☑
|
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
|
For the transition period from
|
|
to
|
|
DESIGNER BRANDS INC.
|
(Exact name of registrant as specified in its charter)
|
Ohio
|
|
31-0746639
|
|||
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|||
|
|
|
|
|
|
810 DSW Drive,
|
Columbus,
|
Ohio
|
|
|
43219
|
(Address of principal executive offices)
|
|
|
(Zip Code)
|
Not Applicable
|
(Former name, former address and former fiscal year, if changed since last report)
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Class A Common Shares, without par value
|
DBI
|
New York Stock Exchange
|
Large accelerated filer
|
☑
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
Emerging growth company
|
☐
|
•
|
risks related to the outbreak of the coronavirus ("COVID-19") and other adverse public health developments;
|
•
|
risks related to holdings of cash and investments and access to liquidity;
|
•
|
risks related to our international operations, including international trade, our reliance on foreign sources for merchandise, exposure to foreign tax contingencies, and fluctuations in foreign currency exchange rates;
|
•
|
maintaining strong relationships with our vendors, manufacturers, licensors, and retailer customers;
|
•
|
our ability to successfully integrate acquired businesses or realize the anticipated benefits of the acquisitions after we complete our integration efforts;
|
•
|
risks related to the loss or disruption of any of our distribution or fulfillment centers;
|
•
|
our reliance on our loyalty programs and marketing to drive traffic, sales and customer loyalty;
|
•
|
our ability to anticipate and respond to fashion trends, consumer preferences and changing customer expectations;
|
•
|
failure to retain our key executives or attract qualified new personnel;
|
•
|
risks related to the loss or disruption of our information systems and data and our ability to prevent or mitigate breaches of our information security and the compromise of sensitive and confidential data;
|
•
|
our ability to comply with privacy laws and regulations, as well as other legal obligations;
|
•
|
continuation of agreements with and our reliance on the financial condition of Stein Mart;
|
•
|
our success in growing our store base and digital demand;
|
•
|
our ability to protect our reputation and to maintain the brands we license;
|
•
|
our ability to execute our strategies;
|
•
|
fluctuation of our comparable sales and quarterly financial performance;
|
•
|
uncertain general economic conditions;
|
•
|
our competitiveness with respect to style, price, brand availability and customer service;
|
•
|
the imposition of increased or new tariffs on our products; and
|
•
|
uncertainty related to future legislation, regulatory reform, policy changes, or interpretive guidance on existing legislation.
|
|
Page
|
PART I. FINANCIAL INFORMATION
|
|
Item 1. Financial Statements
|
|
PART II. OTHER INFORMATION
|
|
PART I.
|
FINANCIAL INFORMATION
|
Item 1.
|
Financial Statements
|
|
Three months ended
|
||||||
|
May 2, 2020
|
|
May 4, 2019
|
||||
Net sales
|
$
|
482,783
|
|
|
$
|
873,289
|
|
Cost of sales
|
(509,243
|
)
|
|
(613,956
|
)
|
||
Operating expenses
|
(187,221
|
)
|
|
(217,580
|
)
|
||
Income from equity investment
|
2,270
|
|
|
2,228
|
|
||
Impairment charges
|
(112,547
|
)
|
|
—
|
|
||
Operating profit (loss)
|
(323,958
|
)
|
|
43,981
|
|
||
Interest expense, net
|
(2,158
|
)
|
|
(1,801
|
)
|
||
Non-operating expenses, net
|
(87
|
)
|
|
(342
|
)
|
||
Income (loss) before income taxes
|
(326,203
|
)
|
|
41,838
|
|
||
Income tax benefit (provision)
|
110,345
|
|
|
(10,644
|
)
|
||
Net income (loss)
|
$
|
(215,858
|
)
|
|
$
|
31,194
|
|
Basic and diluted earnings (loss) per share:
|
|
|
|
||||
Basic earnings (loss) per share
|
$
|
(3.00
|
)
|
|
$
|
0.41
|
|
Diluted earnings (loss) per share
|
$
|
(3.00
|
)
|
|
$
|
0.40
|
|
Weighted average shares used in per share calculations:
|
|
|
|
||||
Basic shares
|
71,914
|
|
|
77,004
|
|
||
Diluted shares
|
71,914
|
|
|
78,263
|
|
|
Three months ended
|
||||||
|
May 2, 2020
|
|
May 4, 2019
|
||||
Net income (loss)
|
$
|
(215,858
|
)
|
|
$
|
31,194
|
|
Other comprehensive income (loss), net of income taxes:
|
|
|
|
||||
Foreign currency translation loss
|
(3,541
|
)
|
|
(714
|
)
|
||
Unrealized net gain on debt securities
|
195
|
|
|
242
|
|
||
Reclassification adjustment for net gains realized in net income
|
(368
|
)
|
