Destination XL Group, Inc. (NASDAQ:DXLG) Q4 2021 Earnings Conference Call March 17, 2022 9:00 AM ET Company Participants Shelly Mokas - Director of Financial Reporting, SEC Compliance Harvey Kanter - CEO and President Peter Stratton - CFO Conference Call Participants Michael Baker - D.A. Davidson Jeremy Hamblin - Craig-Hallum Capital Group Operator Good day, and thank you for standing by. Welcome to the Destination XL Group Fourth Quarter 2021 Earnings Conference Call. At this time all participants are in a ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 29, 2022 (Fiscal 2021) OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 01-34219 DESTINATION XL GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 04-2623104 (State or oth ...

Destination XL Group, Inc. (NASDAQ:DXLG) Q3 2021 Earnings Conference Call November 19, 2021 9:00 AM ET Company Participants Shelly Mokas - Director of Financial Reporting, SEC Compliance Harvey Kanter - Chief Executive Officer and President Peter Stratton - Chief Financial Officer Conference Call Participants Michael Baker - D.A. Davidson Jeremy Hamblin - Craig-Hallum Capital Group Operator Good day, and thank you for standing by. Welcome to the Destination XL Group Third Quarter 2021 Earnings Call. All pa ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Securities registered pursuant to Section 12(b) of the Act. Title of each class Trading symbol(s) Name of each exchange on which registered Common Stock, $0.01 par value DXLG The Nasdaq Stock Market LLC 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 October 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANG ...

Financial Data and Key Metrics Changes - Total sales for Q2 2021 were $138.6 million, compared to $123.2 million in Q2 2019, representing a 21.6% increase over 2019 levels [15][44] - Adjusted EBITDA for Q2 2021 was $29.8 million, compared to $7.1 million in Q2 2019, indicating significant profitability improvement [15][56] - Net income for Q2 2021 was $24.5 million, compared to breakeven in Q2 2019 [15][56] - Gross margin rate was 51.7%, up from 44.3% in Q2 2019, driven by improved merchandise margins and reduced occupancy costs [49][50] Business Line Data and Key Metrics Changes - Comparable sales growth in stores was 13.1% and direct sales growth was 52.2% compared to Q2 2019 [14][44] - Direct sales accounted for 28.1% of total sales in Q2 2021, up from 21.1% in Q2 2019, indicating a shift towards online shopping [19][44] - The direct business showed consistent growth month-over-month, with direct comps of 48.8% in May, 53.4% in June, and 54.6% in July compared to 2019 [19] Market Data and Key Metrics Changes - New customers increased by 28.5% in Q2 2021 compared to the same period in 2019, indicating a strong market share gain [9][30] - The company noted that the Southeast, Midwest, and South Central regions performed exceptionally well, while the Pacific Northwest, Northeast, and Mid-Atlantic regions lagged behind [17][18] Company Strategy and Development Direction - The company is focused on a digital transformation strategy initiated in 2019, which has been crucial in responding to the COVID-19 pandemic [6][8] - The strategic goal is to reposition the DXL brand to be less promotional and more focused on customer experience and fit [27][29] - The company aims to enhance its marketing strategy by increasing inclusivity and personalization in its messaging [34][36] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding future performance, despite ongoing challenges from the COVID-19 pandemic and supply chain issues [11][66] - The company raised its full-year sales and earnings guidance based on strong Q2 performance, expecting sales to range from $490 million to $505 million [62][63] - Management acknowledged the need to improve inventory levels to meet strong consumer demand [23][59] Other Important Information - The company has successfully reduced its total debt to $11 million, the lowest level in years, and ended the quarter with zero balance on its revolving credit facility [58] - The company is working to secure more inventory to meet demand, facing challenges from supply chain disruptions and increased freight costs [25][59] Q&A Session Summary Question: Composition of acceleration in comp trends - Management noted that the increase in same-store sales growth was primarily driven by increased traffic, with slight increases in conversion and average transaction levels [70] Question: Insights on new customer growth - New customer growth is primarily from individuals who have not shopped with DXL before, with significant market share opportunities identified [72] Question: Q3 performance expectations - Management indicated that Q3 performance has been consistent with July trends, with no signs of slowdown in customer engagement [75] Question: Geographic performance differences - Management expects regional performance to normalize over the second half of the year, with improvements anticipated in the Pacific Northwest and Northeast [79] Question: Impact of freight on gross margins - Freight costs are estimated to have a drag of 100 to 200 basis points on margins, but improvements in promotional strategies have more than offset this impact [81] Question: Lease negotiations and savings expectations - Management is optimistic about continuing to generate savings from lease negotiations, although it is becoming more challenging than in previous years [83]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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 July 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 01-34219 DESTINATION XL GROUP, INC. (Exact Name of Registrant as Specified in its Charter) Delaware (State or other jurisdiction of incorporation or organization) 555 T ...

Destination XL Group, Inc. (NASDAQ:DXLG) Q1 2021 Earnings Conference Call May 27, 2021 9:00 AM ET Company Participants Shelly Mokas - Director of Financial Reporting, SEC Compliance Harvey Kanter - President, Chief Executive Officer and Director Peter Stratton - Executive Vice President, Chief Financial Officer and Treasurer Conference Call Participants Eric Beder - SCC Research Alex Silverman - AWM Investments Michael Baker - D.A. Davidson Raphi Savitz - RYS Advisors Operator Ladies and gentlemen, thank yo ...

[PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited consolidated financial information, including statements, MD&A, market risk, and controls [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements.) This section presents the unaudited consolidated financial statements for the quarter ended May 1, 2021, covering balance sheets, income, cash flows, and notes [Consolidated Balance Sheets](index=2&type=section&id=Consolidated%20Balance%20Sheets) This table provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific quarter-end dates | Balance Sheet Highlights (in thousands) | May 1, 2021 (in thousands) | January 30, 2021 (in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $5,843 | $18,997 | | Inventories | $88,390 | $85,028 | | Total current assets | $105,285 | $114,130 | | Total assets | $289,685 | $306,755 | | **Liabilities & Equity** | | | | Borrowings under credit facility | $33,371 | $59,521 | | Total current liabilities | $128,865 | $155,035 | | Long-term debt, net | $16,669 | $14,869 | | Total liabilities | $280,201 | $310,832 | | Total stockholders' equity (deficit) | $9,484 | $(4,077) | [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) This table summarizes the company's financial performance over the quarter, detailing sales, gross profit, operating income, and net income | Income Statement (in thousands, except per share) | Three Months Ended May 1, 2021 (in thousands) | Three Months Ended May 2, 2020 (in thousands) | | :--- | :--- | :--- | | Sales | $111,494 | $57,227 | | Gross profit | $50,833 | $13,214 | | Operating income (loss) | $9,867 | $(40,965) | | Net income (loss) | $8,697 | $(41,726) | | Net income (loss) per share - basic and diluted | $0.14 | $(0.82) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This table details the cash inflows and outflows from operating, investing, and financing activities for the reported periods | Cash Flow Summary (in thousands) | Three Months Ended May 1, 2021 (in thousands) | Three Months Ended May 2, 2020 (in thousands) | | :--- | :--- | :--- | | Net cash provided by (used for) operating activities | $7,765 | $(16,811) | | Net cash used for investing activities | $(803) | $(1,590) | | Net cash provided by (used for) financing activities | $(20,116) | $40,210 | | Net increase (decrease) in cash and cash equivalents | $(13,154) | $21,809 | | Cash and cash equivalents, end of period | $5,843 | $26,147 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail accounting policies, financial items, and COVID-19 impact, noting Q1 2021 results may not be comparable to Q1 2020 - The COVID-19 pandemic adversely affected fiscal 2020 operations, including temporary store closures and furloughs, making Q1 2021 financial results potentially incomparable to Q1 2020[22](index=22&type=chunk) | Disaggregation of Revenue (in thousands) | Q1 2021 (in thousands) | % of Total | Q1 2020 (in thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Store sales | $74,880 | 69.1% | $32,327 | 58.6% | | Direct sales | $33,542 | 30.9% | $22,882 | 41.4% | | **Retail segment** | **$108,422** | | **$55,209** | | | Wholesale segment | $3,072 | | $2,018 | | | **Total Sales** | **$111,494** | | **$57,227** | | - On March 16, 2021, the company refinanced its existing **$15.0 million** FILO loan and secured a new **$17.5 million** FILO loan expiring May 24, 2023, with an **8.5%** interest rate as of May 1, 2021[40](index=40&type=chunk) - On February 5, 2021, the company sold **11,111,111** shares of common stock in a registered direct offering, generating **$5.0 million** in gross proceeds and **$4.4 million** net of costs[51](index=51&type=chunk)[65](index=65&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses Q1 2021 financial results, highlighting strong sales recovery, improved margins, cost savings, and strengthened liquidity [Results of Operations](index=19&type=section&id=Results%20of%20Operations) This section details Q1 2021 operational performance, highlighting sales recovery, improved gross margins, and reduced expenses leading to net income | Key Financial Metrics (in millions, except per share) | Q1 2021 (in millions) | Q1 2020 (in millions) | Q1 2019 (in millions) | | :--- | :--- | :--- | :--- | | Sales | $111.5 | $57.2 | $113.0 | | Gross Margin % | 45.6% | 23.1% | 43.7% | | SG&A % of Sales | 33.3% | 56.1% | 39.5% | | Net Income (Loss) | $8.7 | $(41.7) | $(3.1) | | Adjusted EBITDA | $13.7 | $(18.9) | $4.8 | | Diluted EPS | $0.14 | $(0.82) | $(0.06) | - Strong Q1 2021 performance was driven by accelerated sales, resulting in **3.7%** comparable sales growth versus pre-pandemic Q1 2019, with direct business up **40.7%** while stores were down **6.7%**[62](index=62&type=chunk) - Significant cost structure improvements include over **$16.1 million** in expected savings from restructuring **115** store leases and a **$7.5 million** reduction in SG&A costs compared to Q1 2019[62](index=62&type=chunk) - A restructured promotional strategy, shifting from broad-based deep discounts to targeted, full-priced messaging, significantly reduced markdown dollars and improved the gross margin rate[62](index=62&type=chunk)[63](index=63&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity significantly strengthened in Q1 2021 through a stock offering, debt refinancing, and improved operating cash flow - Free cash flow improved by **$25.4 million** to **$7.0 million** for Q1 2021, compared to **$(18.4) million** for Q1 2020, driven by improved earnings and faster inventory turnover[72](index=72&type=chunk)[79](index=79&type=chunk) | Total Debt Outstanding (in thousands) | May 1, 2021 (in thousands) | | :--- | :--- | | Credit facility (Gross) | $33,560 | | FILO Loan (Gross) | $17,500 | | **Total Gross Debt** | **$51,060** | | Less: Debt Issuance Costs | $(946) | | **Total Net Debt** | **$50,114** | - As of May 1, 2021, the company had **$51.1 million** of unused excess availability under its credit facility, a significant increase from **$16.8 million** at May 2, 2020[65](index=65&type=chunk)[75](index=75&type=chunk) - The company actively manages its store portfolio, having renegotiated **115** store leases since fiscal 2020, projected to yield over **$16.1 million** in savings over lease terms[77](index=77&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk.) The company's primary market risk exposure is interest rate fluctuations on its variable-rate debt, with foreign currency risk deemed immaterial - A sensitivity analysis as of May 1, 2021, indicates a **50 basis point** interest rate increase would result in an approximate **$344,000** annualized increase in interest expense[83](index=83&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded the company's disclosure controls and procedures were effective as of May 1, 2021, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of May 1, 2021, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[84](index=84&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter[85](index=85&type=chunk) [PART II. OTHER INFORMATION](index=26&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information, including legal proceedings, risk factors, and a list of exhibits filed with the report [Item 1. Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings.) The company is subject to ordinary course legal proceedings, which management believes will not materially impact its financial position or results of operations - Management believes the resolution of current legal proceedings will not materially adversely impact the company's future results of operations or financial position[87](index=87&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors.) No material changes have occurred to the risk factors previously disclosed in the company's Fiscal 2020 Annual Report on Form 10-K - No material changes to the risk factors have occurred as previously disclosed in the Fiscal 2020 Annual Report[87](index=87&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits.) This section lists exhibits filed with the Form 10-Q, including employment and credit agreements, stock purchase agreements, and officer certifications

Destination XL Group, Inc. (NASDAQ:DXLG) Q4 2020 Results Earnings Conference Call March 18, 2021 9:00 AM ET Company Participants Shelly Mokas - Director of Financial Reporting, SEC Compliance Harvey Kanter - President, Chief Executive Officer, Director Peter Stratton - Executive Vice President, Chief Financial Officer, Treasurer Conference Call Participants Eric Beder - SCC Research Alex Silverman - AWM Investments Operator Ladies and gentlemen, thank you for standing by and welcome to the Q4 2020 Destinati ...

