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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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45-2164791
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
(do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Class A common stock $0.001 par value
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12,297,234
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Class B common stock $0.001 par value
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16,169,097
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 6.
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August 1,
2015 |
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January 31,
2015 |
||||
ASSETS
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||||
Current assets:
|
|
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|
||||
Cash and cash equivalents
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$
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51,725
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$
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49,789
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Marketable securities
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24,991
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34,957
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Receivables
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11,384
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|
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4,682
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Merchandise inventories
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79,923
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51,507
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Prepaid expenses and other current assets
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13,222
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12,349
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Total current assets
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181,245
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153,284
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Property and equipment, net
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101,214
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101,335
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Other assets
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3,088
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2,932
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Total assets
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$
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285,547
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$
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257,551
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||
Current liabilities:
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|
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||||
Accounts payable
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$
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39,076
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$
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23,109
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Accrued expenses
|
18,527
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12,325
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Deferred revenue
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5,306
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7,075
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Accrued compensation and benefits
|
6,322
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5,911
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Current portion of deferred rent
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5,477
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6,070
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Current portion of capital lease obligation
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832
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806
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Total current liabilities
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75,540
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55,296
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Long-term portion of deferred rent
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42,821
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41,875
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Long-term portion of capital lease obligation
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1,271
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1,694
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Total long-term liabilities
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44,092
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43,569
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Total liabilities
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119,632
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98,865
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Commitments and contingencies (Note 5)
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Stockholders’ equity:
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Common stock (Class A), $0.001 par value; August 1, 2015 - 100,000 shares authorized, 12,297 shares issued and outstanding; January 31, 2015 - 100,000 shares authorized, 11,546 shares issued and outstanding
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12
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11
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Common stock (Class B), $0.001 par value; August 1, 2015 - 35,000 shares authorized, 16,169 shares issued and outstanding; January 31, 2015 - 35,000 shares authorized, 16,544 shares issued and outstanding
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16
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17
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Preferred stock, $0.001 par value; August 1, 2015 and January 31, 2015 - 10,000 shares authorized, no shares issued or outstanding
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—
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—
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Additional paid-in capital
|
131,960
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126,565
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Retained earnings
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33,914
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32,072
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Accumulated other comprehensive income
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13
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21
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Total stockholders’ equity
