x
|
Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
|
Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
|
Delaware
|
|
36-2512786
|
(State or Other Jurisdiction of
Incorporation of Organization) |
|
(I.R.S. Employer
Identification No.) |
|
|
|
1 Lands’ End Lane
Dodgeville, Wisconsin
|
|
53595
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Securities registered pursuant to Section 12(b) of the Act:
|
||
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Common Stock, par value $0.01 per share
|
LE
|
The NASDAQ Stock Market LLC
|
Large accelerated filer
|
|
¨
|
Accelerated filer
|
x
|
|
|
|
|
|
Non-accelerated filer
|
|
¨
|
Smaller reporting company
|
¨
|
|
|
|
|
|
Emerging growth company
|
|
¨
|
|
|
|
|
|
|
Page
|
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|
|
|
|
|
|
PART I FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
Item 1.
|
|
Financial Statements (Unaudited)
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Comprehensive Operations
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Changes in Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements
|
|
|
|
|
|
|
|
Item 2.
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
|
|
|
|
|
Item 3.
|
|
Quantitative and Qualitative Disclosures about Market Risk
|
|
|
|
|
|
|
|
Item 4.
|
|
Controls and Procedures
|
|
|
|
|
|
|
|
|
|
PART II OTHER INFORMATION
|
|
|
|
|
|
|
|
Item 1.
|
|
Legal
Proceedings
|
|
|
|
|
|
|
|
Item 1A.
|
|
Risk Factors
|
|
|
|
|
|
|
|
Item 6.
|
|
Exhibits
|
|
|
|
|
|
|
|
|
|
Signatures
|
|
|
|
13 Weeks Ended
|
||||||
(in thousands, except per share data)
|
|
May 3, 2019
|
|
May 4, 2018
|
||||
Net revenue
|
|
$
|
262,433
|
|
|
$
|
299,825
|
|
Cost of sales (excluding depreciation and amortization)
|
|
142,559
|
|
|
166,800
|
|
||
Gross profit
|
|
119,874
|
|
|
133,025
|
|
||
|
|
|
|
|
||||
Selling and administrative
|
|
116,844
|
|
|
124,000
|
|
||
Depreciation and amortization
|
|
7,618
|
|
|
6,161
|
|
||
Other operating expense, net
|
|
148
|
|
|
337
|
|
||
Operating (loss) income
|
|
(4,736
|
)
|
|
2,527
|
|
||
Interest expense
|
|
7,834
|
|
|
6,912
|
|
||
Other (income) expense, net
|
|
(867
|
)
|
|
3,864
|
|
||
Loss before income taxes
|
|
(11,703
|
)
|
|
(8,249
|
)
|
||
Income tax benefit
|
|
(4,885
|
)
|
|
(5,619
|
)
|
||
NET LOSS
|
|
$
|
(6,818
|
)
|
|
$
|
(2,630
|
)
|
NET LOSS PER COMMON SHARE
|
|
|
|
|
||||
Basic:
|
|
$
|
(0.21
|
)
|
|
$
|
(0.08
|
)
|
Diluted:
|
|
$
|
(0.21
|
)
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
||||
Basic weighted average common shares outstanding
|
|
32,261
|
|
|
32,125
|
|
||
Diluted weighted average common shares outstanding
|
|
32,261
|
|
|
32,125
|
|
|
|
13 Weeks Ended
|
||||||
(in thousands)
|
|
May 3, 2019
|
|
May 4, 2018
|
||||
NET LOSS
|
|
$
|
(6,818
|
)
|
|
$
|
(2,630
|
)
|
Other comprehensive loss, net of tax
|
|
|
|
|
||||
Foreign currency translation adjustments
|
|
(234
|
)
|
|
(1,636
|
)
|
||
COMPREHENSIVE LOSS
|
|
$
|
(7,052
|
)
|
|
$
|
(4,266
|
)
|
(in thousands, except share data)
|
|
