NEW YORK--(BUSINESS WIRE)--
Vince Holding Corp. (NYSE:VNCE), a leading global luxury apparel and
accessories brand (“Vince” or the “Company”), today reported unaudited
results for the fourth quarter and fiscal year 2016 ended January 28,
2017.
In this press release, the Company is presenting its financial results
in conformity with U.S. generally accepted accounting principles
("GAAP") as well as on an "adjusted" basis. Adjusted results presented
in this press release are non-GAAP financial measures. In addition, the
Company is presenting an estimated impact to EPS related to certain
asset impairment charges as well as the valuation allowance that was
recorded against the Company’s deferred tax assets in the fourth quarter
of 2016. Certain components included in the calculation of such impact
are non-GAAP measures. See "Non-GAAP Financial Measures" below for more
information about the Company's use of non-GAAP financial measures and
Exhibits 3, 4, and 5 to this press release for a reconciliation of GAAP
measures to such non-GAAP measures.
For the fourth quarter ended January 28, 2017:
-
Net sales decreased 21.9% to $63.9 million from $81.8 million in the
fourth quarter of fiscal 2015.
-
Operating loss was $62.9 million, which includes $55.1 million in
non-cash long-lived asset impairment charges, of which $53.1 million
were related to goodwill and the tradename intangible asset and $2.1
million were related to property and equipment of certain retail
stores, compared to operating income of $4.8 million for the fourth
quarter of fiscal 2015. In the fourth quarter of fiscal 2015, the
Company recorded a benefit from the recovery on the inventory
write-down taken in the second quarter of fiscal 2015 and the
favorable adjustment to management transition costs, totaling $2.5
million.
-
Net loss was $162.1 million, or $3.28 per share, including an
estimated impact of $3.13 per share related to the aforementioned
non-cash long-lived asset impairment charges as well as the valuation
allowance recorded against the Company’s deferred tax assets (please
refer to Exhibit 3). This compares to net income of $1.8 million, or
$0.05 per diluted share, for the fourth quarter of fiscal 2015, which
included a $0.04 per diluted share benefit from the recovery on the
inventory write-down and favorable adjustment to management transition
costs.
-
The Company ended the fourth quarter with 54 company-operated stores.
Brendan Hoffman, Chief Executive Officer, commented, “Results for the
fourth quarter came in below our expectations, due primarily to
challenges related to our systems conversion, which led to delayed
shipments of Spring product and off-price shipments, as well as lower
than expected performance in our pre-Spring collection. Despite these
recent challenges, we are encouraged by the improved performance we have
seen in our direct-to-consumer channel in the first quarter, led by our
e-commerce business as a result of enhancements we have made to the
website and the positive response that we have driven with our marketing
and social media efforts. Overall, 2016 was largely a year for us to
reset and transition the business, as we have made great strides to
establish a foundation from which we can build Vince in a sustainable
way. As we look to 2017, we have made the prudent decision to suspend
our sales and EPS guidance as we work to make our new systems more
efficient and complete our business transition. This decision to suspend
guidance was further driven by the difficult retail environment in which
we continue to operate. That said, we remain focused on expanding our
direct-to-consumer business, optimizing our wholesale channel, and
growing our international presence over the long-term.”
Marc Leder, Chairman of the Vince Board of Directors, stated, “We
believe that Vince remains a strong brand with a loyal customer
following. While we recognize that the apparel industry remains
challenging and there is still work to be done, we believe that the
management team has made important strides in resetting the brand and we
continue to support efforts to drive improved performance in the
business.”
Fourth Quarter Review:
-
Net sales decreased 21.9% to $63.9 million from $81.8 million in the
fourth quarter of fiscal 2015. Wholesale segment net sales decreased
28.4% to $34.4 million primarily due to a reduction in both off-price
and replenishment orders, as well as an increase in allowances.
Direct-to-consumer segment net sales decreased 12.6% to $29.4 million
compared to the fourth quarter of fiscal 2015. Comparable sales
decreased 20.5%, including e-commerce sales, as a result of declines
in the number of transactions, due to reduced traffic, and a decrease
in average order value.
-
Gross profit was $29.2 million, or 45.7% of net sales. This compares
to gross profit of $41.0 million, or 50.1% of net sales, in the fourth
quarter of fiscal 2015, which included a $2.2 million benefit from the
recovery on inventory write-downs taken in the second quarter of 2015.
