Delaware | 001-09769 | 36-2512786 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
1 Lands’ End Lane Dodgeville, Wisconsin | 53595 | |
(Address of Principal Executive Offices) | (Zip Code) |
Exhibit Number | Description | |
Press Release of Lands’ End, Inc. dated December 6, 2018 |
Date: | December 6, 2018 | By: | /s/ James F. Gooch |
James F. Gooch | |||
Title: Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer (Principal Financial Officer) |
Exhibit No. | Description | |
Press Release of Lands’ End, Inc. dated December 6, 2018 |
• | Net revenue for the third quarter increased 4.9% to $341.6 million from $325.5 million in the third quarter last year. Direct segment net revenue increased 8.1% to $313.8 million, as compared to the same period last year. Retail segment net revenue decreased 21.0% to $27.8 million, from $35.2 million in the third quarter last year, due to the reduction in Lands’ End Shops at Sears locations. Same store sales increased by 11.8% overall, with U.S. Company operated stores increasing by 15.1% and same store sales in Lands’ End Shops at Sears increasing by 11.7%. At the end of the third quarter, there were 63 fewer Lands' End Shops at Sears. |
• | Gross margin increased approximately 60 basis points to 44.2% from 43.6% in the third quarter last year. |
• | Net income was $3.3 million, or $0.10 earnings per diluted share, as compared to Net income of $0.2 million, or $0.01 earnings per diluted share, in the third quarter of fiscal 2017. |
• | Adjusted EBITDA(1) grew 22.1% to $15.7 million compared to $12.9 million in the third quarter of fiscal 2017. |
(in thousands, except share data) | November 2, 2018 | October 27, 2017 | February 2, 2018* | |||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | $ | 105,933 | $ | 92,913 | $ | 195,581 | ||||||
Restricted cash | 2,069 | 1,640 | 2,356 | |||||||||
Accounts receivable, net | 41,496 | 39,044 | 49,860 | |||||||||
Inventories, net | 431,950 | 423,540 | 332,297 | |||||||||
Prepaid expenses and other current assets | 49,001 | 48,934 | 26,659 | |||||||||
Total current assets | 630,449 | 606,071 | 606,753 | |||||||||
Property and equipment, net | 145,808 | 129,955 | 136,501 | |||||||||
Goodwill | 110,000 | 110,000 | 110,000 | |||||||||
Intangible asset, net | 257,000 | 257,000 | 257,000 | |||||||||
Other assets | 5,461 | 17,454 | 13,881 | |||||||||
TOTAL ASSETS | $ | 1,148,718 | $ | 1,120,480 | $ | 1,124,135 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable | $ | 179,036 | $ | 160,340 | $ | 155,874 | ||||||
Other current liabilities | 116,367 | 103,886 | 100,257 | |||||||||
Total current liabilities | 295,403 | 264,226 | 256,131 | |||||||||
Long-term debt, net | 483,401 | 487,197 | 486,248 | |||||||||
Long-term deferred tax liabilities | 58,462 | 91,392 | 59,137 | |||||||||
Other liabilities | 7,246 | 14,568 | 15,526 | |||||||||
TOTAL LIABILITIES | 844,512 | 857,383 | 817,042 | |||||||||
Commitments and contingencies | ||||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||
Common stock, par value $0.01 authorized: 480,000,000 shares; issued and outstanding: 32,211,641, 32,095,021 and 32,101,793, respectively | 320 | 320 | 320 | |||||||||
Additional paid-in capital | 351,064 | 346,153 | 347,175 | |||||||||
Accumulated deficit | (33,371 | ) | (72,010 | ) | (29,810 | ) | ||||||
Accumulated other comprehensive loss | (13,807 | ) | (11,366 | ) | (10,592 | ) | ||||||
