29338000
1
10000000
1
0.001
1
0.001
35000000
1
1000
0.001
1000
100000000
2899000
3969000
669000
46170000
4865000
3335000
60254000
12935000
5616000
140819000
20000
36531000
34225000
30256000
20000000
73843000
6605000
25091000
0.001
140819000
150000
60424000
20000000
64077000
21600000
80395000
16830000
7536000
18400000
9220644
28770000
1
10000000
1
0.001
1
0.001
35000000
1
1000
0.001
1000
100000000
3481000
3796000
679000
41569000
3884000
3632000
65908000
10993000
5536000
145163000
20000
40267000
37516000
33720000
20000000
75963000
8444000
21716000
0.001
145163000
150000
66078000
20000000
65719000
21600000
79085000
17517000
4864000
26209000
18000
-2983000
1849000
296000
56922000
21000
153000
4417000
4916000
0.24
-19000
-3117000
49000
4860000
1609000
3001000
0.24
3718000
83131000
4965000
1616000
21244000
56000
-568000
20000000
489000
81000
2128000
911000
-807000
20440000
-2002000
1443000
4916000
0.14
2950000
0.15
1966000
Q1
TLYS
TILLY'S, INC.
false
Non-accelerated Filer
2012
10-Q
2012-04-28
0001524025
--02-02
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>2. Stockholders’
Equity</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
April 28, 2012, the Company had 100,000,000 shares authorized
and 1,000 shares issued and outstanding of Class A common
stock with a par value of $0.001 to one stockholder. As of
April 28, 2012, the Company had 35,000,000 shares authorized
and no shares issued of Class B common stock with a par value of
$0.001. As of April 28, 2012 the Company had 10,000,000 shares
authorized and no shares issued of preferred stock with a par value
of $0.001.</font></p>
</div>
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>3. Subsequent
Events</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">On May 2,
2012, all four shareholders of World of Jeans & Tops
contributed all of their equity interests in World of
Jeans & Tops to Tilly’s, Inc. in exchange for shares
of Tilly’s, Inc. Class B common stock on a one-for-one basis
(collectively referred to as the “Reorganization”). In
connection with the Reorganization, the Company repurchased 1,000
shares of its Class A common stock for $0.001 per share from
Hezy Shaked, which had been previously issued in connection with
the formation and initial capitalization of the Company. As a
result of the Reorganization, World of Jeans & Tops became
a wholly owned subsidiary of Tilly’s, Inc. Subsequent to the
Reorganization, the only assets of Tilly’s, Inc. are its
investment in World of Jeans & Tops, and all of its
operations are being conducted through World of Jeans &
Tops.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">On May 3,
2012, the Company completed its initial public offering
(“IPO”) in which it issued and sold 7,600,000 shares of
Class A common stock and certain selling stockholders sold
400,000 shares of Class A common stock. In addition, on
May 9, 2012, the underwriters exercised in full their option
to purchase an additional 1,200,000 shares of Class A common
stock from certain selling stockholders to cover over-allotments.
As a result, the total IPO size was 9,200,000 shares of
Class A common stock, which consisted of 7,600,000 shares sold
by Tilly’s and 1,600,000 shares sold by the selling
stockholders. The 9,200,000 shares of Class A common stock in
the offering were sold at a price of $15.50 per share. The Company
did not receive any proceeds from the sale of shares by the selling
stockholders.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">On May 4,
2012, the Company’s board of directors granted stock options
to employees to purchase a total of 650,500 shares of Class A
common stock under the Tilly’s 2012 Equity and Incentive
Award Plan (the “2012 Plan”). The exercise price of
these awards is equal to the Company’s IPO price of $15.50
per share. The stock options vest in four equal annual installments
beginning on May 4, 2013, provided that the respective award
recipient continues to be employed by the Company on each of those
dates. The grant date fair value of these awards totaled $5.2
million. World of Jeans & Tops is recognizing the expense
relating to these awards, net of estimated forfeitures, on a
straight-line basis over four years.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">On May 4,
2012, the Company’s board of directors granted 5,161
restricted shares of Class A common stock to each of its four
independent directors under the 2012 Plan. These shares vest in two
equal annual installments beginning on May 4, 2013, provided
that the respective award recipient continues to serve on the
Company’s board of directors as of those dates. The grant
date fair value of these awards totaled $0.3 million. World of
Jeans & Tops is recognizing the expense relating to these
awards on a straight line basis, over two years.</font></p>
</div>
<div>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>1. Description of the
Company and Basis of Presentation</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">Tilly’s,
Inc. (the “Company”) was formed as a Delaware
corporation on May 4, 2011 and had no material assets or
operations as of April 28, 2012.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The
accompanying unaudited financial statement includes the assets of
the Company. This financial statement has been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission
(“SEC”). Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with accounting principles generally accepted in the U.S.
