8-K
J.Jill, Inc. (JILL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 5, 2023
J.JILL, INC.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-38026 | 45-1459825 |
|---|---|---|
| (State or Other Jurisdiction<br><br>of Incorporation) | (Commission<br><br>File Number) | (I.R.S. Employer<br><br>Identification No.) |
4 Batterymarch Park
Quincy, MA 02169
(Address of Principal Executive Offices) (Zip Code)
(617) 376-4300
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.01 par value | JILL | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Conditions.
On December 5, 2023, J.Jill, Inc. issued a press release to announce its financial results for the third quarter ended October 28, 2023. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated herein by reference.
The information in this report (including Exhibit 99.1) shall not be deemed to be “filed” for purposes of Section 18, of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated December 5, 2023, announcing financial results for the third quarter ended October 28, 2023. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Dated: December 5, 2023
| J.JILL, INC. | |
|---|---|
| By: | /s/ Mark Webb |
| Name: | Mark Webb |
| Title: | Executive Vice President, Chief Financial Officer and Chief Operating Officer |
EX-99.1
EXHIBIT 99.1
J.JILL, INC. ANNOUNCES THIRD QUARTER 2023 RESULTS
Net Sales of $150.1 Million vs. $150.2 Million in Q3 FY2022; Total Company Comparable Sales Up 1.9% vs. Q3 FY2022
Gross Margin Increase 190bps vs. Q3 FY2022 to 71.8%
Operating Income Margin Increase 220bps vs. Q3 FY2022 to 14.7%
Quincy, MA – December 5, 2023 – J.Jill, Inc. (NYSE:JILL) today announced financial results for the third quarter ended October 28, 2023.
Claire Spofford, President and Chief Executive Officer of J.Jill, Inc. stated, "Our performance continues to reflect the disciplined execution of our business by the team especially amidst a very dynamic consumer environment. Our results are supported by solid full price selling across our channels and underscores our ability to continue to deliver product and assortments that are versatile, modern and that appeal to our loyal customer. As we look to the remainder of the year, while we have seen our customer become more discerning with her spend, we believe we are well positioned to deliver on our objectives for the year.”
For the third quarter ended October 28, 2023:
• Total net sales for the thirteen weeks ended October 28, 2023 were down 0.1% to $150.1 million compared to $150.2 million for the thirteen weeks ended October 29, 2022.
• Total company comparable sales, which includes comparable store and direct to consumer sales, increased by 1.9%.
• Direct to consumer net sales, which represented 45.3% of sales, were down 0.5% compared to the third quarter of fiscal 2022.
• Gross profit was $107.8 million compared to $105.0 million in the third quarter of fiscal 2022. Gross margin was 71.8% compared to 69.9% in the third quarter of fiscal 2022.
• SG&A was $85.7 million compared to $84.9 million in the third quarter of fiscal 2022. In comparing the third quarter of fiscal 2023 to fiscal 2022, excluding non-recurring and other one-time costs, SG&A as a percentage of total net sales was 57.5% compared to 56.5% in the third quarter of fiscal 2022.
• Income from operations was $22.1 million compared to $18.9 million in the third quarter of fiscal 2022. Adjusted Income from Operations*, which excludes adjustments for costs to exit retail stores as well as impairment charges was $21.5 million compared to $20.2 million in the third quarter of fiscal 2022.
• Interest expense was $5.8 million compared to $5.4 million in the third quarter of fiscal 2022.
• During the third quarter of fiscal 2023, the Company recorded an income tax provision of $4.7 million compared to $4.5 million in the third quarter of fiscal 2022 and the effective tax rate was 28.9% compared to 33.5% in the third quarter of fiscal 2022.
• Net income was $11.6 million compared to $8.9 million in the third quarter of fiscal 2022.
• Net Income per Diluted Share was $0.80 compared to $0.62 in the third quarter of fiscal 2022 including the impact of non-recurring items. Excluding the impact of these items, Adjusted Net Income per Diluted Share* in the third quarter of fiscal 2023 was $0.78 compared to $0.77 in the third quarter of fiscal 2022.