|
(88
|
)
|
||
Total other comprehensive loss, net of income taxes
|
(3,714
|
)
|
|
(560
|
)
|
||
Total comprehensive income (loss)
|
$
|
(219,572
|
)
|
|
$
|
30,634
|
|
|
May 2, 2020
|
|
February 1, 2020
|
|
May 4, 2019
|
||||||
ASSETS
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
250,874
|
|
|
$
|
86,564
|
|
|
$
|
70,671
|
|
Investments
|
—
|
|
|
24,974
|
|
|
51,259
|
|
|||
Accounts receivable, net
|
81,953
|
|
|
89,151
|
|
|
78,287
|
|
|||
Inventories
|
533,638
|
|
|
632,587
|
|
|
642,045
|
|
|||
Prepaid expenses and other current assets
|
82,742
|
|
|
67,534
|
|
|
54,463
|
|
|||
Total current assets
|
949,207
|
|
|
900,810
|
|
|
896,725
|
|
|||
Property and equipment, net
|
359,841
|
|
|
395,009
|
|
|
405,156
|
|
|||
Operating lease assets
|
799,482
|
|
|
918,801
|
|
|
993,622
|
|
|||
Goodwill
|
93,655
|
|
|
113,644
|
|
|
90,881
|
|
|||
Intangible assets
|
13,908
|
|
|
22,846
|
|
|
42,298
|
|
|||
Deferred tax assets
|
139,269
|
|
|
31,863
|
|
|
27,909
|
|
|||
Equity investment
|
57,538
|
|
|
57,760
|
|
|
60,193
|
|
|||
Other assets
|
24,941
|
|
|
24,337
|
|
|
32,384
|
|
|||
Total assets
|
$
|
2,437,841
|
|
|
$
|
2,465,070
|
|
|
$
|
2,549,168
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
283,054
|
|
|
$
|
299,072
|
|
|
$
|
224,576
|
|
Accrued expenses
|
231,359
|
|
|
194,264
|
|
|
186,992
|
|
|||
Current operating lease liabilities
|
218,313
|
|
|
186,695
|
|
|
184,456
|
|
|||
Total current liabilities
|
732,726
|
|
|
680,031
|
|
|
596,024
|
|
|||
Debt
|
393,000
|
|
|
190,000
|
|
|
235,000
|
|
|||
Non-current operating lease liabilities
|
788,704
|
|
|
846,584
|
|
|
921,145
|
|
|||
Other non-current liabilities
|
25,305
|
|
|
27,541
|
|
|
34,148
|
|
|||
Total liabilities
|
1,939,735
|
|
|
1,744,156
|
|
|
1,786,317
|
|
|||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|||
Shareholders' equity:
|
|
|
|
|
|
||||||
Common shares paid-in capital, no par value
|
975,304
|
|
|
971,380
|
|
|
957,100
|
|
|||
Treasury shares, at cost
|
(515,065
|
)
|
|
(515,065
|
)
|
|
(448,436
|
)
|
|||
Retained earnings
|
44,076
|
|
|
267,094
|
|
|
257,453
|
|
|||
Accumulated other comprehensive loss
|
(6,209
|
)
|
|
(2,495
|
)
|
|
(3,266
|
)
|
|||
Total shareholders' equity
|
498,106
|
|
|
720,914
|
|
|
762,851
|
|
|||
Total liabilities and shareholders' equity
|
$
|
2,437,841
|
|
|
$
|
2,465,070
|
|
|
$
|
2,549,168
|
|
|
Number of shares
|
|
Amounts
|
|||||||||||||||||||||||||
|
Class A common shares
|
|
Class B common shares
|
|
Treasury shares
|
|
Common shares paid in capital
|
|
Treasury shares
|
|
Retained earnings
|
|
Accumulated other comprehensive loss
|
|
Total
|
|||||||||||||
Three months ended May 2, 2020
|
||||||||||||||||||||||||||||
Balance, February 1, 2020
|
64,033
|
|
|
7,733
|
|
|
22,169
|
|
|
$
|
971,380
|
|
|
$
|
(515,065
|
)
|
|
$
|
267,094
|
|
|
$
|
(2,495
|
)
|
|
$
|
720,914
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(215,858
|
)
|
|
—
|
|
|
(215,858
|
)
|
|||||
Stock-based compensation activity
|
269
|
|
|
—
|
|
|
—
|
|
|
3,924
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,924
|
|
|||||
Dividends ($0.10 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,160
|
)
|
|
—
|
|
|
(7,160
|
)
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,714
|
)
|
|
(3,714
|
)
|
|||||
Balance, May 2, 2020
|
64,302
|
|
|
7,733
|
|
|
22,169
|
|
|
$
|
975,304
|
|
|
$
|
(515,065
|
)
|
|
$
|
44,076
|
|
|
$
|
(6,209
|
)
|
|
$
|
498,106
|
|
Three months ended May 4, 2019
|
||||||||||||||||||||||||||||
Balance, February 2, 2019
|
70,672
|
|
|
7,733
|
|
|
15,091
|
|
|
$
|
953,801
|
|
|
$
|
(373,436
|
)
|
|
$
|
254,718
|
|
|
$
|
(2,706
|
)
|
|
$
|
832,377
|
|
Cumulative effect of accounting change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,556
|
)
|
|
—
|
|
|
(9,556
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,194
|
|
|
—
|
|
|
31,194
|
|
|||||
Stock-based compensation activity
|
172
|
|
|
—
|
|
|
—
|
|
|
3,299
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,299
|
|
|||||
Repurchase of Class A Common Shares
|
(3,410
|
)
|
|
—
|
|
|
3,410
|
|
|
—
|
|
|
(75,000
|
)
|
|
—
|
|
|
—
|
|
|
(75,000
|
)
|
|||||
Dividends ($0.25 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,903
|
)
|
|
—
|
|
|
(18,903
|
)
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(560
|
)
|
|
(560
|
)
|
|||||
Balance, May 4, 2019
|
67,434
|
|
|
7,733
|
|
|
18,501
|
|
|
$
|
957,100
|
|
|
$
|
(448,436
|
)
|
|
$
|
257,453
|
|
|
$
|
