Financial Data and Key Metrics Changes - Comparable sales for Q3 2020 were down 20.5% year-over-year, an improvement from a 38.6% decline in Q2 2020 [12] - Store sales decreased by 31.5%, while DXL.com sales increased by 28.4%, with total direct sales up 18.2% [12] - Gross margin rate was 36.5%, down from 41.1% in Q3 2019, reflecting a 460-basis point decrease [37] - SG&A expenses were $32.8 million, or 38.5% of sales, compared to $42.1 million, or 39.5% of sales, in the prior year [38] - Adjusted EBITDA was negative $1.7 million, compared to positive $1.7 million in Q3 2019 [40] Business Line Data and Key Metrics Changes - Direct sales accounted for 33.4% of total retail revenue, with stores fulfilling $10.6 million worth of e-commerce demand, an increase of 87.3% from last year [12][16] - Casual sportswear and loungewear drove business, while tailored clothing remained challenging [22] - Inventory levels decreased by over 21% from last year's Q3, with a focus on conservative inventory management [26] Market Data and Key Metrics Changes - October sales momentum slowed by 600 basis points due to COVID-19 flare-ups and other distractions [12] - The company experienced a good September but faced a decline in October, attributed to external factors like wildfires and the election [56] Company Strategy and Development Direction - The company is focused on cash management and has implemented a corporate restructuring to align costs with lower sales levels, estimating annualized savings of $9.7 million [19][20] - DXL aims to enhance its omnichannel capabilities, with a significant focus on e-commerce and direct fulfillment from stores [17][28] - The company is committed to diversity and inclusion initiatives, including a CEO Advisory Council and ongoing training programs [10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for recovery, emphasizing the importance of maintaining liquidity and financial flexibility [45] - The company anticipates a slow improvement in sales trends and continued growth in its direct business [45] - Management acknowledged the challenges posed by the pandemic but remains hopeful for a return to normalcy with the potential availability of a vaccine [47] Other Important Information - The company has eliminated 101 corporate positions, representing 29% of its corporate workforce, and reduced field personnel by 1,078 positions, or 54% [20] - The company is actively negotiating with landlords to reduce occupancy costs and has successfully secured rent abatements and deferrals [21][41] Q&A Session Summary Question: How is the company responding to the changing dynamics of Black Friday and customer traffic? - The company has started promotions earlier and segmented offers to drive traffic while being cautious about over-promotion [49][50] Question: Can you provide insights on sales performance in October and November? - October sales trailed off unexpectedly, but there has been a recent material change in customer behavior as Thanksgiving approaches [56][57] Question: What is the composition of the increase in accrued expenses? - The increase is attributed to restructuring accruals and long-term incentive accruals [58] Question: How does the company view its inventory structure moving forward? - The company aims to maintain lower inventory levels while balancing the need to drive revenue [53][67] Question: Can you elaborate on the relationship with Amazon? - The relationship with Amazon is seen as having significant potential, with the company expanding its offerings within Amazon's private brand program [68][69]

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 October 31, 2020 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) 55 ...

Destination XL Group, Inc. (NASDAQ:DXLG) Q2 2020 Earnings Conference Call August 27, 2020 9:00 AM ET Company Participants Nitza McKee - ICR Harvey Kanter - President and Chief Executive Officer Peter Stratton - Chief Financial Officer Conference Call Participants Eric Beder - SCC Research Alex Silverman - AWM Investments Operator Ladies and gentlemen, thank you for standing by and welcome to the Second Quarter 2020 Destination XL Group, Incorporated Earnings Call. At this time, all participants are in a lis ...

PART I. FINANCIAL INFORMATION Presents the company's unaudited consolidated financial statements and management's analysis for the period [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements for Q2 fiscal 2020, covering balance sheets, operations, comprehensive income, equity, cash flows, and notes [Consolidated Balance Sheets](index=2&type=section&id=Consolidated%20Balance%20Sheets) | (In thousands, except share data) (Unaudited) | August 1, 2020 (Fiscal 2020) | February 1, 2020 (Fiscal 2019) | | :-------------------------------------------- | :--------------------------- | :----------------------------- | | **ASSETS** | | | | Current assets: | | | | Cash and cash equivalents | $ 20,414 | $ 4,338 | | Accounts receivable | 2,574 | 6,219 | | Inventories | 87,388 | 102,420 | | Prepaid expenses and other current assets | 9,908 | 10,883 | | Total current assets | 120,284 | 123,860 | | Non-current assets: | | | | Property and equipment, net | 65,258 | 78,279 | | Operating lease right-of-use assets | 157,095 | 186,413 | | Intangible assets | 1,150 | 1,150 | | Other assets | 593 | 1,215 | | Total assets | $ 344,380 | $ 390,917 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Current liabilities: | | | | Accounts payable | $ 18,533 | $ 31,763 | | Accrued expenses and other current liabilities| 20,899 | 18,123 | | Operating leases, current | 45,626 | 41,176 | | Borrowings under credit facility | 66,545 | 39,301 | | Total current liabilities | 151,603 | 130,363 | | Long-term liabilities: | | | | Long-term debt | 14,841 | 14,813 | | Operating leases, non-current | 