• Adjusted EBITDA* for the third quarter of fiscal 2023 was $28.3 million compared to $27.5 million in the third quarter of fiscal 2022. Adjusted EBITDA margin* was 18.8% for the third quarter of fiscal 2023 compared to 18.3% for the third quarter fiscal 2022.
• The Company did not open any new stores in the third quarter of fiscal 2023 and ended the quarter with 245 stores.
For the thirty-nine weeks ended October 28, 2023:
• Total net sales for the thirty-nine weeks ended October 28, 2023 were down 2.7% to $455.2 million compared to $467.6 million for the thirty-nine weeks ended October 29, 2022.
• Total company comparable sales, which includes comparable store and direct to consumer sales, decreased by 0.7%.
• Direct to consumer net sales, which represented 45.0% of sales, were down 4.5% compared to the thirty-nine weeks ended October 29, 2022.
• Gross profit was $326.8 million compared to $327.0 million in the thirty-nine weeks ended October 29, 2022. Gross margin was 71.8% compared to 69.9% in the thirty-nine weeks ended October 29, 2022. The year over year gross margin increase benefited from lower freight costs compared to the thirty-nine weeks ended October 29, 2022.
• SG&A was $251.2 million compared to $254.6 million in the thirty-nine weeks ended October 29, 2022. In comparing the thirty-nine weeks ended October 28, 2023 to the thirty-nine weeks ended October 29, 2022, excluding non-recurring and other one-time costs, SG&A as a percentage of total net sales was 55.3% compared to 54.5% in the thirty-nine weeks ended October 29, 2022.
• Income from operations was $75.6 million compared to $70.9 million in the thirty-nine weeks ended October 29, 2022. Adjusted Income from Operations*, which excludes adjustments for costs to exit retail stores as well as impairment charges was $75.0 million compared to $72.1 million in the thirty-nine weeks ended October 29, 2022.
• Interest expense was $18.1 million compared to $14.4 million in the thirty-nine weeks ended October 29, 2022.
• During the thirty-nine weeks ended October 28, 2023, the Company recorded an income tax provision of $13.3 million compared to $15.4 million in the thirty-nine weeks ended October 29, 2022 and the effective tax rate was 29.8% compared to 27.3% in the thirty-nine weeks ended October 29, 2022.
• Net income was $31.4 million compared to $41.1 million in the thirty-nine weeks ended October 29, 2022.
• Net Income per Diluted Share was $2.19 compared to $2.89 in the thirty-nine weeks ended October 29, 2022 including the impact of non-recurring items and a $12.7 million Loss on debt refinancing as part of the Company's Term Loan refinancing in the first quarter of fiscal 2023. Excluding the impact of these items, Adjusted Net Income per Diluted Share* in the thirty-nine weeks ended October 28, 2023 was $2.85 compared to $3.02 in the thirty-nine weeks ended October 29, 2022. The decrease in the thirty-nine weeks ended October 28, 2023 was driven by higher interest expense.
• Adjusted EBITDA* for the thirty-nine weeks ended October 28, 2023 was $94.7 million compared to $94.4 million in the thirty-nine weeks ended October 29, 2022. Adjusted EBITDA margin* for the thirty-nine weeks ended October 28, 2023 was 20.8% compared to 20.2% in the thirty-nine weeks ended October 29, 2022.
• The Company opened 2 new stores in the thirty-nine weeks ended October 28, 2023 and ended the quarter with 245 stores.
Balance Sheet Highlights
• The Company ended the third quarter of fiscal 2023 with $64.1 million in cash and $34.2 million of total availability under its revolving credit agreement.
• Inventory at the end of the third quarter of fiscal 2023, decreased 5.7% to $56.7 million compared to $60.1 million at the end of the third quarter fiscal 2022.
*Non-GAAP financial measures. Please see “Non-GAAP Financial Measures” and “Reconciliation of GAAP Net Income to Adjusted EBITDA, Adjusted Income from Operations and Adjusted Net Income” for more information.
Outlook
For the fourth quarter of fiscal 2023, the Company expects revenues to be approximately flat compared to the fourth quarter of fiscal 2022, and for Adjusted EBITDA to be in the range of $11.0 million and $13.0 million.