Total stockholders’ equity | 304,206 | 263,097 | 307,093 | |||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,148,718 | $ | 1,120,480 | $ | 1,124,135 |
13 Weeks Ended | 39 Weeks Ended | |||||||||||||||
(in thousands, except per share data) | November 2, 2018 | October 27, 2017 | November 2, 2018 | October 27, 2017 | ||||||||||||
Net revenue | $ | 341,570 | $ | 325,489 | $ | 949,340 | $ | 896,044 | ||||||||
Cost of sales (excluding depreciation and amortization) | 190,608 | 183,515 | 528,587 | 497,262 | ||||||||||||
Gross profit | 150,962 | 141,974 | 420,753 | 398,782 | ||||||||||||
Selling and administrative | 135,274 | 129,122 | 388,315 | 377,804 | ||||||||||||
Depreciation and amortization | 7,361 | 6,347 | 20,420 | 19,031 | ||||||||||||
Other operating (income) expense, net | (158 | ) | 564 | 132 | 2,552 | |||||||||||
Operating income (loss) | 8,485 | 5,941 | 11,886 | (605 | ) | |||||||||||
Interest expense | 7,303 | 6,350 | 21,216 | 18,642 | ||||||||||||
Other expense (income), net | 1,866 | (576 | ) | 5,317 | (1,812 | ) | ||||||||||
(Loss) income before income taxes | (684 | ) | 167 | (14,647 | ) | (17,435 | ) | |||||||||
Income tax (benefit) expense | (3,978 | ) | 5 | (10,026 | ) | (5,878 | ) | |||||||||
NET INCOME (LOSS) | $ | 3,294 | $ | 162 | $ | (4,621 | ) | $ | (11,557 | ) | ||||||
NET INCOME (LOSS) PER COMMON SHARE | ||||||||||||||||
Basic: | $ | 0.10 | $ | 0.01 | $ | (0.14 | ) | $ | (0.36 | ) | ||||||
Diluted: | $ | 0.10 | $ | 0.01 | $ | (0.14 | ) | $ | (0.36 | ) | ||||||
Basic weighted average common shares outstanding | 32,211 | 32,095 | 32,182 | 32,068 | ||||||||||||
Diluted weighted average common shares outstanding | 32,314 | 32,117 | 32,182 | 32,068 |
• | EBITDA excludes the effects of financings, investing activities and tax structure by eliminating the effects of interest, depreciation and income tax costs or benefits. |
• | Other significant items, while periodically affecting our results, may vary significantly from period to period and have a disproportionate effect in a given period, which affects comparability of results. We have adjusted our results for these items to make our statements more comparable and therefore more useful to investors as the items are not representative of our ongoing operations. |
◦ | Transfer of corporate functions - severance and contract losses associated with a transition of certain corporate activities from our New York office to our Dodgeville headquarters. |
◦ | Gain or loss on property and equipment - management considers the gains or losses on asset valuation, including impairments, to result from investing decisions rather than ongoing operations. |
13 Weeks Ended | 39 Weeks Ended | |||||||||||||||||||||||||||
November 2, 2018 | October 27, 2017 | November 2, 2018 | October 27, 2017 | |||||||||||||||||||||||||
(in thousands) | $’s | % of Net revenue | $’s | % of Net revenue | $’s | % of Net revenue | $’s | % of Net revenue | ||||||||||||||||||||
NET INCOME (LOSS) | $ | 3,294 | 1.0 | % | $ | 162 | — | % | $ | (4,621 | ) | (0.5 | )% | $ | (11,557 | ) | (1.3 | )% | ||||||||||
Income tax (benefit) expense | (3,978 | ) | (1.2 | )% | 5 | — | % | (10,026 | ) | (1.1 | )% | (5,878 | ) | (0.7 | )% | |||||||||||||
Other expense (income), net | 1,866 | 0.5 | % | (576 | ) | (0.2 | )% | 5,317 | 0.6 | % | (1,812 | ) | (0.2 | )% | ||||||||||||||
