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) |
Securities registered pursuant to Section 12(b) of the Act: | ||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, par value $0.01 per share | LE | The NASDAQ Stock Market LLC |
Exhibit Number | Description | |
Press Release of Lands’ End, Inc. dated December 3, 2019 |
Date: | December 3, 2019 | By: | /s/ James F. Gooch |
James F. Gooch | |||
Title: Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer (Principal Financial Officer) |
• | Net revenue for the third quarter decreased 0.5% to $340.0 million as compared to the same period last year reflecting 89 fewer Lands’ End Shops at Sears, which resulted in a net revenue decline from Sears operations of $17.0 million. Excluding the impact from Sears operations, revenue would have increased by 4.7%. |
◦ | U.S. eCommerce revenue growth of 7.4% was driven by greater demand for key items and a high single digit increase in new customer acquisitions. |
◦ | Same store sales for U.S. Company Operated stores increased by 8.3%. |
• | Gross margin increased to 45.3% as compared to 44.2% in the third quarter last year primarily due to a more disciplined promotional strategy. |
• | Selling and administrative expenses were 39.8% of total net revenue compared to 39.6% in the third quarter last year. |
• | Net income was $3.6 million, or $0.11 earnings per diluted share, as compared to $3.3 million, or $0.10 earnings per diluted share, in the third quarter of fiscal 2018. |
• | Adjusted EBITDA(1) was $18.8 million compared to $15.7 million in the third quarter of fiscal 2018. |
• | The American Airlines uniform launch commenced in November with approximately $20.0 million already shipped in the fourth quarter, in line with the expectation that the majority of the $40.0 million to $50.0 million launch would ship in the fourth quarter of fiscal 2019. |
• | Net revenue to be between $545.0 million and $555.0 million. |
• | Net income to be between $24.0 million and $27.0 million, and diluted earnings per share to be between $0.74 and $0.83. |
• | Adjusted EBITDA(1) in the range of $46.0 million to $50.0 million. |
• | Net revenue to be between $1.45 billion and $1.46 billion. |
• | Net income to be between $18.0 million and $21.0 million, and diluted earnings per share to be between $0.55 and $0.64. |
• | Adjusted EBITDA(1) in the range of $75.0 million to $79.0 million. |
• | Capital Expenditures of approximately $40.0 million. |
(in thousands, except share data) | November 1, 2019 | November 2, 2018 | February 1, 2019* | |||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | $ | 15,859 | $ | 105,933 | $ | 193,405 | ||||||
Restricted cash | 1,830 | 2,069 | 1,948 | |||||||||
Accounts receivable, net | 38,125 | 41,496 | 34,549 | |||||||||
Inventories, net | 499,855 | 431,950 | 321,905 | |||||||||
Prepaid expenses and other current assets | 47,538 | 49,001 | 36,574 | |||||||||
Total current assets | 603,207 | 630,449 | 588,381 | |||||||||
Property and equipment, net | 155,051 | 145,808 | 149,894 | |||||||||
Operating lease right-of-use asset | 31,380 | — | — | |||||||||
Goodwill | 110,000 | 110,000 | 110,000 | |||||||||
Intangible asset, net | 257,000 | 257,000 | 257,000 | |||||||||
Other assets | 5,204 | 5,461 | 5,636 | |||||||||
TOTAL ASSETS | $ | 1,161,842 | $ | 1,148,718 | $ | 1,110,911 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
Current liabilities | ||||||||||||
Current borrowings and short-term debt | $ | 85,150 | $ | 5,150 | $ | 5,150 | ||||||
Accounts payable | 174,312 | 179,036 | 123,827 | |||||||||
Lease liability - current | 6,344 | — | — | |||||||||
Other current liabilities | 103,396 | 111,217 | 112,274 | |||||||||
Total current liabilities | 369,202 | 295,403 | 241,251 | |||||||||