May 3, 2019
|
|
May 4, 2018
|
|
February 1, 2019
|
||||||
ASSETS
|
|
|
|
|
|
|
||||||
Current assets
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
40,221
|
|
|
$
|
141,616
|
|
|
$
|
193,405
|
|
Restricted cash
|
|
1,821
|
|
|
2,081
|
|
|
1,948
|
|
|||
Accounts receivable, net
|
|
27,510
|
|
|
48,610
|
|
|
34,549
|
|
|||
Inventories, net
|
|
319,319
|
|
|
304,543
|
|
|
321,905
|
|
|||
Prepaid expenses and other current assets
|
|
35,304
|
|
|
41,595
|
|
|
36,574
|
|
|||
Total current assets
|
|
424,175
|
|
|
538,445
|
|
|
588,381
|
|
|||
Property and equipment, net
|
|
152,405
|
|
|
138,495
|
|
|
149,894
|
|
|||
Operating lease right-of-use asset
|
|
29,327
|
|
|
0
|
|
|
0
|
|
|||
Goodwill
|
|
110,000
|
|
|
110,000
|
|
|
110,000
|
|
|||
Intangible asset, net
|
|
257,000
|
|
|
257,000
|
|
|
257,000
|
|
|||
Other assets
|
|
5,473
|
|
|
8,557
|
|
|
5,636
|
|
|||
TOTAL ASSETS
|
|
$
|
978,380
|
|
|
$
|
1,052,497
|
|
|
$
|
1,110,911
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
|
|
|
|
|
||||||
Accounts payable
|
|
$
|
98,623
|
|
|
$
|
97,405
|
|
|
$
|
123,827
|
|
Lease liability - current
|
|
8,786
|
|
|
0
|
|
|
0
|
|
|||
Other current liabilities
|
|
89,322
|
|
|
95,550
|
|
|
117,424
|
|
|||
Total current liabilities
|
|
196,731
|
|
|
192,955
|
|
|
241,251
|
|
|||
Long-term debt, net
|
|
381,504
|
|
|
485,299
|
|
|
482,453
|
|
|||
Lease liability - long-term
|
|
24,772
|
|
|
0
|
|
|
0
|
|
|||
Long-term deferred tax liabilities
|
|
56,108
|
|
|
58,708
|
|
|
58,670
|
|
|||
Other liabilities
|
|
4,060
|
|
|
10,681
|
|
|
5,826
|
|
|||
TOTAL LIABILITIES
|
|
663,175
|
|
|
747,643
|
|
|
788,200
|
|
|||
Commitments and contingencies (Note 9)
|
|
|
|
|
|
|
||||||
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
||||||
Common stock, par value $0.01 authorized: 480,000,000 shares; issued and outstanding:
32,363,220
, 32,208,118 and 32,220,080, respectively
|
|
324
|
|
|
320
|
|
|
320
|
|
|||
Additional paid-in capital
|
|
354,016
|
|
|
348,142
|
|
|
352,733
|
|
|||
Accumulated deficit
|
|
(25,718
|
)
|
|
(31,380
|
)
|
|
(17,159
|
)
|
|||
Accumulated other comprehensive loss
|
|
(13,417
|
)
|
|
(12,228
|
)
|
|
(13,183
|
)
|
|||
Total stockholders’ equity
|
|
315,205
|
|
|
304,854
|
|
|
322,711
|
|
|||
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
|
|
$
|
978,380
|
|
|
$
|
1,052,497
|
|
|
$
|
1,110,911
|
|
|
|
13 Weeks Ended
|
||||||
(in thousands)
|
|
May 3, 2019
|
|
May 4, 2018
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
||||
Net loss
|
|
$
|
(6,818
|
)
|
|
$
|
(2,630
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
7,618
|
|
|
6,161
|
|
||
(Gain) loss on property and equipment
|
|
(55
|
)
|
|
336
|
|
||
Amortization of debt issuance costs
|
|
434
|
|
|
535
|
|
||
Stock-based compensation
|
|
1,974
|
|
|
967
|
|
||
Noncash lease impacts
|
|
(133
|
)
|
|
—
|
|
||
Deferred income taxes
|
|
(2,501
|
)
|
|
6
|
|
||
Change in operating assets and liabilities:
|
|
|
|
|
||||
Inventories
|
|
2,234
|
|
|
26,373
|
|
||
Accounts payable
|
|
(20,205
|
)
