Form 8-K

 

 

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)

 

 

TILLY’S, 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

(Registrant’s 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, Tilly’s, 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.

 

    TILLY’S, INC.
Date: May 30, 2012   By:  

/s/ Patrick Grosso

  Name:   Patrick Grosso
  Title:   Vice President, General Counsel and Secretary
Press Release

Exhibit 99.1

 

LOGO

Tilly’s, Inc. Announces First Quarter Fiscal 2012 Results

Irvine, CA – May 30, 2012 – Tilly’s, 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

Tilly’s 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 Tilly’s

Tilly’s 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. Tilly’s 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 company’s 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 management’s 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 SEC’s 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.


TILLY’S

BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

 

     April 28,
2012
     January 28,
2012
 

ASSETS

     

Current assets:

     

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   
  

 

 

    

 

 

 

Total current assets

     75,963         73,843   

Property and equipment, net

     65,719         64,077   

Other assets

     3,481         2,899   
  

 

 

    

 

 

 

Total assets

   $ 145,163       $ 140,819   
  

 

 

    

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

     

Current liabilities:

     

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   
  

 

 

    

 

 

 

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   
  

 

 

    

 

 

 

Total long-term liabilities

     37,516         34,225   
  

 

 

    

 

 

 

Total liabilities

     79,085         80,395   

Commitments and contingencies

     

Shareholders’ equity:

     

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   
  

 

 

    

 

 

 

Total shareholders’ equity

     66,078         60,424   
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 145,163       $ 140,819   
  

 

 

    

 

 

 


TILLY’S

STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

     Thirteen Weeks Ended  
     April 28,
2012
     April 30,
2011
 

Net sales

   $ 96,524       $ 83,131   

Cost of goods sold (includes buying, distribution, and occupancy costs)

     66,106         56,922   
  

 

 

    

 

 

 

Gross profit

     30,418         26,209   

Selling, general and administrative expenses

     24,392         21,244   
  

 

 

    

 

 

 

Operating income

     6,026         4,965   

Interest expense, net

     44         49   
  

 

 

    

 

 

 

Income before provision for income taxes

     5,982         4,916   

Provision for income taxes

     68         56   
  

 

 

    

 

 

 

Net income

   $ 5,914       $ 4,860   
  

 

 

    

 

 

 

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:

     

Historical income before provision for income taxes

   $ 5,982       $ 4,916   

Pro forma provision for income taxes

     2,393         1,966   
  

 

 

    

 

 

 

Pro forma net income

   $ 3,589       $ 2,950   
  

 

 

    

 

 

 

Pro forma basic income per common share

   $ 0.18       $ 0.15   

Pro forma diluted income per common share

   $ 0.18       $ 0.14   


TILLY’S

STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

     Thirteen Weeks Ended  
     April 28,
2012
    April 30,
2011
 

Cash flows from operating activities

    

Net income

   $ 5,914      $ 4,860   

Adjustments to reconcile net income to net cash provided by operating activities:

    

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
  

 

 

   

 

 

 

Net cash provided by operating activities

     3,930        4,417   
  

 

 

   

 

 

 

Cash flows from investing activities

    

Purchase of property and equipment

     (7,523     (3,001

Insurance proceeds from casualty loss

     641        —     

Proceeds from disposal of property and equipment

     —          18   
  

 

 

   

 

 

 

Net cash used in investing activities

     (6,882     (2,983
  

 

 

   

 

 

 

Cash flows from financing activities

    

Payment of capital lease obligation

     (163     (153

Distributions

     (260     (1,849
  

 

 

   

 

 

 

Net cash used in financing activities

     (423     (2,002
  

 

 

   

 

 

 

Change in cash and cash equivalents

     (3,375     (568

Cash and cash equivalents, beginning of period

     25,091        29,338   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 21,716      $ 28,770   
  

 

 

   

 

 

 

Supplemental disclosures of cash flow information

    

Interest paid

   $ 75      $ 81   

Income taxes paid

   $ 7      $ 21   

Supplemental disclosure of non-cash activities

    

Unpaid purchases of property and equipment

   $ 243      $ 296   


Tilly’s

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)
 

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