jcg-10q_20180804.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 4, 2018

Or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission

File Number

 

Registrant, State of Incorporation

Address and Telephone Number

 

I.R.S. Employer

Identification No.

333-175075

 

 

 

22-2894486

 

J.CREW GROUP, INC.

(Incorporated in Delaware)

 

770 Broadway

New York, New York 10003

Telephone: (212) 209-2500

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.*     Yes        No   

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes        No   

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer

 

  

Accelerated Filer

 

 

 

 

 

Non-Accelerated Filer

 

  (Do not check if a smaller reporting company)

Smaller Reporting Company

 

 

 

 

 

 

 

 

  

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.        

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes        No   

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock

 

Outstanding at August 24, 2018

Common Stock, $.01 par value per share

 

1,000 shares

*

The Registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, but is not required to file such reports under such sections.

 

 

 

 


 

J.CREW GROUP, INC.

TABLE OF CONTENTS – FORM 10-Q

 

 

 

Page
Number

 

 

 

PART I. FINANCIAL INFORMATION

 

 

 

 

Item 1.

Condensed Consolidated Financial Statements (unaudited):

3

 

 

 

 

Condensed Consolidated Balance Sheets at August 4, 2018 and February 3, 2018

3

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the thirteen weeks ended August 4, 2018 and July 29, 2017

4

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the twenty-six weeks ended August 4, 2018 and July 29, 2017

5

 

 

 

 

Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the twenty-six weeks ended August 4, 2018 and the fifty-three weeks ended February 3, 2018

6

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the twenty-six weeks ended August 4, 2018 and July 29, 2017

7

 

 

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

8

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

 

 

 

Item 3.

Quantitative and Qualitative Disclosure About Market Risk

37

 

 

 

Item 4.

Controls and Procedures

38

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

39

 

 

 

Item 1A.

Risk Factors

39

 

 

 

Item 6.

Exhibits

39

 

 

 

2


 

PART I – FINANCIAL INFORMATION

 

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

J.CREW GROUP, INC.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except share data)

 

 

 

August 4,

2018

 

 

February 3,

2018

 

ASSETS

 

 

 

 

 

(As adjusted)

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

34,742

 

 

$

107,066

 

Merchandise inventories, net

 

 

412,862

 

 

 

292,489

 

Prepaid expenses and other current assets

 

 

107,855

 

 

 

92,348

 

Refundable income taxes

 

 

6,761

 

 

 

1,622

 

Total current assets

 

 

562,220

 

 

 

493,525

 

Property and equipment, net

 

 

256,313

 

 

 

289,441

 

Intangible assets, net

 

 

305,025

 

 

 

308,702

 

Goodwill

 

 

107,900

 

 

 

107,900

 

Other assets

 

 

7,222

 

 

 

6,374

 

Total assets

 

$

1,238,680

 

 

$

1,205,942

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

297,505

 

 

$

232,480

 

Other current liabilities

 

 

161,228

 

 

 

177,206

 

Due to Parent

 

 

39,771

 

 

 

38,210

 

Borrowings under the ABL Facility

 

 

25,300

 

 

 

 

Interest payable

 

 

22,632

 

 

 

21,914

 

Current portion of long-term debt

 

 

29,039

 

 

 

15,670

 

Total current liabilities

 

 

575,475

 

 

 

485,480

 

Long-term debt, net

 

 

1,680,371

 

 

 

1,697,812

 

Lease-related deferred credits, net

 

 

109,166

 

 

 

117,688

 

Deferred income taxes, net

 

 

35,584

 

 

 

27,752

 

Other liabilities

 

 

27,841

 

 

 

30,168

 

Total liabilities

 

 

2,428,437

 

 

 

2,358,900

 

Stockholders’ deficit:

 

 

 

 

 

 

 

 

Common stock $0.01 par value; 1,000 shares authorized, issued and outstanding

 

 

 

 

 

 

Additional paid-in capital

 

 

733,191

 

 

 

733,071

 

Accumulated other comprehensive income (loss)

 

 

497

 

 

 

(2,603

)

Accumulated deficit

 

 

(1,923,445

)

 

 

(1,883,426

)

Total stockholders’ deficit

 

 

(1,189,757

)

 

 

(1,152,958

)

Total liabilities and stockholders’ deficit

 

$

1,238,680

 

 

$

1,205,942

 

 

 

 

 

 

 

 

 

 

See notes to unaudited condensed consolidated financial statements.

