R | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
for the quarterly period ended | October 29, 2016 |
Minnesota | 41-1673770 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer o | Accelerated filer R | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Page | |
Item 4. Mine Safety Disclosures | |
October 29, 2016 | January 30, 2016 | ||||||
(In thousands, except share and | |||||||
per share data) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash | $ | 39,680 | $ | 11,897 | |||
Restricted cash and investments | 450 | 450 | |||||
Accounts receivable, net | 89,588 | 114,949 | |||||
Inventories | 81,187 | 65,840 | |||||
Prepaid expenses and other | 5,257 | 5,913 | |||||
Total current assets | 216,162 | 199,049 | |||||
Property & equipment, net | 51,464 | 52,629 | |||||
FCC broadcasting license | 12,000 | 12,000 | |||||
Other assets | 1,609 | 1,819 | |||||
$ | 281,235 | $ | 265,497 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 78,504 | $ | 77,779 | |||
Accrued liabilities | 36,367 | 35,342 | |||||
Current portion of long term credit facilities | 2,993 | 2,143 | |||||
Deferred revenue | 85 | 85 | |||||
Total current liabilities | 117,949 | 115,349 | |||||
Deferred revenue | 100 | 164 | |||||
Deferred tax liability | 3,326 | 2,734 | |||||
Long term credit facilities | 83,122 | 70,271 | |||||
Total liabilities | 204,497 | 188,518 | |||||
Commitments and contingencies | |||||||
Shareholders' equity: | |||||||
Preferred stock, $.01 per share par value, 400,000 shares authorized; zero shares issued and outstanding | — | — | |||||
Common stock, $.01 per share par value, 100,000,000 shares authorized; 63,503,159 and 57,170,245 shares issued and outstanding | 635 | 571 | |||||
Additional paid-in capital | 434,061 | 423,574 | |||||
Accumulated deficit | (357,958 | ) | (347,166 | ) | |||
Total shareholders' equity | 76,738 | 76,979 | |||||
$ | 281,235 | $ | 265,497 |
For the Three-Month | For the Nine-Month | ||||||||||||||
Periods Ended | Periods Ended | ||||||||||||||
October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | ||||||||||||
Net sales | $ | 151,636 | $ | 162,258 | $ | 475,695 | $ | 481,770 | |||||||
Cost of sales | 96,205 | 106,348 | 298,988 | 309,699 | |||||||||||
Gross profit | 55,431 | 55,910 | 176,707 | 172,071 | |||||||||||
Operating expense: | |||||||||||||||
Distribution and selling | 49,161 | 51,038 | 154,191 | 153,194 | |||||||||||
General and administrative | 5,690 | 5,975 | 17,337 | 18,078 | |||||||||||
Depreciation and amortization | 1,941 | 2,131 | 6,025 | 6,369 | |||||||||||
Executive and management transition costs | 568 | 754 | 4,411 | 3,549 | |||||||||||
Distribution facility consolidation and technology upgrade costs | 150 | 294 | 530 | 1,266 | |||||||||||
Total operating expense | 57,510 | 60,192 | 182,494 | 182,456 | |||||||||||
Operating loss | (2,079 | ) | (4,282 | ) | (5,787 | ) | (10,385 | ) | |||||||
Other income (expense): | |||||||||||||||
Interest income | 3 | 2 | 7 | 6 | |||||||||||
Interest expense | (1,586 | ) | (690 | ) | (4,397 | ) | (1,957 | ) | |||||||
Total other expense, net | (1,583 | ) | (688 | ) | (4,390 | ) | (1,951 | ) | |||||||
Loss before income taxes | (3,662 | ) | (4,970 | ) | (10,177 | ) | (12,336 | ) | |||||||
Income tax provision | (205 | ) | (205 | ) | (615 | ) | (615 | ) | |||||||
Net loss | $ | (3,867 | ) | $ | (5,175 | ) | $ | (10,792 | ) | $ | (12,951 | ) | |||
Net loss per common share | $ | (0.06 | ) | $ | (0.09 | ) | $ | (0.19 | ) | $ | (0.23 | ) | |||
Net loss per common share — assuming dilution | $ | (0.06 | ) | $ | (0.09 | ) | $ | (0.19 | ) | $ | (0.23 | ) | |||
Weighted average number of common shares outstanding: | |||||||||||||||
Basic | 60,513,215 | 57,125,435 | 58,317,681 | 56,952,952 | |||||||||||
Diluted | 60,513,215 | 57,125,435 | 58,317,681 | 56,952,952 |
Common Stock | Additional Paid-In Capital | Total Shareholders' Equity | ||||||||||||||||
Number of Shares | Par Value | Accumulated Deficit | ||||||||||||||||
BALANCE, January 30, 2016 | 57,170,245 | $ | 571 | $ | 423,574 | $ | (347,166 | ) | $ | 76,979 | ||||||||
Net loss | — | — | — | (10,792 | ) | (10,792 | ) | |||||||||||
Common stock issuances pursuant to equity compensation plans | 380,533 | 4 | (17 | ) | — | (13 | ) | |||||||||||
Share-based payment compensation | — | — | 1,432 | — | 1,432 | |||||||||||||
Common stock and warrant issuance | 5,952,381 | 60 | 9,072 | — | 9,132 | |||||||||||||
BALANCE, October 29, 2016 | 63,503,159 | $ | 635 | $ | 434,061 | $ | (357,958 | ) | $ | 76,738 |
For the Nine-Month | |||||||
Periods Ended | |||||||
October 29, 2016 | October 31, 2015 | ||||||
OPERATING ACTIVITIES: | |||||||
Net loss | $ | (10,792 | ) | $ | (12,951 | ) | |
Adjustments to reconcile net loss to net cash provided by (used for) operating activities: | |||||||
Depreciation and amortization | 9,204 | 7,265 | |||||
Share-based payment compensation | 1,432 | 2,138 | |||||
Amortization of deferred revenue | (64 | ) | (64 | ) | |||
Amortization of deferred financing costs | 410 | 215 | |||||
Deferred income taxes | 592 | 591 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable, net | 25,361 | 16,024 | |||||
Inventories | (15,347 | ) | (13,265 | ) | |||
Prepaid expenses and other | 645 | (1,450 | ) | ||||
Accounts payable and accrued liabilities | 826 | (7,612 | ) | ||||
Net cash provided by (used for) operating activities | 12,267 | (9,109 | ) | ||||
INVESTING ACTIVITIES: | |||||||
Property and equipment additions | (7,313 | ) | (17,885 | ) | |||
Change in restricted cash and investments | — | 1,650 | |||||
Net cash used for investing activities | (7,313 | ) | (16,235 | ) | |||
FINANCING ACTIVITIES: | |||||||
Proceeds from issuance of term loans | 17,000 | 2,849 | |||||
Proceeds for issuance of common stock and warrants | 10,000 | — | |||||
Proceeds from issuance of revolving loans | — | 14,300 | |||||
Proceeds from exercise of stock options | — | 2,503 | |||||
Payments on term loans | (2,102 | ) | (1,540 | ) | |||
Payments for deferred financing costs | (1,432 | ) | (428 | ) | |||
Payments for common stock issuance costs | (585 | ) | — | ||||
Payments on capital leases | (39 | ) | (39 | ) | |||
Payments for restricted stock issuance | (13 | ) | — | ||||
Net cash provided by financing activities | 22,829 | 17,645 | |||||
Net increase (decrease) in cash | 27,783 | (7,699 | ) | ||||
BEGINNING CASH | 11,897 | 19,828 | |||||
ENDING CASH | $ | 39,680 | $ | 12,129 | |||
SUPPLEMENTAL CASH FLOW INFORMATION: | |||||||
Interest paid | $ | 3,363 | $ | 1,672 | |||
Income taxes paid | $ | 51 | $ | 33 | |||
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||||||
Property and equipment purchases included in accounts payable | $ | 803 | $ | 1,827 | |||
Deferred financing costs included in accrued liabilities | $ | 15 | $ | — | |||
Common stock issuance costs included in accrued liabilities | $ | 283 | $ | — |
Weighted Average Life (Years) | October 29, 2016 | January 30, 2016 | ||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||
Finite-lived intangible assets: | ||||||||||||||||||
EVINE trademark | 15 | $ | 1,103,000 | $ | (141,000 | ) | $ | 1,103,000 | $ | (80,000 | ) | |||||||
Total finite-lived intangible assets | $ | 1,103,000 | $ | (141,000 | ) | $ | 1,103,000 | $ | (80,000 | ) | ||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||
FCC broadcast license | $ | 12,000,000 | $ | 12,000,000 |
October 29, 2016 | January 30, 2016 | |||||||
PNC Credit Facility | ||||||||
PNC revolving loan due May 1, 2020, principal amount | $ | 59,900,000 | $ | 59,900,000 | ||||
PNC term loan due May 1, 2020, principal amount | 11,173,000 | 12,780,000 | ||||||
Less unamortized debt issuance costs | (201,000 | ) | (266,000 | ) | ||||
PNC term loan due May 1, 2020, carrying amount | 10,972,000 | 12,514,000 | ||||||
GACP Credit Agreement | ||||||||
GACP term loan due March 9, 2021, principal amount | 16,505,000 | — | ||||||
Less unamortized debt issuance costs | (1,262,000 | ) | — | |||||
GACP term loan due March 9, 2021, carrying amount | 15,243,000 | — | ||||||
Total long-term credit facilities | 86,115,000 | 72,414,000 | ||||||
Less current portion of long-term credit facilities | (2,993,000 | ) | (2,143,000 | ) | ||||
Long-term credit facilities, excluding current portion | $ | 83,122,000 | $ | 70,271,000 |
PNC Credit Facility | ||||||||||||||||
Fiscal year | Term loan | Revolving loan | GACP Term Loan | Total | ||||||||||||
2016 | $ | 536,000 | $ | — | $ | 212,000 | $ | 748,000 | ||||||||
2017 | 2,321,000 | — | 921,000 | 3,242,000 | ||||||||||||
2018 | 2,143,000 | — | 850,000 | 2,993,000 | ||||||||||||
2019 | 1,964,000 | — | 780,000 | 2,744,000 | ||||||||||||
2020 | 4,209,000 | 59,900,000 | 850,000 | 64,959,000 | ||||||||||||
2021 | — | — | 12,892,000 | 12,892,000 | ||||||||||||
$ | 11,173,000 | $ | 59,900,000 | $ | 16,505,000 | $ | 87,578,000 |
Fiscal 2016 | Fiscal 2015 | ||||||||
Expected volatility: | 82 | % | - | 84% | 75 | % | - | 82% | |
Expected term (in years): | 6 years | 6 years | |||||||
Risk-free interest rate: | 1.4 | % | - | 1.7% | 1.7 | % | - | 1.9% |
2011 Incentive Stock Option Plan | Weighted Average Exercise Price | 2004 Incentive Stock Option Plan | Weighted Average Exercise Price | 2001 Incentive Stock Option Plan | Weighted Average Exercise Price | |||||||||||||||
Balance outstanding, January 30, 2016 | 1,555,000 | $ | 4.30 | 670,000 | $ | 6.18 | 399,000 | $ | 7.78 | |||||||||||
Granted | 1,718,000 | $ | 1.33 | — | $ | — | — | $ | — | |||||||||||
Exercised | — | $ | — | — | $ | — | — | $ | — | |||||||||||
Forfeited or canceled | (788,000 | ) | $ | 4.27 | (368,000 | ) | $ | 6.81 | (302,000 | ) | $ | 7.29 | ||||||||
Balance outstanding, October 29, 2016 | 2,485,000 | $ | 2.25 | 302,000 | $ | 5.41 | 97,000 | $ | 9.31 | |||||||||||
Options exercisable at October 29, 2016 | 667,000 | $ | 3.57 | 293,000 | $ | 5.43 | 97,000 | $ | 9.31 |
Options Outstanding | Options Vested or Expected to Vest | ||||||||||||||||||||||||
Option Type | Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | |||||||||||||||||
2011 Incentive: | 2,485,000 | $ | 2.25 | 8.7 | $ | 1,421,000 | 2,323,000 | $ | 2.31 | 8.6 | $ | 1,287,000 | |||||||||||||
2004 Incentive: | 302,000 | $ | 5.41 | 3.5 | $ | 7,300 | 302,000 | $ | 5.41 | 3.5 | $ | 7,300 | |||||||||||||
2001 Incentive: | 97,000 | $ | 9.31 | 0.9 | $ | — | 97,000 | $ | 9.31 | 0.9 | $ | — |
Percentile Rank | Percentage of Units Vested | |
< 33% | 0% | |
33% | 50% | |
50% | 100% | |
100% | 150% |
Fair Value (Per Share) | Derived Service Period | |||
Tranche 1 (immediate) | $1.60 | 0 Years | ||
Tranche 2 ($4.00/share) | $1.52 | 1.46 Years | ||
Tranche 3 ($6.00/share) | $1.48 | 2.22 Years |
Percentile Rank | Percentage of Units Vested | |
< 33% | 0% | |
33% | 50% | |
50% | 100% | |
100% | 150% |
Percentile Rank | Percentage of Units Vested | |
< 33% | 0% | |
33% | 50% | |
50% | 100% | |
100% | 150% |
Shares | Weighted Average Grant Date Fair Value | |||
Non-vested outstanding, January 30, 2016 | 861,000 | $4.46 | ||
Granted | 1,516,000 | $1.50 | ||
Vested | (391,000 | ) | $2.43 | |
Forfeited | (335,000 | ) | $5.00 | |
Non-vested outstanding, October 29, 2016 | 1,651,000 | $2.11 |
Three-Month Periods Ended | Nine-Month Periods Ended | |||||||||||||||
October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||||||||||
Net loss (a) | $ | (3,867,000 | ) | $ | (5,175,000 | ) | $ | (10,792,000 | ) | $ | (12,951,000 | ) | ||||
Weighted average number of shares of common stock outstanding — Basic | 60,513,215 | 57,125,435 | 58,317,681 | 56,952,952 | ||||||||||||
Dilutive effect of stock options, non-vested shares and warrants (b) | — | — | — | — | ||||||||||||
Weighted average number of shares of common stock outstanding — Diluted | 60,513,215 | 57,125,435 | 58,317,681 | 56,952,952 | ||||||||||||
Net loss per common share | $ | (0.06 | ) | $ | (0.09 | ) | $ | (0.19 | ) | $ | (0.23 | ) | ||||
Net loss per common share — assuming dilution | $ | (0.06 | ) | $ | (0.09 | ) | $ | (0.19 | ) | $ | (0.23 | ) |
Three-Month Periods Ended | Nine-Month Periods Ended | |||||||||||||||
October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||||||||||
Jewelry & Watches | $ | 57,138 | $ | 53,601 | $ | 179,284 | $ | 181,454 | ||||||||
Home & Consumer Electronics | 34,083 | 49,850 | 98,647 | 118,642 | ||||||||||||
Beauty | 18,718 | 19,512 | 65,082 | 61,677 | ||||||||||||
Fashion & Accessories | 26,335 | 26,332 | 84,854 | 80,374 | ||||||||||||
All other (primarily shipping & handling revenue) | 15,362 | 12,963 | 47,828 | 39,623 | ||||||||||||
Total | $ | 151,636 | $ | 162,258 | $ | 475,695 | $ | 481,770 |
For the Three-Month | For the Nine-Month | |||||||
Periods Ended | Periods Ended | |||||||
October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||
Merchandise Category | ||||||||
Jewelry & Watches | 42% | 36% | 42% | 41% | ||||
Home & Consumer Electronics | 25% | 33% | 23% | 27% | ||||
Beauty | 14% | 13% | 15% | 14% | ||||
Fashion & Accessories | 19% | 18% | 20% | 18% | ||||
Total | 100% | 100% | 100% | 100% |
Dollar Amount as a Percentage of Net Sales for the | Dollar Amount as a Percentage of Net Sales for the | |||||||
Three-Month Periods Ended | Nine-Month Periods Ended | |||||||
October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||
Net sales | 100.0% | 100.0% | 100.0% | 100.0% | ||||
Gross margin | 36.6% | 34.5% | 37.1% | 35.7% | ||||
Operating expenses: | ||||||||
Distribution and selling | 32.4% | 31.4% | 32.4% | 31.8% | ||||