Excluding this benefit, gross profit was $38.8 million, or 47.5% of
net sales, in the fourth quarter of 2015. The decrease in the gross
profit rate for the fourth quarter of 2016 reflected an increase in
product costs, supply chain expenses, and allowances relative to the
decrease in net sales, partially offset by a favorable impact from a
channel mix shift and inventory reserves.
-
Selling, general, and administrative expenses were $39.1 million, or
61.1% of sales. This includes a $2.1 million non-cash asset impairment
charge related to property and equipment of certain retail stores. In
the fourth quarter of fiscal 2015, SG&A was $36.2 million, or 44.2% of
sales, which included a $0.3 million favorable adjustment to
management transition costs taken in the second quarter. The remaining
increase in SG&A was driven by lower incentive compensation offset by
increased product development costs, strategic investments, and an
increase in rent and occupancy costs associated with six new store
openings since the fourth quarter of fiscal 2015.
For the fiscal year ended January 28, 2017:
-
Net sales decreased 11.3% to $268.2 million from $302.5 million during
fiscal year 2015. Wholesale segment net sales decreased 15.5% to
$170.1 million and direct-to-consumer segment net sales decreased 3.1%
to $98.1 million compared to fiscal year 2015. Comparable store sales
decreased 16.2% compared to the prior year period, including
e-commerce sales.
-
Net loss was $162.7 million, or $3.50 per share, which includes an
estimated impact of $3.33 per share related to the non-cash long-lived
asset impairment charges as well as the valuation allowance recorded
against the Company’s deferred tax assets (please refer to Exhibit 3).
This compares to net income of $5.1 million, or $0.14 per diluted
share, in fiscal 2015, which includes a $7.7 million, or $0.20 per
share, net charge associated with the write-down of excess inventory
and aged product to expected net realizable value incurred in the
second quarter and subsequent recovery of inventory in each of the
third and fourth quarters, as well as net management transition costs.
Balance Sheet
The Company ended the fourth quarter with $21.0 million in cash and cash
equivalents and $50.2 million of borrowings under its debt agreements.
Inventory at the end of the fourth quarter of fiscal 2016 was $38.5
million compared to $36.6 million at the end of the fourth quarter of
fiscal 2015. The year-over-year inventory increase was primarily due to
lower inventory reserves as a result of less excess and aged inventory.
Capital expenditures for the fourth quarter of fiscal 2016 totaled $1.6
million, primarily attributable to the investment in our new systems and
related infrastructure.
Going Concern
In accordance with new accounting guidance that became effective for the
Company’s fiscal year ended January 28, 2017, management has concluded
that there is substantial doubt about the Company’s ability to continue
as a going concern for the twelve months following the date that the
financial statements are issued, specifically relating to its ability to
comply with the consolidated net total leverage ratio under its term
loan facility. The Company’s assessment did not take into account
management’s plans to mitigate such substantial doubt that could be
reasonably possible of occurring but are not final, including
discussions with lenders and with its majority shareholder on additional
financing options and actions to improve the capital structure of the
Company.
As of January 28, 2017, the Company was in compliance with applicable
financial covenants.
Please refer to Part I, Item 1A. Risk Factors and Note 1 of the
consolidated audited financial statements included in the Company’s
Annual Report on Form 10-K for the period ended January 28, 2017 for
more details and risks associated with the management’s conclusion.
Material Weaknesses
As a result of management’s assessment of the effectiveness of the
Company’s internal control over financial reporting as of January 28,
2017, the Company identified deficiencies in internal control over
financial reporting that were assessed as material weaknesses. The
Company has subsequently performed additional analysis, substantive
testing and other post-closing procedures to ensure that its
consolidated financial statements were prepared in accordance with U.S.
GAAP. Accordingly, management believes that its consolidated financial
statements fairly present its financial condition, results of operations
and cash flows for the periods stated, in all material respects.
The Company is taking specific steps to remediate these material
weaknesses by implementing and enhancing its control procedures. These
material weaknesses will not be remediated until all necessary internal
controls have been implemented, tested and determined to be operating
effectively. Until the controls are remediated, the Company will
continue to perform additional analysis, substantive testing and other
post-closing procedures to ensure that its consolidated financial
statements are fairly presented and prepared in accordance with U.S.
GAAP. Please refer to Part I, Item 1A. Risk Factors and Part II, Item
9A. of the Company’s Annual Report on Form 10-K for the period ended
January 28, 2017 for more details on these material weaknesses.