(3,266
|
)
|
|
$
|
762,851
|
|
|
Three months ended
|
||||||
|
May 2, 2020
|
|
May 4, 2019
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(215,858
|
)
|
|
$
|
31,194
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
23,133
|
|
|
21,422
|
|
||
Stock-based compensation expense
|
4,917
|
|
|
4,370
|
|
||
Deferred income taxes
|
(109,308
|
)
|
|
(364
|
)
|
||
Income from equity investment
|
(2,270
|
)
|
|
(2,228
|
)
|
||
Distributions received from equity investment
|
2,493
|
|
|
160
|
|
||
Impairment charges
|
112,547
|
|
|
—
|
|
||
Other
|
340
|
|
|
544
|
|
||
Change in operating assets and liabilities, net of acquired amounts:
|
|
|
|
||||
Accounts receivable
|
6,999
|
|
|
(10,330
|
)
|
||
Inventories
|
96,588
|
|
|
1,235
|
|
||
Prepaid expenses and other current assets
|
(15,014
|
)
|
|
(880
|
)
|
||
Accounts payable
|
(11,816
|
)
|
|
(32,254
|
)
|
||
Accrued expenses
|
37,421
|
|
|
(11,568
|
)
|
||
Operating lease assets and liabilities, net
|
30,359
|
|
|
(4,327
|
)
|
||
Net cash used in operating activities
|
(39,469
|
)
|
|
(3,026
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Cash paid for property and equipment
|
(14,625
|
)
|
|
(24,879
|
)
|
||
Sales of available-for-sale investments
|
24,612
|
|
|
18,691
|
|
||
Net cash provided by (used in) investing activities
|
9,987
|
|
|
(6,188
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowing on revolving line of credit
|
251,000
|
|
|
215,200
|
|
||
Payments on revolving line of credit
|
(48,000
|
)
|
|
(140,200
|
)
|
||
Cash paid for treasury shares
|
—
|
|
|
(75,000
|
)
|
||
Dividends paid
|
(7,160
|
)
|
|
(18,903
|
)
|
||
Other
|
(1,940
|
)
|
|
(986
|
)
|
||
Net cash provided by (used in) financing activities
|
193,900
|
|
|
(19,889
|
)
|
||
Effect of exchange rate changes on cash balances
|
(108
|
)
|
|
839
|
|
||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
164,310
|
|
|
(28,264
|
)
|
||
Cash, cash equivalents, and restricted cash, beginning of period
|
86,564
|
|
|
100,568
|
|
||
Cash and cash equivalents, end of period
|
$
|
250,874
|
|
|
$
|
72,304
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid (received) for income taxes
|
$
|
(31
|
)
|
|
$
|
721
|
|
Cash paid for interest on debt
|
$
|
2,105
|
|
|
$
|
1,987
|
|
Cash paid for operating lease liabilities
|
$
|
24,983
|
|
|
$
|
59,162
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Property and equipment purchases not yet paid
|
$
|
9,478
|
|
|
$
|
6,542
|
|
Operating lease liabilities arising from lease asset additions
|
$
|
9,408
|
|
|
$
|
4,621
|
|
Increase (decrease) to operating lease assets and lease liabilities for modifications
|
$
|
(15,849
|
)
|
|
$
|
19,147
|
|
(in thousands)
|
May 2, 2020
|
|
February 1, 2020
|
|
May 4, 2019
|
||||||
Cash and cash equivalents
|
$
|
250,874
|
|
|
$
|
86,564
|
|
|
$
|
70,671
|
|
Restricted cash, included in prepaid expenses and other current assets
|
—
|
|
|
—
|
|
|
1,633
|
|
|||
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows
|
$
|
250,874
|
|
|
$
|
86,564
|
|
|
$
|
72,304
|
|
•
|
Level 1 - Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 - Quoted prices for similar assets or liabilities in active markets or inputs that are observable.
|
•
|
Level 3 - Unobservable inputs in which little or no market activity exists.
|
|
Three months ended
|
||||||
(in thousands)
|
May 2, 2020
|
|
May 4, 2019
|
||||
Net sales:
|
|
|
|
||||
U.S. Retail segment:
|
|
|
|
||||
Women's footwear
|
$
|
259,563
|
|
|
$
|
482,121
|
|
Men's footwear
|
70,355
|
|
|
128,989
|
|
||
Kids' footwear
|
29,183
|
|
|
37,204
|
|
||
Accessories and other
|
17,972
|
|
|
43,526
|
|
||
|
377,073
|
|
|
691,840
|
|
||
Canada Retail segment:
|
|
|
|
||||
Women's footwear
|
15,972
|
|
|
28,626
|
|
||
Men's footwear
|
6,803
|
|
|
13,008
|
|
||
Kids' footwear
|
5,556
|
|
|
7,827
|
|
||
Accessories and other
|
998
|
|
|
2,355
|
|
||
|
29,329
|
|
|
51,816
|
|
||
Brand Portfolio segment:
|
|
|
|
||||
Wholesale
|
67,304
|
|
|
91,754
|
|
||
Commission income
|
5,123
|
|
|
3,680
|
|
||
Direct-to-consumer
|
9,686
|
|
|
9,112
|
|
||
|
82,113
|
|
|
104,546
|
|
||
Other
|
13,623
|
|
|
35,607
|
|
||
Total segment net sales
|
502,138
|
|
|
883,809
|
|
||
Elimination of intersegment sales
|
(19,355
|
)
|
|
(10,520
|
)
|
||
Total net sales
|
$
|
482,783
|
|
|
$
|
873,289
|
|
|
Three months ended
|
||||||
(in thousands)
|
May 2, 2020
|
|
May 4, 2019
|
||||
Gift cards:
|
|
|
|
||||
Beginning of period
|
$