For fiscal 2023, the Company continues to expect Adjusted EBITDA dollars to be down in the low-single digits compared to fiscal 2022, including approximately $2.0 million of benefit from the 53rd week in fiscal 2023. The Company also continues to expect total capital expenditures of $18.0 million and a flat store count to end fiscal 2023.
Conference Call Information
A conference call to discuss third quarter 2023 results is scheduled for today, December 5, 2023, at 8:00 a.m. Eastern Time. Those interested in participating in the call are invited to dial (888) 330-3391 or (646) 960-0845 if calling internationally. Please dial in approximately 10 minutes prior to the start of the call and reference Conference ID 2289963 when prompted. A live audio webcast of the conference call will be available online at http://investors.jjill.com/Investors-Relations/News-Events/events.
A taped replay of the conference call will be available approximately two hours following the call and can be accessed both online and by dialing (800) 770-2030 or (647) 362-9199. The pin number to access the telephone replay is 2289963. The telephone replay will be available until Tuesday, December 12, 2023.
About J.Jill, Inc.
J.Jill is a national lifestyle brand that provides apparel, footwear and accessories designed to help its customers move through a full life with ease. The brand represents an easy, thoughtful and inspired style that celebrates the totality of all women and designs its products with its core brand ethos in mind: keep it simple and make it matter. J.Jill offers a high touch customer experience through over 200 stores nationwide and a robust ecommerce platform. J.Jill is headquartered outside Boston. For more information, please visit www.jjill.com or http://investors.jjill.com. The information included on our websites is not incorporated by reference herein.
Non-GAAP Financial Measures
To supplement our unaudited consolidated financial statements presented in accordance with generally accepted accounting principles (“GAAP”), we use the following non-GAAP measures of financial performance:
• Adjusted EBITDA, which represents net income (loss) plus interest expense, provision (benefit) for income taxes, depreciation and amortization, equity-based compensation expense, impairments of goodwill, intangible assets and other long-lived assets, fair value adjustments of warrants and derivatives and other non-recurring expenses, consisting of professional fees, retention expenses and costs related to the COVID-19 pandemic. We present Adjusted EBITDA on a consolidated basis because management uses it as a supplemental measure in assessing our operating performance, and we believe that it is helpful to investors, securities analysts and other interested parties as a measure of our comparative operating performance from period to period. We also use Adjusted EBITDA as one of the primary methods for planning and forecasting overall expected performance of our business and for evaluating on a quarterly and annual basis actual results against such expectations. Further, we recognize Adjusted EBITDA as a commonly used measure in determining business value and as such, use it internally to report results. We also use Adjusted EBITDA margin which represents, for any period, Adjusted EBITDA as a percentage of net sales.
• Adjusted Income (Loss) from Operations, which represents operating income (loss) plus impairments of goodwill, intangible assets and other long-lived assets and other non-recurring expense and one-time items. We present Adjusted Income (Loss) from Operations because management uses it as a supplemental measure in assessing our operating performance, and we believe that it is helpful to investors, securities analysts, and other interested parties as a measure of our comparative operating performance from period to period.
• Adjusted Net Income (Loss), which represents net income (loss) plus impairments of goodwill, intangible assets and other long-lived assets, fair value adjustments of warrants and derivatives and other non-recurring expenses and one-time items. We present Adjusted Net Income (Loss) because management uses it as a supplemental measure in assessing our
operating performance, and we believe that it is helpful to investors, securities analysts and other interested parties as a measure of our comparative operating performance from period to period.
• Adjusted Net Income per Diluted Share (“Adjusted Diluted EPS”) represents Adjusted Net Income (Loss) divided by the number of fully diluted shares outstanding. Adjusted Diluted EPS is presented as a supplemental measure in assessing our operating performance, and we believe that it is helpful to investors, securities analysts and other interested parties as a measure of our comparative operating performance from period to period.
