
PART I. FINANCIAL INFORMATION This section presents the unaudited consolidated financial information, including statements, MD&A, market risk, and controls Item 1. Financial Statements 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 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 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 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 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 202022 | 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, 202140 - 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 costs5165 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2021 financial results, highlighting strong sales recovery, improved margins, cost savings, and strengthened liquidity Results of Operations 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 - 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 201962 - A restructured promotional strategy, shifting from broad-based deep discounts to targeted, full-priced messaging, significantly reduced markdown dollars and improved the gross margin rate6263 Liquidity and Capital Resources 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 turnover7279 | 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, 20206575 - 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 terms77 Item 3. Quantitative and Qualitative Disclosures about Market Risk 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 expense83 Item 4. Controls and Procedures 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 effective84 - No material changes to internal control over financial reporting occurred during the quarter85 PART II. OTHER INFORMATION This section provides additional information, including legal proceedings, risk factors, and a list of exhibits filed with the report Item 1. Legal Proceedings 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 position87 Item 1A. Risk Factors 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 Report87 Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including employment and credit agreements, stock purchase agreements, and officer certifications