JJill Inc

Previous wording

Total company comparable sales include net sales from our retail stores that have been open for more than 52 weeks and from our Direct channel. This measure highlights the performance of existing stores open during the period, while excluding the impact of new store openings and closures. When a store in the total company comparable store base is temporarily closed for four or more days within a fiscal week, the store is excluded from the comparable store base; if it is temporarily closed for three or fewer days within a fiscal week, the store is included within the comparable store base. Certain of our competitors and other retailers may calculate total company comparable sales differently than we do. Our comparable sales are based on a 52-week period. The total company comparable sales calculation shifts the weeks in the current fiscal year, which follows a fiscal year containing the fifty-third week to align like-for-like. As a result, the reporting of our total company comparable sales may not be comparable to sales data made available by other companies.

Current wording

Total company comparable sales include net sales from our retail stores that have been open for more than 52 weeks and from our Direct channel. This measure highlights the performance of existing stores open during the period, while excluding the impact of new store openings and closures. When a store in the total company comparable store base is temporarily closed for four or more days within a fiscal week, the store is excluded from the comparable store base; if it is temporarily closed for three or fewer days within a fiscal week, the store is included within the comparable store base. Certain of our competitors and other retailers may calculate total company comparable sales differently than we do. Our comparable sales are based on a 52-week period. The total company comparable sales calculation shifts the weeks in the fiscal year containing the fifty-third week to align like-for-like. As a result, the reporting of our total company comparable sales may not be comparable to sales data made available by other companies.

Previous wording

Selling, general and administrative (“SG&A”) expenses include all operating costs not included in COGS. These expenses consist primarily of all payroll and related expenses, occupancy costs, information systems costs and other operating expenses related to our stores and operations at our headquarters, including utilities, depreciation and amortization. These expenses also consist of marketing expense, including catalog production and mailing costs, warehousing, distribution and outbound shipping costs, customer service operations, consulting and software services, professional services and other administrative costs. Additionally, our outbound shipping costs may fluctuate due to surcharges from shipping vendors based on demand for shipping services.

Current wording

Selling, general and administrative (“SG&A”) expenses include all operating costs not included in COGS. These expenses consist primarily of all payroll and related expenses, occupancy costs, information systems costs and other operating expenses related to our stores and operations at our headquarters, including utilities, depreciation and amortization. These expenses also consist of marketing expense, including catalog production and mailing costs, warehousing, distribution and outbound shipping costs, customer service operations, consulting and software services, natural disasters, professional services and other administrative costs. Additionally, our outbound shipping costs may fluctuate due to surcharges from shipping vendors based on demand for shipping services.

Previous wording

Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) and Adjusted EBITDA Margin. Adjusted EBITDA represents net income plus depreciation and amortization, income tax provision, interest expense, interest expense - related party, interest income, equity-based compensation expense, write-off of property and equipment, amortization of cloud-based software implementation costs, loss on extinguishment of debt, loss on debt refinancing, adjustment for exited retail stores, impairment of long-lived assets and other non-recurring items, primarily consisting of outside legal and professional fees associated with certain non-recurring transactions and events. 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. Adjusted EBITDA margin represents, for any period, Adjusted EBITDA as a percentage of net sales.

Current wording

Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) and Adjusted EBITDA Margin. Adjusted EBITDA represents net income plus depreciation and amortization, income tax provision, interest expense, interest expense - related party, interest income, equity-based compensation expense, write-off of property and equipment, amortization of cloud-based software implementation costs, loss on extinguishment of debt, loss on debt refinancing, adjustment for exited retail stores, impairment of long-lived assets, loss due to hurricane, and other non-recurring items primarily consisting of outside legal and professional fees associated with certain non-recurring transactions and events. 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. Adjusted EBITDA margin represents, for any period, Adjusted EBITDA as a percentage of net sales.

Previous wording

Represents amortization of capitalized implementation costs related to cloud-based software arrangements that are included within Selling, general and administrative expenses. Adjusted EBITDA for the thirteen and twenty-six weeks ended July 29, 2023 has been restated to include such adjustments to Net income.