|
35,461
|
|
|
$
|
34,998
|
|
Gift cards redeemed and breakage recognized to net sales
|
(13,525
|
)
|
|
(22,255
|
)
|
||
Gift cards issued
|
8,972
|
|
|
17,323
|
|
||
End of period
|
$
|
30,908
|
|
|
$
|
30,066
|
|
Loyalty programs:
|
|
|
|
||||
Beginning of period
|
$
|
16,138
|
|
|
$
|
16,151
|
|
Loyalty certificates redeemed and expired and other adjustments recognized to net sales
|
(6,609
|
)
|
|
(9,321
|
)
|
||
Deferred revenue for loyalty points issued
|
5,039
|
|
|
9,323
|
|
||
End of period
|
$
|
14,568
|
|
|
$
|
16,153
|
|
|
Three months ended
|
||||
(in thousands)
|
May 2, 2020
|
|
May 4, 2019
|
||
Weighted average basic shares outstanding
|
71,914
|
|
|
77,004
|
|
Dilutive effect of stock-based compensation awards
|
—
|
|
|
1,259
|
|
Weighted average diluted shares outstanding
|
71,914
|
|
|
78,263
|
|
|
Three months ended
|
||||||
(in thousands)
|
May 2, 2020
|
|
May 4, 2019
|
||||
Stock options
|
$
|
463
|
|
|
$
|
823
|
|
Restricted and director stock units
|
4,454
|
|
|
3,547
|
|
||
|
$
|
4,917
|
|
|
$
|
4,370
|
|
|
Number of shares
|
|||||||
(in thousands)
|
Stock Options
|
|
Time-Based RSUs
|
|
Performance-Based RSUs
|
|||
Outstanding - beginning of period
|
3,761
|
|
|
1,687
|
|
|
768
|
|
Granted
|
—
|
|
|
3,360
|
|
|
21
|
|
Exercised / vested
|
—
|
|
|
(172
|
)
|
|
(177
|
)
|
Forfeited / expired
|
(125
|
)
|
|
(17
|
)
|
|
—
|
|
Outstanding - end of period
|
3,636
|
|
|
4,858
|
|
|
612
|
|
|
May 2, 2020
|
|
February 1, 2020
|
|
May 4, 2019
|
||||||||||||
(in thousands)
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||||
Authorized shares
|
250,000
|
|
|
100,000
|
|
|
250,000
|
|
|
100,000
|
|
|
250,000
|
|
|
100,000
|
|
Issued shares
|
86,471
|
|
|
7,733
|
|
|
86,202
|
|
|
7,733
|
|
|
85,935
|
|
|
7,733
|
|
Outstanding shares
|
64,302
|
|
|
7,733
|
|
|
64,033
|
|
|
7,733
|
|
|
67,434
|
|
|
7,733
|
|
Treasury shares
|
22,169
|
|
|
—
|
|
|
22,169
|
|
|
—
|
|
|
18,501
|
|
|
—
|
|
|
Three months ended
|
||||||||||||||||||||||
|
May 2, 2020
|
|
May 4, 2019
|
||||||||||||||||||||
(in thousands)
|
Foreign Currency Translation
|
|
Available-for-Sale Securities
|
|
Total
|
|
Foreign Currency Translation
|
|
Available-for-Sale Securities
|
|
Total
|
||||||||||||
Accumulated other comprehensive gain (loss) - beginning of period
|
$
|
(2,668
|
)
|
|
$
|
173
|
|
|
$
|
(2,495
|
)
|
|
$
|
(2,328
|
)
|
|
$
|
(378
|
)
|
|
$
|
(2,706
|
)
|
Other comprehensive income (loss) before reclassifications
|
(3,541
|
)
|
|
195
|
|
|
(3,346
|
)
|
|
(714
|
)
|
|
242
|
|
|
(472
|
)
|
||||||
Amounts reclassified to non-operating expenses, net
|
—
|
|
|
(368
|
)
|
|
(368
|
)
|
|
—
|
|
|
(88
|
)
|
|
(88
|
)
|
||||||
Other comprehensive income (loss)
|
(3,541
|
)
|
|
(173
|
)
|
|
(3,714
|
)
|
|
(714
|
)
|
|
154
|
|
|
(560
|
)
|
||||||
Accumulated other comprehensive loss - end of period
|
$
|
(6,209
|
)
|
|
$
|
—
|
|
|
$
|
(6,209
|
)
|
|
$
|
(3,042
|
)
|
|
$
|
(224
|
)
|
|
$
|
(3,266
|
)
|
(in thousands)
|
May 2, 2020
|
|
February 1, 2020
|
|
May 4, 2019
|
||||||
Customer accounts receivables:
|
|
|
|
|
|
||||||
Serviced by third-party provider with guaranteed payment
|
$
|
46,694
|
|
|
$
|
54,209
|
|
|
$
|
57,619
|
|
Serviced by third-party provider without guaranteed payment
|
637
|
|
|
365
|
|
|
168
|
|
|||
Serviced in-house
|
5,702
|
|
|
7,630
|
|
|
12,169
|
|
|||
Other receivables
|
31,467
|
|
|
28,166
|
|
|
10,561
|
|
|||
Accounts receivable
|
84,500
|
|
|
90,370
|
|
|
80,517
|
|
|||
Allowance for doubtful accounts
|
(2,547
|
)
|
|
(1,219
|
)
|
|
(2,230
|
)
|
|||
Accounts receivable, net
|
$
|
81,953
|
|
|
$
|
89,151
|
|
|
$
|
78,287
|
|
(in thousands)
|
May 2, 2020
|
|
February 1, 2020
|
|
May 4, 2019
|
||||||
Carrying value of investments
|
$
|
—
|
|
|
$
|
24,831
|
|
|
$
|
51,542
|
|
Unrealized gains included in accumulated other comprehensive loss
|
—
|
|
|
143
|
|
|
1
|
|
|||
Unrealized losses included in accumulated other comprehensive loss
|
—
|
|
|
—
|
|
|
(284
|
)
|
|||
Fair value
|
$
|
—
|
|
|
$
|
24,974
|
|
|
$
|
51,259
|
|
(in thousands)
|
May 2, 2020
|
|
February 1, 2020
|
|
May 4, 2019
|
||||||
Land
|
$
|
1,110
|
|
|
$
|
1,110
|
|
|
$
|
1,110
|
|
Buildings
|
12,485
|
|
|
12,485
|
|
|
12,485
|
|
|||
Building and leasehold improvements
|
442,222
|
|
|
449,958
|
|
|
439,707
|
|
|||
Furniture, fixtures and equipment
|
479,534
|
|
|
482,573
|
|
|
489,477
|
|
|||
Software
|
196,127
|
|
|
189,291
|
|
|
167,924
|
|
|||
Construction in progress
|