Non-GAAP Financial Measures
In addition to reporting financial results in accordance with GAAP, the
Company has provided, with respect to financial results relating to the
fourth quarter and fifty-two week period of fiscal 2015, adjusted cost
of products sold, adjusted gross margin, adjusted selling, general and
administrative expenses, adjusted operating income, adjusted income
before taxes, adjusted income taxes, adjusted net income and adjusted
earnings per share, which are non-GAAP financial measures, in order to
eliminate the effect on operating results of the inventory write-down
for excess and aged product and management transition costs. The Company
believes that the presentation of these non-GAAP measures facilitates an
understanding of the Company's continuing operations without the impact
associated with the inventory write-down and management transition
costs. In addition, with respect to the fourth quarter and the fifty-two
week period of fiscal 2016, the Company has provided an estimated impact
to EPS related to certain asset impairment charges as well as the
valuation allowance recorded against the Company’s deferred tax assets
in the fourth quarter of 2016. Certain components included in the
calculation of such impact are non-GAAP measures. Non-GAAP financial
measures should not be considered in isolation from, or as a substitute
for, financial information prepared in accordance with GAAP. A
reconciliation of GAAP to non-GAAP results has been provided in Exhibits
3, 4, and 5 to this press release.
2016 Fourth Quarter Earnings Conference Call
A conference call to discuss the fourth quarter results will be held
today, April 28, 2017, at 8:30 a.m. ET, hosted by Vince Holding Corp.
Chief Executive Officer, Brendan Hoffman, and Chief Financial Officer,
David Stefko. During the conference call, the Company may answer
questions concerning business and financial developments, trends and
other business or financial matters. The Company's responses to these
questions, as well as other matters discussed during the conference
call, may contain or constitute information that has not been previously
disclosed.
Those who wish to participate in the call may do so by dialing (877)
201-0168, conference ID 95795497. Any interested party will also have
the opportunity to access the call via the Internet at http://investors.vince.com/.
To listen to the live call, please go to the website at least 15 minutes
early to register and download any necessary audio software. For those
who cannot listen to the live broadcast, a recording will be available
for 12 months after the date of the event. Recordings may be accessed at http://investors.vince.com/.
ABOUT VINCE
Established in 2002, Vince is a global luxury brand best known for
utilizing luxe fabrications and innovative techniques to create a
product assortment that combines urban utility and modern effortless
style. From its edited core collection of ultra-soft cashmere knits and
cotton tees, Vince has evolved into a global lifestyle brand and
destination for both women’s and men’s apparel and accessories. As of
January 28, 2017, Vince products were sold in prestige distribution
worldwide, including approximately 2,300 distribution locations across
more than 40 countries. With corporate headquarters in New York and its
design studio in Los Angeles, the Company operated 40 full-price retail
stores, 14 outlet stores and its e-commerce site, vince.com. Please
visit www.vince.com
for more information.
This document, and any statements incorporated by reference herein,
contains forward-looking statements under the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include the
statements regarding, among other things, our current expectations about
the Company's future results and financial condition, revenues, store
openings and closings, margins, expenses and earnings and are indicated
by words or phrases such as "may," "will," "should," "believe,"
"expect," "seek," "anticipate," "intend," "estimate," "plan," "target,"
"project," "forecast," "envision" and other similar phrases. Although we