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165,915
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158,686
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Total liabilities and stockholders’ equity
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$
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285,547
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$
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257,551
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Thirteen Weeks Ended
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Twenty-Six Weeks Ended
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||||||||||||
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August 1,
2015 |
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August 2,
2014 |
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August 1,
2015 |
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August 2,
2014 |
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Net sales
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$
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130,023
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$
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123,060
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$
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250,213
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$
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234,194
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Cost of goods sold (includes buying, distribution, and occupancy costs)
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93,427
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88,405
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177,565
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168,212
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||||
Gross profit
|
36,596
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34,655
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72,648
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65,982
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Selling, general and administrative expenses
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35,492
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32,326
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69,415
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62,576
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Operating income
|
1,104
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2,329
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3,233
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3,406
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||||
Other income, net
|
10
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4
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18
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3
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Income before income taxes
|
1,114
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2,333
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3,251
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3,409
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||||
Income tax expense
|
554
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1,067
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1,409
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1,552
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Net income
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$
|
560
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$
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1,266
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$
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1,842
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$
|
1,857
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Basic earnings per share of Class A and Class B common stock
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$
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0.02
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$
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0.05
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$
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0.07
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$
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0.07
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Diluted earnings per share of Class A and Class B common stock
|
$
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0.02
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$
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0.05
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$
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0.06
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$
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0.07
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Weighted average basic shares outstanding
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28,333
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28,014
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28,253
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27,999
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Weighted average diluted shares outstanding
|
28,426
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28,049
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28,403
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28,100
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Thirteen Weeks Ended
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Twenty-Six Weeks Ended
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||||||||||||
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August 1,
2015 |
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August 2,
2014 |
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August 1,
2015 |
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August 2, 2014
|
||||||||
Net income
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$
|
560
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$
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1,266
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$
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1,842
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$
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1,857
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Other comprehensive income:
|
|
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||||||||
Net change in unrealized gain on available-for-sale securities, net of tax
|
(7
|
)
|
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(12
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)
|
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(8
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)
|
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(12
|
)
|
||||
