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DELiA*s, Inc. Announces Second Quarter 2011 Results

Stocks in this article: DLIA

Conference Call and Webcast Information

A conference call to discuss second quarter 2011 results is scheduled for Thursday, August 25, 2011 at 4:30 p.m. eastern time. The conference call will be webcast live at www.deliasinc.com. A replay of the call will be available until September 25, 2011 and can be accessed by dialing (888) 286-8010 and providing the pass code number 85325998.

During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends. The Company’s responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously.

About dELiA*s, Inc.

dELiA*s, Inc. is a direct marketing and retail company comprised of two lifestyle brands primarily targeting teenage girls and young women. Its brands – dELiA*s and Alloy – generate revenue by selling apparel, accessories, footwear and room furnishings to consumers through direct mail catalogs, websites, and dELiA*s mall-based specialty retail stores.

Forward-Looking Statements

This announcement may contain forward-looking statements made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our expectations and beliefs regarding our future results or performance. Because these statements apply to future events, they are subject to risks and uncertainties. When used in this announcement, the words “anticipate,” “believe,” “estimate,” “expect,” “expectation,” “should,” “would,” “project,” “plan,” “predict,” “intend” and similar expressions are intended to identify such forward-looking statements. Our actual results could differ materially from those projected in the forward-looking statements. Additionally, you should not consider past results to be an indication of our future performance. For a discussion of risk factors that may affect our results, see the “Risk Factors That May Affect Future Results” section of our filings with the Securities and Exchange Commission, including our annual report on Form 10-K and quarterly reports on Form 10-Q. We do not intend to update any of the forward-looking statements after the date of this announcement to conform these statements to actual results, to changes in management's expectations or otherwise, except as may be required by law.

dELiA*s, Inc.

CONSOLIDATED BALANCE SHEETS
(in thousands, except par value and share data)
(unaudited)
 
  July 30, 2011     July 31, 2010
ASSETS

CURRENT ASSETS:

Cash and cash equivalents $ 22,216 $ 15,156
Inventories, net 39,862 40,364
Prepaid catalog costs 2,955 2,851
Restricted cash - 8,505
Deferred income taxes - 1,138
Other current assets   4,248     17,105  
 
TOTAL CURRENT ASSETS 69,281 85,119
 
PROPERTY AND EQUIPMENT, NET 46,612 54,973
GOODWILL 4,462 12,073
INTANGIBLE ASSETS, NET 2,419 2,419
OTHER ASSETS   855     169  
TOTAL ASSETS $ 123,629   $ 154,753  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable $ 20,902 $ 24,877
Accrued expenses and other current liabilities 19,447 23,486
Income taxes payable   833     797  
TOTAL CURRENT LIABILITIES 41,182 49,160
 
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES   12,076     11,978  
TOTAL LIABILITIES   53,258     61,138  
 
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

Preferred Stock, $.001 par value; 25,000,000 shares authorized, none issued

- -

Common Stock, $.001 par value; 100,000,000 shares authorized; 31,432,531 and 31,310,091 shares issued and outstanding, respectively

31 31
Additional paid-in capital 98,918 99,111
Accumulated deficit   (28,578 )   (5,527 )
TOTAL STOCKHOLDERS' EQUITY   70,371     93,615  
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 123,629   $ 154,753  
 

dELiA*s, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
 
    For the Thirteen Weeks Ended    
July 30,2011         July 31, 2010
 
 
NET REVENUES $ 44,347 100.0 % $ 43,213 100.0 %
Cost of goods sold   32,381   73.0 %   30,826   71.3 %
 
GROSS PROFIT   11,966   27.0 %   12,387   28.7 %
Selling, general and administrative expenses 21,426 48.3 % 21,545 49.9 %
Other operating income   (34 ) -0.1 %   (94 ) -0.2 %
TOTAL OPERATING EXPENSES   21,392   48.2 %   21,451   49.6 %
OPERATING LOSS (9,426 ) -21.3 % (9,064 ) -21.0 %
Interest expense, net   (136 ) -0.3 %   (82 ) -0.2 %
LOSS BEFORE INCOME TAXES (9,562 ) -21.6 % (9,146 ) -21.2 %
Provision (benefit) for income taxes   50   0.1 %   (2,298 ) -5.3 %
NET LOSS $ (9,612 ) -21.7 % $ (6,848 ) -15.8 %
 