PART I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Destination XL Group, Inc. is the largest specialty retailer of big & tall men's clothing and shoes, operating an omni-channel model with retail stores, outlet stores, and a significant digital business. - Destination XL Group, Inc. is the largest specialty retailer of big & tall men's clothing and shoes, operating **226 DXL retail stores**, **17 DXL outlet stores**, **46 Casual Male XL retail stores**, **22 Casual Male XL outlet stores**, and a digital business (dxl.com) as of January 30, 2021, also having launched a wholesale business unit in fiscal 2018[9](index=9&type=chunk)[13](index=13&type=chunk) - The big & tall men's clothing market is defined as starting at a waist size of **38" and greater**, and tops sized **1XL and greater**, with opportunities for market share growth from men with **38" to 43" waist sizes** and those with **54" or greater waist sizes**[10](index=10&type=chunk) - The company's fiscal 2021 business strategy focuses on building digital growth, executing targeted marketing, shifting merchandising towards casual wear, rightsizing the store portfolio through lease negotiations, and managing liquidity and debt[14](index=14&type=chunk)[15](index=15&type=chunk) - The company offers over **5,000 styles**, with tops up to **8XL and 8XLT**, bottoms with waist sizes **38" to 70"**, and shoes in sizes **10W to 18W**, emphasizing unique specifications for proper fit[16](index=16&type=chunk) - The direct business grew **14.7%** in fiscal 2020, representing approximately **40.4% of total retail sales**, up from **23.1% in fiscal 2019**, primarily driven by the DXL.com website and app due to increased online shopping during the pandemic[24](index=24&type=chunk) - Approximately **50% of all product needs** were sourced directly in fiscal 2020, with a significant percentage of private-label merchandise manufactured primarily in Southeast Asian countries, reducing dependency on China[35](index=35&type=chunk) Store Locations (as of January 30, 2021) | United States | DXL retail and outlet stores | Casual Male XL retail and outlet stores | | :------------ | :--------------------------- | :-------------------------------------- | | Alabama | 2 | 1 | | Arizona | 6 | — | | Arkansas | — | 1 | | California | 26 | 7 | | Colorado | 3 | 1 | | Connecticut | 3 | 1 | | Delaware | 2 | — | | Florida | 12 | 8 | | Georgia | 4 | 2 | | Idaho | 1 | — | | Illinois | 11 | 4 | | Indiana | 6 | 3 | | Iowa | 3 | 1 | | Kansas | 2 | — | | Kentucky | 3 | — | | Louisiana | 3 | 1 | | Maine | 2 | — | | Maryland | 6 | 3 | | Massachusetts | 5 | 2 | | Michigan | 13 | 1 | | Minnesota | 2 | 2 | | Mississippi | — | 2 | | Missouri | 5 | 2 | | Montana | 1 | — | | Nebraska | 2 | — | | Nevada | 3 | — | | New Hampshire | 3 | — | | New Jersey | 8 | 5 | | New Mexico | 1 | — | | New York | 17 | 1 | | North Carolina | 4 | 4 | | North Dakota | — | 1 | | Ohio | 10 | 1 | | Oklahoma | 2 | — | | Oregon | 2 | 1 | | Pennsylvania | 11 | 6 | | Rhode Island | 1 | — | | South Carolina | 4 | — | | South Dakota | 1 | — | | Tennessee | 7 | 1 | | Texas | 25 | 3 | | Utah | 2 | — | | Vermont | 1 | — | | Virginia | 6 | 2 | | Washington | 5 | — | | West Virginia | — | 1 | | Wisconsin | 5 | — | | **International** | | | | Toronto, Canada | 2 | — | [Item 1A. Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks, primarily from the ongoing COVID-19 pandemic impacting financial results, liquidity, supply chain, and workforce. - The COVID-19 pandemic has adversely affected the company's business, financial results, liquidity, supply chain, and workforce, leading to furloughs, salary reductions, cost restructuring, and lease renegotiations[50](index=50&type=chunk)[51](index=51&type=chunk) - Key operational risks include the ability to execute growth strategies, develop e-commerce and omni-channel initiatives, manage the wholesale segment, and maintain the centralized distribution center, alongside global supply chain disruptions and intense market competition[56](index=56&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk)[65](index=65&type=chunk)[67](index=67&type=chunk) - Financial risks encompass dependence on adequate capital, potential asset impairment charges (especially due to COVID-19), and increased interest costs from the LIBOR transition, with the business being seasonal and generating most operating income in the fourth quarter[55](index=55&type=chunk)[68](index=68&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - Other risks include reliance on third-party manufacturers, vulnerability to security breaches, challenges in predicting fashion trends, potential loss of key trademarks, labor shortages or increased costs, raw material price fluctuations, and complex regulatory compliance[69](index=69&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk)[83](index=83&type=chunk) - Stock-related risks include potential volatility and sporadic trading of common stock on the OTCQX market (following Nasdaq delisting) and transfer restrictions that could inhibit acquisition bids[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk)[88](index=88&type=chunk) [Item 1B. Unresolved Staff Comments](index=20&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC. - No unresolved staff comments[90](index=90&type=chunk) [Item 2. Properties](index=20&type=section&id=Item%202.%20Properties) The company's corporate offices and retail distribution center are located in a 755,992 sq ft building in Canton, Massachusetts, and it operates 311 leased stores across the United States and Canada. - The corporate offices and retail distribution center are located at 555 Turnpike Street, Canton, MA, in a **755,992 gross square foot building** on approximately **27.3 acres**, leased under a twenty-year agreement from January 30, 2006[91](index=91&type=chunk) - As of January 30, 2021, the company operated a total of **311 leased stores**, comprising **226 DXL retail stores**, **17 DXL outlet stores**, **46 Casual Male XL retail stores**, and **22 Casual Male XL outlet stores**, located in the United States and Toronto, Canada[91](index=91&type=chunk) - Store sites are selected based on demographic profiles, types of surrounding retailers, store layout, and financial models projecting profitability, including sales per square foot, estimated occupancy costs, and return on investment requirements[91](index=91&type=chunk) [Item 3. Legal Proceedings](index=21&type=section&id=Item%203.%20Legal%20Proceedings) The company is subject to various legal proceedings and claims in the ordinary course of business, but management believes their resolution will not materially impact future operations or financial position. - The company is subject to various legal proceedings and claims that arise in the ordinary course of business[95](index=95&type=chunk) - Management believes that the resolution of these matters will not have a material adverse impact on the company's future results of operations or financial position[95](index=95&type=chunk) [Item 4. Mine Safety Disclosures](index=22&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company. - Not applicable[97](index=97&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=22&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock, previously traded on Nasdaq, was voluntarily delisted on December 22, 2020, and now trades on the OTCQX Marketplace under the symbol "DXLG." - The company's common stock was voluntarily delisted from Nasdaq on December 22, 2020, and began trading on the OTCQX Marketplace under the symbol "DXLG"[99](index=99&type=chunk) - As of March 15, 2021, there were approximately **83 holders of record** of the company's common stock[100](index=100&type=chunk) - There were no stock repurchases during fiscal 2020[101](index=101&type=chunk) [Item 6. Selected Financial Data](index=22&type=section&id=Item%206.%20Selected%20Financial%20Data) This item is not applicable to the company. - Not Applicable[101](index=101&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2020 was significantly impacted by the COVID-19 pandemic, leading to a **32.7% decrease** in total sales and a net loss of **$(64.5) million**. - The COVID-19 pandemic negatively affected the global economy, supply chains, and retail markets, leading to a significant adverse effect on the company's business, financial condition, and results of operations in fiscal 2020[105](index=105&type=chunk) - In fiscal 2020, total sales decreased **32.7% to $318.9 million** from **$474.0 million** in fiscal 2019, with comparable sales down **32.6%**, store comparable sales down **47.1%**, and direct business sales up **14.9%** (DXL.com sales up **38.6%**)[118](index=118&type=chunk) Key Financial Metrics (in millions, except per share data) | Metric | Fiscal 2020 | Fiscal 2019 | Fiscal 2018 | | :----------------------------------- | :---------- | :---------- | :---------- | | Net loss | $(64.5) | $(7.8) | $(13.5) | | Adjusted net loss (1) | $(36.7) | $(3.2) | $(3.5) | | EBITDA | $(39.0) | $20.2 | $18.5 | | Adjusted EBITDA (1) | $(24.2) | $23.5 | $27.4 | | Impairment charges | $14.8 | $0.9 | $4.6 | | Diluted loss per share: Net loss | $(1.26) | $(0.16) | $(0.28) | | Adjusted net loss | $(0.72) | $(0.06) | $(0.07) | | Cash flow from operating activities | $(1.2) | $15.8 | $15.7 | | Free cash flow | $(5.5) | $2.4 | $2.8 | - The company took decisive steps to preserve liquidity in fiscal 2020, including drawing **$30.0 million** from its credit facility, furloughing staff, cancelling inventory orders, reducing capital spending, and renegotiating lease agreements, resulting in **$10.0 million** of rent abatements and deferments and **$13.5 million** in savings over the life of restructured leases[111](index=111&type=chunk)[113](index=113&type=chunk)[119](index=119&type=chunk)[121](index=121&type=chunk) - Subsequent to fiscal 2020, the company raised **$5 million** (gross) from a common stock offering and entered into a new **$17.5 million** FILO loan, replacing the existing **$15.0 million** FILO loan, providing an additional **$5.0 million to $10.0 million** in borrowing capacity[114](index=114&type=chunk) Fiscal 2021 Financial Outlook | Metric | Range | | :------------------- | :------------------- | | Expected Sales | $385.0 - $402.0 million | | Adjusted EBITDA | $11.0 - $18.0 million | | Free Cash Flow | Positive | | Comparable Sales (vs. FY2019) | -10.8% to -14.8% | | Comparable Store Sales (vs. FY2019) | -23.8% to -27.8% | | Direct Business Sales (vs. FY2019) | +26.9% to +30.7% | [Forward Looking Statements](index=23&type=section&id=FORWARD%20LOOKING%20STATEMENTS) This section discusses future operational and financial outlooks, acknowledging inherent risks and potential material differences from actual results. - This Annual Report contains "forward-looking statements" regarding future operations, financial outlook for fiscal 2021 (sales, comparable sales, adjusted EBITDA, free cash flows), and the company's ability to mitigate the impact of the COVID-19 pandemic[103](index=103&type=chunk) - These statements are based on management's reasonable estimates but actual results could differ materially due to various factors, including risks outlined in Item 1A, Risk Factors[103](index=103&type=chunk) [Segment Reporting](index=23&type=section&id=Segment%20Reporting) The company aggregates its stores and direct businesses into a single retail segment, with the wholesale segment also combined due to immateriality. - The company has three principal operating segments: stores, direct business, and wholesale business[104](index=104&type=chunk) - The stores and direct business segments are aggregated into one reportable segment, 'retail segment,' due to similar economic characteristics, production processes, and operations, consistent with an omni-channel approach[104](index=104&type=chunk) - The wholesale segment's operating results are aggregated with the retail segment for all periods due to its immateriality in revenues, profits, and assets[104](index=104&type=chunk) [Impact of COVID-19 Pandemic on Our Business](index=23&type=section&id=Impact%20of%20COVID-19%20Pandemic%20on%20Our%20Business) The pandemic severely impacted the company's business, shifting consumer demand online and necessitating store closures and operational adjustments. - The COVID-19 pandemic negatively affected the global economy, supply chains, and retail markets, significantly disrupting consumer demand for men's clothing and accessories[105](index=105&type=chunk) - All retail stores were temporarily closed on March 17, 2020, and gradually reopened by the end of June 2020 with reduced hours, while the direct business played a vital role due to customers shifting to online shopping[105](index=105&type=chunk) - The company experienced a shift from event-driven shopping to need-based shopping, with improvements in core and basic categories, a trend expected to continue into early fiscal 2021[105](index=105&type=chunk) [Comparable Sales and E-Commerce (Direct) Sales Definition](index=23&type=section&id=Comparable%20Sales%20and%20E-Commerce%20%28Direct%29%20Sales%20Definition) This section defines how the company calculates store sales, e-commerce sales, and comparable sales for performance measurement. - Store sales are defined as sales that originate and are fulfilled directly at the store level[106](index=106&type=chunk) - E-commerce sales, or direct sales, are defined as sales that originate online, whether through the website, at the store level, or through a third-party marketplace[108](index=108&type=chunk) - Comparable sales include stores open for **13 months or more**, including remodeled or relocated stores, but exclude clearance centers or stores expanded by more than **25%** for the first **13 months**[108](index=108&type=chunk) [Non-GAAP Measures](index=24&type=section&id=Non-GAAP%20Measures) The company uses non-GAAP financial measures like adjusted net loss and EBITDA to provide additional insights, which are not substitutes for GAAP. - The company monitors non-GAAP financial measures such as adjusted net loss, adjusted net loss per diluted share, free cash flow, EBITDA, and adjusted EBITDA to track business progress and assist investors[109](index=109&type=chunk) - These non-GAAP measures are not comparable to similar measures used by other companies and should not be considered superior to or a substitute for GAAP measures[109](index=109&type=chunk) [Executive Overview](index=24&type=section&id=EXECUTIVE%20OVERVIEW) Fiscal 2020 