|
|
(55,603
|
)
|
||
Other operating assets
|
|
10,612
|
|
|
(13,843
|
)
|
||
Other operating liabilities
|
|
(29,450
|
)
|
|
(3,499
|
)
|
||
Net cash used in operating activities
|
|
(36,290
|
)
|
|
(41,197
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
||||
Purchases of property and equipment
|
|
(15,042
|
)
|
|
(10,748
|
)
|
||
Net cash used in investing activities
|
|
(15,042
|
)
|
|
(10,748
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
||||
Payments on term loan facility
|
|
(101,287
|
)
|
|
(1,288
|
)
|
||
Payments of employee withholding taxes on share-based compensation
|
|
(687
|
)
|
|
(610
|
)
|
||
Net cash used in financing activities
|
|
(101,974
|
)
|
|
(1,898
|
)
|
||
Effects of exchange rate changes on cash, cash equivalents and restricted cash
|
|
(5
|
)
|
|
(397
|
)
|
||
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
|
(153,311
|
)
|
|
(54,240
|
)
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD
|
|
195,353
|
|
|
197,937
|
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD
|
|
$
|
42,042
|
|
|
$
|
143,697
|
|
SUPPLEMENTAL CASH FLOW DATA
|
|
|
|
|
||||
Unpaid liability to acquire property and equipment
|
|
$
|
4,901
|
|
|
$
|
5,059
|
|
Income taxes paid, net of refunds
|
|
$
|
12
|
|
|
$
|
171
|
|
Interest paid
|
|
$
|
6,966
|
|
|
$
|
6,139
|
|
|
Common Stock Issued
|
|
Additional Paid-in
Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders' Equity
|
|||||||||||||
(in thousands except share data)
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at February 2, 2018
|
32,101,793
|
|
|
$
|
320
|
|
|
$
|
347,175
|
|
|
$
|
(29,810
|
)
|
|
$
|
(10,592
|
)
|
|
$
|
307,093
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,630
|
)
|
|
—
|
|
|
(2,630
|
)
|
|||||
Cumulative translation adjustment, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,636
|
)
|
|
(1,636
|
)
|
|||||
Change in accounting principle related to revenue recognition
|
—
|
|
|
—
|
|
|
—
|
|
|
1,060
|
|
|
—
|
|
|
1,060
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
967
|
|
|
—
|
|
|
—
|
|
|
967
|
|
|||||
Vesting of restricted shares
|
132,620
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restricted stock shares surrendered for taxes
|
(26,295
|
)
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at May 4, 2018
|
32,208,118
|
|
|
320
|
|
|
348,142
|
|
|
(31,380
|
)
|
|
(12,228
|
)
|
|
304,854
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at February 1, 2019
|
32,220,080
|
|
|
320
|
|
|
352,733
|
|
|
(17,159
|
)
|
|
(13,183
|
)
|
|
322,711
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,818
|
)
|
|
—
|
|
|
(6,818
|
)
|
|||||
Cumulative translation adjustment, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(234
|
)
|
|
(234
|
)
|
|||||
Change in accounting principle related to lease accounting
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,741
|
)
|
|
—
|
|
|
(1,741
|
)
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
1,974
|
|
|
—
|
|
|
—
|
|
|
1,974
|
|
|||||
Vesting of restricted shares
|
185,052
|
|
