Delaware
(State or Other Jurisdiction of Incorporation) |
001-38026
(Commission File Number) |
45-1459825
(I.R.S. Employer Identification No.) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
☒
|
Emerging growth company
|
☐
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
|
Item 2.02
|
Results of Operations and Financial Conditions.
|
Item 9.01
|
Financial Statements and Exhibits |
Exhibit No.
|
Description
|
99.1
|
J.JILL, INC. | ||||
|
By:
|
/s/ David Biese | ||
Name: | David Biese | |||
Title: | Chief Financial Officer | |||
— |
Total net sales for the fourteen weeks ended February 3, 2018 were $188.7 million versus $166.9 million for the thirteen weeks ended January 28, 2017.
|
— |
Total company comparable sales increased by 8.9%. This includes comparable store and direct to consumer sales on a thirteen week basis.
|
— |
Direct to consumer net sales represented 46.6% of total net sales, compared to 48.8% in the fourth quarter of fiscal 2016.
|
— |
Gross profit increased to $117.3 million from $105.5 million in the fourth quarter of fiscal 2016. Gross margin was 62.2% compared to fourth quarter gross margin of 63.2% in fiscal 2016.
|
— |
SG&A was $105.6 million compared to $94.6 million in the fourth quarter of fiscal 2016. Fourth quarter 2017 SG&A included approximately $2.3 million of non-recurring expenses. Fourth quarter 2016 SG&A included $2.9 million of non-recurring expenses. Excluding the nonrecurring expenses from both this year’s and last year’s figures, fourth quarter SG&A as a percentage of total net sales was 54.8% versus 55.0% for the fourth quarter of 2016.
|
— |
Income from operations, inclusive of non-recurring SG&A expenses, increased to $11.7 million from $10.8 million in the fourth quarter of fiscal 2016.
|
— |
Adjusted EBITDA* for the fourth quarter of fiscal 2017 increased by 7.6% to $24.2 million from $22.5 million in the fourth quarter of fiscal 2016. As a percentage of total net sales, Adjusted EBITDA was 12.8% compared to 13.5% in the fourth quarter of fiscal 2016.
|
— |
Interest expense decreased to $4.7 million from $5.0 million in the fourth quarter of fiscal 2016, including the impact of a $5.0 million open market repurchase of the Company’s term loan.
|
— |
Income tax benefit was $22.4 million compared to income tax expense of $3.7 million in the fourth quarter of fiscal 2016, and the effective tax rate was (320.3%) compared to 64.7% in the fourth quarter of 2016. The U.S. Tax Cuts and Jobs Act, enacted in December 2017, significantly reduced the federal corporate income tax rate, and required the Company to revalue its deferred income tax liabilities based on the lower enacted federal corporate income tax rate, resulting in a one-time benefit of $24.0 million.
|
— |
Diluted earnings per share was $0.67, including the impact of one-time expenses and tax reform compared to $0.05 in the fourth quarter of fiscal 2016.
|
— |
Adjusted diluted earnings per share* for the fourth quarter of fiscal 2017, which excludes non-recurring expenses and other one-time items, including tax reform, affecting diluted earnings per share, was $0.13 compared to $0.08 in the fourth quarter of fiscal 2016.
|
— |
Total net sales for the fifty-three weeks ended February 3, 2018 were $698.1 million versus $639.1 million for the fifty-two weeks ended January 28, 2017.
|
— |
Total company comparable sales increased by 6.4%. This includes comparable store and direct to consumer sales on a fifty-two week basis.
|
— |
Direct to consumer net sales represented 43.1% of total net sales compared to 43.2% in fiscal 2016.
|
— |
Gross profit increased to $464.1 million from $427.9 million in fiscal 2016. Gross margin was 66.5% compared to 67.0% in fiscal 2016.
|
— |
SG&A was $394.9 million compared to $368.5 million in fiscal 2016. For fiscal 2017, SG&A included $7.2 million of non-recurring expenses. For fiscal 2016, SG&A included $9.7 million of non-recurring expenses. Excluding these non-recurring expenses in both years, SG&A as a percentage of total net sales was 55.5% compared to 56.1% for fiscal 2016.
|
— |
Income from operations, inclusive of non-recurring SG&A expenses, increased to $69.2 million from $59.4 million for fiscal 2016.
|
— |
Adjusted EBITDA* for fiscal 2017 increased by 6.8% to $113.5 million from $106.2 million in fiscal 2016. As a percentage of total net sales, Adjusted EBITDA was 16.3% compared to 16.6% for fiscal 2016.