(“GAAP”) have been condensed or omitted from this
report as is permitted by SEC rules and regulations. However, the
Company believes that the disclosures are adequate to make the
information presented not misleading.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">In the opinion
of management, the accompanying unaudited financial statement
contains all normal and recurring adjustments necessary to present
fairly the financial condition of the Company as of April 28,
2012. The interim financial statement should be read in conjunction
with the financial statements and notes included in the
Company’s Registration Statement on Form S-1, as amended
(File No. 333-175299), which was declared effective on
May 3, 2012.</font></p>
</div>
30418000
-6882000
260000
243000
66106000
7000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>6. Commitments and
Contingencies</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company is
subject to various claims and contingencies arising in the normal
course of business, including those relating to product liability,
legal, employee benefit, environmental and other matters.
Management believes that the likelihood is remote that any of these
claims will have a material effect on the Company’s financial
condition as of April 28, 2012 or its results of operations or
cash flows for the periods presented.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Legal
Proceedings</i></b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">In October
2011, a putative class action, <i>Deborah Lyddy v. World of
Jeans & Tops and Tilly’s, Inc.</i>
(37-2011-00098812-CU-BT-CTL) was filed against the Company in the
Superior Court of the State of California for the County of San
Diego, alleging various causes of action based on the
Company’s California gift card redemption
policies.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">From time to
time, the Company becomes involved in lawsuits and other claims
arising from its ordinary course of business. Because of the
uncertainties related to the incurrence, amount and range of loss
on any pending litigation or claim, management is currently unable
to predict the ultimate outcome of any litigation or claim,
determine whether a liability has been incurred or make an estimate
of the reasonably possible liability that could result from an
unfavorable outcome. Management believes, after considering a
number of factors and the nature of any outstanding litigation or
claims, that the outcome will not have a material effect upon the
Company’s results of operations, financial condition or cash
flows. However, because of the unpredictable nature of these
matters, the Company cannot provide any assurances regarding the
outcome of any litigation or claim to which it is a party or the
impact on it of an adverse ruling in such matters.</font></p>
</div>
163000
3930000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>7. Net Income Per
Share</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">Net income per
share is computed under the provisions of ASC Topic 260,
<i>Earnings Per Share</i>. Basic net income per share is based on
the weighted average number of common shares outstanding for the
period. Diluted net income per share is based on the weighted
average number of common shares and potentially dilutive common
share equivalents outstanding for the period. Dilutive common share
equivalents include shares issuable upon an assumed exercise of
outstanding stock options using the “treasury stock”
method, whereby proceeds from such exercise and unamortized
compensation on share-based awards are assumed to be used by the
Company to purchase the common shares at the average market price
during the period. The components of basic and diluted net income
per share are as follows (in thousands, except per share
amounts):</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; FONT-SIZE: 1px">
 </p>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="76%" align="center">
<tr>
<td width="80%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Thirteen Weeks Ended</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" nowrap="nowrap" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>April 28,<br />
2012</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" nowrap="nowrap" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>April 30,<br />
2011</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font style="FONT-FAMILY: Times New Roman" size="2"><i>Numerator:</i></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font style="FONT-FAMILY: Times New Roman" size="2">Net income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5,914</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,860</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
</tr>
<tr>
<td height="8"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font style="FONT-FAMILY: Times New Roman" size="2"><i>Denominator:</i></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font style="FONT-FAMILY: Times New Roman" size="2">Weighted average number of
common shares (basic)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">20,000</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">20,000</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font style="FONT-FAMILY: Times New Roman" size="2">Dilutive effect of