Current wording

Represents amortization of capitalized implementation costs related to cloud-based software arrangements that are included within Selling, general and administrative expenses. Adjusted EBITDA for the thirteen and thirty-nine weeks ended October 28, 2023 has been restated to include such adjustments to Net income.

Previous wording

Represents items management believes are not indicative of ongoing operating performance, including legal and professional fees.

Current wording

Represents items management believes are not indicative of ongoing operating performance, including non-ordinary course legal and professional fees.

Previous wording

The following table summarizes our consolidated results of operations for the periods indicated:

Current wording

The following table summarizes our condensed consolidated results of operations for the periods indicated:

Previous wording

Net sales for the thirteen weeks ended August 3, 2024 decreased $1.4 million, or 0.9%, to $155.2 million from $156.6 million for the thirteen weeks ended July 29, 2023. At the end of those same periods, we operated 244 and 245 retail stores, respectively. The decrease in net sales was primarily due to the impact of approximately $7.0 million from the calendar shift for the thirteen weeks ended August 3, 2024 mostly offset by total company comparable sales increase of 1.7% compared to the thirteen weeks ended July 29, 2023.

Current wording

Net sales for the thirteen weeks ended November 2, 2024 increased $0.4 million, or 0.3%, to $151.3 million from $150.9 million for the thirteen weeks ended October 28, 2023. At the end of those same periods, we operated 247 and 245 retail stores, respectively. The increase in net sales was primarily due to the impact of approximately $2.0 million from the calendar shift resulting from the fifty-third week in Fiscal Year 2023, and lower merchandise returns offset by higher promotional activities and lost sales due to hurricane for the thirteen weeks ended November 2, 2024. The total company comparable sales decreased by 0.8% compared to the thirteen weeks ended October 28, 2023.

Previous wording

Retail contributed 52.9% of our net sales in the thirteen weeks ended August 3, 2024 and 55.0% in the thirteen weeks ended July 29, 2023. Our Direct channel contributed 47.1% of our net sales in the thirteen weeks ended August 3, 2024 and 45.0% in the thirteen weeks ended July 29, 2023.

Current wording

Retail contributed 54.3% of our net sales in the thirteen weeks ended November 2, 2024 and 54.4% in the thirteen weeks ended October 28, 2023. Our Direct channel contributed 45.7% of our net sales in the thirteen weeks ended November 2, 2024 and 45.6% in the thirteen weeks ended October 28, 2023.

Previous wording

Gross profit for the thirteen weeks ended August 3, 2024 decreased $3.0 million, or 2.6%, to $109.4 million from $112.4 million for the thirteen weeks ended July 29, 2023. The gross margin for the thirteen weeks ended August 3, 2024 was 70.5% compared to 71.7% for the thirteen weeks ended July 29, 2023. The decrease in gross profit and gross margin for the thirteen weeks ended August 3, 2024 was primarily driven by the impact of the calendar shift as well as higher freight costs incurred to mitigate disruptions created by global conflicts compared to the thirteen weeks ended July 29, 2023.

Current wording

Gross profit for the thirteen weeks ended November 2, 2024 decreased $0.6 million, or 0.6%, to $108.0 million from $108.6 million for the thirteen weeks ended October 28, 2023. The gross margin for the thirteen weeks ended November 2, 2024 was 71.4% compared to 72.0% for the thirteen weeks ended October 28, 2023. The decrease in gross profit and gross margin for the thirteen weeks ended November 2, 2024 was primarily driven by an increase in promotional activities and increased freight costs due to higher ocean freight container shipping rates compared to the thirteen weeks ended October 28, 2023.

Previous wording

As a percentage of net sales, SG&A expenses were 55.6% for the thirteen weeks ended August 3, 2024 and 53.8% for the thirteen weeks ended July 29, 2023.

