UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
May 30, 2012
Date of Report (Date of Earliest Event Reported)
TILLYS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware | 1-35535 | 45-2164791 | ||
(State of Incorporation) | (Commission File Number) |
(IRS Employer Identification Number) |
10 Whatney
Irvine, California 92618
(Address of Principal Executive Offices) (Zip Code)
(949) 609-5599
(Registrants Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
On May 30, 2012, Tillys, Inc. issued a press release announcing first quarter fiscal 2012 results. The press release is furnished as Exhibit 99.1 and is incorporated herein by reference. Exhibit 99.1 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 (the Exchange Act) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01 | Exhibits. |
(d) Exhibits
99.1 | Press Release dated May 30, 2012. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
TILLYS, INC. | ||||||
Date: May 30, 2012 | By: | /s/ Patrick Grosso | ||||
Name: | Patrick Grosso | |||||
Title: | Vice President, General Counsel and Secretary |
Exhibit 99.1
Tillys, Inc. Announces First Quarter Fiscal 2012 Results
Irvine, CA May 30, 2012 Tillys, Inc. (NYSE: TLYS) today announced financial results for the first quarter of fiscal 2012 ended April 28, 2012.
| Total net sales for the first quarter were $96.5 million, an increase of 16.1%. Comparable store sales, which include e-commerce sales, increased 4.3%. E-commerce sales increased 31% to $10.9 million compared to the first quarter in the prior year. |
| Gross profit increased 16.1% to $30.4 million. Gross margin was 31.5%, equal to the first quarter of fiscal 2011. |
| Operating income increased 21.4% to $6.0 million. Operating margin for the quarter was 6.2% as compared to 6.0% in the first quarter of 2011. |
| On a GAAP basis, net income was $5.9 million, or $0.29 per diluted share, based on a weighted average diluted share count of 20.5 million. This compares to $4.9 million or $0.24 per diluted share based on 20.4 million weighted average diluted shares in the first quarter of fiscal 2011. |
| On a pro-forma basis, assuming an effective tax rate of 40% for both periods, net income for the quarter increased 21.7% to $3.6 million, or $0.18 per weighted average diluted share, from $3.0 million or $0.14 per weighted average diluted share in the first quarter 2011. |
Daniel Griesemer, President and Chief Executive Officer, commented, We are pleased with our first quarter results, which highlight the success of our growth initiatives and the strength of our business model. Growth in the quarter was driven by both new stores and increased comparable store sales, including e-commerce sales. Although the first quarter is a relatively small proportion of our full year earnings, the earnings growth rate in the quarter exceeded our long-term plan and reflects a continued high-quality expansion of our business. We are excited about the significant opportunities ahead of us to drive sustained long-term growth and increased value for our shareholders.
Balance Sheet and Liquidity
As of April 28, 2012, the company had $21.7 million of cash and cash equivalents as compared to $25.1 million as of January 28, 2012 and $28.8 million as of April 30, 2011. The company ended the quarter with no long-term borrowings and no debt outstanding on its revolving credit facility.
Recently Completed Initial Public Offering
Tillys successfully completed its IPO on May 3, 2012, pricing its stock at $15.50 per share. As a result of this offering the company increased the number of shares outstanding by 7.6 million and received net proceeds of approximately $23 million, after payment of offering fees and expenses and a final distribution of taxable earnings to S Corporation shareholders.
Conference Call Information
A conference call to discuss the financial results is scheduled for today, May 30, 2012, at 4:30 p.m. ET (1:30 p.m. PT). Investors and analysts interested in participating in the call are invited to dial (888) 401-4669 at 4:25 p.m. ET (1:25 p.m. PT). The conference call will also be available to interested parties through a live webcast at www.tillys.com. Please visit the Web site and select the Investor Relations link at least 15 minutes prior to the start of the call to register and download any necessary software. A telephone replay of the call will be available until June 13, 2012, by dialing (877) 870-5176 (domestic) or (858) 384-5517 (international) and entering the conference identification number: 6495824. Please note participants must enter the conference identification number in order to access the replay.