|
4
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restricted stock shares surrendered for taxes
|
(41,912
|
)
|
|
—
|
|
|
(687
|
)
|
|
—
|
|
|
—
|
|
|
(687
|
)
|
|||||
Balance at May 3, 2019
|
32,363,220
|
|
|
$
|
324
|
|
|
$
|
354,016
|
|
|
$
|
(25,718
|
)
|
|
$
|
(13,417
|
)
|
|
$
|
315,205
|
|
(in thousands)
|
|
February 1, 2019 (As reported)
|
|
Impact of Adoption
|
|
February 2, 2019
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Operating lease right-of-use asset
|
|
$
|
—
|
|
|
$
|
27,494
|
|
|
$
|
27,494
|
|
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
||||||
Lease liability - current
|
|
—
|
|
|
9,892
|
|
|
9,892
|
|
|||
Lease liability - long-term
|
|
—
|
|
|
21,700
|
|
|
21,700
|
|
|||
|
|
|
|
|
|
|
||||||
Stockholders' Equity:
|
|
|
|
|
|
|
||||||
Accumulated deficit
|
|
(17,159
|
)
|
|
(1,741
|
)
|
(1)
|
(18,900
|
)
|
|
|
13 Weeks Ended
|
||||||
(in thousands, except per share amounts)
|
|
May 3, 2019
|
|
May 4, 2018
|
||||
Net loss
|
|
$
|
(6,818
|
)
|
|
$
|
(2,630
|
)
|
|
|
|
|
|
||||
Basic weighted average common shares outstanding
|
|
32,261
|
|
|
32,125
|
|
||
Dilutive effect of stock awards
|
|
—
|
|
|
—
|
|
||
Diluted weighted average common shares outstanding
|
|
32,261
|
|
|
32,125
|
|
||
|
|
|
|
|
||||
Basic Loss per share
|
|
$
|
(0.21
|
)
|
|
$
|
(0.08
|
)
|
Diluted Loss per share
|
|
$
|
(0.21
|
)
|
|
$
|
(0.08
|
)
|
|
|
13 Weeks Ended
|
||||||
(in thousands)
|
|
May 3, 2019
|
|
May 4, 2018
|
||||
Beginning balance: Accumulated other comprehensive loss (net of tax of $3,505 and $2,816 respectively)
|
|
$
|
(13,183
|
)
|
|
$
|
(10,592
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
||||
Foreign currency translation adjustments (net of tax (benefit) expense of $61 and $434, respectively)
|
|
(234
|
)
|
|
(1,636
|
)
|
||
Ending balance: Accumulated other comprehensive loss (net of tax of $3,567 and $3,250, respectively)
|
|
$
|
(13,417
|
)
|
|
$
|
(12,228
|
)
|
|
|
May 3, 2019
|
|
May 4, 2018
|
|
February 1, 2019
|
|||||||||||||||
(in thousands)
|
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
|||||||||
Term Loan Facility, maturing April 4, 2021
|
|
$
|
389,250
|
|
(1)
|
5.75
|
%
|
|
$
|
494,400
|
|
|
5.13
|
%
|
|
$
|
490,538
|
|
|
5.77
|
%
|
ABL Facility, maturing November 16, 2022
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
|
|
389,250
|
|
|
|
|
494,400
|
|
|
|
|
490,538
|
|
|
|
||||||
Less: Current maturities in Other current liabilities
|
|
5,150
|
|
|
|
|
5,150
|
|
|
|
|
5,150
|
|
|
|
||||||
Less: Unamortized debt issuance costs
|
|
2,596
|
|
|
|
|
3,951
|
|
|
|
|
2,935
|
|
|
|
||||||
Long-term debt, net
|
|
$
|
381,504
|
|
|
|
|
$
|
485,299
|
|
|
|
|
$
|
482,453
|
|
|
|
(in thousands)
|
|
May 3, 2019
|
|
May 4, 2018
|
|
February 1, 2019
|
||||||
ABL Facility maximum borrowing
|
|
$
|
175,000
|
|
|
$
|
175,000
|
|
|
$
|
175,000
|
|
Outstanding letters of credit
|
|
11,203
|
|
|
15,500
|
|
|
21,111
|
|
|||
Borrowing availability under ABL
|
|
$
|
163,797
|
|
|
$
|
159,500
|
|
|
$
|
153,889
|
|
i.