believe the assumptions and expectations reflected in these
forward-looking statements are reasonable, these assumptions and
expectations may not prove to be correct and we may not achieve the
results or benefits anticipated. These forward-looking statements are
not guarantees of actual results, and our actual results may differ
materially from those suggested in the forward-looking statements. These
forward-looking statements involve a number of risks and uncertainties,
some of which are beyond our control, including, without limitation: our
ability to maintain adequate cash flow from operations or availability
under our revolving credit facility to meet our liquidity needs
(including our obligations under the Tax Receivable Agreement with the
Pre-IPO Stockholders); our ability to continue as a going concern; our
ability to successfully operate the newly implemented systems,
processes, and functions recently transitioned from Kellwood Company;
our ability to remediate the identified material weaknesses in our
internal control over financial reporting; our ability to ensure the
proper operation of the distribution facility by a third party logistics
provider recently transitioned from Kellwood; our ability to remain
competitive in the areas of merchandise quality, price, breadth of
selection, and customer service; our ability to anticipate and/or react
to changes in customer demand and attract new customers, including in
connection with making inventory commitments; our ability to control the
level of sales in the off-price channels; our ability to manage excess
inventory in a way that will promote the long-term health of the brand;
changes in consumer confidence and spending; our ability to maintain
projected profit margins; unusual, unpredictable and/or severe weather
conditions; the execution and management of our retail store growth
plans, including the availability and cost of acceptable real estate
locations for new store openings; the execution and management of our
international expansion, including our ability to promote our brand and
merchandise outside the U.S. and find suitable partners in certain
geographies; our ability to expand our product offerings into new
product categories, including the ability to find suitable licensing
partners; our ability to successfully implement our marketing
initiatives; our ability to protect our trademarks in the U.S. and
internationally; our ability to maintain the security of electronic and
other confidential information; serious disruptions and catastrophic
events; changes in global economies and credit and financial markets;
competition; our ability to attract and retain key personnel; commodity,
raw material and other cost increases; compliance with domestic and
international laws, regulations and orders; changes in laws and
regulations; outcomes of litigation and proceedings and the availability
of insurance, indemnification and other third-party coverage of any
losses suffered in connection therewith; tax matters; and other factors
as set forth from time to time in our Securities and Exchange Commission
filings, including under the heading "Item 1A—Risk Factors" in our
Annual Report on Form 10-K and our Quarterly Reports on Form 10Q. We
intend these forward-looking statements to speak only as of the time of
this release and do not undertake to update or revise them as more
information becomes available, except as required by law.
This press release is also available on the Vince Holding Corp. website (http://investors.vince.com/).
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Vince Holding Corp. and Subsidiaries
|
Exhibit (1)
|
|
|
|
|
|
|
Condensed Consolidated Statements of Operations
|
|
|
|
|
|
|
|
(Unaudited, amounts in thousands except
|
|
|
|
percentages, share and per share data )
|
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|
|
|
|
|
|
|
|
|
|
|
|
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|
Three Months Ended
|
|
|
Fiscal Year
|
|
|
|
|
|
January 28,
|
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|
January 30,
|
|
|
January 28,
|
|
|
January 30,
