Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Aug. 04, 2018 | Sep. 01, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Aug. 4, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | CLE | |
Entity Registrant Name | CLAIRES STORES INC | |
Entity Central Index Key | 34,115 | |
Current Fiscal Year End Date | --02-03 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 100 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Aug. 04, 2018 | Feb. 03, 2018 | |
Current assets: | |||
Cash | $ 69,445 | $ 42,446 | |
Inventories | 148,331 | 134,690 | |
Prepaid expenses | 36,889 | 32,284 | |
Other current assets | 21,737 | 26,858 | |
Total current assets | 276,402 | 236,278 | |
Property and equipment: | |||
Furniture, fixtures and equipment | 208,288 | 223,644 | |
Leasehold improvements | 279,104 | 301,338 | |
Total property and equipment, gross | 487,392 | 524,982 | |
Accumulated depreciation and amortization | (387,631) | (405,284) | |
Total property and equipment, net | 99,761 | 119,698 | |
Leased property under capital lease: | |||
Land and building | 18,055 | 18,055 | |
Accumulated depreciation and amortization | (7,667) | (7,216) | |
Total leased property under capital lease | 10,388 | 10,839 | |
Goodwill | 1,132,575 | 1,132,575 | |
Intangible assets, net of accumulated amortization of $88,005 and $87,295, respectively | 450,145 | 457,078 | |
Other assets | 61,107 | 44,255 | |
Total other noncurrent assets | 1,643,827 | 1,633,908 | |
Total assets | 2,030,378 | 2,000,723 | |
Current liabilities: | |||
Current portion of long-term debt, net | [1] | 84,732 | 1,894,039 |
Debtor-in-possession term loan | 60,000 | ||
Trade accounts payable | 55,272 | 62,965 | |
Income taxes payable | 14,096 | 4,049 | |
Accrued interest payable | 1,083 | 56,182 | |
Accrued expenses and other current liabilities | 101,216 | 94,934 | |
Total current liabilities | 316,399 | 2,112,169 | |
Long-term debt, net | 208,847 | 250,355 | |
Obligation under capital lease | 15,718 | 15,970 | |
Deferred tax liability | 29,179 | 32,614 | |
Deferred rent expense | 31,557 | 34,851 | |
Unfavorable lease obligations and other long-term liabilities | 8,646 | 10,040 | |
Total Non current liabilities | 293,947 | 343,830 | |
Liabilities subject to compromise | 1,905,215 | ||
Commitments and contingencies | |||
Stockholder's deficit: | |||
Common stock par value $0.001 per share; authorized 1,000 shares; issued and outstanding 100 shares | 0 | 0 | |
Additional paid-in capital | 630,794 | 630,719 | |
Accumulated other comprehensive loss, net of tax | (40,364) | (25,302) | |
Accumulated deficit | (1,075,613) | (1,060,693) | |
Total stockholder's deficit | (485,183) | (455,276) | |
Total liabilities and stockholder's deficit | $ 2,030,378 | $ 2,000,723 | |
[1] | LSTC must be reported at the amounts expected to be allowed by the Bankruptcy Court. The carrying value of the debt will be adjusted as claims are approved. As of August 4, 2018, the Company wrote off $5.0 million of debt issuance costs, debt premium, and the adjustment to carrying value to present the debt at the outstanding face value. The write-offs are included within reorganization items, net in the Unaudited Condensed Consolidated Statements of Operations. See Note 2 - Bankruptcy Filing for additional details. |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Aug. 04, 2018 | Feb. 03, 2018 |
Accumulated amortization on intangible assets | $ 88,005 | $ 87,295 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, share authorized | 1,000 | 1,000 |
Common stock, share issued | 100 | 100 |
Common stock, share outstanding | 100 | 100 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | ||
Net sales | $ 314,448 | $ 316,637 | $ 625,454 | $ 616,258 | |
Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) | 154,723 | 161,583 | 310,371 | 313,371 | |
Gross profit | 159,725 | 155,054 | 315,083 | 302,887 | |
Other expenses (income): | |||||
Selling, general and administrative | 111,459 | 112,774 | 237,240 | 223,286 | |
Depreciation and amortization | 13,709 | 10,890 | 26,903 | 22,093 | |
Severance and transaction-related costs | 629 | 389 | 1,005 | 532 | |
Other income, net | (3,348) | (2,171) | (7,354) | (4,872) | |
Total other expenses | 122,449 | 121,882 | 257,794 | 241,039 | |
Operating income before interest, reorganization items and income taxes | 37,276 | 33,172 | 57,289 | 61,848 | |
Reorganization items, net | 30,453 | 40,462 | |||
Interest expense, net | 5,072 | 43,394 | 29,961 | 86,974 | |
Income (loss) before income tax expense | 1,751 | (10,222) | (13,134) | (25,126) | |
Income tax expense | 5,040 | 10,266 | 1,786 | 2,120 | |
Net income (loss) | (3,289) | (20,488) | (14,920) | (27,246) | |
Other comprehensive (loss) income: | |||||
Foreign currency translation adjustments | (1,067) | 4,523 | (3,602) | 4,567 | |
Net (loss) gain on intra-entity foreign currency transactions, net of tax (benefit) expense of $(35), $714, $5 and $944 | (4,952) | 7,593 | (11,460) | 9,474 | |
Other comprehensive (loss) income | (6,019) | 12,116 | (15,062) | [1] | 14,041 |
Comprehensive loss | $ (9,308) | $ (8,372) | $ (29,982) | $ (13,205) | |
[1] | Represents foreign currency items and $5.7 million of other income associated with expired derivative instruments. |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | |
Tax related to net gain on intra-entity foreign currency transactions | $ (35) | $ 714 | $ 5 | $ 944 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 04, 2018 | Jul. 29, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (14,920) | $ (27,246) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 26,903 | 22,093 |
Reorganization items, net | 40,462 | |
Amortization of lease rights and other assets | 2,517 | 1,862 |
Amortization of debt issuance costs | 1,613 | 4,312 |
Accretion of debt premium | (360) | (1,457) |
Non-cash pay-in-kind interest expense | 2,889 | 750 |
Net unfavorable accretion of lease obligations | 9 | (55) |
Loss on sale/retirement of property and equipment, net | 46 | 128 |
Stock-based compensation expense | 75 | 156 |
(Increase) decrease in: | ||
Inventories | (17,945) | (22,083) |
Prepaid expenses | (7,130) | (1,926) |
Other assets | (6,461) | (75) |
Increase (decrease) in: | ||
Trade accounts payable | (7,122) | (709) |
Income taxes payable | 12,249 | (279) |
Accrued interest payable | 17,955 | (155) |
Accrued expenses and other liabilities | (6,128) | (6,994) |
Deferred income taxes | (15,287) | (359) |
Deferred rent expense | (2,460) | (1,196) |
Net cash provided by (used in) operating activities | 26,905 | (33,233) |
Cash flows from investing activities: | ||
Acquisition of property and equipment | (9,027) | (8,101) |
Acquisition of intangible assets/lease rights | (100) | (38) |
Net cash used in investing activities | (9,127) | (8,139) |
Cash flows from financing activities: | ||
Proceeds from debtor-in-possession credit facility | 57,000 | |
Repayments under debtor-in-possession credit facility | (57,000) | |
Proceeds from debtor-in-possession term loans | 60,000 | |
Debt issuance costs related to debtor-in-possession financing | (4,470) | |
Proceeds from revolving credit facilities | 43,000 | 81,000 |
Payments on revolving credit facilities | (74,000) | (41,200) |
Payment on current portion of long-term debt | (6,000) | (18,420) |
Payments of unamortized interest related to long-term debt | (5,321) | (4,272) |
Payment of debt issuance costs | (2) | (386) |
Principal payments on capital lease | (200) | (156) |
Net cash provided by (used in) financing activities | 13,007 | 16,566 |
Effect of foreign currency exchange rate changes on cash and cash equivalents | (3,786) | 203 |
Net increase (decrease) in cash and cash equivalents | 26,999 | (24,603) |
Cash and cash equivalents, at beginning of period | 42,446 | 55,792 |
Cash and cash equivalents, at end of period | 69,445 | 31,189 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 13,002 | 87,454 |
Income taxes paid | 2,112 | 3,927 |
Non-cash supplemental financing activities: | ||
Increase in term loans due 2021 from pay-in-kind interest | 2,976 | 2,207 |
Decrease in adjustment to carrying value | $ 2,976 | $ 2,207 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Aug. 04, 2018 | |
Basis of Presentation | 1. Basis of Presentation The accompanying Unaudited Condensed Consolidated Financial Statements of Claire’s Stores, Inc. (the “Company”) have been prepared in accordance with the instructions to Form 10-Q 10-K The Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures regarding contingent assets and liabilities and reported amounts of revenues and expenses. Such estimates include, but are not limited to, the value of inventories, goodwill, intangible assets and other long-lived assets, legal contingencies and assumptions used in the calculation of income taxes, stock-based compensation, residual values and other items. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity, foreign currency, and energy markets and declines in consumer spending have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates will be reflected in the financial statements in those future periods when the changes occur. Due to the seasonal nature of the retail industry and the Company’s business, the results of operations for interim periods of the year are not necessarily indicative of the results of operations for future quarters or on an annualized basis. As discussed further in Note 2 entitled “Bankruptcy Filing,” on March 19, 2018 (the “Commencement Date”), the Company and certain of its domestic subsidiaries (collectively with the Company, the “Debtors”) commenced chapter 11 cases (the “Chapter 11 Cases”) by filing voluntary petitions for reorganization under chapter 11 (“Chapter 11”) of title 11 of the United States Code (the “Bankruptcy Code”) with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The Debtors are authorized to continue to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. Ability to Continue as a Going Concern debtor-in-possession As a result of the Chapter 11 Cases, the realization of assets and the satisfaction of liabilities are subject to uncertainty. The commencement of the Chapter 11 Cases constituted an event of default with respect to certain of the Company’s existing debt obligations. While operating as debtors in possession under Chapter 11, the Company may sell or otherwise dispose of or liquidate assets or settle liabilities, subject to the approval of the Bankruptcy Court or as otherwise permitted in the ordinary course of business under the Bankruptcy Code and subject to restrictions contained in the DIP Credit Agreement (see Note – 5 Debt) and applicable orders of the Bankruptcy Court, for amounts other than those reflected in the accompanying Unaudited Condensed Consolidated Financial Statements. Further, the Company’s restructuring plan, to the extent confirmed by the Bankruptcy Court, could materially impact the amounts and classifications of assets and liabilities reported in its Unaudited Condensed Consolidated Financial Statements. The Company plans to emerge from its Chapter 11 Cases after it obtains an order from the Bankruptcy Court confirming the Company’s Proposed Plan (as defined below). Among other things, confirmation of the Proposed Plan will determine the rights and satisfy the claims of the Company’s creditors and security holders in accordance with the terms of the Proposed Plan. A copy of the Debtors’ Proposed Plan is available free of charge online at https://cases.primeclerk.com/claires/ |
Bankruptcy Filing
Bankruptcy Filing | 6 Months Ended |
Aug. 04, 2018 | |
Bankruptcy Filing | 2. Bankruptcy Filing Chapter 11 Proceedings On the Commencement Date, the Debtors commenced the Chapter 11 Cases by filing voluntary petitions for reorganization under Chapter 11 with the Bankruptcy Court. Pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure, the Debtors’ Chapter 11 Cases are being jointly administered for procedural purposes only under the caption In re Claire’s Stores, Inc., et al No. 18-10584 https://cases.primeclerk.com/claires/ In connection with the commencement of the Chapter 11 Cases, the Debtors entered into a Restructuring Support Agreement (the “Restructuring Support Agreement”), dated as of March 19, 2018, with Apollo Global Management, LLC, the Debtors’ equity sponsor (the “Sponsor”) and certain unaffiliated holders of first lien debt issued by the Company (each, an “Ad Hoc First Lien Holder” and, collectively, the “Ad Hoc First Lien Group” or the “Initial Consenting Holders”). On July 7, 2018, the Debtors and the Ad Hoc First Lien Group amended the Restructuring Support Agreement to permit the Debtors to solicit alternative proposals for (i) plans of reorganization or liquidation or (ii) the purchase of some or all of the Debtors’ assets, and to modify certain milestones with respect to the Debtors’ restructuring process. Pursuant to the Restructuring Support Agreement, the Ad Hoc First Lien Group and Apollo agreed to support the pre-negotiated Significant Bankruptcy Court Actions Following the Commencement Date, the Bankruptcy Court entered certain interim and final orders facilitating the Debtors’ operational transition into Chapter 11. These orders authorized the Debtors to, among other things, pay certain pre-petition pre-petition Global Plan Settlement On July 15, 2018, the Debtors, the official committee of unsecured creditors appointed in the Chapter 11 Cases (the “Creditors’ Committee”), the indenture trustee under the Company’s Unsecured Notes (the “Unsecured Notes Trustee”), and the Ad Hoc First Lien Group entered into a settlement agreement (the “Global Plan Settlement”). Pursuant to the Global Plan Settlement, the Debtors resolved the formal and informal objections of the Creditors’ Committee and the Unsecured Notes Trustee with respect to the Proposed Plan and the Debtors’ restructuring, including with respect to (i) the enterprise value for the Debtors, together with their non-Debtor Settlement with FFI On August 31, 2018, the Debtors, FFI Fund Ltd., FYI Ltd. and their affiliates (collectively, the “ FFI Parties provided Oaktree’s Standing Motion On July 19, 2018, Oaktree Capital Management, L.P. (“Oaktree”), the majority holder of the Company’s Second Lien Notes, filed a motion in the Chapter 11 Cases seeking derivative standing to pursue certain avoidance actions with respect to the 2016 Exchange (the “Standing Motion”). The Debtors object to Oaktree’s Standing Motion on the grounds that, among other things, Oaktree is prohibited from bringing such avoidance actions by virtue of its intercreditor obligations, Oaktree’s Standing Motion is a premature objection to the approval of the Global Plan Settlement, and Oaktree cannot assert colorable claims with respect to such avoidance actions. The Bankruptcy Court will hold a hearing on Oaktree’s Standing Motion on September 17, 2018. Executory Contracts Subject to certain exceptions, under the Bankruptcy Code, the Debtors may assume, assign, or reject certain executory contracts and unexpired leases subject to the approval of the Bankruptcy Court and certain other conditions. Generally, the rejection of an executory contract or unexpired lease is treated as a pre-petition pre-petition The Debtors have filed motions and received Bankruptcy Court approval for the rejection of 140 leases. As of August 4, 2018, the Debtors have rejected 83 leases. On August 24, 2018, the Debtors filed with the Bankruptcy Court a Rejected Executory Contracts and Unexpired Leases Schedule and Assumed Executory Contracts and Unexpired Leases Schedule with respect to those executory contracts and unexpired leases that either will be assumed or rejected pursuant to the Proposed Plan. Copies of these schedules are available free of charge online at https://cases.primeclerk.com/claires/ Key Employee Incentive and Retention Programs On May 5, 2018, the Debtors filed with the Bankruptcy Court a motion (the “KEIP/KERP Motion”) seeking authority to implement a key employee incentive plan (the “KEIP”) and a key employee retention program (the “KERP”). The KEIP provides performance metrics for senior members of the Debtors’ management team to achieve in furtherance of the Debtors’ business goals and, upon the achievement of those performance metrics, provides for maximum payments of up to approximately $1.5 million in the aggregate per quarter through the end of the fourth quarter of Fiscal 2018. The KERP identifies valuable, hard-to-replace non-senior Debtor-In-Possession See Note – 5 Debt for further discussion of the DIP Facility, which provides up to $135.0 million in senior secured super-priority financing under a $75.0 million DIP ABL Loan and a $60.0 million DIP Term Loan. Marketing Process On June 22, 2018, the Bankruptcy Court entered an order requiring the Debtors to solicit bids with respect to a sale or disposition by the Debtors of the Company’s assets or an investment and/or sponsorship of a Chapter 11 plan of reorganization or liquidation. Additionally, the Bankruptcy Court established certain procedures (the “Bid Procedures”) regarding the submission of certain bids (each, a “Qualified Bid” as defined in the Bid Procedures) with respect to some, all, or substantially all of the Company’s assets or an investment in, and/or sponsorship of, a Chapter 11 plan of reorganization or liquidation. The deadline for the submission of Qualified Bids was August 31, 2018. The Debtors, in consultation with the Creditors’ Committee, have determined that the Debtors have not received any Qualified Bids. Financial Reporting in Reorganization Effective on March 19, 2018, the Company began to apply ASC, No. 852, “Reorganizations,” which is applicable to companies under Chapter 11 bankruptcy protection. It requires the financial statements for periods subsequent to the Chapter 11 filing to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Expenses, realized gains and losses, and provisions for losses that are directly associated with reorganization proceedings must be reported separately as reorganization items, net in the Unaudited Condensed Consolidated Statements of Operations. In addition, the balance sheet must distinguish debtor pre-petition non-Debtor pre-petition pre-petition Liabilities Subject to Compromise As a result of the commencement of the Chapter 11 Cases, the payment of pre-petition pre-Commencement pre-petition pre-petition pre-petition Pre-petition Liabilities Subject to Compromise as of August 4, 2018 included the following components (in thousands): August 4, 2018 Debt (1) $ 1,806,363 Accrued interest on debt subject to compromise 73,054 Accounts payable, accrued expense and other liabilities 25,798 Total liabilities subject to compromise $ 1,905,215 (1) See Note 5 – Debt for details of pre-petition Reorganization Items, Net Reorganization items, net represent amounts incurred after the Commencement Date as a direct result of the Bankruptcy and are comprised of the following for the three and six months ended August 4, 2018 (in thousands): Three Months Six Months Professional fees $ 22,744 $ 33,697 Rejection of leases and other 7,277 7,277 Debtor-in-possession 432 4,470 Write-off pre-petition — (4,982 ) Total reorganization items, net $ 30,453 $ 40,462 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Aug. 04, 2018 | |