General and administrative | 3.8% | 3.7% | 3.6% | 3.8% | ||||
Depreciation and amortization | 1.3% | 1.3% | 1.3% | 1.3% | ||||
Executive and management transition costs | 0.4% | 0.5% | 0.9% | 0.7% | ||||
Distribution facility consolidation and technology upgrade costs | 0.1% | 0.2% | 0.1% | 0.3% | ||||
38.0% | 37.1% | 38.3% | 37.9% | |||||
Operating loss | (1.4)% | (2.6)% | (1.2)% | (2.2)% |
For the Three-Month | For the Nine-Month | ||||||||||
Periods Ended | Periods Ended | ||||||||||
October 29, 2016 | October 31, 2015 | Change | October 29, 2016 | October 31, 2015 | Change | ||||||
Merchandise Metrics | |||||||||||
Gross margin % | 36.6% | 34.5% | 210 bps | 37.1% | 35.7% | 140 bps | |||||
Net shipped units (000's) | 2,253 | 2,282 | (1)% | 7,131 | 6,946 | 3% | |||||
Average selling price | $60 | $65 | (8)% | $59 | $63 | (6)% | |||||
Return rate | 20.5% | 18.9% | 160 bps | 19.8% | 20.2% | (40) bps | |||||
Online net sales % (a) | 49.0% | 46.0% | 300 bps | 48.6% | 45.7% | 290 bps | |||||
Total Customers - 12 Month Rolling (000's) | 1,429 | 1,446 | (1)% | N/A | N/A |
For the Three-Month | For the Nine-Month | |||||||||||||||
Periods Ended | Periods Ended | |||||||||||||||
October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||||||||||
Adjusted EBITDA (a) | $ | 2,529 | $ | 169 | $ | 9,790 | $ | 4,279 | ||||||||
Less: | ||||||||||||||||
Executive and management transition costs | (568 | ) | (754 | ) | (4,411 | ) | (3,549 | ) | ||||||||
Distribution facility consolidation and technology upgrade costs | (150 | ) | (294 | ) | (530 | ) | (1,266 | ) | ||||||||
Shareholder Rights Plan costs | — | (82 | ) | — | (446 | ) | ||||||||||
Non-cash share-based compensation expense | (797 | ) | (762 | ) | (1,432 | ) | (2,138 | ) | ||||||||
EBITDA (as defined) | $ | 1,014 | $ | (1,723 | ) | $ | 3,417 | $ | (3,120 | ) | ||||||
A reconciliation of EBITDA to net loss is as follows: | ||||||||||||||||
EBITDA (as defined) | $ | 1,014 | $ | (1,723 | ) | $ | 3,417 | $ | (3,120 | ) | ||||||
Adjustments: | ||||||||||||||||
Depreciation and amortization | (3,093 | ) | (2,559 | ) | (9,204 | ) | (7,265 | ) | ||||||||
Interest income | 3 | 2 | 7 | 6 | ||||||||||||
Interest expense | (1,586 | ) | (690 | ) | (4,397 | ) | (1,957 | ) | ||||||||
Income taxes | (205 | ) | (205 | ) | (615 | ) | (615 | ) | ||||||||
Net loss | $ | (3,867 | ) | $ | (5,175 | ) | $ | (10,792 | ) | $ | (12,951 | ) |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share (1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | ||||||||||
July 31, 2016 through August 27, 2016 | — | N/A | — | $ | — | |||||||||
August 28, 2016 through October 1, 2016 | — | N/A | — | $ | — | |||||||||
October 2, 2016 through October 29, 2016 | 3,601 | $ | 2.17 | — | $ | — | ||||||||
Total | 3,601 | $ | 2.17 | — | $ | — |
EVINE Live Inc. | |
November 30, 2016 | /s/ ROBERT ROSENBLATT |
Robert Rosenblatt | |
Chief Executive Officer (Principal Executive Officer) | |
November 30, 2016 | /s/ TIMOTHY A. PETERMAN |
Timothy A. Peterman | |
Executive Vice President, Chief Financial Officer (Principal Financial Officer) |
Exhibit No. | Description | Manner of Filing | ||
3.1 | Amended and Restated Articles of Incorporation of the Registrant | Incorporated by reference (1) | ||
3.2 | Amended and Restated By-Laws, as amended | Incorporated by reference (2) | ||
3.3 | Certificate of Designation of Series A Junior Participating Cumulative Preferred Stock of the Registrant | Incorporated by reference (3) | ||
10.1 | Form of Securities Purchase Agreement, including Form of Warrant and Form of Option, dated September 14, 2016 | Incorporated by reference (4) | ||
10.2 | Form of Amendment to Option issued pursuant to the Securities Purchase Agreement, dated September 14, 2016 | Incorporated by reference (5) | ||
10.3 | Seventh Amendment to Revolving Credit, Term Loan and Security Agreement, dated September 7, 2016, among the Registrant, as the lead borrower, certain of its subsidiaries party thereto as borrowers, and PNC Bank National Association, as a lender and agent and certain other lenders | Filed herewith | ||
10.4 | First Amendment to the Term Loan and Credit Facility, dated November 7, 2016, among the Registrant, as the lead borrower, certain of its subsidiaries party thereto as borrowers, the lenders from time to time party thereto and GACP Finance Co., LLC, as agent | Filed herewith | ||
31.1 | Certification | Filed herewith | ||
31.2 | Certification | Filed herewith | ||
32 | Section 1350 Certification of Chief Executive Officer and Chief Financial Officer | Filed herewith | ||
101.INS | XBRL Instance Document | Filed herewith | ||
101.SCH | XBRL Taxonomy Extension Schema | Filed herewith | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | Filed herewith | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | Filed herewith | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase | Filed herewith | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | Filed herewith |
(1) | Incorporated herein by reference to the Registrant's Current Report on Form 8-K, filed on November 18, 2014, File No. 000-20243. |
(2) | Incorporated herein by reference to the Registrant's Current Report on Form 8-K, filed on July 7, 2016, File No. 001-37495. |
(3) | Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed on July 13, 2015, File No. 000-20243. |
(4) | Incorporated herein by reference to the Registrant's Current Report on Form 8-K, filed on September 15, 2016, File No. 001-37495. |
(5) | Incorporated herein by reference to the Registrant's Current Report on Form 8-K, filed on November 11, 2016, File No. 001-37495. |
Fiscal year ending January 31, 2017 | $12,000,000 |
Fiscal year ending on or about January 31, 2018 and each fiscal year thereafter | $10,000,000 plus any amount by which EBITDA for the prior fiscal year exceeds $15,000,000 |
BORROWERS: | EVINE LIVE INC. | |
By: | ___________________________ | |
Name: | Timothy Peterman | |
Title: | Chief Financial Officer | |
VALUEVISION INTERACTIVE, INC. | ||
By: | ___________________________ | |
Name: | Timothy Peterman | |
Title: | Chief Financial Officer | |
VVI FULFILLMENT CENTER, INC. | ||
By: | ___________________________ | |
Name: | Timothy Peterman | |
Title: | Chief Financial Officer | |
VALUEVISION MEDIA ACQUISITIONS, INC. | ||
By: | ___________________________ | |
Name: | Timothy Peterman | |
Title: | Chief Financial Officer | |
VALUEVISION RETAIL, INC. | ||
By: | ___________________________ | |
Name: | Timothy Peterman | |
Title: | Chief Financial Officer | |
NORWELL TELEVISION, LLC | ||
By: | ___________________________ | |
Name: | Timothy Peterman | |
Title: | Chief Financial Officer |
AGENT: | PNC BANK, NATIONAL ASSOCIATION, | |
as Lender and Agent | ||
By: | ___________________________ | |
Sherry Winick, Vice President | ||
Address: 200 South Wacker Drive, Suite 600 | ||
Chicago, Illinois 60606 | ||
LENDERS: | PNC BANK, NATIONAL ASSOCIATION, | |
as Lender and Agent | ||
By: | ___________________________ | |
Sherry Winick, Vice President | ||
Revolving Commitment Percentage: 77.0% | ||
Term Loan Commitment Percentage: 77.0% | ||
THE PRIVATEBANK AND TRUST COMPANY, | ||
as Lender | ||
By: | ___________________________ | |
Name: | Richard Pierce | |
Title: | Managing Director | |
Revolving Commitment Percentage: 23.0% | ||
Term Loan Commitment Percentage: 23.0% |
Fiscal year ending January 31, 2017 | $12,000,000 |
Fiscal year ending on or about January 31, 2018 and each fiscal year thereafter | $10,000,000 plus any amount by which EBITDA for the prior fiscal year exceeds $15,000,000 |
BORROWERS: | EVINE LIVE INC. | |
By: | ___________________________ | |
Name: | Timothy Peterman | |
Title: | Chief Financial Officer | |
VALUEVISION INTERACTIVE, INC. | ||
By: | ___________________________ | |
Name: | Timothy Peterman | |
Title: | Chief Financial Officer | |
VVI FULFILLMENT CENTER, INC. | ||
By: | ___________________________ | |
Name: | Timothy Peterman | |
Title: | Chief Financial Officer | |
VALUEVISION MEDIA ACQUISITIONS, INC. | ||
By: | ___________________________ | |
Name: | Timothy Peterman | |
Title: | Chief Financial Officer | |
VALUEVISION RETAIL, INC. | ||
By: | ___________________________ | |
Name: | Timothy Peterman | |
Title: | Chief Financial Officer | |
NORWELL TELEVISION, LLC | ||
By: | ___________________________ | |
Name: | Timothy Peterman | |
Title: | Chief Financial Officer |
AGENT: | GACP FINANCE CO., LLC as Agent | |
By: | ___________________________ | |
Robert A. Louzan, Managing Director | ||
LENDERS: | GACP I, L.P., as Lender | |
By: | ___________________________ | |
Robert A. Louzan, Managing Director | ||
Address: | ||
GACP I, L.P. | ||
Attn: Robert A. Louzan | ||
73 Old Ridgefield Road, Suite 6 | ||
Wilton, CT 06897 |
1. | I have reviewed this report on Form 10-Q of EVINE Live Inc.; |
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(s) 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 |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
(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 controls over financial reporting. |
/s/ Robert Rosenblatt |
Robert Rosenblatt |
Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this report on Form 10-Q of EVINE Live Inc.; |
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(s) 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 |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
(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 controls over financial reporting. |
/s/ Timothy Peterman |
Timothy Peterman |
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
• | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
• | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | November 30, 2016 | /s/ Robert Rosenblatt |
Robert Rosenblatt | ||
Chief Executive Officer | ||
Date: | November 30, 2016 | /s/ Timothy Peterman |
Timothy Peterman | ||
Executive Vice President and Chief Financial Officer |
Document and Entity Information - USD ($) |
9 Months Ended | ||
---|---|---|---|
Oct. 29, 2016 |
Nov. 28, 2016 |
Jul. 31, 2015 |
|
Document Information [Line Items] | |||
Entity Registrant Name | EVINE Live Inc. | ||
Entity Central Index Key | 0000870826 | ||
Current Fiscal Year End Date | --01-28 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-Q | ||
Document Period End Date | Oct. 29, 2016 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | Q3 | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 64,172,475 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 99,849,546 |
Consolidated Balance Sheets (Parentheticals) - $ / shares |
Oct. 29, 2016 |
Jan. 30, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 400,000 | 400,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 63,503,159 | 57,170,245 |
Common stock, shares outstanding | 63,503,159 | 57,170,245 |
Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
|
Income Statement [Abstract] | ||||
Net sales | $ 151,636 | $ 162,258 | $ 475,695 | $ 481,770 |
Cost of sales | 96,205 | 106,348 | 298,988 | 309,699 |
Gross profit | 55,431 | 55,910 | 176,707 | 172,071 |
Operating expense: | ||||
Distribution and selling | 49,161 | 51,038 | 154,191 | 153,194 |
General and administrative | 5,690 | 5,975 | 17,337 | 18,078 |
Depreciation and amortization | 1,941 | 2,131 | 6,025 | 6,369 |
Executive and management transition costs | 568 | 754 | 4,411 | 3,549 |
Distribution facility consolidation and technology upgrade costs | 150 | 294 | 530 | 1,266 |
Total operating expense | 57,510 | 60,192 | 182,494 | 182,456 |
Operating income (loss) | (2,079) | (4,282) | (5,787) | (10,385) |
Other income (expense): | ||||
Interest income | 3 | 2 | 7 | 6 |
Interest expense | (1,586) | (690) | (4,397) | (1,957) |
Total other expense, net | (1,583) | (688) | (4,390) | (1,951) |
Income (loss) before income taxes | (3,662) | (4,970) | (10,177) | (12,336) |
Income tax (provision) benefit | (205) | (205) | (615) | (615) |
Net income (loss) | $ (3,867) | $ (5,175) | $ (10,792) | $ (12,951) |
Net income (loss) per common share | $ (0.06) | $ (0.09) | $ (0.19) | $ (0.23) |
Net income (loss) per common share — assuming dilution | $ (0.06) | $ (0.09) | $ (0.19) | $ (0.23) |
Weighted average number of common shares outstanding: | ||||
Basic | 60,513,215 | 57,125,435 | 58,317,681 | 56,952,952 |
Diluted | 60,513,215 | 57,125,435 | 58,317,681 | 56,952,952 |
General |
9 Months Ended |
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Oct. 29, 2016 | |
General [Abstract] | |