stock-based awards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">512</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">440</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font style="FONT-FAMILY: Times New Roman" size="2">Weighted average number of
common shares (diluted)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">20,512</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">20,440</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font style="FONT-FAMILY: Times New Roman" size="2"><i>Earnings per
share:</i></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font style="FONT-FAMILY: Times New Roman" size="2">Basic</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.30</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font style="FONT-FAMILY: Times New Roman" size="2">Diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.29</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
5982000
0.29
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>3. Financial
Instruments</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">ASC Topic 820,
<i>Fair Value Measurements and Disclosure</i>, (“ASC
820”) defines fair value, establishes a framework for
measuring fair value and expands disclosures about fair value
measurements. Fair value is defined under ASC 820 as the exit price
associated with the sale of an asset or transfer of a liability in
an orderly transaction between market participants at the
measurement date. ASC 820 established the following three-tier fair
value hierarchy, which prioritizes the inputs used in measuring
fair value:</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 6px">
 </p>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" width="3%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><i>Level 1</i> – Quoted prices in active markets for
identical assets and liabilities. The Company had money market
securities within cash and cash equivalents totaling $18.0 million
and $23.0 million at April 28, 2012 and January 28, 2012,
respectively. These money market securities are reported at fair
value utilizing Level 1 inputs, as quoted current market prices are
readily available.</font></p>
</td>
</tr>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 6px">
 </p>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" width="3%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><i>Level 2</i> – Inputs other than Level 1 that are
observable, either directly or indirectly, such as quoted prices
for similar assets and liabilities; quoted prices in markets that
are not active; or other inputs that are observable or can be
corroborated by observable market data for substantially the full
term of the assets or liabilities.</font></p>
</td>
</tr>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 6px">
 </p>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" width="3%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><i>Level 3</i> – Unobservable inputs (i.e. projections,
estimates, interpretations, etc.) that are supported by little or
no market activity and that are significant to the fair value of
the assets or liabilities.</font></p>
</td>
</tr>
</table>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company has
no other financial instruments that would be considered significant
for fair value measurement purposes.</font></p>
</div>
115000
22000
44000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>9. Subsequent
Events</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
April 28, 2012, the Company had capitalized $2.1 million of
offering costs associated with the IPO, which were recorded in
other assets on its balance sheet. Upon the completion of the IPO,
these offering costs, in addition to any offering costs incurred
subsequent to April 28, 2012, were reclassified to additional
paid-in capital and offset against the IPO proceeds.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">On May 2,
2012, as part of the Reorganization, the Company’s
“S” Corporation status was terminated and the Company
became subject to corporate-level federal and state income taxes at
prevailing rates as a “C” Corporation. As a result of
the conversion, the Company recorded an increase in current
deferred tax assets of $3.6 million, an increase in noncurrent
deferred tax liabilities of $0.6 million and a one-time deferred
tax benefit of $3.0 million. Also as part of the Reorganization,
the Company issued notes totaling $84.0 million to its then-current
shareholders representing all of its undistributed taxable income
from the date of its formation through the date of termination of
its “S” Corporation status. As a result of the
Reorganization, WOJT became a wholly owned subsidiary of
Tilly’s, Inc.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">On May 3,
2012, Tilly’s, Inc. completed its IPO in which it issued and
sold 7,600,000 shares of its Class A common stock and certain
selling stockholders sold 400,000 shares of Class A common
stock. In addition, on May 9, 2012, the underwriters exercised
their option to purchase an additional 1,200,000 shares of
Class A common stock from certain selling stockholders to
cover over-allotments. As a result, the total IPO size was
9,200,000 shares of Class A common stock, which consisted of
7,600,000 shares sold by Tilly’s, Inc. and 1,600,000 shares
sold by the selling stockholders. The 9,200,000 shares of