20,315
|
|
|
32,645
|
|
|
42,620
|
|
|||
Total property and equipment
|
1,151,793
|
|
|
1,168,062
|
|
|
1,153,323
|
|
|||
Accumulated depreciation and amortization
|
(791,952
|
)
|
|
(773,053
|
)
|
|
(748,167
|
)
|
|||
Property and equipment, net
|
$
|
359,841
|
|
|
$
|
395,009
|
|
|
$
|
405,156
|
|
|
Three months ended
|
||||||||||||||||||||||
|
May 2, 2020
|
|
May 4, 2019
|
||||||||||||||||||||
(in thousands)
|
Goodwill
|
|
Accumulated Impairments
|
|
Net
|
|
Goodwill
|
|
Accumulated Impairments
|
|
Net
|
||||||||||||
Beginning of period by segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Retail
|
$
|
93,655
|
|
|
$
|
—
|
|
|
$
|
93,655
|
|
|
$
|
25,899
|
|
|
$
|
—
|
|
|
$
|
25,899
|
|
Canada Retail
|
41,610
|
|
|
(41,610
|
)
|
|
—
|
|
|
42,048
|
|
|
(42,048
|
)
|
|
—
|
|
||||||
Brand Portfolio
|
19,989
|
|
|
—
|
|
|
19,989
|
|
|
63,614
|
|
|
—
|
|
|
63,614
|
|
||||||
|
155,254
|
|
|
(41,610
|
)
|
|
113,644
|
|
|
131,561
|
|
|
(42,048
|
)
|
|
89,513
|
|
||||||
Activity by segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Canada Retail -
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency translation adjustment
|
(2,467
|
)
|
|
2,467
|
|
|
—
|
|
|
(1,043
|
)
|
|
1,043
|
|
|
—
|
|
||||||
Brand Portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Impairment charges
|
—
|
|
|
(19,989
|
)
|
|
(19,989
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchase price and allocation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
1,368
|
|
|
—
|
|
|
1,368
|
|
||||||
|
(2,467
|
)
|
|
(17,522
|
)
|
|
(19,989
|
)
|
|
325
|
|
|
1,043
|
|
|
1,368
|
|
||||||
End of period by segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Retail
|
93,655
|
|
|
—
|
|
|
93,655
|
|
|
25,899
|
|
|
—
|
|
|
25,899
|
|
||||||
Canada Retail
|
39,143
|
|
|
(39,143
|
)
|
|
—
|
|
|
41,005
|
|
|
(41,005
|
)
|
|
—
|
|
||||||
Brand Portfolio
|
19,989
|
|
|
(19,989
|
)
|
|
—
|
|
|
64,982
|
|
|
—
|
|
|
64,982
|
|
||||||
|
$
|
152,787
|
|
|
$
|
(59,132
|
)
|
|
$
|
93,655
|
|
|
$
|
131,886
|
|
|
$
|
(41,005
|
)
|
|
$
|
90,881
|
|
(in thousands)
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||
May 2, 2020
|
|
|
|
|
|
||||||
Definite-lived customer relationships
|
$
|
2,780
|
|
|
$
|
(2,353
|
)
|
|
$
|
427
|
|
Indefinite-lived trademarks and tradenames
|
13,481
|
|
|
—
|
|
|
13,481
|
|
|||
|
$
|
16,261
|
|
|
$
|
(2,353
|
)
|
|
$
|
13,908
|
|
February 1, 2020
|
|
|
|
|
|
||||||
Definite-lived customer relationships
|
$
|
9,360
|
|
|
$
|
(2,044
|
)
|
|
$
|
7,316
|
|
Indefinite-lived trademarks and tradenames
|
15,530
|
|
|
—
|
|
|
15,530
|
|
|||
|
$
|
24,890
|
|
|
$
|
(2,044
|
)
|
|
$
|
22,846
|
|
May 4, 2019
|
|
|
|
|
|
||||||
Definite-lived customer relationships
|
$
|
28,340
|
|
|
$
|
(1,326
|
)
|
|
$
|
27,014
|
|
Indefinite-lived trademarks and tradenames
|
15,284
|
|
|
—
|
|
|
15,284
|
|
|||
|
$
|
43,624
|
|
|
$
|
(1,326
|
)
|
|
$
|
42,298
|
|
(in thousands)
|
May 2, 2020
|
|
February 1, 2020
|
|
May 4, 2019
|
||||||
Gift cards and merchandise credits
|
$
|
30,908
|
|
|
$
|
35,461
|
|
|
$
|
30,066
|
|
Accrued compensation and related expenses
|
13,700
|
|
|
26,768
|
|
|
25,951
|
|
|||
Accrued taxes
|
21,628
|
|
|
19,399
|
|
|
23,242
|
|
|||
Loyalty programs deferred revenue
|
14,568
|
|
|
16,138
|
|
|
16,153
|
|
|||
Sales returns
|
47,625
|
|
|
21,408
|
|
|
21,692
|
|
|||
Customer allowances and discounts
|
5,600
|
|
|
11,528
|
|
|
14,436
|
|
|||
Other
|
97,330
|
|
|
63,562
|
|
|
55,452
|
|
|||
|
$
|
231,359
|
|
|
$
|
194,264
|
|
|
$
|
186,992
|
|
•
|
Providing for a lien on all of the Company's assets;
|
•
|
Reducing the borrowing availability from $400 million to $375.0 million on October 31, 2020, $350.0 million on January 30, 2021, $325.0 million on May 1, 2021, and $300.0 million on July 31, 2021;
|
•
|
Redefining the components for calculating the leverage ratio and fixed charge coverage ratio to adjust for certain temporary impacts due to COVID-19;
|
•
|
Changing the maximum leverage ratio covenant to 3.50:1 as of May 2, 2020, 4.00:1 as of August 1, 2020, 3.75:1 as of October 31, 2020, and 3.50:1 as of January 30, 2021 and as of the end of each fiscal quarter thereafter;
|
•
|
Changing the minimum fixed charge coverage ratio to 1.25:1 as of May 2, 2020 and 1.05:1 as of August 1, 2020 and as of the end of each fiscal quarter thereafter; and
|
•
|
Restricting the Company from paying dividends, making share repurchases, and making certain acquisitions.