The Company | General EVINE Live Inc. and its subsidiaries ("we," "our," "us," or the "Company") are collectively a digital commerce company that offers a mix of proprietary, exclusive and name brand merchandise directly to consumers in an engaging and informative shopping experience through TV, online and mobile devices. The Company operates a 24-hour television shopping network, EVINE, which is distributed primarily on cable and satellite systems, through which it offers proprietary, exclusive and name brand merchandise in the categories of jewelry & watches; home & consumer electronics; beauty; and fashion & accessories. Orders are taken via telephone, online and mobile channels. The television network is distributed into approximately 87 million homes, primarily through cable and satellite affiliation agreements and agreements with telecommunications companies such as AT&T and Verizon. Programming is also streamed live online at evine.com and is also available on mobile channels. Programming is also distributed through a Company-owned full power television station in Boston, Massachusetts and through leased carriage on a full power television station in Seattle, Washington. The Company also operates evine.com, a comprehensive digital commerce platform that sells products which appear on its television shopping network as well as an extended assortment of online-only merchandise. The live programming and products are also marketed via mobile devices, including smartphones and tablets, and through the leading social media channels. On November 18, 2014, the Company announced that it had changed its corporate name to EVINE Live Inc. from ValueVision Media, Inc. Effective November 20, 2014, the Company's NASDAQ trading symbol also changed to EVLV from VVTV. The Company transitioned from doing business as "ShopHQ" to "EVINE Live" and evine.com on February 14, 2015. |
Basis of Financial Statement Presentation |
9 Months Ended |
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Oct. 29, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Financial Statement Presentation | Basis of Financial Statement Presentation Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America have been condensed or omitted in accordance with these rules and regulations. The accompanying condensed consolidated balance sheet as of January 30, 2016 has been derived from the Company's audited financial statements for the fiscal year ended January 30, 2016. The information furnished in the interim condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of these financial statements. Although management believes the disclosures and information presented are adequate, these interim condensed consolidated financial statements should be read in conjunction with the Company’s most recent audited financial statements and notes thereto included in its annual report on Form 10-K for the fiscal year ended January 30, 2016. Operating results for the nine-month period ended October 29, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending January 28, 2017. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Fiscal Year The Company's fiscal year ends on the Saturday nearest to January 31. References to years in this report relate to fiscal years, rather than to calendar years. The Company’s most recently completed fiscal year, fiscal 2015, ended on January 30, 2016, and consisted of 52 weeks. Fiscal 2016 will end on January 28, 2017, and will contain 52 weeks. The quarters ended October 29, 2016 and October 31, 2015 each consisted of 13 weeks. Recently Adopted Accounting Standard Updates In April 2015, the Financial Accounting Standards Board issued Simplifying the Presentation of Debt Issuance Costs, Subtopic 835-30 (Accounting Standards Update ("ASU") No. 2015-03). ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying value of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by ASU 2015-03. The Company adopted this standard in the first quarter of fiscal 2016, applying it retrospectively. The consolidated balance sheet as of January 30, 2016 reflects the reclassification of debt issuance costs of $266,000 from other assets to long term credit facilities. The amount of debt issuance costs included in long term credit facilities as of October 29, 2016 was $1.5 million. In August 2015, the FASB issued Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, Subtopic 835-30 (ASU No. 2015-15), which clarifies that absent authoritative guidance in ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the staff of the Securities and Exchange Commission would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the revolving line of credit arrangement, regardless of whether there are any outstanding borrowings on the revolving line of credit arrangement. As of January 30, 2016, debt issuance costs of $694,000 related to our PNC Credit Agreement, revolving line of credit were included within other assets. We continue to include these costs within other assets, amortizing them over the term of the PNC Credit Agreement. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board issued Revenue from Contracts with Customers, Topic 606 (ASU No. 2014-09), which provides a framework for the recognition of revenue, with the objective that recognized revenues properly reflect amounts an entity is entitled to receive in exchange for goods and services. The guidance, also includes additional disclosure requirements regarding revenue, cash flows and obligations related to contracts with customers. In July 2015, the Financial Accounting Standards Board approved a one year deferral of the effective date of ASU 2014-09. The standard will now become effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2016. We are currently evaluating the impact of adopting ASU 2014-09 on our consolidated financial statements. In July 2015, the Financial Accounting Standards Board issued Simplifying the Measurement of Inventory, Topic 330 (ASU No. 2015-11). ASU 2015-11 changes the measurement principle for inventory from the lower of cost or market to lower of cost or net realizable value. The new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2016. We are currently evaluating the impact of adopting ASU 2015-11 on our consolidated financial statements. In November 2015, the Financial Accounting Standards Board issued Balance Sheet Classification of Deferred Taxes, Topic 740 (ASU No. 2015-17). ASU 2015-17 requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as non-current on the balance sheet. The new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted and applied either prospectively or retrospectively. We are currently evaluating the impact of adopting ASU 2015-17 on our consolidated financial statements. In February 2016, the Financial Accounting Standards Board issued Leases, Topic 842 (ASU No. 2016-02). ASU 2016-02 establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective retrospectively for the Company for fiscal years and interim periods beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2016-02 on our consolidated financial statements. In March 2016, the Financial Accounting Standards Board issued Compensation-Stock Compensation, Topic 718 (ASU No. 2016-09). This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. In addition, the ASU also clarifies the statement of cash flows presentation for certain components of share-based awards. The new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2016-09 on our consolidated financial statements. In August 2016, the Financial Accounting Standards Board issued Statement of Cash Flows, Topic 230 (ASU No. 2016-15). This amendment provides guidance on the presentation and classification of specific cash flow items to improve consistency in practice. The new standard is effective retrospectively for the Company for fiscal years and interim periods beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2016-15 on our consolidated financial statements. |
Fair Value Measurements |
9 Months Ended |
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Oct. 29, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements GAAP utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to observable quoted prices (unadjusted) in active markets for identical assets and liabilities (Level 1 measurement), then priority to quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market (Level 2 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). As of October 29, 2016 and January 30, 2016 the Company had $450,000 in Level 2 investments in the form of bank certificates of deposit. The Company's investments in certificates of deposits were measured using inputs based upon quoted prices for similar instruments in active markets and, therefore, were classified as Level 2 investments. As of October 29, 2016 and January 30, 2016 the Company also had long-term variable rate Credit Facilities, classified as Level 2, with carrying values of $86,115,000 and $72,414,000, respectively. As of October 29, 2016 and January 30, 2016, respectively, $2,993,000 and $2,143,000 was classified as current. The fair value of the variable rate Credit Facilities approximates and is based on its carrying value. The Company has no Level 3 investments that use significant unobservable inputs. |
Intangible Assets |
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Intangible Assets | Intangible Assets Intangible assets in the accompanying consolidated balance sheets consisted of the following:
As of January 30, 2016, the Company had an intangible FCC broadcasting license with a carrying value of $12,000,000 and an estimated fair value of $12,900,000. The Company annually reviews its FCC television broadcast license for impairment in the fourth quarter, or more frequently if an impairment indicator is present. The Company estimates the fair value of its FCC television broadcast license primarily by using income-based discounted cash flow models with the assistance of an independent outside fair value consultant. The discounted cash flow models utilize a range of assumptions including revenues, operating profit margin, projected capital expenditures and an unobservable discount rate. The Company also considers comparable asset market and sales data for recent comparable market transactions for standalone television broadcasting stations to assist in determining fair value. The Company concluded that the inputs used in its intangible FCC broadcasting license asset valuation are Level 3 inputs related to this valuation. While the Company believes that its estimates and assumptions regarding the valuation of the license are reasonable, different assumptions or future events could materially affect its valuation. In addition, due to the illiquid nature of this asset, the Company's valuation for this license could be materially different if it were to decide to sell it in the short term which, upon revaluation, could result in a future impairment of this asset. The EVINE trademark asset is included in Other Assets in the accompanying balance sheets. Amortization expense related to the EVINE trademark license was $18,000 for the three-month periods ended October 29, 2016 and October 31, 2015. Amortization expense related to the EVINE trademark license was $61,000 and $43,000 for the nine-month periods ended October 29, 2016 and October 31, 2015, respectively. Estimated amortization expense for fiscal 2016 and each of the subsequent fiscal years is $80,000 and $74,000, respectively. |
Credit Agreements |
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Credit Agreements | Credit Agreements The Company's long-term credit facilities consist of:
PNC Credit Facility On February 9, 2012, the Company entered into a credit and security agreement (as amended through September 7, 2016, the "PNC Credit Facility") with PNC Bank, N.A. ("PNC"), a member of The PNC Financial Services Group, Inc., as lender and agent. The PNC Credit Facility, which includes The Private Bank as part of the facility, provides a revolving line of credit of $90.0 million and provides for a $15 million term loan on which the Company has drawn to fund improvements at the Company's distribution facility in Bowling Green, Kentucky. The PNC Credit Facility also provides an accordion feature that would allow the Company to expand the size of the revolving line of credit by another $25.0 million at the discretion of the lenders and upon certain conditions being met. All borrowings under the PNC Credit Facility mature and are payable on May 1, 2020. Subject to certain conditions, the PNC Credit Facility also provides for the issuance of letters of credit in an aggregate amount up to $6.0 million which, upon issuance, would be deemed advances under the PNC Credit Facility. Maximum borrowings and available capacity under the revolving line of credit under the PNC Credit Facility are equal to the lesser of $90.0 million or a calculated borrowing base comprised of eligible accounts receivable and eligible inventory. The PNC Credit Facility is secured by a first security interest in substantially all of the Company’s personal property, as well as the Company’s real properties located in Eden Prairie, Minnesota and Bowling Green, Kentucky up to $13 million. Under certain circumstances, the borrowing base may be adjusted if there were to be a significant deterioration in value of the Company’s accounts receivable and inventory. The revolving line of credit under the PNC Credit Facility bears interest at LIBOR plus a margin of between 3% and 4.5% based on the Company's trailing twelve-month reported EBITDA (as defined in the PNC Credit Facility) measured quarterly in fiscal 2016 and semi-annually thereafter as demonstrated in its financial statements. The term loan bears interest at either a Base Rate or LIBOR plus a margin consisting of between 4% and 5% on Base Rate term loans and 5% to 6% on LIBOR rate loans based on our annual leverage ratio as demonstrated in its audited financial statements. As of October 29, 2016, the Company had borrowings of $59.9 million under its revolving credit facility. Remaining available capacity under the revolving credit facility as of October 29, 2016 is approximately $16.2 million, and provides liquidity for working capital and general corporate purposes. The PNC