BASIC AND DILUTED LOSS PER SHARE:
NET LOSS PER SHARE $ (0.31 ) $ (0.22 )
 
WEIGHTED AVERAGE BASIC AND DILUTED COMMON SHARES OUTSTANDING   31,209,737     31,105,434  
 
dELiA*s, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
 
    For the Twenty-Six Weeks Ended    
July 30, 2011         July 31, 2010
 
 
NET REVENUES $ 93,493 100.0 % $ 93,174 100.0 %
 
Cost of goods sold   65,046  

69.6

%

  65,138   69.9 %
 
GROSS PROFIT   28,447   30.4 %   28,036   30.1 %
Selling, general and administrative expenses 43,324 46.3 % 45,136 48.4 %
Other operating income   (72 ) -0.1 %   (238 ) -0.3 %
TOTAL OPERATING EXPENSES   43,252   46.3 %   44,898   48.2 %
OPERATING LOSS (14,805 ) -15.8 % (16,862 ) -18.1 %
Interest expense, net   (223 ) -0.2 %   (169 ) -0.2 %
LOSS BEFORE INCOME TAXES (15,028 ) -16.1 % (17,031 ) -18.3 %
Benefit for income taxes   (947 ) -1.0 %   (4,358 ) -4.7 %
NET LOSS $ (14,081 ) -15.1 % $ (12,673 ) -13.6 %
 
BASIC AND DILUTED LOSS PER SHARE:
NET LOSS PER SHARE $ (0.45 ) $ (0.41 )
 

WEIGHTED AVERAGE BASIC AND DILUTED COMMON SHARES OUTSTANDING

  31,209,737     31,102,369  
 
dELiA*s Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
    For the Twenty-Six Weeks Ended
July 30, 2011     July 31, 2010
 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (14,081 ) $ (12,673 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 5,722 5,169
Stock-based compensation 408 474
Changes in operating assets and liabilities:
Inventories (7,837 ) (6,662 )
Prepaid catalog costs and other assets 6,409 (4,594 )
Restricted cash 8,268

 

(965 )
Income taxes payable 91 64
Accounts payable, accrued expenses and other liabilities   (2,870 )   (2,904 )
 
Total adjustments   10,191     (9,418 )
NET CASH USED IN OPERATING ACTIVITIES   (3,890 )   (22,091 )
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures   (1,968 )   (4,400 )
NET CASH USED IN INVESTING ACTIVITIES   (1,968 )   (4,400 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of employee stock options   -  

 

  1  
NET CASH PROVIDED BY FINANCING ACTIVITIES   -     1  
 
NET DECREASE IN CASH AND CASH EQUIVALENTS (5,858 ) (26,490 )
CASH AND CASH EQUIVALENTS, beginning of period   28,074     41,646  
CASH AND CASH EQUIVALENTS, end of period $ 22,216   $ 15,156  
 
dELiA*s, Inc.
SELECTED OPERATING DATA
(in thousands, except number of stores)
(unaudited)
 
    For The Thirteen Weeks Ended     For The Twenty-Six Weeks Ended
July 30, 2011   July 31, 2010 July 30, 2011   July 31, 2010
 

Channel net revenues:

Retail $ 26,388 $ 24,353 $ 53,402 $ 50,335
Direct   17,959     18,860     40,091     42,839  
Total net revenues $ 44,347   $ 43,213   $ 93,493   $ 93,174  
 
Comparable store sales   7.2 %   (6.8 %)   3.9 %   (7.7 %)
 
Catalogs mailed   7,843     8,492     16,584     17,566  
 
Inventory - retail $ 24,047   $ 23,251   $ 24,047   $ 23,251  
Inventory - direct $ 15,815   $ 17,113   $ 15,815   $ 17,113  
 
 

Number of stores:

Beginning of period 115 111 114 109
Opened 1 * 7 ** 2 * 9 **
Closed   1   *   3   **   1   *   3   **
End of period   115     115     115     115  
 

Total gross sq. ft @ end of period

  440.0     440.4     440.0     440.4  

* Totals include one store that was closed, remodeled and reopened in the second quarter of fiscal 2011.

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