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
Net sales
|
|
|
$
|
63,879
|
|
|
$
|
81,763
|
|
|
$
|
268,199
|
|
|
$
|
302,457
|
|
|
Cost of products sold
|
|
|
|
34,663
|
|
|
|
40,782
|
|
|
|
145,380
|
|
|
|
169,941
|
|
|
Gross profit
|
|
|
|
29,216
|
|
|
|
40,981
|
|
|
|
122,819
|
|
|
|
132,516
|
|
|
as a % of net sales
|
|
|
|
45.7
|
%
|
|
|
50.1
|
%
|
|
|
45.8
|
%
|
|
|
43.8
|
%
|
|
Impairment of goodwill and indefinite-lived intangible asset
|
|
|
|
53,061
|
|
|
|
—
|
|
|
|
53,061
|
|
|
|
—
|
|
|
Selling, general and administrative expenses
|
|
|
|
39,087
|
|
|
|
36,157
|
|
|
|
134,430
|
|
|
|
116,790
|
|
|
as a % of net sales
|
|
|
|
61.1
|
%
|
|
|
44.2
|
%
|
|
|
50.1
|
%
|
|
|
38.6
|
%
|
|
(Loss) income from operations
|
|
|
|
(62,932
|
)
|
|
|
4,824
|
|
|
|
(64,672
|
)
|
|
|
15,726
|
|
|
as a % of net sales
|
|
|
|
(98.5
|
)%
|
|
|
5.9
|
%
|
|
|
(24.1
|
)%
|
|
|
5.2
|
%
|
|
Interest expense, net
|
|
|
|
1,023
|
|
|
|
1,313
|
|
|
|
3,932
|
|
|
|
5,680
|
|
|
Other expense, net
|
|
|
|
(50
|
)
|
|
|
343
|
|
|
|
329
|
|
|
|
1,733
|
|
|
(Loss) income before income taxes
|
|
|
|
(63,905
|
)
|
|
|
3,168
|
|
|
|
(68,933
|
)
|
|
|
8,313
|
|
|
Provision for income taxes
|
|
|
|
98,243
|
|
|
|
1,390
|
|
|
|
93,726
|
|
|
|
3,214
|
|
|
Net (loss) income
|
|
|
$
|
(162,148
|
)
|
|
$
|
1,778
|
|
|
$
|
(162,659
|
)
|
|
$
|
5,099
|
|
|
(Loss) earnings per share:
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|
|
|
|
|
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|
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|
|
|
|
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Basic (loss) earnings per share
|
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|
$
|
(3.28
|
)
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|
$
|
0.05
|
|
|
$
|
(3.50
|
)
|
|
$
|
0.14
|
|
|
Diluted (loss) earnings per share
|
|
|
$
|
(3.28
|
)
|
|
$
|
0.05
|
|
|
$
|
(3.50
|
)
|
|
$
|
0.14
|
|
|
Weighted average shares outstanding:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
49,423,148
|
|
|
|
36,778,413
|
|
|
|
46,420,533
|
|
|
|
36,770,430
|
|
|
Diluted
|
|
|
|
49,423,148
|
|
|
|
36,779,438
|
|
|
|
46,420,533
|
|
|
|
37,529,227
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|
|
|
|
|
|
|
|
|
|
|
|
Vince Holding Corp. and Subsidiaries
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|
|
Exhibit (2)
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|
|
|
|
|
|
Condensed Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
(Unaudited, amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 28,
|
|
|
January 30,
|
|
|
|
|
|
2017
|
|
|
2016
|
|
ASSETS
|
|
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|
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Current assets:
|
|
|
|
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|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
20,978
|
|
|
$
|
6,230
|
|
Trade receivables, net
|
|
|
|
|
10,336
|
|
|
|
9,400
|
|
Inventories, net
|
|
|
|
|
38,529
|
|
|
|
36,576
|
|
Prepaid expenses and other current assets
|
|
|
|
|
4,768
|
|
|
|
8,027
|
|
Total current assets
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|
|
|
|
74,611
|
|
|
|
60,233
|
|
Property, plant and equipment, net
|
|
|
|
|
42,945
|
|
|
|
37,769
|
|
Intangible assets, net
|
|
|
|
|
77,698
|
|
|
|
109,046
|
|
Goodwill
|
|
|
|
|
41,435
|
|
|
|
63,746
|
|
Deferred income taxes and other assets
|
|
|
|
|
2,791
|
|
|
|
92,774
|
|
Total assets
|
|
|
|
$
|
239,480
|
|
|
$
|
363,568
|
|
|
|
|
|
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|
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|
LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
37,022
|
|
|
$
|
28,719
|
|
Accrued salaries and employee benefits
|
|
|
|
|
3,427
|
|
|
|
5,755
|
|
Other accrued expenses
|
|
|
|
|
9,992
|
|
|
|
37,174
|
|
Total current liabilities
|
|
|
|
|
50,441
|
|
|
|
71,648
|
|
Long-term debt
|
|
|
|
|
48,298
|
|
|
|
57,615
|
|
Deferred rent
|
|
|
|
|
16,892
|
|
|
|
14,965
|
|
Other liabilities
|
|
|
|
|
137,830
|
|
|
|
140,838
|
|
Stockholders' (deficit) equity
|
|
|
|
|
(13,981
|
)
|
|
|
78,502
|