Credit Facility also provides for a $15.0 million term loan on which the Company has drawn to fund an expansion and improvements at the Company's distribution facility in Bowling Green, Kentucky. As of October 29, 2016, there was approximately $11.2 million outstanding under the PNC Credit Facility term loan of which $2.1 million was classified as current in the accompanying balance sheet. Principal borrowings under the term loan are to be payable in monthly installments over an 84 month amortization period commencing on January 1, 2015 and are also subject to mandatory prepayment in certain circumstances, including, but not limited to, upon receipt of certain proceeds from dispositions of collateral. Borrowings under the term loan are also subject to mandatory prepayment starting in the fiscal year ended January 30, 2016 in an amount equal to fifty percent (50%) of excess cash flow for such fiscal year, with any such payment not to exceed $2.0 million in any such fiscal year. The PNC Credit Facility is also subject to other mandatory prepayment in certain circumstances. In addition, if the total PNC Credit Facility is terminated prior to maturity, the Company would be required to pay an early termination fee of 1.0% if terminated on or before October 8, 2017, 0.5% if terminated on or before October 8, 2018; and no fee if terminated after October 8, 2018. As of October 29, 2016, the imputed effective interest rate on the PNC term loan was 7.3%. Interest expense recorded under the PNC Credit Facility for the three- and nine-month periods ended October 29, 2016 was $997,000 and $2,864,000, respectively, and $684,000 and $1,945,000 for the three- and nine-month periods ended October 31, 2015, respectively. The PNC Credit Facility contains customary covenants and conditions, including, among other things, maintaining a minimum of unrestricted cash plus facility availability of $10.0 million at all times and limiting annual capital expenditures. As our unused line availability was greater than $10.0 million at October 29, 2016, no additional cash was required to be restricted. Certain financial covenants, including minimum EBITDA levels (as defined in the PNC Credit Facility) and a minimum fixed charge coverage ratio of 1.1 to 1.0, become applicable only if unrestricted cash plus facility availability falls below $18.0 million. As of October 29, 2016, the Company's unrestricted cash plus facility availability was $55.8 million and the Company was in compliance with applicable financial covenants of the PNC Credit Facility and expects to be in compliance with applicable financial covenants over the next twelve months. In addition, the PNC Credit Facility places restrictions on the Company’s ability to incur additional indebtedness or prepay existing indebtedness, to create liens or other encumbrances, to sell or otherwise dispose of assets, to merge or consolidate with other entities, and to make certain restricted payments, including payments of dividends to common shareholders. Costs incurred to obtain amendments to the PNC Credit Facility totaling $1,181,000 and unamortized costs incurred to obtain the original PNC Credit Facility totaling $466,000 have been deferred and are being expensed as additional interest over the five-year term of the PNC Credit Facility. Great American Capital Partners Credit Agreement On March 10, 2016, the Company entered into a term loan credit and security agreement (as amended on November 7, 2016, the "GACP Credit Agreement") with GACP Finance Co., LLC ("GACP") for a term loan of $17.0 million. Proceeds from the GACP Credit Agreement will be used to provide for working capital and general corporate purposes and to help strengthen the Company's total liquidity position. The term loan under the GACP Credit Agreement (the "GACP Term Loan") is secured on a first lien priority basis by the proceeds of any sale of the Company's Boston television station FCC license and on a second lien priority basis by the Company's accounts receivable, equipment, inventory and certain real estate as well as other assets as described in the GACP Credit Agreement. The Company has also pledged the stock of certain subsidiaries to secure such obligations on a second lien priority basis. The GACP Credit Agreement matures on March 9, 2021. The GACP Term Loan bears interest at either (i) a fixed rate based on the greater of LIBOR for interest periods of one, two or three months or 1% plus a margin of 11.0%, or (ii) a daily floating Alternate Base Rate plus a margin of 10.0%. As of October 29, 2016, the imputed effective interest rate on the GACP term loan was 14.0%. Principal borrowings under the GACP Term Loan are to be payable in consecutive monthly installments of $70,833 each, commencing on April 1, 2016, with a final installment due at the end of the five-year term equal to the aggregate principal amount of all loans outstanding on such date. The GACP Term Loan is also subject to mandatory prepayment in certain circumstances, including, but without limitation, from the proceeds of the sale of collateral assets and from 50% of annual excess cash flow as defined in the GACP Credit Agreement. The GACP Term Loan can be prepaid voluntarily at any time and, if terminated prior to maturity, the Company would be required to pay an early termination fee of 3.0% if terminated on or before March 10, 2017; 2.0% if terminated on or before March 10, 2018; 1.0% if terminated on or before March 10, 2019; and no fee if terminated after March 10, 2019. Interest expense recorded under the GACP Credit Agreement was $585,000 and $1,519,000 for the three and nine-month periods ended October 29, 2016. The GACP Credit Agreement contains customary covenants and conditions, including, among other things, maintaining a minimum of unrestricted cash plus revolving line of credit availability under the PNC Credit Facility of $10.0 million at all times and limiting annual capital expenditures. Certain financial covenants, including minimum EBITDA levels (as defined in the GACP Credit Agreement) and a minimum fixed charge coverage ratio of 1.1 to 1.0, become applicable only if unrestricted cash plus revolving line of credit availability under the PNC Credit Facility falls below $18.0 million. In addition, the GACP Credit Agreement places restrictions on the Company’s ability to incur additional indebtedness or prepay existing indebtedness, to create liens or other encumbrances, to sell or otherwise dispose of assets, to merge or consolidate with other entities, and to make certain restricted payments, including payments of dividends to common shareholders. Costs incurred to obtain the GACP Credit Agreement totaling $1,475,000 have been deferred and are being expensed as additional interest over the five-year term of the GACP Credit Agreement. The aggregate maturities of the Company's long-term credit facilities as of October 29, 2016 are as follows:
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Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Shareholders' Equity Private Placement Securities Purchase Agreements On September 14, 2016, the Company entered into private placement securities purchase agreements ("Purchase Agreements") with certain accredited investors to which the Company: (a) sold, in the aggregate, 5,952,381 shares of the Company's common stock at a price of $1.68 per share; (b) issued five-year warrants ("Warrants") to purchase 2,976,190 shares of the Company's common stock at an exercise price of $2.90 per share, and (c) issued an option by which certain investors may purchase additional shares of Company's common stock and additional warrants to purchase shares of common stock ("Options"). The Company received gross proceeds of $10.0 million and incurred approximately $868,000 of issuance costs. The Warrants will expire on September 19, 2021 and are not exercisable until March 19, 2017. The term of each option is six months and expire on March 19, 2017, provided, however, that an option may not be exercised for the first 30 days following issuance. Each option may only be exercised once, in whole or in part, and the future potential investment offering will have a price equal to the five-day volume weighted average price per share of the Company's common stock as of the day immediately prior to exercise. Upon exercise of the Options, two-thirds of the option securities will be issued in the form of common stock, and one-third will be issued in the form of warrants ("Option Warrants"). These Option Warrants will have an exercise price at a 50% premium to the Company's closing stock price one-day prior to the option exercise and will expire five years after issuance. If all of the Warrants, Options and Option Warrants issued by the Company are all exercised, the total shares of common stock issued in connection with this offering cannot be more than approximately 19.99% of the Company's total issued and outstanding shares following such exercises. The Company allocated the $10 million proceeds of the stock offering to each of the issued freestanding financial instruments based on their fair value at the time of issuance. The Warrants are indexed to the Company's publicly traded stock and were classified as equity. As a result, the portion of the proceeds allocated to the fair value of the Warrants was recorded as an increase to additional paid-in capital. The fair value of the Options was determined to be nominal. The par value of the shares issued was recorded within common stock, with the remainder of the proceeds, less offering costs, recorded as additional paid in capital in the Company's balance sheet. The Company plans to use the proceeds for general working capital purposes. As part of the Purchase Agreements, the Company agreed to register the shares of common stock sold in the private placement and the shares of common stock issuable upon exercise of the Warrants, Options and Option Warrants. Specifically, the Company agreed to (i) file with the Securities and Exchange Commission a shelf registration statement with respect to the resale of the registrable securities within 30 days after the closing date; (ii) use commercially reasonable efforts to have the shelf registration statement declared effective by the SEC as soon as possible after the initial filing, and in any event no later than 90 days after the closing date (or 120 days in the event of a full review of the shelf registration statement by the SEC); and (iii) keep the shelf registration statement effective until the earlier of the second anniversary of the closing or such time as all registrable securities may be sold pursuant to Rule 144 under the Securities Act of 1933, without the need for current public information or other restriction. The Company has filed a registration statement on Form S-3 to register the common stock sold in the private placement and issuable upon exercise of the Warrants and Options. On November 10, 2016, two investors exercised their Options. This exercise resulted in our issuance, in the aggregate, of (a) 667,746 shares of our common stock at a price of $1.94 per share, resulting in aggregate proceeds of $1.3 million; and (b) five-year warrants to purchase an additional 333,873 shares of our common stock at an exercise price of $3.00 per share expiring on November 10, 2021. Stock-Based Compensation - Stock Option Awards Compensation is recognized for all stock-based compensation arrangements by the Company. Stock-based compensation expense for the third quarters of fiscal 2016 and fiscal 2015 related to stock option awards was $119,000 and $317,000, respectively. Stock-based compensation expense for the first nine months of fiscal 2016 and fiscal 2015 related to stock option awards was $374,000 and $904,000, respectively. The Company has not recorded any income tax benefit from the exercise of stock options due to the uncertainty of realizing income tax benefits in the future. As of October 29, 2016, the Company had one omnibus stock plan for which stock awards can be currently granted: the 2011 Omnibus Incentive Plan that provides for the issuance of up to 9,500,000 shares of the Company's stock. The 2004 Omnibus Stock Plan expired on June 22, 2014. No further awards may be made under the 2004 Omnibus Plan, but any award granted under the 2004 Omnibus Plan and outstanding on June 22, 2014 will remain outstanding in accordance with its terms. The 2001 Omnibus Stock Plan expired on June 21, 2011. No further awards may be made under the 2001 Omnibus Plan, but any award granted under the 2001 Omnibus Plan and outstanding on June 21, 2011 will remain outstanding in accordance with its terms. The 2011 plan is administered by the human resources and compensation committee of the board of directors and provides for awards for employees, directors and consultants. All employees and directors of the Company and its affiliates are eligible to receive awards under the plan. The types of awards that may be granted under this plan include restricted and unrestricted stock, restricted stock units, incentive and nonstatutory stock options, stock appreciation rights, performance units, and other stock-based awards. Incentive stock options may be granted to employees at such exercise prices as the human resources and compensation committee may determine but not less than 100% of the fair market value of the underlying stock as of the date of grant. No incentive stock option may be granted more than 10 years after the effective date of the respective plan's inception or be exercisable more than 10 years after the date of grant. Options granted to outside directors are nonstatutory stock options with an exercise price equal to 100% of the fair market value of the underlying stock as of the date of grant. With the exception of market-based options, options granted generally vest over three years in the case of employee stock options and vest immediately on the date of grant in the case of director options, and have contractual terms of 10 years from the date of grant. The fair value of each time-based vesting option award is estimated on the date of grant using the Black-Scholes option pricing model that uses assumptions noted in the following table. Expected volatilities are based on the historical volatility of the Company's stock. Expected term is calculated using the simplified method taking into consideration the option's contractual life and vesting terms. The Company uses the simplified method in estimating its expected option term because it believes that historical exercise data cannot be accurately relied upon at this time to provide a reasonable basis for estimating an expected term due to the extreme volatility of its stock price and the resulting unpredictability of its stock option exercises. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected dividend yields were not used in the fair value computations as the Company has never declared or paid dividends on its common stock and currently intends to retain earnings for use in operations.