|
13.
|
LEASES
|
|
Three months ended
|
||||||
(in thousands)
|
May 2, 2020
|
|
May 4, 2019
|
||||
Operating lease income
|
$
|
3,163
|
|
|
$
|
2,212
|
|
Operating lease expense:
|
|
|
|
||||
Lease expense to unrelated parties
|
$
|
53,228
|
|
|
$
|
53,354
|
|
Lease expense to related parties
|
2,387
|
|
|
2,342
|
|
||
Variable lease expense to unrelated parties
|
12,986
|
|
|
13,022
|
|
||
Variable lease expense to related parties
|
367
|
|
|
302
|
|
||
Total operating lease expense
|
$
|
68,968
|
|
|
$
|
69,020
|
|
(in thousands)
|
Unrelated Parties
|
|
Related Parties
|
|
Total
|
||||||
Remainder of fiscal 2020
|
$
|
187,639
|
|
|
$
|
6,203
|
|
|
$
|
193,842
|
|
Fiscal 2021
|
222,551
|
|
|
8,697
|
|
|
231,248
|
|
|||
Fiscal 2022
|
188,403
|
|
|
7,417
|
|
|
195,820
|
|
|||
Fiscal 2023
|
148,960
|
|
|
4,574
|
|
|
153,534
|
|
|||
Fiscal 2024
|
110,649
|
|
|
4,139
|
|
|
114,788
|
|
|||
Future fiscal years thereafter
|
225,594
|
|
|
11,352
|
|
|
236,946
|
|
|||
|
1,083,796
|
|
|
42,382
|
|
|
1,126,178
|
|
|||
Less discounting impact on operating leases
|
(114,364
|
)
|
|
(4,797
|
)
|
|
(119,161
|
)
|
|||
Total operating lease liabilities
|
969,432
|
|
|
37,585
|
|
|
1,007,017
|
|
|||
Less current operating lease liabilities
|
(211,204
|
)
|
|
(7,109
|
)
|
|
(218,313
|
)
|
|||
Non-current operating lease liabilities
|
$
|
758,228
|
|
|
$
|
30,476
|
|
|
$
|
788,704
|
|
(in thousands)
|
U.S. Retail
|
|
Canada Retail
|
|
Brand Portfolio
|
|
Other
|
|
Corporate/Eliminations
|
|
Total
|
||||||||||||
Three months ended May 2, 2020
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External customer sales
|
$
|
377,073
|
|
|
$
|
29,329
|
|
|
$
|
62,758
|
|
|
$
|
13,623
|
|
|
$
|
—
|
|
|
$
|
482,783
|
|
Intersegment sales
|
—
|
|
|
—
|
|
|
19,355
|
|
|
—
|
|
|
(19,355
|
)
|
|
—
|
|
||||||
Total net sales
|
$
|
377,073
|
|
|
$
|
29,329
|
|
|
$
|
82,113
|
|
|
$
|
13,623
|
|
|
$
|
(19,355
|
)
|
|
$
|
482,783
|
|
Gross profit (loss)
|
$
|
(32,970
|
)
|
|
$
|
(2,311
|
)
|
|
$
|
13,904
|
|
|
$
|
(5,428
|
)
|
|
$
|
345
|
|
|
$
|
(26,460
|
)
|
Income from equity investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,270
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,270
|
|
Three months ended May 4, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External customer sales
|
$
|
691,840
|
|
|
$
|
51,816
|
|
|
$
|
94,026
|
|
|
$
|
35,607
|
|
|
$
|
—
|
|
|
$
|
873,289
|
|
Intersegment sales
|
—
|
|
|
—
|
|
|
10,520
|
|
|
—
|
|
|
(10,520
|
)
|
|
—
|
|
||||||
Total net sales
|
$
|
691,840
|
|
|
$
|
51,816
|
|
|
$
|
104,546
|
|
|
$
|
35,607
|
|
|
$
|
(10,520
|
)
|
|
$
|
873,289
|
|
Gross profit
|
$
|
209,891
|
|
|
$
|
15,747
|
|
|
$
|
25,673
|
|
|
$
|
9,311
|
|
|
$
|
(1,289
|
)
|
|
$
|
259,333
|
|
Income from equity investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,228
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,228
|
|
|
Three months ended
|
|
|
|
|
|||||||||||||||
|
May 2, 2020
|
|
May 4, 2019
|
|
Change
|
|||||||||||||||
(dollars in thousands, except per share amounts)
|
Amount
|
|
% of Net Sales
|
|
Amount
|
|
% of Net Sales
|
|
Amount
|
|
%
|
|||||||||
Net sales(1)
|
$
|
482,783
|
|
|
100.0
|
%
|
|
$
|
873,289
|
|
|
100.0
|
%
|
|
$
|
(390,506
|
)
|
|
(44.7
|
)%
|
Cost of sales
|
(509,243
|
)
|
|
(105.5
|
)
|
|
(613,956
|
)
|
|
(70.3
|
)
|
|
104,713
|
|
|
(17.1
|
)%
|
|||
Gross profit (loss)(1)
|
(26,460
|
)
|
|
(5.5
|
)
|
|
259,333
|
|
|
29.7
|
|
|
(285,793
|
)
|
|
NM
|
||||
Operating expenses(1)
|
(187,221
|
)
|
|
(38.8
|
)
|
|
(217,580
|
)
|
|
(24.9
|
)
|
|
30,359
|
|
|
(14.0
|
)%
|
|||
Income from equity investment
|
2,270
|
|
|
0.5
|
|
|
2,228
|
|
|
0.2
|
|
|
42
|
|
|
1.9
|
%
|
|||
Impairment charges
|
(112,547
|
)
|
|
(23.3
|
)
|
|
—
|
|
|
—
|
|
|
(112,547
|
)
|
|
NM
|
||||
Operating profit (loss)
|
(323,958
|
)
|
|
(67.1
|
)
|
|
43,981
|
|
|
5.0
|
|
|
(367,939
|
)
|
|
NM
|
||||
Interest expense, net
|
(2,158
|
)
|
|
(0.5
|
)
|
|
(1,801
|
)
|
|
(0.2
|
)
|
|
(357
|
)
|
|
19.8
|
%
|
|||
Non-operating expenses, net
|
(87
|
)
|
|
(0.0
|
)
|
|
(342
|
)
|
|
(0.0
|
)
|
|
255
|
|
|
(74.6)%
|
||||
Income (loss) before income taxes
|
(326,203
|
)
|
|
(67.6
|
)
|
|
41,838
|
|
|
4.8
|
|
|
(368,041
|
)
|
|
NM
|
||||
Income tax benefit (provision)
|
110,345
|
|
|
22.9
|
|
|
(10,644
|
)
|
|
(1.2
|
)
|
|
120,989
|
|
|
NM
|
||||
Net income (loss)
|
$
|
(215,858
|
)
|
|
(44.7
|
)%
|
|
$
|
31,194
|
|
|
3.6
|
%
|
|
$
|
(247,052
|
)
|
|
NM
|
|