165,310 | 182,051 | | Other long-term liabilities | 5,241 | 5,267 | | Total long-term liabilities | 185,392 | 202,131 | | Stockholders' equity: | | | | Common stock | 638 | 633 | | Additional paid-in capital | 313,874 | 312,933 |\n| Treasury stock at cost | (92,658) | (92,658) |\n| Accumulated deficit | (208,494) | (156,054) |\n| Accumulated other comprehensive loss | (5,975) | (6,431) |\n| Total stockholders' equity | 7,385 | 58,423 |\n| Total liabilities and stockholders' equity | $ 344,380 | $ 390,917 | [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) | (In thousands, except share data) (Unaudited) | For the Three Months Ended August 1, 2020 (Fiscal 2020) | For the Three Months Ended August 3, 2019 (Fiscal 2019) | For the Six Months Ended August 1, 2020 (Fiscal 2020) | For the Six Months Ended August 3, 2019 (Fiscal 2019) | | :-------------------------------------------- | :------------------------------------------------------ | :------------------------------------------------------ | :---------------------------------------------------- | :---------------------------------------------------- | | Sales | $ 76,442 | $ 123,245 | $ 133,669 | $ 236,218 |\n| Cost of goods sold including occupancy costs | 54,945 | 68,676 | 98,958 | 132,236 |\n| Gross profit | 21,497 | 54,569 | 34,711 | 103,982 |\n| Expenses: | | | | |\n| Selling, general and administrative | 25,795 | 47,478 | 57,907 | 92,089 |\n| CEO transition costs | — | — | — | 702 |\n| Impairment of assets | — | — | 16,335 | — |\n| Depreciation and amortization | 5,340 | 6,210 | 11,072 | 12,548 |\n| Total expenses | 31,135 | 53,688 | 85,314 | 105,339 |\n| Operating income (loss) | (9,638) | 881 | (50,603) | (1,357) |\n| Interest expense, net | (1,052) | (851) | (1,793) | (1,715) |\n| Income (loss) before provision (benefit) for income taxes | (10,690) | 30 | (52,396) | (3,072) |\n| Provision (benefit) for income taxes | 24 | (8) | 44 | (29) |\n| Net income (loss) | $ (10,714) | $ 38 | $ (52,440) | $ (3,043) |\n| Net income (loss) per share - basic and diluted | $ (0.21) | $ 0.00 | $ (1.03) | $ (0.06) |\n| Weighted-average number of common shares outstanding: | | | | |\n| Basic | 51,078 | 49,867 | 50,918 | 49,734 |\n| Diluted | 51,078 | 50,175 | 50,918 | 49,734 | [Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) | (In thousands) (Unaudited) | For the Three Months Ended August 1, 2020 (Fiscal 2020) | For the Three Months Ended August 3, 2019 (Fiscal 2019) | For the Six Months Ended August 1, 2020 (Fiscal 2020) | For the Six Months Ended August 3, 2019 (Fiscal 2019) | | :-------------------------------------------------------- | :------------------------------------------------------ | :------------------------------------------------------ | :---------------------------------------------------- | :---------------------------------------------------- | | Net income (loss) | $ (10,714) | $ 38 | $ (52,440) | $ (3,043) |\n| Other comprehensive income before taxes: | | | | |\n| Foreign currency translation | (5) | (59) | (39) | (83) |\n| Pension plans | 253 | 191 | 495 | 392 |\n| Other comprehensive income before taxes | 248 | 132 | 456 | 309 |\n| Tax provision related to items of other comprehensive income | — | (30) | — | (81) |\n| Other comprehensive income, net of tax | 248 | 102 | 456 | 228 |\n| Comprehensive income (loss) | $ (10,466) | $ 140 | $ (51,984) | $ (2,815) | [Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) | (in thousands) | Common Shares | Common Stock Amounts | Additional Paid-in Capital | Treasury Stock Shares | Treasury Stock Amounts | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total |\n| :-------------------------------------------- | :------------ | :------------------- | :------------------------- | :-------------------- | :--------------------- | :------------------ | :-------------------------------------------- | :---- |\n| Balance at February 1, 2020 | **63,297** | **$ 633** | **$ 312,933** | (**12,755**) | **$ (92,658)** | **$ (156,054)** | **$ (6,431)** | **$ 58,423** |\n| Board of directors compensation | **93** | **1** | **148** | | | | | **149** |\n| Stock compensation expense | | | **452** | | | | | **452** |\n| Issuance of common stock, upon RSUs release | **437** | **4** | (**4**) | | | | | — |\n| Deferred stock vested | **6** | — | — | | | | | — |\n| Accumulated other comprehensive income (loss):| | | | | | | | |\n| Pension plan, net of taxes | | | | | | | **242** | **242** |\n| Foreign currency, net of taxes | | | | | | | (**34**) | (**34**) |\n| Net loss | | | | | | (**41,726**) | | (**41,726**) |\n| Balance at May 2, 2020 | **63,833** | **$ 638** | **$ 313,529** | (**12,755**) | **$ (92,658)** | **$ (197,780)** | **$ (6,223)** | **$ 17,506** |\n| Stock compensation expense | | | **345** | | | | | **345** |\n| Deferred stock vested | **8** | — | — | | | | | — |\n| Accumulated other comprehensive income (loss):| | | | | | | | |\n| Pension plan, net of taxes | | | | | | | **253** | **253** |\n| Foreign currency, net of taxes | | | | | | | (**5**) | (**5**) |\n| Net loss | | | | | | (**10,714**) | | (**10,714**) |\n| Balance at August 1, 2020 | **63,840** | **$ 638** | **$ 313,874** | (**12,755**) | **$ (92,658)** | **$ (208,494)** | **$ (5,975)** | **$ 7,385** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | (In thousands) (Unaudited) | For the Six Months Ended August 1, 2020 (Fiscal 2020) | For the Six Months Ended August 3, 2019 (Fiscal 2019) |\n| :----------------------------------------------------------- | :---------------------------------------------------- | :---------------------------------------------------- |\n| **Cash flows from operating activities:** | | |\n| Net loss | $ (52,440) | $ (3,043) |\n| Adjustments to reconcile net loss to net cash provided by (used for) operating activities: | | |\n| Amortization