Other comprehensive income
|
(7
|
)
|
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(12
|
)
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(8
|
)
|
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(12
|
)
|
||||
Comprehensive income
|
$
|
553
|
|
|
$
|
1,254
|
|
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$
|
1,834
|
|
|
$
|
1,845
|
|
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Number of Shares
|
|
|
|
|
|
|
|
|
|
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||||||||||||||
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Common
Stock
(Class A)
|
|
Common
Stock
(Class B)
|
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Common
Stock
|
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Additional
Paid-in
Capital
|
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Retained
Earnings
|
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Accumulated
Other
Comprehensive
Income
|
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Total
Stockholders’
Equity
|
||||||||||||
Balance at January 31, 2015
|
11,546
|
|
|
16,544
|
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$
|
28
|
|
|
$
|
126,565
|
|
|
$
|
32,072
|
|
|
$
|
21
|
|
|
$
|
158,686
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,842
|
|
|
—
|
|
|
1,842
|
|
|||||
Restricted Stock
|
40
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shares converted by founders
|
375
|
|
|
(375
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
2,301
|
|
|
—
|
|
|
—
|
|
|
2,301
|
|
|||||
Exercise of stock options
|
336
|
|
|
—
|
|
|
—
|
|
|
3,094
|
|
|
—
|
|
|
—
|
|
|
3,094
|
|
|||||
Change in unrealized gain/loss on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|||||
Balance at August 1, 2015
|
12,297
|
|
|
16,169
|
|
|
$
|
28
|
|
|
$
|
131,960
|
|
|
$
|
33,914
|
|
|
$
|
13
|
|
|
$
|
165,915
|
|
|
Twenty-Six Weeks Ended
|
||||||
|
August 1,
2015 |
|
August 2,
2014 |
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
1,842
|
|
|
$
|
1,857
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
11,260
|
|
|
10,182
|
|
||
Stock-based compensation expense
|
2,301
|
|
|
1,903
|
|
||
Loss on disposal of assets
|
67
|
|
|
39
|
|
||
Impairment of assets
|
367
|
|
|
—
|
|
||
Gain on sales and maturities of marketable securities
|
(65
|
)
|
|
(77
|
)
|
||
Deferred income taxes
|
147
|
|
|
334
|
|
||
Excess tax benefit from stock-based compensation
|
(95
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables
|
(6,702
|
)
|
|
(1,750
|
)
|
||
Merchandise inventories
|
(28,416
|
)
|
|
(24,121
|
)
|
||
Prepaid expenses and other assets
|
(1,171
|
)
|
|
(1,268
|
)
|
||
Accounts payable
|
15,928
|
|
|
18,397
|
|
||
Accrued expenses
|
6,149
|
|
|
6,906
|
|
||
Accrued compensation and benefits
|
411
|
|
|
782
|
|
||
Deferred rent
|
353
|
|
|
(4
|
)
|
||
Deferred revenue
|
(1,769
|
)
|
|
(1,437
|
)
|
||
Net cash provided by operating activities
|
607
|
|
|
11,743
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Purchase of property and equipment
|
(11,481
|
)
|
|
(14,587
|
)
|
||
Proceeds from sale of property and equipment
|
—
|
|
|
9
|
|
||
Purchases of marketable securities
|
(19,982
|
)
|
|
(24,961
|
)
|
||
Maturities of marketable securities
|
30,000
|
|
|
35,000
|
|
||
Net cash used in investing activities
|
(1,463
|
)
|
|
(4,539
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from exercise of stock options
|
3,094
|
|
|
165
|
|
||
Payment of capital lease obligation
|
(397
|
)
|
|
(373
|
)
|
||
Excess tax benefit from stock-based compensation
|
95
|
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
2,792
|
|
|
(208
|
)
|
||
Change in cash and cash equivalents
|
1,936
|
|
|
6,996
|
|
||
Cash and cash equivalents, beginning of period
|
49,789
|
|
|
25,412
|
|
||
Cash and cash equivalents, end of period
|
$
|
51,725
|
|
|
$
|
32,408
|
|
Supplemental disclosures of cash flow information
|
|
|
|
||||
Interest paid
|
$
|
73
|
|
|
$
|
97
|
|
Income taxes paid
|
$
|
3,716
|
|
|
$
|
63
|
|
Supplemental disclosure of non-cash activities
|
|
|
|
||||
Unpaid purchases of property and equipment
|
$
|
1,605
|
|
|
$
|
2,992
|
|
|
August 1, 2015
|
||||||||||||||
|
Cost
|
|
Gross
Unrealized
Holding
Gains
|
|
Gross
Unrealized
Holding
Losses
|
|
Fair Value
|
||||||||
Commercial paper
|
$
|
24,969
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
24,991
|
|
|
January 31, 2015
|
||||||||||||||
|
Cost
|
|
Gross
Unrealized
Holding
Gains
|
|
Gross
Unrealized
Holding
Losses
|
|
Fair Value
|
||||||||
Commercial paper
|
$
|
34,922
|
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
34,957
|
|
|
August 1, 2015
|
|
January 31, 2015
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market securities
|
$
|
39,467
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34,433
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Marketable securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial paper
|
—
|
|
|
24,991
|
|
|
—
|
|
|
—
|
|
|
34,957
|
|
|
—
|
|
|
August 1, 2015
|
||
|
($ in thousands)
|
||
Carrying value of assets tested for impairment
|
$
|
6,226
|
|
Carrying value of assets with impairment
|
$
|
645
|
|
Fair value of assets impaired
|
$
|
278
|
|
Number of stores tested for impairment
|
12
|
|
|
Number of stores with impairment
|
1
|
|
|
Stock
Options
|
|
Grant Date
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Contractual
Life (in Years)
|
|
Aggregate
Intrinsic
Value (1)
|
|||||
Outstanding at January 31, 2015
|
2,880,040
|
|
|
$
|
13.03
|
|
|
|
|
|
||
Granted
|
62,500
|
|
|
$
|
13.54
|
|
|
|
|
|
||
Exercised
|
(336,140
|
)
|
|
$
|
9.21
|
|
|
|
|
|
||
Forfeited
|
(125,625
|
)
|
|
$
|
13.29
|
|
|
|
|
|
||
Expired
|
(21,625
|
)
|
|
$
|
14.40
|
|
|
|
|
|
||
Outstanding at August 1, 2015
|
2,459,150
|
|
|
$
|
13.54
|
|
|
6.6
|
|
$
|
148
|
|
Vested and expected to vest at August 1, 2015
|
2,392,686
|
|
|
$
|
13.56
|
|
|
6.6
|
|
$
|
146
|
|
Exercisable at August 1, 2015
|
1,510,900
|
|
|
$
|
13.90
|
|
|
5.6
|
|
$
|
130
|
|
(1)
|
Intrinsic value for stock options is defined as the difference between the market price of our Class A common stock on the last business day of the fiscal quarter and the weighted average exercise price of in-the-money stock options outstanding at the end of each fiscal period. The market value per share was
$9.05
at
August 1, 2015
.
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||
|
August 1,
2015 |
|
August 2,
2014 |
|
August 1,
2015 |
|
August 2,
2014 |
||||
Expected option term
(1)
|
5.0 years
|
|
|
5.0 years
|
|
|
5.0 years
|
|
|
5.0 years
|
|
Expected volatility factor
(2)
|
45.2
|
%
|
|
45.2% - 45.3%
|
|
|
45.16% - 47.78%
|
|
|
45.2% - 46.9%
|
|
Risk-free interest rate
(3)
|
1.6
|
%
|
|
1.8
|
%
|
|
1.5
|
%
|
|
1.8
|
%
|
Expected annual dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
(1)
|
We have limited historical information regarding the expected option term. Accordingly, we determined the expected option term of the awards using historical data available from comparable public companies and management’s expectation of exercise behavior.
