What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-12-08 compared with 2020-09-08 · 68 added, 66 removed, 260 unchanged (34% of the section changed)

9 unchanged sentences

Total current assets

Property and equipment, net of accumulated depreciation of $ 271,749 and $ 262,570 as of August 1, 2020 and February 1, 2020, respectively

Property and equipment, net of accumulated depreciation of $ 275,599 and $ 262,570 as of October 31, 2020 and February 1, 2020, respectively

Operating lease right of use assets

10 unchanged sentences

Noncurrent operating lease liabilities

Revolving credit facility

Other long-term liabilities

3 unchanged sentences

Authorized 32,000,000 shares;

15,967,948 shares issued as of August 1, 2020 and 15,907,666 shares issued as of February 1, 2020;

10,634,162 shares outstanding as of August 1, 2020 and 10,834,134 shares outstanding as of February 1, 2020

15,968,849 shares issued as of October 31, 2020 and 15,907,666 shares issued as of February 1, 2020;

10,259,260 shares outstanding as of October 31, 2020 and 10,834,134 shares outstanding as of February 1, 2020

Paid in capital

1 unchanged sentence

Treasury stock, at cost;

5,333,786 shares held as of August 1, 2020 and 5,073,532 shares held as of February 1, 2020

5,709,589 shares held as of October 31, 2020 and 5,073,532 shares held as of February 1, 2020

Total stockholders’ equity

5 unchanged sentences

(in thousands, except per share amounts)

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

Cost of sales (exclusive of depreciation)

1 unchanged sentence

Asset impairment

(Loss) income from operations

Income from operations

Interest income

Interest expense

(Loss) income before income taxes

Income tax benefit (provision)

Net (loss) income

Basic net (loss) income per common share

Diluted net (loss) income per common share

Income before income taxes

Income tax provision

Basic net income per common share

Diluted net income per common share

Weighted average number of shares outstanding

5 unchanged sentences

Selling, general and administrative expenses

Asset impairment

Income from operations

Income (loss) from operations

Interest income

Interest expense

Income before income taxes

Income tax provision

Basic net income per common share

Diluted net income per common share

Income (loss) before income taxes

Income tax (provision) benefit

Net income (loss)

Basic net income (loss) per common share

Diluted net income (loss) per common share

Weighted average number of shares outstanding

3 unchanged sentences

(in thousands)

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

Operating activities:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

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

Non-cash operating lease costs

24 unchanged sentences

Repurchases of common stock

Net cash provided by (used in) financing activities

Net cash used in financing activities

Net increase in cash and cash equivalents

25 unchanged sentences

Balances — August 1, 2020

Issuance of nonvested shares under incentive plan

Forfeiture of nonvested shares by employees and directors

Stock-based compensation expense

Net share settlement of nonvested shares and restricted stock units

Repurchase of common stock

Balances — October 31, 2020

Treasury Stock

15 unchanged sentences

Balances — August 3, 2019

Issuance of nonvested shares under incentive plan

Stock-based compensation expense

Repurchase of common stock

Dividends paid to stockholders ($ 0.08 per common share)

Balances — November 2, 2019

See accompanying notes to the condensed consolidated financial statements (unaudited).

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements (unaudited)

August 1, 2020

October 31, 2020

Significant Accounting Policies

2 unchanged sentences

(collectively referred to herein with its wholly owned subsidiary as the “Company”) is a value-priced retailer of fashion apparel, accessories and home goods for the entire family.

As of August 1, 2020, the Company operated 579 stores in 33 states.

As of October 31, 2020, the Company operated 585 stores in 33 states.

The condensed consolidated financial statements are prepared in accordance with U.S.

4 unchanged sentences

These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the 2019 Form 10-K.

Operating results for the twenty-six weeks ended August 1, 2020 are not necessarily indicative of the results that may be expected for the fiscal year as a result of the seasonality of the business and changes in our business, consumer spending patterns, and the macroeconomic environment, including those resulting from the novel coronavirus (“COVID-19”) pandemic.

Operating results for the thirty-nine weeks ended October 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year as a result of the seasonality of the business and changes in our business, consumer spending patterns, and the macroeconomic environment, including those resulting from the novel coronavirus (“COVID-19”) pandemic.

The following contains references to fiscal years 2020 and 2019, which represent fiscal years ending or ended on January 30, 2021 and February 1, 2020, respectively.

16 unchanged sentences

(iii) temporary tiered salary reductions for management level corporate employees and a reduction to the cash portion of non-employee director fees;

and (iv) extensions of payment terms with vendors and suppliers.