Recent Accounting Pronouncements | 3. Recent Accounting Pronouncements In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory 2016-16 In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) 2016-15 In March 2016, the FASB issued ASU 2016-04, Liabilities—Extinguishments of Liabilities (Subtopic 405-20), 2016-04 2016-04 2014-09 In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) right-of-use 2018-11 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date 2014-09 No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) 2014-09 Accounting policies as a result of recently adopted accounting pronouncements Revenue Recognition e-commerce Revenue is recognized when performance obligations are satisfied through the transfer of control of promised goods to the Company’s customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. Revenue from company-operated stores is recognized as the customer takes possession of the merchandise. Revenue from concessions is recognized as the customer takes possession of the merchandise. Revenue from e-commerce Shipping fees billed to customers are recorded as revenue, and shipping costs are recognized within cost of sales in the same period the related revenue is recognized. Upon purchase of a gift card or gift certificate, a liability is established for the cash value. The liability is included in “Accrued expenses and other current liabilities.” Revenue from gift card and gift certificate sales is recognized at the time of redemption. Unredeemed gift card and gift certificate breakage income is recorded as a reduction of “Selling, general and administrative” expenses. The Company records breakage income when the probability of redemption, based upon historical redemption patterns, is remote as there is currently no basis for estimating breakage income. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Aug. 04, 2018 | |
Fair Value Measurements | 4. Fair Value Measurements ASC 820, Fair Value Measurement Disclosures, Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company does not have any assets (liabilities) measured at fair value on a recurring basis. Non-Financial Non-Recurring The Company’s non-financial non-financial non-financial Financial Instruments Not Measured at Fair Value The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, short-term debt, current liabilities and long-term debt. Cash and cash equivalents, accounts receivable, short-term debt, and current liabilities approximate fair market value due to the relatively short maturity of these financial instruments. The Company considers all investments with a maturity of three months or less when acquired to be cash equivalents. The Company’s cash equivalent instruments are valued using quoted market prices and are primarily U.S. Treasury securities. The revolving credit facilities approximate fair value due to the variable component of the interest rate. Excluding unamortized debt issuance costs, the estimated fair value of the Company’s long-term debt (including current portion) was approximately $1.12 billion as of August 4, 2018, compared to a carrying value of $2.10 billion at that date. Excluding unamortized debt issuance costs, the estimated fair value of the Company’s long-term debt (including current portion) was approximately $1.28 billion as of February 3, 2018, compared to a carrying value of $2.12 billion at that date. For publicly-traded debt, the fair value (estimated market value) is based on quoted market prices in less active markets. For non-publicly |
Debt
Debt | 6 Months Ended |
Aug. 04, 2018 | |
Debt | 5. Debt Debt as of August 4, 2018 and February 3, 2018 included the following components (in thousands): August 4, 2018 February 3, 2018 Short-term borrowings: Debtor-in-possession $ 60,000 $ — Current portion of long-term debt: Claire’s Gibraltar Intermediate secured term loan due 2019 $ 51,500 $ 51,500 Claire’s Gibraltar unsecured term loan due 2019 34,000 — 9.0% Senior secured first lien notes due 2019 — 1,125,000 8.875% Senior secured second lien notes due 2019 — 222,300 6.125% Senior secured first lien notes due 2020 — 210,000 7.75% Senior notes due 2020 — 216,742 9.0% Claire’s Stores term loan due 2021 — 31,804 U.S. asset based lending credit facility due 2019 — 31,000 Unamortized premium (1) — 3,642 Adjustment to carrying value (1) — 12,483 Unamortized debt issuance cost (1) (768 ) (10,432 ) Total current portion of long-term debt, net (1) $ 84,732 $ 1,894,039 Debt subject to compromise: 9.0% Senior secured first lien notes due 2019 $ 1,125,000 $ — 8.875% Senior secured second lien notes due 2019 222,300 — 6.125% Senior secured first lien notes due 2020 210,000 — 7.75% Senior notes due 2020 216,742 — 9.0% Claire’s Stores term loan due 2021 32,321 — Total debt subject to compromise $ 1,806,363 $ — Long-term debt: Claire’s Gibraltar unsecured term loan due 2019 $ — $ 40,000 11.0% CLSIP term loan due 2021 (2) 107,926 103,356 9.0% Claire’s Gibraltar term loans due 2021 48,477 47,701 Adjustment to carrying value 52,444 59,298 Total long-term debt, net $ 208,847 $ 250,355 Obligation under capital lease (including current portion) $ 16,188 $ 16,388 (1) LSTC must be reported at the amounts expected to be allowed by the Bankruptcy Court. The carrying value of the debt will be adjusted as claims are approved. As of August 4, 2018, the Company wrote off $5.0 million of debt issuance costs, debt premium, and the adjustment to carrying value to present the debt at the outstanding face value. The write-offs are included within reorganization items, net in the Unaudited Condensed Consolidated Statements of Operations. See Note 2 – Bankruptcy Filing for additional details. (2) See CLSIP Forbearance Agreement below for discussion of increased interest rate. Debtor-In-Possession On March 22, 2018, the Company, pursuant to a commitment letter dated as of March 11, 2018 and previously disclosed on the Company’s Current Report on Form 8-K, non-amortizing last-out The proceeds of the DIP ABL Loan extended on the DIP Closing Date were used to refinance all outstanding obligations and replace commitments under the ABL Credit Facility (described below), including cash collateralization of certain letters of credit previously issued, outstanding and undrawn as of March 22, 2018, the closing date of the DIP Facility (the “DIP Closing Date”), and to pay fees, costs and expenses incurred in connection with the DIP Facility. The proceeds of the DIP Facility will also be used for working capital and general corporate purposes and to fund certain fees payable to professional service providers in connection with the Chapter 11 Cases. The DIP Facility will mature, subject to the satisfaction of certain conditions, on the earliest of (i) the one year anniversary of the DIP Closing Date, (ii) the effective date of a plan of reorganization, (iii) the date of closing of a sale of all or substantially all of the Company’s assets pursuant to Section 363 of the Bankruptcy Code, (iv) the date on which acceleration of the outstanding loans, and the terminations of the commitments, occurs under the DIP Facility and (v) certain dates specified in connection with the Chapter 11 Cases and orders issued in connection therewith. As of August 4, 2018, the Company had $65.6 million of availability under the DIP ABL Loan, net of applicable reserves. Contractual interest on debt subject to compromise Effective as of the Commencement Date, the Company ceased recording interest expense on outstanding pre-petition pre-petition ABL Credit Facility In March 2018, the Company paid an aggregate amount of $71.0 million and, in addition, the related accrued interest associated with the extinguishment of the ABL Credit Facility. CLSIP Forbearance Agreement CLSIP Holdings, CLSIP, Wilmington Trust, N.A., as Administrative Agent and Collateral Agent under the CLSIP Term Loan Agreement, and certain of the lenders constituting Required Lenders (as that term is defined by the CLSIP Term Loan Agreement) under the CLSIP Term Loan entered into a forbearance agreement dated as of April 19, 2018 (the “CLSIP Forbearance”) providing that, among other things, such lenders will forbear from causing the CLSIP Term Loan to become immediately due and payable and from exercising remedies arising from such event of default or other events of default that may arise on account of the commencement of the Chapter 11 Cases and/or any other transaction and/or agreement contemplated by the Restructuring Support Agreement. The CLSIP Forbearance also increased the interest rate of the CLSIP Term Loan to bear 11.0% per annum. As a result of the CLSIP Forbearance, the CLSIP Term Loan is classified as long-term debt. Debt Covenants The Company’s debt agreements contain certain covenants that, among other things, subject to certain exceptions and other basket amounts, restrict its ability and the ability of its subsidiaries to: • incur additional indebtedness; • pay dividends or distributions on its capital stock, repurchase or retire its capital stock and redeem, repurchase or defease any subordinated indebtedness; • make certain investments; • create or incur certain liens; • create restrictions on the payment of dividends or other distributions to us from the Company’s subsidiaries; • transfer or sell assets; • engage in certain transactions with its affiliates; and • merge or consolidate with other companies or transfer all or substantially all of its assets. Certain of these covenants in the indentures governing the Company’s note indebtedness, such as limitations on the Company’s ability to make certain payments such as dividends, or incur debt, will no longer apply if the notes have investment grade ratings from both of the rating agencies of Moody’s Investor Services, Inc. (“Moody’s”) and Standard & Poor’s Ratings Group (“S&P”) and no event of default has occurred. Since the date of issuance of the notes, the notes have not received investment grade ratings from Moody’s or S&P. Accordingly, all of the covenants under the notes currently apply to the Company. None of the covenants under the notes, however, require the Company to maintain any particular financial ratio or other measure of financial performance. See Note 4 – Fair Value Measurements for related fair value disclosure on debt. Europe Bank Credit Facilities The Company’s non-U.S. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Aug. 04, 2018 | |
Commitments and Contingencies | 6. Commitments and Contingencies The Company is, from time to time, involved in litigation incidental to the conduct of its business, including personal injury litigation, litigation regarding merchandise sold, including product and safety concerns regarding heavy metal and chemical content in merchandise, litigation with respect to various employment matters, including litigation with present and former employees, wage and hour litigation and litigation regarding intellectual property rights. The Company believes that current pending litigation will not have a material adverse effect on its consolidated financial position, results of operations or cash flows. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Aug. 04, 2018 | |
Accumulated Other Comprehensive Loss | 7. Accumulated Other Comprehensive Loss The following summary sets forth the components of accumulated other comprehensive loss, net of tax as follows (in thousands, net of tax): Total (1) Balance as of February 3, 2018 $ (25,302 ) Other comprehensive loss (15,062 ) Balance as of August 4, 2018 $ (40,364 ) (1) Represents foreign currency items and $5.7 million of other income associated with expired derivative instruments. |
Stock Options and Stock-Based C
Stock Options and Stock-Based Compensation | 6 Months Ended |
Aug. 04, 2018 | |
Stock Options and Stock-Based Compensation | 8. Stock Options and Stock-Based Compensation The following is a summary of activity in the Company’s stock option plan for the six months ended August 4, 2018: Number of Weighted- Weighted- Outstanding as of February 3, 2018 3,224,326 $ 5.18 Options granted — Options exercised — Options forfeited (17,511 ) $ 2.83 Options expired (154,887 ) $ 9.48 Outstanding as of August 4, 2018 3,051,928 $ 4.98 3.6 Options vested and expected to vest as of August 4, 2018 2,938,253 $ 5.10 3.5 Exercisable as of August 4, 2018 1,892,324 $ 6.09 3.1 There were no options granted during the six months ended August 4, 2018. The weighted average grant date fair value of options granted during the six months ended July 29, 2017 was $0.39. Stock-based compensation benefit is recorded in “Selling, general and administrative” expenses in the accompanying Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss. |
Income Taxes
Income Taxes | 6 Months Ended |
Aug. 04, 2018 | |
Income Taxes | 9. Income Taxes The effective income tax rate was 287.8% and (13.6)% for the three and six months ended August 4, 2018. This effective income tax rate differed from the statutory federal income tax rate of 21.0% primarily due to foreign losses with no associated income tax benefit and changes in valuation allowances. The effective income tax rate was (100.4)% and (8.4)% for the three and six months ended July 29, 2017. This effective income tax rate differed from the statutory federal income tax rate of 35.0% primarily due to foreign tax rate differentials as compared to the U.S. statutory rate, changes in the valuation allowance and the correction of an immaterial error in the three months ended July 29, 2017. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). The Tax Act instituted fundamental changes to the US tax system. Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. In accordance with SAB 118, Management calculated their best estimate of the impact of the Tax Act in the 2017 year-end one-time |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Aug. 04, 2018 | |
Related Party Transactions | 10. Related Party Transactions Indebtedness As of August 4, 2018 and February 3, 2018, Parent and affiliates held $68.6 million and $65.6 million of the Company’s indebtedness and the Company had no accrued interest payable associated with the indebtedness. For the three and six months ended August 4, 2018 and July 29, 2017, the Company recognized no interest expense related to the indebtedness held by Parent and affiliates as a result of the 2016 debt exchange whereby all future interest to be paid through maturity date was recorded at the time of the exchange. Management Services Agreement On June 6, 2017, the Company and Parent entered into an Amended and Restated Management Services Agreement (the “Management Services Agreement”) with Apollo Management VI, L.P. (“Apollo”), Cowen & Co., LLC, as successor to Tri-Artisan out-of-pocket time-to-time In addition, on June 6, 2017, the Company and Cowen entered into a letter agreement (the “Cowen Management Agreement”) pursuant to which Cowen agreed to provide the Company with certain financial advisory and investment banking services on a month-to-month out-of-pocket |
Segment Information
Segment Information | 6 Months Ended |
Aug. 04, 2018 | |