Class A common stock in the offering were sold at a price of
$15.50 per share. Tilly’s, Inc. did not receive any proceeds
from the sale of shares by the selling stockholders.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">On May 3,
2012, in connection with the completion of the IPO, the Company
recognized $7.6 million of stock-based compensation expense
relating to stock options previously granted to employees and
directors under the Tilly’s 2007 Stock Option Plan (the
“2007 Plan”). This amount represents the cumulative
stock-based compensation expense from the inception of the 2007
Plan through the IPO date, as the Company had not previously
recognized any stock-based compensation expense for these awards
due to the performance condition wherein, if the stock options were
vested, they would only become exercisable upon the consummation of
the Company’s IPO. In connection with the recognition of
stock-based compensation, the Company recorded an increase in
noncurrent deferred tax assets and income taxes payable of $3.0
million.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">On May 3,
2012, the Company amended its revolving credit facility agreement
with Wells Fargo Bank, NA. The amended credit facility provides for
a line of credit of $25.0 million and matures on May 3, 2014.
Interest charged on borrowings is either at the London Interbank
Offered Rate (“LIBOR”) plus 1.75%, or at the
bank’s prime rate. The Company has the ability to select
between the prime or LIBOR-based rate at the time of a cash
advance. Borrowing from the credit facility is secured by
substantially all of the Company’s assets. A sub-feature of
the credit facility allows stand-by and commercial letters of
credit up to $15.0 million. The Company is required to maintain
certain financial and nonfinancial covenants in accordance with the
revolving credit facility. The financial covenants contain
requirements for certain levels of liquidity and profitability,
such as: (i) a minimum current asset to current liability
ratio of 1.25 to 1.00, (ii) a net profit before tax of at
least $1, determined as of the end of each fiscal quarter on a
cumulative rolling four-quarter basis, excluding a non-cash expense
of up to a maximum of $2.0 million for the write-off of impaired
fixed assets for that period and (iii) a maximum ratio of 4.00
to 1.00 for “funded debt” to “EBITDAR”,
where “funded debt” includes credit facility
borrowings, capital lease debt and eight times annual operating
lease rent expense, and “EBITDAR” includes net income
before interest, income taxes, depreciation, amortization and rent
expense.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">On May 4,
2012, Tilly’s, Inc.’s board of directors granted stock
options to employees to purchase a total of 650,500 shares of
Class A common stock under the Tilly’s 2012 Equity and
Incentive Award Plan (the “2012 Plan”). The exercise
price of these awards is equal to the IPO price of $15.50 per
share. The stock options vest in four equal annual installments
beginning on May 4, 2013, provided that the respective award
recipient continues to be employed by the Company through each of
those dates. The grant date fair value of these awards totaled $5.2
million. The Company is recognizing the expense relating to these
awards, net of estimated forfeitures, on a straight-line basis over
four years.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">On May 4,
2012, the Tilly’s, Inc.’s board of directors granted
5,161 restricted shares of Class A common stock to each of its
four independent directors under the 2012 Plan. These shares vest
in two equal annual installments beginning on May 4, 2013,
provided that the respective award recipient continues to serve on
Tilly’s, Inc.’s board of directors through each of
those dates. The grant date fair value of these awards totaled $0.3
million. The Company is recognizing the expense relating to these
awards on a straight line basis over two years.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">On May 9,
2012, the Company used $84.0 million of the net proceeds from the
IPO to pay in full the principal amount of notes representing
WOJT’s undistributed taxable income. These notes were issued
to the former shareholders of WOJT in connection with the
Reorganization, as discussed above.</font></p>
</div>
<div>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>1. Description of the
Company and Basis of Presentation</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">World of
Jeans & Tops dba Tilly’s (“WOJT” or the
“Company”) operates a chain of specialty retail stores
featuring casual clothing, footwear and accessories for teens and
young adults. The Company operated a total of 145 and 140 stores as
of April 28, 2012 and January 28, 2012, respectively. The
stores are located in malls, lifestyle centers, ‘power’
centers, community centers, outlet centers and street-front
locations. Customers may also shop online, where the Company
features a similar assortment of product as is carried in its
brick-and-mortar stores.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The
accompanying unaudited financial statements include the assets,
liabilities, revenues and expenses of the Company. These financial
statements have been prepared pursuant to the rules and regulations
of the Securities and Exchange Commission (“SEC”).