Other measures taken by the Company to mitigate the impact of the pandemic that began in the first quarter of 2020 and are continuing include (i) negotiating rent concessions with landlords;

(ii) executing substantial reductions in operating expenses, store occupancy costs, capital expenditures and other costs;

and (iii) temporarily suspending share repurchases and dividend payments.

(iv) extensions of payment terms with vendors and suppliers;

and (v) temporarily suspending share repurchases.

Other measures taken by the Company to mitigate the impact of the pandemic that began in the first quarter of 2020 and are continuing include negotiating rent concessions with landlords and executing substantial reductions in operating expenses, store occupancy costs, capital expenditures and other costs.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security ("CARES") Act was signed into law.

The provisions include technical corrections to tax depreciation methods for qualified improvement property which allow for accelerated depreciation, an employee retention tax credit and the deferral of the employer portion of social security deposits.

Under the CARES Act, the Company deferred payment of approximately $ 1.7 million of amounts due for the employer portion of social security tax deposits during the six months ended August 1, 2020.

As of October 31, 2020, the Company had deferred payment of approximately $ 3.5 million of amounts due for the employer portion of social security tax deposits.

The Company expects to defer approximately $ 1.2 million of additional tax deposits during the remainder of the calendar year as allowed by the CARES Act.

The total amounts of deferred payroll taxes will be paid in

two equal installments during the fourth calendar quarters of 2021 and 2022.

The total amounts of deferred payroll taxes will be paid in two equal installments during the fourth calendar quarters of 2021 and 2022.

In addition, in the second quarter of 2020, the Company recognized a $ 1.5 million benefit related to the employee retention credit created under the CARES Act based on qualified wages paid primarily to store and distribution center associates.

The retention credit is included in selling, general and administrative expenses on the condensed consolidated statements of operations for the twenty-six and thirteen weeks ended August 1, 2020.

The retention credit is included in selling, general and administrative expenses on the condensed consolidated statements of operations for the thirty-nine weeks ended October 31, 2020.

Cash and Cash Equivalents/Concentration of Credit Risk

9 unchanged sentences

The Company includes as assumed proceeds the amount of compensation cost attributed to future services and not yet recognized.

For the twenty-six weeks ended August 1, 2020 and August 3, 2019, there were 173,000 and 135,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

For the thirteen weeks ended August 1, 2020 and August 3, 2019, there were 165,000 and 143,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

For the thirty-nine weeks ended October 31, 2020 and November 2, 2019, there were 150,000 and 139,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

For the thirteen weeks ended October 31, 2020 and November 2, 2019, there were 134,000 and 147,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

The following table provides a reconciliation of the weighted average number of common shares outstanding used to calculate basic earnings per share to the number of common shares and common stock equivalents outstanding used in calculating diluted earnings per share:

Twenty-Six Weeks Ended

August 1, 2020

August 3, 2019

Thirty-Nine Weeks Ended

October 31, 2020

November 2, 2019

Weighted average number of common shares outstanding

2 unchanged sentences

Thirteen Weeks Ended

August 1, 2020

August 3, 2019

October 31, 2020

November 2, 2019

Weighted average number of common shares outstanding

5 unchanged sentences

Non-cash impairment expenses consisted of the following (in thousands):

Twenty-Six Weeks Ended

Thirteen Weeks Ended

August 1, 2020

August 3, 2019

August 1, 2020

August 3, 2019

Thirty-Nine Weeks Ended

October 31, 2020

November 2, 2019

Operating lease right-of-use asset impairment

12 unchanged sentences

During the second quarter of 2020, the Company repaid $ 2.1 million of the outstanding borrowings.

On September 11, 2020, the Company repaid the full amount outstanding under the credit facility.

Income taxes are accounted for under the asset and liability method.

3 unchanged sentences

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

For the twenty-six weeks ended August 1, 2020 and August 3, 2019, the Company utilized the discrete effective tax rate method to determine its tax expense based upon interim period results.

The Company concluded that the use of the discrete method was more appropriate than the annual effective tax rate method because the full-year tax rate is not reliably predictable.

The effective income tax rate was 27.6 % for the twenty-six weeks ended August 1, 2020, compared to 14.9 % for the twenty-six weeks ended August 3, 2019.

The difference in the effective income tax rate was due to a pretax loss for the twenty-six weeks ended August 1, 2020 compared to pretax income in the prior year and lower federal and state tax credits this year.

On March 27, 2020, the CARES Act was enacted into law.