Segment Information | 11. Segment Information The Company is organized based on the geographic markets in which it operates. Under this structure, the Company currently has two reportable segments: North America and Europe. The Company accounts for the goods it sells to third parties under franchising and licensing agreements within “Net sales” and “Cost of sales, occupancy and buying expenses” in the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income within its North America segment. The franchise fees the Company charges under the franchising agreements are reported in “Other income, net” in the accompanying Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income within its Europe segment. Substantially all of the interest expense on the Company’s outstanding debt and all of Reorganization Items, net is recorded in the Company’s North America segment. Net sales, depreciation and amortization and operating income for the three and six months ended August 4, 2018 and July 29, 2017 are as follows (in thousands): Three Months Three Months Six Months Six Months Net sales: North America $ 199,454 $ 196,033 $ 406,388 $ 391,993 Europe 114,994 120,604 219,066 224,265 Total net sales 314,448 316,637 625,454 616,258 Depreciation and amortization: North America 9,623 7,028 18,276 14,130 Europe 4,086 3,862 8,627 7,963 Total depreciation and amortization 13,709 10,890 26,903 22,093 Operating income for reportable segments: North America 28,511 16,306 55,139 42,016 Europe 9,394 17,255 3,155 20,364 Total operating income for reportable segments 37,905 33,561 58,294 62,380 Severance and transaction-related costs 629 389 1,005 532 Consolidated operating income 37,276 33,172 57,289 61,848 Reorganization items, net 30,453 — 40,462 — Interest expense, net 5,072 43,394 29,961 86,974 Consolidated income (loss) before income tax expense $ 1,751 $ (10,222 ) $ (13,134 ) $ (25,126 ) Excluded from operating income for the North America segment are severance and transaction-related costs of approximately $0.3 million and $0.3 million for the three months ended August 4, 2018 and July 29, 2017, respectively, and $0.4 million and $0.3 million for the six months ended August 4, 2018 and July 29, 2017, respectively. Excluded from operating income for the Europe segment are severance and transaction-related costs of approximately $0.3 million and $0.1 million for the three months ended August 4, 2018 and July 29, 2017, respectively and $0.6 million and $0.2 million for the six months ended August 4, 2018 and July 29, 2017, respectively. Net sales by channel type and by segment for the three and six months ended August 4, 2018 are as follows (in thousands): Three Months Six Months North America: Company-operated net sales $ 186,518 $ 376,453 Other net sales 12,936 29,935 Total net sales 199,454 406,388 Europe: Company-operated net sales 108,419 205,089 Other net sales 6,575 13,977 Total net sales 114,994 219,066 Consolidated: Company-operated net sales 294,937 581,542 Other net sales 19,511 43,912 Total net sales $ 314,448 $ 625,454 |
Condensed Combined Debtor-In-Po
Condensed Combined Debtor-In-Possession Financial Information | 6 Months Ended |
Aug. 04, 2018 | |
Condensed Combined Debtor-In-Possession Financial Information | 12. Condensed Combined Debtor-In-Possession The financial statements below represent the unaudited condensed combined financial statements of the Debtors. As of and for the three and six months ended August 4, 2018, the results of the Company’s subsidiaries that are not part of the Chapter 11 Cases, are not included in these condensed combined financial statements. Intercompany transactions among the Debtors have been eliminated in the financial statements contained herein. Intercompany transactions among the Debtors and the subsidiaries that are not part of the Chapter 11 Cases have not been eliminated in the Debtors’ financial statements. Debtors Unaudited Condensed Combined Balance Sheet August 4, 2018 (in thousands) ASSETS Current assets: Cash $ 27,825 Inventories 88,422 Prepaid expenses 20,935 Other current assets 13,400 Total current assets 150,582 Property and equipment: Furniture, fixtures and equipment 128,307 Leasehold improvements 167,133 295,440 Accumulated depreciation and amortization (240,023 ) 55,417 Leased property under capital lease: Land and building 18,055 Accumulated depreciation and amortization (7,667 ) 10,388 Investment in non-filing 409,863 Goodwill 987,517 Intangible assets, net 188,223 Other assets 14,169 1,599,772 Total assets $ 1,816,159 LIABILITIES AND STOCKHOLDER’S DEFICIT Current liabilities: Debtor-in-possession $ 60,000 Trade accounts payable 18,549 Income taxes payable 7,849 Accrued interest payable 140 Accrued expenses and other current liabilities 61,907 Total current liabilities 148,445 Intercompany payables 174,547 Obligation under capital lease 15,718 Deferred tax liability 24,795 Deferred rent expense 20,692 Other long-term liabilities 8,646 244,398 Liabilities subject to compromise 1,905,215 Stockholder’s deficit: Common stock — Additional paid in capital 630,794 Accumulated other comprehensive loss, net of tax (40,364 ) Accumulated deficit (1,072,329 ) (481,899 ) Total liabilities and stockholder’s deficit $ 1,816,159 Debtors Unaudited Condensed Combined Statement of Operations and Comprehensive Income (in thousands) Three Months August 4, 2018 Six Months August 4, 2018 Net sales $ 184,157 $ 376,611 Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) 89,654 179,919 Gross profit 94,503 196,692 Other expenses: Selling, general and administrative 62,921 136,553 Depreciation and amortization 9,202 17,389 Severance and transaction-related costs 264 348 Other income (4,351 ) (10,764 ) 68,036 143,526 Operating income 26,467 53,166 Reorganization items, net 30,453 40,462 Interest expense, net 1,940 21,472 Loss before income taxes (5,926 ) (8,768 ) Income tax expense 2,945 7,872 Loss from continuing operations (8,871 ) (16,640 ) Equity in earnings of subsidiaries 24,836 51,928 Equity in earnings of non-filing 5,977 5,004 Net income 21,942 40,292 Foreign currency translation adjustments (1,207 ) (4,168 ) Net loss on intra-entity foreign currency transactions, net of tax (5,214 ) (12,522 ) Other comprehensive loss (6,421 ) (16,690 ) Comprehensive income $ 15,521 $ 23,602 Debtors Unaudited Condensed Combined Statement of Cash Flows Six Months Ended August 4, 2018 (in thousands) Cash flows from operating activities: Net income $ 40,292 Adjustments to reconcile net income to net cash used in operating activities: Equity in earnings of subsidiaries (51,928 ) Equity in earnings of non-filing (5,004 ) Depreciation and amortization 17,389 Reorganization items, net 40,462 Amortization of debt issuance costs 898 Accretion of debt premium (360 ) Net accretion of unfavorable lease obligations 7 Loss on sale/retirement of property and equipment, net 44 Stock-based compensation expense 70 (Increase) decrease in: Inventories (11,953 ) Prepaid expenses (4,557 ) Other assets (6,947 ) Increase (decrease) in: Trade accounts payable (8,076 ) Income taxes payable 7,340 Accrued interest payable 17,386 Accrued expenses and other liabilities (5,802 ) Deferred income taxes (2,586 ) Deferred rent expense (2,142 ) Net cash provided by operating activities 24,533 Cash flows from investing activities: Acquisition of property and equipment (6,553 ) Acquisition of intangible assets/lease rights (20 ) Net cash used in investing activities (6,573 ) Cash flows from financing activities: Proceeds from debtor-in-possession 57,000 Repayments under debtor-in-possession (57,000 ) Proceeds from debtor-in-possession 60,000 Debt issuance costs related to debtor-in-possession (4,470 ) Proceeds from revolving credit facilities 43,000 Payments on revolving credit facilities (74,000 ) Payments of unamortized interest related to long-term debt (925 ) Principal payments on capital lease (200 ) Intercompany activity, net (18,680 ) Net cash provided by financing activities 4,725 Effect of foreign currency exchange rate changes on cash and cash equivalents (2,207 ) Net increase in cash and cash equivalents 20,478 Cash and cash equivalents, at beginning of period 7,347 Cash and cash equivalents, at end of period 27,825 |
Supplemental Financial Informat
Supplemental Financial Information | 6 Months Ended |
Aug. 04, 2018 | |
Supplemental Financial Information | 13. Supplemental Financial Information On March 4, 2011, Claire’s Stores, Inc. (referred to in this Note 13 as the “Issuer”), issued the Second Lien Notes. On February 28, 2012, March 12, 2012 and September 20, 2012, the Issuer issued the 9.0% Senior Secured First Lien Notes. On March 15, 2013, the Issuer issued the 6.125% Senior Secured First Lien Notes and on May 14, 2013, the Issuer issued the Unsecured Notes. The Second Lien Notes are irrevocably and unconditionally guaranteed, jointly and severally, by all wholly-owned domestic current and future subsidiaries of Claire’s Stores, Inc. that guarantee the Company’s ABL Credit Facility and U.S. Credit Facility. The First Lien Notes are unconditionally guaranteed, jointly and severally, by all wholly-owned domestic current and future subsidiaries of Claire’s Stores, Inc. (subject to certain exceptions, including CLSIP LLC and CLSIP Holdings LLC). As of August 4, 2018, Claire’s Stores, Inc. owned 100% of its domestic subsidiaries that guarantee the Notes. All guarantors are collectively referred to as the “Guarantors.” The Company’s other subsidiaries, principally its international subsidiaries including its European, Canadian and Asian subsidiaries (the “Non-Guarantors”), The tables in the following pages present the unaudited condensed consolidating financial information for the Issuer, the Guarantors and the Non-Guarantors, Non-Guarantors Unaudited Condensed Consolidating Balance Sheet August 4, 2018 (in thousands) Non- Issuer Guarantors Guarantors Eliminations Consolidated ASSETS Current assets: Cash $ 23,551 $ 10,774 $ 35,120 $ — $ 69,445 Inventories — 88,422 59,909 — 148,331 Prepaid expenses 8,300 12,635 15,954 — 36,889 Other current assets 418 12,982 8,337 — 21,737 Total current assets 32,269 124,813 119,320 — 276,402 Property and equipment: Furniture, fixtures and equipment 3,239 125,068 79,981 — 208,288 Leasehold improvements 1,315 165,818 111,971 — 279,104 4,554 290,886 191,952 — 487,392 Accumulated depreciation and amortization (3,834 ) (236,189 ) (147,608 ) — (387,631 ) 720 54,697 44,344 — 99,761 Leased property under capital lease: Land and building — 18,055 — — 18,055 Accumulated depreciation and amortization — (7,667 ) — — (7,667 ) — 10,388 — — 10,388 Intercompany receivables — 368,135 105,026 (473,161 ) — Investment in subsidiaries 1,729,045 (40,870 ) — (1,688,175 ) — Goodwill — 987,517 145,058 — 1,132,575 Intangible assets, net 188,100 149,657 197,022 (84,634 ) 450,145 Other assets 8,000 6,169 46,938 — 61,107 1,925,145 1,470,608 494,044 (2,245,970 ) 1,643,827 Total assets $ 1,958,134 $ 1,660,506 $ 657,708 $ (2,245,970 ) $ 2,030,378 LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT) Current liabilities: Current portion of long-term debt, net $ — $ — $ 84,732 $ — $ 84,732 Debtor-in-possession 60,000 — — — 60,000 Trade accounts payable 2,323 16,226 36,723 — 55,272 Income taxes payable — 7,849 6,247 — 14,096 Accrued interest payable 140 395 548 — 1,083 Accrued expenses and other current liabilities 27,113 34,794 39,309 — 101,216 Total current liabilities 89,576 59,264 167,559 — 316,399 Intercompany payables 473,161 — — (473,161 ) — Long-term debt, net — 143,810 65,037 — 208,847 Revolving credit facility, net — — — — — Obligation under capital lease — 15,718 — — 15,718 Deferred tax liability — 24,795 4,384 — 29,179 Deferred rent expense — 20,692 10,865 — 31,557 Other long-term liabilities — 8,646 — — 8,646 473,161 213,661 80,286 (473,161 ) 293,947 Liabilities subject to compromise 1,880,580 24,635 — — 1,905,215 Stockholder’s equity (deficit): Common stock — 367 2 (369 ) — Additional paid in capital 630,794 1,520,543 766,993 (2,287,536 ) 630,794 Accumulated other comprehensive income (loss), net of tax (40,364 ) (4,784 ) (36,187 ) 40,971 (40,364 ) Accumulated deficit (1,075,613 ) (153,180 ) (320,945 ) 474,125 (1,075,613 ) (485,183 ) 1,362,946 409,863 (1,772,809 ) (485,183 ) Total liabilities and stockholder’s equity (deficit) $ 1,958,134 $ 1,660,506 $ 657,708 $ (2,245,970 ) $ 2,030,378 Unaudited Condensed Consolidating Balance Sheet February 3, 2018 (in thousands) Non- Issuer Guarantors Guarantors Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 4,203 $ 9,644 $ 28,599 $ — $ 42,446 Inventories — 76,469 58,221 — 134,690 Prepaid expenses 2,638 13,740 15,906 — 32,284 Other current assets 1,281 13,111 12,466 — 26,858 Total current assets 8,122 112,964 115,192 — 236,278 Property and equipment: Furniture, fixtures and equipment 3,075 133,664 86,905 — 223,644 Leasehold improvements 1,315 177,520 122,503 — 301,338 4,390 311,184 209,408 — 524,982 Accumulated depreciation and amortization (3,640 ) (245,778 ) (155,866 ) — (405,284 ) 750 65,406 53,542 — 119,698 Leased property under capital lease: Land and building — 18,055 — — 18,055 Accumulated depreciation and amortization — (7,216 ) — — (7,216 ) — 10,839 — — 10,839 Intercompany receivables — 299,768 121,143 (420,911 ) — Investment in subsidiaries 1,688,098 (42,369 ) — (1,645,729 ) — Goodwill — 987,517 145,058 — 1,132,575 Intangible assets, net 188,100 149,678 203,934 (84,634 ) 457,078 Other assets 1,140 3,647 39,468 — 44,255 1,877,338 1,398,241 509,603 (2,151,274 ) 1,633,908 Total assets $ 1,886,210 $ 1,587,450 $ 678,337 $ (2,151,274 ) $ 2,000,723 LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT) Current liabilities: Current portion of long-term debt, net $ 1,843,582 $ — $ 50,457 $ — $ 1,894,039 Trade accounts payable 3,231 21,090 38,644 — 62,965 Income taxes payable — 484 3,565 — 4,049 Accrued interest payable 55,808 — 374 — 56,182 Accrued expenses and other current liabilities 17,954 34,494 42,486 — 94,934 Total current liabilities 1,920,575 56,068 135,526 — 2,112,169 Intercompany payables 420,911 — — (420,911 ) — Long-term debt, net — 143,929 106,426 — 250,355 Obligation under capital lease — 15,970 — — 15,970 Deferred tax liability — 25,963 6,651 — 32,614 Deferred rent expense — 22,834 12,017 — 34,851 Unfavorable lease obligations and other long-term liabilities — 10,040 — — 10,040 420,911 218,736 125,094 (420,911 ) 343,830 Stockholder’s equity (deficit): Common stock — 367 2 (369 ) — Additional paid in capital 630,719 1,520,543 766,993 (2,287,536 ) 630,719 Accumulated other comprehensive income (loss), net of tax (25,302 ) (3,156 ) (23,326 ) 26,482 (25,302 ) Accumulated deficit (1,060,693 ) (205,108 ) (325,952 ) 531,060 (1,060,693 ) (455,276 ) 1,312,646 417,717 (1,730,363 ) (455,276 ) Total liabilities and stockholder’s equity (deficit) $ 1,886,210 $ 1,587,450 $ 678,337 $ (2,151,274 ) $ 2,000,723 Unaudited Condensed Consolidating Statement of Operations and Comprehensive Loss For The Three Months Ended August 4, 2018 (in thousands) Non- Issuer Guarantors Guarantors Eliminations Consolidated Net sales $ — $ 184,157 $ 130,291 $ — $ 314,448 Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) 2,828 86,826 65,069 — 154,723 Gross profit (deficit) (2,828 ) 97,331 65,222 — 159,725 Other expenses: Selling, general and administrative 5,536 57,385 48,538 — 111,459 Depreciation and amortization 96 9,106 4,507 — 13,709 Severance and transaction-related costs 209 55 365 — 629 Other (income) expense (1,541 ) (2,810 ) 1,003 — (3,348 ) 4,300 63,736 54,413 — 122,449 Operating income (loss) (7,128 ) 33,595 10,809 — 37,276 Reorganization items, net 24,832 5,621 — — 30,453 Interest expense, net 1,406 929 2,737 — 5,072 Income (loss) before income taxes (33,366 ) 27,045 8,072 — 1,751 Income tax expense — 2,945 2,095 — 5,040 Income (loss) from continuing operations (33,366 ) 24,100 5,977 — (3,289 ) Equity in earnings (loss) of subsidiaries 30,077 736 — (30,813 ) — Net income (loss) (3,289 ) 24,836 5,977 (30,813 ) (3,289 ) Foreign currency translation adjustments (1,067 ) (140 ) (520 ) 660 (1,067 ) Net gain (loss) on intra-entity foreign currency transactions, net of tax (4,952 ) (262 ) (4,952 ) 5,214 (4,952 ) Other comprehensive income (loss) (6,019 ) (402 ) (5,472 ) 5,874 (6,019 ) Comprehensive income (loss) $ (9,308 ) $ 24,434 $ 505 $ (24,939 ) $ (9,308 ) Unaudited Condensed Consolidating Statement of Operations and Comprehensive Loss For The Three Months Ended July 29, 2017 (in thousands) Non- Issuer Guarantors Guarantors Eliminations Consolidated Net sales $ — $ 180,868 $ 135,769 $ — $ 316,637 Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) 3,017 89,864 68,702 — 161,583 Gross (deficit) profit (3,017 ) 91,004 67,067 — 155,054 Other expenses: Selling, general and administrative 5,967 58,717 48,090 — 112,774 Depreciation and amortization 181 6,379 4,330 — 10,890 Severance and transaction-related costs 234 16 139 — 389 Other income, net (918 ) (112 ) (1,141 ) — (2,171 ) 5,464 65,000 51,418 — 121,882 Operating (loss) income (8,481 ) 26,004 15,649 — 33,172 Interest expense, net 40,071 535 2,788 — 43,394 (Loss) income before income taxes (48,552 ) 25,469 12,861 — (10,222 ) Income tax expense — 121 10,145 — 10,266 (Loss) income from continuing operations (48,552 ) 25,348 2,716 — (20,488 ) Equity in earnings (loss) of subsidiaries 28,064 (2,203 ) — (25,861 ) — Net (loss) income (20,488 ) 23,145 2,716 (25,861 ) (20,488 ) Foreign currency translation adjustments 4,523 1,080 (196 ) (884 ) 4,523 Net gain (loss) on intra-entity foreign currency transactions, net of tax 7,593 2,199 7,588 (9,787 ) 7,593 Other comprehensive income (loss) 12,116 3,279 7,392 (10,671 ) 12,116 Comprehensive (loss) income $ (8,372 ) $ 26,424 $ 10,108 $ (36,532 ) $ (8,372 ) Unaudited Condensed Consolidating Statement of Operations and Comprehensive Loss For The Six Months Ended August 4, 2018 (in thousands) Non- Issuer Guarantors Guarantors Eliminations Consolidated Net sales $ — $ 376,611 $ 248,843 $ — $ 625,454 Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) 6,642 173,277 130,452 — 310,371 Gross profit (deficit) (6,642 ) 203,334 118,391 — 315,083 Other expenses: Selling, general and administrative 20,936 115,617 100,687 — 237,240 Depreciation and amortization 194 17,195 9,514 — 26,903 Severance and transaction-related costs 209 139 657 — 1,005 Other (income) expense (12,321 ) 1,557 3,410 — (7,354 ) 9,018 134,508 114,268 — 257,794 Operating income (loss) (15,660 ) 68,826 4,123 — 57,289 Reorganization items, net 34,841 5,621 — — 40,462 Interest expense, net 20,430 4,326 5,205 — 29,961 Income (loss) before