A summary of the status of the Company’s stock option activity as of October 29, 2016 and changes during the nine months then ended is as follows:
The following table summarizes information regarding stock options outstanding at October 29, 2016:
The weighted average grant-date fair value of options granted in the first nine-months of fiscal 2016 and fiscal 2015 was $0.94 and $3.95, respectively. The total intrinsic value of options exercised during the first nine-months of fiscal 2016 and fiscal 2015 was $0 and $1,441,000, respectively. As of October 29, 2016, total unrecognized compensation cost related to stock options was $1,215,000 and is expected to be recognized over a weighted average expected life of approximately 2.4 years. Stock-Based Compensation - Restricted Stock Awards Compensation expense recorded for the third quarter of fiscal 2016 and fiscal 2015 relating to restricted stock grants was $678,000 and $445,000, respectively. Compensation expense recorded for the first nine months of fiscal 2016 and fiscal 2015 relating to restricted stock grants was $1,058,000 and $1,234,000, respectively. As of October 29, 2016, there was $1,899,000 of total unrecognized compensation cost related to non-vested restricted stock grants. That cost is expected to be recognized over a weighted average expected life of 1.8 years. The total fair value of restricted stock vested during the first nine months of fiscal 2016 and fiscal 2015 was $653,000 and $249,000, respectively. During the third quarter of fiscal 2016, Bob Rosenblatt was appointed as permanent Chief Executive Officer and entered into an executive employment agreement. In conjunction with the employment agreement, the Company granted, to Mr. Rosenblatt, 231,799 shares of market-based restricted stock performance units as part of the Company's long-term incentive program. The number of restricted stock units earned is based on the Company's total shareholder return ("TSR") relative to a group of industry peers over a three-year performance measurement period. The total grant date fair value was estimated to be $422,000, or $1.82 per share and is being amortized over the three-year performance period. Grant date fair values were determined using a Monte Carlo valuation model based on assumptions, which included a weighted average risk-free interest rate of 0.76%, a weighted average expected life of three years and an implied volatility of 77%. The percent of the target market-based performance vested restricted stock unit award that will be earned based on the Company's TSR relative to the peer group is as follows:
On August 18, 2016 the Company granted an additional 625,000 shares of restricted stock in conjunction with Mr. Rosenblatt's employment agreement. The restricted stock award will vest in three tranches. Tranche 1 (one-third of the shares subject to the award) vested on the date of grant. Tranche 2 (one-third) will vest on the date the Company's average closing stock price for 20 consecutive trading days equals or exceeds $4.00 per share and the executive has been continuously employed at least one year. Tranche 3 (one-third) will vest on the date the Company's average closing stock price for 20 consecutive trading days equals or exceeds $6.00 per share and the executive has been continuously employed at least two years. The vesting of the second and third tranches can occur any time on or before the tenth anniversary of the grant date. The total grant date fair value was estimated to be $958,000 and is being amortized over the derived service periods for each tranche. Grant date fair values and derived service periods for each tranche were determined using a Monte Carlo valuation model based on assumptions, which included a weighted average risk-free interest rate of 1.5%, a weighted average expected life of 1.2 years and an implied volatility of 86% and were as follows for each tranche:
During the third quarter of fiscal 2016, the Company also granted a total of 34,563 shares of time-based restricted stock awards to certain key employees as part of the Company's long-term incentive program. The restricted stock will vest in three equal annual installments beginning in August 2017. The aggregate market value of the restricted stock at the date of the award was $57,000 and is being amortized as compensation expense over the three-year vesting period. During the third quarter of fiscal 2016, the Company also granted a total of 28,119 shares of restricted stock to a board member as part of the Company's annual director compensation program. This restricted stock award vests on the day immediately preceding the next annual meeting of shareholders following the date of grant. The aggregate market value of the restricted stock at the date of the award was $51,000 and is being amortized as director compensation expense over the vesting period. During the second quarter of fiscal 2016, the Company granted a total of 167,142 shares of restricted stock to six board members as part of the Company's annual director compensation program. Each restricted stock award vests on the day immediately preceding the next annual meeting of shareholders following the date of grant. The aggregate market value of the restricted stock at the date of the award was $292,000 and is being amortized as director compensation expense over the twelve-month vesting period. During the second quarter of fiscal 2016, the Company also granted a total of 60,916 shares of time-based restricted stock awards to certain key employees as part of the Company's long-term incentive program. The restricted stock will vest in three equal annual installments beginning in July 2017. The aggregate market value of the restricted stock at the date of the award was $78,000 and is being amortized as compensation expense over the three-year vesting period. During the first quarter of fiscal 2016, the Company granted a total of 188,991 shares of time-based restricted stock awards to certain key employees as part of the Company's long-term incentive program. The restricted stock will vest in three equal annual installments beginning March 28, 2017. The aggregate market value of the restricted stock at the date of the award was $187,101 and is being amortized as compensation expense over the three-year vesting period. During the first quarter of fiscal 2016, the Company also granted a total of 179,156 shares of market-based restricted stock performance units to certain executives as part of the Company's long-term incentive program. The number of restricted stock units earned is based on the Company's TSR relative to a group of industry peers over a three-year performance measurement period. The total grant date fair value was estimated to be $223,571, or $0.98 - $1.72 per share and is being amortized over the three-year performance period. Grant date fair values were determined using a Monte Carlo valuation model based on assumptions, which included a weighted average risk-free interest rate of 0.9% - 1.0%, a weighted average expected life of three years and an implied volatility of 71% - 73%. The percent of the target market-based performance vested restricted stock unit award that will be earned based on the Company's TSR relative to the peer group is as follows:
During the third quarter of fiscal 2015, the Company granted a total of 32,000 shares of time-based restricted stock awards to certain key employees as part of the Company's long-term incentive program. The restricted stock will vest in three equal annual installments beginning October 1, 2016. The aggregate market value of the restricted stock at the date of the award was $80,640 and is being amortized as compensation expense over the three-year vesting period. During the second quarter of fiscal 2015, the Company granted a total of 182,334 shares of restricted stock to eight non-management board members as part of the Company's annual director compensation program. Each restricted stock award vests on the day immediately preceding the next annual meeting of shareholders following the date of grant. The aggregate market value of the restricted stock at the date of the award was $520,000 was being amortized as director compensation expense over the twelve-month vesting period. During the second quarter of fiscal 2015, the Company also granted a total of 26,810 shares of time-based restricted stock awards to certain key employees as part of the Company's long-term incentive program. The restricted stock will vest in three equal annual installments beginning in May 2016. The aggregate market value of the restricted stock at the date of the award was $158,000 and is being amortized as compensation expense over the three-year vesting period. During the first quarter of fiscal 2015, the Company granted a total of 67,786 shares of time-based restricted stock awards to certain key employees as part of the Company's long-term incentive program. The restricted stock will vest in three equal annual installments beginning March 20, 2016. The aggregate market value of the restricted stock at the date of the award was $417,593 and is being amortized as compensation expense over the three-year vesting period. During the first quarter of fiscal 2015, the Company also granted a total of 106,963 shares of market-based restricted stock performance units to certain executives as part of the Company's long-term incentive program. The number of restricted stock units earned is based on the Company's TSR relative to a group of industry peers over a three-year performance measurement period. The total grant date fair value was estimated to be $776,865, or $7.26 per share and is being amortized over the three-year performance period. Grant date fair values were determined using a Monte Carlo valuation model based on assumptions, which included a weighted average risk-free interest rate of 0.9%, a weighted average expected life of three years and an implied volatility of 54% - 55%. The percent of the target market-based performance vested restricted stock unit award that will be earned based on the Company's TSR relative to the peer group is as follows:
A summary of the status of the Company’s non-vested restricted stock activity as of October 29, 2016 and changes during the nine-month period then ended is as follows:
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Net Loss Per Common Share (Notes) |
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Net Income (Loss) Per Common Share | Net Loss Per Common Share Basic net loss per share is computed by dividing reported loss by the weighted average number of shares of common stock outstanding for the reported period. Diluted income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock of the Company during reported periods. A reconciliation of net loss per share calculations and the number of shares used in the calculation of basic loss per share and diluted loss per share is as follows:
(a) The net loss for the three and nine-month periods ended October 29, 2016 includes costs related to executive and management transition of $568,000 and $4,411,000, respectively, and distribution facility consolidation and technology upgrade costs totaling $150,000 and $530,000, respectively. The net loss for the three and nine-month periods ended October 31, 2015 includes costs related to executive and management transition of $754,000 and $3,549,000, respectively, and distribution facility consolidation and technology upgrade costs totaling $294,000 and $1,266,000, respectively. (b) For the three and nine-month periods ended October 29, 2016, approximately 796,000 and 58,000, respectively, incremental in-the-money potentially dilutive common shares have been excluded from the computation of diluted earnings per share, as the effect of their inclusion would be antidilutive. For the three and nine-month periods ended October 31, 2015, approximately -0- and 71,000, respectively, incremental in-the-money potentially dilutive common shares have been excluded from the computation of diluted earnings per share, as the effect of their inclusion would be antidilutive. |