saw a net loss and significant sales decline due to COVID-19, prompting aggressive liquidity management and cost reductions, while digital sales grew. Key Financial Metrics (in millions, except per share data) | Metric | Fiscal 2020 | Fiscal 2019 | Fiscal 2018 | | :----------------------------------- | :---------- | :---------- | :---------- | | Net loss | $(64.5) | $(7.8) | $(13.5) | | Adjusted net loss (1) | $(36.7) | $(3.2) | $(3.5) | | EBITDA | $(39.0) | $20.2 | $18.5 | | Adjusted EBITDA (1) | $(24.2) | $23.5 | $27.4 | | Impairment charges | $14.8 | $0.9 | $4.6 | | Exit costs associated with London operations | — | $1.7 | — | | CEO transition costs | — | $0.7 | $2.4 | | Corporate restructuring | — | — | $1.9 | | Diluted loss per share: Net loss | $(1.26) | $(0.16) | $(0.28) | | Adjusted net loss | $(0.72) | $(0.06) | $(0.07) | | Cash flow from operating activities | $(1.2) | $15.8 | $15.7 | | Free cash flow | $(5.5) | $2.4 | $2.8 | - In fiscal 2020, the company focused on managing liquidity and took immediate steps including drawing **$30.0 million** from its credit facility, furloughing staff, cancelling inventory orders, and negotiating rent deferments and abatements[111](index=111&type=chunk) - Cost-reduction measures included reducing the field organization by approximately **54%** and corporate workforce by **29%**, with expected annualized savings of **$9.7 million** from actions taken in November 2020[113](index=113&type=chunk) - The DXL.com site experienced significant growth, with sales increasing **38.6%** over the prior year, serving as a bright spot amidst a **47.1% decline** in comparable store sales due to the pandemic[113](index=113&type=chunk) [Subsequent Events](index=25&type=section&id=Subsequent%20Events) Post-fiscal year-end, the company raised **$5.0 million** through an equity offering and refinanced its FILO loan, increasing borrowing capacity. - On February 5, 2021, the company sold **11.1 million shares** of common stock in a registered direct offering, raising **$5.0 million** (gross) for working capital and general corporate purposes[114](index=114&type=chunk) - On March 16, 2021, the company refinanced its existing **$15.0 million** FILO loan with a new **$17.5 million** senior secured FILO loan, which is expected to provide an additional **$5.0 million to $10.0 million** in borrowing capacity, albeit with higher interest rates (**250 to 300 basis points**)[114](index=114&type=chunk) [Financial Outlook](index=25&type=section&id=Financial%20Outlook) For fiscal 2021, the company projects sales between **$385.0-$402.0 million** and positive adjusted EBITDA, assuming vaccine rollout and market recovery. Fiscal 2021 Financial Projections | Metric | Range | | :------------------- | :------------------- | | Expected Sales | $385.0 - $402.0 million | | Adjusted EBITDA | $11.0 - $18.0 million | | Free Cash Flow | Positive | | Comparable Sales (vs. FY2019) | -10.8% to -14.8% | | Comparable Store Sales (vs. FY2019) | -23.8% to -27.8% | | Direct Business Sales (vs. FY2019) | +26.9% to +30.7% | - These projections assume widespread availability and administration of COVID-19 vaccines by the end of Spring 2021 and a gradual improvement in apparel demand as customers return to pre-COVID-19 activities[115](index=115&type=chunk) [Sales](index=26&type=section&id=SALES) Total sales decreased by **32.7%** in fiscal 2020 due to the pandemic, with store sales significantly down, partially offset by strong direct business growth. Sales Performance (in millions) | Metric | Fiscal 2020 | Fiscal 2019 | | :------------------- | :---------- | :---------- | | Total Sales | $318.9 | $474.0 | | Comparable Sales | -32.6% | N/A | | Store Comparable Sales | -47.1% | N/A | | Direct Business Sales | +14.9% | N/A | | DXL.com Sales | +38.6% | N/A | | Universe Sales | -50.4% | N/A | | Wholesale Revenues | $16.6 | $12.5 | - The significant sales decrease in fiscal 2020 was primarily due to temporary store closures and reduced in-person shopping demand caused by the COVID-19 pandemic[118](index=118&type=chunk) - The increase in wholesale revenues was primarily due to the sale of masks during the second quarter of fiscal 2020[118](index=118&type=chunk) [Gross Margin](index=26&type=section&id=GROSS%20MARGIN) The gross margin rate decreased by **10.2 percentage points** in fiscal 2020, primarily due to increased promotions and deleveraging of occupancy costs. - Gross margin rate for fiscal 2020 decreased by **10.2 percentage points to 32.9%** from **43.1%** in fiscal 2019[119](index=119&type=chunk) - The decrease was attributed to a **5.6 percentage point decrease** in merchandise margin (due to increased promotions) and a **4.6 percentage point decrease** from the deleveraging of occupancy costs against lower sales[119](index=119&type=chunk) - Occupancy costs decreased **$8.3 million** (**11.8%**) due to lease restructuring efforts and store closures, including **$10.0 million** in favorable rent abatements and deferments negotiated in the first half of fiscal 2020[119](index=119&type=chunk)[121](index=121&type=chunk) [Selling, General and Administrative Expenses](index=27&type=section&id=SELLING%2C%20GENERAL%20AND%20ADMINISTRATIVE%20EXPENSES) SG&A expenses decreased by **$51.6 million** in fiscal 2020 due to cost reductions, but increased as a percentage of lower sales. - SG&A expenses decreased **$51.6 million**, or **28.6%**, to **$129.1 million** in fiscal 2020 compared to **$180.7 million** in fiscal 2019, but increased as a percentage of sales to **40.5%** from **38.1%**[122](index=122&type=chunk) - The decrease was driven by reductions in variable-based costs (store payroll, supplies, travel), advertising, corporate payroll, professional services, and director compensation, partially offset by increases in performance-based incentives and insurance costs[123](index=123&type=chunk) - Cost savings initiatives, including workforce reductions (**54% field, 29% corporate**) and termination of service agreements, are expected to result in annualized savings of **$9.7 million**, mostly realized in fiscal 2021[123](index=123&type=chunk) [Impairment of Assets](index=27&type=section&id=IMPAIRMENT%20OF%20ASSETS) The company recorded a significant asset impairment charge of **$14.8 million** in fiscal 2020, primarily due to the impact of the COVID-19 pandemic on store operations. - The company recorded a significant asset impairment charge of **$14.8 million** in fiscal 2020, primarily due to the impact of the COVID-19 pandemic on store operations[124](index=124&type=chunk) - This charge included **$13.3 million** for the write-down of operating lease right-of-use assets and **$4.1 million** for the write-down of store assets, partially offset by a **$2.6 million** non-cash gain from revaluation of lease liabilities due to store closures[124](index=124&type=chunk) - In comparison, the asset impairment charge for fiscal 2019 was **$0.9 million**[124](index=124&type=chunk) [Depreciation and Amortization](index=28&type=section&id=DEPRECIATION%20AND%20AMORTIZATION) Depreciation and amortization expense decreased to **$21.5 million** in fiscal 2020, reflecting the completion of new store growth in prior years. - Depreciation and amortization expense decreased to **$21.5 