The CARES Act includes several significant business tax provisions that, among other things, would eliminate the taxable income limit for certain net operating losses (“NOLs”) and allow businesses to carry back NOLs arising in 2018, 2019 and 2020 to the five prior tax years, reduce the business interest limitation under section 163(j), and fix the qualified improvement property regulations in the 2017 Tax Cuts and Jobs Act.

As a result of the CARES Act, to the extent that there are taxable losses at the end of fiscal 2020, the Company believes that it will be able to obtain a tax refund from the carryback of federal NOLs.

For the thirty-nine weeks ended October 31, 2020 and November 2, 2019, the Company utilized the annual effective tax rate method to calculate income taxes.

The effective income tax rate was 23.2 % for the thirty-nine weeks ended October 31, 2020, compared to 15.6 % for the thirty-nine weeks ended November 2, 2019.

The difference in the effective income tax rate was due to lower federal and state tax credits this year.

Commitments and Contingencies

5 unchanged sentences

In November 2018, the Company’s board of directors approved a program that authorized the repurchase of up to $ 25.0 million in shares of the Company’s common stock.

During the twenty-six weeks ended August 3, 2019, the Company repurchased 82,312 shares of its common stock at an aggregate cost of $ 1.6 million.

During the thirty-nine weeks ended November 2, 2019, the Company repurchased 82,312 shares of its common stock at an aggregate cost of $ 1.6 million.

This repurchase program was completed in October 2019.

In November 2019, the Company’s board of directors approved a new program that authorized the repurchase of up to $ 25.0 million in shares of the Company’s common stock.

During the twenty-six weeks ended August 1, 2020, the Company repurchased 260,254 shares of its common stock at an aggregate cost of $ 6.3 million.

During the thirty-nine weeks ended October 31, 2020, the Company repurchased 260,254 shares of its common stock under this program at an aggregate cost of $ 6.3 million.

This repurchase program was completed in February 2020.

On March 13, 2020, the Company’s board of directors approved another new program that authorized the repurchase of up to $ 30.0 million in shares of the Company’s common stock.

Due to the current economic uncertainty stemming from the COVID-19 pandemic, the Company has temporarily suspended any repurchases as of March 23, 2020 and plans to continue to monitor the situation based on business conditions and regard for its financial liquidity needs.

On March 23, 2020, due to the economic uncertainty stemming from the COVID-19 pandemic, the Company temporarily suspended any repurchases.

On September 14, 2020, the Company announced the reinstatement of this program.

During the thirteen weeks ended October 31, 2020, the Company repurchased 375,803 shares of its common stock under this program at an aggregate cost of $ 9.9 million.

On February 18, 2020, the Company’s board of directors declared a dividend of $ 0.08 per common share, which was paid on March 17, 2020 to stockholders of record as of March 3, 2020.

15 unchanged sentences

The percentage of net sales related to each classification of its merchandise assortment was approximately:

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

Thirteen Weeks Ended

6 unchanged sentences

Lease costs consisted of the following (in thousands):

Twenty-Six Weeks Ended

August 1, 2020

August 3, 2019

Thirty-Nine Weeks Ended

October 31, 2020

November 2, 2019

Operating lease cost

5 unchanged sentences

The Company is engaging in ongoing discussions with landlords regarding the potential restructuring of lease payments and rent concessions.

As of August 1, 2020, the Company negotiated contractual rent concessions on certain leases in the form of early renewals, rent deferrals and rent abatements.

As of October 31, 2020, the Company negotiated contractual rent concessions on certain leases in the form of early renewals, rent deferrals and rent abatements.

The Company has elected to account for qualifying COVID-19 related rent concessions as if they were part of the enforceable rights and obligations under the existing lease agreements, as permitted by the updated guidance provided by the FASB in April 2020.

As a result of this election, the Company recognized rent abatement credits of approximately $ 0.6 million in the second quarter of 2020.

Future minimum lease payments as of August 1, 2020 are as follows (in thousands):

As a result of this election, the Company recognized rent abatement credits of approximately $ 0.8 million and $ 0.2 million during the thirty-nine and thirteen weeks ended October 31, 2020, respectively.

Future minimum lease payments as of October 31, 2020 are as follows (in thousands):

Remainder of 2020

6 unchanged sentences

Supplemental cash flows and other information related to operating leases are as follows (in thousands, except for weighted average amounts):

Twenty-Six Weeks Ended

August 1, 2020

August 3, 2019

Thirty-Nine Weeks Ended

October 31, 2020

November 2, 2019

Cash paid for operating leases

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements