Lands’ End(US:LE)2022-03-24 20:39Financial Performance - Total Net revenue for Fiscal 2021 was $1.64 billion, an increase of $209.2 million or 14.7% from Fiscal 2020[201]. - Gross profit for Fiscal 2021 was $691.5 million, representing 42.2% of net revenue, compared to 42.4% in Fiscal 2020[193]. - Operating income for Fiscal 2021 was $79.8 million, or 4.9% of net revenue, up from $41.1 million or 2.9% in Fiscal 2020[193]. - Net income for Fiscal 2021 was $33.4 million, compared to $10.8 million in Fiscal 2020, reflecting a significant improvement[195]. - Adjusted EBITDA for Fiscal 2021 was $120.9 million, or 7.4% of net revenue, compared to $87.0 million or 6.1% in Fiscal 2020[197]. - Total Net revenue for Fiscal 2021 was $1.64 billion, an increase of 14.7% from $1.43 billion in Fiscal 2020[202]. - U.S. eCommerce Net revenue reached $1.03 billion, up $65.2 million or 6.8% from Fiscal 2020, driven by stronger website traffic and higher average order value[202]. - Outfitters Net revenue increased by 45.9% to $254.2 million, attributed to stronger demand in travel-related national accounts[204]. - Third Party Net revenue surged 116.6% to $86.5 million, driven by a full year of revenue with expanded product assortment online and in retail locations[206]. - Retail Net revenue rose 67.9% to $47.8 million, with Same Store Sales increasing by 32.4% compared to the Fourth Quarter of 2020[207]. - Gross profit increased 14.1% to $691.5 million, while gross margin slightly decreased to 42.3% of total Net revenue[208]. - Operating income was $79.8 million, an increase of $38.7 million from $41.1 million in Fiscal 2020, driven by higher gross profit[212]. - Net income for Fiscal 2021 was $33.4 million, or $0.99 per diluted share, compared to $10.8 million, or $0.33 per diluted share in Fiscal 2020[217]. - Adjusted EBITDA increased 39.0% to $120.9 million in Fiscal 2021, compared to $87.0 million in Fiscal 2020[218]. - Comprehensive income for the fiscal year was $31.9 million, compared to $12.6 million in the previous year, indicating a growth of 153.5%[292]. - Net income for the fiscal year ended January 28, 2022, was $33,369, compared to $10,836 in the previous year, reflecting a significant increase of 208%[298]. - Basic net income per share rose to $1.01, up from $0.33 in the previous year, indicating a 206.1% increase[289]. Revenue Sources - U.S. eCommerce experienced increased demand due to enhancements in seasonal product assortments and digital capabilities[201]. - Outfitters saw stronger demand within travel-related national accounts and school uniform households returned to historical back-to-school shopping patterns[201]. - Third Party revenue increased with a full year of Kohl's revenue and expansion into an additional 150 Kohl's retail locations, totaling 300[201]. - International Net revenue was $221.0 million, a decrease of $1.9 million or 0.8% from Fiscal 2020, primarily due to softer demand and delayed inventory receipts[203]. Supply Chain and Operational Challenges - The company anticipates ongoing global supply chain challenges and increased transportation costs to impact future net sales and gross margin[185]. - Global supply chain challenges impacted the company's distribution process and resulted in increased transportation and distribution costs during the second half of Fiscal 2021[313]. - The company expects global supply chain challenges and increased transportation costs to continue throughout Fiscal 2022, potentially affecting future net sales and gross margin[314]. Financial Position and Liabilities - Total contractual obligations amounted to $832.3 million, with $477.5 million due within one year[241]. - Operating lease obligations total $48.1 million, with $9.2 million due within one year[241]. - Principal payments on long-term debt are projected at $257.8 million, with $13.8 million due within one year[241]. - The fair value of the U.S. eCommerce reporting unit exceeded its carrying value by 91.2% in Fiscal 2021, indicating no goodwill impairment[255]. - The fair value of the Lands' End trade name exceeded its carrying value by 68.9% in Fiscal 2021, resulting in no impairment charges[259]. - Each one percentage point change in interest rates on the Term Loan Facility would result in a $2.6 million change in annual cash interest expenses[270]. - The ABL Facility has a principal amount of $275.0 million, with a $70.0 million sublimit for letters of credit[244]. - The consolidated carrying value of goodwill as of January 28, 2022, was $106.7 million, associated with the U.S. eCommerce and Outfitters reporting units[283]. - The consolidated carrying value of the indefinite-lived trade name was $257.0 million, which is tested annually for impairment[283]. - Long-term debt decreased to $234,474 from $245,632, a decline of about 4.5%[295]. - Total current liabilities decreased to $311,432 from $314,922, a reduction of about 1.6%[295]. - Total stockholders' equity increased to $406,696 from $369,703, reflecting a growth of approximately 10%[295]. Expenses and Cost Management - Total costs and expenses for the fiscal year were $611.7 million, compared to $564.7 million in the previous year, reflecting an increase of 8.3%[289]. - Marketing expenses for Fiscal 2021 totaled $220.0 million, an increase from $195.4 million in Fiscal 2020[327]. - The company reported a depreciation and amortization expense of $39,166, compared to $37,343 in the previous year, an increase of about 4.9%[298]. - The company recorded depreciation expense of $39.2 million for Fiscal 2021, up from $37.3 million in Fiscal 2020[330]. - The excess and obsolete reserve balances decreased from $22.8 million to $15.2 million, reflecting improved inventory management[249]. - The excess and obsolescence reserve decreased by $7.6 million to $15.2 million as of January 28, 2022, due to improved sales of returned products[326]. Cash Flow and Investments - Net cash used in financing activities was $45.1 million in Fiscal 2021, down from $103.1 million in Fiscal 2020[240]. - Cash and cash equivalents increased slightly to $34,301 from $33,933, showing a growth of 1.1%[295]. - The company utilized $25,238 in cash for investing activities, a decrease from $30,149 in the prior year, indicating a reduction of approximately 16.3%[298]. - Net cash provided by operating activities was $70,569, down from $91,633, a decrease of approximately 23%[298]. Corporate Actions and Changes - The company reduced approximately 10% of corporate positions in the second quarter of 2020, incurring severance costs of approximately $2.9 million[317]. - The Company adopted ASU 2019-12 in the First Quarter of 2021, which did not have a material impact on its financial statements[368]. - The Company increased the maximum borrowings under the ABL Facility from $175 million to $275 million, completed in two transactions of $25 million and $75 million[370]. - The Company entered into a Term Loan Facility on September 9, 2020, providing borrowings of $275 million with origination costs including a 3% Original Issue Discount and $5.1 million in debt origination fees[372]. - The Third Amendment to the ABL Facility lowered interest rates for LIBOR loans, with margins ranging from 1.25% to 1.75% based on total loans outstanding[374].