured obligations of BCFWC, and interest is payable semiannually in cash, in arrears, at a rate of 6.25 % per annum on April 15 and October 15 of each year, beginning on October 15, 2020 .

The Secured Notes are guaranteed on a senior secured basis by Burlington Coat Factory Holdings, LLC, Burlington Coat Factory Investments Holdings, Inc.

The Secured Notes were senior, secured obligations of BCFWC, and interest was payable semiannually in cash, in arrears, at a rate of 6.25 % per annum on April 15 and October 15 of each year, beginning on October 15, 2020 .

The Secured Notes were guaranteed on a senior secured basis by Burlington Coat Factory Holdings, LLC, Burlington Coat Factory Investments Holdings, Inc.

and BCFWC’s subsidiaries that guarantee the loans under the Term Loan Facility.

The Secured Notes mature on April 15, 2025 , unless earlier redeemed or repurchased.

In connection with the Secured Notes issuance, the Company incurred deferred financing costs of $ 7.9 million, primarily related to fees paid to the bookrunners of the offering, as well as legal fees.

1 unchanged sentence

The Company incurred additional costs of $ 2.5 million, primarily related to legal fees, which are recorded in the line item, “Costs related to debt issuances and amendments” in the Company’s Condensed Consolidated Statement of Income (Loss).

On May 27, 2021, the Company announced a make-whole call for the full $ 300.0 million outstanding principal amount of the Secured Notes.

As a result of this action, the Company is expecting a pre-tax debt extinguishment charge of approximately $ 30 million in the three month period ended July 31, 2021.

On June 11, 2021, BCFWC redeemed the full $ 300.0 million aggregate principal amount of the Secured Notes.

The redemption price of the Secured Notes was $ 323.7 million, plus accrued and unpaid interest to, but not including, the date of redemption.

This redemption resulted in a pre-tax debt extinguishment charge of $ 30.2 million in the three month period ended July 31, 2021.

ABL Line of Credit

1 unchanged sentence

The Company repaid $ 150 million of this amount during the second quarter of Fiscal 2020, and the remaining $ 250.0 million during the fourth quarter of Fiscal 2020.

At May 1, 2021, the Company had $ 549.5 million available under the ABL Line of Credit.

There were no borrowings under the ABL Line of Credit during the three month period ended May 1, 2021.

At May 2, 2020, the Company had $ 150.9 million available under the ABL Line of Credit.

The maximum borrowings under the ABL Line of Credit during the three month period ended May 2, 2020 amounted to $ 400.0 million.

Average borrowings during the three month period ended May 2, 2020 amounted to $ 206.6 million, at an average interest rate of 2.2 %.

At July 31, 2021, the Company had $ 533.6 million available under the ABL Line of Credit.

There were no borrowings under the ABL Line of Credit during the three and six month periods ended July 31, 2021.

At August 1, 2020, the Company had $ 120.4 million available under the ABL Line of Credit.

The maximum borrowings under the ABL Line of Credit during the three and six month periods ended August 1, 2020 amounted to $ 400.0 million.

Average borrowings during the three and six month periods ended August 1, 2020 amounted to $ 372.0 million and $ 289.3 million, respectively, at an average interest rate of 2.1 % in both periods.

Derivative Instruments and Hedging Activities

6 unchanged sentences

The Company classifies its derivative valuations in Level 2 of the fair value hierarchy.

On December 17, 2018, the Company entered into an interest rate swap, which hedged $ 450 million of the variable rate exposure under the Term Loan Facility at a rate of 2.72 %.

On June 24, 2021, the Company terminated this previous interest rate swap, and entered into a new interest rate swap, which hedges $ 450 million of the variable rate exposure on the Term Loan Facility at a blended rate of 2.19 %, and is designated as a cash flow hedge.

The amount of loss deferred for the previous interest rate swap was $ 26.9 million.

The Company is amortizing this amount from accumulated other comprehensive loss into interest expense over the original life of the previous interest rate swap, which had an original maturity date of December 29, 2023 .

The new interest rate swap had a liability fair va lue at inception of $ 26.9 million.

The Company will accrete this amount into accumulated other comprehensive loss as a benefit to interest expense over the life of the new interest rate swap, which has a maturity date of June 24, 2028 .

