Tilly’s, Inc. Announces First Quarter Fiscal 2012 Results

Forward Looking Statements

Certain statements in this press release and oral statements made from time to time by our representatives are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, statements regarding our guidance, future financial and operating results and any other statements about our future expectations, beliefs or prospects expressed by management are forward-looking statements. These forward-looking statements are based on management’s current expectations and beliefs, but they involve a number of risks and uncertainties that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including, but not limited to, our ability to respond to changing customer preferences, execute our growth strategy, expand into new markets, effectively compete with other retailers, enhance our brand image and other factors that are detailed in our registration statement on Form S-1 (333-175299), including those detailed in the section titled “Risk Factors” contained that registration statement, which is available from the SEC’s website at www.sec.gov and from our website at www.tillys.com under the heading “Investor Relations”. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We do not undertake any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

TILLY’S BALANCE SHEETS (In thousands, except per share data) (Unaudited)
			April 28,			January 28,
			2012			2012
ASSETS
Current assets:
Cash and cash equivalents			$	21,716		$	25,091
Receivables				8,444			6,605
Merchandise inventories				40,267			36,531
Prepaid expenses and other current assets				5,536			5,616
Total current assets				75,963			73,843
Property and equipment, net				65,719			64,077
Other assets				3,481			2,899
Total assets			$	145,163		$	140,819
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable			$	17,517		$	16,830
Deferred revenue				3,884			4,865
Accrued compensation and benefits				4,864			7,536
Accrued expenses				10,993			12,935
Current portion of deferred rent				3,632			3,335
Current portion of capital lease obligation/Related party				679			669
Total current liabilities				41,569			46,170
Long-term portion of deferred rent				33,720			30,256
Long-term portion of capital lease obligation/Related party				3,796			3,969
Total long-term liabilities				37,516			34,225
Total liabilities				79,085			80,395
Commitments and contingencies
Shareholders' equity:
Common stock, $0.001 par value; 21,600 shares authorized, 20,000 shares issued and outstanding				20			20
Additional paid-in capital				150			150
Retained earnings				65,908			60,254
Total shareholders' equity				66,078			60,424
Total liabilities and shareholders' equity			$	145,163		$	140,819

TILLY’S STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited)
			Thirteen Weeks Ended
			April 28,			April 30,
			2012			2011
Net sales			$	96,524		$	83,131
Cost of goods sold (includes buying, distribution, and occupancy costs)				66,106			56,922
Gross profit				30,418			26,209
Selling, general and administrative expenses				24,392			21,244
Operating income				6,026			4,965
Interest expense, net				44			49
Income before provision for income taxes				5,982			4,916
Provision for income taxes				68			56
Net income			$	5,914		$	4,860
Basic income per common share			$	0.30		$	0.24
Diluted income per common share			$	0.29		$	0.24
Weighted average basic common shares outstanding				20,000			20,000
Weighted average diluted common shares outstanding				20,512			20,440
Pro forma income information:
Historical income before provision for income taxes			$	5,982		$	4,916
Pro forma provision for income taxes				2,393			1,966
Pro forma net income			$	3,589		$	2,950
Pro forma basic income per common share			$	0.18		$	0.15
Pro forma diluted income per common share			$	0.18		$	0.14

TILLY’S STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
			Thirteen Weeks Ended
			April 28,				April 30,
			2012				2011
Cash flows from operating activities
Net income			$	5,914			$	4,860
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization				3,904				3,718
(Gain) loss on disposal of assets				(115	)			19
Changes in operating assets and liabilities				(5,773	)			(4,180	)
Net cash provided by operating activities				3,930				4,417
Cash flows from investing activities
Purchase of property and equipment				(7,523	)			(3,001	)
Insurance proceeds from casualty loss				641				-
Proceeds from disposal of property and equipment				-				18
Net cash used in investing activities				(6,882	)			(2,983	)
Cash flows from financing activities
Payment of capital lease obligation				(163	)			(153	)
Distributions				(260	)			(1,849	)
Net cash used in financing activities				(423	)			(2,002	)
Change in cash and cash equivalents				(3,375	)			(568	)
Cash and cash equivalents, beginning of period				25,091				29,338
Cash and cash equivalents, end of period			$	21,716			$	28,770
Supplemental disclosures of cash flow information
Interest paid			$	75			$	81
Income taxes paid			$	7			$	21
Supplemental disclosure of non-cash activities
Unpaid purchases of property and equipment			$	243			$	296

Tilly's Store Count and Square Footage
														Total Gross
		Stores		Stores		Stores		Stores		Stores		Stores		Square Footage
		Open at		Opened		Closed		Remodel		Remodel		Open at		End of Qtr
		Beg of Qtr		During Qtr		During Qtr		Closed		Reopened		End of Qtr		(in thousands)
2011 Q1		125		1		0		0		0		126		977
2011 Q2		126		6		1		0		0		131		1,015
2011 Q3		131		4		0		1		0		134		1,044
2011 Q4		134		5		0		0		1		140		1,094
2012 Q1		140		5		0		0		0		145		1,134

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