|
(2)
|
Stock volatility for each grant is measured using the weighted average of historical daily price changes of our competitors’ common stock over the most recent period equal to the expected option term of the awards.
|
(3)
|
The risk-free interest rate is determined using the rate on treasury securities with the same term as the expected life of the stock option as of the grant date.
|
|
Restricted
Stock
|
|
Weighted
Average
Grant-Date
Fair Value
|
|||
Nonvested at January 31, 2015
|
48,584
|
|
|
$
|
9.88
|
|
Granted
|
330,240
|
|
|
$
|
15.13
|
|
Vested
|
(29,236
|
)
|
|
$
|
10.95
|
|
Forfeited
|
(34,500
|
)
|
|
$
|
16.07
|
|
Nonvested at August 1, 2015
|
315,088
|
|
|
$
|
14.61
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
August 1,
2015 |
|
August 2,
2014 |
|
August 1,
2015 |
|
August 2,
2014 |
||||||||
Cost of goods sold
|
$
|
284
|
|
|
$
|
286
|
|
|
$
|
523
|
|
|
$
|
458
|
|
Selling, general and administrative expenses
|
748
|
|
|
779
|
|
|
1,778
|
|
|
1,445
|
|
||||
Stock-based compensation
|
$
|
1,032
|
|
|
$
|
1,065
|
|
|
$
|
2,301
|
|
|
$
|
1,903
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
August 1, 2015
|
|
August 2, 2014
|
|
August 1, 2015
|
|
August 2, 2014
|
||||||||
Net income
|
$
|
560
|
|
|
$
|
1,266
|
|
|
$
|
1,842
|
|
|
$
|
1,857
|
|
Weighted average basic shares outstanding
|
28,333
|
|
|
28,014
|
|
|
28,253
|
|
|
27,999
|
|
||||
Dilutive effect of stock options and restricted stock
|
93
|
|
|
35
|
|
|
150
|
|
|
101
|
|
||||
Weighted average shares for diluted earnings per share
|
28,426
|
|
|
28,049
|
|
|
28,403
|
|
|
28,100
|
|
||||
Basic earnings per share
|
$
|
0.02
|
|
|
$
|
0.05
|
|
|
$
|
0.07
|
|
|
$
|
0.07
|
|
Diluted earnings per share
|
$
|
0.02
|
|
|
$
|
0.05
|
|
|
$
|
0.06
|
|
|
$
|
0.07
|
|
•
|
overall economic trends;
|
•
|
our ability to identify and respond effectively to consumer preferences and fashion trends;
|
•
|
competition;
|
•
|
the timing of our releases of new and seasonal styles;
|
•
|
changes in our product mix;
|
•
|
pricing;
|
•
|
the level of customer service that we provide in stores;
|
•
|
our ability to source and distribute products efficiently;
|
•
|
calendar shifts of holiday or seasonal periods;
|
•
|
the number and timing of store openings and the relative proportion of new stores to mature stores; and
|
•
|
the timing and success of promotional and advertising efforts.
