Floor & Decor Holdings, Inc. (FND) presents a deeply negative liquidation recovery posture as of March 26, 2026, consistent with the MFFAIS-reported cash liquidation value of approximately negative $2.75 billion and operating liquidation value of approximately negative $1.60 billion. The liability stack is dominated by operating lease obligations, which at $1.81 billion present value ($2.63 billion undiscounted over a 12-year weighted average remaining term) are non-negotiable in a wind-down scenario and remain at face value under the liquidation lens. Total reported liabilities are $3.12 billion against $5.58 billion in total assets, but asset-side haircuts eliminate most recovery value: PP&E of $1.87 billion haircuts to roughly $0.93-1.31 billion; inventory of $1.15 billion haircuts to approximately $0.69 billion at 60%; intangibles of $0.15 billion and goodwill of $0.26 billion are zeroed; and the ROU asset of $1.63 billion carries no independent liquidation value absent the associated lease liability. The net result is that haircutted assets fall materially short of face-value liabilities, generating the large negative recovery shown in MFFAIS metrics. A notable development since the prior annual filing (December 25, 2025) is the reclassification of the entire Term Loan balance of $196.1 million from long-term to current, as the facility matures February 14, 2027, adding near-term refinancing pressure. The ABL facility ($800 million capacity, $713.6 million net available) remains undrawn and provides liquidity headroom but does not alter liquidation recovery. Cash at $293.6 million is recoverable at par. Supply chain finance obligations embedded in accounts payable rose to $143.9 million from $133.2 million at year-end; these are trade payables at face value and reduce asset recovery on a wind-down. The Board approved a $400 million share repurchase program post-period (April 23, 2026), which would reduce the cash cushion if executed and is not reflected in the balance sheet. Operating lease cost of $91 million per quarter underscores the scale and stickiness of the lease liability stack. The tariff environment discussed in MD&A introduces forward inventory cost pressure that could compress inventory recovery values, though no reserve or write-down is disclosed in this filing.
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