Long-term debt, net | 379,606 | 483,401 | 482,453 | |||||||||
Lease liability - long-term | 30,971 | — | — | |||||||||
Long-term deferred tax liabilities | 56,109 | 58,462 | 58,670 | |||||||||
Other liabilities | 5,469 | 7,246 | 5,826 | |||||||||
TOTAL LIABILITIES | 841,357 | 844,512 | 788,200 | |||||||||
Commitments and contingencies | ||||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||
Common stock, par value $0.01 authorized: 480,000,000 shares; issued and outstanding: 32,372,693, 32,211,641 and 32,220,080, respectively | 324 | 320 | 320 | |||||||||
Additional paid-in capital | 358,648 | 351,064 | 352,733 | |||||||||
Accumulated deficit | (25,126 | ) | (33,371 | ) | (17,159 | ) | ||||||
Accumulated other comprehensive loss | (13,361 | ) | (13,807 | ) | (13,183 | ) | ||||||
Total stockholders’ equity | 320,485 | 304,206 | 322,711 | |||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,161,842 | $ | 1,148,718 | $ | 1,110,911 |
13 Weeks Ended | 39 Weeks Ended | |||||||||||||||
(in thousands, except per share data) | November 1, 2019 | November 2, 2018 | November 1, 2019 | November 2, 2018 | ||||||||||||
Net revenue | $ | 340,023 | $ | 341,570 | $ | 900,723 | $ | 949,340 | ||||||||
Cost of sales (excluding depreciation and amortization) | 185,848 | 190,608 | 497,589 | 528,587 | ||||||||||||
Gross profit | 154,175 | 150,962 | 403,134 | 420,753 | ||||||||||||
Selling and administrative | 135,417 | 135,274 | 374,521 | 388,315 | ||||||||||||
Depreciation and amortization | 8,076 | 7,361 | 23,101 | 20,420 | ||||||||||||
Other operating (income) expense, net | (225 | ) | (158 | ) | (99 | ) | 132 | |||||||||
Operating income | 10,907 | 8,485 | 5,611 | 11,886 | ||||||||||||
Interest expense | 6,121 | 7,303 | 20,190 | 21,216 | ||||||||||||
Other (income) expense, net | (166 | ) | 1,866 | (1,640 | ) | 5,317 | ||||||||||
Income (loss) before income taxes | 4,952 | (684 | ) | (12,939 | ) | (14,647 | ) | |||||||||
Income tax expense (benefit) | 1,346 | (3,978 | ) | (6,713 | ) | (10,026 | ) | |||||||||
NET INCOME (LOSS) | $ | 3,606 | $ | 3,294 | $ | (6,226 | ) | $ | (4,621 | ) | ||||||
NET INCOME (LOSS) PER COMMON SHARE | ||||||||||||||||
Basic: | $ | 0.11 | $ | 0.10 | $ | (0.19 | ) | $ | (0.14 | ) | ||||||
Diluted: | $ | 0.11 | $ | 0.10 | $ | (0.19 | ) | $ | (0.14 | ) | ||||||
Basic weighted average common shares outstanding | 32,371 | 32,211 | 32,333 | 32,182 | ||||||||||||
Diluted weighted average common shares outstanding | 32,398 | 32,314 | 32,333 | 32,182 |
• | EBITDA excludes the effects of financings, investing activities and tax structure by eliminating the effects of interest, depreciation and income tax |
• | Other significant items, while periodically affecting our results, may vary significantly from period to period and have a disproportionate effect in a given period, which affects comparability of results. We have adjusted our results for the following items to make our statements more comparable and therefore more useful to investors as the items are not representative of our ongoing operations. |
◦ | Gain or loss on property and equipment - management considers the gains or losses on asset valuation, including impairments, to result from investing decisions rather than ongoing operations. |
13 Weeks Ended | 39 Weeks Ended | |||||||||||||||||||||||||||
November 1, 2019 | November 2, 2018 | November 1, 2019 | November 2, 2018 | |||||||||||||||||||||||||
(in thousands) | $’s | % of Net revenue | $’s | % of Net revenue | $’s | % of Net revenue | $’s | % of Net revenue | ||||||||||||||||||||
NET INCOME (LOSS) | $ | 3,606 | 1.1 | % | $ | 3,294 | 1.0 | % | $ | (6,226 | ) | (0.7 | )% | $ | (4,621 | ) | (0.5 | )% | ||||||||||
Income tax expense (benefit) | 1,346 | 0.4 | % | (3,978 | ) | (1.2 | )% | (6,713 | ) | (0.7 | )% | (10,026 | ) | (1.1 | )% | |||||||||||||