|
Total liabilities and stockholders' equity
|
|
|
|
$
|
239,480
|
|
|
$
|
363,568
|
|
|
|
|
|
|
|
|
|
|
|
Vince Holding Corp. and Subsidiaries
|
Exhibit (3)
|
|
|
|
|
|
|
|
Estimated Impact of Impairment Charges and Valuation Allowance
on
|
|
|
|
|
Fiscal 2016 Net Loss and Loss per Share
|
|
|
|
|
|
|
|
|
|
(Unaudited, amounts in thousands except percentages, share and
per share
|
|
|
|
|
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended January 28, 2017
|
|
|
|
|
|
|
|
|
Estimated impact on
|
|
|
|
|
Loss before
income taxes
|
|
|
Provision for
Income Taxes
|
|
|
|
Net
Loss
|
|
|
Loss per
Share (b)
|
|
|
Goodwill Impairment Charge
|
|
$
|
(22,311
|
)
|
|
$
|
(9,098
|
)
|
(a)
|
|
$
|
(13,213
|
)
|
|
$
|
(0.27
|
)
|
|
Tradename Impairment Charge
|
|
|
(30,750
|
)
|
|
|
(12,540
|
)
|
(a)
|
|
|
(18,210
|
)
|
|
|
(0.37
|
)
|
|
Retail Store Impairment Charge
|
|
|
(2,082
|
)
|
|
|
(849
|
)
|
(a)
|
|
|
(1,233
|
)
|
|
|
(0.02
|
)
|
|
Valuation allowance against deferred tax assets
|
|
|
—
|
|
|
|
121,836
|
|
|
|
|
(121,836
|
)
|
|
|
(2.47
|
)
|
|
Total
|
|
$
|
(55,143
|
)
|
|
$
|
99,349
|
|
|
|
$
|
(154,492
|
)
|
|
$
|
(3.13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the twelve months ended January 28, 2017
|
|
|
|
|
|
|
|
|
Estimated impact on
|
|
|
|
|
Loss before
income taxes
|
|
|
Provision for
Income Taxes
|
|
|
|
Net
Loss
|
|
|
Loss per
Share (c)
|
|
|
Goodwill Impairment Charge
|
|
$
|
(22,311
|
)
|
|
$
|
(9,098
|
)
|
(a)
|
|
$
|
(13,213
|
)
|
|
$
|
(0.28
|
)
|
|
Tradename Impairment Charge
|
|
|
(30,750
|
)
|
|
|
(12,540
|
)
|
(a)
|
|
|
(18,210
|
)
|
|
|
(0.39
|
)
|
|
Retail Store Impairment Charge
|
|
|
(2,082
|
)
|
|
|
(849
|
)
|
(a)
|
|
|
(1,233
|
)
|
|
|
(0.03
|
)
|
|
Valuation allowance against deferred tax assets
|
|
|
—
|
|
|
|
121,836
|
|
|
|
|
(121,836
|
)
|
|
|
(2.62
|
)
|
|
Total
|
|
$
|
(55,143
|
)
|
|
$
|
99,349
|
|
|
|
$
|
(154,492
|
)
|
|
$
|
(3.33
|
)
|
|
|
|
(a) Based on a normalized tax rate of 40.8%, derived by
reference to statutory rates in the jurisdictions in which the
Company operates, without giving effect to the Company’s valuation
allowance.
|
|
|
|
(b) Based on 49,423,148 weighted-average shares
outstanding.
|
|
|
|
(c) Based on 46,420,533 weighted-average shares
outstanding.
|
|
|
|
|
|
|
|
|
|
Vince Holding Corp. and Subsidiaries
|
Exhibit (4)
|
|
|
|
|
|
|
Reconciliation of net income on a GAAP basis to “Adjusted net
income”
|
|
|
|
|
|
|
|
(Unaudited, amounts in thousands except percentages, share and
per share
|
|
|
|
data)
|
|
|
|
|
|
|
|
For the three months ended January 30, 2016
|
|
|
|
|
|
|
As Reported
|
|
|
Adjustments
|
|
|
As Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
|
81,763
|
|
|
|
|
|
|
$
|
81,763
|
|
|
Cost of products sold
|
|
|
|
|
40,782
|
|
|
$
|
2,161
|
|
(a)
|
|
42,943
|
|
|
Gross profit
|
|
|
|
|
40,981
|
|
|
|
(2,161
|
)
|
|
|
38,820
|
|
|
as a % of sales
|
|
|
|
|
50.1
|
%
|
|
|
|
|
|
|
47.5
|
%
|
|
Selling, general and administrative expenses
|
|
|
|
|
36,157
|
|
|
|
323
|
|
(b)
|
|
36,480
|
|
|
as a % of sales
|
|
|
|
|
44.2
|
%
|
|
|
|
|
|
|
44.6
|
%
|
|
Income from operations
|
|
|
|
|
4,824
|
|
|
|
(2,484
|
)
|
|
|
2,340
|
|
|
as a % of sales
|
|
|
|
|
5.9
|
%
|
|
|
|
|
|
|
2.9
|
%
|
|
Interest expense, net
|
|
|
|
|
1,313
|
|
|
|
|
|
|
|
1,313
|
|
|
Other expense, net
|
|
|
|
|
343
|
|
|
|
|
|
|
|
343
|
|
|
Income before income taxes
|
|
|
|
|
3,168
|
|
|
|
(2,484
|
)
|
|
|
684
|
|
|
Provision for Income taxes
|
|
|
|
|
1,390
|
|
|
|
(1,018
|
)
|
(c)
|
|
372
|
|
|
Net income
|
|
|
|
$
|
1,778
|
|
|
$
|
(1,466
|
)
|
|
$
|
312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
|
$
|
0.05
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.01
|
|
|
Diluted earnings per share
|
|
|
|
$
|
0.05
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic shares
|
|
|
|
|
36,778,413
|
|
|
|
|
|
|
|
36,778,413
|
|
|
Diluted shares
|
|
|
|
|
36,779,438
|
|
|
|
|
|
|
|
36,779,438
|
|
|
(a)
|
|
To adjust cost of products sold to remove the favorable impact of
the recovery on inventory write downs taken in the second quarter
of approximately $2.2 million.