of deferred debt issuance costs | 72 | 69 |\n| Impairment of assets | 16,335 | — |\n| Depreciation and amortization | 11,072 | 12,548 |\n| Stock compensation expense | 797 | 928 |\n| Board of directors stock compensation | 149 | 284 |\n| Changes in operating assets and liabilities: | | |\n| Accounts receivable | 3,645 | 23 |\n| Inventories | 15,032 | (3,537) |\n| Prepaid expenses and other current assets | 975 | (889) |\n| Other assets | 622 | (441) |\n| Accounts payable | (13,230) | 2,511 |\n| Operating leases, net | 4,487 | (2,115) |\n| Accrued expenses and other liabilities | 3,488 | (5,420) |\n| Net cash provided by (used for) operating activities | (8,996) | 918 |\n| **Cash flows from investing activities:** | | |\n| Additions to property and equipment, net | (2,128) | (7,597) |\n| Net cash used for investing activities | (2,128) | (7,597) |\n| **Cash flows from financing activities:** | |\n| Net borrowings under credit facility | 27,225 | 7,502 |\n| Debt issuance costs associated with credit facility amendment| (25) | — |\n| Tax withholdings paid related to net share settlements of RSUs | — | (198) |\n| Net cash provided by financing activities | 27,200 | 7,304 |\n| Net increase in cash and cash equivalents | 16,076 | 625 |\n| Cash and cash equivalents: | |\n| Beginning of period | 4,338 | 4,868 |\n| End of period | $ 20,414 | $ 5,493 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide essential context and detail for the consolidated financial statements, covering the basis of presentation, the significant impact of the COVID-19 pandemic on operations and liquidity, segment information, accounting for intangibles, accounts payable, fair value measurements, and accumulated other comprehensive income. They also detail revenue recognition policies, debt agreements, lease accounting, long-term incentive plans, stock-based compensation, earnings per share calculations, income tax provisions, CEO transition costs, and the company's Nasdaq listing compliance [Note 1. Basis of Presentation](index=8&type=section&id=1.%20Basis%20of%20Presentation) [Impact of COVID-19 Pandemic on Business](index=8&type=section&id=Impact%20of%20COVID-19%20Pandemic%20on%20Business) - All store locations temporarily closed on March **17**, **2020**, with gradual reopening starting in late April and all stores reopened by end of June **2020**, though operating with reduced hours[19](index=19&type=chunk) - Significant precautionary measures taken to reduce expenses and preserve liquidity, including furloughs, layoffs (**34** employees in May, **430** store associates in July), temporary salary reductions for management (**10%-20%**), and suspension of non-employee director compensation[19](index=19&type=chunk) - Drew **$30.0 million** from revolving facility in March **2020**, amended credit facility in April **2020** to increase borrowing base and permit promissory notes with vendors, and negotiated rent concessions with landlords[19](index=19&type=chunk) [Segment Information](index=8&type=section&id=Segment%20Information) - The Company operates three principal segments: stores, direct, and wholesale businesses. Stores and direct segments are aggregated into one 'retail segment' due to similar economic characteristics and omni-channel approach[20](index=20&type=chunk) - Wholesale segment's operating results are aggregated with the retail segment due to immateriality of its revenues, profits, and assets[20](index=20&type=chunk) [Intangibles](index=9&type=section&id=Intangibles) - The 'dxl.com' domain name, with a carrying value of **$1.2 million**, is considered an indefinite-lived asset[21](index=21&type=chunk) - Qualitative review performed as of May **2**, **2020**, and August **1**, **2020**, concluded no impairment of the intangible asset despite the COVID-19 pandemic's impact[21](index=21&type=chunk) [Accounts Payable](index=9&type=section&id=Accounts%20Payable) - Company received extended payment terms from certain merchandise vendors through short-term notes totaling **$3.5 million**, accruing interest at **4.0%** annually[21](index=21&type=chunk) - Outstanding balance of these notes was **$2.0 million** at August **1**, **2020**, included in Accounts Payable[21](index=21&type=chunk) [Fair Value of Financial Instruments](index=9&type=section&id=Fair%20Value%20of%20Financial%20Instruments) - Fair value of long-term debt is classified within Level **2** of the valuation hierarchy, approximating carrying amount at August **1**, **2020**[22](index=22&type=chunk) - The 'dxl.com' domain name's fair value is measured on a non-recurring basis (Level **3**) during annual impairment tests[22](index=22&type=chunk) - Carrying amounts of cash, receivables, payables, accrued expenses, and short-term borrowings approximate fair value due to their short maturity[22](index=22&type=chunk) [Accumulated Other Comprehensive Income (Loss) - ("AOCI")](index=10&type=section&id=Accumulated%20Other%20Comprehensive%20Income%20(Loss)%20-%20(%22AOCI%22)) | (in thousands) | For the three months ended: August 1, 2020 | For the three months ended: August 3, 2019 | For the six months ended: August 1, 2020 | For the six months ended: August 3, 2019 |\n| :--------------------------------------------------------------------------- | :----------------------------------------- | :----------------------------------------- | :--------------------------------------- | :--------------------------------------- |\n| **Balance at beginning of the quarter** | **Pension Plans** $ (6,236) | **Pension Plans** $ (5,371) | **Pension Plans** $ (6,478) | **Pension Plans** $ (5,521) |\n| | **Foreign Currency** $ 13 | **Foreign Currency** $ (686) | **Foreign Currency** $ 47 | **Foreign Currency** $ (662) |\n| | **Total** $ (6,223) | **Total** $ (6,057) | **Total** $ (6,431) | **Total** $ (6,183) |\n| Other