Cash Flow Hedges of Interest Rate Risk

2 unchanged sentences

Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

As of May 1, 2021, the Company had the following outstanding interest rate derivative that was designated as a cash flow hedge of interest rate risk:

As of July 31, 2021, the Company had the following outstanding interest rate derivative that was designated as a cash flow hedge of interest rate risk:

Interest Rate Derivative

1 unchanged sentence

Principal Amount

Cap/Swap Rate

Interest Swap Rate

Maturity Date

1 unchanged sentence

$ 450.0 million

December 29, 2023

June 24, 2028

Tabular Disclosure

2 unchanged sentences

Fair Values of Derivative Instruments

July 31, 2021

January 30, 2021

August 1, 2020

Derivatives Designated as Hedging Instruments

Interest rate swap contract

Interest rate swap contracts

Other liabilities

4 unchanged sentences

Three Months Ended

Six Months Ended

Interest Rate Derivatives:

Unrealized gains (losses), before taxes

Income tax (expense) benefit

Unrealized gains (losses), net of taxes

July 31, 2021

August 1, 2020

July 31, 2021

August 1, 2020

Unrealized losses, before taxes

Income tax benefit

Unrealized losses, net of taxes

The following table presents information about the reclassification of gains and losses from accumulated other comprehensive loss into earnings related to the Company’s derivative instruments for each of the reporting periods.

1 unchanged sentence

Three Months Ended

Six Months Ended

Component of Earnings:

July 31, 2021

August 1, 2020

July 31, 2021

August 1, 2020

Interest expense

2 unchanged sentences

The Company estimates that approximately $ 6.7 million will be reclassified from accumulated other comprehensive loss into interest expense during the next twelve months.

Accumulated Other Comprehensive Loss

Amounts included in accumulated other comprehensive loss are recorded net of the related income tax effects.

The following table details the changes in accumulated other comprehensive loss:

(in thousands)

Balance at January 30, 2021

Unrealized gains, net of related taxes of $ 0.3 million

Amount reclassified into earnings, net of related taxes of $ 0.8 million

Balance at May 1, 2021

Fair Value Measurements

12 unchanged sentences

Financial Assets

The fair values of the Company’s financial assets and the hierarchy of the level of inputs as of May 1, 2021, January 30, 2021 and May 2, 2020 are summarized below:

The fair values of the Company’s financial assets and the hierarchy of the level of inputs as of July 31, 2021, January 30, 2021 and August 1, 2020 are summarized below:

(in thousands)

4 unchanged sentences

The fair value of the Company’s long-lived assets is generally calculated using discounted cash flows.

During the three months ended May 1, 2021, the Company recorded impairment charges of $ 0.8 million, primarily related to declines in revenues and operating results for one store.

During the three and six months ended July 31, 2021, the Company recorded impairment charges of $ 1.0 million and $ 1.7 million, respectively, primarily related to the expected sale of one store, as well as declines in revenues and operating results for one store.

These costs were recorded in the line item “Impairment charges – long-lived assets” in the Company’s Condensed Consolidated Statements of Income (Loss).

All of the fixed assets for this store were fully impaired and therefore had zero fair value as of May 1, 2021, and would be categorized as Level 3 in the fair value hierarchy described above.

The assets associated with the sale had a remaining fair value as of July 31, 2021 of $ 2.5 million, and would be categorized as Level 2 in the fair value hierarchy described above.

Financial Liabilities

1 unchanged sentence

(in thousands)

July 31, 2021

January 30, 2021

August 1, 2020

Term B-6 Loans

Term B-5 Loans

Convertible Notes

Secured Notes

ABL Line of Credit

Total debt (a)

ABL Line of Credit (a)

Total debt (b)

To the extent the Company has any outstanding borrowings under the ABL Line of Credit, the fair value would approximate its reported value, because the interest rate is variable and reflects current market rates, due to short term nature.

The table above excludes finance lease obligations, debt discount and deferred debt costs.

1 unchanged sentence

The estimated fair values of the Company’s debt are classified as Level 2 in the fair value hierarchy, and are based on current market quotes received from inactive markets.

Income tax expense was $ 40.6 million during the three month period ended May 1, 2021, compared with income tax benefit of $ 205.4 million during the three month period ended May 2, 2020.

The effective tax rate for the three month period ended May 1, 2021 was 19.2 %, compared with 38.1 % during the three month period ended May 2, 2020.

Income tax expense was $ 21.2 million during the second quarter of Fiscal 2021 compared with income tax benefit of $ 63.1 million during the second quarter of Fiscal 2020.

The effective tax rate for the second quarter of Fiscal 2021 was 17.1 % compared with 57.4 % during the second quarter of Fiscal 2020.

Income tax expense was $ 61.8 million during the six month period ended July 31, 2021, compared with income tax benefit of $ 268.4 million during the six month period ended August 1, 2020.

The effective tax rate for the six month period ended July 31, 2021 was 18.4 %, compared with 41.4 % during the six month period ended August 1, 2020.