million** in fiscal 2020 from **$24.6 million** in fiscal 2019[126](index=126&type=chunk) - This decrease is attributed to the majority of new store growth being complete in prior years[126](index=126&type=chunk) [Interest Expense, Net](index=28&type=section&id=INTEREST%20EXPENSE%2C%20NET) Net interest expense increased to **$3.9 million** in fiscal 2020 due to higher average borrowings and increased effective borrowing rates. - Net interest expense increased to **$3.9 million** in fiscal 2020 from **$3.3 million** in fiscal 2019[127](index=127&type=chunk) - The increase was due to higher average borrowings (including a **$30.0 million** draw on the revolving credit facility in March 2020) and an increase in effective borrowing rates (approximately **150 basis points** higher due to a credit facility amendment)[127](index=127&type=chunk) [Income Taxes](index=28&type=section&id=INCOME%20TAXES) The company maintains a full valuation allowance against deferred tax assets due to current and forecasted losses, with federal NOLs expiring through 2037. - Realization of deferred tax assets, including **$158.2 million** in federal net operating loss carryforwards (expiring fiscal 2022-2037) and **$43.1 million** non-expiring, depends on generating sufficient taxable income[128](index=128&type=chunk) - A full valuation allowance against net deferred tax assets remains appropriate due to current period losses in fiscal 2020 and the forecast for fiscal 2021[128](index=128&type=chunk) - The current tax provision for fiscal 2020 and 2019 was primarily due to current state margin tax[128](index=128&type=chunk) [Net Loss](index=28&type=section&id=NET%20LOSS) The company reported a net loss of **$(64.5) million** in fiscal 2020, significantly higher than the prior year, primarily due to pandemic impacts and impairment charges. - Net loss for fiscal 2020 was **$(64.5) million**, or **$(1.26) per diluted share**, compared to **$(7.8) million**, or **$(0.16) per diluted share**, in fiscal 2019[129](index=129&type=chunk) - Fiscal 2020 results included **$14.8 million** (**$0.29 per diluted share**) in asset impairment charges[130](index=130&type=chunk) - On a non-GAAP basis, adjusted net loss per share for fiscal 2020 was **$(0.72)**, compared to **$(0.06)** for fiscal 2019, excluding asset impairments, London exit costs, and CEO transition costs, and assuming a normalized tax rate of **26%**[130](index=130&type=chunk) [Seasonality](index=29&type=section&id=SEASONALITY) The business is seasonal, with the fourth quarter traditionally generating the majority of operating income, though fiscal 2020 was heavily impacted by pandemic-related store closures. - The company's business is seasonal, with the majority of operating income traditionally generated in the fourth quarter due to the holiday selling season[132](index=132&type=chunk) - Fiscal 2020 sales results reflect the significant impact of the COVID-19 pandemic, especially in the first and second quarters when stores were temporarily closed[132](index=132&type=chunk) Quarterly Sales (in millions, except percentages) | Quarter | Fiscal 2020 | % of Total | Fiscal 2019 | % of Total | Fiscal 2018 | % of Total | | :-------------------------------------- | :---------- | :--------- | :---------- | :--------- | :---------- | :--------- | | First quarter | $57.2 | 17.9% | $113.0 | 23.8% | $113.3 | 23.9% | | Second quarter | $76.4 | 24.0% | $123.2 | 26.0% | $122.2 | 25.8% | | Third quarter | $85.2 | 26.7% | $106.6 | 22.5% | $107.1 | 22.6% | | Fourth quarter | $100.1 | 31.4% | $131.2 | 27.7% | $131.2 | 27.7% | | **Total** | **$318.9** | **100.0%** | **$474.0** | **100.0%** | **$473.8** | **100.0%** | [Effects of Inflation](index=29&type=section&id=EFFECTS%20OF%20INFLATION) The company does not believe inflation has materially affected its operating results over the past three fiscal years. - The company does not believe that inflation has had a material effect on its results of operations in the last three fiscal years[134](index=134&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company's liquidity relies on cash from operations and its credit facility, with recent equity and loan refinancing bolstering its position for the next 12 months. - Primary sources of liquidity are cash generated from operations and availability under the credit facility with Bank of America, N.A[135](index=135&type=chunk) - The company believes its cash on hand, proceeds from the recent equity offering, availability under the amended Credit Facility, the new FILO loan, and cash from operations will be sufficient to cover working capital and limited capital expenditures for the next **12 months**[135](index=135&type=chunk) Liquidity Position (in millions) | Metric | Fiscal 2020 | Fiscal 2019 | | :----------------------------------- | :---------- | :---------- | | Cash flow from operating activities | $(1.2) | $15.8 | | Capital expenditures | $(4.2) | $(13.4) | | Free Cash Flow | $(5.5) | $2.4 | | Cash on hand, at year end | $19.0 | $4.3 | | Total debt, net of unamortized debt issuance costs | $74.4 | $54.1 | | Unused excess availability under Credit Facility | $11.5 | $48.5 | Total Debt Outstanding (January 30, 2021, in thousands) | Debt Type | Gross Debt Outstanding | Less Debt Issuance Costs | Net Debt Outstanding | | :----------------- | :--------------------- | :----------------------- | :------------------- | | Credit facility | $59,733 | $(212) | $59,521 | | FILO loan | $15,000 | $(131) | $14,869 | | **Total debt** | **$74,733** | **$(343)** | **$74,390** | - Total inventories decreased by **$17.4 million**, or **17%**, to **$85.0 million** at January 30, 2021, as a result of conservative inventory management and reduced receipts to align with lower sales volumes[141](index=141&type=chunk) [Off-Balance Sheet Arrangements](index=30&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) The company has no off-balance sheet arrangements as defined by Regulation S-K. - The company has no off-balance sheet arrangements as defined by 303(a)(4) of Regulation S-K[142](index=142&type=chunk) [Contractual Obligations](index=31&type=section&id=CONTRACTUAL%20OBLIGATIONS) As of January 30, 2021, total contractual obligations were **$255.6 million**, primarily comprising operating leases and merchandise purchase obligations. Contractual Obligations (January 30, 2021, in millions) | Obligation Type | Total | Less than 1 year | 1 to 3 years | 3 to 5 years | More than 5 years | | :------------------------------- | :------ | :--------------- | :----------- | :----------- | :---------------- | | Operating leases | $207.6 | $53.6 | $87.7 | $51.2 | $15.1 | | Long-term debt obligations (FILO) | $15.0 | — | $15.0 | — | — | | Interest on long-term debt | $3.0 | $0.9 | $2.1 | — | — | | Merchandise purchase obligations | $30.0 | $10.0 | $20.0 | — | — | | **Total Commitments** | **$255.6** | **$64.5** | **$124.8** | **$51.2** | **$15.1** | - The table excludes **$59.7 million** outstanding under the credit facility and unfunded pension obligations (**$4.5 million**) and Supplemental Employee Retirement Plan obligations (**$0.6 million**) due to uncertainty over future contributions[144](index=144&type=chunk) - As of January 30, 2021, the company had approximately **$62.4 