comprehensive income (loss) before reclassifications, net of taxes | Pension Plans: 77 | Pension Plans: 27 | Pension Plans: 154 | Pension Plans: 55 |\n| | Foreign Currency: (5) | Foreign Currency: (40) | Foreign Currency: (39) | Foreign Currency: (64) |\n| | Total: 72 | Total: (13) | Total: 115 | Total: (9) |\n| Amounts reclassified from accumulated other comprehensive income, net of taxes | Pension Plans: 176 | Pension Plans: 115 | Pension Plans: 341 | Pension Plans: 237 |\n| | Foreign Currency: — | Foreign Currency: — | Foreign Currency: — | Foreign Currency: — |\n| | Total: 176 | Total: 115 | Total: 341 | Total: 237 |\n| Other comprehensive income (loss) for the period | Pension Plans: 253 | Pension Plans: 142 | Pension Plans: 495 | Pension Plans: 292 |\n| | Foreign Currency: (5) | Foreign Currency: (40) | Foreign Currency: (39) | Foreign Currency: (64) |\n| | Total: 248 | Total: 102 | Total: 456 | Total: 228 |\n| **Balance at end of quarter** | **Pension Plans** $ (5,983) | **Pension Plans** $ (5,229) | **Pension Plans** $ (5,983) | **Pension Plans** $ (5,229) |\n| | **Foreign Currency** $ 8 | **Foreign Currency** $ (726) | **Foreign Currency** $ 8 | **Foreign Currency** $ (726) |\n| | **Total** $ (5,975) | **Total** $ (5,955) | **Total** $ (5,975) | **Total** $ (5,955) | [Note 2. Revenue Recognition](index=12&type=section&id=2.%20Revenue%20Recognition) [Disaggregation of Revenue](index=13&type=section&id=Disaggregation%20of%20Revenue) | (in thousands) | For the three months ended August 1, 2020 | For the three months ended August 3, 2019 | For the six months ended August 1, 2020 | For the six months ended August 3, 2019 |\n| :------------- | :---------------------------------------- | :---------------------------------------- | :-------------------------------------- | :-------------------------------------- |\n| Store sales | $ 38,465 (**53.9%**) | $ 95,119 (**78.9%**) | $ 70,792 (**55.9%**) | $ 181,834 (**78.7%**) |\n| Direct sales | 32,959 (**46.1%**) | 25,406 (**21.1%**) | 55,841 (**44.1%**) | 49,239 (**21.3%**) |\n| Retail segment | $ 71,424 | $ 120,525 | $ 126,633 | $ 231,073 |\n| Wholesale segment | 5,018 | 2,720 | 7,036 | 5,145 |\n| Total Sales | $ 76,442 | $ 123,245 | $ 133,669 | $ 236,218 | [Note 3. Debt](index=13&type=section&id=3.%20Debt) [Credit Agreement with Bank of America, N.A.](index=13&type=section&id=Credit%20Agreement%20with%20Bank%20of%20America,%20N.A.) - Third Amendment to Credit Facility (April **15**, **2020**) extended FILO loan advance rate, lowered Loan Cap, increased Applicable Margins by **150 basis points**, and allowed up to **$15.0 million** in vendor promissory notes[31](index=31&type=chunk) - **Borrowings and Repayments under Revolving Facility (Six Months Ended):** | (in thousands) | August 1, 2020 | August 3, 2019 |\n| :------------- | :------------- | :------------- |\n| Borrowings | $ 53,471 | $ 72,384 |\n| Repayments | (26,246) | (64,882) |\n| Net borrowings | $ 27,225 | $ 7,502 | - At August **1**, **2020**, outstanding borrowings under the Revolving Facility were **$66.8 million**, with **$12.4 million** in unused excess availability[32](index=32&type=chunk) [Long-Term Debt](index=14&type=section&id=Long-Term%20Debt) - FILO loan borrowing capacity is based on eligible accounts and inventory, with advance rates extended to December **2020** before stepping down[32](index=32&type=chunk) - Applicable margin rates for FILO loan borrowings increased by approximately **150 basis points** due to advance rate extension[32](index=32&type=chunk) - **Long-Term Debt (in thousands):** | Item | August 1, 2020 | February 1, 2020 |\n| :---------------------------------- | :------------- | :--------------- |\n| FILO Loan | $ 15,000 | $ 15,000 |\n| Less: unamortized debt issuance costs | (159) | (187) |\n| Total long-term debt | $ 14,841 | $ 14,813 | [Note 4. Leases](index=15&type=section&id=4.%20Leases) - Company leases all store locations and corporate headquarters under operating leases, typically **5-10** year initial terms for stores and **20** years for headquarters[35](index=35&type=chunk) - Due to COVID-19, rent payments were held from April-June **2020**, leading to concessions (deferrals, abatements, extensions) with most landlords, accounted for as lease modifications[35](index=35&type=chunk) - **Total Lease Costs (in thousands):** | Item | For the three months ended August 1, 2020 | For the three months ended August 3, 2019 | For the six months ended August 1, 2020 | For the six months ended August 3, 2019 |\n| :---------------- | :---------------------------------------- | :---------------------------------------- | :-------------------------------------- | :-------------------------------------- |\n| Operating lease cost | $ 11,300 | $ 13,215 | $ 23,932 | $ 26,468 |\n| Variable lease costs | 3,266 | 3,954 | 7,069 | 7,999 |\n| Total lease costs | $ 14,566 | $ 17,169 | $ 31,001 | $ 34,467 | - **Lease Liabilities Reconciliation (in thousands) as of August 1, 2020:** | Year | Undiscounted Cash Flows |\n| :--------------- | :---------------------- |\n| 2020 (remaining) | $ 27,978 |\n| 2021 | 58,166 |\n| 2022 | 49,959 |\n| 2023 | 41,321 |\n| 2024 | 31,031 |\n| Thereafter | 38,509 |\n| Total minimum lease payments | $ 246,964 |\n| Less: interest | 36,028 |\n| Present value of future minimum lease payments | $ 210,936 |\n| Less: current obligations | 45,626 |\n| Long-term lease obligations | $ 165,310 | [Note 5. Long-Term Incentive Plans](index=16&type=section&id=5.%20Long-Term%20Incentive%20Plans) - Company has three active LTIPs (**2018-2020**, **2019-2021**, **2020-2022**), with **50%** time-based and **50%** performance-based vesting[38](index=38&type=chunk) - Time-based awards for **2020-2022** LTIP were granted as **50%** stock options and **50%** cash[38](index=38&type=chunk) - Estimated compensation expense for each LTIP is approximately **$3.7 million** to **$3.8 million**, expensed straight-line over **41-46** months for time-based awards[38](index=38&type=chunk) [Note 6. Stock-Based Compensation](index=16&type=section&id=6.