|
|
(b)
|
|
To adjust selling, general and administrative expenses to remove
the favorable impact of the reversal of severance expense taken in
the second quarter of approximately $0.3 million.
|
|
(c)
|
|
Adjusted amount represents adjusted pretax income multiplied by a
normalized tax rate of 41%. The normalized tax rate was derived by
reference to statutory tax rates in the jurisdictions in which the
Company operates, without giving effect to the Company’s valuation
allowance or potential use of its net operating loss carryforwards.
|
|
|
|
|
|
|
|
|
|
Vince Holding Corp. and Subsidiaries
|
Exhibit (5)
|
|
|
|
|
|
Reconciliation of net income on a GAAP basis to “Adjusted net
income”
|
|
|
|
|
|
|
|
(Unaudited, amounts in thousands except percentages, share and
per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the twelve months ended January 30, 2016
|
|
|
|
|
|
As Reported
|
|
|
Adjustments
|
|
|
|
As Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
302,457
|
|
|
|
|
|
|
|
$
|
302,457
|
|
|
Cost of products sold
|
|
|
|
169,941
|
|
|
$
|
(10,300
|
)
|
(a)
|
|
|
159,641
|
|
|
Gross profit
|
|
|
|
132,516
|
|
|
|
10,300
|
|
|
|
|
142,816
|
|
|
as a % of sales
|
|
|
|
43.8
|
%
|
|
|
|
|
|
|
|
47.2
|
%
|
|
Selling, general and administrative expenses
|
|
|
|
116,790
|
|
|
|
(2,702
|
)
|
(b)
|
|
|
114,088
|
|
|
as a % of sales
|
|
|
|
38.6
|
%
|
|
|
|
|
|
|
|
37.7
|
%
|
|
Income from operations
|
|
|
|
15,726
|
|
|
|
13,002
|
|
|
|
|
28,728
|
|
|
as a % of sales
|
|
|
|
5.2
|
%
|
|
|
|
|
|
|
|
9.5
|
%
|
|
Interest expense, net
|
|
|
|
5,680
|
|
|
|
|
|
|
|
|
5,680
|
|
|
Other expense, net
|
|
|
|
1,733
|
|
|
|
|
|
|
|
|
1,733
|
|
|
Income before income taxes
|
|
|
|
8,313
|
|
|
|
13,002
|
|
|
|
|
21,315
|
|
|
Provision for Income taxes
|
|
|
|
3,214
|
|
|
|
5,331
|
|
(c)
|
|
|
8,545
|
|
|
Net Income
|
|
|
$
|
5,099
|
|
|
$
|
7,671
|
|
|
|
$
|
12,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
$
|
0.14
|
|
|
$
|
0.21
|
|
|
|
$
|
0.35
|
|
|
Diluted earnings per share
|
|
|
$
|
0.14
|
|
|
$
|
0.20
|
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic shares
|
|
|
|
36,770,430
|
|
|
|
|
|
|
|
|
36,770,430
|
|
|
Diluted shares
|
|
|
|
37,529,227
|
|
|
|
|
|
|
|
|
37,529,227
|
|
|
(a)
|
|
To adjust cost of products sold to remove the net impact of
inventory write downs of approximately $10.3 million primarily
related to excess out of season and current inventory.
|
|
(b)
|
|
To adjust selling, general and administrative expenses to remove
executive severance costs of $3.4 million and executive search
costs of $0.6 million partially offset by the favorable impact of
$(1.3) million related to executive stock option forfeitures.
|
|
(c)
|
|
Adjusted amount represents adjusted pretax income multiplied by a
normalized tax rate of 41%. The normalized tax rate was derived by
reference to statutory tax rates in the jurisdictions in which the
Company operates, without giving effect to the Company’s valuation
allowance or potential use of its net operating loss carryforwards.
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170428005189/en/
Source: Vince Holding Corp.