income taxes (70,931 ) 58,879 (1,082 ) — (13,134 ) Income tax benefit — 7,872 (6,086 ) — 1,786 Income (loss) from continuing operations (70,931 ) 51,007 5,004 — (14,920 ) Equity in earnings (loss) of subsidiaries 56,011 921 — (56,932 ) — Net income (loss) (14,920 ) 51,928 5,004 (56,932 ) (14,920 ) Foreign currency translation adjustments (3,602 ) (566 ) (1,404 ) 1,970 (3,602 ) Net gain (loss) on intra-entity foreign currency transactions, net of tax (11,460 ) (1,062 ) (11,457 ) 12,519 (11,460 ) Other comprehensive income (loss) (15,062 ) (1,628 ) (12,861 ) 14,489 (15,062 ) Comprehensive income (loss) $ (29,982 ) $ 50,300 $ (7,857 ) $ (42,443 ) $ (29,982 ) Unaudited Condensed Consolidating Statement of Operations and Comprehensive Loss For The Six Months Ended July 29, 2017 (in thousands) Non- Issuer Guarantors Guarantors Eliminations Consolidated Net sales $ — $ 362,938 $ 253,320 $ — $ 616,258 Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) 6,179 176,063 131,129 — 313,371 Gross profit (deficit) (6,179 ) 186,875 122,191 — 302,887 Other expenses: Selling, general and administrative 11,720 116,002 95,564 — 223,286 Depreciation and amortization 372 12,705 9,016 — 22,093 Severance and transaction-related costs 234 73 225 — 532 Other income, net (2,855 ) (304 ) (1,713 ) — (4,872 ) 9,471 128,476 103,092 — 241,039 Operating income (loss) (15,650 ) 58,399 19,099 — 61,848 Interest expense, net 80,341 1,061 5,572 — 86,974 Income (loss) before income taxes (95,991 ) 57,338 13,527 — (25,126 ) Income tax expense (benefit) — (943 ) 3,063 — 2,120 Income (loss) from continuing operations (95,991 ) 58,281 10,464 — (27,246 ) Equity in earnings (loss) of subsidiaries 68,745 (2,157 ) — (66,588 ) — Net income (loss) (27,246 ) 56,124 10,464 (66,588 ) (27,246 ) Foreign currency translation adjustments 4,567 668 1,641 (2,309 ) 4,567 Net gain (loss) on intra-entity foreign currency transactions, net of tax 9,474 1,343 9,471 (10,814 ) 9,474 Other comprehensive income (loss) 14,041 2,011 11,112 (13,123 ) 14,041 Comprehensive income (loss) $ (13,205 ) $ 58,135 $ 21,576 $ (79,711 ) $ (13,205 ) Unaudited Condensed Consolidating Statement of Cash Flows Six Months Ended August 4, 2018 (in thousands) Non- Issuer Guarantors Guarantors Eliminations Consolidated Cash flows from operating activities: Net income (loss) $ (14,920 ) $ 51,928 $ 5,004 $ (56,932 ) $ (14,920 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Loss (equity) in earnings of subsidiaries (56,011 ) (921 ) — 56,932 — Depreciation and amortization 194 17,195 9,514 — 26,903 Reorganization items, net 34,841 5,621 — — 40,462 Amortization of lease rights and other assets — — 2,517 — 2,517 Amortization of debt issuance costs 898 — 715 — 1,613 Accretion of debt premium (360 ) — — — (360 ) Non-cash pay-in-kind — 2,889 — — 2,889 Net accretion of unfavorable lease obligations — 7 2 — 9 Loss on sale/retirement of property and equipment, net — 44 2 — 46 Stock-based compensation expense 70 — 5 — 75 (Increase) decrease in: Inventories — (11,953 ) (5,992 ) — (17,945 ) Prepaid expenses (5,662 ) 1,105 (2,573 ) — (7,130 ) Other assets (5,998 ) (949 ) 486 — (6,461 ) Increase (decrease) in: Trade accounts payable (19,578 ) 11,502 954 — (7,122 ) Income taxes payable — 7,340 4,909 — 12,249 Accrued interest payable 17,386 395 174 — 17,955 Accrued expenses and other liabilities (7,648 ) 1,846 (326 ) — (6,128 ) Deferred income taxes — (2,586 ) (12,701 ) — (15,287 ) Deferred rent expense — (2,142 ) (318 ) — (2,460 ) Net cash provided by (used in) operating activities (56,788 ) 81,321 2,372 — 26,905 Cash flows from investing activities: Acquisition of property and equipment (164 ) (6,389 ) (2,474 ) — (9,027 ) Acquisition of intangible assets/lease rights — (20 ) (80 ) — (100 ) Net cash used in investing activities (164 ) (6,409 ) (2,544 ) — (9,127 ) Cash flows from financing activities: Proceeds from debtor-in-possession 57,000 — — — 57,000 Repayments under debtor-in-possession (57,000 ) — — — (57,000 ) Proceeds from debtor-in-possession 60,000 — — — 60,000 Debt issuance costs related to debtor-in-possession (4,470 ) — — — (4,470 ) Proceeds from revolving credit facilities 43,000 — — — 43,000 Payments on revolving credit facilities (74,000 ) — — — (74,000 ) Payment on current portion of long-term debt — — (6,000 ) — (6,000 ) Payments of unamortized interest related to long-term debt (925 ) (3,008 ) (1,388 ) — (5,321 ) Payment of debt issuance costs — — (2 ) — (2 ) Principal payments on capital lease — (200 ) — — (200 ) Intercompany activity, net 52,695 (68,367 ) 15,672 — — Net cash provided by (used in) financing activities 76,300 (71,575 ) 8,282 — 13,007 Effect of foreign currency exchange rate changes on cash and cash equivalents — (2,207 ) (1,579 ) — (3,786 ) Net increase (decrease) in cash and cash equivalents 19,348 1,130 6,521 — 26,999 Cash and cash equivalents, at beginning of period 4,203 9,644 28,599 — 42,446 Cash and cash equivalents, at end of period 23,551 10,774 35,120 — 69,445 Unaudited Condensed Consolidating Statement of Cash Flows Six Months Ended July 29, 2017 (in thousands) Non- Issuer Guarantors Guarantors Eliminations Consolidated Cash flows from operating activities: Net income (loss) $ (27,246 ) $ 56,124 $ 10,464 $ (66,588 ) $ (27,246 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Loss (equity) in earnings of subsidiaries (68,745 ) 2,157 — 66,588 — Depreciation and amortization 372 12,705 9,016 — 22,093 Amortization of lease rights and other assets — — 1,862 — 1,862 Amortization of debt issuance costs 3,781 — 531 — 4,312 Accretion of debt premium (1,457 ) — — — (1,457 ) Non-cash pay-in-kind — — 750 — 750 Net accretion of unfavorable lease obligations — (56 ) 1 — (55 ) Loss on sale/retirement of property and equipment, net — 126 2 — 128 Stock-based compensation expense 139 — 17 — 156 (Increase) decrease in: Inventories — (12,077 ) (10,006 ) — (22,083 ) Prepaid expenses (675 ) (84 ) (1,167 ) — (1,926 ) Other assets (268 ) (23 ) 216 — (75 ) Increase (decrease) in: Trade accounts payable (912 ) 2,811 (2,608 ) — (709 ) Income taxes payable — (967 ) 688 — (279 ) Accrued interest payable 73 — (228 ) — (155 ) Accrued expenses and other liabilities (2,683 ) (365 ) (3,946 ) — (6,994 ) Deferred income taxes — — (359 ) — (359 ) Deferred rent expense — (712 ) (484 ) — (1,196 ) Net cash provided by (used in) operating activities (97,621 ) 59,639 4,749 — (33,233 ) Cash flows from investing activities: Acquisition of property and equipment — (5,111 ) (2,990 ) — (8,101 ) Acquisition of intangible assets/lease rights — (38 ) — — (38 ) Net cash used in investing activities — (5,149 ) (2,990 ) — (8,139 ) Cash flows from financing activities: Proceeds from revolving credit facilities 81,000 — — — 81,000 Payments on revolving credit facilities (41,200 ) — — — (41,200 ) Payment on current portion of long-term debt (18,420 ) — — — (18,420 ) Payments of unamortized interest related to long-term debt (743 ) (2,415 ) (1,114 ) — (4,272 ) Payment of debt issuance costs — — (386 ) — (386 ) Principal payments on capital lease — (156 ) — — (156 ) Intercompany activity, net 79,605 (53,034 ) (26,571 ) — — Net cash provided by (used in) financing activities 100,242 (55,605 ) (28,071 ) — 16,566 Effect of foreign currency exchange rate changes on cash and cash equivalents — 2,928 (2,725 ) — 203 Net increase (decrease) in cash and cash equivalents 2,621 1,813 (29,037 ) — (24,603 ) Cash and cash equivalents, at beginning of period 3,038 3,005 49,749 — 55,792 Cash and cash equivalents, at end of period $ 5,659 $ 4,818 $ 20,712 $ — $ 31,189 |
Bankruptcy Filing (Tables)
Bankruptcy Filing (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Summary of Liabilities Subject to Compromise | Liabilities Subject to Compromise as of August 4, 2018 included the following components (in thousands): August 4, 2018 Debt (1) $ 1,806,363 Accrued interest on debt subject to compromise 73,054 Accounts payable, accrued expense and other liabilities 25,798 Total liabilities subject to compromise $ 1,905,215 (1) See Note 5 – Debt for details of pre-petition |
Summary of Reorganization Items, Net | Reorganization items, net represent amounts incurred after the Commencement Date as a direct result of the Bankruptcy and are comprised of the following for the three and six months ended August 4, 2018 (in thousands): Three Months Six Months Professional fees $ 22,744 $ 33,697 Rejection of leases and other 7,277 7,277 Debtor-in-possession 432 4,470 Write-off pre-petition — (4,982 ) Total reorganization items, net $ 30,453 $ 40,462 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Components of Debt | Debt as of August 4, 2018 and February 3, 2018 included the following components (in thousands): August 4, 2018 February 3, 2018 Short-term borrowings: Debtor-in-possession $ 60,000 $ — Current portion of long-term debt: Claire’s Gibraltar Intermediate secured term loan due 2019 $ 51,500 $ 51,500 Claire’s Gibraltar unsecured term loan due 2019 34,000 — 9.0% Senior secured first lien notes due 2019 — 1,125,000 8.875% Senior secured second lien notes due 2019 — 222,300 6.125% Senior secured first lien notes due 2020 — 210,000 7.75% Senior notes due 2020 — 216,742 9.0% Claire’s Stores term loan due 2021 — 31,804 U.S. asset based lending credit facility due 2019 — 31,000 Unamortized premium (1) — 3,642 Adjustment to carrying value (1) — 12,483 Unamortized debt issuance cost (1) (768 ) (10,432 ) Total current portion of long-term debt, net (1) $ 84,732 $ 1,894,039 Debt subject to compromise: 9.0% Senior secured first lien notes due 2019 $ 1,125,000 $ — 8.875% Senior secured second lien notes due 2019 222,300 — 6.125% Senior secured first lien notes due 2020 210,000 — 7.75% Senior notes due 2020 216,742 — 9.0% Claire’s Stores term loan due 2021 32,321 — Total debt subject to compromise $ 1,806,363 $ — Long-term debt: Claire’s Gibraltar unsecured term loan due 2019 $ — $ 40,000 11.0% CLSIP term loan due 2021 (2) 107,926 103,356 9.0% Claire’s Gibraltar term loans due 2021 48,477 47,701 Adjustment to carrying value 52,444 59,298 Total long-term debt, net $ 208,847 $ 250,355 Obligation under capital lease (including current portion) $ 16,188 $ 16,388 (1) LSTC must be reported at the amounts expected to be allowed by the Bankruptcy Court. The carrying value of the debt will be adjusted as claims are approved. As of August 4, 2018, the Company wrote off $5.0 million of debt issuance costs, debt premium, and the adjustment to carrying value to present the debt at the outstanding face value. The write-offs are included within reorganization items, net in the Unaudited Condensed Consolidated Statements of Operations. See Note 2 – Bankruptcy Filing for additional details. (2) See CLSIP Forbearance Agreement below for discussion of increased interest rate. |
Accumulated Other Comprehensi22
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Components of Accumulated Other Comprehensive Loss, Net of Tax | The following summary sets forth the components of accumulated other comprehensive loss, net of tax as follows (in thousands, net of tax): Total (1) Balance as of February 3, 2018 $ (25,302 ) Other comprehensive loss (15,062 ) Balance as of August 4, 2018 $ (40,364 ) (1) Represents foreign currency items and $5.7 million of other income associated with expired derivative instruments. |
Stock Options and Stock-Based23
Stock Options and Stock-Based Compensation (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Summary of Activity in Stock Option Plan | The following is a summary of activity in the Company’s stock option plan for the six months ended August 4, 2018: Number of Weighted- Weighted- Outstanding as of February 3, 2018 3,224,326 $ 5.18 Options granted — Options exercised — Options forfeited (17,511 ) $ 2.83 Options expired (154,887 ) $ 9.48 Outstanding as of August 4, 2018 3,051,928 $ 4.98 3.6 Options vested and expected to vest as of August 4, 2018 2,938,253 $ 5.10 3.5 Exercisable as of August 4, 2018 1,892,324 $ 6.09 3.1 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Net Sales, Depreciation and Amortization and Operating Income | Net sales, depreciation and amortization and operating income for the three and six months ended August 4, 2018 and July 29, 2017 are as follows (in thousands): Three Months Three Months Six Months Six Months Net sales: North America $ 199,454 $ 196,033 $ 406,388 $ 391,993 Europe 114,994 120,604 219,066 224,265 Total net sales 314,448 316,637 625,454 616,258 Depreciation and amortization: North America 9,623 7,028 18,276 14,130 Europe 4,086 3,862 8,627 7,963 Total depreciation and amortization 13,709 10,890 26,903 22,093 Operating income for reportable segments: North America 28,511 16,306 55,139 42,016 Europe 9,394 17,255 3,155 20,364 Total operating income for reportable segments 37,905 33,561 58,294 62,380 Severance and transaction-related costs 629 389 1,005 532 Consolidated operating income 37,276 33,172 57,289 61,848 Reorganization items, net 30,453 — 40,462 — Interest expense, net 5,072 43,394 29,961 86,974 Consolidated income (loss) before income tax expense $ 1,751 $ (10,222 ) $ (13,134 ) $ (25,126 ) |
Schedule of Net Sales by Channel Type and by Segment | Net sales by channel type and by segment for the three and six months ended August 4, 2018 are as follows (in thousands): Three Months Six Months North America: Company-operated net sales $ 186,518 $ 376,453 Other net sales 12,936 29,935 Total net sales 199,454 406,388 Europe: Company-operated net sales 108,419 205,089 Other net sales 6,575 13,977 Total net sales 114,994 219,066 Consolidated: Company-operated net sales 294,937 581,542 Other net sales 19,511 43,912 Total net sales $ 314,448 $ 625,454 |
Condensed Combined Debtor-In-25
Condensed Combined Debtor-In-Possession Financial Information (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Schedule of Debtor-in-Possession Condensed Financial Statements | ASSETS Current assets: Cash $ 27,825 Inventories 88,422 Prepaid expenses 20,935 Other current assets 13,400 Total current assets 150,582 Property and equipment: Furniture, fixtures and equipment 128,307 Leasehold improvements 167,133 295,440 Accumulated depreciation and amortization (240,023 ) 55,417 Leased property under capital lease: Land and building 18,055 Accumulated depreciation and amortization (7,667 ) 10,388 Investment in non-filing 409,863 Goodwill 987,517 Intangible assets, net 188,223 Other assets 14,169 1,599,772 Total assets $ 1,816,159 LIABILITIES AND STOCKHOLDER’S DEFICIT Current liabilities: Debtor-in-possession $ 60,000 Trade accounts payable 18,549 Income taxes payable 7,849 Accrued interest payable 140 Accrued expenses and other current liabilities 61,907 Total current liabilities 148,445 Intercompany payables 174,547 Obligation under capital lease 15,718 Deferred tax liability 24,795 Deferred rent expense 20,692 Other long-term liabilities 8,646 244,398 Liabilities subject to compromise 1,905,215 Stockholder’s deficit: Common stock — Additional paid in capital 630,794 Accumulated other comprehensive loss, net of tax (40,364 ) Accumulated deficit (1,072,329 ) (481,899 ) Total liabilities and stockholder’s deficit $ 1,816,159 Debtors Unaudited Condensed Combined Statement of Operations and Comprehensive Income (in thousands) Three Months August 4, 2018 Six Months August 4, 2018 Net sales $ 184,157 $ 376,611 Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) 89,654 179,919 Gross profit 94,503 196,692 Other expenses: Selling, general and administrative 62,921 136,553 Depreciation and amortization 9,202 17,389 Severance and transaction-related costs 264 348 Other income (4,351 ) (10,764 ) 68,036 143,526 Operating income 26,467 53,166 Reorganization items, net 30,453 40,462 Interest expense, net 1,940 21,472 Loss before income taxes (5,926 ) (8,768 ) Income tax expense 2,945 7,872 Loss from continuing operations (8,871 ) (16,640 ) Equity in earnings of subsidiaries 24,836 51,928 Equity in earnings of non-filing 5,977 5,004 Net income 21,942 40,292 Foreign currency translation adjustments (1,207 ) (4,168 ) Net loss on intra-entity foreign currency transactions, net of tax (5,214 ) (12,522 ) Other comprehensive loss (6,421 ) (16,690 ) Comprehensive income $ 15,521 $ 23,602 Debtors Unaudited Condensed Combined Statement of Cash Flows Six Months Ended August 4, 2018 (in thousands) Cash flows from operating activities: Net income $ 40,292 Adjustments to reconcile net income to net cash used in operating activities: Equity in earnings of subsidiaries (51,928 ) Equity in earnings of non-filing (5,004 ) Depreciation and amortization 17,389 Reorganization items, net 40,462 Amortization of debt issuance costs 898 Accretion of debt premium (360 ) Net accretion of unfavorable lease obligations 7 Loss on sale/retirement of property and equipment, net 44 Stock-based compensation expense 70 (Increase) decrease in: Inventories (11,953 ) Prepaid expenses (4,557 ) Other assets (6,947 ) Increase (decrease) in: Trade accounts payable (8,076 ) Income taxes payable 7,340 Accrued interest payable 17,386 Accrued expenses and other liabilities (5,802 ) Deferred income taxes (2,586 ) Deferred rent expense (2,142 ) Net cash provided by operating activities 24,533 Cash flows from investing activities: Acquisition of property and equipment (6,553 ) Acquisition of intangible assets/lease rights (20 ) Net cash used in investing activities (6,573 ) Cash flows from financing activities: Proceeds from debtor-in-possession 57,000 Repayments under debtor-in-possession (57,000 ) Proceeds from debtor-in-possession 60,000 Debt issuance costs related to debtor-in-possession (4,470 ) Proceeds from revolving credit facilities 43,000 Payments on revolving credit facilities (74,000 ) Payments of unamortized interest related to long-term debt (925 ) Principal payments on capital lease (200 ) Intercompany activity, net (18,680 ) Net cash provided by financing activities 4,725 Effect of foreign currency exchange rate changes on cash and cash equivalents (2,207 ) Net increase in cash and cash equivalents 20,478 Cash and cash equivalents, at beginning of period 7,347 Cash and cash equivalents, at end of period 27,825 |