Other (income) expense, net | (166 | ) | 0.0 | % | 1,866 | 0.5 | % | (1,640 | ) | (0.2 | )% | 5,317 | 0.6 | % | ||||||||||||||
Interest expense | 6,121 | 1.8 | % | 7,303 | 2.1 | % | 20,190 | 2.2 | % | 21,216 | 2.2 | % | ||||||||||||||||
Operating income | 10,907 | 3.2 | % | 8,485 | 2.5 | % | 5,611 | 0.6 | % | 11,886 | 1.3 | % | ||||||||||||||||
Depreciation and amortization | 8,076 | 2.4 | % | 7,361 | 2.2 | % | 23,101 | 2.6 | % | 20,420 | 2.2 | % | ||||||||||||||||
Other operating (income) expense | (206 | ) | (0.1 | )% | 4 | — | % | — | — | % | 10 | — | % | |||||||||||||||
(Gain) loss on property and equipment | (19 | ) | — | % | (162 | ) | — | % | (99 | ) | — | % | 121 | — | % | |||||||||||||
Adjusted EBITDA (1) | $ | 18,758 | 5.5 | % | $ | 15,688 | 4.6 | % | $ | 28,613 | 3.2 | % | $ | 32,437 | 3.4 | % | ||||||||||||
Fiscal 2019 Guidance | 13 Weeks Ended | 52 Weeks Ended | ||||||||||||||
(in millions) | January 31, 2020 | January 31, 2020 | ||||||||||||||
Net (loss) income | $ | 24.0 | - | $ | 27.0 | $ | 18.0 | - | $ | 21.0 | ||||||
Depreciation, interest, other income, taxes and other adjustments | 22.0 | - | 23.0 | 57.0 | - | 58.0 | ||||||||||
Adjusted EBITDA (1) | $ | 46.0 | - | $ | 50.0 | $ | 75.0 | - | $ | 79.0 |
39 Weeks Ended | ||||||||
(in thousands) | November 1, 2019 | November 2, 2018 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (6,226 | ) | $ | (4,621 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 23,101 | 20,420 | ||||||
Gain (loss) on property and equipment | (99 | ) | 121 | |||||
Amortization of debt issuance costs | 1,293 | 1,394 | ||||||
Stock-based compensation | 6,632 | 4,432 | ||||||
Noncash lease impacts | 1,837 | — | ||||||
Deferred income taxes | (1,899 | ) | 180 | |||||
Change in operating assets and liabilities: | ||||||||
Inventories | (178,016 | ) | (103,177 | ) | ||||
Accounts payable | 50,173 | 26,742 | ||||||
Other operating assets | (14,755 | ) | (2,864 | ) | ||||
Other operating liabilities | (6,992 | ) | 5,125 | |||||
Net cash used in operating activities | (124,951 | ) | (52,248 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Sales of property and equipment | — | 127 | ||||||
Purchases of property and equipment | (28,487 | ) | (33,160 | ) | ||||
Net cash used in investing activities | (28,487 | ) | (33,033 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Proceeds from borrowing under ABL Facility | 95,000 | — | ||||||
Payments of borrowings under ABL Facility | (15,000 | ) | — | |||||
Payments of term-loan | (103,863 | ) | (3,865 | ) | ||||
Payments of employee withholding taxes on share-based compensation | (713 | ) | (543 | ) | ||||
Net cash used in financing activities | (24,576 | ) | (4,408 | ) | ||||
Effects of exchange rate changes on cash, cash equivalents and restricted cash | 350 | (246 | ) | |||||
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (177,664 | ) | (89,935 | ) | ||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | 195,353 | 197,937 | ||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $ | 17,689 | $ | 108,002 | ||||
SUPPLEMENTAL CASH FLOW DATA | ||||||||
Unpaid liability to acquire property and equipment | $ | 5,494 | $ | 4,707 | ||||
Income taxes paid, net of refunds | $ | 3,225 | $ | 1,420 | ||||
Interest paid | $ | 18,455 | $ | 19,792 |
13 Weeks Ended | 39 Weeks Ended | |||||||||||||||
(in thousands) | November 1, 2019 | November 2, 2018 | November 1, 2019 | November 2, 2018 | ||||||||||||
eCommerce | $ | 242,328 | $ | 231,517 | $ | 669,880 | $ | 634,082 | ||||||||
Outfitters | 83,342 | 82,261 | 191,877 | 229,671 | ||||||||||||
Retail | 14,353 | 27,792 | 38,966 | 85,587 | ||||||||||||
Total net revenue | $ | 340,023 | $ | 341,570 | $ | 900,723 | $ | 949,340 |