Restoration Hardware 2015 Annual Report Download - page 50

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Cash Flow Analysis
A summary of operating, investing, and financing activities is set forth in the following table:
Year Ended
January 30, January 31, February 1,
2016 2015 2014
(in thousands)
Provided by operating activities ............................................... $ 141,886 $ 82,491 $ 87,521
Used in investing activities ....................................................... (227,397) (200,548 ) (93,868)
Provided by financing activities ............................................... 286,782 253,800 11,505
Increase in cash and cash equivalents ....................................... 200,963 135,545 5,035
Cash and cash equivalents at end of period .............................. 349,897 148,934 13,389
Net Cash Provided By Operating Activities
Operating activities consist primarily of net income adjusted for non-cash items including depreciation and amortization, stock-
based compensation, amortization of debt discount and the effect of changes in working capital and other activities.
For fiscal 2015, net cash provided by operating activities was $141.9 million and consisted of net income of $91.1 million and
non-cash items of $78.1 million, partially offset by an increase in cash used for working capital and other activities of $27.3 million.
Working capital and other activities consisted primarily of increases in inventory of $166.5 million related to the increase in both
existing and new products, as well as to support the opening of our new distribution center in Northern California. This was partially
offset by increases in accounts payable and accrued liabilities of $44.4 million, increases in other current liabilities of $39.6 million
primarily due to an increase in our federal tax liabilities, increases in deferred revenue and customer deposits of $33.2 million and
increases in deferred rent and lease incentives of $13.6 million primarily due to the profit participation arrangements for our
distribution center facilities.
For fiscal 2014, net cash provided by operating activities was $82.5 million and consisted of net income of $91.0 million and
non-cash items of $47.1 million, partially offset by an increase in cash used for working capital and other activities of $55.6 million.
Working capital and other activities consisted primarily of increases in inventory of $106.0 million to support our revenue growth,
increases in non-current assets of $6.0 million primarily related to an increase in deposits, as well as decreases in other current
liabilities of $3.1 million related to payments made for federal and state taxes. These uses of cash from working capital components
were partially offset by increases in accounts payable and accrued liabilities of $25.5 million, increases in deferred revenue and
customers deposits of $20.0 million due to the timing of shipments made at fiscal quarter end and increased special orders and
decreases in prepaid expenses and other current assets of $15.1 million primarily due to a decrease in vendor deposits and capitalized
Source Book costs.
For fiscal 2013, net cash provided by operating activities was $87.5 million and consisted of net income of $18.2 million and
non-cash items of $99.2 million, partially offset by an increase in cash used for working capital and other activities of $29.9 million.
Working capital and other activities consisted primarily of increases in inventory of $100.9 million to support our revenue growth,
increases in prepaid expenses of $22.8 million primarily due to an increase in vendor deposits and capitalized Source Book costs, and
increases in accounts receivable of $5.0 million due to revenue growth and tenant improvements. These uses of cash from working
capital components were partially offset by increases in accounts payable and accrued liabilities of $57.3 million primarily due to
timing of payments, increases in other current liabilities of $30.4 million due to federal and state tax liabilities and an increase in our
customer return reserve, increases in deferred revenue and customer deposits of $7.3 million due to the timing of shipments made at
fiscal year-end, as well as increases in deferred rent and lease incentives of $7.2 million primarily due to entering into new lease
agreements for Galleries and new distribution center locations.
Net Cash Used In Investing Activities
Investing activities consist primarily of investments in capital expenditures related to new gallery openings, the acquisition of
land and buildings, investments in supply chain and systems infrastructure, construction related deposits, as well as activities
associated with investing in available-for-sale securities.