Restoration Hardware 2014 Annual Report Download - page 80

RESTORATION HARDWARE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1—NATURE OF BUSINESS
Restoration Hardware Holdings, Inc., a Delaware corporation, together with its subsidiaries (collectively,
the “Company”), is a luxury home furnishings retailer that offers a growing number of categories including
furniture, lighting, textiles, bathware, décor, outdoor and garden, tableware and children’s furnishings. These
products are sold through the Company’s stores, catalogs and websites. As of January 31, 2015, the Company
operated a total of 67 retail stores and 17 outlet stores in 29 states, the District of Columbia and Canada, and had
sourcing operations in Shanghai and Hong Kong.
NOTE 2—ORGANIZATION
The Company was formed on August 18, 2011 and capitalized on September 2, 2011 as a holding company
for the purposes of facilitating an initial public offering of common equity and was at such time a direct
subsidiary of Home Holdings, LLC, a Delaware limited liability company (“Home Holdings”).
On November 1, 2012, the Company acquired all of the outstanding shares of capital stock of Restoration
Hardware, Inc., a Delaware corporation, and Restoration Hardware, Inc. became a direct, wholly owned
subsidiary of the Company. Restoration Hardware, Inc. was a direct, wholly owned subsidiary of Home Holdings
LLC, a Delaware limited liability company (“Home Holdings”) prior to the Company’s initial public offering.
Outstanding units issued by Home Holdings under its equity compensation plan, referred to as the Team Resto
Ownership Plan, were replaced with common stock of the Company at the time of its initial public offering.
These transactions are referred to as the “Reorganization.” As a result of these transactions, as of November 1,
2012, 32,188,891 shares of the Company’s common stock were outstanding.
On November 7, 2012, the Company completed its initial public offering. In connection with its initial
public offering, the Company issued and sold 4,782,609 shares of its common stock at a price of $24.00 per
share. In addition, certain of the Company’s stockholders sold an aggregate of 381,723 shares of common stock
held by them in the initial public offering. Further, certain stockholders sold an additional aggregate of 774,650
shares of common stock held by them pursuant to the exercise by the offering’s underwriters of their option to
purchase additional shares. The Company did not receive any proceeds from the sale of stock by its stockholders.
Prior to the Reorganization, Restoration Hardware Holdings, Inc. had not engaged in any business or other
activities except in connection with its formation and the Reorganization. Accordingly, all financial and other
information herein relating to periods prior to the completion of the Reorganization is that of Restoration
Hardware, Inc.
On May 20, 2013, the Company completed a follow-on offering of 9,974,985 shares of common stock at an
offering price of $50.00 per share, which included 1,301,085 shares sold in connection with the full exercise of
the option to purchase additional shares granted to the underwriters. All of the shares sold in the offering were
sold by existing stockholders of the Company. No shares were sold by the Company in the offering, and, as such,
the Company did not receive any of the proceeds from such sales. Effective May 20, 2013, the Company ceased
being a subsidiary of Home Holdings, as a result of the sale, by Home Holdings, of a portion of its shares of the
Company’s voting common stock, which resulted in Home Holdings owning less than a majority of the
Company’s voting common stock after such sale.
On July 17, 2013, the Company completed a second follow-on offering of 8,000,000 shares of common
stock at an offering price of $70.00 per share. On August 14, 2013, in connection with the full exercise of the
option to purchase additional shares granted to the underwriters, an additional 1,200,000 shares were sold at a
price of $70.00 per share. All of the shares sold in the offering were sold by existing stockholders of the
Company. No shares were sold by the Company in the offering, and, as such, the Company did not receive any of
the proceeds from such sales.
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