While we believe that Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS are useful in evaluating our business, they are non-GAAP financial measures that have limitations as analytical tools. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS should not be considered alternatives to, or substitutes for, Net Income (Loss), Income (Loss) from Operations or Net Income (Loss) per Diluted Share, which are calculated in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS differently or not at all, which reduces the usefulness of such non-GAAP financial measures as tools for comparison. We recommend that you review the reconciliation and calculation of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS to Net Income (Loss), Income (Loss) from Operations and Net Income (Loss) per Diluted Share, the most directly comparable GAAP financial measures, under “Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA,” “Reconciliation of GAAP Operating Income to Adjusted Income from Operations” and “Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income” and not rely solely on Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss), Adjusted Diluted EPS or any single financial measure to evaluate our business.
Forward-Looking Statements
This press release contains, and oral statements made from time to time by our representatives may contain, “forward-looking statements.” All statements that address activities, events or developments that we intend, expect or believe may occur in the future are forward-looking statements, including, among others, statements under “Outlook” and other statements identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects,” “goal,” “target” (although not all forward-looking statements contain these identifying words) and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements are based on our current expectations and assumptions regarding capital market conditions, our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are inherently subject to a number of risks, uncertainties, potentially inaccurate assumptions and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, regional, national or global political, economic, business, competitive, market and regulatory conditions, including risks regarding: (1) our ability to successfully expand and increase sales, including by opening new retail stores on a profitable basis, to maintain and enhance a strong brand image, and to optimize our omnichannel operations; (2) changes in consumer confidence, preference and spending, and our ability to adapt to such changes; (3) the competitive environment we operate in; (4) post-pandemic changes in consumer behavior and the timeline of overall economic recovery; (5) our level of indebtedness and ability to work with lenders to pursue options to refinance; and (6) other factors that may be described in our filings with the Securities and Exchange Commission (the “SEC”), including the factors set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 28, 2023. You are encouraged to read our filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. We caution investors, potential investors and others not to place considerable reliance on the forward-looking statements in this press release and in the oral statements made by our representatives. Any such forward-looking statement speaks only as of the date on which it is made. J.Jill undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
(Tables Follow)
J.Jill, Inc.
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
(Amounts in thousands, except share and per share data)
| For the Thirteen Weeks Ended | ||||
|---|---|---|---|---|
| October 28, 2023 | October 29, 2022 | |||
| Net sales | $ | 150,125 | $ | 150,204 |
| Costs of goods sold | 42,283 | 45,181 | ||
| Gross profit | 107,842 | 105,023 | ||
| Selling, general and administrative expenses | 85,694 | 84,873 | ||
| Impairment of long-lived assets | 21 | 1,300 | ||
| Operating income | 22,127 | 18,850 | ||
| Interest expense, net | 5,794 | 4,348 | ||
| Interest expense, net - related party | — | 1,092 | ||
| Income before provision for income taxes | 16,333 | 13,410 | ||
| Income tax provision | 4,717 | 4,491 | ||
| Net income and total comprehensive income | $ | 11,616 | $ | 8,919 |
| Net income per common share attributable to common shareholders | ||||
| Basic | $ | 0.82 | $ | 0.64 |
| Diluted | $ | 0.80 | $ | 0.62 |
| Weighted average number of common shares outstanding | ||||
| Basic | 14,169,955 | 13,962,467 | ||
| Diluted | 14,448,228 | 14,297,925 |
J.Jill, Inc.
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
(Amounts in thousands, except share and per share data)
| For the Thirty-Nine Weeks Ended | ||||
|---|---|---|---|---|
| October 28, 2023 | October 29, 2022 | |||
| Net sales | $ | 455,214 | $ | 467,616 |
| Costs of goods sold | 128,423 | 140,656 | ||
| Gross profit | 326,791 | 326,960 | ||
| Selling, general and administrative expenses | 251,161 | 254,624 | ||
| Impairment of long-lived assets | 66 | 1,408 | ||
| Operating income | 75,564 | 70,928 | ||
| Loss on debt refinancing | 12,702 | — | ||
| Interest expense, net | 17,008 | 11,553 | ||
| Interest expense, net - related party | 1,074 | 2,823 | ||
| Income (loss) before provision for income taxes | 44,780 | 56,552 | ||
| Income tax provision | 13,346 | 15,413 | ||
| Net income (loss) and total comprehensive income (loss) | $ | 31,434 | $ | 41,139 |
| Net Income (loss) per common share attributable to common shareholders: | ||||
| Basic | $ | 2.22 | $ | 2.95 |
| Diluted | $ | 2.19 | $ | 2.89 |
| Weighted average number of common shares outstanding: | ||||
| Basic | 14,130,734 | 13,922,460 | ||
| Diluted | 14,379,529 | 14,240,486 |
J.Jill, Inc.
Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands, except common share data)
| January 28, 2023 | |||||
|---|---|---|---|---|---|
| Assets | |||||
| Current assets: | |||||
| Cash and cash equivalents | 64,115 | $ | 87,053 | ||
| Accounts receivable | 6,210 | 7,039 | |||
| Inventories, net | 56,652 | 50,585 | |||
| Prepaid expenses and other current assets | 16,629 | 16,143 | |||
| Total current assets | 143,606 | 160,820 | |||
| Property and equipment, net | 53,883 | 53,497 | |||
| Intangible assets, net | 67,981 | 73,188 | |||
| Goodwill | 59,697 | 59,697 | |||
| Operating lease assets, net | 112,389 | 119,118 | |||
| Other assets | 492 | 97 | |||
| Total assets | 438,048 | $ | 466,417 | ||
| Liabilities and Shareholders’ Equity (Deficit) | |||||
| Current liabilities: | |||||
| Accounts payable | 48,981 | $ | 39,306 | ||
| Accrued expenses and other current liabilities | 42,858 | 49,730 | |||
| Current portion of long-term debt | 8,750 | 3,424 | |||
| Current portion of operating lease liabilities | 35,415 | 34,527 | |||
| Total current liabilities | 136,004 | 126,987 | |||
| Long-term debt, net of discount and current portion | 148,731 | 195,517 | |||
| Long-term debt, net of discount and current portion - related party | — | 9,719 | |||
| Deferred income taxes | 10,738 | 10,059 | |||
| Operating lease liabilities, net of current portion | 110,008 | 123,101 | |||
| Other liabilities | 909 | 1,253 | |||
| Total liabilities | 406,390 | 466,636 | |||
| Commitments and contingencies | |||||
| Shareholders’ Equity (Deficit) | |||||
| Common stock, par value 0.01 per share; 50,000,000 shares authorized; 10,603,506 and 10,165,361 shares issued and outstanding at October 28, 2023 and January 28, 2023, respectively | 107 | 102 | |||
| Additional paid-in capital | 212,443 | 212,005 | |||
| Accumulated deficit | (180,892 | ) | (212,326 | ) | |
| Total shareholders’ equity (deficit) | 31,658 | (219 | ) | ||
| Total liabilities and shareholders’ equity (deficit) | 438,048 | $ | 466,417 |
All values are in US Dollars.
J.Jill, Inc.
Reconciliation of GAAP Net Income to Adjusted EBITDA
(Unaudited)
(Amounts in thousands)
| For the Thirteen Weeks Ended | ||||||
|---|---|---|---|---|---|---|
| October 28, 2023 | October 29, 2022 | |||||
| Net income | $ | 11,616 | $ | 8,919 | ||
| Interest expense, net | 5,794 | 4,348 | ||||
| Interest expense, net - related party | — | 1,092 | ||||
| Income tax provision | 4,717 | 4,491 | ||||
| Depreciation and amortization | 5,792 | 6,406 | ||||
| Equity-based compensation expense (a) | 942 | 897 | ||||
| Write-off of property and equipment (b) | 19 | 68 | ||||
| Adjustment for costs to exit retail stores (c) | (632 | ) | — | |||
| Impairment of long-lived assets (d) | 21 | 1,300 | ||||
| Other non-recurring items (e) | — | 2 | ||||
| Adjusted EBITDA | $ | 28,269 | $ | 27,523 | ||
| Net sales | $ | 150,125 | $ | 150,204 | ||
| Adjusted EBITDA margin | 18.8 | % | 18.3 | % |
(a) Represents expenses associated with equity incentive instruments granted to our management and board of directors. Incentive instruments are accounted for as equity-classified awards with the related compensation expense recognized based on fair value at the date of the grant.