Current wording

As a percentage of net sales, SG&A expenses were 58.6% for the thirteen weeks ended November 2, 2024 and 57.3% for the thirteen weeks ended October 28, 2023.

Previous wording

For the thirteen weeks ended August 3, 2024 and July 29, 2023, the Company recorded an immaterial amount of noncash impairment charges.

Current wording

For the thirteen weeks ended November 2, 2024, the Company recorded $0.1 million of impairment charges. The Company recorded an immaterial amount of impairment charges for the thirteen weeks ended October 28, 2023.

Previous wording

Interest expense was $3.7 million and $6.6 million for the thirteen weeks ended August 3, 2024 and July 29, 2023, respectively. The decrease was due to a lower debt balance for the thirteen weeks ended August 3, 2024.

Current wording

Interest expense was $2.8 million and $6.5 million for the thirteen weeks ended November 2, 2024 and October 28, 2023, respectively. The decrease was due to a lower debt balance for the thirteen weeks ended November 2, 2024.

Previous wording

For the twenty-six weeks ended August 3, 2024, the Company earned interest on cash of $1.5 million, compared to $1.0 million for the twenty-six weeks ended July 29, 2023.

Current wording

For the thirteen weeks ended November 2, 2024, the Company earned interest on cash of $0.5 million, compared to $0.7 million for the thirteen weeks ended October 28, 2023.

Previous wording

The income tax provision was $3.1 million for the thirteen weeks ended August 3, 2024 compared to $6.7 million for the thirteen weeks ended July 29, 2023, while our effective tax rates for the same periods were 27.3% and 30.5%, respectively. The effective tax rate during the thirteen weeks ended August 3, 2024 is lower primarily due to the impact of state and local income taxes and executive compensation limitations.

Current wording

The income tax provision was $4.5 million for the thirteen weeks ended November 2, 2024 compared to $4.7 million for the thirteen weeks ended October 28, 2023, while our effective tax rates for the same periods were 26.8% and 28.9%, respectively. The effective tax rate during the thirteen weeks ended November 2, 2024 is lower primarily due to the impact of state and local income taxes and executive compensation limitations.

Previous wording

The following table summarizes our consolidated results of operations for the periods indicated:

Current wording

The following table summarizes our condensed consolidated results of operations for the periods indicated:

Previous wording

Net sales for the twenty-six weeks ended August 3, 2024 increased $9.9 million, or 3.2%, to $316.8 million from $306.9 million for the twenty-six weeks ended July 29, 2023. At the end of those same periods, we operated 244 and 245 retail stores, respectively. The increase in net sales was primarily due to total company comparable sales increase of 2.4% compared to the twenty-six weeks ended July 29, 2023.

Current wording

Net sales for the thirty-nine weeks ended November 2, 2024 increased $10.3 million, or 2.2%, to $468.0 million from $457.8 million for the thirty-nine weeks ended October 28, 2023. At the end of those same periods, we operated 247 and 245 retail stores, respectively. The increase in net sales was primarily due to total company comparable sales increase of 1.4% and the impact of approximately $2.0 million from the calendar shift compared to the thirty-nine weeks ended October 28, 2023.

Previous wording

Retail contributed 53.0% of our net sales in the twenty-six weeks ended August 3, 2024 and 54.8% in the twenty-six weeks ended July 29, 2023. Our Direct channel contributed 47.0% of our net sales in the twenty-six weeks ended August 3, 2024 and 45.2% in the twenty-six weeks ended July 29, 2023.

Current wording

Retail contributed 53.4% of our net sales in the thirty-nine weeks ended November 2, 2024 and 54.7% in the thirty-nine weeks ended October 28, 2023. Our Direct channel contributed 46.6% of our net sales in the thirty-nine weeks ended November 2, 2024 and 45.3% in the thirty-nine weeks ended October 28, 2023.