The decrease in the effective tax rate was primarily due to the Company’s pretax loss in the prior year and applying various provisions of the CARES Act, namely the benefit related to the carryback of federal NOLs in Fiscal 2020 to earlier tax years with higher tax rates.

6 unchanged sentences

Net deferred tax liabilities primarily relate to intangible assets and depreciation expense where the Company has a future obligation for tax purposes.

The decrease in deferred tax liability is primarily attributable to the early adoption of ASU 2020-06 related to accounting for convertible debt in the first quarter of 2021.

See Note 1 for additional information related to the Company’s adoption of this accounting guidance.

As of May 1, 2021, the Company had a deferred tax asset related to net operating losses of $ 36.2 million, inclusive of $ 35.9 million related to state net operating losses that expire at various dates between 2022 and 2040 , as well as $ 0.3 million related to Puerto Rico net operating losses that will expire in 2025 .

As of May 1, 2021, the Company had a deferred tax asset related to tax credit carry-forwards of $ 9.8 million, inclusive of $ 8.6 million of state tax credit carry-forwards, which will begin to expire in 2023 , and $ 1.2 million of deferred tax assets recorded for Puerto Rico alternative minimum tax credits that have an indefinite life .

As of May 1, 2021, January 30, 2021 and May 2, 2020, valuation allowances amounted to $ 13.7 million, $ 13.0 million and $ 10.7 million, respectively, related to state and Puerto Rico net operating losses and state tax credit carry-forwards.

As of July 31, 2021, the Company had a deferred tax asset related to net operating losses of $ 31.3 million, inclusive of $ 31.0 million related to state net operating losses that expire at various dates between 2022 and 2040 , as well as $ 0.3 million related to Puerto Rico net operating losses that will expire in 2025 .

As of July 31, 2021, the Company had a deferred tax asset related to tax credit carry-forwards of $ 6.9 million, inclusive of $ 5.9 million of state tax credit carry-forwards, which will begin to expire in 2023 , and $ 1.0 million of deferred tax assets recorded for Puerto Rico alternative minimum tax credits that have an indefinite life .

As of July 31, 2021, January 30, 2021 and August 1, 2020, valuation allowances amounted to $ 11.3 million, $ 13.0 million and $ 11.5 million, respectively, related to state and Puerto Rico net operating losses and state tax credit carry-forwards.

The Company believes that it is more likely than not that this portion of state and Puerto Rico net operating losses and state tax credit carry-forwards will not be realized.

2 unchanged sentences

The Company accounts for treasury stock under the cost method.

During the three month period ended May 1, 2021, the Company acquired 41,768 shares of common stock from employees for approximately $ 13.1 million to satisfy their minimum statutory tax withholdings related to the vesting of restricted stock and restricted stock unit awards, which was recorded in the line item “Treasury stock” on the Company’s Condensed Consolidated Balance Sheets, and the line item “Purchase of treasury shares” on the Company’s Condensed Consolidated Statements of Cash Flows.

Share Repurchase Program

During the six month period ended July 31, 2021, the Company acquired 42,371 shares of common stock from employees for approximately $ 13.3 million to satisfy their minimum statutory tax withholdings related to the vesting of restricted stock and restricted stock unit awards, which was recorded in the line item “Treasury stock” on the Company’s Condensed Consolidated Balance Sheets, and the line item “Purchase of treasury shares” on the Company’s Condensed Consolidated Statements of Cash Flows.

Share Repurchase Program s

On August 14, 2019, the Company’s Board of Directors authorized the repurchase of up to $ 400 million of common stock, which was authorized to be executed through August 2021 .

As part of the Company’s cash management efforts during the COVID-19 pandemic, the Company temporarily suspended its share repurchase programs in March 2020.

As of July 31, 2021, the Company had $ 348.4 million remaining under this share repurchase authorization, which expired in August 2021 .

On August 18, 2021, the Company’s board of directors authorized the repurchase of up to $ 400 million of common stock, which is authorized to be executed through August 2023 .

This repurchase program is funded using the Company’s available cash and borrowings under the ABL Line of Credit.

As part of the Company’s cash management efforts during the COVID-19 pandemic, the Company suspended its share repurchase program in March 2020.

As of May 1, 2021, the Company had $ 348.4 million remaining under its share repurchase authorization.

The Company’s repurchase program is funded using the Company’s available cash and borrowings under the ABL Line of Credit.

Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding.

stock option, restricted stock and restricted stock unit awards, and the if-converted method for the Convertible Notes .

Diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares and potentially dilutive securities outstanding during the period using the treasury stock method for the Company’s stock option, restricted stock and restricted stock unit awards, and the if-converted method for the Convertible Notes.