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
August 1,
2015 |
|
August 2,
2014 |
|
August 1,
2015 |
|
August 2,
2014 |
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Statements of Income Data:
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
130,023
|
|
|
$
|
123,060
|
|
|
$
|
250,213
|
|
|
$
|
234,194
|
|
Cost of goods sold
|
93,427
|
|
|
88,405
|
|
|
177,565
|
|
|
168,212
|
|
||||
Gross profit
|
36,596
|
|
|
34,655
|
|
|
72,648
|
|
|
65,982
|
|
||||
Selling, general and administrative expenses
|
35,492
|
|
|
32,326
|
|
|
69,415
|
|
|
62,576
|
|
||||
Operating income
|
1,104
|
|
|
2,329
|
|
|
3,233
|
|
|
3,406
|
|
||||
Other income, net
|
10
|
|
|
4
|
|
|
18
|
|
|
3
|
|
||||
Income before income taxes
|
1,114
|
|
|
2,333
|
|
|
3,251
|
|
|
3,409
|
|
||||
Income tax expense
|
554
|
|
|
1,067
|
|
|
1,409
|
|
|
1,552
|
|
||||
Net income
|
$
|
560
|
|
|
$
|
1,266
|
|
|
$
|
1,842
|
|
|
$
|
1,857
|
|
|
|
|
|
|
|
|
|
||||||||
Percentage of Net Sales:
|
|
|
|
|
|
|
|
||||||||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
||||
Cost of goods sold
|
71.9
|
%
|
|
71.8
|
%
|
|
71.0
|
%
|
|
71.8
|
%
|
||||
Gross profit
|
28.1
|
%
|
|
28.2
|
%
|
|
29.0
|
%
|
|
28.2
|
%
|
||||
Selling, general and administrative expenses
|
27.3
|
%
|
|
26.3
|
%
|
|
27.7
|
%
|
|
26.7
|
%
|
||||
Operating income
|
0.8
|
%
|
|
1.9
|
%
|
|
1.3
|
%
|
|
1.5
|
%
|
||||
Interest income, net
|
0.1
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
||||
Income before income taxes
|
0.9
|
%
|
|
1.9
|
%
|
|
1.3
|
%
|
|
1.5
|
%
|
||||
Income tax expense
|
0.5
|
%
|
|
0.9
|
%
|
|
0.6
|
%
|
|
0.7
|
%
|
||||
Net income
|
0.4
|
%
|
|
1.0
|
%
|
|
0.7
|
%
|
|
0.8
|
%
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
August 1,
2015 |
|
August 2,
2014 |
|
August 1,
2015 |
|
August 2,
2014 |
||||||||
Store Operating Data:
|
|
|
|
|
|
|
|
||||||||
Stores operating at end of period
|
216
|
|
|
203
|
|
|
216
|
|
|
203
|
|
||||
Comparable store sales change
(1)
|
0.5
|
%
|
|
(7.1
|
)%
|
|
1.2
|
%
|
|
(6.9
|
)%
|
||||
Total square feet at end of period
|
1,654,570
|
|
|
1,563,409
|
|
|
1,654,570
|
|
|
1,563,409
|
|
||||
Average net sales per brick-and-mortar store (in $000's)
(2)
|
$
|
540
|
|
|
$
|
552
|
|
|
$
|
1,043
|
|
|
$
|
1,051
|
|
Average net sales per square foot
(2)
|
$
|
71
|
|
|
$
|
71
|
|
|
$
|
136
|
|
|
$
|
136
|
|
(1)
|
Comparable store sales include sales through our e-commerce store, but excludes gift card breakage income and e-commerce shipping and handling fee revenue.
|
(2)
|
E-commerce sales, e-commerce shipping fee revenue and gift card breakage are excluded from net sales in deriving average net sales per brick-and-mortar store and average net sales per square foot.
|
$ millions
|
Attributable to
|
$6.3
|
Increase in non-comparable store sales due to opening 13 net new stores in the prior twelve months
|
0.6
|
Increase in comparable store sales of 0.5%
|
$6.9
|
Total
|
%
|
Attributable to
|
(0.4)
|
Decrease in product margins due to increased markdowns on seasonal summer inventory
|
0.3
|
Decrease in buying, distribution and occupancy costs as a percentage of net sales primarily due to improved labor and other operational efficiencies in our distribution center and e-commerce fulfillment center, partially offset by an increase in occupancy costs
|
(0.1)
|
Total
|
%
|
Attributable to
|
0.6
|
Increase of $0.9 million due to a combination of legal expenses associated with a loss contingency and a non-cash retail store impairment
|
0.5
|
Increase of $0.8 million in print and digital marketing expenses
|
0.3
|
Increase of $0.6 million in corporate payroll and benefits primarily due to merit awards and minimal headcount additions
|
(0.4)
|
Decrease of $0.4 million in e-commerce fulfillment labor expenses associated with our dedicated e-commerce fulfillment center
|
—
|
Increase of $1.3 million in all other SG&A expenses
|
1.0
|
Total
|
$ millions
|
Attributable to
|
$13.3
|
Increase in non-comparable store sales due to opening 13 net new stores in the prior twelve months
|
2.7
|
Increase in comparable store sales of 1.2%
|
$16.0
|
Total
|
%
|
Attributable to
|
0.6
|
Decrease in buying, distribution and occupancy costs as a percentage of net sales, primarily due to improved labor and other operational efficiencies in our distribution center and e-commerce fulfillment center