Supplemental Financial Inform26
Supplemental Financial Information (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Condensed Consolidating Balance Sheet | Unaudited Condensed Consolidating Balance Sheet August 4, 2018 (in thousands) Non- Issuer Guarantors Guarantors Eliminations Consolidated ASSETS Current assets: Cash $ 23,551 $ 10,774 $ 35,120 $ — $ 69,445 Inventories — 88,422 59,909 — 148,331 Prepaid expenses 8,300 12,635 15,954 — 36,889 Other current assets 418 12,982 8,337 — 21,737 Total current assets 32,269 124,813 119,320 — 276,402 Property and equipment: Furniture, fixtures and equipment 3,239 125,068 79,981 — 208,288 Leasehold improvements 1,315 165,818 111,971 — 279,104 4,554 290,886 191,952 — 487,392 Accumulated depreciation and amortization (3,834 ) (236,189 ) (147,608 ) — (387,631 ) 720 54,697 44,344 — 99,761 Leased property under capital lease: Land and building — 18,055 — — 18,055 Accumulated depreciation and amortization — (7,667 ) — — (7,667 ) — 10,388 — — 10,388 Intercompany receivables — 368,135 105,026 (473,161 ) — Investment in subsidiaries 1,729,045 (40,870 ) — (1,688,175 ) — Goodwill — 987,517 145,058 — 1,132,575 Intangible assets, net 188,100 149,657 197,022 (84,634 ) 450,145 Other assets 8,000 6,169 46,938 — 61,107 1,925,145 1,470,608 494,044 (2,245,970 ) 1,643,827 Total assets $ 1,958,134 $ 1,660,506 $ 657,708 $ (2,245,970 ) $ 2,030,378 LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT) Current liabilities: Current portion of long-term debt, net $ — $ — $ 84,732 $ — $ 84,732 Debtor-in-possession 60,000 — — — 60,000 Trade accounts payable 2,323 16,226 36,723 — 55,272 Income taxes payable — 7,849 6,247 — 14,096 Accrued interest payable 140 395 548 — 1,083 Accrued expenses and other current liabilities 27,113 34,794 39,309 — 101,216 Total current liabilities 89,576 59,264 167,559 — 316,399 Intercompany payables 473,161 — — (473,161 ) — Long-term debt, net — 143,810 65,037 — 208,847 Revolving credit facility, net — — — — — Obligation under capital lease — 15,718 — — 15,718 Deferred tax liability — 24,795 4,384 — 29,179 Deferred rent expense — 20,692 10,865 — 31,557 Other long-term liabilities — 8,646 — — 8,646 473,161 213,661 80,286 (473,161 ) 293,947 Liabilities subject to compromise 1,880,580 24,635 — — 1,905,215 Stockholder’s equity (deficit): Common stock — 367 2 (369 ) — Additional paid in capital 630,794 1,520,543 766,993 (2,287,536 ) 630,794 Accumulated other comprehensive income (loss), net of tax (40,364 ) (4,784 ) (36,187 ) 40,971 (40,364 ) Accumulated deficit (1,075,613 ) (153,180 ) (320,945 ) 474,125 (1,075,613 ) (485,183 ) 1,362,946 409,863 (1,772,809 ) (485,183 ) Total liabilities and stockholder’s equity (deficit) $ 1,958,134 $ 1,660,506 $ 657,708 $ (2,245,970 ) $ 2,030,378 Unaudited Condensed Consolidating Balance Sheet February 3, 2018 (in thousands) Non- Issuer Guarantors Guarantors Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 4,203 $ 9,644 $ 28,599 $ — $ 42,446 Inventories — 76,469 58,221 — 134,690 Prepaid expenses 2,638 13,740 15,906 — 32,284 Other current assets 1,281 13,111 12,466 — 26,858 Total current assets 8,122 112,964 115,192 — 236,278 Property and equipment: Furniture, fixtures and equipment 3,075 133,664 86,905 — 223,644 Leasehold improvements 1,315 177,520 122,503 — 301,338 4,390 311,184 209,408 — 524,982 Accumulated depreciation and amortization (3,640 ) (245,778 ) (155,866 ) — (405,284 ) 750 65,406 53,542 — 119,698 Leased property under capital lease: Land and building — 18,055 — — 18,055 Accumulated depreciation and amortization — (7,216 ) — — (7,216 ) — 10,839 — — 10,839 Intercompany receivables — 299,768 121,143 (420,911 ) — Investment in subsidiaries 1,688,098 (42,369 ) — (1,645,729 ) — Goodwill — 987,517 145,058 — 1,132,575 Intangible assets, net 188,100 149,678 203,934 (84,634 ) 457,078 Other assets 1,140 3,647 39,468 — 44,255 1,877,338 1,398,241 509,603 (2,151,274 ) 1,633,908 Total assets $ 1,886,210 $ 1,587,450 $ 678,337 $ (2,151,274 ) $ 2,000,723 LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT) Current liabilities: Current portion of long-term debt, net $ 1,843,582 $ — $ 50,457 $ — $ 1,894,039 Trade accounts payable 3,231 21,090 38,644 — 62,965 Income taxes payable — 484 3,565 — 4,049 Accrued interest payable 55,808 — 374 — 56,182 Accrued expenses and other current liabilities 17,954 34,494 42,486 — 94,934 Total current liabilities 1,920,575 56,068 135,526 — 2,112,169 Intercompany payables 420,911 — — (420,911 ) — Long-term debt, net — 143,929 106,426 — 250,355 Obligation under capital lease — 15,970 — — 15,970 Deferred tax liability — 25,963 6,651 — 32,614 Deferred rent expense — 22,834 12,017 — 34,851 Unfavorable lease obligations and other long-term liabilities — 10,040 — — 10,040 420,911 218,736 125,094 (420,911 ) 343,830 Stockholder’s equity (deficit): Common stock — 367 2 (369 ) — Additional paid in capital 630,719 1,520,543 766,993 (2,287,536 ) 630,719 Accumulated other comprehensive income (loss), net of tax (25,302 ) (3,156 ) (23,326 ) 26,482 (25,302 ) Accumulated deficit (1,060,693 ) (205,108 ) (325,952 ) 531,060 (1,060,693 ) (455,276 ) 1,312,646 417,717 (1,730,363 ) (455,276 ) Total liabilities and stockholder’s equity (deficit) $ 1,886,210 $ 1,587,450 $ 678,337 $ (2,151,274 ) $ 2,000,723 |
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) | Unaudited Condensed Consolidating Statement of Operations and Comprehensive Loss For The Three Months Ended August 4, 2018 (in thousands) Non- Issuer Guarantors Guarantors Eliminations Consolidated Net sales $ — $ 184,157 $ 130,291 $ — $ 314,448 Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) 2,828 86,826 65,069 — 154,723 Gross profit (deficit) (2,828 ) 97,331 65,222 — 159,725 Other expenses: Selling, general and administrative 5,536 57,385 48,538 — 111,459 Depreciation and amortization 96 9,106 4,507 — 13,709 Severance and transaction-related costs 209 55 365 — 629 Other (income) expense (1,541 ) (2,810 ) 1,003 — (3,348 ) 4,300 63,736 54,413 — 122,449 Operating income (loss) (7,128 ) 33,595 10,809 — 37,276 Reorganization items, net 24,832 5,621 — — 30,453 Interest expense, net 1,406 929 2,737 — 5,072 Income (loss) before income taxes (33,366 ) 27,045 8,072 — 1,751 Income tax expense — 2,945 2,095 — 5,040 Income (loss) from continuing operations (33,366 ) 24,100 5,977 — (3,289 ) Equity in earnings (loss) of subsidiaries 30,077 736 — (30,813 ) — Net income (loss) (3,289 ) 24,836 5,977 (30,813 ) (3,289 ) Foreign currency translation adjustments (1,067 ) (140 ) (520 ) 660 (1,067 ) Net gain (loss) on intra-entity foreign currency transactions, net of tax (4,952 ) (262 ) (4,952 ) 5,214 (4,952 ) Other comprehensive income (loss) (6,019 ) (402 ) (5,472 ) 5,874 (6,019 ) Comprehensive income (loss) $ (9,308 ) $ 24,434 $ 505 $ (24,939 ) $ (9,308 ) Unaudited Condensed Consolidating Statement of Operations and Comprehensive Loss For The Three Months Ended July 29, 2017 (in thousands) Non- Issuer Guarantors Guarantors Eliminations Consolidated Net sales $ — $ 180,868 $ 135,769 $ — $ 316,637 Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) 3,017 89,864 68,702 — 161,583 Gross (deficit) profit (3,017 ) 91,004 67,067 — 155,054 Other expenses: Selling, general and administrative 5,967 58,717 48,090 — 112,774 Depreciation and amortization 181 6,379 4,330 — 10,890 Severance and transaction-related costs 234 16 139 — 389 Other income, net (918 ) (112 ) (1,141 ) — (2,171 ) 5,464 65,000 51,418 — 121,882 Operating (loss) income (8,481 ) 26,004 15,649 — 33,172 Interest expense, net 40,071 535 2,788 — 43,394 (Loss) income before income taxes (48,552 ) 25,469 12,861 — (10,222 ) Income tax expense — 121 10,145 — 10,266 (Loss) income from continuing operations (48,552 ) 25,348 2,716 — (20,488 ) Equity in earnings (loss) of subsidiaries 28,064 (2,203 ) — (25,861 ) — Net (loss) income (20,488 ) 23,145 2,716 (25,861 ) (20,488 ) Foreign currency translation adjustments 4,523 1,080 (196 ) (884 ) 4,523 Net gain (loss) on intra-entity foreign currency transactions, net of tax 7,593 2,199 7,588 (9,787 ) 7,593 Other comprehensive income (loss) 12,116 3,279 7,392 (10,671 ) 12,116 Comprehensive (loss) income $ (8,372 ) $ 26,424 $ 10,108 $ (36,532 ) $ (8,372 ) Unaudited Condensed Consolidating Statement of Operations and Comprehensive Loss For The Six Months Ended August 4, 2018 (in thousands) Non- Issuer Guarantors Guarantors Eliminations Consolidated Net sales $ — $ 376,611 $ 248,843 $ — $ 625,454 Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) 6,642 173,277 130,452 — 310,371 Gross profit (deficit) (6,642 ) 203,334 118,391 — 315,083 Other expenses: Selling, general and administrative 20,936 115,617 100,687 — 237,240 Depreciation and amortization 194 17,195 9,514 — 26,903 Severance and transaction-related costs 209 139 657 — 1,005 Other (income) expense (12,321 ) 1,557 3,410 — (7,354 ) 9,018 134,508 114,268 — 257,794 Operating income (loss) (15,660 ) 68,826 4,123 — 57,289 Reorganization items, net 34,841 5,621 — — 40,462 Interest expense, net 20,430 4,326 5,205 — 29,961 Income (loss) before income taxes (70,931 ) 58,879 (1,082 ) — (13,134 ) Income tax benefit — 7,872 (6,086 ) — 1,786 Income (loss) from continuing operations (70,931 ) 51,007 5,004 — (14,920 ) Equity in earnings (loss) of subsidiaries 56,011 921 — (56,932 ) — Net income (loss) (14,920 ) 51,928 5,004 (56,932 ) (14,920 ) Foreign currency translation adjustments (3,602 ) (566 ) (1,404 ) 1,970 (3,602 ) Net gain (loss) on intra-entity foreign currency transactions, net of tax (11,460 ) (1,062 ) (11,457 ) 12,519 (11,460 ) Other comprehensive income (loss) (15,062 ) (1,628 ) (12,861 ) 14,489 (15,062 ) Comprehensive income (loss) $ (29,982 ) $ 50,300 $ (7,857 ) $ (42,443 ) $ (29,982 ) Unaudited Condensed Consolidating Statement of Operations and Comprehensive Loss For The Six Months Ended July 29, 2017 (in thousands) Non- Issuer Guarantors Guarantors Eliminations Consolidated Net sales $ — $ 362,938 $ 253,320 $ — $ 616,258 Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) 6,179 176,063 131,129 — 313,371 Gross profit (deficit) (6,179 ) 186,875 122,191 — 302,887 Other expenses: Selling, general and administrative 11,720 116,002 95,564 — 223,286 Depreciation and amortization 372 12,705 9,016 — 22,093 Severance and transaction-related costs 234 73 225 — 532 Other income, net (2,855 ) (304 ) (1,713 ) — (4,872 ) 9,471 128,476 103,092 — 241,039 Operating income (loss) (15,650 ) 58,399 19,099 — 61,848 Interest expense, net 80,341 1,061 5,572 — 86,974 Income (loss) before income taxes (95,991 ) 57,338 13,527 — (25,126 ) Income tax expense (benefit) — (943 ) 3,063 — 2,120 Income (loss) from continuing operations (95,991 ) 58,281 10,464 — (27,246 ) Equity in earnings (loss) of subsidiaries 68,745 (2,157 ) — (66,588 ) — Net income (loss) (27,246 ) 56,124 10,464 (66,588 ) (27,246 ) Foreign currency translation adjustments 4,567 668 1,641 (2,309 ) 4,567 Net gain (loss) on intra-entity foreign currency transactions, net of tax 9,474 1,343 9,471 (10,814 ) 9,474 Other comprehensive income (loss) 14,041 2,011 11,112 (13,123 ) 14,041 Comprehensive income (loss) $ (13,205 ) $ 58,135 $ 21,576 $ (79,711 ) $ (13,205 ) |
Condensed Consolidating Statement of Cash Flows | Unaudited Condensed Consolidating Statement of Cash Flows Six Months Ended August 4, 2018 (in thousands) Non- Issuer Guarantors Guarantors Eliminations Consolidated Cash flows from operating activities: Net income (loss) $ (14,920 ) $ 51,928 $ 5,004 $ (56,932 ) $ (14,920 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Loss (equity) in earnings of subsidiaries (56,011 ) (921 ) — 56,932 — Depreciation and amortization 194 17,195 9,514 — 26,903 Reorganization items, net 34,841 5,621 — — 40,462 Amortization of lease rights and other assets — — 2,517 — 2,517 Amortization of debt issuance costs 898 — 715 — 1,613 Accretion of debt premium (360 ) — — — (360 ) Non-cash pay-in-kind — 2,889 — — 2,889 Net accretion of unfavorable lease obligations — 7 2 — 9 Loss on sale/retirement of property and equipment, net — 44 2 — 46 Stock-based compensation expense 70 — 5 — 75 (Increase) decrease in: Inventories — (11,953 ) (5,992 ) — (17,945 ) Prepaid expenses (5,662 ) 1,105 (2,573 ) — (7,130 ) Other assets (5,998 ) (949 ) 486 — (6,461 ) Increase (decrease) in: Trade accounts payable (19,578 ) 11,502 954 — (7,122 ) Income taxes payable — 7,340 4,909 — 12,249 Accrued interest payable 17,386 395 174 — 17,955 Accrued expenses and other liabilities (7,648 ) 1,846 (326 ) — (6,128 ) Deferred income taxes — (2,586 ) (12,701 ) — (15,287 ) Deferred rent expense — (2,142 ) (318 ) — (2,460 ) Net cash provided by (used in) operating activities (56,788 ) 81,321 2,372 — 26,905 Cash flows from investing activities: Acquisition of property and equipment (164 ) (6,389 ) (2,474 ) — (9,027 ) Acquisition of intangible assets/lease rights — (20 ) (80 ) — (100 ) Net cash used in investing activities (164 ) (6,409 ) (2,544 ) — (9,127 ) Cash flows from financing activities: Proceeds from debtor-in-possession 57,000 — — — 57,000 Repayments under debtor-in-possession (57,000 ) — — — (57,000 ) Proceeds from debtor-in-possession 60,000 — — — 60,000 Debt issuance costs related to debtor-in-possession (4,470 ) — — — (4,470 ) Proceeds from revolving credit facilities 43,000 — — — 43,000 Payments on revolving credit facilities (74,000 ) — — — (74,000 ) Payment on current portion of long-term debt — — (6,000 ) — (6,000 ) Payments of unamortized interest related to long-term debt (925 ) (3,008 ) (1,388 ) — (5,321 ) Payment of debt issuance costs — — (2 ) — (2 ) Principal payments on capital lease — (200 ) — — (200 ) Intercompany activity, net 52,695 (68,367 ) 15,672 — — Net cash provided by (used in) financing activities 76,300 (71,575 ) 8,282 — 13,007 Effect of foreign currency exchange rate changes on cash and cash equivalents — (2,207 ) (1,579 ) — (3,786 ) Net increase (decrease) in cash and cash equivalents 19,348 1,130 6,521 — 26,999 Cash and cash equivalents, at beginning of period 4,203 9,644 28,599 — 42,446 Cash and cash equivalents, at end of period 23,551 10,774 35,120 — 69,445 Unaudited Condensed Consolidating Statement of Cash Flows Six Months Ended July 29, 2017 (in thousands) Non- Issuer Guarantors Guarantors Eliminations Consolidated Cash flows from operating activities: Net income (loss) $ (27,246 ) $ 56,124 $ 10,464 $ (66,588 ) $ (27,246 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Loss (equity) in earnings of subsidiaries (68,745 ) 2,157 — 66,588 — Depreciation and amortization 372 12,705 9,016 — 22,093 Amortization of lease rights and other assets — — 1,862 — 1,862 Amortization of debt issuance costs 3,781 — 531 — 4,312 Accretion of debt premium (1,457 ) — — — (1,457 ) Non-cash pay-in-kind — — 750 — 750 Net accretion of unfavorable lease obligations — (56 ) 1 — (55 ) Loss on sale/retirement of property and equipment, net — 126 2 — 128 Stock-based compensation expense 139 — 17 — 156 (Increase) decrease in: Inventories — (12,077 ) (10,006 ) — (22,083 ) Prepaid expenses (675 ) (84 ) (1,167 ) — (1,926 ) Other assets (268 ) (23 ) 216 — (75 ) Increase (decrease) in: Trade accounts payable (912 ) 2,811 (2,608 ) — (709 ) Income taxes payable — (967 ) 688 — (279 ) Accrued interest payable 73 — (228 ) — (155 ) Accrued expenses and other liabilities (2,683 ) (365 ) (3,946 ) — (6,994 ) Deferred income taxes — — (359 ) — (359 ) Deferred rent expense — (712 ) (484 ) — (1,196 ) Net cash provided by (used in) operating activities (97,621 ) 59,639 4,749 — (33,233 ) Cash flows from investing activities: Acquisition of property and equipment — (5,111 ) (2,990 ) — (8,101 ) Acquisition of intangible assets/lease rights — (38 ) — — (38 ) Net cash used in investing activities — (5,149 ) (2,990 ) — (8,139 ) Cash flows from financing activities: Proceeds from revolving credit facilities 81,000 — — — 81,000 Payments on revolving credit facilities (41,200 ) — — — (41,200 ) Payment on current portion of long-term debt (18,420 ) — — — (18,420 ) Payments of unamortized interest related to long-term debt (743 ) (2,415 ) (1,114 ) — (4,272 ) Payment of debt issuance costs — — (386 ) — (386 ) Principal payments on capital lease — (156 ) — — (156 ) Intercompany activity, net 79,605 (53,034 ) (26,571 ) — — Net cash provided by (used in) financing activities 100,242 (55,605 ) (28,071 ) — 16,566 Effect of foreign currency exchange rate changes on cash and cash equivalents — 2,928 (2,725 ) — 203 Net increase (decrease) in cash and cash equivalents 2,621 1,813 (29,037 ) — (24,603 ) Cash and cash equivalents, at beginning of period 3,038 3,005 49,749 — 55,792 Cash and cash equivalents, at end of period $ 5,659 $ 4,818 $ 20,712 $ — $ 31,189 |
Bankruptcy Filling - Additional
Bankruptcy Filling - Additional Information (Detail) | 6 Months Ended | |
Aug. 04, 2018USD ($)Leases | Mar. 22, 2018USD ($) | |
Bankruptcy Filing [Line Items] | ||
Bankruptcy, description of proceedings | Following the Commencement Date, the Bankruptcy Court entered certain interim and final orders facilitating the Debtors’ operational transition into Chapter 11. These orders authorized the Debtors to, among other things, pay certain pre-petition employee expenses and benefits, use their existing cash management system, maintain and administer customer programs, pay certain critical and foreign vendors, honor insurance-related obligations, and pay certain pre-petition taxes and related fees on a final basis. The Bankruptcy Court also approved the DIP Facility on a final basis. | |