|
— |
Interest expense was $19.3 million, including $0.7 million of accelerated deferred financing amortization due to the voluntary pre-payment of $20.0 million in the second quarter and a $5.0 million open market repurchase of the Company’s term loan in the fourth quarter, compared to $18.7 million for fiscal 2016.
|
— |
Income tax benefit was $5.4 million compared to income tax expense of $16.7 million in fiscal 2016, and the effective tax rate was (10.9%) compared to 40.9% in fiscal 2016. The U.S. Tax Cuts and Jobs Act, enacted in December 2017, significantly reduced the federal corporate income tax rate, and required the Company to revalue its deferred income tax liabilities based on the lower enacted federal corporate income tax rate, resulting in a one-time benefit of $24.0 million.
|
— |
Diluted earnings per share was $1.27, including the impact of one-time expenses and tax reform compared to $0.55 in fiscal 2016.
|
— |
Adjusted diluted earnings per share* for the full fiscal year 2017, which excludes net non-recurring expenses and other one-time items, including tax reform, affecting diluted earnings per share, was $0.79 compared to $0.68 in fiscal 2016.
|
— |
Adjusted EBITDA, which represents net income (loss) plus interest expense, provision (benefit) for income taxes, depreciation and amortization, equity-based compensation expense, write-off of property and equipment, and other non-recurring expenses, primarily consisting of outside legal and professional fees associated with the initial public offering and subsequent transition to a public company. We present Adjusted EBITDA on a consolidated basis because management uses it as a supplemental measure in assessing our operating performance, and we believe that it is helpful to investors, securities analysts and other interested parties as a measure of our comparative operating performance from period to period. We also use Adjusted EBITDA as one of the primary methods for planning and forecasting overall expected performance of our business and for evaluating on a quarterly and annual basis actual results against such expectations. Further, we recognize Adjusted EBITDA as a commonly used measure in determining business value and as such, use it internally to report results.
|
— |
Adjusted Net Income, which represents net income (loss) plus other non-recurring expenses and one-time items, primarily consisting of outside legal and professional fees associated with the initial public offering and subsequent transition to a public company. We present Adjusted Net Income on a consolidated basis because management uses it as a supplemental measure in assessing our operating performance, and we believe that it is helpful to investors, securities analysts and other interested parties as a measure of our comparative operating performance from period to period.
|
— |
Adjusted Earnings per Share (“Adjusted EPS”) represents Adjusted Net Income divided by the number of shares outstanding. Adjusted EPS is presented as a supplemental measure in assessing our operating performance, and we believe that it is helpful to investors, securities analysts and other interested parties as a measure of our comparative operating performance from period to period.
|
For the Fourteen Weeks Ended
|
For the Thirteen Weeks Ended
|
|||||||
February 3, 2018
|
January 28, 2017
|
|||||||
Net sales
|
$
|
188,672
|
$
|
166,917
|
||||
Cost of goods sold
|
71,344
|
61,444
|
||||||
Gross profit
|
117,328
|
105,473
|
||||||
Selling, general and administrative expenses
|
105,609
|
94,643
|
||||||
Operating income
|
11,719
|
10,830
|
||||||
Interest expense
|
4,736
|
5,040
|
||||||
Income before provision for income taxes
|
6,983
|
5,790
|
||||||
Income tax (benefit) provision
|
(22,365
|
)
|
3,745
|
|||||
Net income and total comprehensive income
|
$
|
29,348
|
$
|
2,045
|
||||
Net income per common share attributable to common shareholders
|
||||||||
Basic
|
$
|
0.70
|
$
|
0.05
|
||||
Diluted
|
$
|
0.67
|
$
|
0.05
|
||||
Weighted average number of common shares outstanding
|
||||||||
Basic
|
41,906,414
|
43,747,944
|
||||||
Diluted
|
43,499,744
|
43,747,944
|
For the Fifty-Three Weeks Ended
|
For the Fifty-Two Weeks Ended
|
|||||||
February 3, 2018
|
January 28, 2017
|
|||||||
Net sales
|
$
|
698,145
|
$
|
639,056
|
||||
Cost of goods sold
|
234,065
|
211,117
|
||||||
Gross profit
|
464,080
|
427,939
|
||||||
Selling, general and administrative expenses
|
394,893
|
368,525
|
||||||
Operating income
|
69,187
|
59,414
|
||||||
Interest expense
|
19,261
|
18,670
|
||||||
Income before provision for income taxes
|
49,926
|
40,744
|
||||||
Income tax (benefit) provision
|
(5,439
|
)
|
16,669
|
|||||
Net income and total comprehensive income
|
$
|
55,365
|
$
|
24,075
|
||||
Net income per common share attributable to common shareholders
|
||||||||
Basic
|
$
|
1.32
|
$
|
0.55
|
||||
Diluted
|
$
|
1.27
|
$
|
0.55
|
||||
Weighted average number of common shares outstanding
|
||||||||
Basic
|
41,926,157
|
43,747,944
|
||||||
Diluted
|
43,571,746
|
43,747,944
|
February 3, 2018
|
January 28, 2017
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash
|
$
|
25,978
|
$
|
13,468
|
||||
Accounts receivable
|
4,733
|
3,851
|
||||||
Inventories, net
|
80,591
|
66,641
|
||||||
Prepaid expenses and other current assets
|
21,166
|
18,559
|
||||||
Receivable from related party
|
—
|
1,922
|
||||||
Total current assets
|
132,468
|
104,441
|
||||||
Property and equipment, net
|
118,420
|
102,322
|
||||||
Intangible assets, net
|
148,961
|
163,483
|
||||||
Goodwill
|
197,026
|
197,026
|
||||||
Other assets
|
682
|
1,033
|
||||||
Total assets
|
$
|
597,557
|
$
|
568,305
|
||||
Liabilities and Shareholders’ / Members’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
53,962
|
$
|
38,438
|
||||
Accrued expenses and other current liabilities
|
48,759
|
46,121
|
||||||
Current portion of long-term debt
|
2,799
|
2,799
|
||||||
Total current liabilities
|
105,520
|
87,358
|
||||||
Long-term debt, net of discount and current portion
|
238,881
|
264,440
|
||||||
Deferred income taxes
|
46,263
|
73,511
|
||||||
Other liabilities
|
27,577
|
20,132
|
||||||
Total liabilities
|
418,241
|
445,441
|
||||||
Commitments and contingencies
|
||||||||
Shareholders’ / Members’ Equity
|
||||||||
Common stock, par value $0.01 per share; 250,000,000 shares authorized;
43,752,790 and zero shares issued and outstanding at February 3, 2018 and January
28, 2017, respectively
|
437
|
—
|
||||||
Common units, zero par value, zero and 1,000,000 units authorized, issued and outstanding at February 3, 2018 and January 28, 2017, respectively
|
—
|
—
|
||||||
Contributed capital
|
—
|
116,743
|
||||||
Additional paid-in capital
|
117,393
|
—
|
||||||
Accumulated earnings
|
61,486
|
6,121
|
||||||
Total shareholders’ / members’ equity
|
179,316
|
122,864
|
||||||
Total liabilities and shareholders’ / members’ equity
|
$
|
597,557
|
$
|
568,305
|
For the Fourteen Weeks Ended
|
For the Thirteen Weeks Ended
|
|||||||
February 3, 2018
|
January 28, 2017
|
|||||||
Net income
|
$
|
29,348
|
$
|
2,045
|
||||
Interest expense
|
4,736
|
5,040
|
||||||
Income tax (benefit) provision
|
(22,365
|
)
|
3,745
|
|||||
Depreciation and amortization
|
9,284
|
8,939
|
||||||
Equity-based compensation expense (a)
|
243
|
165
|
||||||
Write-off of property and equipment (b)
|
17
|
—
|
||||||
Impairment of long lived assets (c)
|
2,164
|
—
|
||||||
Special bonus
|
624
|
—
|
||||||
Other non-recurring expenses (d)
|
117
|
2,909
|
||||||
Prior period adjustment for tenant allowance (e)
|
-
|
(376
|
)
|
|||||
Adjusted EBITDA
|
$
|
24,168
|
$
|
22,467
|
||||
For the Fifty-Three Weeks Ended
|
For the Fifty-Two Weeks Ended
|
|||||||
February 3, 2018
|
January 28, 2017
|
|||||||
Net income
|
$
|
55,365
|
$
|
24,075
|
||||
Interest expense
|
19,261
|
18,670
|
||||||
Income tax (benefit) provision
|
(5,439
|
)
|
16,669
|
|||||
Depreciation and amortization
|
35,052
|
36,219
|
||||||
Equity-based compensation expense (a)
|
782
|
624
|
||||||
Write-off of property and equipment (b)
|
586
|
385
|
||||||
Impairment of long lived assets (c)
|
2,164
|
—
|
||||||
Special bonus
|
624
|
—
|
||||||
Other non-recurring expenses (d)
|
5,081
|
9,741
|
||||||
Prior period adjustment for tenant allowance (e)
|
—
|
(163
|
)
|
|||||
Adjusted EBITDA
|
$
|
113,476
|
$
|
106,220
|
(a): |
Represents expenses associated with equity incentive instruments granted to our management and board of directors. Incentive instruments are accounted for as equity-classified awards with the related compensation expense recognized based on fair value at the date of the grants.