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting
principles generally accepted in the U.S. (“GAAP”) have
been omitted from this report as is permitted by SEC rules and
regulations.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">In the opinion
of management, the accompanying unaudited consolidated financial
statements contain all normal and recurring adjustments necessary
to present fairly the financial condition, results of operations
and cash flows of the Company for the interim periods presented.
The results of operations for the thirteen weeks ended
April 28, 2012 and April 30, 2011 are not necessarily
indicative of results to be expected for the full fiscal year.
These interim consolidated financial statements should be read in
conjunction with the financial statements and notes included in the
Company’s Registration Statement on Form S-1, as amended
(Registration No. 333-175299), which was declared effective on
May 3, 2012.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Fiscal
Periods</i></b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The
Company’s fiscal year ends on the Saturday closest to
January 31. References to the fiscal quarters ended
April 28, 2012 and April 30, 2011 refer to the
thirteen-week periods ended as of those dates.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Reorganization and
Initial Public Offering</i></b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">On May 2,
2012, all four shareholders of WOJT contributed all of their equity
interests in WOJT to Tilly’s, Inc. in exchange for shares of
Tilly’s, Inc. Class B common stock on a one-for-one basis. In
addition, WOJT terminated its “S” Corporation status
and became a “C” Corporation. These events are
collectively referred to as the “Reorganization.” As a
result of the Reorganization, WOJT became a wholly owned subsidiary
of Tilly’s, Inc.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">On May 3,
2012, Tilly’s, Inc. completed its initial public offering
(“IPO”) in which it issued and sold 7,600,000 shares of
its Class A common stock and certain selling stockholders sold
400,000 shares of Class A common stock. In addition, on
May 9, 2012, the underwriters exercised their option to
purchase an additional 1,200,000 shares of Class A common
stock from the selling stockholders to cover over-allotments. As a
result, the total IPO size was 9,200,000 shares of Class A
common stock, which consisted of 7,600,000 shares sold by
Tilly’s, Inc. and 1,600,000 shares sold by the selling
stockholders. The 9,200,000 shares of Class A common stock
sold in the offering were sold at a price of $15.50 per share.
Tilly’s, Inc. did not receive any proceeds from the sale of
shares by the selling stockholders.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">These financial
statements, including share and per share amounts, do not include
the effect of the Reorganization or the IPO as these were completed
subsequent to April 28, 2012. See Note 9 for more information
relating to the Reorganization and the IPO.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Unaudited Pro Forma
Income Information</i></b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The unaudited
pro forma income information gives effect to the conversion of the
Company to a “C” Corporation on May 2, 2012. Prior
to such conversion, the Company was an “S” Corporation
and generally not subject to income taxes. The pro forma net income
and per share amounts, therefore, includes an adjustment for income
tax expense as if the Company had been a “C”
Corporation during the periods presented at an assumed combined
federal, state and local effective tax rate of 40%, which
approximates the calculated statutory tax rate for each period. In
addition, the unaudited pro forma diluted weighted average shares
outstanding was computed using the assumed 40% effective tax rate.
As a result, the pro forma adjustment to diluted weighted average
shares outstanding for the thirteen weeks ended April 28, 2012
is a reduction of approximately 68,000 shares.</font></p>
</div>
5914000
2489000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>2. Summary of
Significant Accounting Policies</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">Information
regarding significant accounting policies is contained in Note 2,
“Summary of Significant Accounting Policies”, of the
financial statements of the Company’s Registration Statement
on Form S-1, as amended (File No. 333-175299). Presented below
in the following notes is supplemental information that should be
read in conjunction with “Notes to Financial
Statements”.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Deferred Offering
Costs</i></b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">Deferred
offering costs of $2.1 million and $1.5 million are included in
other assets on the Company’s balance sheets as of
April 28, 2012 and January 28, 2012, respectively. Upon
consummation of the IPO, these costs were offset against the
proceeds of the offering.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Income
Taxes</i></b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
calculates its interim income tax provision in accordance with
Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) Topic 270,
<i>Interim Reporting</i> and ASC Topic 740, <i>Accounting for
Income Taxes</i> (“ASC 740”). At the end of each
interim period, the Company estimates the annual effective tax rate
and applies that rate to its ordinary quarterly earnings. The tax
expense or benefit related to significant, unusual or extraordinary
items is recognized in the interim period in which those items
occur. In addition, the effect of changes in enacted tax laws,
rates or tax status is recognized in the interim period in which
the change occurs. The computation of the annual estimated
effective tax rate at each interim period requires certain
estimates and significant judgment including the expected operating
income for the year, permanent and temporary differences as a
result of differences between amounts measured and recognized in
accordance with tax laws and financial accounting standards and the
likelihood of recovering deferred tax assets generated in the
current fiscal year. The accounting estimates used to compute the
provision for income taxes may change as new events occur,
additional information is obtained or as the tax environment
changes.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Use of
Estimates</i></b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The preparation
of financial statements in conformity with GAAP requires management
to make estimates and assumptions. These estimates and assumptions
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of net sales and
expenses during the reporting period. Actual results could differ
from those estimates. On an ongoing basis, management evaluates its
estimates and judgments, including those related to inventory
valuation, property and equipment, recoverability of long-lived
assets, income taxes and stock-based compensation.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Recent Accounting
Pronouncements</i></b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">In June 2011,
the FASB issued Accounting Standards Update No. 2011-05,
<i>Comprehensive Income (Topic 220)-Presentation of Comprehensive
Income</i>, (“ASU 2011-05”) which requires an entity to
present the total of comprehensive income, the components of net
income and the components of other comprehensive income either in a
single continuous statement of comprehensive income or in two
separate but consecutive statements. ASU 2011-05 eliminates the
option to present the components of other comprehensive income as
part of the statement of changes in shareholders’ equity. ASU
2011-05 is effective for interim and annual reporting periods
beginning after December 15, 2011, with early adoption
permitted. The Company adopted ASU 2011-05 in the three months
ended April 28, 2012. As ASU 2011-05 only amends the
presentation of the components of comprehensive income, the
adoption did not have an impact on the Company’s financial
position, results of operations or cash flows.</font></p>
</div>
7523000
0.30
3904000
96524000
6026000
687000
24392000
68000
-3375000
20000000
502000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>4. Income
Taxes</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company has
elected to be taxed under the provisions of subchapter
“S” of the Internal Revenue Code for federal and state
income tax purposes. Under these provisions, the Company is
generally not subject to corporate level income taxes on its
taxable income. However, the company is subject to a 1.5%
California franchise tax. As an “S” Corporation, the
shareholders are liable for federal and state income taxes on their
share of the Company’s taxable income. The provision for
income tax in the current period consists primarily of the
California franchise tax. The Company generally distributes funds
necessary to satisfy the shareholders’ personal income tax
liabilities associated with their share of the company’s
taxable income.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
recognizes income tax liabilities related to unrecognized tax
benefits in accordance with ASC 740 and adjusts these liabilities
when its judgment changes as the result of the evaluation of new