The following table presents the computation of basic and diluted net income (loss) per share:

1 unchanged sentence

Three Months Ended

Six Months Ended

Basic net income (loss) per share

10 unchanged sentences

Net income (loss) per common share – diluted

Approximately 5,000 shares of the Company’s stock-based compensation grants were excluded from diluted net income per share for the three month period ended May 1, 2021, since their effect was anti-dilutive.

Approximately 185,000 and 95,000 shares of the Company’s stock-based compensation grants were excluded from diluted net income per share for the three and six month periods ended July 31, 2021, respectively, since their effect was anti-dilutive.

All of the Company’s stock option, restricted stock and restricted stock unit awards have an anti-dilutive effect while in a net loss position.

Approximately 2,025,000 shares related to the Company’s stock option, restricted stock and restricted stock unit awards were excluded from diluted net loss per share for the three month period ended May 2, 2020, since their effect was anti-dilutive.

Approximately 2,005,000 and 2,015,000 shares related to the Company’s stock option, restricted stock and restricted stock unit awards were excluded from diluted net loss per share for the three and six month periods ended August 1, 2020, respectively, since their effect was anti-dilutive.

Stock-Based Compensation

As of May 1, 2021, there were 2,485,161 shares of common stock available for issuance under the Company’s 2013 Omnibus Incentive Plan.

As of July 31, 2021, there were 1,994,299 shares of common stock available for issuance under the Company’s 2013 Omnibus Incentive Plan.

Non-cash stock compensation expense is as follows:

1 unchanged sentence

Three Months Ended

Six Months Ended

Type of Non-Cash Stock Compensation

4 unchanged sentences

The amounts presented in the table above exclude taxes.

For the three month period ended May 1, 2021, the tax benefit related to the Company’s non-cash stock compensation was approximately $ 2.4 million.

For the three month period ended May 2, 2020, the tax benefit related to the Company’s non-cash stock compensation was approximately $ 3.8 million.

For the three and six month periods ended July 31, 2021, the tax benefit related to the Company’s non-cash stock compensation was approximately $ 3.7 million and $ 6.1 million, respectively.

For the three and six month periods ended August 1, 2020, the tax benefit related to the Company’s non-cash stock compensation was approximately $ 2.2 million and $ 6.0 million, respectively.

Stock Options

Stock option transactions during the three month period ended May 1, 2021 are summarized as follows:

Stock option transactions during the six month period ended July 31, 2021 are summarized as follows:

Options outstanding, January 30, 2021

2 unchanged sentences

Options forfeited

Options outstanding, May 1, 2021

Options exercised during the three month period ended May 1, 2021 had a total intrinsic value of $ 39.9 million.

The following table summarizes information about the stock options vested and expected to vest during the contractual term of such options as of May 1, 2021:

Options outstanding, July 31, 2021

Options exercised during the six month period ended July 31, 2021 had a total intrinsic value of $ 70.1 million.

The following table summarizes information about the stock options vested and expected to vest during the contractual term of such options as of July 31, 2021:

(in millions)

1 unchanged sentence

Options exercisable

The fair value of each stock option granted during the three month period ended May 1, 2021 was estimated using the Black Scholes option pricing model using the following assumptions:

Three Months Ended

The fair value of each stock option granted during the six month period ended July 31, 2021 was estimated using the Black Scholes option pricing model using the following assumptions:

Six Months Ended

Risk-free interest rate

0.45% - 1.13%

Expected volatility

9 unchanged sentences

Treasury zero-coupon bonds with maturities similar to those of the expected term of the awards being valued.

For grants issued during the three month period ended May 1, 2021, the expected life of the options was calculated using the simplified method.

For grants issued during the six month period ended July 31, 2021, the expected life of the options was calculated using the simplified method.

The simplified method defines the life as the average of the contractual term of the options and the weighted average vesting period for all option tranches.

3 unchanged sentences

Grants made on and after May 1, 2019 are in the form of restricted stock units.

Restricted stock transactions during the three month period ended May 1, 2021 are summarized as follows:

Restricted stock transactions during the six month period ended July 31, 2021 are summarized as follows:

Average Grant

3 unchanged sentences

Awards forfeited

Non-vested awards outstanding, May 1, 2021

Restricted stock awards vested during the three month period ended May 1, 2021 had a total intrinsic value of $ 37.5 million.

Non-vested awards outstanding, July 31, 2021

Restricted stock awards vested during the six month period ended July 31, 2021 had a total intrinsic value of $ 40.2 million.

The fair value of each share of restricted stock granted during Fiscal 2021 was based upon the closing price of the Company’s common stock on the grant date .