(b) Represents the net gain or loss on the disposal of fixed assets.
(c) Represents non-cash adjustments associated with exiting store leases earlier than anticipated.
(d) Represents impairment of long-lived assets related to leasehold improvements.
(e) Represents items management believes are not indicative of ongoing operating performance, including professional fees, retention expenses and costs related to the COVID-19 pandemic.
J.Jill, Inc.
Reconciliation of GAAP Net Income to Adjusted EBITDA
(Unaudited)
(Amounts in thousands)
| For the Thirty-Nine Weeks Ended | ||||||
|---|---|---|---|---|---|---|
| October 28, 2023 | October 29, 2022 | |||||
| Net income | $ | 31,434 | $ | 41,139 | ||
| Interest expense, net | 17,008 | 11,553 | ||||
| Interest expense, net - related party | 1,074 | 2,823 | ||||
| Income tax provision | 13,346 | 15,413 | ||||
| Depreciation and amortization | 16,854 | 19,450 | ||||
| Equity-based compensation expense (a) | 2,757 | 2,615 | ||||
| Write-off of property and equipment (b) | 65 | 231 | ||||
| Loss on debt refinancing (c) | 12,702 | — | ||||
| Adjustment for costs to exit retail stores (d) | (632 | ) | (246 | ) | ||
| Impairment of long-lived assets (e) | 66 | 1,408 | ||||
| Other non-recurring items (f) | 2 | 6 | ||||
| Adjusted EBITDA | $ | 94,676 | $ | 94,392 | ||
| Net sales | $ | 455,214 | $ | 467,616 | ||
| Adjusted EBITDA margin | 20.8 | % | 20.2 | % |
(a) Represents expenses associated with equity incentive instruments granted to our management and board of directors. Incentive instruments are accounted for as equity-classified awards with the related compensation expense recognized based on fair value at the date of the grant.
(b) Represents the net gain or loss on the disposal of fixed assets.
(c) Represents loss on the repayment of Priming Term Loan Credit Agreement and the Subordinated Term Loan Credit Agreement.
(d) Represents non-cash adjustments associated with exiting store leases earlier than anticipated.
(e) Represents impairment of long-lived assets related to leasehold improvements.
(f) Represents items management believes are not indicative of ongoing operating performance, including professional fees, retention expenses and costs related to the COVID-19 pandemic.
J.Jill, Inc.
Reconciliation of GAAP Operating Income to Adjusted Income from Operations
(Unaudited)
(Amounts in thousands)
| For the Thirteen Weeks Ended | ||||||
|---|---|---|---|---|---|---|
| October 28, 2023 | October 29, 2022 | |||||
| Operating income | $ | 22,127 | $ | 18,850 | ||
| Adjustment for costs to exit retail stores (a) | (632 | ) | — | |||
| Impairment of long-lived assets (b) | 21 | 1,300 | ||||
| Other non-recurring items (c) | — | 2 | ||||
| Adjusted income from operations | $ | 21,516 | $ | 20,152 | ||
| For the Thirty-Nine Weeks Ended | ||||||
| October 28, 2023 | October 29, 2022 | |||||
| Operating income | $ | 75,564 | $ | 70,928 | ||
| Adjustment for costs to exit retail stores (a) | (632 | ) | (246 | ) | ||
| Impairment of long-lived assets (b) | 66 | 1,408 | ||||
| Other non-recurring items (c) | 2 | 6 | ||||
| Adjusted income from operations | $ | 75,000 | $ | 72,096 |
(a) Represents non-cash adjustments associated with exiting store leases earlier than anticipated.
(b) Represents impairment of long-lived assets related to leasehold improvements.
(c) Represents items management believes are not indicative of ongoing operating performance, including professional fees, retention expenses and costs related to the COVID-19 pandemic.
J.Jill, Inc.