Business Segments and Sales by Product Group |
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Business Segments and Sales by Product Group | Business Segments and Sales by Product Group The Company has one reporting segment, which encompasses its digital commerce retailing. The Company markets, sells and distributes its products to consumers primarily through its digital commerce television, online website evine.com and mobile platforms. The Company's television shopping, online and mobile platforms have similar economic characteristics with respect to products, product sourcing, vendors, marketing and promotions, gross margins, customers, and methods of distribution. In addition, the Company believes that its television shopping program is a key driver of traffic to both the evine.com website and mobile applications whereby many of the online sales originate from customers viewing the Company's television program and then place their orders online or through mobile devices. All of the Company's sales are made to customers residing in the United States. The chief operating decision maker is the Chief Executive Officer of the Company. Information on net sales by significant product groups are as follows (in thousands):
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Income Taxes |
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Oct. 29, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes At January 30, 2016, the Company had federal net operating loss carryforwards ("NOLs") of approximately $312 million, and state NOLs of approximately $200 million which are available to offset future taxable income. The Company's federal NOLs expire in varying amounts each year from 2023 through 2035 in accordance with applicable federal tax regulations and the timing of when the NOLs were incurred. In the first quarter of fiscal 2011, the Company had a change in ownership (as defined in Section 382 of the Internal Revenue Code) as a result of the issuance of common stock coupled with the redemption of all the Series B Preferred Stock held by GE Equity. Sections 382 and 383 limit the annual utilization of certain tax attributes, including NOL carryforwards, incurred prior to a change in ownership. Currently, the limitations imposed by Sections 382 and 383 are not expected to impair the Company's ability to fully realize its NOLs; however, the annual usage of NOLs incurred prior to the change in ownership is limited. In addition, if the Company were to experience another ownership change, as defined by Sections 382 and 383, its ability to utilize its NOLs could be further substantially limited and depending on the severity of the annual NOL limitation, the Company could permanently lose its ability to use a significant amount of its accumulated NOLs. The Company currently has recorded a full valuation allowance for its net deferred tax assets. The ultimate realization of these deferred tax assets and related limitations depend on the ability of the Company to generate sufficient taxable income in the future, as well as the timing of such income. For both the third quarters of fiscal 2016 and fiscal 2015, the income tax provision included a non-cash tax charge of approximately $197,000 relating to changes in the Company's long-term deferred tax liability related to the tax amortization of the Company's indefinite-lived intangible FCC license asset that is not available to offset existing deferred tax assets in determining changes to our income tax valuation allowance. For the first nine-months of fiscal 2016 and fiscal 2015, the income tax provision included a non-cash charge of approximately $592,000 and $591,000, respectively. The Company expects the continued tax amortization of its indefinite-lived intangible asset and resulting book versus tax asset carrying value difference to result in approximately $197,000 of additional non-cash income tax expense over the remainder of fiscal 2016. Shareholder Rights Plan During the second quarter of fiscal 2015, the Company adopted a Shareholder Rights Plan to preserve the value of certain deferred tax benefits, including those generated by net operating losses. On July 10, 2015, the Company declared a dividend distribution of one purchase right (a “Right”) for each outstanding share of the Company’s common stock to shareholders of record as of the close of business on July 23, 2015 and issuable as of that date, and on July 13, 2015, the Company entered into a Shareholder Rights Plan (the “Plan”) with Wells Fargo Bank, N.A., a national banking association, with respect to the Rights. Except in certain circumstances set forth in the Plan, each Right entitles the holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Cumulative Preferred Stock, $0.01 par value, of the Company (“Preferred Stock” and each one one-thousandth of a share of Preferred Stock, a “Unit”) at a price of $9.00 per Unit. The Rights initially trade together with the common stock and are not exercisable. Subject to certain exceptions specified in the Plan, the Rights will separate from the common stock and become exercisable following (i) the tenth calendar day after a public announcement or filing that a person or group has become an “Acquiring Person,” which is defined as a person who has acquired, or obtained the right to acquire, beneficial ownership of 4.99% or more of the common stock then outstanding, subject to certain exceptions, or (ii) the tenth calendar day (or such later date as may be determined by the board of directors) after any person or group commences a tender or exchange offer, the consummation of which would result in a person or group becoming an Acquiring Person. If a person or group becomes an Acquiring Person, each Right will entitle its holders (other than such Acquiring Person) to purchase one Unit at a price of $9.00 per Unit. A Unit is intended to give the shareholder approximately the same dividend, voting and liquidation rights as would one share of Common Stock, and should approximate the value of one share of Common Stock. At any time after a person becomes an Acquiring Person, the board of directors may exchange all or part of the outstanding Rights (other than those held by an Acquiring Person) for shares of common stock at an exchange rate of one share of common stock (and, in certain circumstances, a Unit) for each Right. The Company will promptly give public notice of any exchange (although failure to give notice will not affect the validity of the exchange). The Rights will expire upon certain events described in the Plan, including the close of business on the date of the third annual meeting of shareholders following the last annual meeting of shareholders of the Company at which the Plan was most recently approved by shareholders, unless the Plan is re-approved by shareholders at that third annual meeting of shareholders. However, in no event will the Plan expire later than the close of business on July 13, 2025. The Plan was approved by the Company’s shareholders at the 2016 annual meeting of shareholders. Until the close of business on the tenth calendar day after the day a public announcement or a filing is made indicating that a person or group has become an Acquiring Person, the Company may in its sole and absolute discretion amend the Rights or the Plan agreement without the approval of any holders of the Rights or shares of common stock in any manner, including without limitation, amendments that increase or decrease the purchase price or redemption price or accelerate or extend the final expiration date or the period in which the Rights may be redeemed. The Company may also amend the Plan after the close of business on the tenth calendar day after the day such public announcement or filing is made to cure ambiguities, to correct defective or inconsistent provisions, to shorten or lengthen time periods under the Plan or in any other manner that does not adversely affect the interests of holders of the Rights. No amendment of the Plan may extend its expiration date. |
Litigation |
9 Months Ended |
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Oct. 29, 2016 | |
Litigation [Abstract] | |
Litigation | Litigation The Company is involved from time to time in various claims and lawsuits in the ordinary course of business. In the opinion of management, the claims and suits individually and in the aggregate will not have a material effect on the Company’s operations or consolidated financial statements. |
Related Party Transactions |
9 Months Ended |
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Oct. 29, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Relationship with GE Equity, Comcast and NBCU Until April 29, 2016 the Company was a party to an amended and restated shareholder agreement, dated February 25, 2009 (the “GE/NBCU Shareholder Agreement”), with GE Capital Equity Investments, Inc. (“GE Equity”) and NBCUniversal Media, LLC (“NBCU”), which provided for certain corporate governance and standstill matters (as described further below). NBCU is an indirect subsidiary of Comcast Corporation (“Comcast”). The Company believes that as of October 29, 2016, the direct equity ownership of NBCU in the Company consists of 7,141,849 shares of common stock, or approximately 11.2% of the Company’s current outstanding common stock. The Company has a significant cable distribution agreement with Comcast and believe that the terms of the agreement are comparable to those with other cable system operators. During the third quarter of fiscal 2016, the Company received a $500,000 cash payment from a wholly owned subsidiary of NBCUniversal for the right to use a specified channel in the Boston, Massachusetts' designated market area. In an SEC filing made on August 18, 2015, GE Equity disclosed that on August 14, 2015, it and ASF Radio, L.P. (“ASF Radio”), an independent third party to us, entered into a Stock Purchase Agreement pursuant to which GE Equity agreed to sell 3,545,049 shares of the Company’s common stock, which is all of the shares GE Equity currently owns, to ASF Radio for $2.15 per share. According to the SEC filing, ASF Radio is an affiliate of Ardian, an independent private equity investment company. The closing of this sale (the “GE/ASF Radio Sale”) occurred on April 29, 2016. In connection with the GE/ASF Radio Sale, the GE/NBCU Shareholder Agreement was terminated and the Company and NBCU entered into a new Shareholder Agreement (the “NBCU Shareholder Agreement”) described below. GE/NBCU Shareholder Agreement The GE/NBCU Shareholder Agreement that was terminated April 29, 2016 provided that GE Equity was entitled to designate nominees for three members of our Board of Directors so long as the aggregate beneficial ownership of GE Equity and NBCU (and their affiliates) was at least equal to 50% of their beneficial ownership as of February 25, 2009 (i.e., beneficial ownership of approximately 8.7 million common shares) (the “50% Ownership Condition”), and two members of our Board of Directors so long as their aggregate beneficial ownership was at least 10% of the shares of “adjusted outstanding common stock,” as defined in the GE/NBCU Shareholder Agreement (the “10% Ownership Condition”). In addition, the GE/NBCU Shareholder Agreement provided that GE Equity may designate any of its director-designees to be an observer of the audit, human resources and compensation, and corporate governance and nominating committees of our Board of Directors. Neither GE Equity nor NBCU currently has, or during fiscal 2016 had, any designees serving on our Board of Directors or committees. The GE/NBCU Shareholder Agreement required that the Company obtain the consent of GE Equity before the Company (i) exceeded certain thresholds relating to the issuance of securities, the payment of dividends, the repurchase or redemption of common stock, acquisitions (including investments and joint ventures) or dispositions, and the incurrence of debt; (ii) entered into any business different than the business in which the Company and our subsidiaries are currently engaged; and (iii) amended our articles of incorporation to adversely affect GE Equity and NBCU (or their affiliates); provided, however, that these restrictions would no longer apply when both (1) GE Equity is no longer entitled to designate three director nominees, and (2) GE Equity and NBCU no longer hold any Series B preferred stock. The Company was also prohibited from taking any action that would cause any ownership interest by us in television broadcast stations from being attributable to GE Equity, NBCU or their affiliates. NBCU Shareholder Agreement On April 29, 2016, the Company entered into the NBCU Shareholder Agreement with NBCU. The NBCU Shareholder Agreement replaced the GE/NBCU Shareholder Agreement. The NBCU Shareholder Agreement provides that as long as NBCU or its affiliates beneficially own at least 5% of our outstanding common stock, NBCU will be entitled to designate one individual to be nominated to the Company’s Board of Directors. In addition, the NBCU Shareholder Agreement provides that NBCU may designate its director designee to be an observer of the audit, human resources and compensation, and corporate governance and nominating committees of our Board of Directors. In addition, the NBCU Shareholder Agreement requires the Company to obtain the consent of NBCU prior to our adoption or amendment of any shareholder’s rights plan or certain other actions that would impede or restrict the ability of NBCU to acquire our voting stock or our taking any action that would result in NBCU being deemed to be in violation of the Federal Communications Commission multiple ownership regulations. Unless NBCU beneficially owns less than 5% or more than 90% of the adjusted outstanding shares of common stock, NBCU may not sell, transfer or otherwise dispose of any securities of the Company subject to limited exceptions for (i) transfers to affiliates, (ii) third party tender offers, (iii) mergers, consolidations and reorganizations and (iv) transfers pursuant to underwritten public offerings or transfers exempt from registration under the Securities Act (provided, in the case of (iv), such transfers do not result in the transferee acquiring beneficial ownership in excess of 20%). Registration Rights Agreement On February 25, 2009, the Company entered into an amended and restated registration rights agreement that, as further amended, provided GE Equity, NBCU and their affiliates and any transferees and assigns, an aggregate of five demand registrations and unlimited piggy-back registration rights. In connection with the GE/ASF Radio Sale, an amendment to the Amended and Restated Registration Rights Agreement was entered into removing GE Equity as a party and adding ASF Radio, L.P. as a party. 