Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2019 | May 03, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | TUESDAY MORNING CORP/DE | |
Entity Central Index Key | 0000878726 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | TUES | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 46,710,278 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 13,768 | $ 9,510 |
Inventories | 238,280 | 234,365 |
Prepaid expenses | 4,756 | 6,301 |
Other current assets | 2,052 | 1,206 |
Total Current Assets | 258,856 | 251,382 |
Property and equipment, net | 111,518 | 121,117 |
Deferred financing costs | 1,050 | 671 |
Other assets | 3,185 | 3,086 |
Total Assets | 374,609 | 376,256 |
Current liabilities: | ||
Accounts payable | 82,954 | 88,912 |
Accrued liabilities | 46,114 | 41,765 |
Income taxes payable | 141 | 66 |
Total Current Liabilities | 129,209 | 130,743 |
Borrowings under revolving credit facility | 35,200 | 38,480 |
Deferred rent | 23,864 | 22,883 |
Asset retirement obligation — non-current | 3,002 | 3,100 |
Other liabilities — non-current | 809 | 796 |
Total Liabilities | 192,084 | 196,002 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, par value $0.01 per share, authorized 10,000,000 shares; none issued or outstanding | ||
Common stock, par value $0.01 per share, authorized 100,000,000 shares; 48,523,910 shares issued and 46,740,249 shares outstanding at March 31, 2019 and 47,648,958 shares issued and 45,865,297 shares outstanding at June 30, 2018 | 465 | 469 |
Additional paid-in capital | 240,623 | 237,957 |
Retained deficit | (51,751) | (51,360) |
Less: 1,783,661 common shares in treasury, at cost, at March 31, 2019 and 1,783,661 common shares in treasury, at cost, at June 30, 2018 | (6,812) | (6,812) |
Total Stockholders’ Equity | 182,525 | 180,254 |
Total Liabilities and Stockholders’ Equity | $ 374,609 | $ 376,256 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Jun. 30, 2018 |
Stockholders’ equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 48,523,910 | 47,648,958 |
Common stock, shares outstanding | 46,740,249 | 45,865,297 |
Treasury stock, shares | 1,783,661 | 1,783,661 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 210,984 | $ 223,296 | $ 776,716 | $ 775,860 |
Cost of sales | 134,486 | 142,993 | 501,054 | 511,922 |
Gross profit | 76,498 | 80,303 | 275,662 | 263,938 |
Selling, general and administrative expenses | 84,309 | 88,092 | 274,751 | 275,445 |
Operating income/(loss) | (7,811) | (7,789) | 911 | (11,507) |
Other income/(expense): | ||||
Interest expense | (513) | (493) | (1,868) | (1,473) |
Other income, net | 165 | 179 | 597 | 907 |
Other income/(expense) total | (348) | (314) | (1,271) | (566) |
Loss before income taxes | (8,159) | (8,103) | (360) | (12,073) |
Income tax provision/(benefit) | 130 | (23) | 31 | (431) |
Net loss | $ (8,289) | $ (8,080) | $ (391) | $ (11,642) |
Net loss per common share: | ||||
Basic | $ (0.18) | $ (0.18) | $ (0.01) | $ (0.26) |
Diluted | $ (0.18) | $ (0.18) | $ (0.01) | $ (0.26) |
Weighted average number of common shares: | ||||
Basic | 44,811 | 44,365 | 44,677 | 44,236 |
Diluted | 44,811 | 44,365 | 44,677 | 44,236 |
Dividends per common share | $ 0 | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Deficit) | Treasury Stock |
Balance at Jun. 30, 2017 | $ 198,839 | $ 469 | $ 234,604 | $ (29,422) | $ (6,812) |
Balance (in shares) at Jun. 30, 2017 | 45,121,000 | ||||
Net loss | (11,642) | (11,642) | |||
Share-based compensation expense | 2,691 | 2,691 | |||
Shares issued in connection with exercises of employee stock options | 4 | 4 | |||
Shares issued in connection with exercises of employee stock options (in shares) | 3,000 | ||||
Shares issued or canceled in connection with employee stock incentive plans and related tax effect (in shares) | 800,000 | ||||
Balance at Mar. 31, 2018 | 189,892 | $ 469 | 237,299 | (41,064) | (6,812) |
Balance (in shares) at Mar. 31, 2018 | 45,924,000 | ||||
Balance at Dec. 31, 2017 | 197,109 | $ 469 | 236,436 | (32,984) | (6,812) |
Balance (in shares) at Dec. 31, 2017 | 45,919,000 | ||||
Net loss | (8,080) | (8,080) | |||
Share-based compensation expense | 860 | 860 | |||
Shares issued in connection with exercises of employee stock options | 3 | 3 | |||
Shares issued in connection with exercises of employee stock options (in shares) | 3,000 | ||||
Shares issued or canceled in connection with employee stock incentive plans and related tax effect (in shares) | 2,000 | ||||
Balance at Mar. 31, 2018 | 189,892 | $ 469 | 237,299 | (41,064) | (6,812) |
Balance (in shares) at Mar. 31, 2018 | 45,924,000 | ||||
Balance at Jun. 30, 2018 | $ 180,254 | $ 469 | 237,957 | (51,360) | (6,812) |
Balance (in shares) at Jun. 30, 2018 | 45,865,297 | 45,865,000 | |||
Net loss | $ (391) | (391) | |||
Share-based compensation expense | 2,655 | 2,655 | |||
Shares issued in connection with exercises of employee stock options | 7 | 7 | |||
Shares issued in connection with exercises of employee stock options (in shares) | 3,000 | ||||
Shares issued or canceled in connection with employee stock incentive plans and related tax effect | $ (4) | 4 | |||
Shares issued or canceled in connection with employee stock incentive plans and related tax effect (in shares) | 872,000 | ||||
Balance at Mar. 31, 2019 | $ 182,525 | $ 465 | 240,623 | (51,751) | (6,812) |
Balance (in shares) at Mar. 31, 2019 | 46,740,249 | 46,740,000 | |||
Balance at Dec. 31, 2018 | $ 189,918 | $ 469 | 239,723 | (43,462) | (6,812) |
Balance (in shares) at Dec. 31, 2018 | 46,801,000 | ||||
Net loss | (8,289) | (8,289) | |||
Share-based compensation expense | 896 | 896 | |||
Shares issued or canceled in connection with employee stock incentive plans and related tax effect | $ (4) | 4 | |||
Shares issued or canceled in connection with employee stock incentive plans and related tax effect (in shares) | (61,000) | ||||
Balance at Mar. 31, 2019 | $ 182,525 | $ 465 | $ 240,623 | $ (51,751) | $ (6,812) |
Balance (in shares) at Mar. 31, 2019 | 46,740,249 | 46,740,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (391) | $ (11,642) |
Adjustments to reconcile loss to net cash provided by operating activities: | ||
Depreciation and amortization | 19,727 | 19,087 |
Amortization of financing fees | 220 | 236 |
Gain on disposal of assets | (10) | (69) |
Gain on sale-leaseback | (371) | |
Share-based compensation | 2,671 | 2,729 |
Deferred income taxes | (571) | |
Construction allowances from landlords | 1,121 | 6,688 |
Change in operating assets and liabilities: | ||
Inventories | (3,931) | (23,122) |
Prepaid and other current assets | 885 | 883 |
Accounts payable | (15,349) | 19,396 |
Accrued liabilities | 5,063 | 2,199 |
Deferred rent | (141) | 1,921 |
Income taxes payable | 82 | 71 |
Other liabilities — non-current | 34 | 367 |
Net cash provided by operating activities | 9,981 | 17,802 |
Cash flows from investing activities: | ||
Capital expenditures | (10,924) | (25,552) |
Purchase of intellectual property | (292) | (30) |
Proceeds from sale of assets | 25 | 69 |
Net cash used in investing activities | (11,191) | (25,513) |
Cash flows from financing activities: | ||
Proceeds under revolving credit facility | 156,200 | 153,900 |
Repayments under revolving credit facility | (159,480) | (140,000) |
Change in cash overdraft | 9,391 | (60) |
Payments on capital leases | (121) | (119) |
Proceeds from exercise of common stock options and stock purchase plan purchases | 7 | 4 |
Payment of financing fees | (529) | |
Net cash provided by financing activities | 5,468 | 13,725 |
Net increase in cash and cash equivalents | 4,258 | 6,014 |
Cash and cash equivalents, beginning of period | 9,510 | 6,263 |
Cash and cash equivalents, end of period | $ 13,768 | $ 12,277 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Mar. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of presentation — The unaudited interim consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. These financial statements include all adjustments, consisting only of those of a normal recurring nature, which, in the opinion of management, are necessary to present fairly the results of the interim periods presented and should be read in conjunction with the audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018. The consolidated balance sheet at June 30, 2018 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and notes required by GAAP for complete financial statements. For further information, refer to the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018. The results of operations for the three and nine month periods ended March 31, 2019 are not necessarily indicative of the results to be expected for the full fiscal year ending June 30, 2019, which we refer to as fiscal 2019. We do not present a consolidated statement of comprehensive income as there are no other comprehensive income items in either the current or prior fiscal periods. The preparation of unaudited interim consolidated financial statements, in conformity with GAAP, requires us to make assumptions and use estimates that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to: inventory valuation under the retail method and estimation of reserves and valuation allowances specifically related to insurance, income taxes and litigation. Actual results could differ materially from these estimates. Our fiscal year ends on June 30 and we operate our business as a single operating segment. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Mar. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | 2. Revenue Recognition — Our revenue is earned from sales of merchandise within our stores and is recorded at the point of sale and conveyance of merchandise to customers. Revenue is measured based on the amount of consideration that we expect to receive, reduced by point of sale discounts and estimates for sales returns, and excludes sales tax. Payment for our sales is due at the time of sale. We maintain a reserve for estimated returns, and we use historical customer return behavior to estimate our reserve requirements. Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), adopted in the first quarter of fiscal 2019 as discussed in Note 14 below, required a change in presentation of the sales return reserve on the balance sheet, which we previously presented net of the estimated value of returned merchandise, but is now being presented on a gross basis. In the first quarter of fiscal 2019, we recorded an immaterial adjustment to present the reserve on a gross basis, increasing “Accrued Liabilities” and recording the corresponding returns asset, as evaluated for impairment, in “Other Assets,” in the Consolidated Balance Sheet. No impairment of the returns asset was indicated or recorded as of March 31, 2019. Gift cards are sold to customers in our stores and we issue gift cards for merchandise returns in our stores. Revenue from sales of gift cards and issuances of merchandise credits is recognized when the gift card is redeemed by the customer, or if the likelihood of the gift card being redeemed by the customer is remote (gift card breakage). The gift card breakage rate is determined based upon historical redemption patterns. An estimate of the rate of gift card breakage is applied over the period of estimated performance and the breakage amounts are included in net sales in the Consolidated Statement of Operations. Breakage income recognized was less than $0.01 million in the third quarter of fiscal 2019 and was $0.2 million in the third quarter of fiscal 2018. Breakage income recognized was $0.3 million for the nine months ended March 31, 2019 and was $0.6 million for the nine months ended March 31, 2018. The gift card liability is included in “Accrued Liabilities” in the Consolidated Balance Sheet at March 31, 2019. |
Share-Based Incentive Plans
Share-Based Incentive Plans | 9 Months Ended |
Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Incentive Plans | 3. Share-based incentive plans — Stock Option Awards. On November 16, 2016, our stockholders approved amendments to the 2014 Plan to increase the number of shares of the Company’s common stock available for issuance under the 2014 Plan by 2,500,000 shares and to make additional amendments to the 2014 Plan, including (i) reducing the percentage of shares exempt from the minimum vesting requirements under the 2014 Plan, (ii) adding a clawback policy, (iii) generally eliminating the discretion of the Board of Directors to accelerate the vesting of outstanding and unvested awards upon a change of control and (iv) providing that certain shares surrendered in payment of the exercise price of awards or withheld for tax withholding would count against the shares available under the 2014 Plan. Stock options were awarded with a strike price at a fair market value equal to the closing price of our common stock on the date of the grant under the 2008 Plan and the 2014 Plan. Options granted under the 2008 Plan and the 2014 Plan typically vest over periods of one to four years and expire ten years from the date of grant. Options granted under the 2008 Plan and the 2014 Plan may have certain performance requirements in addition to service terms. If the performance conditions are not satisfied, the options are forfeited. The exercise prices of stock options outstanding on March 31, 2019, range between $1.80 per share and $20.91 per share. The 2008 Plan terminated as to new awards as of September 16, 2014. There were 1.9 million shares available for grant under the 2014 Plan at March 31, 2019. Restricted Stock Awards —The 2008 Plan and the 2014 Plan authorize the grant of restricted stock awards to directors, officers, key employees and certain other key individuals who perform services for us and our subsidiaries. Equity awards may no longer be granted under the 2008 Plan, but restricted stock awards granted under the 2008 Plan are still outstanding. Restricted stock awards are not transferable, but bear certain rights of common stock ownership including voting and dividend rights. The 2014 Plan also authorizes the issuance of restricted stock units which, upon vesting, provide for the issuance of an equivalent number of shares of common stock. Restricted units are not transferable and do not provide voting or dividend rights. Shares and units are valued at the fair market value of our common stock at the date of award. Shares and units may be subject to certain performance requirements. If the performance requirements are not met, the restricted shares or units are forfeited. Under the 2008 Plan and the 2014 Plan, as of March 31, 2019, there were 1,910,659 shares of restricted stock and 230,770 restricted stock units outstanding with award vesting periods, both performance-based and service-based, of one to four years and a weighted average grant date fair value of $2.07 and $3.49 per share, respectively. Performance-Based Restricted Stock Awards and Performance-Based Stock Option Awards. As of March 31, 2019 there were 1,481,507 unvested performance-based restricted stock awards and performance-based stock options outstanding under the 2014 Plan. Share-based Compensation Costs. Share-based compensation costs were recognized as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Amortization of share-based compensation during the period $ 896 $ 860 $ 2,655 $ 2,691 Amounts capitalized in ending inventory (275 ) (318 ) (892 ) (1,041 ) Amounts recognized and charged to cost of sales 218 242 908 1,079 Amounts charged against income for the period before tax $ 839 $ 784 $ 2,671 $ 2,729 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Mar. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 4. Commitments and contingencies — we are involved in legal and governmental proceedings as part of the normal course of our business. Reserves have been established when a loss is considered probable and are based on management’s best estimates of our potential liability in these matters. These estimates have been developed in consultation with internal and external counsel and are based on a combination of litigation and settlement strategies. Management believes that such litigation and claims will be resolved without material effect on our financial position or results of operations. |
Earnings Per Common Share
Earnings Per Common Share | 9 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | 5. Earnings per common share — The following table sets forth the computation of basic and diluted income/(loss) per common share (in thousands, except per share amounts): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Net loss $ (8,289 ) $ (8,080 ) $ (391 ) $ (11,642 ) Less: Income to participating securities — — — — Net loss attributable to common shares $ (8,289 ) $ (8,080 ) $ (391 ) $ (11,642 ) Weighted average number of common shares outstanding basic 44,811 44,365 44,677 44,236 Effect of dilutive stock equivalents — — — — Weighted average number of common shares outstanding diluted 44,811 44,365 44,677 44,236 Net loss per common share basic $ (0.18 ) $ (0.18 ) $ (0.01 ) $ (0.26 ) Net loss per common share diluted $ (0.18 ) $ (0.18 ) $ (0.01 ) $ (0.26 ) For the quarters and year to date periods ended March 31, 2019 and March 31, 2018, all options representing the rights to purchase shares, respectively, were not included in the dilutive income per share calculation, because the assumed exercise of such options would have been anti-dilutive. |
Revolving Credit Facility
Revolving Credit Facility | 9 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility | 6. Revolving credit facility — We are party to a credit agreement providing for an asset-based, five-year senior secured revolving credit facility in the amount of up to $180.0 million (the “Revolving Credit Facility”) which originally was scheduled to mature on August 18, 2020. On January 29, 2019, the Revolving Credit Facility was amended to extend the maturity date to January 29, 2024. The availability of funds under the Revolving Credit Facility is limited to the lesser of a calculated borrowing base and the lenders’ aggregate commitments under the Revolving Credit Facility. Our indebtedness under the Revolving Credit Facility is secured by a lien on substantially all of our assets. The Revolving Credit Facility contains certain restrictive covenants, which affect, among others, our ability to incur liens or incur additional indebtedness, change the nature of our business, sell assets or merge or consolidate with any other entity, or make investments or acquisitions unless they meet certain requirements. The Revolving Credit Facility requires that we satisfy a fixed charge coverage ratio at any time that our availability is less than the greater of 10% of our calculated borrowing base or $12.5 million. Our Revolving Credit Facility, in some instances, limits our ability to pay cash dividends and repurchase our common stock. In order for the borrower under the Revolving Credit Facility, our subsidiary, to make a restricted payment to us for the payment of a dividend or a repurchase of shares, we are required to, among other things, maintain availability of 20% of the lesser of our calculated borrowing base or our lenders’ aggregate commitments under the Revolving Credit Facility on a pro forma basis for a specified period prior to and immediately following the restricted payment. As of March 31, 2019, we were in compliance with all of the Revolving Credit Facility covenants. At March 31, 2019, we had $35.2 million outstanding under the Revolving Credit Facility, $11.0 million of outstanding letters of credit and availability of $71.1 million. Letters of credit under the Revolving Credit Facility are generally for self-insurance purposes. We incur commitment fees of up to 0.25% on the unused portion of the Revolving Credit Facility, payable quarterly. Any borrowing under the Revolving Credit Facility incurs interest at the prime rate, or LIBOR, plus an applicable margin, at our election (except with respect to swing loans, which incur interest solely at the prime rate plus the applicable margin), subject to a floor of one month LIBOR plus an applicable margin in the case of loans based on the prime rate. Interest expense for the third quarter of the current fiscal year from the Revolving Credit Facility of $0.5 million was comprised of interest of $0.3 million, commitment fees of $0.1 million and the amortization of financing fees of $0.1 million. Interest expense for the third quarter of the prior fiscal year from the Revolving Credit Facility of $0.5 million was comprised of interest of $0.3 million, commitment fees of $0.1 million and the amortization of financing fees of $0.1 million. Interest expense for the nine months ended March 31, 2019 of $1.9 million was comprised of interest of $1.3 million, commitment fees of $0.3 million, and the amortization of financing fees of $0.3 million. Interest expense for the nine months ended March 31, 2018 of $1.5 million was comprised of interest of $0.8 million, commitment fees of $0.4 million, and the amortization of financing fees of $0.3 million. The fair value of the Company’s debt approximated its carrying amount as of March 31, 2019. |
Depreciation
Depreciation | 9 Months Ended |
Mar. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Depreciation | 7. Depreciation — Accumulated depreciation of owned property and equipment at March 31, 2019 and June 30, 2018 was $173.5 million and $157.0 million, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income taxes — The Company or one of its subsidiaries files income tax returns in the U.S. federal, state and local taxing jurisdictions. With few exceptions, the Company and its subsidiaries are no longer subject to state and local income tax examinations for years through fiscal 2013. The Internal Revenue Service has concluded an examination of the Company for years ending on or before June 30, 2010. The effective tax rates for the quarters ended March 31, 2019 and March 31, 2018 were (1.6%) and 0.3%, respectively. The effective tax rates for the nine months ended March 31, 2019 and March 31, 2018 were (8.6%) and 3.6%, respectively. The income tax benefit in the prior year included a favorable tax impact of approximately $0.6 million resulting from the release of a valuation allowance on deferred taxes due to enactment of the Tax Cuts and Jobs Act of 2017 (“TCJA”), as discussed further below. A full valuation allowance is currently recorded against substantially all of the Company’s other deferred tax assets. A deviation from the customary relationship between income tax expense/(benefit) and pretax income/(loss) results from the effects of the valuation allowance. We have completed our accounting for the impact of the enactment of the TCJA, within the one year measurement period ending December 22, 2018, as required under the rules issued by the SEC. Through the third quarter of fiscal 2018, we applied the provisions of the newly enacted TCJA, resulting in an approximate $0.6 million income tax benefit connected with future refunds of alternative minimum tax credits no longer requiring a valuation allowance. The impact of the new tax law, including the remeasurement of our deferred taxes at the new corporate tax rate, did not have a material impact on our deferred taxes as substantially all of our other deferred tax assets have corresponding valuation allowances. The Company currently expects the effect of the TCJA to have a nominal impact on its annual effective tax rate, given its cumulative loss position and the related valuation allowance. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 9 Months Ended |
Mar. 31, 2019 | |
Cash And Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | 9. Cash and cash equivalents — Cash and cash equivalents include credit card receivables and all highly liquid instruments with original maturities of three months or less. Cash equivalents are carried at cost, which approximates fair value. At March 31, 2019 and June 30, 2018, credit card receivables from third party consumer credit card providers were $11.3 million and $7.9 million, respectively. Such receivables are generally collected within one week of the balance sheet date. |
Intellectual Property
Intellectual Property | 9 Months Ended |
Mar. 31, 2019 | |
Intangible Assets Net Excluding Goodwill [Abstract] | |
Intellectual Property | 10. Intellectual property — Our intellectual property primarily consists of indefinite lived trademarks. We evaluate annually whether the trademarks continue to have an indefinite life. Trademarks and other intellectual property are reviewed for impairment annually in the fourth fiscal quarter, and may be reviewed more frequently if indicators of impairment are present. As of March 31, 2019, the carrying value of the intellectual property, which included indefinite-lived trademarks, was $1.3 million, and no impairment was identified or recorded. |
Cease Use Liability
Cease Use Liability | 9 Months Ended |
Mar. 31, 2019 | |
Cease Use Liability [Abstract] | |
Cease Use Liability | 11. Cease use liability — Amounts in “Accrued liabilities” in the Consolidated Balance Sheet at March 31, 2019 include the current portions of accruals for the net present value of future minimum lease payments, net of estimated sublease income, attributable to closed stores with remaining lease obligations. There was no cease use liability at March 31, 2019. The cease use liability at June 30, 2018 was $77 thousand, and was all classified as short-term. Expenses related to store closings are included in “Selling, general and administrative expenses” in the Consolidated Statements of Operations. |
Sale-leaseback
Sale-leaseback | 9 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Sale-leaseback | 12. Sale-leaseback —During the fourth quarter of fiscal 2016, we entered into a sale-leaseback transaction to sell two buildings and land utilized in our Dallas distribution center operations, which we did not consider part of our long-term distribution network, and leased back these facilities through December 2017. We subsequently exercised our option to extend the related lease through March 2018, which was accounted for as an operating lease and has now expired. We had no continuing involvement with the properties sold other than a normal leaseback. The consideration received for the sale, as reduced by closing and transaction costs, was $8.8 million, and the net book value of properties sold was $5.2 million, resulting in a $3.6 million gain. The gain recognized in fiscal 2016 was $2.5 million, which included the portion of the gain in excess of the present value of the minimum lease payments for the leaseback, and was included in “Other income” in our Consolidated Statement of Operations. During fiscal 2017, we recognized $0.7 million of the gain. During the first three months of fiscal 2018, we recognized $0.2 million of the gain. The final $0.2 million gain deferred on the Consolidated Balance Sheet at September 30, 2017 was classified as short-term and was recognized in the second quarter of fiscal 2018. |
Capital Lease
Capital Lease | 9 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Capital Lease | 13. Capital lease — During fiscal 2017, we entered into a 5-year capital lease maturing on January 31, 2022 for equipment and software. At March 31, 2019, the capital lease asset balance was $0.5 million, the current lease liability was $0.2 million and the long-term lease liability was $0.3 million. The capital lease asset is amortized on a straight-line basis. Capital lease amortization was less than $0.1 million in the third quarter of both fiscal 2019 and 2018. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Mar. 31, 2019 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 14. Recent accounting pronouncements — In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118),” which allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As discussed in Note 8, the Company has completed its analysis of the effects of the TCJA within the measurement period in accordance with SAB 118. In August 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”), which provides guidance on eight specific cash flow issues in regard to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those years, and required adoption on a retrospective basis. The Company adopted ASU 2016-15 in the first quarter of fiscal 2019. The adoption of this standard did not materially impact our consolidated financial statements and disclosures. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which is intended to improve financial reporting in connection with leasing transactions. ASU 2016-02 will require entities (“lessees”) that lease assets with lease terms of more than twelve months to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all leases, whether operating or finance, while the income statement will reflect lease expense for operating leases and amortization/interest expense for finance leases. Accounting by entities that own the assets leased by lessees (“lessors”) will remain largely unchanged from current GAAP. In addition, ASU 2016-02 requires disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. For public companies, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. A modified retrospective approach is required for all leases existing or entered into after the beginning of the earliest comparative period in the financial statements. In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements” (“ASU 2018-11”), which provided an additional transition option that allows companies to continue applying the guidance under the current lease standard in the comparative periods presented in the consolidated financial statements. Companies that elect this option would record a cumulative-effect adjustment to the opening balance of retained earnings on the date of adoption. The Company currently plans to elect this transition option. The Company will adopt this standard in the first quarter of fiscal 2020. While the Company is currently evaluating the provisions of ASU 2016-02, including which practical expedients to apply and assessing the impact on the Company’s consolidated financial statements and disclosures, the primary effect of adopting the new standard will be to record assets and obligations for current operating leases. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), an updated standard on revenue recognition, and has since modified the standard with additional ASUs. The new guidance provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using IFRS and GAAP. The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration, or payment, to which the company expects to be entitled in exchange for those goods or services. The Company adopted this standard in the first quarter of fiscal 2019 using the modified retrospective method, and the adoption did not have a material impact on its consolidated financial statements and disclosures. See Note 2 for further information. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | 14. Recent accounting pronouncements — In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118),” which allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As discussed in Note 8, the Company has completed its analysis of the effects of the TCJA within the measurement period in accordance with SAB 118. In August 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”), which provides guidance on eight specific cash flow issues in regard to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those years, and required adoption on a retrospective basis. The Company adopted ASU 2016-15 in the first quarter of fiscal 2019. The adoption of this standard did not materially impact our consolidated financial statements and disclosures. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which is intended to improve financial reporting in connection with leasing transactions. ASU 2016-02 will require entities (“lessees”) that lease assets with lease terms of more than twelve months to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all leases, whether operating or finance, while the income statement will reflect lease expense for operating leases and amortization/interest expense for finance leases. Accounting by entities that own the assets leased by lessees (“lessors”) will remain largely unchanged from current GAAP. In addition, ASU 2016-02 requires disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. For public companies, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. A modified retrospective approach is required for all leases existing or entered into after the beginning of the earliest comparative period in the financial statements. In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements” (“ASU 2018-11”), which provided an additional transition option that allows companies to continue applying the guidance under the current lease standard in the comparative periods presented in the consolidated financial statements. Companies that elect this option would record a cumulative-effect adjustment to the opening balance of retained earnings on the date of adoption. The Company currently plans to elect this transition option. The Company will adopt this standard in the first quarter of fiscal 2020. While the Company is currently evaluating the provisions of ASU 2016-02, including which practical expedients to apply and assessing the impact on the Company’s consolidated financial statements and disclosures, the primary effect of adopting the new standard will be to record assets and obligations for current operating leases. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), an updated standard on revenue recognition, and has since modified the standard with additional ASUs. The new guidance provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using IFRS and GAAP. The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration, or payment, to which the company expects to be entitled in exchange for those goods or services. The Company adopted this standard in the first quarter of fiscal 2019 using the modified retrospective method, and the adoption did not have a material impact on its consolidated financial statements and disclosures. See Note 2 for further information. |
Share-Based Incentive Plans (Ta
Share-Based Incentive Plans (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Recognized Share-Based Compensation Costs | Share-based compensation costs were recognized as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Amortization of share-based compensation during the period $ 896 $ 860 $ 2,655 $ 2,691 Amounts capitalized in ending inventory (275 ) (318 ) (892 ) (1,041 ) Amounts recognized and charged to cost of sales 218 242 908 1,079 Amounts charged against income for the period before tax $ 839 $ 784 $ 2,671 $ 2,729 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Income/(Loss) Per Common Share | The following table sets forth the computation of basic and diluted income/(loss) per common share (in thousands, except per share amounts): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Net loss $ (8,289 ) $ (8,080 ) $ (391 ) $ (11,642 ) Less: Income to participating securities — — — — Net loss attributable to common shares $ (8,289 ) $ (8,080 ) $ (391 ) $ (11,642 ) Weighted average number of common shares outstanding basic 44,811 44,365 44,677 44,236 Effect of dilutive stock equivalents — — — — Weighted average number of common shares outstanding diluted 44,811 44,365 44,677 44,236 Net loss per common share basic $ (0.18 ) $ (0.18 ) $ (0.01 ) $ (0.26 ) Net loss per common share diluted $ (0.18 ) $ (0.18 ) $ (0.01 ) $ (0.26 ) |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - Accounting Standards Update 2014-09 - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation Of Revenue [Line Items] | ||||
Impairment charges | $ 0 | |||
Breakage | ||||
Disaggregation Of Revenue [Line Items] | ||||
Breakage income recognized | $ 200,000 | $ 300,000 | $ 600,000 | |
Breakage | Maximum | ||||
Disaggregation Of Revenue [Line Items] | ||||
Breakage income recognized | $ 10,000 |
Share-Based Incentive Plans - N
Share-Based Incentive Plans - Narrative (Details) - $ / shares | 9 Months Ended | |
Mar. 31, 2019 | Nov. 16, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Exercise price of stock options outstanding, low end of range | $ 1.80 | |
Exercise price of stock option outstanding, high end of range | $ 20.91 | |
2014 Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of common stock shares available for issuance | 2,500,000 | |
2014 Plan | Stock Option Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expiration period (in years) | 10 years | |
Shares available for grant | 1,900,000 | |
2014 Plan | Stock Option Awards | Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period (in years) | 1 year | |
2014 Plan | Stock Option Awards | Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period (in years) | 4 years | |
2014 Plan | Performance-Based Restricted Stock Awards and Stock Option Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Awards outstanding | 1,481,507 | |
2008 Plan | Stock Option Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expiration period (in years) | 10 years | |
2008 Plan | Stock Option Awards | Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period (in years) | 1 year | |
2008 Plan | Stock Option Awards | Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period (in years) | 4 years | |
2008 and 2014 Plan | Restricted Stock Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Awards outstanding | 1,910,659 | |
Weighted average grant date fair value of awards granted (in dollars per share) | $ 2.07 | |
2008 and 2014 Plan | Restricted Stock Awards | Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period (in years) | 1 year | |
2008 and 2014 Plan | Restricted Stock Awards | Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period (in years) | 4 years | |
2008 and 2014 Plan | Restricted Stock Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Awards outstanding | 230,770 | |
Weighted average grant date fair value of awards granted (in dollars per share) | $ 3.49 | |
2008 and 2014 Plan | Restricted Stock Units | Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period (in years) | 1 year | |
2008 and 2014 Plan | Restricted Stock Units | Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period (in years) | 4 years |
Share-Based Incentive Plans - S
Share-Based Incentive Plans - Schedule of Recognized Share-Based Compensation Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based incentive plans | ||||
Share-based compensation | $ 839 | $ 784 | $ 2,671 | $ 2,729 |
Amounts capitalized in ending inventory | (275) | (318) | (892) | (1,041) |
Share Based Compensation Amortization | ||||
Share-based incentive plans | ||||
Share-based compensation | 896 | 860 | 2,655 | 2,691 |
Cost of Sales | ||||
Share-based incentive plans | ||||
Share-based compensation | $ 218 | $ 242 | $ 908 | $ 1,079 |
Earnings Per Common Share - Com
Earnings Per Common Share - Computation of Basic and Diluted Income/(Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (8,289) | $ (8,080) | $ (391) | $ (11,642) |
Net loss attributable to common shares | $ (8,289) | $ (8,080) | $ (391) | $ (11,642) |
Weighted average number of common shares outstanding basic | 44,811 | 44,365 | 44,677 | 44,236 |
Weighted average number of common shares outstanding diluted | 44,811 | 44,365 | 44,677 | 44,236 |
Net loss per common share basic | $ (0.18) | $ (0.18) | $ (0.01) | $ (0.26) |
Net loss per common share diluted | $ (0.18) | $ (0.18) | $ (0.01) | $ (0.26) |
Revolving Credit Facility - Nar
Revolving Credit Facility - Narrative (Details) - USD ($) | Jan. 29, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 |
Line Of Credit Facility [Line Items] | ||||||
Revolving credit facility outstanding amount | $ 35,200,000 | $ 35,200,000 | $ 38,480,000 | |||
Amortization of financing fees | $ 220,000 | $ 236,000 | ||||
Revolving credit facility, description of variable rate basis | one month LIBOR | |||||
Revolving Credit Facility | ||||||
Line Of Credit Facility [Line Items] | ||||||
Term of credit facility (in years) | 5 years | |||||
Maximum borrowing capacity | 180,000,000 | $ 180,000,000 | ||||
Revolving credit facility maturity date | Jan. 29, 2024 | Aug. 18, 2020 | ||||
Availability to be maintained under credit facility | $ 12,500,000 | $ 12,500,000 | ||||
Availability to be maintained under credit facility before restriction on investments, percentage | 20.00% | 20.00% | ||||
Covenant terms | The Revolving Credit Facility requires that we satisfy a fixed charge coverage ratio at any time that our availability is less than the greater of 10% of our calculated borrowing base or $12.5 million. | |||||
Revolving credit facility outstanding amount | $ 35,200,000 | $ 35,200,000 | ||||
Outstanding letters of credit | 11,000,000 | 11,000,000 | ||||
Availability under the credit facility | 71,100,000 | $ 71,100,000 | ||||
Frequency of commitment fee payment | Payable quarterly | |||||
Interest expense | 500,000 | $ 500,000 | $ 1,900,000 | 1,500,000 | ||
Commitment fees | 100,000 | 100,000 | 300,000 | 400,000 | ||
Interest expense, debt | 300,000 | 300,000 | 1,300,000 | 800,000 | ||
Amortization of financing fees | $ 100,000 | $ 100,000 | $ 300,000 | $ 300,000 | ||
Revolving Credit Facility | Minimum | ||||||
Line Of Credit Facility [Line Items] | ||||||
Availability to be maintained under credit facility, percentage | 10.00% | 10.00% | ||||
Revolving Credit Facility | Maximum | ||||||
Line Of Credit Facility [Line Items] | ||||||
Commitment fees (as a percent) | 0.25% |
Depreciation - Narrative (Detai
Depreciation - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Jun. 30, 2018 |
Property Plant And Equipment [Abstract] | ||
Accumulated depreciation | $ 173.5 | $ 157 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019Subsidiary | Mar. 31, 2018USD ($) | Mar. 31, 2019Subsidiary | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Number of subsidiaries filing income tax returns in the U.S. federal jurisdiction, and various state jurisdictions | Subsidiary | 1 | 1 | ||
Effective tax rate | (1.60%) | 0.30% | (8.60%) | 3.60% |
Additional income tax benefit | $ | $ 0.6 |
Cash and Cash Equivalents - Nar
Cash and Cash Equivalents - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Jun. 30, 2018 |
Cash And Cash Equivalents [Abstract] | ||
Credit card receivables from third party consumer credit card providers | $ 11.3 | $ 7.9 |
Intellectual Property - Narrati
Intellectual Property - Narrative (Details) - Intellectual Property | 9 Months Ended |
Mar. 31, 2019USD ($) | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | |
Carrying value of intellectual property | $ 1,300,000 |
Impairment of intellectual property | $ 0 |
Cease Use Liability - Narrative
Cease Use Liability - Narrative (Details) - USD ($) | Mar. 31, 2019 | Jun. 30, 2018 |
Cease Use Liability [Abstract] | ||
Short-term cease use liabilities | $ 0 | $ 77,000 |
Sale-leaseback - Narrative (Det
Sale-leaseback - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Mar. 31, 2019 | Mar. 31, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($)Building | |
Sale Leaseback Transaction [Line Items] | ||||||
Sale-leaseback transaction, gain recognized in other income | $ 371,000 | |||||
Dallas | Buildings and Land | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Sale-leaseback transaction, asset description | transaction to sell two buildings and land | |||||
Transaction to sell, number of buildings | Building | 2 | |||||
Sale-leaseback transaction, extended period | 2018-03 | |||||
Consideration received reduced by closing and transaction costs | $ 8,800,000 | |||||
Sale-leaseback transaction, net book value | 5,200,000 | |||||
Gain on sale-leaseback transaction | 3,600,000 | |||||
Sale-leaseback transaction, gain recognized in other income | $ 200,000 | $ 200,000 | $ 700,000 | $ 2,500,000 | ||
Sale-leaseback transaction, remaining deferred gain | $ 200,000 |
Capital Lease - Narrative (Deta
Capital Lease - Narrative (Details) - Equipment and Software - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2017 | |
Capital Leased Assets [Line Items] | |||
Term of capital lease | 5 years | ||
Capital lease maturity date | Jan. 31, 2022 | ||
Capital lease asset | $ 500,000 | ||
Current capital lease liability | 200,000 | ||
Long-term capital lease liability | 300,000 | ||
Maximum | |||
Capital Leased Assets [Line Items] | |||
Capital lease amortization expense | $ 100,000 | $ 100,000 |