What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-09-01 compared with 2023-06-02 · 109 added, 65 removed, 442 unchanged (28% of the section changed)

3 unchanged sentences

(Amounts in thousands)

April 30, 2023

July 30, 2023

January 29, 2023

1 unchanged sentence

Cash and cash equivalents

Income tax receivable

Inventory, less reserves of $ 1,182 and $ 1,837 , respectively

11 unchanged sentences

(Amounts in thousands)

April 30, 2023

July 30, 2023

January 29, 2023

16 unchanged sentences

10,000 shares authorized;

issued or outstanding as of April 30, 2023 and January 29, 2023

issued or outstanding as of July 30, 2023 and January 29, 2023

Common stock (Class A), no par value;

10,000 shares authorized;

3,364 shares issued and outstanding as of April 30, 2023 and January 29, 2023

issued and outstanding as of July 30, 2023 and January 29, 2023

Common stock (Class B), no par value;

200,000 shares authorized;

31,264 shares issued and 31,110 shares outstanding as of April 30, 2023,

31,371 shares issued and 31,217 shares outstanding as of July 30, 2023 and

30,191 shares issued and 30,079 shares outstanding as of January 29, 2023

Treasury stock, at cost;

154 and 112 shares as of April 30, 2023 and

154 and 112 shares as of July 30, 2023 and

January 29, 2023, respectively

1 unchanged sentence

Retained earnings

Accumulated other comprehensive income

Accumulated other comprehensive loss

Total shareholders'

8 unchanged sentences

Three Months Ended

April 30, 2023

Six Months Ended

July 30, 2023

July 31, 2022

July 30, 2023

July 31, 2022

Cost of goods sold (excluding depreciation and amortization)

Selling, general and administrative expenses

Operating loss

Operating (loss) income

Interest expense

Other income, net

Loss before income taxes

Income tax benefit

(Loss) income before income taxes

Income tax (benefit) expense

Net (loss) income

Net loss attributable to noncontrolling interest

Net loss attributable to controlling interest

Net (loss) income attributable to controlling interest

Basic earnings per share (Class A and Class B):

Weighted average shares of common stock outstanding

Net loss per share attributable to controlling interest

Net (loss) income per share attributable to controlling interest

Diluted earnings per share (Class A and Class B):

Weighted average shares and equivalents outstanding

Net loss per share attributable to controlling interest

Net (loss) income per share attributable to controlling interest

The accompanying notes are an integral part of these condensed consolidated financial statements.

3 unchanged sentences

Three Months Ended

April 30, 2023

Six Months Ended

July 30, 2023

July 31, 2022

July 30, 2023

July 31, 2022

Net (loss) income

Other comprehensive income

3 unchanged sentences

Other comprehensive loss

Comprehensive loss

Comprehensive (loss) income

Comprehensive loss attributable to noncontrolling interest

Comprehensive loss attributable

Comprehensive (loss) income attributable

‎ to controlling interest

3 unchanged sentences

(Amounts in thousands)

Three Months Ended April 30, 2023

Six Months Ended July 30, 2023

Noncontrolling

11 unchanged sentences

Balance at April 30, 2023

Issuance of common stock

Stock-based compensation

Restricted stock forfeitures

Restricted stock surrendered for taxes

Other comprehensive loss

Net income (loss)

Balance at July 30, 2023

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Three Months Ended May 1, 2022

Six Months Ended July 31, 2022

Noncontrolling

10 unchanged sentences

Balance at May 1, 2022

Issuance of common stock

Stock-based compensation

Restricted stock forfeitures

Restricted stock surrendered for taxes

Other comprehensive income

Net income (loss)

Balance at July 31, 2022

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Three Months Ended

April 30, 2023

Six Months Ended

July 30, 2023

July 31, 2022

Cash flows from operating activities:

Net (loss) income

Adjustments to reconcile net income to net cash used in operating activities:

4 unchanged sentences

Changes in operating assets and liabilities:

Income taxes receivable

Prepaid expense & other current assets

51 unchanged sentences

Fiscal 2022 was a 52-week period and ended on January 29, 2023.

The three months of fiscal 2023 and fiscal 2022 represent the Company’s 13-week periods ended April 30, 2023 and May 1, 2022, respectively.

The accompanying condensed consolidated financial statements as of and for the three months ended April 30, 2023 and May 1, 2022 have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of the Company, include all adjustments (which are normal and recurring in nature) necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented.

The three months of fiscal 2023 and fiscal 2022 represent the Company’s 13-week periods ended July 30, 2023 and July 31, 2022, respectively.

The accompanying condensed consolidated financial statements as of and for the three and six months ended July 30, 2023 and July 31, 2022 have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of the Company, include all adjustments (which are normal and recurring in nature) necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented.

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S.

GAAP have been condensed or omitted pursuant to such SEC rules and regulations as of and for the three months ended April 30, 2023 and May 1, 2022.

GAAP have been condensed or omitted pursuant to such SEC rules and regulations as of and for the three and six months ended July 30, 2023 and July 31, 2022.

These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s annual report on Form 10-K for the fiscal year ended January 29, 2023.

Impairment Analysis

As of April 30, 2023 and for the three months ended, no triggering events or indicators of asset impairment were noted.

Inventory, consisting of purchased product, is valued at the lower of cost or net realizable value, under the first-in, first-out method.

The significant estimates used in inventory valuation are obsolescence (including excess and slow-moving inventory and lower of cost or market reserves) and estimates of inventory shrinkage.

Both estimates have calculations that require the Company to make assumptions and apply judgment regarding a number of factors, including market conditions, the selling environment, historical results and current inventory trends.

Inventory is adjusted periodically to reflect current market conditions, which requires management’s judgment that may significantly affect the ending inventory valuation, as well as gross margin.

The reserve for inventory shrinkage is adjusted to reflect the trend of historical physical inventory count results.

As of July 30, 2023 and for the three and six months ended, no triggering events or indicators of asset impairment were noted.

Inventory consists of finished goods stated at the lower of cost or net realizable value, with cost determined using the first-in, first-out valuation method.

The Company records an inventory reserve for the anticipated loss associated with selling inventories below cost.

Inventory reserve for excess and obsolete items was $ 1.2 million as of July 30, 2023 and January 29, 2023.

The reserve for retail inventory shrinkage is adjusted to reflect the trend of historical physical inventory count results.

The Company performs its retail store physical inventory counts in July and the difference between actual and estimated shrinkage, recorded in Cost of goods sold, may cause fluctuations in second fiscal quarter results.

Due to the timing of the inventory counts, an insignificant retail inventory shrinkage reserve was outstanding as of July 30, 2023, compared to $ 0.6 million as of January 29, 2023.

DULUTH HOLDINGS INC.

2 unchanged sentences

Prepaid expenses and other assets consist of the following:

April 30, 2023

July 30, 2023

January 29, 2023

17 unchanged sentences

Reclassifications

Certain reclassifications have been made to the 2022 financial statements in order to conform to 2023 presentation.

Certain reclassifications have been made to the 2022 financial statements in order to conform to the 2023 presentation.

The Company reclassified $ 4.2 million and ($ 4.2 ) million from Property, Plant & Equipment and Prepaid Expenses, respectively, in the prior period.

22 unchanged sentences

Three Months Ended

Six Months Ended

of Operations

April 30, 2023

July 30, 2023

July 31, 2022

July 30, 2023

July 31, 2022

(in thousands)

20 unchanged sentences

Other information related to leases were as follows:

Three Months Ended

April 30, 2023

Six Months Ended

July 30, 2023

July 31, 2022

(in thousands)

11 unchanged sentences

Operating leases

Future minimum lease payments under the non-cancellable leases are as follows as of April 30, 2023:

Future minimum lease payments under the non-cancellable leases are as follows as of July 30, 2023:

(in thousands)

5 unchanged sentences

Debt consists of the following:

April 30, 2023

July 30, 2023

January 29, 2023

22 unchanged sentences

(iii) amend the pricing index to replace BSBY with the Term Secured Overnight Financing Rate;

and (iv) to reduce the commitment fee in some instances.

As of April 30, 2023 and for the three months then ended, the Company was in compliance with all financial and non-financial covenants contained within the Credit Agreement and the First Amendment.

and (iv) reduce the commitment fee in some instances.

As of July 30, 2023 and for the six months then ended, the Company was in compliance with all financial and non-financial covenants contained within the Credit Agreement and the First Amendment.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:

April 30, 2023

July 30, 2023

January 29, 2023

20 unchanged sentences

Treasury yield curve, credit information and an estimate of future cash flows.

During fiscal 2022, certain changes in the inputs did impact the fair value of the available-for-sale security.

During the six months ended July 30, 2023, certain changes in the inputs did impact the fair value of the available-for-sale security.

The calculated fair value is based on estimates that are subjective in nature and involve uncertainties and matters of significant judgement and, therefore, cannot be determined with precision.

1 unchanged sentence

The amortized cost and fair value of the Company’s money market account and available-for-sale security and the corresponding amount of gross unrealized gains and losses recognized in accumulated other comprehensive income are as follows:

April 30, 2023

July 30, 2023

(in thousands)

11 unchanged sentences

The Company reviews its securities on a quarterly basis to monitor its exposure to other-than-temporary impairment.

No other-than-temporary impairment was recorded in the unaudited condensed consolidated statements of operations for the three months ended April 30, 2023 or May 1, 2022 .

No other-than-temporary impairment was recorded in the unaudited condensed consolidated statements of operations for the six months ended July 30, 2023 or July 31, 2022 .

DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents future principal receipts related to the Company’s available-for-sale security by contractual maturity as of April 30, 2023.

The following table presents future principal receipts related to the Company’s available-for-sale security by contractual maturity as of July 30, 2023.

(in thousands)

4 unchanged sentences

The carrying values and fair values of other financial instruments in the Consolidated Balance Sheets are as follows:

April 30, 2023

July 30, 2023

January 29, 2023

10 unchanged sentences

and (b) the obligation to absorb the VIE losses and the right to receive benefits that are significant to the VIE.

The Company has determined that it was the primary beneficiary of one variable interest entity (“VIE”) as of April 30, 2023 and January 29, 2023.

The Company has determined that it was the primary beneficiary of one variable interest entity (“VIE”) as of July 30, 2023 and January 29, 2023.

The Company leases the Company’s headquarters in Mt.

7 unchanged sentences

Notes to Condensed Consolidated Financial Statements (Unaudited)

The condensed consolidated balance sheets include the following amounts as a result of the consolidation of TRI as of April 30, 2023 and January 29, 2023:

April 30, 2023

The condensed consolidated balance sheets include the following amounts as a result of the consolidation of TRI as of July 30, 2023 and January 29, 2023:

July 30, 2023

January 29, 2023

6 unchanged sentences

Total liabilities and shareholders'

EARNINGS PER SHARE

(LOSS) EARNINGS PER SHARE

Earnings per share is computed under the provisions of ASC 260 , Earnings Per Share .

4 unchanged sentences

Three Months Ended

April 30, 2023

Six Months Ended

July 30, 2023

July 31, 2022

July 30, 2023

July 31, 2022

(in thousands, except per share data)

Numerator - net loss attributable to

Numerator - net (loss) income attributable to

‎ controlling interest

2 unchanged sentences

Dilutive shares

Earnings per share (Class A and Class B)

The computation of diluted (loss) earnings per share excluded 0.3 million and 0.2 million shares of unvested restricted stock for the three months ended April 30, 2023 and May 1, 2022, respectively because their inclusion would be anti-dilutive due to a net loss.

(Loss) earnings per share (Class A and Class B)

The computation of diluted (loss) earnings per share excluded ( 0.2 ) million and 0.4 million shares of unvested restricted stock for the three and six months ended July 30, 2023, respectively, because their inclusion would be anti-dilutive due to a net loss.

The computation of diluted (loss) earnings per share excluded ( 0.1 ) million of unvested restricted stock for the three months ended July 31, 2022, because the inclusion of dilutive potential common shares outstanding would be anti-dilutive.

STOCK-BASED COMPENSATION

The Company accounts for its stock-based compensation plan in accordance with ASC 718, Stock Compensation , which requires the Company to measure all share-based payments at grant date fair value and recognize the cost over the requisite service period of the award.

Total stock compensation expense associated with restricted stock recognized by the Company was $ 1.0 million and $ 0.6 million for the three months ended April 30, 2023 and May 1, 2022, respectively.

Total stock compensation expense associated with restricted stock recognized by the Company was $ 1.3 million and $ 2.3 million for the three and six months ended July 30, 2023, respectively.

The Company’s total stock compensation expense is included in selling, general and administrative expenses on the Condensed Consolidated Statements of Operations.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements (Unaudited)

A summary of the activity in the Company’s unvested restricted stock during the three months ended April 30, 2023 is as follows:

A summary of the activity in the Company’s unvested restricted stock during the six months ended July 30, 2023 is as follows:

Outstanding at January 29, 2023

Outstanding at April 30, 2023

At April 30, 2023, the Company had unrecognized compensation expense of $ 10.9 million related to the restricted stock awards, which is expected to be recognized over a weighted average period of 2.9 years.

Outstanding at July 30, 2023

At July 30, 2023, the Company had unrecognized compensation expense of $ 10.0 million related to the restricted stock awards, which is expected to be recognized over a weighted average period of 2.6 years.

PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

April 30, 2023

July 30, 2023

January 29, 2023

17 unchanged sentences

Three Months Ended

April 30, 2023

Six Months Ended

July 30, 2023

July 31, 2022

July 30, 2023

July 31, 2022

(in thousands)

6 unchanged sentences

Contract assets and liabilities on the Company’s consolidated balance sheets are presented in the following table:

April 30, 2023

July 30, 2023

January 29, 2023

5 unchanged sentences

Gift card breakage is recorded within Net sales on the Company’s consolidated statement of operations.

The following table provides the reconciliation of the contract liability related to gift cards for the nine months ended:

April 30, 2023

The following table provides the reconciliation of the contract liability related to gift cards for the six months ended:

July 30, 2023

July 31, 2022

(in thousands)

4 unchanged sentences

Balance as of end of period

The provision for income taxes for the interim period is based on an estimate of the annual effective tax rate adjusted to reflect the impact of discrete items.

Management judgment is required in projecting ordinary income to estimate the Company’s annual effective tax rate.

The effective tax rate related to controlling interest was 27 % and 25 % for the three months ended April 30, 2023 and May 1, 2022, respectively.

For the six months ended July 30, 2023, the Company has utilized the discrete effective tax rate method as allowed by Accounting Standards Codification ("ASC") 740-270-30-18, Income Taxes – Interim Reporting to calculate its interim tax provision.

The discrete method treats the year-to-date period as if it was the annual period and determines the income tax expense or benefit on that basis.

The Company believes that, at this time, the use of this discrete method is more appropriate than the annual effective tax rate method.

The effective tax rate related to controlling interest was 22 % for the six months ended July 30, 2023 and 21 % for the six months ended July 31, 2022.

The income from TRI was excluded from the calculation of the Company’s effective tax rate, as TRI is a limited liability company and not subject to income taxes.

12 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