Basic and diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic earnings (loss) per share
|
$
|
(3.00
|
)
|
|
|
|
$
|
0.41
|
|
|
|
|
$
|
(3.41
|
)
|
|
NM
|
|||
Diluted earnings (loss) per share
|
$
|
(3.00
|
)
|
|
|
|
$
|
0.40
|
|
|
|
|
$
|
(3.40
|
)
|
|
NM
|
|||
Weighted average shares used in per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic shares
|
71,914
|
|
|
|
|
77,004
|
|
|
|
|
(5,090
|
)
|
|
(6.6
|
)%
|
|||||
Diluted shares
|
71,914
|
|
|
|
|
78,263
|
|
|
|
|
(6,349
|
)
|
|
(8.1
|
)%
|
(1)
|
We changed our presentation of net sales and gross profit (loss) for all periods presented to include commission income. Previously reported other revenue, which primarily included operating sublease income, was reclassified to operating expenses.
|
(in thousands)
|
Three months ended May 2, 2020
|
||
Consolidated net sales for the same period last year
|
$
|
873,289
|
|
Decrease in comparable sales
|
(328,789
|
)
|
|
Net decrease from non-comparable sales and other changes
|
(34,310
|
)
|
|
Loss of net sales from closed stores
|
(4,400
|
)
|
|
Decrease in wholesale net sales from Brand Portfolio segment
|
(24,450
|
)
|
|
Increase in commission income from Brand Portfolio segment
|
1,443
|
|
|
Consolidated net sales
|
$
|
482,783
|
|
|
Three months ended
|
|
Change
|
|||||||||||||
(dollars in thousands)
|
May 2, 2020
|
|
May 4, 2019
|
|
Amount
|
|
%
|
|
Comparable Sales %
|
|||||||
Segment net sales:
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. Retail
|
$
|
377,073
|
|
|
$
|
691,840
|
|
|
$
|
(314,767
|
)
|
|
(45.5
|
)%
|
|
(42.4)%
|
Canada Retail
|
29,329
|
|
|
51,816
|
|
|
(22,487
|
)
|
|
(43.4
|
)%
|
|
(32.4)%
|
|||
Brand Portfolio
|
82,113
|
|
|
104,546
|
|
|
(22,433
|
)
|
|
(21.5
|
)%
|
|
92.8%
|
|||
Other
|
13,623
|
|
|
35,607
|
|
|
(21,984
|
)
|
|
(61.7
|
)%
|
|
(62.0)%
|
|||
Total segment net sales
|
502,138
|
|
|
883,809
|
|
|
(381,671
|
)
|
|
(43.2
|
)%
|
|
(42.3)%
|
|||
Elimination of intersegment net sales
|
(19,355
|
)
|
|
(10,520
|
)
|
|
(8,835
|
)
|
|
84.0
|
%
|
|
|
|||
Consolidated net sales
|
$
|
482,783
|
|
|
$
|
873,289
|
|
|
$
|
(390,506
|
)
|
|
(44.7
|
)%
|
|
|
|
Three months ended
|
|
|
||||||||||||||
|
May 2, 2020
|
|
May 4, 2019
|
|
|
||||||||||||
(dollars in thousands)
|
Amount
|
|
% of Segment Net Sales
|
|
Amount
|
|
% of Segment Net Sales
|
|
Change
|
||||||||
Segment gross profit (loss):
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Retail
|
$
|
(32,970
|
)
|
|
(8.7
|
)%
|
|
$
|
209,891
|
|
|
30.3
|
%
|
|
$
|
(242,861
|
)
|
Canada Retail
|
(2,311
|
)
|
|
(7.9
|
)%
|
|
15,747
|
|
|
30.4
|
%
|
|
$
|
(18,058
|
)
|
||
Brand Portfolio
|
13,904
|
|
|
16.9
|
%
|
|
25,673
|
|
|
24.6
|
%
|
|
$
|
(11,769
|
)
|
||
Other
|
(5,428
|
)
|
|
(39.8
|
)%
|
|
9,311
|
|
|
26.1
|
%
|
|
$
|
(14,739
|
)
|
||
|
(26,805
|
)
|
|
|
|
260,622
|
|
|
|
|
|
||||||
Elimination of intersegment gross profit
|
345
|
|
|
|
|
(1,289
|
)
|
|
|
|
|
||||||
Gross profit (loss)
|
$
|
(26,460
|
)
|
|
(5.5
|
)%
|
|
$
|
259,333
|
|
|
29.7
|
%
|
|
$
|
(285,793
|
)
|
|
Three months ended
|
||||||
(in thousands)
|
May 2, 2020
|
|
May 4, 2019
|
||||
Elimination of intersegment activity:
|
|
|
|
||||
Net sales recognized by Brand Portfolio segment
|
$
|
(19,355
|
)
|
|
$
|
(10,520
|
)
|
Cost of sales:
|
|
|
|
||||
Cost of sales recognized by Brand Portfolio segment
|
12,134
|
|
|
7,607
|
|
||
Recognition of intersegment gross profit for inventory previously purchased that was subsequently sold to external customers during the current period
|
7,566
|
|
|
1,624
|
|
||
Gross profit (loss)
|
$
|
345
|
|
|
$
|
(1,289
|
)
|
•
|
Providing for a lien on all of the Company's assets;
|
•
|
Reducing the borrowing availability from $400 million to $375.0 million on October 31, 2020, $350.0 million on January 30, 2021, $325.0 million on May 1, 2021, and $300.0 million on July 31, 2021;
|
•
|
Redefining the components for calculating the leverage ratio and fixed charge coverage ratio to adjust for certain temporary impacts due to COVID-19;
|
•
|
Changing the maximum leverage ratio covenant to 3.50:1 as of May 2, 2020, 4.00:1 as of August 1, 2020, 3.75:1 as of October 31, 2020, and 3.50:1 as of January 30, 2021 and as of the end of each fiscal quarter thereafter;
|
•
|
Changing the minimum fixed charge coverage ratio to 1.25:1 as of May 2, 2020 and 1.05:1 as of August 1, 2020 and as of the end of each fiscal quarter thereafter; and
|
•
|