million** in open purchase orders, with an estimated **95%** considered non-cancelable[144](index=144&type=chunk) [Capital Expenditures](index=31&type=section&id=CAPITAL%20EXPENDITURES) Capital expenditures significantly decreased to **$4.2 million** in fiscal 2020, reflecting a focus on liquidity preservation and no new store openings planned for fiscal 2021. Store Count and Square Footage (in thousands) | Store Concept | At January 30, 2021 (Number of Stores) | At January 30, 2021 (Square Footage) | At February 1, 2020 (Number of Stores) | At February 1, 2020 (Square Footage) | | :------------------ | :------------------------------------- | :----------------------------------- | :------------------------------------- | :----------------------------------- | | DXL Retail | 226 | 1,718 | 228 | 1,729 | | DXL Outlet | 17 | 82 | 17 | 82 | | Casual Male XL Retail | 46 | 152 | 50 | 164 | | Casual Male XL Outlet | 22 | 66 | 28 | 85 | | **Total Stores** | **311** | **2,018** | **323** | **2,060** | - Capital expenditures for fiscal 2020 were **$4.2 million**, a significant decrease from **$13.4 million** in fiscal 2019, as all non-essential capital projects were eliminated to preserve liquidity during the pandemic[145](index=145&type=chunk) - The company closed **12 stores** during fiscal 2020 and does not plan to open any new stores or rebrand existing Casual Male XL stores in fiscal 2021, focusing instead on rightsizing its store portfolio through lease renegotiations or expirations for **131 stores** with options in the next two years[145](index=145&type=chunk)[147](index=147&type=chunk) [Non-GAAP Reconciliations](index=32&type=section&id=Non-GAAP%20Reconciliations) This section provides reconciliations for non-GAAP financial measures such as adjusted net loss, free cash flow, EBITDA, and adjusted EBITDA. Adjusted Net Loss and Adjusted Net Loss Per Diluted Share (in thousands, except per share data) | Metric | Fiscal 2020 | Per diluted share | Fiscal 2019 | Per diluted share | Fiscal 2018 | Per diluted share | | :----------------------------------------- | :---------- | :---------------- | :---------- | :---------------- | :---------- | :---------------- | | Net loss, GAAP basis | $(64,538) | $(1.26) | $(7,796) | $(0.16) | $(13,531) | $(0.28) | | Add back: Impairment of assets | $14,841 | $0.29 | $889 | $0.02 | $4,579 | $0.09 | | Add back: Exit costs (London) | — | — | $1,737 | $0.03 | — | — | | Add back: CEO transition costs | — | — | $743 | $0.01 | $2,404 | $0.05 | | Add back: Corporate restructuring | — | — | — | — | $1,904 | $0.04 | | Adjusted loss before income taxes | $(49,591) | $(0.97) | $(4,322) | $(0.09) | $(4,694) | $(0.10) | | Income tax benefit (normalized 26%) | $(12,894) | $(0.25) | $(1,124) | $(0.02) | $(1,220) | $(0.02) | | **Adjusted net loss, non-GAAP basis** | **$(36,697)** | **$(0.72)** | **$(3,198)** | **$(0.06)** | **$(3,474)** | **$(0.07)** | Free Cash Flow (in millions) | Metric | Fiscal 2020 | Fiscal 2019 | Fiscal 2018 | Projected 2021 | | :----------------------------------- | :---------- | :---------- | :---------- | :------------- | | Cash flow from operating activities (GAAP) | $(1.2) | $15.8 | $15.7 | >$4.3 | | Capital expenditures | $(4.2) | $(13.4) | $(13.0) | $4.3 | | **Free cash flow (non-GAAP)** | **$(5.5)** | **$2.4** | **$2.8** | **>$0.0** | EBITDA and Adjusted EBITDA (in millions) | Metric | Fiscal 2020 | Fiscal 2019 | Fiscal 2018 | | :----------------------------------------- | :---------- | :---------- | :---------- | | Net loss, GAAP basis | $(64.5) | $(7.8) | $(13.5) | | Add back: Provision (benefit) for income taxes | $0.1 | $0.1 | $(0.1) | | Add back: Interest expense | $3.9 | $3.3 | $3.5 | | Add back: Depreciation and amortization | $21.5 | $24.6 | $28.7 | | **EBITDA (non-GAAP)** | **$(39.0)** | **$20.2** | **$18.5** | | Add back: Exit costs associated with London operations | — | $1.7 | — | | Add back: CEO transition costs | — | $0.7 | $2.4 | | Add back: Corporate restructuring | — | — | $1.9 | | Add back: Impairment of assets | $14.8 | $0.9 | $4.6 | | **Adjusted EBITDA (non-GAAP)** | **$(24.2)** | **$23.5** | **$27.4** | [Critical Accounting Policies; Use of Estimates](index=33&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%3B%20USE%20OF%20ESTIMATES) The company's critical accounting policies involve significant estimates for LTIPs, impairment of long-lived assets, and leases, particularly impacted by COVID-19. - The company's critical accounting policies involve significant estimates and assumptions, particularly for Long-Term Incentive Plans (LTIPs), impairment of long-lived assets, and leases[153](index=153&type=chunk) - For LTIPs, performance targets for the 2018-2020 LTIP were not achieved, and an accrual of **$0.2 million** was made for performance awards under the 2020-2022 LTIP[154](index=154&type=chunk) - Impairment of long-lived assets (property, plant, equipment, and operating lease right-of-use assets) is evaluated at the store level using projected undiscounted and discounted cash flow analyses, with fiscal 2020 recording **$14.8 million** in charges due to COVID-19 uncertainty[158](index=158&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks primarily from interest rate movements on borrowings and foreign currency fluctuations. - The company's financial position is subject to market risk from interest rate movements on borrowings under its Credit Facility and FILO loan, which bear variable rates based on the Federal Funds rate or LIBOR[162](index=162&type=chunk) - As of January 30, 2021, outstanding borrowings included approximately **$59.7 million** under the Revolving Facility (mostly LIBOR-based at ~**4.00%**) and **$15.0 million** under the FILO loan (LIBOR-based at **6.00%**)[162](index=162&type=chunk) - A sensitivity analysis indicates that a **50 basis point increase** in interest rates would have increased interest expense by approximately **$0.4 million** on an annualized basis, based on average outstanding borrowings during fiscal 2020[162](index=162&type=chunk) - Foreign currency risk is considered immaterial, as sales from the two DXL stores in Toronto, Canada, are not material to consolidated sales[157](index=157&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=35&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for Destination XL Group, Inc. and its subsidiaries, along with accompanying notes and the independent auditor's report. - KPMG LLP, the independent registered public accounting firm, audited the consolidated financial statements and provided an unqualified opinion, noting a change in accounting principle for leases due to the adoption of ASU 2016-02 and ASU 2018-11 as of February 3, 2019[167](index=167&type=chunk) - The evaluation of the recoverability of long-lived store assets (property and equipment, operating lease right-of-use assets) was identified as a critical audit matter, involving significant auditor judgment in evaluating internally-developed assumptions for forecasted sales and gross margin[169](index=169&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk) Consolidated Balance Sheets (in thousands) | ASSETS | Jan 30, 2021 | Feb 1, 2020 | | :----------------------------------- | :----------- | :---------- | | Cash and cash equivalents | $18,997 | $4,338 | | Inventories | $85,028 | $102,420 | | Total current assets | $114,130 | $123,860 | | Property and equipment, net | $56,552 | $78,279 | | Operating lease right-of-use assets | $134,321 | $186,413 | | Total assets | $306,755 | $390,917 | | LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | | | | Borrowings under credit facility | $59,521 | $39,301 | | Total current liabilities | $155,035 | $130,363 | | Long-term debt | $14,869 | $14,813 | | Operating leases, noncurrent | $135,819 | $182,051 | | Total long-term liabilities | $155,797 | $202,131 | | Total stockholders' equity (deficit) | $(4,077) | $58,423 | | Total liabilities and stockholders' equity (deficit) | $306,755 | $390,917 | Consolidated Statements of Operations (in thousands) | Metric | Jan 30, 2021 (Fiscal 2020) | Feb 1, 2020 (Fiscal 2019) | Feb 2, 2019 (Fiscal 2018) | | :----------------------------------- | :------------------------- | :------------------------ | :------------------------ | | Sales | $318,946 | $474,038 | $473,756 | | Gross profit | $104,865 | $204,201 | $211,289 | | Selling, general and administrative | $129,062 | $180,663 | $183,868 | | Impairment of assets | $14,841 | $889 | $4,579 | | Operating loss | $(60,515) | $(4,394) | $(10,119) | | Net loss | $(64,538) | $(7,796) | $(13,531) | | Net loss per share - basic and diluted | $(1.26) | $(0.16) | $(0.28) | Consolidated Statements of Cash Flows (in thousands) | Metric | Jan 30, 2021 (Fiscal 2020) | Feb 1, 2020 (Fiscal 2019) | Feb 2, 2019 (Fiscal 2018) | | :----------------------------------- | :------------------------- | :------------------------ | :------------------------ | | Net cash provided by (used for) operating activities | $(1,200) | $15,803 | $15,741 | | Net cash used for investing activities | $(4,200) | $(13,399) | $(12,961) | | Net cash provided by (used for) financing activities | $20,155 | $(2,934) | $(3,274) | | Net increase (decrease) in cash and cash equivalents | $14,759 | $(530) | $(494) | | Cash and cash equivalents: End of period | $18,997 | $4,338 | $4,868 | [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=64&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no changes in or disagreements with accountants on accounting and financial disclosure. - There were no changes in or disagreements with accountants on accounting and financial disclosure[276](index=276&type=chunk) [Item 9A. Controls and Procedures](index=64&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of January 30, 2021. - Management, under the supervision of the CEO and CFO, evaluated and concluded that the company's disclosure controls and procedures were effective as of January 30, 2021[277](index=277&type=chunk) - Management assessed the design and effectiveness of the internal control over financial reporting as of January 30, 2021, using the COSO framework (2013), and determined it was effective[278](index=278&type=chunk) - There were no changes in internal control over financial reporting during the fourth quarter of fiscal 2020 that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[279](index=279&type=chunk) [Item 9B. Other Information](index=64&type=section&id=Item%209B.%20Other%20Information) The company reported no other information. - None[279](index=279&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=65&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information required for this item is incorporated by reference from the company's definitive proxy statement for the 2021 Annual Meeting of Stockholders. - Information for this item is incorporated by reference from the definitive proxy statement for the 2021 Annual Meeting of Stockholders[283](index=283&type=chunk) [Item 11. Executive Compensation](index=65&type=section&id=Item%2011.%20Executive%20Compensation) Information required for this item is incorporated by reference from the company's definitive proxy statement for the 2021 Annual Meeting of Stockholders. - Information for this item is incorporated by reference from the definitive proxy statement for the 2021 Annual Meeting of Stockholders[284](index=284&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=65&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information required for this item is incorporated by reference from the company's definitive proxy statement for the 2021 Annual Meeting of Stockholders. - Information for this item is incorporated by reference from the definitive proxy statement for the 2021 Annual Meeting of Stockholders[285](index=285&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=65&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required for this item is incorporated by reference from the company's definitive proxy statement for the 2021 Annual Meeting of Stockholders. - Information for this item is incorporated by reference from the definitive proxy statement for the 2021 Annual Meeting of Stockholders[286](index=286&type=chunk) [Item 14. Principal Accounting Fees and Services](index=65&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information required for this item is incorporated by reference from the company's definitive proxy statement for the 2021 Annual Meeting of Stockholders. - Information for this item is incorporated by reference from the definitive proxy statement for the 2021 Annual Meeting of Stockholders[287](index=287&type=chunk) PART IV [Item 15. Exhibits and Financial Statement Schedules](index=66&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, financial statement schedules, and a comprehensive index of exhibits filed as part of the Annual Report on Form 10-K. - The list of consolidated financial statements and notes required by this Item 15(a)(1) is set forth in the "Index to Consolidated Financial Statements" on page 35 of this Annual Report[290](index=290&type=chunk) - All financial statement schedules have been omitted because the required information is not applicable or is not present in amounts sufficient to require submission, or because the information is included in the financial statements or notes thereto[291](index=291&type=chunk) - A comprehensive list of exhibits required by this Item 15(a)(3) is set forth in the "Index to Exhibits" beginning on page 67 of this Annual Report[291](index=291&type=chunk)[294](index=294&type=chunk) [Item 16. Form 10-K Summary](index=66&type=section&id=Item%2016.%20Form%2010-K%20Summary) The Form 10-K Summary is omitted at the registrant's option. - The Form 10-K Summary is omitted at the registrant's option[292](index=292&type=chunk) [Signatures](index=71&type=section&id=Signatures) The report is duly signed on behalf of Destination XL Group, Inc. by its President and Chief Executive Officer, Chief Financial Officer and Treasurer, Vice President and Managing Director of Finance, Chief Accounting Officer and Corporate Controller, and members of the Board of Directors, as of March 19, 2021. - The report was signed on March 19, 2021, by Harvey S. Kanter (President and Chief Executive Officer), Peter H. Stratton, Jr. (Executive Vice President, Chief Financial Officer and Treasurer), John F. Cooney (Vice President and Managing Director of Finance, Chief Accounting Officer and Corporate Controller), and members of the Board of Directors[301](index=301&type=chunk)