Name: RH (NYSE:RH) | Cash Flow Statement
Creator: Stock Analysis on Net

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.

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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).

Net income exhibited substantial growth between 2018 and 2022, rising from $2.18 million to $688.5 million, before moderating to $528.6 million in 2023. Net cash provided by operating activities generally trended upward, peaking at $662.1 million in 2022, although it decreased to $403.7 million in the final period analyzed.

Operating Cash Flow Dynamics: A widening gap is observed between net income and net cash provided by operating activities. While non-cash add-backs such as depreciation and amortization remained relatively stable, ranging between $70 million and $108 million, the change in assets and liabilities became a significant drag on cash. This figure shifted from a positive $337.3 million in 2018 to a negative $498.4 million by 2023, driven largely by outflows in prepaid expenses, other non-current obligations, and operating lease liabilities.
Investment Patterns and Capital Expenditure: Investing activities transitioned from a net cash inflow of $64 million in 2018 to consistent net outflows, averaging approximately $170 million to $190 million annually from 2020 to 2023. Capital expenditures showed a general upward trajectory, peaking at $185.4 million in 2022, signaling a period of sustained investment in physical assets and infrastructure.
Financing Strategy and Capital Structure: Financing activities were marked by extreme volatility and a shift in funding sources. The period ending January 2022 saw a massive liquidity surge with net cash provided by financing activities totaling $1.6 billion, primarily fueled by $2 billion in new term loan borrowings. This was offset by a strategic shift away from convertible senior notes, as evidenced by significant repayments and the termination of related hedges in 2023. Shareholder returns were aggressive, with $1 billion repurchased in common stock in both 2018 and 2023.
Liquidity and Cash Position: The company's cash and cash equivalents balance experienced a dramatic peak, rising from $107.1 million in 2021 to $2.18 billion by the end of 2022. However, this balance decreased to $1.51 billion by January 2023. This reduction is primarily attributable to the $1 billion share repurchase program and significant cash outflows associated with debt repurchase obligations and warrant terminations.

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