Previous wording

Gross profit for the twenty-six weeks ended August 3, 2024 increased $6.4 million, or 2.9%, to $227.1 million from $220.7 million for the twenty-six weeks ended July 29, 2023. The gross margin for the twenty-six weeks ended August 3, 2024 was 71.7% compared to 71.9% for the twenty-six weeks ended July 29, 2023. The increase in gross profit and decrease in gross margin for the twenty-six weeks ended August 3, 2024 was primarily driven by an increase in net sales of 3.2%, offset by higher freight costs incurred to mitigate disruptions created by global conflicts compared to the twenty-six weeks ended July 29, 2023.

Current wording

Gross profit for the thirty-nine weeks ended November 2, 2024 increased $5.8 million, or 1.8%, to $335.1 million from $329.3 million for the thirty-nine weeks ended October 28, 2023. The gross margin for the thirty-nine weeks ended November 2, 2024 was 71.6% compared to 71.9% for the thirty-nine weeks ended October 28, 2023. The increase in gross profit and gross margin for the thirty-nine weeks ended November 2, 2024 was primarily driven by an increase in net sales of 2.2%, partially offset by higher promotional activities and increased freight costs due to higher ocean freight container shipping rates compared to the thirty-nine weeks ended October 28, 2023.

Previous wording

SG&A expenses for the twenty-six weeks ended August 3, 2024 increased $8.2 million, or 4.9%, to $175.4 million from $167.3 million for the twenty-six weeks ended July 29, 2023. The increase was primarily driven by a $3.4 million increase in compensation, benefits and management incentive expense, $1.6 million increase in marketing costs, $1.5 million increase in professional services, $1.0 million increase in information systems costs, and $0.9 million increase in outbound shipping costs, partially offset by lower occupancy costs of $0.3 million compared to the twenty-six weeks ended July 29, 2023.

Current wording

SG&A expenses for the thirty-nine weeks ended November 2, 2024 increased $10.4 million, or 4.1%, to $264.1 million from $253.7 million for the thirty-nine weeks ended October 28, 2023. The increase was primarily driven by a $2.9 million increase in compensation, benefits and management incentive expense, $2.2 million increase in marketing costs, $1.9 million increase in equity based compensation expense, $1.6 million increase in outbound shipping costs, $1.3 million increase in professional services, $1.2 million increase in information systems costs mainly due to the upgrade of our order management system, partially offset by lower depreciation and amortization of $0.8 million compared to the thirty-nine weeks ended October 28, 2023.

Previous wording

As a percentage of net sales, SG&A expenses were 55.4% for the twenty-six weeks ended August 3, 2024 compared to 54.5% for the twenty-six weeks ended July 29, 2023.

Current wording

As a percentage of net sales, SG&A expenses were 56.4% for the thirty-nine weeks ended November 2, 2024 compared to 55.4% for the thirty-nine weeks ended October 28, 2023.

Previous wording

For the twenty-six weeks ended August 3, 2024, the Company recorded noncash impairment charges of $0.3 million primarily related to leasehold improvements at certain store locations. The Company recorded an immaterial amount of impairment charges for the twenty-six weeks ended July 29, 2023.

Current wording

For the thirty-nine weeks ended November 2, 2024, the Company recorded noncash impairment charges of $0.4 million primarily related to leasehold improvements at certain store locations. The Company recorded an immaterial amount of impairment charges for the thirty-nine weeks ended October 28, 2023.

Previous wording

For the thirteen weeks ended August 3, 2024, the Company recognized a loss on debt extinguishment of $8.6 million related to the voluntary prepayment of a portion of the Term Loan Credit Agreement. No such loss was incurred by the Company during the thirteen weeks ended July 29, 2023.

Current wording

For the thirty-nine weeks ended November 2, 2024, the Company recognized a loss on extinguishment of debt of $8.6 million related to the voluntary prepayment of a portion of the Term Loan Credit Agreement. No such loss was incurred by the Company during the thirty-nine weeks ended October 28, 2023.