|
Time vesting stock awards ("Deferred Awards") are in the form of restricted stock units and only require each recipient to complete a service period for the award to be earned. Deferred Awards generally vest over three years. The fair value of Deferred Awards is based on the closing price of the Company's common stock on the grant date and is reduced for estimated forfeitures of those awards not expected to vest due to employee turnover.
|
ii.
|
Stock option awards ("Option Awards") provide the recipient with the option to purchase a set number of shares at a stated exercise price over the term of the contract, which is ten years for all Option Awards currently outstanding. Options are granted with a strike price equal to the stock price on the date of grant and vest ratably over a four year period.
|
iii.
|
Performance-based stock awards ("Performance Awards") are in the form of restricted stock units and have, in addition to a service requirement, performance criteria that must be achieved for the awards to be earned. Performance Awards granted prior to Fiscal 2018 had annual vesting, but due to the performance criteria, were not eligible for straight-line expensing. All Performance Awards granted prior to Fiscal 2018 were forfeited during the First Quarter 2018. For Performance Awards granted in Fiscal 2018 and after, the Target Shares earned can range from 0% to 200% and depend on the achievement of Adjusted EBITDA and revenue performance measures for the cumulative three-fiscal year performance period beginning in the fiscal year of the grant date. The applicable percentage of the Target Shares, as determined by performance, vest after the completion of the applicable three year performance period, and unearned Target Shares are forfeited. The fair value of the Performance Awards granted in Fiscal 2018 and after are based on the closing price of the Company’s common stock on the grant date. Stock based compensation expense is recognized ratably over the related service period reduced for estimated forfeitures of those awards not expected to vest due to employee turnover and adjusted based on the Company's estimate of the percentage of the aggregate Target Shares expected to be earned. Based on performance to date, the Company is currently accruing for performance shares based on a 100% payout, which is reflected in the financial information below.
|
|
|
13 Weeks Ended
|
||||||
(in thousands)
|
|
May 3, 2019
|
|
May 4, 2018
|
||||
Deferred Awards
|
|
$
|
1,365
|
|
|
$
|
709
|
|
Option Awards
|
|
187
|
|
|
187
|
|
||
Performance Awards
|
|
422
|
|
|
71
|
|
||
Total stock-based compensation expense
|
|
$
|
1,974
|
|
|
$
|
967
|
|
|
|
Deferred Awards
|
|||||
(in thousands, except per share amounts)
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value per Share
|
|||
Unvested as of February 1, 2019
|
|
594
|
|
|
$
|
21.96
|
|
Granted
|
|
410
|
|
|
15.73
|
|
|
Vested
|
|
(184
|
)
|
|
22.41
|
|
|
Forfeited or expired
|
|
(23
|
)
|
|
18.40
|
|
|