|
0.2
|
Increase in product margins
|
0.8
|
Total
|
%
|
Attributable to
|
0.5
|
Increase of $1.2 million in corporate payroll and benefits primarily due to merit awards and minimal headcount additions
|
0.4
|
Increase of $1.1 million due to a combination of legal expenses associated with a loss contingency, a non-cash retail store impairment and various other general corporate costs
|
0.4
|
Increase of $1.5 million in print and digital marketing expenses
|
0.2
|
Increase of $2.0 million in store payroll expenses primarily due to 13 net new store openings in the prior twelve months
|
(0.5)
|
Decrease of $1.0 million in e-commerce fulfillment labor expenses associated with our dedicated e-commerce fulfillment center
|
—
|
Increase of $2.0 million in all other SG&A expenses
|
1.0
|
Total
|
$ millions
|
Description
|
$98.0
|
Working capital at January 31, 2015
|
11.8
|
Increase in merchandise inventories, net of accounts payable
|
6.7
|
Increase in receivables
|
1.9
|
Increase in cash and cash equivalents
|
(10.0)
|
Decrease in marketable securities
|
(2.7)
|
Decrease in other changes in working capital
|
$105.7
|
Working capital at August 1, 2015
|
|
Twenty-Six Weeks Ended
|
||||||
|
August 1,
2015 |
|
August 2,
2014 |
||||
|
(in thousands)
|
||||||
Net cash provided by operating activities
|
$
|
607
|
|
|
$
|
11,743
|
|
Net cash used in investing activities
|
(1,463
|
)
|
|
(4,539
|
)
|
||
Net cash provided by/(used in) financing activities
|
2,792
|
|
|
(208
|
)
|
||
Net increase in cash and cash equivalents
|
$
|
1,936
|
|
|
$
|
6,996
|
|
|
•
|
|
identifying suitable store locations, the availability of which is beyond our control;
|
|
•
|
|
obtaining acceptable lease terms;
|
|
•
|
|
sourcing sufficient levels of inventory;
|
|
•
|
|
selecting the appropriate merchandise that appeals to our customers;
|
|
•
|
|
hiring and retaining store employees;
|
|
•
|
|
assimilating new store employees into our corporate culture;
|
|
•
|
|
effectively marketing the new stores’ locations;
|
|
•
|
|
avoiding construction delays and cost overruns in connection with the build-out of new stores;
|
|
•
|
|
managing and expanding our infrastructure to accommodate growth; and
|
|
•
|
|
integrating the new stores with our existing buying, distribution and other support operations.
|
|
•
|
|
diversion of traffic from our stores;
|
|
•
|
|
liability for online content;
|
|
•
|
|
government regulation of the Internet; and
|
|
•
|
|
risks related to the computer systems that operate our website and related support systems, including computer viruses, electronic break-ins and similar disruptions.
|
|
•
|
|
that a majority of our board of directors consist of independent directors, as defined under the rules of the NYSE;
|
|
•
|
|
that we have a corporate governance and nominating committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
|
|
•
|
|
that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
|
|
•
|
|
our certificate of incorporation includes a provision authorizing our board of directors to issue blank check preferred stock without stockholder approval, which, if issued, would increase the number of outstanding shares of our capital stock and could make it more difficult for a stockholder to acquire us;
|
|
•
|
|
our certificate of incorporation provides that if all shares of our Class B common stock are converted into Class A common stock or otherwise cease to be outstanding, our board of directors will be divided into three classes in the manner provided by our certificate of incorporation. After the directors in each class serve for the initial terms provided in our certificate of incorporation, each class will serve for a staggered three-year term;
|
|
•
|
|
our certificate of incorporation permits removal of a director only for cause by the affirmative vote of the holders of a majority of the voting power of the company once the board of directors is divided into three classes and provides that director vacancies can only be filled by an affirmative vote of a majority of directors then in office;
|
|
•
|
|
our amended and restated bylaws require advance notice of stockholder proposals and director nominations; and
|
|
•
|
|
Section 203 of the Delaware General Corporation Law may prevent large stockholders from completing a merger or acquisition of us.