Reconciliation of GAAP Net Income to Adjusted Net Income
(Unaudited)
(Amounts in thousands, except share and per share data)
| For the Thirteen Weeks Ended | |||||
|---|---|---|---|---|---|
| October 28, 2023 | October 29, 2022 | ||||
| Net income and total comprehensive income | $ | 11,616 | $ | 8,919 | |
| Add: Income tax provision | 4,717 | 4,491 | |||
| Income before provision for income tax | 16,333 | 13,410 | |||
| Add: Adjustment for costs to exit retail stores (a) | (632 | ) | — | ||
| Add: Impairment of long-lived assets (b) | 21 | 1,300 | |||
| Add: Other non-recurring items (c) | — | 2 | |||
| Adjusted income before income tax provision | 15,722 | 14,712 | |||
| Less: Adjusted tax provision (d) | 4,386 | 3,737 | |||
| Adjusted net income | $ | 11,336 | $ | 10,975 | |
| Adjusted net income per share attributable to common shareholders | |||||
| Basic | $ | 0.80 | $ | 0.79 | |
| Diluted | $ | 0.78 | $ | 0.77 | |
| Weighted average number of common shares | |||||
| Basic | 14,169,955 | 13,962,467 | |||
| Diluted | 14,448,228 | 14,297,925 |
(a) Represents non-cash adjustments associated with exiting store leases earlier than anticipated.
(b) Represents impairment of long-lived assets related to leasehold improvements.
(c) Represents items management believes are not indicative of ongoing operating performance, including professional fees, retention expenses and costs related to the COVID-19 pandemic.
(d) The adjusted tax provision for adjusted net income is estimated by applying a rate of 27.9% for the thirteen weeks ended October 28, 2023 and 25.4% for the thirteen weeks ended October 29, 2022 to the adjusted net income before income tax provision.
J.Jill, Inc.
Reconciliation of GAAP Net Income to Adjusted Net Income
(Unaudited)
(Amounts in thousands, except share and per share data)
| For the Thirty-Nine Weeks Ended | ||||||
|---|---|---|---|---|---|---|
| October 28, 2023 | October 29, 2022 | |||||
| Net income and total comprehensive income | $ | 31,434 | $ | 41,139 | ||
| Add: Income tax provision | 13,346 | 15,413 | ||||
| Income before provision for income tax | 44,780 | 56,552 | ||||
| Add: Loss on debt refinancing(a) | 12,702 | — | ||||
| Add: Adjustment for costs to exit retail stores (b) | (632 | ) | (246 | ) | ||
| Add: Impairment of long-lived assets (c) | 66 | 1,408 | ||||
| Add: Other non-recurring items (d) | 2 | 6 | ||||
| Adjusted income before income tax provision | 56,918 | 57,720 | ||||
| Less: Adjusted tax provision(e) | 15,880 | 14,661 | ||||
| Adjusted net income | $ | 41,038 | $ | 43,059 | ||
| Adjusted net income per share attributable to common shareholders | ||||||
| Basic | $ | 2.90 | $ | 3.09 | ||
| Diluted | $ | 2.85 | $ | 3.02 | ||
| Weighted average number of common shares | ||||||
| Basic | 14,130,734 | 13,922,460 | ||||
| Diluted | 14,379,529 | 14,240,486 |
(a) Represents loss on the repayment of Priming Term Loan Credit Agreement and the Subordinated Term Loan Credit Agreement.
(b) Represents non-cash adjustments associated with exiting store leases earlier than anticipated.
(c) Represents impairment of long-lived assets related to leasehold improvements.
(d) Represents items management believes are not indicative of ongoing operating performance, including professional fees, retention expenses and costs related to the COVID-19 pandemic.
(e) The adjusted tax provision for adjusted net income is estimated by applying a rate of 27.9% for the thirty-nine weeks ended October 28, 2023 and 25.4% for the thirty-nine weeks ended October 29, 2022 to the adjusted net income before income tax provision.
Contacts:
Investor Relations:
Caitlin Churchill
ICR, Inc.
investors@jjill.com
203-682-8200
Business and Financial Media:
Ariel Kouvaras
Sloane & Company
akouvaras@sloanepr.com
973-897-6241
Brand Media:
Meredith Schwenk
J.Jill, Inc.
media@jjill.com
617-376-4399