1 unchanged sentence

The Company grants performance-based restricted stock units to its senior executives.

Vesting of these performance stock units is based on pre-established EBIT margin expansion and sales compounded annual growth rate (CAGR) goals (each weighted equally) over a three-year performance period.

Vesting of these performance stock units is based on continued service and the achievement of pre-established EBIT margin expansion and sales compounded annual growth rate (CAGR) goals (each weighted equally) over a three-year performance period.

Based on the Company’s achievement of these goals, each award may range from 50 % (at threshold performance) to no more than 200 % of the target award.

In the event that actual performance is below threshold, no award will be made.

In addition to the performance conditions, each performance stock unit cliff vests at the end of a three-year service period.

Compensation costs recognized on the performance stock units are adjusted, as applicable, for performance above or below the target specified in the award.

Performance stock unit transactions during the three month period ended May 1, 2021 are summarized as follows:

Performance stock unit transactions during the six month period ended July 31, 2021 are summarized as follows:

Average Grant

2 unchanged sentences

Awards forfeited

Non-vested units outstanding, May 1, 2021

Non-vested units outstanding, July 31, 2021

Commitments and Contingencies

Like many retailers, the Company has been named in potential class or collective actions on behalf of groups alleging violations of federal and state wage and hour and other labor statutes, and alleged violations of state consumer and/or privacy protection and other statutes.

In the normal course of business, the Company is also party to representative claims under the California Private Attorneys’ General Act and various other lawsuits and regulatory proceedings including, among others, commercial, product, product safety, employee, customer, intellectual property and other claims.

product safety, employee, customer, intellectual property and other claims.

Actions against us are in various procedural stages.

2 unchanged sentences

Letters of Credit

The Company had letters of credit arrangements with various banks in the aggregate amount of $ 50.6 million, $ 54.9 million and $ 49.1 million as of May 1, 2021, January 30, 2021 and May 2, 2020, respectively.

Among these arrangements, as of May 1, 2021,

January 30, 2021 and May 2, 2020 , the Company had letters of credit outstanding in the amount of $ 46.8 million, $ 46.8 million and $ 47.2 million, respectively, guaranteeing performance under various insurance contracts and utility agreements.

In addition, the Company had outstand ing letters of credit arrangements in the amounts of $ 3.8 million, $ 8.2 million and $ 1.9 million at May 1, 2021 , January 30, 2021 and May 2, 2020 , respectively, related to certain merchandising agreements.

Based on the terms of the agreement governing the ABL Line of Credit, the Company had the ability to enter into letters of credit up to $ 549.5 million, $ 476.8 million and $ 150.9 million as of May 1, 2021 , January 30, 2021 and May 2, 2020 , respectively.

The Company had letters of credit arrangements with various banks in the aggregate amount of $ 65.3 million, $ 54.9 million and $ 53.9 million as of July 31, 2021, January 30, 2021 and August 1, 2020, respectively.

Among these arrangements, as of July 31, 2021, January 30, 2021 and August 1, 2020, the Company had letters of credit outstanding in the amount of $ 46.7 million, $ 46.8 million and $ 47.2 million, respectively, guaranteeing performance under various insurance contracts and utility agreements.

In addition, the Company had outstanding letters of credit arrangements in the amounts of $ 18.6 million, $ 8.2 million and $ 6.7 million at July 31, 2021, January 30, 2021 and August 1, 2020, respectively, related to certain merchandising agreements.

Based on the terms of the agreement governing the ABL Line of Credit, the Company had the ability to enter into letters of credit up to $ 533.6 million, $ 476.8 million and $ 120.4 million as of July 31, 2021, January 30, 2021 and August 1, 2020, respectively.

Purchase Commitments

The Company had $ 1,576.6 million of purchase commitments related to goods that were not received as of May 1, 2021.

The Company had $ 1,959.7 million of purchase commitments related to goods that were not received as of July 31, 2021.

Death Benefits

1 unchanged sentence

Related Parties

The brother-in-law of one of the Company’s Executive Vice Presidents is an independent sales representative of one of the Company’s suppliers of merchandise inventory.

This relationship predated the commencement of the Executive Vice President’s employment with the Company.

The brother-in-law of one of the Company’s former Executive Vice Presidents is an independent sales representative of one of the Company’s suppliers of merchandise inventory.

This relationship predated the commencement of the former Executive Vice President’s employment with the Company.

The Company has determined that the dollar amount of purchases through such supplier represents an insignificant amount of its inventory purchases.

The Executive Vice President retired from the Company during the second quarter of Fiscal 2021.

BURLINGTON STORES, INC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements