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Floor & Decor Holdings, Inc. Announces Launch of Secondary Offering and Preliminary Financial Results as of and for the Thirteen Weeks Ended June 29, 2017

ATLANTA--(BUSINESS WIRE)--Floor & Decor Holdings, Inc. (the “Company” or “Floor & Decor”) (NYSE:FND) today announced the launch of a proposed secondary offering of 9,000,000 shares of common stock to be offered and sold by certain stockholders of the Company, including funds affiliated with Ares Management, L.P. and Freeman Spogli Management Co., L.P. and certain members of the Company’s management and directors of the Company (collectively, the “Selling Stockholders”), subject to market conditions and other factors.

The underwriters are expected to have a 30-day option to purchase up to 1,350,000 additional shares of common stock from the Selling Stockholders. The Company is not selling any shares in this offering and will not receive any proceeds from the sale of the shares by the Selling Stockholders or the exercise of the underwriters’ option to purchase additional shares of common stock.

BofA Merrill Lynch, Barclays, Credit Suisse, UBS Investment Bank, Goldman Sachs & Co. LLC, Jefferies, Piper Jaffray and Wells Fargo Securities are acting as joint book-running managers for the offering. Houlihan Lokey is acting as co-manager for the offering. A registration statement relating to these securities has been filed with the U.S. Securities and Exchange Commission (the “SEC”) but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time that the registration statement becomes effective.

In connection with the proposed offering, the representatives of the underwriters for the Company’s recent initial public offering of 10,147,025 shares of common stock (the “IPO”) have agreed to waive the lock-up restrictions with respect to the shares of common stock held by the Selling Stockholders. In addition, the underwriters have agreed to replace the lock-up agreements entered into in connection with the IPO with new 90-day lock-up agreements with officers, directors, and certain other existing stockholders of the Company. Such agreements will be effective as of the date of the final prospectus in order to permit the offer and sale of the shares by the Selling Stockholders in connection with the proposed offering and will supersede the lock-up agreements entered into in connection with the IPO. This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described above, nor shall there be any sale of such shares of common stock in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Preliminary Financial Results as of and for the Thirteen Weeks Ended June 29, 2017

The registration statement relating to the proposed secondary offering contains the Company’s preliminary financial results as of and for the thirteen weeks ended June 29, 2017. These preliminary financial results are based upon the Company’s current estimates and subject to completion of financial and operating closing procedures as of and for the thirteen weeks ended June 29, 2017.

The Company has provided ranges, rather than specific amounts, for certain financial results below, primarily because the Company’s financial closing procedures as of and for the thirteen weeks ended June 29, 2017 are not yet complete. As a result, the Company’s actual results may vary materially from the estimated preliminary results included herein and will not be publicly available until after the closing of this offering. Accordingly, you should not place undue reliance on these estimates. See “Forward-Looking Statements” below and “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Special Note Regarding Forward-Looking Statements” in the Company’s registration statement on Form S-1 relating to the proposed secondary offering for additional information regarding factors that could result in differences between the preliminary estimated ranges of certain financial results presented below and the financial results the Company will ultimately report as of and for the thirteen weeks ended June 29, 2017. The summary information below is not a comprehensive statement of the Company’s financial results for this period.

The preliminary estimated unaudited financial results included in this release have been prepared by, and are the responsibility of, the Company’s management. The Company’s independent registered public accounting firm, Ernst & Young LLP, has not audited, reviewed, compiled or performed any procedures with respect to the preliminary financial results. Accordingly, Ernst & Young LLP does not express an opinion or any other form of assurance with respect thereto. These estimates should not be viewed as a substitute for interim financial statements prepared in accordance with accounting principles generally accepted in the United States (‘‘GAAP’’). In addition, these estimates as of and for the thirteen weeks ended June 29, 2017 are not necessarily indicative of the results to be achieved for the remainder of the 2017 fiscal year or any future period.

The following are the Company’s preliminary estimates as of and for the thirteen weeks ended June 29, 2017:

  • The Company’s warehouse-format store count as of June 29, 2017 was 73 compared to 63 as of June 30, 2016. During the thirteen weeks ended June 29, 2017, the Company opened one new warehouse-format store.
  • Comparable store sales growth is estimated to be approximately 14.7% compared to comparable store sales growth of 22.6% for the thirteen weeks ended June 30, 2016. See “Comparable Store Sales” below for information on how the Company calculates its comparable store sales growth.
  • The Company’s net sales are estimated to be approximately $342.0 million to $344.0 million, representing an increase of 28.6% to 29.4% compared to $265.9 million for the thirteen weeks ended June 30, 2016.
  • The Company’s operating income is estimated to be approximately $32.1 million to $34.1 million, representing an increase of 202.8% to 221.7% compared to $10.6 million for the thirteen weeks ended June 30, 2016. The Company recorded a $14.0 million charge in the thirteen weeks ended June 30, 2016 for a legal settlement.
  • The Company’s net income is estimated to be approximately $19.2 million to $20.4 million, representing an increase of 282.3% to 307.6% compared to $5.0 million for the thirteen weeks ended June 30, 2016.
  • The Company’s Adjusted net income is estimated to be approximately $19.2 million to $20.5 million, representing an increase of 38.8% to 48.0% compared to $13.8 million for the thirteen weeks ended June 30, 2016. Adjusted net income is a non-GAAP financial measure. See below for a reconciliation of Adjusted net income.
  • The Company’s diluted earnings per share (“EPS”) is estimated to be approximately $0.19 to $0.20, representing an increase of 216.7% to 233.3% compared to $0.06 for the thirteen weeks ended June 30, 2016.
  • The Company’s Adjusted diluted EPS is estimated to be approximately $0.19 to $0.20, representing an increase of 35.7% to 42.9% compared to $0.14 for the thirteen weeks ended June 30, 2016. Adjusted diluted EPS is a non-GAAP financial measure. See below for a reconciliation of Adjusted diluted EPS.
  • Adjusted EBITDA is estimated to be approximately $41.7 million to $43.7 million, representing an increase of 30.3% to 36.5%...

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