Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

RH, consolidated cash flow statement

US$ in thousands

12 months ended:	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018
Net income	528,642)	688,546)	271,815)	220,375)	150,639)	2,180)
Depreciation and amortization	108,588)	96,022)	100,040)	100,739)	74,346)	70,135)
Non-cash operating lease cost	75,185)	72,479)	64,132)	65,195)	—)	—)
Goodwill and tradename impairment	—)	—)	20,459)	—)	32,086)	33,700)
Asset impairments	24,186)	9,630)	6,484)	15,168)	5,634)	6,481)
(Gain) loss on sale leaseback transaction	—)	—)	9,352)	(1,196)	—)	—)
Amortization of debt discount	—)	28,816)	42,372)	46,245)	41,868)	30,457)
Stock-based compensation expense	43,546)	48,478)	145,704)	21,832)	23,983)	50,709)
Non-cash compensation related to consolidated variable interest entities	4,470)	—)	—)	—)	—)	—)
Non-cash finance lease interest expense	32,051)	26,412)	24,011)	22,608)	—)	—)
Product recalls	560)	1,940)	7,370)	(3,517)	6,874)	7,707)
Amortization of purchase premiums and accretion of purchase discount, net	—)	—)	—)	—)	—)	99)
Deferred income taxes	(91,988)	(6,921)	(4,920)	(7,709)	263)	6,572)
(Gain) loss on extinguishment of debt	169,578)	29,138)	(152)	6,472)	917)	1,880)
Share of equity method investments losses	2,055)	8,214)	888)	—)	—)	—)
Other non-cash items	5,213)	(6,649)	3,998)	4,001)	4,790)	7,852)
Cash paid attributable to accretion of debt discount upon settlement of debt	—)	(55,243)	(84,003)	(70,482)	—)	—)
Accounts receivable	(1,846)	1,564)	(10,485)	(7,309)	(8,883)	2,758)
Merchandise inventories	(77,193)	(190,074)	(104,621)	93,266)	(7,399)	220,767)
Prepaid expense and other assets	(102,521)	(49,555)	(67,349)	28,404)	(78,454)	45,537)
Landlord assets under construction, net of tenant allowances	(51,369)	(68,454)	(69,508)	(64,300)	—)	—)
Accounts payable and accrued expenses	(56,264)	43,435)	63,583)	7,445)	(452)	64,460)
Deferred revenue and customer deposits	(62,086)	107,306)	116,205)	9,799)	8,413)	3,366)
Other current liabilities	(37,653)	(9,778)	43,856)	(45,767)	51,215)	680)
Current and non-current operating lease liabilities	(76,968)	(77,252)	(58,920)	(77,004)	—)	—)
Deferred rent and lease incentives	—)	—)	—)	—)	(1,111)	1,059)
Other non-current obligations	(32,499)	(35,940)	(19,541)	(25,077)	(4,173)	(1,297)
Change in assets and liabilities	(498,399)	(278,748)	(106,780)	(80,543)	(40,844)	337,330)
Adjustments to reconcile net income to net cash provided by operating activities	(124,955)	(26,432)	228,955)	118,813)	149,917)	552,922)
Net cash provided by operating activities	403,687)	662,114)	500,770)	339,188)	300,556)	555,102)
Capital expenditures	(173,642)	(185,383)	(111,126)	(93,623)	(136,736)	(112,455)
Proceeds from sale of asset	5,287)	—)	25,006)	24,078)	—)	15,123)
Equity method investments	(2,713)	(8,970)	(80,723)	—)	—)	—)
Acquisition of business and assets	—)	—)	(17,900)	—)	—)	(39)
Deposits on asset under construction	—)	—)	(12,857)	(53,000)	—)	(14,387)
Purchase of investments	—)	—)	—)	—)	—)	(16,109)
Maturities of investments	—)	—)	—)	—)	—)	46,890)
Sales of investments	—)	—)	—)	—)	—)	145,020)
Net cash (used in) provided by investing activities	(171,068)	(194,353)	(197,600)	(122,545)	(136,736)	64,043)
Borrowings under asset based credit facility	—)	—)	359,401)	322,500)	866,500)	600,000)
Repayments under asset based credit facility	—)	—)	(359,401)	(380,000)	(1,008,970)	(400,030)
Borrowings under term loans	500,000)	2,000,000)	—)	320,000)	—)	180,000)
Repayments under term loans	(21,250)	(5,000)	—)	(324,000)	(80,000)	(100,000)
Borrowings under real estate loans	16,000)	—)	—)	—)	—)	—)
Repayments under real estate loans	(10)	—)	—)	—)	—)	—)
Borrowings under promissory and equipment security notes	—)	—)	12,857)	122,000)	—)	34,000)
Repayments under promissory and equipment security notes	(13,863)	(22,949)	(34,456)	(16,520)	(31,974)	(2,319)
Proceeds from issuance of convertible senior notes	—)	—)	—)	350,000)	335,000)	—)
Proceeds from issuance of warrants	—)	—)	—)	50,225)	51,021)	—)
Purchase of convertible note hedges	—)	—)	—)	(91,350)	(91,857)	—)
Debt issuance costs related to convertible senior notes	—)	—)	—)	(4,818)	(6,349)	—)
Repayments of convertible senior notes	(13,064)	(335,729)	(215,846)	(278,560)	—)	—)
Repayment under convertible senior notes repurchase obligation	(395,372)	—)	—)	—)	—)	—)
Debt extinguishment costs	(8,059)	—)	—)	—)	—)	—)
Debt issuance costs	(28,069)	(26,411)	—)	(4,636)	—)	(8,298)
Principal payments under finance lease agreements, net of tenant allowances	(10,146)	(14,158)	(12,498)	(9,682)	—)	(377)
Proceeds from termination of convertible senior note hedges	231,796)	—)	—)	—)	—)	—)
Payments for termination of common stock warrants	(390,934)	—)	—)	—)	—)	—)
Repurchases of common stock	(1,000,000)	—)	—)	(250,032)	(250,000)	(1,000,326)
Borrowing on build-to-suit lease transactions	—)	—)	—)	—)	7,077)	—)
Payments on build-to-suit lease transactions	—)	—)	—)	—)	(7,452)	(10,200)
Proceeds from exercise of stock options	231,297)	32,045)	14,377)	27,138)	44,024)	24,896)
Tax withholdings related to issuance of stock-based awards	(803)	(20,671)	(8,348)	(7,069)	(9,502)	(5,759)
Other financing activities	—)	—)	—)	—)	(719)	—)
Net cash provided by (used in) financing activities	(902,477)	1,607,127)	(243,914)	(174,804)	(183,201)	(688,413)
Effects of foreign currency exchange rate translation	(243)	(95)	157)	16)	(130)	152)
Net increase (decrease) in cash and cash equivalents, restricted cash and restricted cash equivalents	(670,101)	2,074,793)	59,413)	41,855)	(19,511)	(69,116)
Cash and cash equivalents, restricted cash and restricted cash equivalents, beginning of period	2,181,864)	107,071)	47,658)	5,803)	25,314)	87,023)
Cash and cash equivalents, restricted cash and restricted cash equivalents, end of period	1,511,763)	2,181,864)	107,071)	47,658)	5,803)	17,907)

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).

The analysis of the financial data reveals several notable trends and changes over the examined periods.

Net Income: There is a significant upward trend in net income from 2018 through 2022, peaking at $688,546 thousand in 2022, followed by a decline to $528,642 thousand in 2023. This suggests strong profitability growth that moderated in the latest period.
Depreciation and Amortization: Depreciation and amortization expenses increased steadily from $70,135 thousand in 2018 to $108,588 thousand in 2023, indicating ongoing investment in fixed assets and intangible asset amortization.
Operating Lease Costs: Non-cash operating lease costs appeared starting in 2020, maintaining a steady level between approximately $64,000 and $75,000 thousand through 2023, reflecting lease accounting changes or increased lease obligations.
Asset Impairments and Goodwill Impairments: Goodwill and tradename impairment was recorded notably in the earlier years but was absent in the most recent periods. Asset impairments showed variability, with a marked increase to $24,186 thousand in 2023, suggesting episodic write-downs of asset values.
Stock-Based Compensation: Stock-based compensation expenses fluctuated substantially, reaching a high spike of $145,704 thousand in 2021, possibly linked to specific equity award activities or company performance incentives, then declined to $43,546 thousand in 2023.
Non-Cash Finance Lease Interest and Other Non-Cash Items: Non-cash finance lease interest expenses increased gradually from 2020 onward, reaching over $32,000 thousand in 2023. Other non-cash items alternated between positive and negative values, indicating variable adjustments affecting non-cash profits.
Working Capital Components: Accounts receivable and merchandise inventories displayed volatility, with some negative values indicating reductions or adjustments. Notably, merchandise inventories displayed large negative values in 2019, 2021, and 2022, potentially indicating inventory reductions or write-downs. Accounts payable and accrued expenses fluctuated widely, including a negative figure in 2023, suggesting varying payment cycles or obligations.
Operating Cash Flow: Net cash provided by operating activities showed consistent growth from 2018 through 2022, peaking at $662,114 thousand, followed by a notable decline to $403,687 thousand in 2023, which may reflect changes in working capital or operational efficiency.
Capital Expenditures and Investing Activities: Capital expenditures generally increased over time, peaking at $185,383 thousand in 2022, indicative of continued investment in property and equipment. Net cash used in investing activities remained negative throughout, reflecting ongoing asset purchases, with some fluctuation in magnitude.
Financing Activities: Financing activities fluctuated, with significant negative cash flows in several years, reflecting debt repayments and stock repurchases. A notable exception occurred in 2022, with a large positive cash inflow of $1,607,127 thousand primarily driven by borrowing activities, followed by a significant outflow of $902,477 thousand in 2023.
Debt and Borrowings: Borrowings under various credit facilities and term loans showed inconsistency, with large draws in some years and substantial repayments in others. The term loans expanded notably in 2022, indicating increased leverage. Concurrently, repayments under convertible senior notes appeared significant, especially in 2023.
Share Repurchases and Stock Transactions: Repurchases of common stock were substantial in 2018 and 2023, with purchases exceeding $1 billion in the former and $1 billion in the latter, suggesting a focus on returning capital to shareholders or market support. Proceeds from stock option exercises increased notably in 2023, indicating heightened employee stock activity.
Cash and Cash Equivalents: Cash and equivalents exhibited volatility, with a low of $5,803 thousand in early periods and a substantial increase to $2,181,864 thousand by the end of 2022, followed by a decline to $1,511,763 thousand in 2023, possibly related to the noted financing and investing cash flow activities.

In summary, the data reflect a company that experienced strong growth in net income and operating cash flows through 2022, supported by sizable asset investments and financing activities including significant debt issuance and stock repurchases. The year 2023 showed some moderation in net income and operating cash flows with increased asset impairments and financing outflows, potentially indicating a period of strategic adjustment or market challenges. Variations in working capital and non-cash items illustrate active management of resources and financial obligations throughout the periods.

Download chart

RH (NYSE:RH)

Cash Flow Statement