|
(b): |
Represents net gain or loss on the disposal of fixed assets.
|
(c): |
Represents the impairment of assets associated with three underperforming retail locations.
|
(d): |
Represents items management believes are not indicative of ongoing operating performance. These expenses are primarily composed of legal and professional fees associated with the initial public offering completed March 14, 2017 and subsequent transition to a public company.
|
(e): |
Represents the prior period correction to recognize lease incentives as reductions of rental expense by the lessee on a straight-line basis over the term of the new lease, in accordance with ASC 840.
|
For the Fourteen Weeks Ended
|
For the Thirteen Weeks Ended
|
|||||||
February 3, 2018
|
January 28, 2017
|
|||||||
Net income and total comprehensive income
|
$
|
29,348
|
$
|
2,045
|
||||
Add: Income tax (benefit) provision
|
(22,365
|
)
|
3,745
|
|||||
Income before income tax (benefit) provision
|
6,983
|
5,790
|
||||||
Add: Impairment of long lived assets (a)
|
2,164
|
—
|
||||||
Add: Other non-recurring expenses(b)
|
117
|
2,909
|
||||||
Add: Prior period adjustment for tenant allowance(c)
|
—
|
(376
|
)
|
|||||
Adjusted Income before provision for income taxes
|
9,264
|
8,323
|
||||||
Less: Adjusted Tax Provision (d)(e)
|
3,706
|
4,781
|
||||||
Adjusted net income
|
$
|
5,558
|
$
|
3,542
|
||||
Adjusted net income per common share attributable to common shareholders
|
||||||||
Basic
|
$
|
0.13
|
$
|
0.08
|
||||
Diluted
|
$
|
0.13
|
$
|
0.08
|
||||
Weighted average number of common shares outstanding
|
||||||||
Basic
|
41,906,414
|
43,747,944
|
||||||
Diluted
|
43,499,744
|
43,747,944
|
For the Fifty-Three Weeks Ended
|
For the Fifty-Two Weeks Ended
|
|||||||
February 3, 2018
|
January 28, 2017
|
|||||||
Net income and total comprehensive income
|
$
|
55,365
|
$
|
24,075
|
||||
Add: Income tax (benefit) provision
|
(5,439
|
)
|
16,669
|
|||||
Income before income tax (benefit) provision
|
49,926
|
40,744
|
||||||
Add: Impairment of long lived assets (a)
|
2,164
|
—
|
||||||
Add: Other non-recurring expenses(b)
|
5,081
|
9,741
|
||||||
Add: Prior period adjustment for tenant allowance(c)
|
—
|
(163
|
)
|
|||||
Adjusted Income before provision for income taxes
|
57,171
|
50,322
|
||||||
Less: Adjusted Tax Provision (d)(e)
|
22,868
|
20,584
|
||||||
Adjusted net income
|
$
|
34,303
|
$
|
29,738
|
||||
Adjusted net income per common share attributable to common shareholders
|
||||||||
Basic
|
$
|
0.82
|
$
|
0.68
|
||||
Diluted
|
$
|
0.79
|
$
|
0.68
|
||||
Weighted average number of common shares outstanding
|
||||||||
Basic
|
41,926,157
|
43,747,944
|
||||||
Diluted
|
43,571,746
|
43,747,944
|
(a): |
Represents the impairment of assets associated with three underperforming retail locations.
|
(b): |
Represents items management believes are not indicative of ongoing operating performance. These expenses are primarily composed of legal and professional fees associated with the initial public offering completed March 14, 2017 and subsequent transition to a public company.
|
(c): |
Represents the prior period correction to recognize lease incentives as reductions of rental expense by the lessee on a straight-line basis over the term of the new lease, in accordance with ASC 840.
|
(d): |
The February 3, 2018 adjusted tax provision for adjusted net income is estimated by applying 40% to the adjusted income before provision for income taxes.
|
(e): |
The January 28, 2017 adjusted tax provision for adjusted net income is estimated by applying the fiscal year 2016 fourth quarter and full fiscal year tax provision plus the tax effects of adjustments made to net income in the prior year.
|