Restricting the Company from paying dividends, making share repurchases, and making certain acquisitions.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Exhibit No.
|
|
Description
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32.1**
|
|
|
32.2**
|
|
|
101*
|
|
The following materials from the Designer Brands Inc. Quarterly Report on Form 10-Q for the quarter ended May 2, 2020, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations; (ii) Condensed Consolidated Statements of Comprehensive Income (Loss); (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Shareholders’ Equity; (v) Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed Consolidated Financial Statements.
|
104*
|
|
Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101.
|
*
|
Filed herewith
|
Date:
|
June 19, 2020
|
|
By:
|
/s/ Jared Poff
|
|
|
|
|
Jared Poff
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer and duly authorized officer)
|
1.
|
Definitions. Defined terms used in this Amendment shall have the meaning ascribed to them in the Agreement.
|
2.
|
Supplier Exclusivity. Section 2.4 of the Agreement shall be deleted in its entirety.
|
3.
|
Merchandise Supplied. The first sentence of Section 4.1 shall be deleted in its entirety and replaced with the following in lieu thereof:
|
4.
|
Space. Section 4.6 of the Agreement shall be deleted in its entirety and replaced with the following in lieu thereof:
|
(a)
|
Relocated Shoe Departments. Subject to Section 4.6(b) below, Stein Mart will relocate to the front of the Covered Stores 15 Shoe Departments on or before the end of Supplier’s fiscal first quarter of 2021 as mutually agreed upon by the parties.
|
(b)
|
Space. Supplier shall determine, subject to Stein Mart’s reasonable approval, the specific Covered Stores and build-out schedule for the construction of the Relocated Shoe Departments. The parties will endeavor to allocate approximately 2,400 square feet to each Relocated Shoe Department, but in no event shall the Relocated Shoe Department be less than the space devoted to the existing Shoe Department in such Covered Store.
|
(c)
|
Cost of Relocation. Supplier shall, at its sole cost and expense, construct and build-out each Relocated Shoe Department using site plans and specifications mutually agreed upon by the parties. Supplier may, but shall have no obligation to, fund the construction and build-out of additional Shoe Departments on a case-by-case basis, and any such Shoe Departments shall be considered a Relocated Shoe Department under this Agreement.
|
(d)
|
Fixtures. Supplier will supply, at its expense, any new fixtures or equipment the parties determine may be necessary to accommodate additional Merchandise in the Relocated Shoe Departments. Any such fixtures or equipment shall be governed by Section 4.8 of the Agreement.
|
5.
|
Net Revenue Split. Section 5.1 shall be deleted in its entirety and replaced with the following in lieu thereof:
|
6.
|
Sales Revenue Sharing; Accounting Procedures. Section 5.5 of the Agreement shall be amended by adding the following to the end of Section 5.5:
|
7.
|
Term and Termination. Section 7 of the Agreement shall be amended as follows:
|
a.
|
Section 7.1 shall be hereby deleted in its entirety and replaced with the following in lieu thereof:
|
b.
|
The following provision shall be hereby incorporated into the Agreement as Section 7.1.2:
|
8.
|
Agreement in Effect. Except as set forth herein, all other terms and conditions of the Agreement shall remain in full force and effect.
|
June 19, 2020
|
By:
|
/s/ Roger Rawlins
|
|
|
Roger Rawlins
|
|
|
Chief Executive Officer
|
June 19, 2020
|
By:
|
/s/ Jared Poff
|
|
|
Jared Poff
|
|
|
Executive Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"); 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 19, 2020
|
By:
|
/s/ Roger Rawlins
|
|
|
Roger Rawlins
|
|
|
Chief Executive Officer
|
*
|
This Certification is being furnished as required by Rule 13a-14(b) under the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This Certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"); 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 19, 2020
|
By:
|
/s/ Jared Poff
|
|
|
Jared Poff
|
|
|
Executive Vice President and Chief Financial Officer
|
*
|
This Certification is being furnished as required by Rule 13a-14(b) under the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This Certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.
|