 

 

3


 

J.CREW GROUP, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands)

 

 

 

For the

Thirteen

Weeks Ended

August 4, 2018

 

 

For the

Thirteen

Weeks Ended

July 29, 2017

 

Revenues:

 

 

 

 

 

(As adjusted)

 

Net sales

 

$

550,541

 

 

$

544,903

 

Other

 

 

37,032

 

 

 

25,760

 

Total revenues

 

 

587,573

 

 

 

570,663

 

Cost of goods sold, including buying and occupancy costs

 

 

361,572

 

 

 

352,880

 

Gross profit

 

 

226,001

 

 

 

217,783

 

Selling, general and administrative expenses

 

 

192,659

 

 

 

209,111

 

Impairment losses

 

 

 

 

 

3,898

 

Income from operations

 

 

33,342

 

 

 

4,774

 

Interest expense, net

 

 

34,400

 

 

 

22,818

 

Loss before income taxes

 

 

(1,058

)

 

 

(18,044

)

Provision for income taxes

 

 

5,036

 

 

 

434

 

Net loss

 

$

(6,094

)

 

$

(18,478

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

Reclassification of losses on cash flow hedges, net of tax, to earnings

 

 

365

 

 

 

1,682

 

Unrealized loss on cash flow hedges, net of tax

 

 

(201

)

 

 

(497

)

Foreign currency translation adjustments

 

 

(147

)

 

 

777

 

Comprehensive loss

 

$

(6,077

)

 

$

(16,516

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to unaudited condensed consolidated financial statements.

 

4


 

J.CREW GROUP, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands)

 

 

 

For the

Twenty-six

Weeks Ended

August 4, 2018

 

 

For the

Twenty-six

Weeks Ended

July 29, 2017

 

Revenues:

 

 

 

 

 

(As adjusted)

 

Net sales

 

$

1,058,247

 

 

$

1,049,759

 

Other

 

 

69,776

 

 

 

46,671

 

Total revenues

 

 

1,128,023

 

 

 

1,096,430

 

Cost of goods sold, including buying and occupancy costs

 

 

695,214

 

 

 

688,048

 

Gross profit

 

 

432,809

 

 

 

408,382

 

Selling, general and administrative expenses

 

 

393,495

 

 

 

419,594

 

Impairment losses

 

 

6,866

 

 

 

135,055

 

Income (loss) from operations

 

 

32,448

 

 

 

(146,267

)

Interest expense, net of interest income

 

 

67,382

 

 

 

43,254

 

Loss before income taxes

 

 

(34,934

)

 

 

(189,521

)

Provision (benefit) for income taxes

 

 

5,085

 

 

 

(50,050

)

Net loss

 

$

(40,019

)

 

$

(139,471

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

Reclassification of losses on cash flow hedges, net of tax, to earnings

 

 

1,361

 

 

 

3,546

 

Unrealized gain (loss) on cash flow hedges, net of tax

 

 

2,217

 

 

 

(501

)

Foreign currency translation adjustments

 

 

(478

)

 

 

1,187

 

Comprehensive loss

 

$

(36,919

)

 

$

(135,239

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to unaudited condensed consolidated financial statements.

5


 

J.CREW GROUP, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Deficit

(unaudited)

(in thousands, except shares)

 

 

 

Common stock

 

 

Additional

paid-in

 

 

Accumulated

 

 

Accumulated

other

comprehensive

 

 

Total

stockholders’

 

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit

 

 

income (loss)

 

 

deficit

 

Balance at January 28, 2017 (as adjusted)

 

 

1,000

 

 

$

 

 

$

980,368

 

 

$

(1,760,227

)

 

$

(11,536

)

 

$

(791,395

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(123,199

)

 

 

 

 

 

(123,199

)

Share-based compensation

 

 

 

 

 

 

 

 

2,299

 

 

 

 

 

 

 

 

 

2,299

 

Non-cash contribution to Parent in connection with

   Exchange Offer

 

 

 

 

 

 

 

 

(249,596

)

 

 

 

 

 

 

 

 

(249,596

)

Reclassification of realized losses on cash flow

   hedges, net of tax, to earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,537

 

 

 

6,537

 

Unrealized gain on cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

693

 

 

 

693

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,703

 

 

 

1,703

 

Balance at February 3, 2018 (as adjusted)

 

 

1,000

 

 

$

 

 

$

733,071

 

 

$

(1,883,426

)

 

$

(2,603

)

 

$

(1,152,958

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(40,019

)

 

 

 

 

 

(40,019

)

Share-based compensation

 

 

 

 

 

 

 

 

120

 

 

 

 

 

 

 

 

 

120

 

Reclassification of realized losses on cash flow

   hedges, net of tax, to earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,361

 

 

 

1,361

 

Unrealized gain on cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,217

 

 

 

2,217

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(478

)

 

 

(478

)

Balance at August 4, 2018

 

 

1,000

 

 

$

 

 

$

733,191

 

 

$

(1,923,445

)

 

$

497

 

 

$

(1,189,757

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to unaudited condensed consolidated financial statements.