2015 Letter Agreement with GE Equity On July 9, 2015, the Company entered into a letter agreement with GE Equity pursuant to which GE Equity consented to our adoption of a Shareholder Rights Plan in consideration for our agreement to provide GE Equity, NBCU and certain of their respective affiliates with exemptions from the Shareholder Rights Plan. GE Equity’s consent was required pursuant to the terms of the GE/NBCU Shareholder Agreement. This discussion is a summary of the terms of the letter agreement. In the letter agreement, the Company agreed that if any of GE Equity, NBCU or any of their respective affiliates that holds shares of our common stock from time to time (each a “Grandfathered Investor”) sells or otherwise transfers shares of our common stock currently owned by such Grandfathered Investor to any third party identified to us in writing (any such third party, an “Exempt Purchaser”), the Company will take all actions necessary under the Shareholder Rights Plan so that such third party will not be deemed an Acquiring Person (as defined in the Shareholder Rights Plan) by virtue of the acquisition of such shares. The Company further agreed that, subject to certain limitations, upon request of any Grandfathered Investor or Exempt Purchaser, and in connection with a transfer by such Grandfathered Investor or Exempt Purchaser of shares of our common stock to an Exempt Purchaser, the Company will enter into an agreement with the acquiring Exempt Purchaser granting such acquiring Exempt Purchaser substantially the same rights as set forth above with respect to any sale of our outstanding shares of common stock to any other third party. Additionally, the Company agreed that without the consent of any Grandfathered Investor that is an affiliate of GE Equity and any Grandfathered Investor that is an affiliate of NBCU, the Company will not (i) amend the Shareholder Rights Plan in any material respect, other than to accelerate the Expiration Date or the Final Expiration Date, (ii) adopt another shareholders’ rights plan or (iii) amend the letter agreement. Director Relationships The Company entered into a service agreement with Newgistics, Inc. ("Newgistics") in fiscal 2004. Newgistics provides offsite customer returns consolidation and delivery services to the Company. The Company's Chief Executive Officer, Robert Rosenblatt, is a member of Newgistics Board of Directors. The Company made payments to Newgistics totaling approximately $1,255,000 and $3,789,000 during the three and nine-month periods ended October 29, 2016, respectively and payments totaling approximately $1,152,000 and $3,563,000 during the three and nine-month periods ended October 31, 2015, respectively. One of the Company's directors, Thomas Beers, has a minority interest in one of the Company's on air food suppliers. The Company made inventory payments to this supplier totaling approximately $412,000 and $1,635,000 during the three and nine-month periods ended October 29, 2016, respectively and payments totaling approximately $2,129,000 and $2,892,000 during the three and nine-month periods ended October 31, 2015, respectively. |
Distribution Facility Expansion, Consolidation & Technology Upgrade (Notes) |
9 Months Ended |
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Oct. 29, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, Schedule of Significant Acquisitions and Disposals [Table Text Block] | Distribution Facility Expansion, Consolidation & Technology Upgrade During fiscal 2014, the Company began a significant operational expansion initiative with respect to overall warehousing capacity and new equipment and system technology upgrades at our Bowling Green, Kentucky distribution facility. During the first quarter of fiscal 2015 the new building was substantially completed and expanded our 262,000 square foot facility to an approximately 600,000 square foot facility. Subsequently, during the second quarter of fiscal 2015, the Company finished the building expansion and moved out of its leased satellite warehouse space. The updated facilities and technology upgrade includes a new high-speed parcel shipping and item sortation system coupled with a new warehouse management system to support our increased level of shipments and a new call center facility to better serve our customers. The new sortation and warehouse management system were phased into production through the first half of fiscal 2016. Total cost of the physical building expansion, new sortation equipment and call center facility was approximately $25 million and was financed with our expanded PNC revolving line of credit and a $15 million PNC term loan. As a result of our distribution facility expansion, consolidation and technology upgrade initiative, the Company incurred approximately $150,000 and $530,000 in incremental expenses during the three and nine month periods ended October 29, 2016, respectively, relating primarily to increased labor and training costs associated with the Company’s warehouse management system migration. For the three and nine month periods ending October 31, 2015, we incurred approximately $294,000 and $1,266,000, respectively, primarily related to increased labor, inventory and other warehousing transportation costs, training costs and increased equipment rental costs associated with: the move into the new expanded warehouse building, the move out of previously leased warehouse space and the preparation of the Company’s expanded facility for the new high-speed parcel shipping and item sortation system and upgraded warehouse management system. |
Executive and Management Transition Costs (Notes) |
9 Months Ended |
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Oct. 29, 2016 | |
Executive Transition Costs [Abstract] | |
Executive Transition Costs [Text Block] | Executive and Management Transition Costs On February 8, 2016, the Company announced the resignation of two executive officers, namely its Chief Executive Officer, and its Executive Vice President - Chief Strategy Officer & Interim General Counsel. In addition, on March 23, 2016, the Company also announced additional actions taken to reduce corporate overhead and other operating costs. On August 18, 2016, the Company announced that Bob Rosenblatt, was appointed permanent Chief Executive Officer, effective immediately and entered into an executive employment agreement with Mr. Rosenblatt. Among other things, the employment agreement provides for a two-year initial term, followed by automatic one-year renewals, an initial base salary of $750,000, annual bonus stipulations, a temporary living expense allowance and participation in the Company's executive relocation program. In conjunction with the employment agreement, the Company granted Mr. Rosenblatt an award of restricted stock units, performance restricted stock units and incentive stock options under the Company's 2011 Omnibus Incentive Plan with an aggregate fair value of $1.8 million. The chief executive officer’s employment agreement also provides for severance in the event of employment termination of (i) 1.5 times the amount of his base salary, plus (ii) one times his target bonus. In the event of a change of control, as defined in the agreement, the severance shall be two times his base salary and two times his target bonus. In conjunction with these executive changes as well as other executive and management terminations made during the first nine months of fiscal 2016, the Company recorded charges to income totaling $568,000 and $4,411,000 for the three and nine-months ended October 29, 2016, respectively, which relate primarily to severance payments to be made as a result of the executive officer terminations and other direct costs associated with the Company's 2016 executive and management transition. On March 26, 2015, the Company announced the termination and departure of three executive officers, namely its Chief Financial Officer, its Senior Vice President and General Counsel, and President. In addition, during the first quarter of fiscal 2015, the Company also announced the hiring of a new Chief Financial Officer and a new Chief Merchandising Officer. In conjunction with these executive changes as well as other management terminations made during the first nine months of fiscal 2015, the Company recorded charges to income of $754,000 and $3,549,000 for the three and nine-months ended October 31, 2015, respectively, which related primarily to severance payments to be made as a result of the executive officer resignations, management terminations and other direct costs associated with the Company's 2015 executive and management transition. |
Basis of Financial Statement Presentation (Policies) |
9 Months Ended |
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Oct. 29, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America have been condensed or omitted in accordance with these rules and regulations. The accompanying condensed consolidated balance sheet as of January 30, 2016 has been derived from the Company's audited financial statements for the fiscal year ended January 30, 2016. The information furnished in the interim condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of these financial statements. Although management believes the disclosures and information presented are adequate, these interim condensed consolidated financial statements should be read in conjunction with the Company’s most recent audited financial statements and notes thereto included in its annual report on Form 10-K for the fiscal year ended January 30, 2016. Operating results for the nine-month period ended October 29, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending January 28, 2017. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. |
Fiscal Year | Fiscal Year The Company's fiscal year ends on the Saturday nearest to January 31. References to years in this report relate to fiscal years, rather than to calendar years. The Company’s most recently completed fiscal year, fiscal 2015, ended on January 30, 2016, and consisted of 52 weeks. Fiscal 2016 will end on January 28, 2017, and will contain 52 weeks. The quarters ended October 29, 2016 and October 31, 2015 each consisted of 13 weeks. |