%20Stock-Based%20Compensation) [Non-Employee Director Compensation Plan](index=18&type=section&id=Non-Employee%20Director%20Compensation%20Plan) - **23,148** shares of common stock, with a fair value of approximately **$24,999**, were granted to non-employee directors as compensation in lieu of cash in the first six months of fiscal **2020**[42](index=42&type=chunk) - Non-employee directors suspended their compensation for the second quarter of fiscal **2020**[42](index=42&type=chunk) [Stock Compensation Expense](index=18&type=section&id=Stock%20Compensation%20Expense) - Total stock-based compensation expense recognized was **$0.8 million** for the first six months of fiscal **2020**, down from **$0.9 million** in fiscal **2019**[42](index=42&type=chunk) - Unrecognized compensation cost for time-vested awards was approximately **$2.7 million** as of August **1**, **2020**, to be expensed over a weighted average remaining life of **32** months[42](index=42&type=chunk) [Note 7. Earnings per Share](index=18&type=section&id=7.%20Earnings%20per%20Share) - **Weighted-Average Common Shares Outstanding (in thousands):** | Item | For the three months ended August 1, 2020 | For the three months ended August 3, 2019 | For the six months ended August 1, 2020 | For the six months ended August 3, 2019 |\n| :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | :-------------------------------------- | :-------------------------------------- |\n| Basic weighted average common shares outstanding | 51,078 | 49,867 | 50,918 | 49,734 |\n| Common stock equivalents – stock options and restricted stock | — | 308 | — | — |\n| Diluted weighted average common shares outstanding | 51,078 | 50,175 | 50,918 | 49,734 | - **720,000** shares of unvested performance stock units and **327,382** shares of deferred stock (at August **1**, **2020**) were excluded from EPS computations due to unachieved performance targets or unvested status[45](index=45&type=chunk) [Note 8. Income Taxes](index=19&type=section&id=8.%20Income%20Taxes) - Company maintains a full valuation allowance against its deferred tax assets (**$107.4 million** total deferred tax assets, **$47.4 million** liabilities, **$60.0 million** valuation allowance at August **1**, **2020**) due to uncertainty in generating sufficient taxable income[46](index=46&type=chunk) - Federal net operating loss carryforwards of **$158.2 million** (expiring **2022-2036**) and **$34.0 million** (no expiration), plus state and Canadian NOLs[46](index=46&type=chunk) - CARES Act provided a **$1.2 million** refundable employee retention tax credit and accelerated **$1.1 million** in refundable alternative minimum tax (AMT) credit in Q2 fiscal **2020**[46](index=46&type=chunk) [Note 9. CEO Transition Costs](index=19&type=section&id=9.%20CEO%20Transition%20Costs) - First six months of fiscal **2019** included **$0.7 million** in CEO transition costs[47](index=47&type=chunk) [Note 10. Nasdaq Notification of Non-Compliance](index=19&type=section&id=10.%20Nasdaq%20Notification%20of%20Non-Compliance) - Received Nasdaq non-compliance notification on April **9**, **2020**, for failing to meet the **$1.00** minimum bid price requirement[48](index=48&type=chunk) - Grace period extended to December **21**, **2020**, due to COVID-19 tolling of compliance periods[49](index=49&type=chunk) - Shareholders approved a reverse stock split (**1-for-2** to **1-for-5**) to regain compliance, but no assurance of success[49](index=49&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's analysis of financial condition and results, highlighting COVID-19 impact, liquidity, sales, and non-GAAP measures [Forward-Looking Statements](index=21&type=section&id=FORWARD-LOOKING%20STATEMENTS) - This section contains forward-looking statements regarding the Company's ability to withstand the COVID-19 pandemic, manage costs, expected inventory levels, direct sales impact, store operations, and liquidity for the next **12** months[51](index=51&type=chunk) - Readers are encouraged to refer to 'Risk Factors' in Part II, Item **1A**, which discusses risks including the COVID-19 pandemic, corporate strategy execution, and market competition[51](index=51&type=chunk) [Business Summary](index=21&type=section&id=BUSINESS%20SUMMARY) - Destination XL Group, Inc. is the largest specialty retailer of big and tall men's clothing, operating retail, wholesale, and direct businesses in the US and Canada[52](index=52&type=chunk) - As of August **1**, **2020**, the Company operated **228** Destination XL stores, **17** DXL outlet stores, **49** Casual Male XL retail stores, and **23** Casual Male XL outlet stores, supported by its e-commerce site dxl.com[52](index=52&type=chunk) [Segment Reporting](index=21&type=section&id=SEGMENT%20REPORTING) - The Company has three operating segments: stores, direct business, and wholesale business. Stores and direct businesses are aggregated into a single 'retail segment' due to similar economic characteristics and an omni-channel approach[53](index=53&type=chunk) - The wholesale segment's operating results are aggregated with the retail segment due to its immateriality[53](index=53&type=chunk) [Direct Sales](index=21&type=section&id=DIRECT%20SALES) - The Company is adapting to evolving customer shopping preferences across multiple channels, with stores capable of fulfilling online orders and customers able to order online for in-store or curbside pickup[54](index=54&type=chunk) - E-commerce sales (direct sales) are defined as sales originating online, including via website, in-store online, or third-party marketplaces, distinct from store sales fulfilled directly at the store level[56](index=56&type=chunk) [Comparable Sales](index=22&type=section&id=COMPARABLE%20SALES) - Comparable sales discussion is omitted for Q2 and first six months of fiscal **2020** because temporary store closures and reduced hours due to COVID-19 make it an unmeaningful metric[57](index=57&type=chunk) [Results of Operations](index=22&type=section&id=RESULTS%20OF%20OPERATIONS) [Impact of COVID-19 Pandemic on Our Business](index=22&type=section&id=Impact%20of%20COVID-19%20Pandemic%20on%20Our%20Business) - COVID-19 significantly impacted the business, leading to temporary store closures (March **17**, **2020**, all reopened by end of June with reduced hours) and a shift to online shopping[58](index=58&type=chunk) - Direct business sales increased by **$7.6 million** in Q2 fiscal **2020**, accounting for **46.1%** of retail sales (vs. **21.1%** prior year), driven by digital strategies and changing customer preferences[58](index=58&type=chunk) - Proactive measures included restructuring to reduce operating costs (furloughs, layoffs of **34** corporate and **430** store associates, temporary salary reductions for management), negotiating rent relief (**$10.0 million** reduction for fiscal **2020**), and managing cash flow by drawing **$30.0 million** from credit facility[58](index=58&type=chunk) [Financial Summary](index=23&type=section&id=Financial%20Summary) - **Financial Summary (in millions, except per share data):** | Item | For the three months ended August 1, 2020 | For the three months ended August 3, 2019 | For the six months ended August 1, 2020 | For the six months ended August 3, 2019 |\n| :---------------------------------- | :---------------------------------------- | :---------------------------------------- | :-------------------------------------- | :-------------------------------------- |\n| Net income (loss) | $ (10.7) | $ 0.0 | $ (52.4) | $ (3.0) |\n| Adjusted EBITDA (Non-GAAP basis) | $ (4.3) | $ 7.1 | $ (23.2) | $ 11.9 |\n| Per diluted share: | | | | |\n| Net income (loss) | $ (0.21) | $ 0.00 | $ (1.03) | $ (0.06) |\n| Adjusted net income (loss) (Non-GAAP basis) | $ (0.15) | $ 0.00 | $ (0.52) | $ (0.04) | [Sales](index=23&type=section&id=Sales) - **Total Sales (in thousands):** | Sales Channel | For the three months ended August 1, 2020 | For the three months ended August 3, 2019 | For the six months ended August 1, 2020 | For the six months ended August 3, 2019 |\n| :--------------- | :---------------------------------------- | :---------------------------------------- | :-------------------------------------- | :-------------------------------------- |\n| Store sales | $ 38,465 (**53.9%**) | $ 95,119 (**78.9%**) | $ 70,792 (**55.9%**) | $ 181,834 (**78.7%**) |\n| Direct sales | 32,959 (**46.1%**) | 25,406 (**21.1%**) | 55,841 (**44.1%**) | 49,239 (**21.3%**) |\n| Retail segment | $ 71,424 | $ 120,525 | $ 126,633 | $ 231,073 |\n| Wholesale segment| 5,018 | 2,720 | 7,036 | 5,145 |\n| Total Sales | $ 76,442 | $ 123,245 | $ 133,669 | $ 236,218 | - Total sales for Q2 fiscal **2020** decreased **38.0%** to **$76.4 million** (from **$123.2 million**), and for the first six months decreased **43.4%** to **$133.7 million** (from **$236.2 million**), primarily due to store closures and reduced consumer spending from COVID-19[60](index=60&type=chunk) - Direct business sales increased **69%** over prior year Q2, driven by DXL.com, and wholesale sales increased to **$5.0 million** (from **$2.7 million**) due to **$4.1 million** in protective mask sales[60](index=60&type=chunk) [Gross Margin Rate](index=23&type=section&id=Gross%20Margin%20Rate) - Gross margin rate for Q2 fiscal **2020** was **28.1%**, a **16.2%** decrease from **44.3%** in Q2 fiscal **2019**, due to **5.1%** deleveraging in occupancy costs and **11.1%** decrease in merchandise margins[61](index=61&type=chunk)[62](index=62&type=chunk) - For the first six months, gross margin was **26.0%**, an **18.1%** decrease from **44.0%** in fiscal **2019**, reflecting **8.6%** deleveraging in occupancy costs and **9.5%** decrease in merchandise margins, plus a **$0.7 million** increase in inventory reserves[62](index=62&type=chunk) - Merchandise margins improved significantly post-Father's Day, with a **1260 basis point** improvement in July compared to May, despite increased shipping costs from direct channel growth and free shipping promotions[62](index=62&type=chunk) [Selling, General and Administrative Expenses](index=24&type=section&id=Selling,%20General%20and%20Administrative%20Expenses) - SG&A expenses decreased by **$21.7 million** (**45.7%**) to **33.7%** of sales in Q2 fiscal **2020** (from **38.5%** in Q2 fiscal **2019**), and by **$34.2 million** (**37.1%**) to **43.3%** of sales for the first six months (from **39.0%** in fiscal **2019**)[63](index=63&type=chunk) - Cost reduction steps included furloughs, marketing cost reductions, temporary salary cuts for management, suspension of non-employee director compensation, and elimination of **34** corporate positions and **430** store associates[63](index=63&type=chunk) - Customer Facing Costs were **20.0%** of sales for the first six months of fiscal **2020** (vs. **23.3%** prior year), while Corporate Supporting Costs were **23.3%** of sales (vs. **15.7%** prior year)[63](index=63&type=chunk) [Impairment of Assets](index=24&type=section&id=Impairment%20of%20Assets) - A **$16.3 million** impairment charge was recorded in Q1 fiscal **2020**, comprising **$12.5 million** for right-of-use assets and **$3.8 million** for property and equipment, due to the COVID-19 pandemic's impact on store operations and projected cash flows[63](index=63&type=chunk) - No material impairment of long-lived assets occurred in Q2 fiscal **2020** or the first six months