CONTACT:
Sears Public Relations And Communications
(847) 286-8371
Sears Holdings Acquires Additional Sears Canada Shares and Provides Financial Update HOFFMAN ESTATES, Ill., April 23 /PRNewswire-FirstCall/ -- Sears
Holdings Corporation ("Holdings," "we," "us," "our" or the "Company")
(Nasdaq: SHLD) today announced that we entered into agreements to purchase
or cause a wholly-owned subsidiary to purchase a total of 18,660,880 common
shares of Sears Canada Inc. at a price of C$30.00 per share from Pershing
Square, L.P., Pershing Square II, L.P. and Pershing Square International,
Ltd. The acquisition is scheduled to close on April 27, 2010. The common
shares to be acquired represent approximately 17.3% of the outstanding
shares of Sears Canada. As a result of these agreements, we beneficially
own an additional 18,660,880 common shares and now beneficially own
97,341,670 common shares, representing approximately 90.4% of the
outstanding shares of Sears Canada. The purchases are being made as we
consider them to be an attractive investment.
The purchases are being made in compliance with the private agreement
exemption contained in section 100.1(1) of the Securities Act (Ontario) and
section 4.2 of Multilateral Instrument 62-104, as the price does not exceed
the maximum amount payable under such exemption and the purchases are being
made from not more than five vendors.
In connection with this transaction, we are also providing the
following financial update.
Comparable Store Sales and Earnings Outlook
For the quarter-to-date ("QTD") period through April 21, 2010
comparable store sales for our Kmart and Sears stores were as follows:
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QTD
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Kmart +3.2%
Sears Domestic +0.3%
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Total +1.7%
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Kmart's QTD comparable store sales benefited from increases in apparel,
home and toys categories. Sears Domestic's comparable store sales reflect
increased sales of home appliances which benefited from the launch of new
Kenmore products and a federally funded stimulus program to encourage
customers to replace less energy efficient appliance products, offset by
lower sales in the tools and home electronics categories.
We currently expect net income attributable to Holdings' shareholders
for the quarter ending May 1, 2010 will be between $0 and $35 million, or
between $0.00 and $0.31 per diluted share. In the first quarter of the
prior year, we reported net income attributable to Holdings' shareholders
of $26 million, or $0.21 per diluted share.
Financial Position
We currently expect to end the quarter with approximately $1.8 billion
in cash balances (of which approximately $500 million will be domestic and
$1.3 billion will be Sears Canada).
Short-term borrowings (consisting of commercial paper and borrowings
under our revolving credit facility) are expected to be approximately $500
million at May 1, 2010, up from our year-end balance of $325 million but
below last year's first quarter balance of $839 million. The expected
short-term borrowings exclude the effects of the $560 million purchase of
Sears Canada shares noted above.
During the first quarter through April 22, 2010, we repurchased
approximately 12,000 common shares at a total cost of $1 million (or $88.76
per share) under our share repurchase program. As of April 23, 2010, we had
remaining authorization to repurchase $581 million of common shares under
the previously approved programs.
Adjusted EBITDA
The Company expects to report total Adjusted EBITDA (consisting of
Kmart, Sears Domestic and Sears Canada segments) of $290 to $350 million in
the current quarter as compared to Adjusted EBITDA of $359 million in the
prior year quarter. During the quarter we incurred an incremental $40
million of expenses building our multi-channel capabilities and Shop Your
Way Rewards program. The current year expected Adjusted EBITDA range
contemplates:
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-- expected operating income of $85 to $130 million;
-- plus expected depreciation expense of $215 to $230 million;
-- less gains on sales of assets of $42 million;
-- plus expected domestic pension expense of $26 million;
-- plus expected closed store / severance costs of $6 million.
For further discussion of the reconciling items, see the Company's
press release on fourth quarter 2009 results issued on February 23, 2010.
We plan to release financial results for our first quarter of fiscal
2010 on or before May 20, 2010.
Forward-Looking Statements
Results are preliminary and unaudited. This press release contains
forward-looking statements about our expectations for the first quarter of
fiscal 2010. Forward-looking statements are subject to risks and
uncertainties that may cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by these forward-looking
statements. Such statements are based upon the current beliefs and
expectations of our management and are subject to significant risks and
uncertainties. The following factors, among others, could cause actual
results to differ from those set forth in the forward-looking statements:
our ability to offer merchandise and services that our customers want,
including our proprietary brand products; our ability to successfully
implement initiatives to improve inventory management and other
capabilities; competitive conditions in the retail and related services
industries; worldwide economic conditions and business uncertainty, the
availability of consumer and commercial credit, changes in consumer
confidence, tastes, preferences and spending, and changes in vendor
relationships; the impact of seasonal buying patterns, including seasonal
fluctuations due to weather conditions, which are difficult to forecast
with certainty; our dependence on sources outside the United States for
significant amounts of our merchandise; our extensive reliance on computer
systems to process transactions, summarize results and manage our business;
our reliance on third parties to provide us with services in connection
with the administration of certain aspects of our business; impairment
charges for goodwill and intangible assets or fixed-asset impairment for
long-lived assets; our ability to attract, motivate and retain key
executives and other associates; the outcome of pending and/or future legal
proceedings, including product liability claims, including proceedings with
respect to which the parties have reached a preliminary settlement; and the
timing and amount of required pension plan funding. We intend the
forward-looking statements to speak only as of the time made and do not
undertake to update or revise them as more information becomes available.
About Sears Holdings Corporation
Sears Holdings Corporation is the nation's fourth largest broadline
retailer with approximately 3,900 full-line and specialty retail stores in
the United States and Canada. Sears Holdings is the leading home appliance
retailer as well as a leader in tools, lawn and garden, home electronics
and automotive repair and maintenance. Sears Holdings is the 2010 ENERGY
STAR? Retail Partner of the Year. Key proprietary brands include Kenmore,
Craftsman and DieHard, and a broad apparel offering, including such
well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the
Apostrophe and Covington brands. It also has the Country Living collection,
which is offered by Sears and Kmart. We are the nation's largest provider
of home services, with more than 12 million service calls made annually.
Sears Holdings Corporation operates through its subsidiaries, including
Sears, Roebuck and Co. and Kmart Corporation. For more information, visit
Sears Holdings' website at http://www.searsholdings.com.
SOURCE Sears Holdings Corporation
Web site: http://www.searsholdings.com
Company News On Call: http://www.prnewswire.com/comp/923204.html
CONTACT: Sears Holdings Public Relations, +1-847-286-8371
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