|
Exhibit
No.
|
|
Description of Exhibit
|
|
|
|
10.1*
|
|
Form of Indemnification Agreement between Tilly’s and each of its directors and officers .
|
|
|
|
10.2*
|
|
Offer Letter dated May 12, 2015 from Tilly's, Inc. to Michael Henry.
|
|
|
|
10.3
|
|
Amendment No. 2 to Amended and Restated Credit Agreement, dated July 9, 2015, by and between World of Jeans & Tops and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on July 10, 2015).
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
32.1**
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101
|
|
Interactive data files from Tilly’s, Inc.’s Quarterly Report on Form 10-Q for the quarter ended August 1, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statement of Stockholders’ Equity; (v) the Consolidated Statements of Cash Flows and (iv) Notes to Consolidated Financial Statements.
|
*
|
Filed herewith
|
**
|
Furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
|
|
Tilly’s, Inc.
|
Date: September 9, 2015
|
|
|
/s/ Daniel Griesemer
|
|
Daniel Griesemer
|
|
President, Chief Executive Officer and Director
|
|
(Principal Executive Officer)
|
|
|
Date: September 9, 2015
|
|
|
/s/ Michael Henry
|
|
Michael Henry
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
1.
|
Start Date.
Unless otherwise agreed and contingent upon a successful completion of our post-offer employment screening, you will join Tilly’s on Tuesday, May 26, 2015.
|
1.
|
Supervisor.
Unless otherwise instructed, you will report to Daniel Griesemer, President and Chief Executive Officer.
|
1.
|
Compensation.
You will be paid an annual salary of $325,000.00. Your bi-weekly earnings will be $12,500.00. You will be classified as a Salaried/Exempt Employee.
|
1.
|
Stock/Options.
25,000 non-qualified stock options and 10,000 restricted stock units (RSU’s) will be granted to you as of the first open window following your start date of employment at Tilly’s. They will vest over a four (4) year period and have a strike price/exercise price/grant price which will match the closing price of Tilly’s, Inc. stock on the open window date. The terms of the stock options are set forth in Tilly’s 2013 Equity and Incentive Plan.
|
2.
|
Vacation.
You will be accruing vacation at a rate of twenty (20) calendar days per year. Vacation begins accruing from the first payroll period.
|
1.
|
Benefits.
Eligibility to enroll in Tilly’s Medical Benefits Program will take effect on the first of the month following one complete calendar month of employment.
|
1.
|
Bonus.
You will be eligible for our Annual Bonus Plan payable in 2016. Please refer to the attached 2015 Bonus Plan for details.
|
1.
|
At-will employment
. Your employment is at-will. Therefore, you may leave your employment at any time and Tilly’s may transfer, reassign, suspend, demote or terminate your employment, at any time, for any reason, with or without cause, and with or without notice.
|
1.
|
Non-solicitation.
At Tilly's you will have access to confidential information about Tilly's employees. During your employment and for one year thereafter, you will not, whether for your own account or for any business organization, encourage or solicit any Tilly's employee to leave Tilly's employment. You acknowledge that violating this provision will cause Tilly's irreparable harm that cannot be compensated by monetary damages alone, and that an injunction is an appropriate provisional remedy.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Tilly’s, Inc. for the quarter ended August 1, 2015;
|
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
|
(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.
|
|
|
|
/s/ Daniel Griesemer
|
|
Daniel Griesemer
|
|
President, Chief Executive Officer and Director
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Tilly’s, Inc. for the quarter ended August 1, 2015;
|
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
|
(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
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(b)
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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.
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/s/ Michael Henry
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Michael Henry
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Chief Financial Officer
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(i)
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the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(ii)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Daniel Griesemer
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Daniel Griesemer
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President, Chief Executive Officer and Director
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(i)
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the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(ii)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Michael Henry
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Michael Henry
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Chief Financial Officer
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