of fiscal **2019**[25](index=25&type=chunk)[63](index=63&type=chunk) [Depreciation and Amortization](index=24&type=section&id=Depreciation%20and%20Amortization) - Depreciation and amortization decreased to **$5.3 million** in Q2 fiscal **2020** (from **$6.2 million** in Q2 fiscal **2019**) and to **$11.1 million** for the first six months (from **$12.5 million** in fiscal **2019**)[64](index=64&type=chunk) [Interest Expense, Net](index=24&type=section&id=Interest%20Expense,%20Net) - Net interest expense increased to **$1.1 million** in Q2 fiscal **2020** (from **$0.9 million** in Q2 fiscal **2019**) and to **$1.8 million** for the first six months (from **$1.7 million** in fiscal **2019**)[64](index=64&type=chunk) - Increase was due to higher average borrowings and a **150 basis point** increase in interest rates under the Credit Facility amendment in April **2020**, plus a **$30.0 million** draw on the revolving credit facility in March **2020**[64](index=64&type=chunk)[65](index=65&type=chunk) [Income Taxes](index=25&type=section&id=Income%20Taxes) - A full valuation allowance against deferred tax assets has been maintained since fiscal **2013**, deemed appropriate for fiscal **2020** due to current period losses and state margin tax[66](index=66&type=chunk) - The total income tax benefit for Q2 and first six months of fiscal **2019** included a deferred tax impact of **$30,000** and **$81,000**, respectively, in other comprehensive income (loss)[66](index=66&type=chunk) [Net Loss](index=25&type=section&id=Net%20Loss) - Net loss for Q2 fiscal **2020** was **$(10.7) million**, or **$(0.21)** per diluted share, compared to net income of **$0.0 million**, or **$0.00** per diluted share, in Q2 fiscal **2019**[67](index=67&type=chunk) - Net loss for the first six months of fiscal **2020** was **$(52.4) million**, or **$(1.03)** per diluted share, compared to **$(3.0) million**, or **$(0.06)** per diluted share, in fiscal **2019**[67](index=67&type=chunk) - Adjusted net loss per diluted share (non-GAAP) was (**$0.15**) for Q2 and (**$0.52**) for the first six months of fiscal **2020**, compared to adjusted net income (loss) of **$0.00** and (**$0.04**) respectively, in fiscal **2019**[67](index=67&type=chunk) [Inventory](index=25&type=section&id=Inventory) - Inventory at August **1**, **2020**, decreased by approximately **$23.0 million** to **$87.4 million**, compared to **$110.4 million** at August **3**, **2019**[67](index=67&type=chunk) - The Company cancelled approximately **$148 million** (at retail) of open merchandise orders for fiscal **2020** and expects fall inventory buys to be below fiscal **2019** levels[67](index=67&type=chunk) - Clearance inventory decreased by **$2.2 million** and represented **11.3%** of total inventory at August **1**, **2020** (vs. **10.9%** prior year)[67](index=67&type=chunk) [Seasonality](index=25&type=section&id=SEASONALITY) - Consistent with the retail industry, the Company historically experiences seasonal fluctuations, with a significant portion of operating and net income generated in the fourth quarter due to the 'Holiday' season[68](index=68&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) - Primary liquidity sources are cash from operations and the Credit Facility. Management believes current liquidity is sufficient for the next **12** months, assuming no further significant economic shutdowns[69](index=69&type=chunk) - Cash flow from operations decreased by **$9.9 million** to **$(9.0) million** for the first six months of fiscal **2020** (from **$0.9 million** in fiscal **2019**)[69](index=69&type=chunk) - Cash flow from financing activities increased **$19.9 million** to **$27.2 million** for the first six months of fiscal **2020**, primarily due to a **$30.0 million** draw on the Credit Facility in March **2020**[69](index=69&type=chunk) - **Total Debt Outstanding (in thousands) at August 1, 2020:** | Item | Gross Debt Outstanding | Less Debt Issuance Costs | Net Debt Outstanding |\n| :---------------- | :--------------------- | :----------------------- | :------------------- |\n| Credit facility | $ 66,803 | $ (258) | $ 66,545 |\n| FILO Loan | 15,000 | (159) | 14,841 |\n| Total debt | $ 81,803 | $ (417) | $ 81,386 | [FILO Loan](index=26&type=section&id=FILO%20Loan) - The Credit Facility includes a **$15.0 million** FILO loan, with borrowing capacity based on eligible accounts and inventory, whose advance rates were extended to December **2020**[72](index=72&type=chunk) - Borrowings under the FILO loan bear interest at variable rates (Federal Funds or LIBOR) plus increased applicable margins (e.g., **6.00%** LIBOR-based at August **1**, **2020**)[72](index=72&type=chunk) [Capital Expenditures](index=26&type=section&id=Capital%20Expenditures) - Capital expenditures for the first six months of fiscal **2020** were reduced to **$2.1 million** (from **$7.6 million** in fiscal **2019**) to preserve liquidity[72](index=72&type=chunk) - **Store Count and Square Footage (in thousands) at August 1, 2020 vs. August 3, 2019:** | Store Concept | August 1, 2020 (Number of Stores) | August 1, 2020 (Square Footage) | August 3, 2019 (Number of Stores) | August 3, 2019 (Square Footage) |\n| :---------------------- | :-------------------------------- | :------------------------------ | :-------------------------------- | :------------------------------ |\n| DXL Retail | 228 | 1,729 | 220 | 1,697 |\n| DXL Outlets | 17 | 82 | 16 | 82 |\n| Casual Male XL Retail | 49 | 160 | 60 | 200 |\n| Casual Male Outlets | 23 | 69 | 29 | 88 |\n| Rochester Clothing | - | - | 3 | 36 |\n| Total Stores | 317 | 2,040 | 328 | 2,103 | - During the first six months of fiscal **2020**, five Casual Male XL outlets and one Casual Male XL retail store were closed[72](index=72&type=chunk) [Critical Accounting