6


 

J.CREW GROUP, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

 

 

 

For the

Twenty-six

Weeks Ended

August 4, 2018

 

 

For the

Twenty-six

Weeks Ended

July 29, 2017

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

(As adjusted)

 

Net loss

 

$

(40,019

)

 

$

(139,471

)

Adjustments to reconcile to cash flows from operating activities:

 

 

 

 

 

 

 

 

Depreciation of property and equipment

 

 

45,253

 

 

 

49,739

 

Impairment losses

 

 

6,866

 

 

 

135,055

 

Deferred income taxes

 

 

5,508

 

 

 

(52,136

)

Amortization of intangible assets

 

 

3,603

 

 

 

4,558

 

Amortization of deferred financing costs and debt discount

 

 

3,579

 

 

 

2,554

 

Reclassification of hedging losses to earnings

 

 

1,854

 

 

 

5,814

 

Foreign currency transaction (gains) losses

 

 

229

 

 

 

(627

)

Share-based compensation

 

 

120

 

 

 

373

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Merchandise inventories, net

 

 

(120,761

)

 

 

15,067

 

Prepaid expenses and other current assets

 

 

(15,715

)

 

 

6,973

 

Other assets

 

 

(1,214

)

 

 

(543

)

Accounts payable and other liabilities

 

 

41,847

 

 

 

(39,220

)

Federal and state income taxes

 

 

(1,169

)

 

 

2,216

 

Net cash used in operating activities

 

 

(70,019

)

 

 

(9,648

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(19,106

)

 

 

(20,173

)

Net cash used in investing activities

 

 

(19,106

)

 

 

(20,173

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Net borrowings under the ABL Facility

 

 

25,300

 

 

 

 

Quarterly principal repayments of Term Loan Facility

 

 

(7,835

)

 

 

(7,835

)

Proceeds from New Notes, net of discount

 

 

 

 

 

94,090

 

Proceeds from New Term Loan Borrowings, net of discount

 

 

 

 

 

29,400

 

Repayments pursuant to the Term Loan amendment

 

 

 

 

 

(150,456

)

Cost paid in connection with refinancings of debt

 

 

 

 

 

(5,740

)

Net cash provided by (used in) financing activities

 

 

17,465

 

 

 

(40,541

)

Effect of changes in foreign exchange rates on cash and cash equivalents

 

 

(664

)

 

 

562

 

Decrease in cash and cash equivalents

 

 

(72,324

)

 

 

(69,800

)

Beginning balance

 

 

107,066

 

 

 

132,226

 

Ending balance

 

$

34,742

 

 

$

62,426

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

Income taxes paid

 

$

793

 

 

$

825

 

Interest paid

 

$

63,053

 

 

$

41,467

 

Non-cash contribution to Parent in connection with Exchange Offer

 

$

 

 

$

249,596

 

 

 

 

 

 

 

See notes to unaudited condensed consolidated financial statements.


7


 

J.CREW GROUP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the thirteen and twenty-six weeks ended August 4, 2018 and July 29, 2017

(Dollars in thousands, unless otherwise indicated)

 

1. Basis of Presentation  

J.Crew Group, Inc. and its wholly owned subsidiaries (the “Company” or “Group”) were acquired (the “Acquisition”) on March 7, 2011 through a merger with a subsidiary of Chinos Holdings, Inc. (the “Parent”). The Parent was formed by investment funds affiliated with TPG Capital, L.P. (“TPG”) and Leonard Green & Partners, L.P. (“LGP” and together with TPG, the “Sponsors”). Subsequent to the Acquisition, Group became an indirect, wholly owned subsidiary of Parent, which is owned by affiliates of the Sponsors, investors and members of management. Prior to March 7, 2011, the Company operated as a public company with its common stock traded on the New York Stock Exchange.

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. Therefore, these financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2018.

