Restoration Hardware 2015 Annual Report Download - page 69

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RESTORATION HARDWARE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended
January 30, January 31, February 1,
2016 2015 2014
CASH FLOWS FROM OPERATING ACTIVITIES
N
et income ............................................................................................................................................... $91,103 $ 91,002 $ 18,195
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization .......................................................................................................... 44,595 34,463 27,654
Impairment of long-lived assets ........................................................................................................ — — 1,385
Amortization of purchase premiums and accretion of purchases discount—net ................................ 1,166 — —
Amortization of debt discount ........................................................................................................... 22,114 7,969 —
Excess tax benefit from exercise of stock options ............................................................................. (10,443) (16,421) (3,685 )
Stock-based compensation expense................................................................................................... 24,223 17,072 67,622
Deferred income taxes ...................................................................................................................... (6,011 ) 2,693 5,602
Other non-cash interest expense ........................................................................................................ 2,473 1,342 671
Change in assets and liabilities:
Accounts receivable ................................................................................................................... (2,629) (3,991 ) (4,995 )
Merchandise inventories ............................................................................................................ (166,505) (106,036) (100,937)
Prepaid expense ......................................................................................................................... 8,929 15,123 (22,819)
Other current assets .................................................................................................................... 1,888 (6,030) (3,129 )
Accounts payable and accrued expenses .................................................................................... 44,378 25,470 57,318
Deferred revenue and customer deposits .................................................................................... 33,213 19,955 8,750
Other current liabilities .............................................................................................................. 39,580 (3,131 ) 28,883
Deferred rent and lease incentives .............................................................................................. 13,597 3,574 7,196
Other non-current obligations .................................................................................................... 215 (563 ) (190 )
Net cash provided by operating activities .......................................................................................... 141,886 82,491 87,521
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures ................................................................................................................................. (119,461) (110,359) (93,868)
Acquisition of buildings and land ............................................................................................................. (13,999) — —
Construction related deposits ................................................................................................................... (20,049) (9,250) —
Purchase of trademarks and domain names .............................................................................................. (339) (453) —
Purchase of investments ........................................................................................................................... (217,379) (91,604) —
Maturities of investments ......................................................................................................................... 143,830 11,118 —
Net cash used in investing activities .................................................................................................. (227,397) (200,548) (93,868)
CASH FLOWS FROM FINANCING ACTIVITIES
Gross borrowings under revolving line of credit ...................................................................................... — 749,945 1,670,876
Gross repayments under revolving line of credit ...................................................................................... — (835,370) (1,667,952 )
Revolving line of credit deferred financing fees ....................................................................................... — (2,133 ) —
Proceeds from issuance of convertible senior notes .................................................................................. 296,250 350,000 —
Proceeds from issuance of warrants ......................................................................................................... 30,390 40,390 —
Purchase of convertible note hedges......................................................................................................... (68,250) (73,325) —
Debt issuance costs related to convertible senior notes ............................................................................ (2,382 ) (5,385) —
Borrowings under build-to-suit lease transactions .................................................................................... — 1,776 —
Payments on capital leases ....................................................................................................................... (248) (1,803 ) (2,555)
Proceeds from exercise of stock options ................................................................................................... 25,606 16,400 7,629
Excess tax benefit from exercise of stock options .................................................................................... 10,443 16,421 3,685
Tax withholdings related to issuance of stock-based awards .................................................................... (5,027) (3,116) (178)
Net cash provided by financing activities .......................................................................................... 286,782 253,800 11,505
Effects of foreign currency exchange rate translation ............................................................................... (308) (198) (123 )
Net increase in cash and cash equivalents ......................................................................................... 200,963 135,545 5,035
Cash and cash equivalents ........................................................................................................................
Beginning of period .......................................................................................................................... 148,934 13,389 8,354
End of period .................................................................................................................................... $349,897 $ 148,934 $ 13,389
Cash paid for interest ............................................................................................................................... $13,369 $ 8,611 $ 5,038
Cash paid for taxes ................................................................................................................................... 29,135 60,121 1,521
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on-cash transactions:
Property and equipment additions due to build-to-suit lease transactions .......................................... 96,323 89,829 33,494
Property and equipment reduction due to effected sale leaseback (Note 5) .................................................. (74,855) — —
Property and equipment additions from use of construction related deposits .................................... 13,915 — —
Property and equipment additions in accounts payable and accrued expenses at period-end ............. 12,108 10,875 4,204
Property and equipment acquired under capital lease ........................................................................ 88 38 238
Building acquired under capital lease ................................................................................................ — 6,798 —
Trademarks and domain names additions in accounts payable and accrued expenses at period-end ............ 107 — —
Issuance of non-current notes payable related to share repurchases from former employees ............ 238 16,575 2,710
The accompanying notes are an integral part of these Consolidated Financial Statements.