Bankruptcy court approval for the rejection of leases | Leases | 140 | |
Debtors rejected leases | Leases | 83 | |
Debtor-in-possession financing, amount | $ 135,000,000 | |
Key Employee Incentive Plan [Member] | Maximum | ||
Bankruptcy Filing [Line Items] | ||
Payment to debtors' management team members | 1,500,000 | |
Key Employee Retention Program [Member] | Maximum | ||
Bankruptcy Filing [Line Items] | ||
Payment to debtors' management team members | 1,500,000 | |
DIP ABL Loan | ||
Bankruptcy Filing [Line Items] | ||
Debtor-in-possession financing, amount | 75,000,000 | $ 75,000,000 |
D I P Term Loan | ||
Bankruptcy Filing [Line Items] | ||
Debtor-in-possession financing, amount | $ 60,000,000 | $ 60,000,000 |
Summary of Liabilities Subject
Summary of Liabilities Subject to Compromise (Detail) $ in Thousands | Aug. 04, 2018USD ($) | |
Schedule of Liabilities Subject to Compromise [Line Items] | ||
Debt | $ 1,806,363 | [1] |
Accrued interest on debt subject to compromise | 73,054 | |
Accounts payable, accrued expense and other liabilities | 25,798 | |
Total liabilities subject to compromise | $ 1,905,215 | |
[1] | See Note 5 - Debt for details of pre-petition debt reported as liabilities subject to compromise. |
Summary of Reorganization Items
Summary of Reorganization Items, Net (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Aug. 04, 2018 | Aug. 04, 2018 | |
Reorganization Items [Line Items] | ||
Professional fees | $ 22,744 | $ 33,697 |
Rejection of leases and other | 7,277 | 7,277 |
Debtor-in-possession financing costs | 432 | 4,470 |
Write-off of pre-petition debt issuance costs, debt premium, and adjustment in carrying value | (4,982) | |
Total reorganization items, net | $ 30,453 | $ 40,462 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions | Aug. 04, 2018 | Feb. 03, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long term debt, fair value | $ 1,120 | $ 1,280 |
Long term debt, carrying value | $ 2,100 | $ 2,120 |
Components of Debt (Detail)
Components of Debt (Detail) - USD ($) $ in Thousands | Aug. 04, 2018 | Feb. 03, 2018 | |
Debt Instrument [Line Items] | |||
Debtor-in-possession facility | $ 60,000 | ||
Unamortized premium | [1] | $ 3,642 | |
Adjustment to carrying value | [1] | 12,483 | |
Unamortized debt issuance cost | [1] | (768) | (10,432) |
Total current portion of long-term debt, net | [1] | 84,732 | 1,894,039 |
Total debt subject to compromise | [2] | 1,806,363 | |
Adjustment to carrying value | 52,444 | 59,298 | |
Total long-term debt, net | 208,847 | 250,355 | |
Obligation under capital lease (including current portion) | 16,188 | 16,388 | |
Claire's Gibraltar Intermediate secured term loan due 2019 | |||
Debt Instrument [Line Items] | |||
Debt instrument carrying amount, current | 51,500 | 51,500 | |
Claire's Gibraltar unsecured term loan due 2019 | |||
Debt Instrument [Line Items] | |||
Debt instrument carrying amount, current | 34,000 | ||
Debt instrument carrying amount, non current | 40,000 | ||
9.0% Senior secured first lien notes due 2019 | |||
Debt Instrument [Line Items] | |||
Debt instrument carrying amount, current | 1,125,000 | ||
Total debt subject to compromise | 1,125,000 | ||
8.875% Senior secured second lien notes due 2019 | |||
Debt Instrument [Line Items] | |||
Debt instrument carrying amount, current | 222,300 | ||
Total debt subject to compromise | 222,300 | ||
6.125% Senior secured first lien notes due 2020 | |||
Debt Instrument [Line Items] | |||
Debt instrument carrying amount, current | 210,000 | ||
Total debt subject to compromise | 210,000 | ||
7.75% Senior notes due 2020 | |||
Debt Instrument [Line Items] | |||
Debt instrument carrying amount, current | 216,742 | ||
Total debt subject to compromise | 216,742 | ||
9.0% Claire's Stores term loan due 2021 | |||
Debt Instrument [Line Items] | |||
Debt instrument carrying amount, current | 31,804 | ||
Total debt subject to compromise | 32,321 | ||
Asset Based Lending Credit Facility | U.S. Credit Facility | |||
Debt Instrument [Line Items] | |||
Debt instrument carrying amount, current | 31,000 | ||
11.0% CLSIP term loan due 2021 | |||
Debt Instrument [Line Items] | |||
Debt instrument carrying amount, non current | [3] | 107,926 | 103,356 |
9.0% Claire's Gibraltar term loans due 2021 | |||
Debt Instrument [Line Items] | |||
Debt instrument carrying amount, non current | $ 48,477 | $ 47,701 | |
[1] | LSTC must be reported at the amounts expected to be allowed by the Bankruptcy Court. The carrying value of the debt will be adjusted as claims are approved. As of August 4, 2018, the Company wrote off $5.0 million of debt issuance costs, debt premium, and the adjustment to carrying value to present the debt at the outstanding face value. The write-offs are included within reorganization items, net in the Unaudited Condensed Consolidated Statements of Operations. See Note 2 - Bankruptcy Filing for additional details. | ||
[2] | See Note 5 - Debt for details of pre-petition debt reported as liabilities subject to compromise. | ||
[3] | See CLSIP Forbearance Agreement below for discussion of increased interest rate. |
Components of Debt (Parenthetic
Components of Debt (Parenthetical) (Detail) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Aug. 04, 2018 | Feb. 03, 2018 | ||
Debt Instrument [Line Items] | |||
Write off of debt issuance costs | $ 5 | ||
Claire's Gibraltar unsecured term loan due 2019 | |||
Debt Instrument [Line Items] | |||
Long-term Debt, due date | 2,019 | 2,019 | |
9.0% Senior secured first lien notes due 2019 | |||
Debt Instrument [Line Items] | |||
Long-term Debt, interest rate | 9.00% | 9.00% | |
Long-term Debt, due date | 2,019 | 2,019 | |
8.875% Senior secured second lien notes due 2019 | |||
Debt Instrument [Line Items] | |||
Long-term Debt, interest rate | 8.875% | 8.875% | |
Long-term Debt, due date | 2,019 | 2,019 | |
6.125% Senior secured first lien notes due 2020 | |||
Debt Instrument [Line Items] | |||
Long-term Debt, interest rate | 6.125% | 6.125% | |
Long-term Debt, due date | 2,020 | 2,020 | |
7.75% Senior notes due 2020 | |||
Debt Instrument [Line Items] | |||
Long-term Debt, interest rate | 7.75% | 7.75% | |
Long-term Debt, due date | 2,020 | 2,020 | |
9.0% Claire's Stores term loan due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term Debt, interest rate | 9.00% | 9.00% | |
Long-term Debt, due date | 2,021 | 2,021 | |
11.0% CLSIP term loan due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term Debt, interest rate | [1] | 11.00% | 11.00% |
Long-term Debt, due date | [1] | 2,021 | 2,021 |
9.0% Claire's Gibraltar term loans due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term Debt, interest rate | 9.00% | 9.00% | |
Long-term Debt, due date | 2,021 | 2,021 | |
U.S. Credit Facility | Asset Based Lending Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term Debt, due date | 2,019 | ||
[1] | See CLSIP Forbearance Agreement below for discussion of increased interest rate. |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Mar. 22, 2018 | Mar. 31, 2018 | Aug. 04, 2018 | Jul. 29, 2017 | Apr. 19, 2018 | Feb. 03, 2018 | |
Debt Instrument [Line Items] | |||||||
Bankruptcy date, petition for bankruptcy filed | Mar. 19, 2018 | ||||||
Debtor-in-possession financing, amount | $ 135,000,000 | ||||||
Description of DIP Facility maturity | The DIP Facility will mature, subject to the satisfaction of certain conditions, on the earliest of (i) the one year anniversary of the DIP Closing Date, (ii) the effective date of a plan of reorganization, (iii) the date of closing of a sale of all or substantially all of the Company’s assets pursuant to Section 363 of the Bankruptcy Code, (iv) the date on which acceleration of the outstanding loans, and the terminations of the commitments, occurs under the DIP Facility and (v) certain dates specified in connection with the Chapter 11 Cases and orders issued in connection therewith. | ||||||
Availability under the DIP ABL Loan, net of applicable reserves | $ 60,000,000 | ||||||
Contractual interest expense related to LSTC | 58,500,000 | ||||||
Reduction in indebtedness under credit facility | 6,000,000 | $ 18,420,000 | |||||
Europe Bank Credit Facilities | |||||||
Debt Instrument [Line Items] | |||||||
Credit facilities borrowing capacity | 1,900,000 | ||||||
Reduction in indebtedness under credit facility | 1,700,000 | ||||||
Line Of Credit Facility Remaining Borrowing Capacity | 200,000 | ||||||
DIP ABL Loan | |||||||
Debt Instrument [Line Items] | |||||||
Debtor-in-possession financing, amount | $ 75,000,000 | 75,000,000 | |||||
DIP ABL Loan available for issuance of standby letters of credit | 10,000,000 | ||||||
Availability under the DIP ABL Loan, net of applicable reserves | 65,600,000 | ||||||
D I P Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Debtor-in-possession financing, amount | $ 60,000,000 | $ 60,000,000 | |||||
ABL Credit Facility | Revolving credit facilities | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate amount of debt repaid | $ 71,000,000 | ||||||
11.0% CLSIP term loan due 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt, interest rate | [1] | 11.00% | 11.00% | ||||
CLSIP Forbearance Agreement | 11.0% CLSIP term loan due 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt, interest rate | 11.00% | ||||||
[1] | See CLSIP Forbearance Agreement below for discussion of increased interest rate. |
Components of Accumulated Other
Components of Accumulated Other Comprehensive Loss, Net of Tax (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Beginning balance | $ (455,276) | |||||
Other comprehensive loss | $ (6,019) | $ 12,116 | (15,062) | [1] | $ 14,041 | |
Ending balance | (485,183) | (485,183) | ||||
Accumulated other comprehensive loss, net | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Beginning balance | [1] | (25,302) | ||||
Ending balance | [1] | $ (40,364) | $ (40,364) | |||
[1] | Represents foreign currency items and $5.7 million of other income associated with expired derivative instruments. |
Components of Accumulated Oth35
Components of Accumulated Other Comprehensive Loss, Net of Tax (Parenthetical) (Detail) $ in Millions | 6 Months Ended |
Aug. 04, 2018USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Other income associated with expired derivative instruments | $ 5.7 |
Summary of Activity in Stock Op
Summary of Activity in Stock Option Plan (Detail) | 6 Months Ended |
Aug. 04, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding as of February 3, 2018 | shares | 3,224,326 |
Options granted | shares | 0 |
Options exercised | shares | 0 |
Options forfeited | shares | (17,511) |
Options expired | shares | (154,887) |
Outstanding as of August 4, 2018 | shares | 3,051,928 |
Options vested and expected to vest as of August 4, 2018 | shares | 2,938,253 |
Exercisable at end of period | shares | 1,892,324 |
Outstanding as of January 28, 2017, Weighted-Average Exercise Price | $ / shares | $ 5.18 |
Options granted, Weighted-Average Exercise Price | $ / shares | 0 |
Options exercised, Weighted-Average Exercise Price | $ / shares | 0 |
Options forfeited, Weighted-Average Exercise Price | $ / shares | 2.83 |
Options expired, Weighted-Average Exercise Price | $ / shares | 9.48 |
Outstanding as of August 4, 2018 | $ / shares | 4.98 |
Options vested and expected to vest as of August 4, 2018, Weighted-Average Exercise Price | $ / shares | 5.10 |
Exercisable as of August 4, 2018, Weighted Average Exercise Price | $ / shares | $ 6.09 |
Outstanding as of August 4, 2018, Weighted Average Remaining Contractual Term | 3 years 7 months 6 days |
Options vested and expected to vest as of August 4, 2018, Weighted Average Remaining Contractual Term | 3 years 6 months |
Exercisable as of August 4, 2018, Weighted Average Remaining Contractual Term | 3 years 1 month 6 days |
Stock Options and Stock-Based37
Stock Options and Stock-Based Compensation - Additional Information (Detail) - $ / shares | 6 Months Ended | |
Aug. 04, 2018 | Jul. 29, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant date fair value of options granted | $ 0.39 | |
Options granted | 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | |
Income Tax Disclosure [Line Items] | ||||
U.S. income taxes at statutory federal rate | 21.00% | 35.00% | ||
Effective income tax rate | 287.80% | (100.40%) | (13.60%) | (8.40%) |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) | Jun. 06, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | Feb. 03, 2018 |
Related Party Transaction [Line Items] | ||||||
Indebtedness held by Parent and affiliates | $ 68,600,000 | $ 68,600,000 | $ 65,600,000 | |||
Accrued interest payable associated with indebtedness held by parent and affiliates | 0 | 0 | $ 0 | |||
Interest expense related to indebtedness held by Parent and affiliates | $ 0 | $ 0 | $ 0 | $ 0 | ||
Compensation for services | $ 32,000 | |||||
Notice period for agreement termination | 30 days | |||||
Apollo Management and Sponsors | ||||||
Related Party Transaction [Line Items] | ||||||
Management services agreement fee per year | $ 3,000,000 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018USD ($) | Jul. 29, 2017USD ($) | Aug. 04, 2018USD ($)Segment | Jul. 29, 2017USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | Segment | 2 | |||
Severance and transaction-related costs | $ 629 | $ 389 | $ 1,005 | $ 532 |
North America | ||||
Segment Reporting Information [Line Items] | ||||
Severance and transaction-related costs | 300 | 300 | 400 | 300 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Severance and transaction-related costs | $ 300 | $ 100 | $ 600 | $ 200 |
Information about Company's Ope
Information about Company's Operation by Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 314,448 | $ 316,637 | $ 625,454 | $ 616,258 |
Depreciation and amortization | 13,709 | 10,890 | 26,903 | 22,093 |
Severance and transaction-related costs | 629 | 389 | 1,005 | 532 |
Operating income | 37,276 | 33,172 | 57,289 | 61,848 |
Reorganization items, net | 30,453 | 40,462 | ||
Interest expense, net | 5,072 | 43,394 | 29,961 | 86,974 |
Consolidated income (loss) before income tax expense | 1,751 | (10,222) | (13,134) | (25,126) |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 37,905 | 33,561 | 58,294 | 62,380 |
North America | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 199,454 | 196,033 | 406,388 | 391,993 |
Depreciation and amortization | 9,623 | 7,028 | 18,276 | 14,130 |
Severance and transaction-related costs | 300 | 300 | 400 | 300 |
North America | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 28,511 | 16,306 | 55,139 | 42,016 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 114,994 | 120,604 | 219,066 | 224,265 |
Depreciation and amortization | 4,086 | 3,862 | 8,627 | 7,963 |
Severance and transaction-related costs | 300 | 100 | 600 | 200 |
Europe | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | $ 9,394 | $ 17,255 | $ 3,155 | $ 20,364 |
Schedule of Net Sales by Channe
Schedule of Net Sales by Channel Type and by Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 314,448 | $ 316,637 | $ 625,454 | $ 616,258 |
Company-operated net sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 294,937 | 581,542 | ||
Other net sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 19,511 | 43,912 | ||
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 199,454 | 196,033 | 406,388 | 391,993 |
North America | Company-operated net sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 186,518 | 376,453 | ||
North America | Other net sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 12,936 | 29,935 | ||
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 114,994 | $ 120,604 | 219,066 | $ 224,265 |
Europe | Company-operated net sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 108,419 | 205,089 | ||
Europe | Other net sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 6,575 | $ 13,977 |
Debtors Condensed Combined Bala
Debtors Condensed Combined Balance Sheet (Detail) - USD ($) $ in Thousands | Aug. 04, 2018 | Feb. 03, 2018 |
Current assets: | ||
Cash | $ 69,445 | $ 42,446 |
Inventories | 148,331 | 134,690 |
Prepaid expenses | 36,889 | 32,284 |
Other current assets | 21,737 | 26,858 |
Total current assets | 276,402 | 236,278 |
Property and equipment: | ||
Furniture, fixtures and equipment | 208,288 | 223,644 |
Leasehold improvements | 279,104 | 301,338 |
Total property and equipment | 487,392 | 524,982 |
Accumulated depreciation and amortization | (387,631) | (405,284) |
Total property and equipment, net | 99,761 | 119,698 |
Leased property under capital lease: | ||
Land and building | 18,055 | 18,055 |
Accumulated depreciation and amortization | (7,667) | (7,216) |
Total leased property under capital lease | 10,388 | 10,839 |
Goodwill | 1,132,575 | 1,132,575 |
Intangible assets, net | 450,145 | 457,078 |
Other assets | 61,107 | 44,255 |
Total other noncurrent assets | 1,643,827 | 1,633,908 |
Total assets | 2,030,378 | 2,000,723 |
Current liabilities: | ||
Debtor-in-possession term loan | 60,000 | |
Trade accounts payable | 55,272 | 62,965 |
Income taxes payable | 14,096 | 4,049 |
Accrued interest payable | 1,083 | 56,182 |
Accrued expenses and other current liabilities | 101,216 | 94,934 |
Total current liabilities | 316,399 | 2,112,169 |
Obligation under capital lease | 15,718 | 15,970 |
Deferred tax liability | 29,179 | 32,614 |
Deferred rent expense | 31,557 | 34,851 |
Other long-term liabilities | 8,646 | |
Total Non current liabilities | 293,947 | 343,830 |
Liabilities subject to compromise | 1,905,215 | |
Stockholder's deficit: | ||
Common stock | 0 | 0 |
Additional paid in capital | 630,794 | 630,719 |
Accumulated other comprehensive loss, net of tax | (40,364) | (25,302) |
Accumulated deficit | (1,075,613) | (1,060,693) |
Total stockholder's deficit | (485,183) | (455,276) |
Total liabilities and stockholder's deficit | 2,030,378 | $ 2,000,723 |
Debtors | ||
Current assets: | ||
Cash | 27,825 | |
Inventories | 88,422 | |
Prepaid expenses | 20,935 | |
Other current assets | 13,400 | |
Total current assets | 150,582 | |
Property and equipment: | ||
Furniture, fixtures and equipment | 128,307 | |
Leasehold improvements | 167,133 | |
Total property and equipment | 295,440 | |
Accumulated depreciation and amortization | (240,023) | |
Total property and equipment, net | 55,417 | |
Leased property under capital lease: | ||
Land and building | 18,055 | |
Accumulated depreciation and amortization | (7,667) | |
Total leased property under capital lease | 10,388 | |
Investment in non-filing entities | 409,863 | |
Goodwill | 987,517 | |
Intangible assets, net | 188,223 | |
Other assets | 14,169 | |
Total other noncurrent assets | 1,599,772 | |
Total assets | 1,816,159 | |
Current liabilities: | ||
Debtor-in-possession term loan | 60,000 | |
Trade accounts payable | 18,549 | |
Income taxes payable | 7,849 | |
Accrued interest payable | 140 | |
Accrued expenses and other current liabilities | 61,907 | |
Total current liabilities | 148,445 | |
Intercompany payables | 174,547 | |
Obligation under capital lease | 15,718 | |
Deferred tax liability | 24,795 | |
Deferred rent expense | 20,692 | |
Other long-term liabilities | 8,646 | |
Total Non current liabilities | 244,398 | |
Liabilities subject to compromise | 1,905,215 | |
Stockholder's deficit: | ||
Common stock | 0 | |
Additional paid in capital | 630,794 | |
Accumulated other comprehensive loss, net of tax | (40,364) | |
Accumulated deficit | (1,072,329) | |
Total stockholder's deficit | (481,899) | |
Total liabilities and stockholder's deficit | $ 1,816,159 |
Debtors Condensed Combined Stat
Debtors Condensed Combined Statement of Operations and Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | ||
Schedule Of Debtor In Possession [Line Items] | |||||
Net sales | $ 314,448 | $ 316,637 | $ 625,454 | $ 616,258 | |
Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) | 154,723 | 161,583 | 310,371 | 313,371 | |
Gross profit | 159,725 | 155,054 | 315,083 | 302,887 | |
Other expenses: | |||||
Selling, general and administrative | 111,459 | 112,774 | 237,240 | 223,286 | |
Depreciation and amortization | 13,709 | 10,890 | 26,903 | 22,093 | |
Severance and transaction-related costs | 629 | 389 | 1,005 | 532 | |
Other (income) expense | (3,348) | (2,171) | (7,354) | (4,872) | |
Total other expenses | 122,449 | 121,882 | 257,794 | 241,039 | |
Operating income | 37,276 | 33,172 | 57,289 | 61,848 | |
Reorganization items, net | 30,453 | 40,462 | |||
Interest expense, net | 5,072 | 43,394 | 29,961 | 86,974 | |
Loss before income taxes | 1,751 | (10,222) | (13,134) | (25,126) | |
Income tax expense | 5,040 | 10,266 | 1,786 | 2,120 | |
Loss from continuing operations | (3,289) | (20,488) | (14,920) | (27,246) | |
Net income (loss) | (3,289) | (20,488) | (14,920) | (27,246) | |
Foreign currency translation adjustments | (1,067) | 4,523 | (3,602) | 4,567 | |
Net loss on intra-entity foreign currency transactions, net of tax | (4,952) | 7,593 | (11,460) | 9,474 | |
Other comprehensive loss | (6,019) | 12,116 | (15,062) | [1] | 14,041 |
Comprehensive income | (9,308) | $ (8,372) | (29,982) | $ (13,205) | |
Debtors | |||||
Schedule Of Debtor In Possession [Line Items] | |||||
Net sales | 184,157 | 376,611 | |||
Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) | 89,654 | 179,919 | |||
Gross profit | 94,503 | 196,692 | |||
Other expenses: | |||||
Selling, general and administrative | 62,921 | 136,553 | |||
Depreciation and amortization | 9,202 | 17,389 | |||
Severance and transaction-related costs | 264 | 348 | |||
Other (income) expense | (4,351) | (10,764) | |||
Total other expenses | 68,036 | 143,526 | |||
Operating income | 26,467 | 53,166 | |||
Reorganization items, net | 30,453 | 40,462 | |||
Interest expense, net | 1,940 | 21,472 | |||
Loss before income taxes | (5,926) | (8,768) | |||
Income tax expense | 2,945 | 7,872 | |||
Loss from continuing operations | (8,871) | (16,640) | |||
Equity in earnings of subsidiaries | 24,836 | 51,928 | |||
Equity in earnings of non-filing entities | 5,977 | 5,004 | |||
Net income (loss) | 21,942 | 40,292 | |||
Foreign currency translation adjustments | (1,207) | (4,168) | |||
Net loss on intra-entity foreign currency transactions, net of tax | (5,214) | (12,522) | |||
Other comprehensive loss | (6,421) | (16,690) | |||
Comprehensive income | $ 15,521 | $ 23,602 | |||
[1] | Represents foreign currency items and $5.7 million of other income associated with expired derivative instruments. |
Debtors Condensed Combined St45
Debtors Condensed Combined Statement of Cash Flows (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | |
Cash flows from operating activities: | ||||
Net income (loss) | $ (3,289) | $ (20,488) | $ (14,920) | $ (27,246) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Depreciation and amortization | 13,709 | 10,890 | 26,903 | 22,093 |
Reorganization items, net | 30,453 | 40,462 | ||
Amortization of debt issuance costs | 1,613 | 4,312 | ||
Accretion of debt premium | (360) | (1,457) | ||
Net accretion of unfavorable lease obligations | 9 | (55) | ||
Loss on sale/retirement of property and equipment, net | 46 | 128 | ||
Stock-based compensation expense | 75 | 156 | ||
(Increase) decrease in: | ||||
Inventories | (17,945) | (22,083) | ||
Prepaid expenses | (7,130) | (1,926) | ||
Other assets | (6,461) | (75) | ||
Increase (decrease) in: | ||||
Trade accounts payable | (7,122) | (709) | ||
Income taxes payable | 12,249 | (279) | ||
Accrued interest payable | 17,955 | (155) | ||
Accrued expenses and other liabilities | (6,128) | (6,994) | ||
Deferred income taxes | (15,287) | (359) | ||
Deferred rent expense | (2,460) | (1,196) | ||
Net cash provided by (used in) operating activities | 26,905 | (33,233) | ||
Cash flows from investing activities: | ||||
Acquisition of property and equipment | (9,027) | (8,101) | ||
Acquisition of intangible assets/lease rights | (100) | (38) | ||
Net cash used in investing activities | (9,127) | (8,139) | ||
Cash flows from financing activities: | ||||
Proceeds from debtor-in-possession credit facility | 57,000 | |||
Repayments under debtor-in-possession credit facility | (57,000) | |||
Proceeds from debtor-in-possession term loans | 60,000 | |||
Debt issuance costs related to debtor-in-possession financing | (432) | (4,470) | ||
Proceeds from revolving credit facilities | 43,000 | 81,000 | ||
Payments on revolving credit facilities | (74,000) | (41,200) | ||
Payments of unamortized interest related to long-term debt | (5,321) | (4,272) | ||
Principal payments on capital lease | (200) | (156) | ||
Net cash provided by (used in) financing activities | 13,007 | 16,566 | ||
Effect of foreign currency exchange rate changes on cash and cash equivalents | (3,786) | 203 | ||
Net increase in cash and cash equivalents | 26,999 | (24,603) | ||
Cash and cash equivalents, at beginning of period | 42,446 | 55,792 | ||
Cash and cash equivalents, at end of period | 69,445 | $ 31,189 | 69,445 | $ 31,189 |
Debtors | ||||
Cash flows from operating activities: | ||||
Net income (loss) | 21,942 | 40,292 | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Equity in earnings of subsidiaries | (24,836) | (51,928) | ||
Equity in earnings of non-filing entities | (5,977) | (5,004) | ||
Depreciation and amortization | 9,202 | 17,389 | ||
Reorganization items, net | 30,453 | 40,462 | ||
Amortization of debt issuance costs | 898 | |||
Accretion of debt premium | (360) | |||
Net accretion of unfavorable lease obligations | 7 | |||
Loss on sale/retirement of property and equipment, net | 44 | |||
Stock-based compensation expense | 70 | |||
(Increase) decrease in: | ||||
Inventories | (11,953) | |||
Prepaid expenses | (4,557) | |||
Other assets | (6,947) | |||
Increase (decrease) in: | ||||
Trade accounts payable | (8,076) | |||
Income taxes payable | 7,340 | |||
Accrued interest payable | 17,386 | |||
Accrued expenses and other liabilities | (5,802) | |||
Deferred income taxes | (2,586) | |||
Deferred rent expense | (2,142) | |||
Net cash provided by (used in) operating activities | 24,533 | |||
Cash flows from investing activities: | ||||
Acquisition of property and equipment | (6,553) | |||
Acquisition of intangible assets/lease rights | (20) | |||
Net cash used in investing activities | (6,573) | |||
Cash flows from financing activities: | ||||
Proceeds from debtor-in-possession credit facility | 57,000 | |||
Repayments under debtor-in-possession credit facility | (57,000) | |||
Proceeds from debtor-in-possession term loans | 60,000 | |||
Debt issuance costs related to debtor-in-possession financing | (4,470) | |||
Proceeds from revolving credit facilities | 43,000 | |||
Payments on revolving credit facilities | (74,000) | |||
Payments of unamortized interest related to long-term debt | (925) | |||
Principal payments on capital lease | (200) | |||
Intercompany activity, net | (18,680) | |||
Net cash provided by (used in) financing activities | 4,725 | |||
Effect of foreign currency exchange rate changes on cash and cash equivalents | (2,207) | |||
Net increase in cash and cash equivalents | 20,478 | |||
Cash and cash equivalents, at beginning of period | 7,347 | |||
Cash and cash equivalents, at end of period | $ 27,825 | $ 27,825 |
Supplemental Financial Inform46
Supplemental Financial Information - Additional Information (Detail) - Issuer | Aug. 04, 2018 | Mar. 15, 2013 | Sep. 20, 2012 | Mar. 12, 2012 | Feb. 28, 2012 |
Debt Instrument [Line Items] | |||||
Percentage of ownership of domestic subsidiaries | 100.00% | ||||
First Lien [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term Debt, interest rate | 6.125% | 9.00% | 9.00% | 9.00% |
Condensed Consolidating Balance
Condensed Consolidating Balance Sheet (Detail) - USD ($) $ in Thousands | Aug. 04, 2018 | Feb. 03, 2018 | Jul. 29, 2017 | Jan. 28, 2017 | |
Current assets: | |||||
Cash | $ 69,445 | $ 42,446 | |||
Cash and cash equivalents | 69,445 | 42,446 | $ 31,189 | $ 55,792 | |
Inventories | 148,331 | 134,690 | |||
Prepaid expenses | 36,889 | 32,284 | |||
Other current assets | 21,737 | 26,858 | |||
Total current assets | 276,402 | 236,278 | |||
Property and equipment: | |||||
Furniture, fixtures and equipment | 208,288 | 223,644 | |||
Leasehold improvements | 279,104 | 301,338 | |||
Total property and equipment | 487,392 | 524,982 | |||
Accumulated depreciation and amortization | (387,631) | (405,284) | |||
Total property and equipment, net | 99,761 | 119,698 | |||
Leased property under capital lease: | |||||
Land and building | 18,055 | 18,055 | |||
Accumulated depreciation and amortization | (7,667) | (7,216) | |||
Total leased property under capital lease | 10,388 | 10,839 | |||
Goodwill | 1,132,575 | 1,132,575 | |||
Intangible assets, net | 450,145 | 457,078 | |||
Other assets | 61,107 | 44,255 | |||
Total other noncurrent assets | 1,643,827 | 1,633,908 | |||
Total assets | 2,030,378 | 2,000,723 | |||
Current liabilities: | |||||
Current portion of long-term debt, net | [1] | 84,732 | 1,894,039 | ||
Debtor-in-possession term loan | 60,000 | ||||
Trade accounts payable | 55,272 | 62,965 | |||
Income taxes payable | 14,096 | 4,049 | |||
Accrued interest payable | 1,083 | 56,182 | |||
Accrued expenses and other current liabilities | 101,216 | 94,934 | |||
Total current liabilities | 316,399 | 2,112,169 | |||
Long-term debt, net | 208,847 | 250,355 | |||
Revolving credit facility, net | 0 | ||||
Obligation under capital lease | 15,718 | 15,970 | |||
Deferred tax liability | 29,179 | 32,614 | |||
Deferred rent expense | 31,557 | 34,851 | |||
Other long-term liabilities | 8,646 | ||||
Unfavorable lease obligations and other long-term liabilities | 8,646 | 10,040 | |||
Total Non current liabilities | 293,947 | 343,830 | |||
Liabilities subject to compromise | 1,905,215 | ||||
Stockholder's equity (deficit): | |||||
Common stock | 0 | 0 | |||
Additional paid in capital | 630,794 | 630,719 | |||
Accumulated other comprehensive income (loss), net of tax | (40,364) | (25,302) | |||
Accumulated deficit | (1,075,613) | (1,060,693) | |||
Total stockholder's deficit | (485,183) | (455,276) | |||
Total liabilities and stockholder's deficit | 2,030,378 | 2,000,723 | |||
Eliminations | |||||
Leased property under capital lease: | |||||
Intercompany receivables | (473,161) | (420,911) | |||
Investment in subsidiaries | (1,688,175) | (1,645,729) | |||
Intangible assets, net | (84,634) | (84,634) | |||
Total other noncurrent assets | (2,245,970) | (2,151,274) | |||
Total assets | (2,245,970) | (2,151,274) | |||
Current liabilities: | |||||
Intercompany payables | (473,161) | (420,911) | |||
Revolving credit facility, net | 0 | ||||
Total Non current liabilities | (473,161) | (420,911) | |||
Stockholder's equity (deficit): | |||||
Common stock | (369) | (369) | |||
Additional paid in capital | (2,287,536) | (2,287,536) | |||
Accumulated other comprehensive income (loss), net of tax | 40,971 | 26,482 | |||
Accumulated deficit | 474,125 | 531,060 | |||
Total stockholder's deficit | (1,772,809) | (1,730,363) | |||
Total liabilities and stockholder's deficit | (2,245,970) | (2,151,274) | |||
Issuer | |||||
Current assets: | |||||
Cash | 23,551 | ||||
Cash and cash equivalents | 23,551 | 4,203 | 5,659 | 3,038 | |
Prepaid expenses | 8,300 | 2,638 | |||
Other current assets | 418 | 1,281 | |||
Total current assets | 32,269 | 8,122 | |||
Property and equipment: | |||||
Furniture, fixtures and equipment | 3,239 | 3,075 | |||
Leasehold improvements | 1,315 | 1,315 | |||
Total property and equipment | 4,554 | 4,390 | |||
Accumulated depreciation and amortization | (3,834) | (3,640) | |||
Total property and equipment, net | 720 | 750 | |||
Leased property under capital lease: | |||||
Investment in subsidiaries | 1,729,045 | 1,688,098 | |||
Intangible assets, net | 188,100 | 188,100 | |||
Other assets | 8,000 | 1,140 | |||
Total other noncurrent assets | 1,925,145 | 1,877,338 | |||
Total assets | 1,958,134 | 1,886,210 | |||
Current liabilities: | |||||
Current portion of long-term debt, net | 1,843,582 | ||||
Debtor-in-possession term loan | 60,000 | ||||
Trade accounts payable | 2,323 | 3,231 | |||
Accrued interest payable | 140 | 55,808 | |||
Accrued expenses and other current liabilities | 27,113 | 17,954 | |||
Total current liabilities | 89,576 | 1,920,575 | |||
Intercompany payables | 473,161 | 420,911 | |||
Revolving credit facility, net | 0 | ||||
Total Non current liabilities | 473,161 | 420,911 | |||
Liabilities subject to compromise | 1,880,580 | ||||
Stockholder's equity (deficit): | |||||
Additional paid in capital | 630,794 | 630,719 | |||
Accumulated other comprehensive income (loss), net of tax | (40,364) | (25,302) | |||
Accumulated deficit | (1,075,613) | (1,060,693) | |||
Total stockholder's deficit | (485,183) | (455,276) | |||
Total liabilities and stockholder's deficit | 1,958,134 | 1,886,210 | |||
Guarantors | |||||
Current assets: | |||||
Cash | 10,774 | ||||
Cash and cash equivalents | 10,774 | 9,644 | 4,818 | 3,005 | |
Inventories | 88,422 | 76,469 | |||
Prepaid expenses | 12,635 | 13,740 | |||
Other current assets | 12,982 | 13,111 | |||
Total current assets | 124,813 | 112,964 | |||
Property and equipment: | |||||
Furniture, fixtures and equipment | 125,068 | 133,664 | |||
Leasehold improvements | 165,818 | 177,520 | |||
Total property and equipment | 290,886 | 311,184 | |||
Accumulated depreciation and amortization | (236,189) | (245,778) | |||
Total property and equipment, net | 54,697 | 65,406 | |||
Leased property under capital lease: | |||||
Land and building | 18,055 | 18,055 | |||
Accumulated depreciation and amortization | (7,667) | (7,216) | |||
Total leased property under capital lease | 10,388 | 10,839 | |||
Intercompany receivables | 368,135 | 299,768 | |||
Investment in subsidiaries | (40,870) | (42,369) | |||
Goodwill | 987,517 | 987,517 | |||
Intangible assets, net | 149,657 | 149,678 | |||
Other assets | 6,169 | 3,647 | |||
Total other noncurrent assets | 1,470,608 | 1,398,241 | |||
Total assets | 1,660,506 | 1,587,450 | |||
Current liabilities: | |||||
Trade accounts payable | 16,226 | 21,090 | |||
Income taxes payable | 7,849 | 484 | |||
Accrued interest payable | 395 | ||||
Accrued expenses and other current liabilities | 34,794 | 34,494 | |||
Total current liabilities | 59,264 | 56,068 | |||
Long-term debt, net | 143,810 | 143,929 | |||
Revolving credit facility, net | 0 | ||||
Obligation under capital lease | 15,718 | 15,970 | |||
Deferred tax liability | 24,795 | 25,963 | |||
Deferred rent expense | 20,692 | 22,834 | |||
Other long-term liabilities | 8,646 | ||||
Unfavorable lease obligations and other long-term liabilities | 10,040 | ||||
Total Non current liabilities | 213,661 | 218,736 | |||
Liabilities subject to compromise | 24,635 | ||||
Stockholder's equity (deficit): | |||||
Common stock | 367 | 367 | |||
Additional paid in capital | 1,520,543 | 1,520,543 | |||
Accumulated other comprehensive income (loss), net of tax | (4,784) | (3,156) | |||
Accumulated deficit | (153,180) | (205,108) | |||
Total stockholder's deficit | 1,362,946 | 1,312,646 | |||
Total liabilities and stockholder's deficit | 1,660,506 | 1,587,450 | |||