About Tillys
Tillys is a fast-growing destination specialty retailer of West Coast inspired apparel, footwear and accessories with an extensive assortment of the most relevant and sought-after brands rooted in action sports, music, art and fashion. Tillys is headquartered in Southern California and, as of April 28, 2012, operated 145 stores and through its website, www.tillys.com.
Non-GAAP Financial Measure
In addition to reporting financial measures in accordance with generally accepted accounting principles in the United States (GAAP), the company provides non-GAAP pro forma provisions for income taxes, pro forma net income, pro forma basic income per common share and pro forma diluted income per common share. These amounts are not in accordance with, or an alternative to, GAAP. The companys management believes that these measures provide investors with transparency by helping illustrate the financial results as if the company had been a C Corporation during the relevant time periods, in order to provide better comparison to future periods when the company will file as a C Corporation.
Forward Looking Statements
Certain statements in this press release and oral statements made from time to time by our representatives are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, statements regarding our guidance, future financial and operating results and any other statements about our future expectations, beliefs or prospects expressed by management are forward-looking statements. These forward-looking statements are based on managements current expectations and beliefs, but they involve a number of risks and uncertainties that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including, but not limited to, our ability to respond to changing customer preferences, execute our growth strategy, expand into new markets, effectively compete with other retailers, enhance our brand image and other factors that are detailed in our registration statement on Form S-1 (333-175299), including those detailed in the section titled Risk Factors contained that registration statement, which is available from the SECs website at www.sec.gov and from our website at www.tillys.com under the heading Investor Relations. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We do not undertake any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.
TILLYS
BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
April 28, 2012 |
January 28, 2012 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | 21,716 | $ | 25,091 | ||||
Receivables |
8,444 | 6,605 | ||||||
Merchandise inventories |
40,267 | 36,531 | ||||||
Prepaid expenses and other current assets |
5,536 | 5,616 | ||||||
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Total current assets |
75,963 | 73,843 | ||||||
Property and equipment, net |
65,719 | 64,077 | ||||||
Other assets |
3,481 | 2,899 | ||||||
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Total assets |
$ | 145,163 | $ | 140,819 | ||||
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LIABILITIES AND SHAREHOLDERS EQUITY |
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Current liabilities: |
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Accounts payable |
$ | 17,517 | $ | 16,830 | ||||
Deferred revenue |
3,884 | 4,865 | ||||||
Accrued compensation and benefits |
4,864 | 7,536 | ||||||
Accrued expenses |
10,993 | 12,935 | ||||||
Current portion of deferred rent |
3,632 | 3,335 | ||||||
Current portion of capital lease obligation/Related party |
679 | 669 | ||||||
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Total current liabilities |
41,569 | 46,170 | ||||||
Long-term portion of deferred rent |
33,720 | 30,256 | ||||||
Long-term portion of capital lease obligation/Related party |
3,796 | 3,969 | ||||||
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Total long-term liabilities |
37,516 | 34,225 | ||||||
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Total liabilities |
79,085 | 80,395 | ||||||
Commitments and contingencies |
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Shareholders equity: |
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Common stock, $0.001 par value; 21,600 shares authorized, 20,000 shares issued and outstanding |
20 | 20 | ||||||
Additional paid-in capital |
150 | 150 | ||||||
Retained earnings |
65,908 | 60,254 | ||||||
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Total shareholders equity |
66,078 | 60,424 | ||||||
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Total liabilities and shareholders equity |
$ | 145,163 | $ | 140,819 | ||||
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TILLYS
STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Thirteen Weeks Ended | ||||||||
April 28, 2012 |
April 30, 2011 |
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Net sales |
$ | 96,524 | $ | 83,131 | ||||
Cost of goods sold (includes buying, distribution, and occupancy costs) |
66,106 | 56,922 | ||||||
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Gross profit |
30,418 | 26,209 | ||||||
Selling, general and administrative expenses |
24,392 | 21,244 | ||||||
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Operating income |
6,026 | 4,965 | ||||||
Interest expense, net |
44 | 49 | ||||||
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Income before provision for income taxes |
5,982 | 4,916 | ||||||
Provision for income taxes |
68 | 56 | ||||||
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Net income |
$ | 5,914 | $ | 4,860 | ||||
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Basic income per common share |
$ | 0.30 | $ | 0.24 | ||||
Diluted income per common share |
$ | 0.29 | $ | 0.24 | ||||
Weighted average basic common shares outstanding |
20,000 | 20,000 | ||||||
Weighted average diluted common shares outstanding |
20,512 | 20,440 | ||||||
Pro forma income information: |
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Historical income before provision for income taxes |
$ | 5,982 | $ | 4,916 | ||||
Pro forma provision for income taxes |
2,393 | 1,966 | ||||||
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Pro forma net income |
$ | 3,589 | $ | 2,950 | ||||
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Pro forma basic income per common share |
$ | 0.18 | $ | 0.15 | ||||
Pro forma diluted income per common share |
$ | 0.18 | $ | 0.14 |
TILLYS
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Thirteen Weeks Ended | ||||||||
April 28, 2012 |
April 30, 2011 |
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Cash flows from operating activities |
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Net income |
$ | 5,914 | $ | 4,860 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
3,904 | 3,718 | ||||||
(Gain) loss on disposal of assets |
(115 | ) | 19 | |||||
Changes in operating assets and liabilities |
(5,773 | ) | (4,180 | ) | ||||
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Net cash provided by operating activities |
3,930 | 4,417 | ||||||
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Cash flows from investing activities |
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Purchase of property and equipment |
(7,523 | ) | (3,001 | ) | ||||
Insurance proceeds from casualty loss |
641 | | ||||||
Proceeds from disposal of property and equipment |
| 18 | ||||||
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Net cash used in investing activities |
(6,882 | ) | (2,983 | ) | ||||
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Cash flows from financing activities |
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Payment of capital lease obligation |
(163 | ) | (153 | ) | ||||
Distributions |
(260 | ) | (1,849 | ) | ||||
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Net cash used in financing activities |
(423 | ) | (2,002 | ) | ||||
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Change in cash and cash equivalents |
(3,375 | ) | (568 | ) | ||||
Cash and cash equivalents, beginning of period |
25,091 | 29,338 | ||||||
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Cash and cash equivalents, end of period |
$ | 21,716 | $ | 28,770 | ||||
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Supplemental disclosures of cash flow information |
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Interest paid |
$ | 75 | $ | 81 | ||||
Income taxes paid |
$ | 7 | $ | 21 | ||||
Supplemental disclosure of non-cash activities |
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Unpaid purchases of property and equipment |
$ | 243 | $ | 296 |
Tillys
Store Count and Square Footage
Stores Open at Beg of Qtr |
Stores Opened During Qtr |
Stores Closed During Qtr |
Stores Remodel Closed |
Stores Remodel Reopened |
Stores Open at End of Qtr |
Total Gross Square Footage End of Qtr (in thousands) |
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2011 Q1 |
125 | 1 | 0 | 0 | 0 | 126 | 977 | |||||||||||||||||||||
2011 Q2 |
126 | 6 | 1 | 0 | 0 | 131 | 1,015 | |||||||||||||||||||||
2011 Q3 |
131 | 4 | 0 | 1 | 0 | 134 | 1,044 | |||||||||||||||||||||
2011 Q4 |
134 | 5 | 0 | 0 | 1 | 140 | 1,094 | |||||||||||||||||||||
2012 Q1 |
140 | 5 | 0 | 0 | 0 | 145 | 1,134 |
Investor Relations Contact:
ICR, Inc.
Anne Rakunas/Joseph Teklits
310-954-1113
anne.rakunas@icrinc.com