Previous wording

During the twenty-six weeks ended July 29, 2023, the Company recognized a loss on debt refinancing of $12.7 million related to entering into the Term Loan Credit Agreement and the repayment of the Priming Credit Agreement and the Subordinated Credit Agreement. No such loss was incurred by the Company during the twenty-six weeks ended August 3, 2024.

Current wording

During the thirty-nine weeks ended October 28, 2023, the Company recognized a loss on debt refinancing of $12.7 million related to entering into the Term Loan Credit Agreement and the repayment of the Priming Credit Agreement and the Subordinated Credit Agreement. No such loss was incurred by the Company during the thirty-nine weeks ended November 2, 2024.

Previous wording

Interest expense was $10.2 million and $12.3 million for the twenty-six weeks ended August 3, 2024 and July 29, 2023, respectively. The decrease was primarily due to a lower debt balance for the twenty-six weeks ended August 3, 2024.

Current wording

Interest expense was $13.0 million and $18.8 million for the thirty-nine weeks ended November 2, 2024 and October 28, 2023, respectively. The decrease was primarily due to a lower debt balance for the thirty-nine weeks ended November 2, 2024.

Previous wording

Interest expense consists of interest expense on the Term Loan Credit Agreement for the twenty-six weeks ended August 3, 2024, and, on the Company’s Term Loan Credit Agreement, Priming Credit Agreement prior to repayment in full on April 5, 2023, and ABL Facility for the twenty-six weeks ended July 29, 2023.

Current wording

Interest expense consists of interest expense on the Term Loan Credit Agreement for the thirty-nine weeks ended November 2, 2024, and, on the Company’s Term Loan Credit Agreement, Priming Credit Agreement prior to repayment in full on April 5, 2023, and asset-based revolving credit facility agreement (the “ABL Credit Agreement” and, such facility, the “ABL Facility”) for the thirty-nine weeks ended October 28, 2023.

Previous wording

For the twenty-six weeks ended July 29, 2023, the Company incurred $1.1 million of Interest expense - related party associated with the Subordinated Credit Agreement, until it was repaid in full on April 5, 2023. The Company did not incur any Interest expense - related party during the twenty-six weeks ended August 3, 2024.

Current wording

For the thirty-nine weeks ended October 28, 2023, the Company incurred $1.1 million of Interest expense - related party associated with the Subordinated Credit Agreement, until it was repaid in full on April 5, 2023. The Company did not incur any Interest expense - related party during the thirty-nine weeks ended November 2, 2024.

Previous wording

For the thirteen weeks ended August 3, 2024 and July 29, 2023, the Company earned interest on cash of $0.5 million.

Current wording

For the thirty-nine weeks ended November 2, 2024, the Company earned interest on cash of $2.0 million, compared to $1.8 million for the thirty-nine weeks ended October 28, 2023.

Previous wording

The income tax provision was $9.3 million for the twenty-six weeks ended August 3, 2024 compared to $8.6 million for the twenty-six weeks ended July 29, 2023, while our effective tax rates for the same periods were 27.2% and 30.3%, respectively. The effective tax rate during the twenty-six weeks ended August 3, 2024 is lower primarily due to the impact of state and local income taxes and executive compensation limitations.

Current wording

The income tax provision was $13.8 million for the thirty-nine weeks ended November 2, 2024 compared to $13.3 million for the thirty-nine weeks ended October 28, 2023, while our effective tax rates for the same periods were 27.1% and 29.8%, respectively. The effective tax rate during the thirty-nine weeks ended November 2, 2024 is lower primarily due to the impact of state and local income taxes and executive compensation limitations.

Previous wording

Our primary sources of liquidity and capital resources are cash and cash equivalents generated from operating activities and availability under our ABL Facility, so long as certain conditions related to the maturity of the Term Loan Credit Agreement are met. As of August 3, 2024, we had $28.5 million in cash and $35.7 million of total availability under our ABL Facility. In addition, through our shelf registration statement on file with the SEC or through private transactions, and depending on conditions prevailing in the public and private capital markets, we may from time to time issue equity securities in one or more series in one or more offerings.

Current wording

Our primary sources of liquidity and capital resources are cash and cash equivalents generated from operating activities and availability under our ABL Facility, so long as certain conditions related to the maturity of the Term Loan Credit Agreement are met. As of November 2, 2024, we had $38.8 million in cash and $35.7 million of total availability under our ABL Facility. In addition, through our shelf registration statement on file with the SEC or through private transactions, and depending on conditions prevailing in the public and private capital markets, we may from time to time issue equity securities in one or more series in one or more offerings.

Previous wording

Subsequently, on August 20, 2024, the Company issued 3,317,488 shares of common stock following the exercise of 3,318,443 warrants. The exercise price of the warrants was net share settled as per the terms of the Warrant Agreement. As a result of this transaction, the number of shares outstanding increased to 15,084,356 and the number of warrants outstanding decreased to 255,265. As the exercise of the warrants is near certain due to its non-substantive exercise price in relation to the fair value of the common shares issuable upon exercise, the exercise of these warrants has no impact on net income per common share, both basic and diluted.

Current wording

During the third quarter of Fiscal Year 2024, the Company issued 3,572,664 shares of common stock following the exercise of 3,573,707 warrants (the “Warrants”) that were previously issued pursuant to a Warrant Agreement, dated as of October 2, 2020, by and between the Company and American Stock Transfer & Company LLC (the “Warrant Agreement”). The exercise price of the Warrants was net share settled as per the terms of the Warrant Agreement. Given the non-substantive exercise price of the Warrants in relation to the fair value of the common shares issued upon exercise, the exercise of these Warrants had no impact on net income per common share, both basic and diluted.

Previous wording

We believe our cash and cash equivalents balance, along with our future cash flows from operations, capacity for borrowings under the ABL Facility and access to credit and capital markets, provide sufficient liquidity to meet the needs of our business operations, make voluntary prepayments, pay dividends and to satisfy our projected cash requirements for the next 12 months and the foreseeable future.

Current wording

We believe our cash and cash equivalents balance, along with our future cash flows from operations, capacity for borrowings under the ABL Facility and access to credit and capital markets, provide sufficient liquidity to meet the needs of our business operations, make voluntary prepayments, pay dividends, repurchase shares, and to satisfy our projected cash requirements for the next 12 months and the foreseeable future.

Previous wording

On May 10, 2024, the Company made a voluntary principal prepayment of $58.2 million on the Term Loan Credit Agreement, in lieu of the previously expected excess cash flow payment of $26.6 million. The expected excess cash flow payment was rejected by the lenders as permitted under the provisions of the Term Loan Credit Agreement. On June 21, 2024, the Company made an additional voluntary principal prepayment of $27.2 million (See Note 8. Shareholders’ Equity, Common Stock Issuance, for additional information). Together with the required quarterly payments, the Company has repaid $89.8 million in principal under the Term Loan Credit Agreement in Fiscal Year 2024. In connection with both of the voluntary principal prepayments, the Company paid a $2.6 million premium, amounting to 3% on the aggregate principal amount being prepaid, and $1.6 million towards interest, in accordance with the provisions of the Term Loan Credit Agreement.

Current wording

On May 10, 2024, the Company made a voluntary principal prepayment of $58.2 million on the Term Loan Credit Agreement, in lieu of the previously expected excess cash flow payment of $26.6 million. The expected excess cash flow payment was rejected by the lenders as permitted under the provisions of the Term Loan Credit Agreement. On June 21, 2024, the Company made an additional voluntary principal prepayment of $27.2 million (See Note 8. Shareholders’ Equity, Common Stock Issuance, for additional information). Together with the required quarterly payments, the Company has repaid $92.0 million in principal under the Term Loan Credit Agreement in Fiscal Year 2024. In connection with the voluntary principal prepayments, the Company paid a $2.6 million premium, amounting to 3% on the aggregate principal amount being prepaid, and $1.6 million towards interest, in accordance with the provisions of the Term Loan Credit Agreement.