information. As of April 28, 2012, there were no material
unrecognized tax benefits and the Company does not anticipate that
there will be a material change in the balance of the unrecognized
tax benefits within the next 12 months. The Company recognizes
penalties and interest related to unrecognized tax benefits as
income tax expense.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">As discussed in
Notes 1 and 9, on May 2, 2012, the Company terminated its
“S” Corporation status and became a “C”
Corporation as part of the Reorganization.</font></p>
</div>
75000
641000
3599000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>5. Stock-Based
Compensation</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
accounts for stock-based compensation under the fair-value
recognition provisions of ASC Topic 718, <i>Compensation-Stock
Compensation</i>. Under these provisions, for its awards of stock
options, the Company recognizes stock-based compensation expense in
an amount equal to the fair market value of the underlying stock on
the grant date of the respective award. This expense, net of
estimated forfeitures, is recognized over the requisite service
period. For stock options granted prior to the Company’s IPO,
the awards contained a performance condition wherein, if they were
vested, they only became exercisable upon the consummation of an
IPO of Tilly’s, Inc.’s common stock. Therefore, no
stock-based compensation expense was recognized by the Company
prior to the consummation of the IPO (see Note 9).</font></p>
</div>
-2672000
-981000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>8. Related
Parties</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
leases its corporate headquarters and distribution center (10 and
12 Whatney, Irvine, California) from a company that is owned by the
co-founders of WOJT. This lease expires on December 31, 2012,
with multiple options to renew thereafter. The land component of
this lease is accounted for as an operating lease and the building
component is accounted for as a capital lease. The Company incurred
rent expense of $0.2 million for both of the thirteen weeks ended
April 28, 2012 and April 30, 2011 for the operating
component of this lease. The initial obligation at inception under
the capital lease was $9.2 million, with an outstanding balance of
$4.5 million and $4.6 million as of April 28, 2012 and January
28, 2012, respectively. The gross amount of the building under
capital lease was $7.8 million as of both April 28, 2012 and
January 28, 2012. The gross amount of accumulated depreciation of
the building under capital lease was $4.9 million and $4.7 million
as of April 28, 2012 and January 28, 2012,
respectively.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
leases warehouse space (15 Chrysler, Irvine, California) from a
company that is owned by one of the co-founders of WOJT. The lease
expires on October 31, 2014 and is being accounted for as an
operating lease. The Company incurred rent expense of $0.1 million
for both of the thirteen weeks ended April 28, 2012 and
April 30, 2011. The Company subleases part of the building to
an unrelated third party. The sublease terminates on May 31,
2014.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
leases office and warehouse space (11 Whatney, Irvine, California)
from a company that is owned by one of the co-founders of WOJT. The
lease is being accounted for as an operating lease. This building
is currently being constructed by the landlord, and construction is
expected to be completed during the first half of fiscal year 2012.
The lease terminates ten years from the earlier of (i) the
date the building is substantially completed or (ii) the date
the Company can access the building and begin tenant improvements.
The Company is not required to make lease payments until access to
the building has been granted to begin tenant improvements and
therefore, the Company did not incur any rent expense for this
lease for either of the thirteen weeks ended April 28, 2012 or
April 30, 2011.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
leases a building (17 Pasteur, Irvine, California) from a company
that is owned by one of the co-founders of WOJT. The lease
terminates on October 31, 2021 and is being accounted for as
an operating lease. The Company intends to use this building at its
e-commerce distribution center. Pursuant to the lease agreement,
the Company has requested that the landlord expand the building,
and the Company expects the expansion to be completed by the first
half of fiscal year 2013. The Company is currently using this
building for warehousing until the commencement of the expansion,
at which point the Company will return the building to the landlord
for the duration of the construction. The Company incurred rent
expense of $0.2 million for the thirteen weeks ended April 28,
2012 and incurred no rent expense for the thirteen weeks ended
April 30, 2011 for this lease.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">Prior to
signing each of the related party leases above, the Company
received an independent market analysis regarding the property and
therefore believes that the terms of each lease are reasonable and
are not materially different than terms the Company would have
obtained from an unaffiliated third party.</font></p>
</div>
20512000
-423000
3761000
5982000
0.18
3589000
0.18
2393000
0001524025
tlys:WorldOfJeansAndTopsDbaTillysMembertlys:ProFormaMember
2012-01-29
2012-04-28
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