Unvested as of May 3, 2019
|
|
797
|
|
|
18.61
|
|
|
|
Performance Awards
|
|||||
(in thousands, except per share amounts)
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value per Share
|
|||
Unvested as of February 1, 2019
|
|
176
|
|
|
$
|
21.93
|
|
Granted
|
|
265
|
|
|
15.73
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited or expired
|
|
(5
|
)
|
|
21.90
|
|
|
Unvested as of May 3, 2019
|
|
436
|
|
|
18.17
|
|
|
|
Option Awards
|
|||||
(in thousands, except per share amounts)
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value per Share
|
|||
Unvested as of February 1, 2019
|
|
257
|
|
|
$
|
8.73
|
|
Granted
|
|
—
|
|
|
—
|
|
|
Vested
|
|
(74
|
)
|
|
8.49
|
|
|
Forfeited or expired
|
|
—
|
|
|
—
|
|
|
Unvested as of May 3, 2019
|
|
183
|
|
|
8.85
|
|
|
|
May 3, 2019
|
|
May 4, 2018
|
|
February 1, 2019
|
||||||||||||||||||
(in thousands)
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount |
|
Fair
Value |
||||||||||||
Long-term debt, including short-term portion
|
|
$
|
389,250
|
|
|
$
|
381,952
|
|
|
$
|
494,400
|
|
|
$
|
452,994
|
|
|
$
|
490,538
|
|
|
$
|
460,493
|
|
|
|
13 Weeks Ended
|
||||||
(in thousands, except for number of stores)
|
|
May 3, 2019
|
|
May 4, 2018
|
||||
Rent, CAM and occupancy costs
|
|
$
|
1,106
|
|
|
$
|
4,494
|
|
Retail services, store labor
|
|
988
|
|
|
4,129
|
|
||
Financial services and payment processing
|
|
68
|
|
|
389
|
|
||
Supply chain costs
|
|
78
|
|
|
130
|
|
||
Total expenses
|
|
$
|
2,240
|
|
|
$
|
9,142
|
|
Number of Lands’ End Shops at Sears at period end
|
|
39
|
|
|
159
|
|
|
|
13 Weeks Ended
|
||||||
(in thousands)
|
|
May 3, 2019
|
|
May 4, 2018
|
||||
Sourcing
|
|
$
|
1,595
|
|
|
$
|
1,817
|
|
Shop Your Way
|
|
35
|
|
|
167
|
|
||
Shared services
|
|
47
|
|
|
48
|
|
||
Total expenses
|
|
$
|
1,677
|
|
|
$
|
2,032
|
|
|
|
13 Weeks Ended
|
||||||
(in thousands)
|
|
May 3, 2019
|
|
May 4, 2018
|
||||
Lands' End business outfitters revenue
|
|
$
|
2
|
|
|
$
|
325
|
|
Credit card revenue
|
|
75
|
|
|
153
|
|
||
Royalty income
|
|
23
|
|
|
27
|
|
||
Gift card expense
|
|
(2
|
)
|
|
(5
|
)
|
||
Total income
|
|
$
|
98
|
|
|
$
|
500
|
|
|
|
13 Weeks Ended
|
||||||
(in thousands)
|
|
May 3, 2019
|
|
May 4, 2018
|
||||
Net revenue:
|
|
|
|
|
||||
eCommerce
|
|
$
|
208,902
|
|
|
$
|
198,768
|
|
Outfitters
|
|
43,083
|
|
|
74,605
|
|
||
Retail
|
|
10,448
|
|
|
26,452
|
|
||
Total net revenue
|
|
$
|
262,433
|
|
|
$
|
299,825
|
|
|
|
13 Weeks Ended
|
||||||
(in thousands)
|
|
May 3, 2019
|
|
May 4, 2018
|
||||
Net revenue:
|
|
|
|
|
||||
United States
|
|
$
|
216,873
|
|
|
$
|
253,022
|
|
Europe
|
|
30,826
|
|
|
29,690
|
|
||
Asia
|
|
11,844
|
|
|
13,289
|
|
||
Other
|
|
2,890
|
|
|
3,824
|
|
||
Total Net revenue
|
|
$
|
262,433
|
|
|
$
|
299,825
|
|
|
|
13 Weeks Ended
|
||||||
(in thousands)
|
|
May 3, 2019
|
|
May 4, 2018
|
||||
Deferred Revenue Beginning of Period
|
|
$
|
9,051
|
|
|
$
|
12,993
|
|
Deferred Revenue Recognized in Period
|
|
(9,051
|
)
|
|
(12,993
|
)
|
||
Revenue Deferred in Period
|
|
