Duluth (US:DLTH)2023-03-16 16:00Financial Performance - Net sales in fiscal 2022 decreased by 6.5% to $653.3 million compared to $698.6 million in fiscal 2021[152]. - Net income in fiscal 2022 was $2.2 million, a significant decline from $29.6 million in the prior year[152]. - Adjusted EBITDA decreased by 43.8% to $43.5 million in fiscal 2022, down from $77.4 million in fiscal 2021[177]. - Gross profit decreased by 9.0% to $343.4 million, with gross margin declining to 52.6% from 54.0%[169]. - Operating income significantly decreased to $6,231 thousand from $44,099 thousand, indicating a decline of approximately 86.9% year-over-year[240]. - Net income attributable to controlling interest was $2,304 thousand, a substantial drop from $29,702 thousand, representing a decrease of about 92.2%[240]. - Comprehensive income for the fiscal year was $1,609 thousand, down from $29,991 thousand, reflecting a significant decline in overall profitability[243]. - Basic earnings per share attributable to controlling interest fell to $0.07 from $0.91, a decrease of approximately 92.4%[240]. Cash Flow and Liquidity - Free cash flow decreased by $110.1 million to $(28.5) million in fiscal 2022, down from $81.6 million in fiscal 2021[179]. - For fiscal 2022, net cash used in operating activities was $5.6 million, compared to a net cash provided of $92.0 million in fiscal 2021, primarily due to a $32.3 million increase in inventory[186][187]. - The company reported net cash used in investing activities of $22.6 million in fiscal 2022, mainly for purchases related to the Adairsville fulfillment center[188]. - In fiscal 2022, net cash used in financing activities was $3.2 million, a significant decrease from $51.4 million in fiscal 2021, which included the full paydown of bank debt[190]. - The company believes that cash flow from operating activities and available cash under its credit facility will be sufficient to meet working capital requirements and anticipated capital expenditures for the foreseeable future[182]. - The company experienced a decrease in cash and cash equivalents of $31.5 million in fiscal 2022, compared to an increase of $30.5 million in fiscal 2021[184]. - The company's cash and cash equivalents decreased to $45,548 thousand from $77,051 thousand, a decline of approximately 40.7%[238]. Expenses and Costs - Selling, general and administrative expenses increased by 1.2% to $337.2 million, representing 51.6% of net sales compared to 47.7% in fiscal 2021[170]. - The company incurred shipping and processing expenses of $44,000,000 in fiscal 2022, slightly down from $44,300,000 in fiscal 2021[263]. - Advertising and catalog expenses rose to $76,300,000 in fiscal 2022 from $75,200,000 in fiscal 2021[261]. - Total lease expense for the fiscal year ended January 29, 2023, was $35.572 million, compared to $31.413 million for the fiscal year ended January 30, 2022, representing an increase of approximately 13.7%[306]. - Cash paid for operating leases was $18.477 million for the fiscal year ended January 29, 2023, up from $15.792 million in the prior year, indicating a year-over-year increase of about 16.9%[308]. Inventory and Assets - Store market net sales decreased by 6.1% to $456.5 million, while non-store market sales decreased by 7.1% to $191.6 million[168]. - The principal supplier accounted for 56% of total inventory expenditures in fiscal 2022, up from 53% in fiscal 2021[268]. - The company’s inventory valuation is based on the first-in, first-out method, and adjustments are made for obsolescence and shrinkage reserves[206][207]. - Total assets increased to $527,454 thousand as of January 29, 2023, compared to $515,550 thousand as of January 30, 2022, marking a growth of approximately 2.0%[238]. - Total liabilities rose to $300,257 thousand from $292,832 thousand, indicating an increase of about 2.3% year-over-year[238]. - Property and equipment net value decreased from $110,078,000 in January 30, 2022 to $108,332,000 in January 29, 2023, reflecting a decline of approximately 1.6%[272]. Debt and Financing - The company has a total credit facility of $200.0 million following the First Amendment to the New Credit Agreement, which extends the maturity date to July 8, 2027[194]. - The carrying amount of long-term debt, including the short-term portion, was $26,681,000 as of January 29, 2023, compared to $27,301,000 in January 30, 2022, reflecting a decrease of approximately 2.3%[300]. - Total debt as of January 29, 2023, was $26.681 million, a slight decrease from $27.301 million as of January 30, 2022[311]. Taxation - Income tax expense was $0.7 million in fiscal 2022, down from $9.9 million in fiscal 2021[173]. - Total income tax expense for the fiscal year ended January 29, 2023, was $0.7 million, significantly lower than $9.9 million for the fiscal year ended January 30, 2022, a decrease of approximately 92.9%[333]. - The company reported a total deferred tax asset of $62.6 million as of January 29, 2023, compared to $58.5 million as of January 30, 2022, an increase of about 7.0%[336]. Other Financial Metrics - The product return reserve was recorded at $5,168 thousand as of January 29, 2023, reflecting management's estimates based on historical sales and return data[224]. - The company recognized a loss on disposal of property and equipment amounting to $1,392,000 in fiscal 2022, compared to $398,000 in fiscal 2021[249]. - The Company recorded depreciation expense of $26.7 million for fiscal 2022, up from $25.1 million in fiscal 2021, indicating a year-over-year increase of 6.4%[272]. - The accumulated amortization for intangible assets was $0.8 million as of January 29, 2023, compared to $0.6 million as of January 30, 2022, representing a 33.3% increase[279].