Interest expense | 7,303 | 2.1 | % | 6,350 | 2.0 | % | 21,216 | 2.2 | % | 18,642 | 2.1 | % | ||||||||||||||||
Operating income (loss) | 8,485 | 2.5 | % | 5,941 | 1.8 | % | 11,886 | 1.3 | % | (605 | ) | (0.1 | )% | |||||||||||||||
Depreciation and amortization | 7,361 | 2.2 | % | 6,347 | 1.9 | % | 20,420 | 2.2 | % | 19,031 | 2.1 | % | ||||||||||||||||
Transfer of corporate functions | 4 | — | % | 475 | 0.1 | % | 10 | — | % | 2,401 | 0.3 | % | ||||||||||||||||
(Gain) loss on property and equipment | (162 | ) | — | % | 89 | — | % | 121 | — | % | 151 | — | % | |||||||||||||||
Adjusted EBITDA(1) | $ | 15,688 | 4.6 | % | $ | 12,852 | 3.9 | % | $ | 32,437 | 3.4 | % | $ | 20,978 | 2.3 | % |
39 Weeks Ended | ||||||||
(in thousands) | November 2, 2018 | October 27, 2017 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (4,621 | ) | $ | (11,557 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 20,420 | 19,031 | ||||||
Loss on property and equipment | 121 | 151 | ||||||
Amortization of debt issuance costs | 1,394 | 1,284 | ||||||
Stock-based compensation | 4,432 | 2,855 | ||||||
Deferred income taxes | 180 | 355 | ||||||
Change in operating assets and liabilities: | ||||||||
Inventories | (103,177 | ) | (96,522 | ) | ||||
Accounts payable | 26,742 | 944 | ||||||
Other operating assets | (2,864 | ) | (21,890 | ) | ||||
Other operating liabilities | 5,125 | 17,542 | ||||||
Net cash used in operating activities | (52,248 | ) | (87,807 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Sales of property and equipment | 127 | — | ||||||
Purchases of property and equipment | (33,160 | ) | (29,143 | ) | ||||
Net cash used in investing activities | (33,033 | ) | (29,143 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Payments on term loan facility | (3,865 | ) | (3,863 | ) | ||||
Payments of employee withholding taxes on share-based compensation | (543 | ) | (674 | ) | ||||
Net cash used in financing activities | (4,408 | ) | (4,537 | ) | ||||
Effects of exchange rate changes on cash, cash equivalents and restricted cash | (246 | ) | (368 | ) | ||||
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (89,935 | ) | (121,855 | ) | ||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD | 197,937 | 216,408 | ||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $ | 108,002 | $ | 94,553 | ||||
SUPPLEMENTAL CASH FLOW DATA | ||||||||
Unpaid liability to acquire property and equipment | $ | 4,707 | $ | 4,796 | ||||
Income taxes paid, net of refunds | $ | 1,420 | $ | 3,220 | ||||
Interest paid | $ | 19,792 | $ | 17,106 |
13 Weeks Ended | 39 Weeks Ended | |||||||||||||||
(in thousands) | November 2, 2018 | October 27, 2017 | November 2, 2018 | October 27, 2017 | ||||||||||||
Net revenue: | ||||||||||||||||
Direct | $ | 313,778 | $ | 290,326 | $ | 863,753 | $ | 778,554 | ||||||||
Retail | 27,792 | 35,163 | 85,587 | 117,490 | ||||||||||||
Total net revenue | $ | 341,570 | $ | 325,489 | $ | 949,340 | $ | 896,044 |
13 Weeks Ended | 39 Weeks Ended | |||||||||||||||
(in thousands) | November 2, 2018 | October 27, 2017 | November 2, 2018 | October 27, 2017 | ||||||||||||
Adjusted EBITDA(1): | ||||||||||||||||
Direct | $ | 30,284 | $ | 29,100 | $ | 68,379 | $ | 54,018 | ||||||||
Retail | (3,595 | ) | (6,003 | ) | (7,763 | ) | (7,405 | ) | ||||||||
Corporate / other | (11,001 | ) | (10,245 | ) | (28,179 | ) | (25,635 | ) | ||||||||
Total Adjusted EBITDA(1) | $ | 15,688 | $ | 12,852 | $ | 32,437 | $ | 20,978 |