10,199
|
|
|
16,062
|
|
||
Deferred Revenue End of Period
|
|
$
|
10,199
|
|
|
$
|
16,062
|
|
|
|
13 Weeks Ended
|
||||||
(in thousands)
|
|
May 3, 2019
|
|
May 4, 2018
|
||||
Balance as of Beginning of Period
|
|
$
|
18,191
|
|
|
$
|
19,272
|
|
Gift cards sold
|
|
15,117
|
|
|
16,072
|
|
||
Gift cards redeemed
|
|
(13,033
|
)
|
|
(14,664
|
)
|
||
Gift card breakage
|
|
(265
|
)
|
|
(1,390
|
)
|
||
Balance as of May 3, 2019
|
|
$
|
20,010
|
|
|
$
|
19,290
|
|
|
13 Weeks Ended
|
||
(in thousands)
|
May 3, 2019
|
||
Operating lease right-of-use asset
|
$
|
29,327
|
|
Lease liability - current
|
8,786
|
|
|
Lease liability - long-term
|
24,772
|
|
|
Weighted average remaining lease term in years
|
7.1
|
|
|
Weighted average discount rate
|
6.07
|
%
|
(in thousands)
|
May 3, 2019
|
|
Operating cash flows from operating leases
|
2,352
|
|
2019, excluding the quarter ended May 3, 2019
|
$
|
8,477
|
|
2020
|
6,339
|
|
|
2021
|
5,139
|
|
|
2022
|
4,397
|
|
|
2023
|
3,618
|
|
|
Thereafter
|
14,519
|
|
|
Total operating lease payments
|
$
|
42,489
|
|
Less imputed interest
|
8,931
|
|
|
Present value of lease liabilities
|
$
|
33,558
|
|
2019
|
$
|
10,851
|
|
2020
|
6,338
|
|
|
2021
|
4,873
|
|
|
2022
|
3,828
|
|
|
2023
|
2,839
|
|
|
Thereafter
|
10,590
|
|
|
Total minimum payments required
|
$
|
39,319
|
|
|
|
13 Weeks Ended
|
||||||||||||
|
|
May 3, 2019
|
|
May 4, 2018
|
||||||||||
(in thousands)
|
|
$'s
|
|
% of
Net revenue |
|
$’s
|
|
% of
Net revenue |
||||||
Net revenue
|
|
$
|
262,433
|
|
|
100.0
|
%
|
|
$
|
299,825
|
|
|
100.0
|
%
|
Cost of sales (excluding depreciation and amortization)
|
|
142,559
|
|
|
54.3
|
%
|
|
166,800
|
|
|
55.6
|
%
|
||
Gross profit
|
|
119,874
|
|
|
45.7
|
%
|
|
133,025
|
|
|
44.4
|
%
|
||
Selling and administrative
|
|
116,844
|
|
|
44.5
|
%
|
|
124,000
|
|
|
41.4
|
%
|
||
Depreciation and amortization
|
|
7,618
|
|
|
2.9
|
%
|
|
6,161
|
|
|
2.1
|
%
|
||
Other operating expense, net
|
|
148
|
|
|
0.1
|
%
|
|
337
|
|
|
0.1
|
%
|
||
Operating income
|
|
(4,736
|
)
|
|
(1.8
|
)%
|
|
2,527
|
|
|
0.8
|
%
|
||
Interest expense
|
|
7,834
|
|
|
3.0
|
%
|
|
6,912
|
|
|
2.3
|
%
|
||
Other (income) expense, net
|
|
(867
|
)
|
|
(0.3
|
)%
|
|
3,864
|
|
|
1.3
|
%
|
||
Loss before income taxes
|
|
(11,703
|
)
|
|
(4.5
|
)%
|
|
(8,249
|
)
|
|
(2.8
|
)%
|
||
Income tax benefit
|
|
(4,885
|
)
|
|
(1.9
|
)%
|
|
(5,619
|
)
|
|
(1.9
|
)%
|
||
NET LOSS
|
|
$
|
(6,818
|
)
|
|
(2.6
|
)%
|
|
$
|
(2,630
|
)
|
|
(0.9
|
)%
|
•
|
EBITDA excludes the effects of financings, investing activities and tax structure by eliminating the effects of interest, depreciation and income tax
|
•
|
Other significant items, while periodically affecting our results, may vary significantly from period to period and have a disproportionate effect in a given period, which affects comparability of results. We have adjusted our results for these items to make our statements more comparable and therefore more useful to investors as the items are not representative of our ongoing operations.
|
◦
|
Gain or loss on property and equipment - management considers the gains or losses on asset valuation, including impairments, to result from investing decisions rather than ongoing operations.
|
|
|
13 Weeks Ended
|
||||||||||||
|
|
May 3, 2019
|
|
May 4, 2018
|
||||||||||
(in thousands)
|
|
$’s
|
|
% of
Net revenue |
|
$’s
|
|
% of
Net revenue |
||||||
Net loss
|
|
$
|
(6,818
|
)
|
|
(2.6
|
)%
|
|
$
|
(2,630
|
)
|
|
(0.9
|
)%
|
Income tax benefit
|
|
(4,885
|
)
|
|
(1.9
|
)%
|
|
(5,619
|
)
|
|
(1.9
|
)%
|
||
Other (income) expense, net
|
|
(867
|
)
|
|
(0.3
|
)%
|
|
3,864
|
|
|
1.3
|
%
|
||
Interest expense
|
|
7,834
|
|
|
3.0
|
%
|
|
6,912
|
|
|
2.3
|
%
|
||
Operating (loss) income
|
|
(4,736
|
)
|
|
(1.8
|
)%
|
|
2,527
|
|
|
0.8
|
%
|
||
Depreciation and amortization
|
|
7,618
|
|
|
2.9
|
%
|
|
6,161
|
|
|
2.1
|
%
|
||
Other Operating Expense
|
|
203
|
|
|
0.1
|
%
|
|
1
|
|
|
—
|
%
|
||
(Gain) loss on property and equipment
|
|
(55
|
)
|
|
—
|
%
|
|
336
|
|
|
0.1
|
%
|
||
Adjusted EBITDA
|
|
$
|
3,030
|
|
|
1.2
|
%
|
|
$
|
9,025
|
|
|
3.0
|
%
|
By:
|
/s/ James F. Gooch
|
|
James F. Gooch
|
|
Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer
(Principal Financial Officer)
|
|
|
EXHIBIT 10.2
|
EXECUTIVE
|
|
/s/ James Gooch
|
|
Name: James Gooch
|
|
Address:
Address Omitted
|
|
|
|
LANDS’ END, INC.
|
|
By:
/s/ Josephine Linden
|
|
Name: Josephine Linden
|
|
Its: Chairman
|
|
|
|
5 Lands' End Lane
|
|
Dodgeville, WI 53595
|
Date:
SAMPLE ONLY - DO NOT DATE
|
|
Signed by:
SAMPLE ONLY - DO NOT SIGN
|
|
|
|
|
|
Witness by:
SAMPLE ONLY - DO NOT SIGN
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Lands’ End, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
June 4, 2019
|
|
/s/ Jerome S. Griffith
|
Jerome S. Griffith
|
|
Chief Executive Officer and President
|
(Principal Executive Officer)
|
|
Lands' End, Inc.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Lands’ End, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
June 4, 2019
|
|
/s/ James F. Gooch
|
James F. Gooch
|
|
Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer
|
(Principal Financial Officer)
|
|
Lands' End, Inc.
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
June 4, 2019
|
|
/s/ Jerome S. Griffith
|
Jerome S. Griffith
|
|
Chief Executive Officer and President
|
(Principal Executive Officer)
|
June 4, 2019
|
|
/s/ James F. Gooch
|
James F. Gooch
|
|
Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer
|
(Principal Financial Officer)
|