Non-Guarantors | |||||
Current assets: | |||||
Cash | 35,120 | ||||
Cash and cash equivalents | 35,120 | 28,599 | $ 20,712 | $ 49,749 | |
Inventories | 59,909 | 58,221 | |||
Prepaid expenses | 15,954 | 15,906 | |||
Other current assets | 8,337 | 12,466 | |||
Total current assets | 119,320 | 115,192 | |||
Property and equipment: | |||||
Furniture, fixtures and equipment | 79,981 | 86,905 | |||
Leasehold improvements | 111,971 | 122,503 | |||
Total property and equipment | 191,952 | 209,408 | |||
Accumulated depreciation and amortization | (147,608) | (155,866) | |||
Total property and equipment, net | 44,344 | 53,542 | |||
Leased property under capital lease: | |||||
Intercompany receivables | 105,026 | 121,143 | |||
Goodwill | 145,058 | 145,058 | |||
Intangible assets, net | 197,022 | 203,934 | |||
Other assets | 46,938 | 39,468 | |||
Total other noncurrent assets | 494,044 | 509,603 | |||
Total assets | 657,708 | 678,337 | |||
Current liabilities: | |||||
Current portion of long-term debt, net | 84,732 | 50,457 | |||
Trade accounts payable | 36,723 | 38,644 | |||
Income taxes payable | 6,247 | 3,565 | |||
Accrued interest payable | 548 | 374 | |||
Accrued expenses and other current liabilities | 39,309 | 42,486 | |||
Total current liabilities | 167,559 | 135,526 | |||
Long-term debt, net | 65,037 | 106,426 | |||
Revolving credit facility, net | 0 | ||||
Deferred tax liability | 4,384 | 6,651 | |||
Deferred rent expense | 10,865 | 12,017 | |||
Total Non current liabilities | 80,286 | 125,094 | |||
Stockholder's equity (deficit): | |||||
Common stock | 2 | 2 | |||
Additional paid in capital | 766,993 | 766,993 | |||
Accumulated other comprehensive income (loss), net of tax | (36,187) | (23,326) | |||
Accumulated deficit | (320,945) | (325,952) | |||
Total stockholder's deficit | 409,863 | 417,717 | |||
Total liabilities and stockholder's deficit | $ 657,708 | $ 678,337 | |||
[1] | LSTC must be reported at the amounts expected to be allowed by the Bankruptcy Court. The carrying value of the debt will be adjusted as claims are approved. As of August 4, 2018, the Company wrote off $5.0 million of debt issuance costs, debt premium, and the adjustment to carrying value to present the debt at the outstanding face value. The write-offs are included within reorganization items, net in the Unaudited Condensed Consolidated Statements of Operations. See Note 2 - Bankruptcy Filing for additional details. |
Condensed Consolidating Stateme
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | ||
Net sales | $ 314,448 | $ 316,637 | $ 625,454 | $ 616,258 | |
Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) | 154,723 | 161,583 | 310,371 | 313,371 | |
Gross profit (deficit) | 159,725 | 155,054 | 315,083 | 302,887 | |
Other expenses: | |||||
Selling, general and administrative | 111,459 | 112,774 | 237,240 | 223,286 | |
Depreciation and amortization | 13,709 | 10,890 | 26,903 | 22,093 | |
Severance and transaction-related costs | 629 | 389 | 1,005 | 532 | |
Other (income) expense | (3,348) | (2,171) | (7,354) | (4,872) | |
Total other expenses | 122,449 | 121,882 | 257,794 | 241,039 | |
Operating income (loss) | 37,276 | 33,172 | 57,289 | 61,848 | |
Reorganization items, net | 30,453 | 40,462 | |||
Interest expense, net | 5,072 | 43,394 | 29,961 | 86,974 | |
Income (loss) before income taxes | 1,751 | (10,222) | (13,134) | (25,126) | |
Income tax expense (benefit) | 5,040 | 10,266 | 1,786 | 2,120 | |
Income (loss) from continuing operations | (3,289) | (20,488) | (14,920) | (27,246) | |
Net income (loss) | (3,289) | (20,488) | (14,920) | (27,246) | |
Foreign currency translation adjustments | (1,067) | 4,523 | (3,602) | 4,567 | |
Net gain (loss) on intra-entity foreign currency transactions, net of tax | (4,952) | 7,593 | (11,460) | 9,474 | |
Other comprehensive income (loss) | (6,019) | 12,116 | (15,062) | [1] | 14,041 |
Comprehensive income (loss) | (9,308) | (8,372) | (29,982) | (13,205) | |
Issuer | |||||
Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) | 2,828 | 3,017 | 6,642 | 6,179 | |
Gross profit (deficit) | (2,828) | (3,017) | (6,642) | (6,179) | |
Other expenses: | |||||
Selling, general and administrative | 5,536 | 5,967 | 20,936 | 11,720 | |
Depreciation and amortization | 96 | 181 | 194 | 372 | |
Severance and transaction-related costs | 209 | 234 | 209 | 234 | |
Other (income) expense | (1,541) | (918) | (12,321) | (2,855) | |
Total other expenses | 4,300 | 5,464 | 9,018 | 9,471 | |
Operating income (loss) | (7,128) | (8,481) | (15,660) | (15,650) | |
Reorganization items, net | 24,832 | 34,841 | |||
Interest expense, net | 1,406 | 40,071 | 20,430 | 80,341 | |
Income (loss) before income taxes | (33,366) | (48,552) | (70,931) | (95,991) | |
Income (loss) from continuing operations | (33,366) | (48,552) | (70,931) | (95,991) | |
Equity in earnings (loss) of subsidiaries | 30,077 | 28,064 | 56,011 | 68,745 | |
Net income (loss) | (3,289) | (20,488) | (14,920) | (27,246) | |
Foreign currency translation adjustments | (1,067) | 4,523 | (3,602) | 4,567 | |
Net gain (loss) on intra-entity foreign currency transactions, net of tax | (4,952) | 7,593 | (11,460) | 9,474 | |
Other comprehensive income (loss) | (6,019) | 12,116 | (15,062) | 14,041 | |
Comprehensive income (loss) | (9,308) | (8,372) | (29,982) | (13,205) | |
Guarantors | |||||
Net sales | 184,157 | 180,868 | 376,611 | 362,938 | |
Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) | 86,826 | 89,864 | 173,277 | 176,063 | |
Gross profit (deficit) | 97,331 | 91,004 | 203,334 | 186,875 | |
Other expenses: | |||||
Selling, general and administrative | 57,385 | 58,717 | 115,617 | 116,002 | |
Depreciation and amortization | 9,106 | 6,379 | 17,195 | 12,705 | |
Severance and transaction-related costs | 55 | 16 | 139 | 73 | |
Other (income) expense | (2,810) | (112) | 1,557 | (304) | |
Total other expenses | 63,736 | 65,000 | 134,508 | 128,476 | |
Operating income (loss) | 33,595 | 26,004 | 68,826 | 58,399 | |
Reorganization items, net | 5,621 | 5,621 | |||
Interest expense, net | 929 | 535 | 4,326 | 1,061 | |
Income (loss) before income taxes | 27,045 | 25,469 | 58,879 | 57,338 | |
Income tax expense (benefit) | 2,945 | 121 | 7,872 | (943) | |
Income (loss) from continuing operations | 24,100 | 25,348 | 51,007 | 58,281 | |
Equity in earnings (loss) of subsidiaries | 736 | (2,203) | 921 | (2,157) | |
Net income (loss) | 24,836 | 23,145 | 51,928 | 56,124 | |
Foreign currency translation adjustments | (140) | 1,080 | (566) | 668 | |
Net gain (loss) on intra-entity foreign currency transactions, net of tax | (262) | 2,199 | (1,062) | 1,343 | |
Other comprehensive income (loss) | (402) | 3,279 | (1,628) | 2,011 | |
Comprehensive income (loss) | 24,434 | 26,424 | 50,300 | 58,135 | |
Non-Guarantors | |||||
Net sales | 130,291 | 135,769 | 248,843 | 253,320 | |
Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below) | 65,069 | 68,702 | 130,452 | 131,129 | |
Gross profit (deficit) | 65,222 | 67,067 | 118,391 | 122,191 | |
Other expenses: | |||||
Selling, general and administrative | 48,538 | 48,090 | 100,687 | 95,564 | |
Depreciation and amortization | 4,507 | 4,330 | 9,514 | 9,016 | |
Severance and transaction-related costs | 365 | 139 | 657 | 225 | |
Other (income) expense | 1,003 | (1,141) | 3,410 | (1,713) | |
Total other expenses | 54,413 | 51,418 | 114,268 | 103,092 | |
Operating income (loss) | 10,809 | 15,649 | 4,123 | 19,099 | |
Interest expense, net | 2,737 | 2,788 | 5,205 | 5,572 | |
Income (loss) before income taxes | 8,072 | 12,861 | (1,082) | 13,527 | |
Income tax expense (benefit) | 2,095 | 10,145 | (6,086) | 3,063 | |
Income (loss) from continuing operations | 5,977 | 2,716 | 5,004 | 10,464 | |
Net income (loss) | 5,977 | 2,716 | 5,004 | 10,464 | |
Foreign currency translation adjustments | (520) | (196) | (1,404) | 1,641 | |
Net gain (loss) on intra-entity foreign currency transactions, net of tax | (4,952) | 7,588 | (11,457) | 9,471 | |
Other comprehensive income (loss) | (5,472) | 7,392 | (12,861) | 11,112 | |
Comprehensive income (loss) | 505 | 10,108 | (7,857) | 21,576 | |
Eliminations | |||||
Other expenses: | |||||
Equity in earnings (loss) of subsidiaries | (30,813) | (25,861) | (56,932) | (66,588) | |
Net income (loss) | (30,813) | (25,861) | (56,932) | (66,588) | |
Foreign currency translation adjustments | 660 | (884) | 1,970 | (2,309) | |
Net gain (loss) on intra-entity foreign currency transactions, net of tax | 5,214 | (9,787) | 12,519 | (10,814) | |
Other comprehensive income (loss) | 5,874 | (10,671) | 14,489 | (13,123) | |
Comprehensive income (loss) | $ (24,939) | $ (36,532) | $ (42,443) | $ (79,711) | |
[1] | Represents foreign currency items and $5.7 million of other income associated with expired derivative instruments. |
Condensed Consolidating State49
Condensed Consolidating Statement of Cash Flows (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | |
Cash flows from operating activities: | ||||
Net income (loss) | $ (3,289) | $ (20,488) | $ (14,920) | $ (27,246) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Depreciation and amortization | 13,709 | 10,890 | 26,903 | 22,093 |
Reorganization items, net | 30,453 | 40,462 | ||
Amortization of lease rights and other assets | 2,517 | 1,862 | ||
Amortization of debt issuance costs | 1,613 | 4,312 | ||
Accretion of debt premium | (360) | (1,457) | ||
Non-cash pay-in-kind interest expense | 2,889 | 750 | ||
Net accretion of unfavorable lease obligations | 9 | (55) | ||
Loss on sale/retirement of property and equipment, net | 46 | 128 | ||
Stock-based compensation expense | 75 | 156 | ||
(Increase) decrease in: | ||||
Inventories | (17,945) | (22,083) | ||
Prepaid expenses | (7,130) | (1,926) | ||
Other assets | (6,461) | (75) | ||
Increase (decrease) in: | ||||
Trade accounts payable | (7,122) | (709) | ||
Income taxes payable | 12,249 | (279) | ||
Accrued interest payable | 17,955 | (155) | ||
Accrued expenses and other liabilities | (6,128) | (6,994) | ||
Deferred income taxes | (15,287) | (359) | ||
Deferred rent expense | (2,460) | (1,196) | ||
Net cash provided by (used in) operating activities | 26,905 | (33,233) | ||
Cash flows from investing activities: | ||||
Acquisition of property and equipment | (9,027) | (8,101) | ||
Acquisition of intangible assets/lease rights | (100) | (38) | ||
Net cash used in investing activities | (9,127) | (8,139) | ||
Cash flows from financing activities: | ||||
Proceeds from debtor-in-possession credit facility | 57,000 | |||
Repayments under debtor-in-possession credit facility | (57,000) | |||
Proceeds from debtor-in-possession term loans | 60,000 | |||
Debt issuance costs related to debtor-in-possession financing | (432) | (4,470) | ||
Proceeds from revolving credit facilities | 43,000 | 81,000 | ||
Payments on revolving credit facilities | (74,000) | (41,200) | ||
Payment on current portion of long-term debt | (6,000) | (18,420) | ||
Payments of unamortized interest related to long-term debt | (5,321) | (4,272) | ||
Payment of debt issuance costs | (2) | (386) | ||
Principal payments on capital lease | (200) | (156) | ||
Net cash provided by (used in) financing activities | 13,007 | 16,566 | ||
Effect of foreign currency exchange rate changes on cash and cash equivalents | (3,786) | 203 | ||
Net increase (decrease) in cash and cash equivalents | 26,999 | (24,603) | ||
Cash and cash equivalents, at beginning of period | 42,446 | 55,792 | ||
Cash and cash equivalents, at end of period | 69,445 | 31,189 | 69,445 | 31,189 |
Eliminations | ||||
Cash flows from operating activities: | ||||
Net income (loss) | (30,813) | (25,861) | (56,932) | (66,588) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Loss (equity) in earnings of subsidiaries | 30,813 | 25,861 | 56,932 | 66,588 |
Issuer | ||||
Cash flows from operating activities: | ||||
Net income (loss) | (3,289) | (20,488) | (14,920) | (27,246) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Loss (equity) in earnings of subsidiaries | (30,077) | (28,064) | (56,011) | (68,745) |
Depreciation and amortization | 96 | 181 | 194 | 372 |
Reorganization items, net | 24,832 | 34,841 | ||
Amortization of debt issuance costs | 898 | 3,781 | ||
Accretion of debt premium | (360) | (1,457) | ||
Stock-based compensation expense | 70 | 139 | ||
(Increase) decrease in: | ||||
Prepaid expenses | (5,662) | (675) | ||
Other assets | (5,998) | (268) | ||
Increase (decrease) in: | ||||
Trade accounts payable | (19,578) | (912) | ||
Accrued interest payable | 17,386 | 73 | ||
Accrued expenses and other liabilities | (7,648) | (2,683) | ||
Net cash provided by (used in) operating activities | (56,788) | (97,621) | ||
Cash flows from investing activities: | ||||
Acquisition of property and equipment | (164) | |||
Net cash used in investing activities | (164) | |||
Cash flows from financing activities: | ||||
Proceeds from debtor-in-possession credit facility | 57,000 | |||
Repayments under debtor-in-possession credit facility | (57,000) | |||
Proceeds from debtor-in-possession term loans | 60,000 | |||
Debt issuance costs related to debtor-in-possession financing | (4,470) | |||
Proceeds from revolving credit facilities | 43,000 | 81,000 | ||
Payments on revolving credit facilities | (74,000) | (41,200) | ||
Payment on current portion of long-term debt | (18,420) | |||
Payments of unamortized interest related to long-term debt | (925) | (743) | ||
Intercompany activity, net | 52,695 | 79,605 | ||
Net cash provided by (used in) financing activities | 76,300 | 100,242 | ||
Net increase (decrease) in cash and cash equivalents | 19,348 | 2,621 | ||
Cash and cash equivalents, at beginning of period | 4,203 | 3,038 | ||
Cash and cash equivalents, at end of period | 23,551 | 5,659 | 23,551 | 5,659 |
Guarantors | ||||
Cash flows from operating activities: | ||||
Net income (loss) | 24,836 | 23,145 | 51,928 | 56,124 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Loss (equity) in earnings of subsidiaries | (736) | 2,203 | (921) | 2,157 |
Depreciation and amortization | 9,106 | 6,379 | 17,195 | 12,705 |
Reorganization items, net | 5,621 | 5,621 | ||
Non-cash pay-in-kind interest expense | 2,889 | |||
Net accretion of unfavorable lease obligations | 7 | (56) | ||
Loss on sale/retirement of property and equipment, net | 44 | 126 | ||
(Increase) decrease in: | ||||
Inventories | (11,953) | (12,077) | ||
Prepaid expenses | 1,105 | (84) | ||
Other assets | (949) | (23) | ||
Increase (decrease) in: | ||||
Trade accounts payable | 11,502 | 2,811 | ||
Income taxes payable | 7,340 | (967) | ||
Accrued interest payable | 395 | |||
Accrued expenses and other liabilities | 1,846 | (365) | ||
Deferred income taxes | (2,586) | |||
Deferred rent expense | (2,142) | (712) | ||
Net cash provided by (used in) operating activities | 81,321 | 59,639 | ||
Cash flows from investing activities: | ||||
Acquisition of property and equipment | (6,389) | (5,111) | ||
Acquisition of intangible assets/lease rights | (20) | (38) | ||
Net cash used in investing activities | (6,409) | (5,149) | ||
Cash flows from financing activities: | ||||
Payments of unamortized interest related to long-term debt | (3,008) | (2,415) | ||
Principal payments on capital lease | (200) | (156) | ||
Intercompany activity, net | (68,367) | (53,034) | ||
Net cash provided by (used in) financing activities | (71,575) | (55,605) | ||
Effect of foreign currency exchange rate changes on cash and cash equivalents | (2,207) | 2,928 | ||
Net increase (decrease) in cash and cash equivalents | 1,130 | 1,813 | ||
Cash and cash equivalents, at beginning of period | 9,644 | 3,005 | ||
Cash and cash equivalents, at end of period | 10,774 | 4,818 | 10,774 | 4,818 |
Non-Guarantors | ||||
Cash flows from operating activities: | ||||
Net income (loss) | 5,977 | 2,716 | 5,004 | 10,464 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Depreciation and amortization | 4,507 | 4,330 | 9,514 | 9,016 |
Amortization of lease rights and other assets | 2,517 | 1,862 | ||
Amortization of debt issuance costs | 715 | 531 | ||
Non-cash pay-in-kind interest expense | 750 | |||
Net accretion of unfavorable lease obligations | 2 | 1 | ||
Loss on sale/retirement of property and equipment, net | 2 | 2 | ||
Stock-based compensation expense | 5 | 17 | ||
(Increase) decrease in: | ||||
Inventories | (5,992) | (10,006) | ||
Prepaid expenses | (2,573) | (1,167) | ||
Other assets | 486 | 216 | ||
Increase (decrease) in: | ||||
Trade accounts payable | 954 | (2,608) | ||
Income taxes payable | 4,909 | 688 | ||
Accrued interest payable | 174 | (228) | ||
Accrued expenses and other liabilities | (326) | (3,946) | ||
Deferred income taxes | (12,701) | (359) | ||
Deferred rent expense | (318) | (484) | ||
Net cash provided by (used in) operating activities | 2,372 | 4,749 | ||
Cash flows from investing activities: | ||||
Acquisition of property and equipment | (2,474) | (2,990) | ||
Acquisition of intangible assets/lease rights | (80) | |||
Net cash used in investing activities | (2,544) | (2,990) | ||
Cash flows from financing activities: | ||||
Payment on current portion of long-term debt | (6,000) | |||
Payments of unamortized interest related to long-term debt | (1,388) | (1,114) | ||
Payment of debt issuance costs | (2) | (386) | ||
Intercompany activity, net | 15,672 | (26,571) | ||
Net cash provided by (used in) financing activities | 8,282 | (28,071) | ||
Effect of foreign currency exchange rate changes on cash and cash equivalents | (1,579) | (2,725) | ||
Net increase (decrease) in cash and cash equivalents | 6,521 | (29,037) | ||
Cash and cash equivalents, at beginning of period | 28,599 | 49,749 | ||
Cash and cash equivalents, at end of period | $ 35,120 | $ 20,712 | $ 35,120 | $ 20,712 |