Recently Adopted Accounting Standard Update | Recently Adopted Accounting Standard Updates In April 2015, the Financial Accounting Standards Board issued Simplifying the Presentation of Debt Issuance Costs, Subtopic 835-30 (Accounting Standards Update ("ASU") No. 2015-03). ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying value of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by ASU 2015-03. The Company adopted this standard in the first quarter of fiscal 2016, applying it retrospectively. The consolidated balance sheet as of January 30, 2016 reflects the reclassification of debt issuance costs of $266,000 from other assets to long term credit facilities. The amount of debt issuance costs included in long term credit facilities as of October 29, 2016 was $1.5 million. In August 2015, the FASB issued Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, Subtopic 835-30 (ASU No. 2015-15), which clarifies that absent authoritative guidance in ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the staff of the Securities and Exchange Commission would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the revolving line of credit arrangement, regardless of whether there are any outstanding borrowings on the revolving line of credit arrangement. As of January 30, 2016, debt issuance costs of $694,000 related to our PNC Credit Agreement, revolving line of credit were included within other assets. We continue to include these costs within other assets, amortizing them over the term of the PNC Credit Agreement. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board issued Revenue from Contracts with Customers, Topic 606 (ASU No. 2014-09), which provides a framework for the recognition of revenue, with the objective that recognized revenues properly reflect amounts an entity is entitled to receive in exchange for goods and services. The guidance, also includes additional disclosure requirements regarding revenue, cash flows and obligations related to contracts with customers. In July 2015, the Financial Accounting Standards Board approved a one year deferral of the effective date of ASU 2014-09. The standard will now become effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2016. We are currently evaluating the impact of adopting ASU 2014-09 on our consolidated financial statements. In July 2015, the Financial Accounting Standards Board issued Simplifying the Measurement of Inventory, Topic 330 (ASU No. 2015-11). ASU 2015-11 changes the measurement principle for inventory from the lower of cost or market to lower of cost or net realizable value. The new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2016. We are currently evaluating the impact of adopting ASU 2015-11 on our consolidated financial statements. In November 2015, the Financial Accounting Standards Board issued Balance Sheet Classification of Deferred Taxes, Topic 740 (ASU No. 2015-17). ASU 2015-17 requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as non-current on the balance sheet. The new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted and applied either prospectively or retrospectively. We are currently evaluating the impact of adopting ASU 2015-17 on our consolidated financial statements. In February 2016, the Financial Accounting Standards Board issued Leases, Topic 842 (ASU No. 2016-02). ASU 2016-02 establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective retrospectively for the Company for fiscal years and interim periods beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2016-02 on our consolidated financial statements. In March 2016, the Financial Accounting Standards Board issued Compensation-Stock Compensation, Topic 718 (ASU No. 2016-09). This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. In addition, the ASU also clarifies the statement of cash flows presentation for certain components of share-based awards. The new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2016-09 on our consolidated financial statements. In August 2016, the Financial Accounting Standards Board issued Statement of Cash Flows, Topic 230 (ASU No. 2016-15). This amendment provides guidance on the presentation and classification of specific cash flow items to improve consistency in practice. The new standard is effective retrospectively for the Company for fiscal years and interim periods beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2016-15 on our consolidated financial statements. |
Intangible Assets (Tables) |
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Schedule of Finite-lived and Infinite-lived Intangible Asset [Table Text Block] | Intangible assets in the accompanying consolidated balance sheets consisted of the following:
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Credit Agreements Credit Facility (Tables) |
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Schedule of Long-term Credit Facilities [Table Text Block] | The Company's long-term credit facilities consist of:
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Schedule of Maturities of Long-term Debt [Table Text Block] | The aggregate maturities of the Company's long-term credit facilities as of October 29, 2016 are as follows:
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Shareholders' Equity (Tables) |
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The fair value of each time-based vesting option award is estimated on the date of grant using the Black-Scholes option pricing model that uses assumptions noted in the following table. Expected volatilities are based on the historical volatility of the Company's stock. Expected term is calculated using the simplified method taking into consideration the option's contractual life and vesting terms. The Company uses the simplified method in estimating its expected option term because it believes that historical exercise data cannot be accurately relied upon at this time to provide a reasonable basis for estimating an expected term due to the extreme volatility of its stock price and the resulting unpredictability of its stock option exercises. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected dividend yields were not used in the fair value computations as the Company has never declared or paid dividends on its common stock and currently intends to retain earnings for use in operations.
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Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of the status of the Company’s stock option activity as of October 29, 2016 and changes during the nine months then ended is as follows:
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Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding [Table Text Block] | The following table summarizes information regarding stock options outstanding at October 29, 2016:
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Restricted Stock Vesting Criteria [Table Text Block] | The percent of the target market-based performance vested restricted stock unit award that will be earned based on the Company's TSR relative to the peer group is as follows:
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Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | A summary of the status of the Company’s non-vested restricted stock activity as of October 29, 2016 and changes during the nine-month period then ended is as follows:
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Net Loss Per Common Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | A reconciliation of net loss per share calculations and the number of shares used in the calculation of basic loss per share and diluted loss per share is as follows:
(a) The net loss for the three and nine-month periods ended October 29, 2016 includes costs related to executive and management transition of $568,000 and $4,411,000, respectively, and distribution facility consolidation and technology upgrade costs totaling $150,000 and $530,000, respectively. The net loss for the three and nine-month periods ended October 31, 2015 includes costs related to executive and management transition of $754,000 and $3,549,000, respectively, and distribution facility consolidation and technology upgrade costs totaling $294,000 and $1,266,000, respectively. (b) For the three and nine-month periods ended October 29, 2016, approximately 796,000 and 58,000, respectively, incremental in-the-money potentially dilutive common shares have been excluded from the computation of diluted earnings per share, as the effect of their inclusion would be antidilutive. For the three and nine-month periods ended October 31, 2015, approximately -0- and 71,000, respectively, incremental in-the-money potentially dilutive common shares have been excluded from the computation of diluted earnings per share, as the effect of their inclusion would be antidilutive. |
Business Segments and Sales by Product Group (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from External Customers by Products and Services [Table Text Block] | Information on net sales by significant product groups are as follows (in thousands):
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General (Details) Households in Millions |
9 Months Ended |
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Oct. 29, 2016
Households
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General [Abstract] | |
Household Broadcast Penetration, Number of Households | 87 |
Basis of Financial Statement Presentation (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Jan. 30, 2016 |
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New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Unamortized Debt Issuance Expense | $ 1,500 | $ 1,500 | ||
Accounting Policies [Abstract] | ||||
Number of weeks in fiscal year | 364 days | 364 days | ||
Number of weeks in fiscal quarter | P13W | P13W | ||
Line of Credit [Member] | Other Assets [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Unamortized Debt Issuance Expense | $ 694 | |||
Term Loan [Member] | Accounting Standards Update 2015-03 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Unamortized Debt Issuance Expense | $ 266 |
Fair Value Measurements (Details) - USD ($) |
Oct. 29, 2016 |
Jan. 30, 2016 |
---|---|---|
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Bank certificates of deposit | $ 450,000 | $ 450,000 |
Long-term variable rate credit facilities | 86,115,000 | 72,414,000 |
Long-term credit facilities, current maturities | 2,993,000 | 2,143,000 |
Level 2 [Member] | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Bank certificates of deposit | 450,000 | 450,000 |
Long-term variable rate credit facilities | 86,115,000 | 72,414,000 |
Level 3 [Member] | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Level 3 investments | $ 0 | $ 0 |
Shareholders' Equity - Stock Option Awards - Stock Grant Volatility (Details) |
9 Months Ended | |
---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
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Equity [Abstract] | ||
Expected Volatility Rate, Minimum | 82.00% | 75.00% |
Expected Volatility Rate, Maximum | 84.00% | 82.00% |
Expected Term, Maximum | 6 years | 6 years |
Risk Free Interest Rate, Minimum | 1.40% | 1.70% |
Risk Free Interest Rate, Maximum | 1.70% | 1.90% |
Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
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Earnings Per Share [Abstract] | ||||
Net income (loss) (a) | $ (3,867) | $ (5,175) | $ (10,792) | $ (12,951) |
Weighted average number of common shares outstanding — Basic | 60,513,215 | 57,125,435 | 58,317,681 | 56,952,952 |
Dilutive effect of stock options, non-vested shares and warrants (b) | 0 | 0 | 0 | 0 |
Weighted average number of common shares outstanding — Diluted | 60,513,215 | 57,125,435 | 58,317,681 | 56,952,952 |
Net income (loss) per common share | $ (0.06) | $ (0.09) | $ (0.19) | $ (0.23) |
Net income (loss) per common share — assuming dilution | $ (0.06) | $ (0.09) | $ (0.19) | $ (0.23) |
Executive and management transition costs | $ 568 | $ 754 | $ 4,411 | $ 3,549 |
Distribution facility consolidation and technology upgrade costs | $ 150 | $ 294 | $ 530 | $ 1,266 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 796,000 | 0 | 58,000 | 71,000 |
Income Taxes (Details) - USD ($) |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jul. 10, 2015 |
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Income Tax Disclosure [Abstract] | |||||||
Federal net operating loss carryforwards | $ 312,000,000 | ||||||
State NOLs | $ 200,000,000 | ||||||
Non-cash income tax provision charge relating to indefinite-lived intangible FCC license | $ 197,000 | $ 197,000 | |||||
Increase (Decrease) in Income Taxes Payable | $ 592,000 | $ 591,000 | |||||
Income Tax Disclosures [Line Items] | |||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | $ 0.01 | ||||
one one-thousandth of a share of Preferred Stock unit price | $ 9.00 | ||||||
Related Party, Ownership Interest in Company | 4.99% | ||||||
Scenario, Forecast [Member] | |||||||
Income Tax Disclosures [Line Items] | |||||||
Deferred Income Tax Expense (Benefit), Remainder of Year | $ 197,000 |
Distribution Facility Expansion, Consolidation & Technology Upgrade (Details) ft² in Thousands |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Oct. 29, 2016
USD ($)
ft²
|
Oct. 31, 2015
USD ($)
|
Oct. 29, 2016
USD ($)
ft²
|
Oct. 31, 2015
USD ($)
|
Jan. 30, 2016
USD ($)
|
Oct. 08, 2015
USD ($)
|
Jan. 31, 2015
ft²
|
|
Distribution Facility Expansion [Line Items] | |||||||
Previous Facility Square Footage | ft² | 262 | ||||||
Expanded Facility Square Footage | ft² | 600 | 600 | |||||
Total cost of the physical building expansion, new sortation equipment and call center facility | $ 25,000,000 | $ 25,000,000 | |||||
Long-term debt | 86,115,000 | 86,115,000 | $ 72,414,000 | ||||
Distribution facility consolidation and technology upgrade costs | 150,000 | $ 294,000 | 530,000 | $ 1,266,000 | |||
PNC Bank, N.A. [Member] | Term Loan [Member] | |||||||
Distribution Facility Expansion [Line Items] | |||||||
Long-term debt | $ 10,972,000 | $ 10,972,000 | $ 12,514,000 | $ 15,000,000 |
Executive and Management Transition Costs (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Aug. 18, 2016 |
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
|
Executive Transition Costs [Abstract] | |||||
Initial base salary | $ 750,000 | ||||
Aggregate fair value of granted award of restricted stock units, performance restricted stock units and incentive stock options at the date of the award | $ 1,800,000 | ||||
Severance Costs | $ 568,000 | $ 754,000 | $ 4,411,000 | $ 3,549,000 |
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