The Company’s fiscal year ends on the Saturday closest to January 31. All references to “fiscal 2018” represent the 52-week fiscal year that will end on February 2, 2019 and to “fiscal 2017” represent the 53-week fiscal year that ended February 3, 2018.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to present fairly in all material respects the Company’s financial position, results of operations and cash flows for the applicable interim periods. Certain prior year amounts have been reclassified to conform to current period presentation. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or for the fiscal year as a whole.

Management is required to make estimates and assumptions about future events in preparing financial statements in conformity with generally accepted accounting principles. These estimates and assumptions affect the amounts of assets, liabilities, revenues and expenses at the date of the unaudited condensed consolidated financial statements. While management believes that past estimates and assumptions have been materially accurate, current estimates are subject to change if different assumptions as to the outcome of future events are made. Management evaluates estimates and judgments on an ongoing basis and predicates those estimates and judgments on historical experience and on reasonable factors. Since future events and their effects cannot be determined with absolute certainty, actual results may differ from the estimates used in preparing the accompanying unaudited condensed consolidated financial statements.

 

2. Revenue Recognition

Overview. The Company generates revenue from three sources: (i) customers who shop in its brick-and-mortar stores, (ii) customers who shop on its websites, and (iii) wholesale customers who buy and resell its merchandise. The Company recognizes revenue at (i) the point-of-sale in brick-and-mortar stores, (ii) an estimated date of receipt by a customer in the e-commerce business, and (iii) the time ownership is transferred in the wholesale business.    

New Pronouncement. At the beginning of fiscal 2018, the Company adopted a pronouncement that clarified the principles of revenue recognition and standardized a comprehensive model for recognizing revenue arising from contracts with customers. Adoption of the new standard impacted the financial statements of the Company as follows:

 

 

Change in the timing of recognition of breakage income associated with its loyalty program;       

 

Change in the timing of recognition of expenses related to direct-response advertising costs;

 

Change in the presentation of the allowance for sales returns to recognize the reserve on a gross basis in the condensed consolidated financial statements, including recording a current asset related to its right to recover products for its sales returns, with an offsetting increase to its liability for returns; and

 

Change in the presentation of income from its private label credit card from a reduction of SG&A to other revenues.           


8


 

Impact of Adoption. The adoption was applied retrospectively to each prior period presented, with the cumulative effect of all fiscal years prior to those periods presented recorded to retained earnings. The cumulative effect recorded as of January 31, 2016 was $5.0 million. The impact of adoption on the condensed consolidated statement of operations for the previous two fiscal years is as follows:  

 

 

For the Year Ended

 

 

 

February 3, 2018

 

 

January 28, 2017

 

 

 

As

reported

 

 

Adjustments

 

 

As

adjusted

 

 

As

reported

 

 

Adjustments

 

 

As

adjusted

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

2,270,190

 

 

$

(2,380

)

 

$

2,267,810

 

 

$

2,359,622

 

 

$

388

 

 

$

2,360,010

 

Other

 

 

99,928

 

 

 

5,957

 

 

 

105,885

 

 

 

65,840

 

 

 

5,745

 

 

 

71,585

 

Total revenues

 

 

2,370,118

 

 

 

3,577

 

 

 

2,373,695

 

 

 

2,425,462

 

 

 

6,133

 

 

 

2,431,595

 

Cost of goods sold, including buying and occupancy costs

 

 

1,477,943

 

 

 

(1,879

)

 

 

1,476,064

 

 

 

1,550,185

 

 

 

120

 

 

 

1,550,305

 

Gross profit

 

 

892,175

 

 

 

5,456

 

 

 

897,631

 

 

 

875,277

 

 

 

6,013

 

 

 

881,290

 

Selling, general and administrative expenses

 

 

870,950

 

 

 

1,731

 

 

 

872,681

 

 

 

818,546

 

 

 

5,744

 

 

 

824,290

 

Impairment losses

 

 

141,187

 

 

 

 

 

 

141,187

 

 

 

7,752

 

 

 

 

 

 

7,752

 

Income (loss) from operations

 

 

(119,962

)

 

 

3,725

 

 

 

(116,237

)

 

 

48,979

 

 

 

269

 

 

 

49,248

 

Interest expense, net

 

 

110,513

 

 

 

 

 

 

110,513

 

 

 

79,359

 

 

 

 

 

 

79,359

 

Loss on refinancings

 

 

 

 

 

 

 

 

 

 

 

435

 