Policies](index=27&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) - No material changes to critical accounting policies and estimates were disclosed compared to the Form **10-K** for the year ending February **1**, **2020**[75](index=75&type=chunk) [Non-GAAP Financial Measures](index=27&type=section&id=Non-GAAP%20Financial%20Measures) - Adjusted net income (loss), adjusted net income (loss) per diluted share, free cash flow, and Adjusted EBITDA are non-GAAP measures used by management to evaluate performance and liquidity[75](index=75&type=chunk) - **Adjusted Net Income (Loss) (Non-GAAP Basis) (in thousands, except per share data):** | Item | For the three months ended August 1, 2020 | For the three months ended August 3, 2019 | For the six months ended August 1, 2020 | For the six months ended August 3, 2019 |\n| :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | :-------------------------------------- | :-------------------------------------- |\n| Net income (loss) (GAAP basis) | $ (10,714) | $ 38 | $ (52,440) | $ (3,043) |\n| Adjust: CEO transition costs | - | - | - | 702 |\n| Impairment of assets | - | - | 16,335 | - |\n| Add back actual income tax provision (benefit) | 24 | (8) | 44 | (29) |\n| Add income tax (provision) benefit, assuming a normal tax rate of 26% | 2,779 | (8) | 9,376 | 616 |\n| Adjusted net income (loss) (non-GAAP basis) | $ (7,911) | $ 22 | $ (26,685) | $ (1,754) |\n| Per diluted share: | $ (0.15) | $ 0.00 | $ (0.52) | $ (0.04) | - **Free Cash Flow (Non-GAAP Basis) (in millions):** | Item | For the six months ended August 1, 2020 | For the six months ended August 3, 2019 |\n| :------------------------------------------ | :-------------------------------------- | :-------------------------------------- |\n| Cash flow from operating activities (GAAP basis) | $ (9.0) | $ 0.9 |\n| Capital expenditures, infrastructure projects | (1.4) | (5.2) |\n| Capital expenditures for DXL stores | (0.7) | (2.4) |\n| Free Cash Flow (non-GAAP basis) | $ (11.1) | $ (6.7) | - **Adjusted EBITDA (Non-GAAP Basis) (in millions):** | Item | For the three months ended August 1, 2020 | For the three months ended August 3, 2019 | For the six months ended August 1, 2020 | For the six months ended August 3, 2019 |\n| :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | :-------------------------------------- | :-------------------------------------- |\n| Net income (loss) (GAAP basis) | $ (10.7) | $ 0.0 | $ (52.4) | $ (3.0) |\n| Add back: CEO transition costs | - | - | - | 0.7 |\n| Impairment of assets | - | - | 16.3 | - |\n| Provision (benefit) for income taxes | - | - | 0.0 | - |\n| Interest expense | 1.1 | 0.9 | 1.8 | 1.7 |\n| Depreciation and amortization | 5.3 | 6.2 | 11.1 | 12.5 |\n| Adjusted EBITDA (non-GAAP basis) | $ (4.3) | $ 7.1 | $ (23.2) | $ 11.9 | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Discusses market risks, primarily interest rate exposure on borrowings and immaterial foreign currency fluctuations [Interest Rates](index=28&type=section&id=Interest%20Rates) - Borrowings under the Credit Facility and FILO loan bear variable interest rates based on Bank of America's prime rate or LIBOR[79](index=79&type=chunk) - At August **1**, **2020**, **$66.8 million** outstanding borrowings under Credit Facility (**$62.0 million** LIBOR-based at ~**4.00%**, remainder prime-based at **5.25%**) and **$15.0 million** FILO loan (LIBOR-based at **6.00%**)[79](index=79&type=chunk) - A **50 basis point** increase in interest rates would result in an approximate **$421,000** increase in annualized interest expense[79](index=79&type=chunk) [Foreign Currency](index=28&ty

Destination XL Group, Inc. (NASDAQ:DXLG) Q1 2020 Earnings Conference Call June 4, 2020 9:00 AM ET Company Participants Nitza McKee - IR, ICR Harvey Kanter - President & CEO Peter Stratton - CFO Conference Call Participants Eric Beder - SCC Research Glenn Krevlin - Glenhill Capital Advisors Operator Good day ladies and gentlemen, and welcome to the DXLG Fiscal First Quarter Year 2020 Financial Results Conference Call. Today’s call is being recorded. [Operator Instructions] At this time, I would like to turn ...

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 May 2, 2020 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) Canton, MA (Address of principal executive offices) (Zip Code) | --- | --- | |- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended February 1, 2020 (Fiscal 2019) Commission File Number 01-34219 DESTINATION XL GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 04-2623104 (State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.) 555 Turnpike Street, Canton, MA 02021 (Address of principa ...

Destination XL Group, Inc. (NASDAQ:DXLG) Q4 2019 Earnings Conference Call March 19, 2020 9:00 AM ET Company Participants Nitza McKee - ICR Harvey Kanter - President, CEO & Director Peter Stratton - EVP, CFO & Treasurer Conference Call Participants Operator Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter 2019 Destination XL Group, Incorporated Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to your host today, Ms. Nitza Mckee ...

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 November 2, 2019 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) Canton, MA (Address of principal executive offices) (Zip Code) | --- | --- ...

Destination XL Group, Inc. (NASDAQ:DXLG) Q3 2019 Earnings Conference Call November 22, 2019 9:00 AM ET Company Participants Harvey Kanter - President, CEO & Director Peter Stratton - EVP, CFO & Treasurer Conference Call Participants Nitza McKee - ICR Roger Feldman - West Creek Capital Christopher Krueger - Lake Street Capital Markets Bernard Sosnick - Madison Global Partners Eric Beder - Small Cap Consumer Research Operator Good day, ladies and gentlemen, and welcome to the Q3 2019 Destination XL Group Earn ...