 

 

 

 

 

435

 

Loss before income taxes

 

 

(230,475

)

 

 

3,725

 

 

 

(226,750

)

 

 

(30,815

)

 

 

269

 

 

 

(30,546

)

Benefit for income taxes

 

 

(105,516

)

 

 

1,965

 

 

 

(103,551

)

 

 

(7,301

)

 

 

486

 

 

 

(6,815

)

Net loss

 

$

(124,959

)

 

$

1,760

 

 

$

(123,199

)

 

$

(23,514

)

 

$

(217

)

 

$

(23,731

)

The impact of the adoption on the condensed consolidated statement of operations for the second quarter and the first half of fiscal 2017 is as follows:

 

 

For the

Thirteen

Weeks Ended

July 29, 2017

 

 

For the

Twenty-six

Weeks Ended

July 29, 2017

 

 

 

As reported

 

 

Adjustments

 

 

As adjusted

 

 

As reported

 

 

Adjustments

 

 

As adjusted

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

536,180

 

 

$

8,723

 

 

$

544,903

 

 

$

1,049,359

 

 

$

400

 

 

$

1,049,759

 

Other

 

 

24,726

 

 

 

1,034

 

 

 

25,760

 

 

 

43,513

 

 

 

3,158

 

 

 

46,671

 

Total revenues

 

 

560,906

 

 

 

9,757

 

 

 

570,663

 

 

 

1,092,872

 

 

 

3,558

 

 

 

1,096,430

 

Cost of goods sold, including buying and occupancy costs

 

 

344,274

 

 

 

8,606

 

 

 

352,880

 

 

 

688,004

 

 

 

44

 

 

 

688,048

 

Gross profit

 

 

216,632

 

 

 

1,151

 

 

 

217,783

 

 

 

404,868

 

 

 

3,514

 

 

 

408,382

 

Selling, general and administrative expenses

 

 

210,136

 

 

 

(1,025

)

 

 

209,111

 

 

 

420,558

 

 

 

(964

)

 

 

419,594

 

Impairment losses

 

 

3,898

 

 

 

 

 

 

3,898

 

 

 

135,055

 

 

 

 

 

 

135,055

 

Income (loss) from operations

 

 

2,598

 

 

 

2,176

 

 

 

4,774

 

 

 

(150,745

)

 

 

4,478

 

 

 

(146,267

)

Interest expense, net

 

 

22,818

 

 

 

 

 

 

22,818

 

 

 

43,254

 

 

 

 

 

 

43,254

 

Loss before income taxes

 

 

(20,220

)

 

 

2,176

 

 

 

(18,044

)

 

 

(193,999

)

 

 

4,478

 

 

 

(189,521

)

Provision (benefit) for income taxes

 

 

434

 

 

 

 

 

 

434

 

 

 

(50,050

)

 

 

 

 

 

(50,050

)

Net loss

 

$

(20,654

)

 

$

2,176

 

 

$

(18,478

)

 

$

(143,949

)

 

$

4,478

 

 

$

(139,471

)


9


 

The impact of the adoption on the condensed consolidated balance sheets as of February 3, 2018 and July 29, 2017 is as follows:        

 

 

As of

 

 

 

February 3, 2018

 

 

July 29, 2017

 

 

 

As reported

 

 

Adjustments

 

 

As adjusted

 

 

As reported

 

 

Adjustments

 

 

As adjusted

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

107,066

 

 

$

 

 

$

107,066

 

 

$

62,426

 

 

$

 

 

$

62,426

 

Merchandise inventories, net

 

 

292,489

 

 

 

 

 

 

292,489

 

 

 

299,796

 

 

 

 

 

 

299,796

 

Prepaid expenses and other current assets

 

 

83,228

 

 

 

9,120

 

 

 

92,348

 

 

 

51,261

 

 

 

6,037

 

 

 

57,298

 

Refundable income taxes

 

 

5,807

 

 

 

(4,185

)

 

 

1,622

 

 

 

8,139

 

 

 

(3,644

)

 

 

4,495

 

Total current assets

 

 

488,590

 

 

 

4,935

 

 

 

493,525

 

 

 

421,622

 

 

 

2,393

 

 

 

424,015

 

Property and equipment, net

 

 

289,441

 

 

 

 

 

 

289,441

 

 

 

330,006

 

 

 

 

 

 

330,006

 

Intangible assets, net

 

 

308,702

 

 

 

 

 

 

308,702

 

 

 

313,161