Previous wording

In connection with the voluntary principal prepayments discussed above, for the thirteen and twenty-six weeks ended August 3, 2024, the Company recognized a loss on extinguishment of debt of approximately $8.6 million, consisting of $6.0 million of accelerated amortization of the discount and fees and $2.6 million of prepayment premium, in its condensed consolidated statements of operations and comprehensive income. As of August 3, 2024, the remaining Term Loan Facility principal balance was $78.7 million, which is to be repaid in two quarterly principal payments of $2.2 million through January 31, 2025, with the remaining balance of $74.3 million to be paid upon maturity on May 8, 2028. The remaining unamortized discount and fees of $5.5 million will continue to be amortized over the remaining term through maturity. See Note 5. Debt to the condensed consolidated financial statements included in this Quarterly Report for additional information.

Current wording

In connection with the voluntary principal prepayments discussed above, for the thirty-nine weeks ended November 2, 2024, the Company recognized a loss on extinguishment of debt of approximately $8.6 million, consisting of $6.0 million of accelerated amortization of the discount and fees and $2.6 million of prepayment premium, in its condensed consolidated statements of operations and comprehensive income. As of November 2, 2024, the remaining Term Loan Facility principal balance was $76.5 million, which is to be repaid in one quarterly principal payment of $2.2 million prior to January 31, 2025, with the remaining balance of $74.3 million to be paid upon maturity on May 8, 2028. The remaining unamortized discount and fees of $5.2 million will continue to be amortized over the remaining term through maturity. See Note 5. Debt to the condensed consolidated financial statements included in this Quarterly Report for additional information.

Previous wording

Net cash provided by operating activities increased by $2.3 million during the twenty-six weeks ended August 3, 2024 compared to the twenty-six weeks ended July 29, 2023. The increase during the twenty-six weeks ended August 3, 2024 was driven by higher net income of $5.1 million, lower adjustments to reconcile net income to net cash from operation of $7.1 million, and an increase in cash from working capital of $4.2 million. The increase in net cash from working capital was driven primarily by changes in accrued expenses and other current liabilities of $6.8 million, mainly consisting of management incentives of $3.8 million, $2.1 million due to payment timing of interest on debt and corporate expenses, outbound shipping costs, information systems costs, and the timing of payments relating to income taxes of $1.1 million, partially offset by lower sales returns reserve of $1.7 million, timing of payments relating to accounts payable of $5.9 million, and changes in other non current assets and liabilities of $0.3 million. The increase in net cash from working capital was partially offset by timing of payments relating to inventory of $4.3 million, accounts receivable of $3.4 million, and prepaid expenses and other current assets of $1.2 million.

Current wording

Net cash provided by operating activities increased by $0.3 million during the thirty-nine weeks ended November 2, 2024 compared to the thirty-nine weeks ended October 28, 2023. The increase during the thirty-nine weeks ended November 2, 2024 was driven by higher net income of $5.8 million, and a higher change in operating assets and liabilities of $0.4 million offset by lower adjustments to reconcile net income to net cash from operations of $5.9 million. The higher change in operating assets and liabilities was driven primarily by changes in accrued expenses and other current liabilities of $8.2 million, mainly consisting of management incentives of $3.1 million, and the timing of payments relating to income taxes of $2.2 million, interest on debt and corporate expenses of $2.1 million, payroll of $1.9 million, and other net expenses, partially offset by lower sales returns reserve of $1.2 million. The higher change in operating assets and liabilities was partially offset by timing of payments relating to other noncurrent assets and liabilities of $2.7 million, inventory of $2.5 million, and accounts receivable of $2.3 million.

Previous wording

Net cash provided by operating activities during the twenty-six weeks ended August 3, 2024 was $37.9 million. Key elements of cash provided by operating activities were (i) net income of $24.9 million, (ii) adjustments to reconcile net income to net cash provided by operating activities of $21.7 million, primarily driven by depreciation and amortization, loss on extinguishment of debt and equity-based compensation, and (iii) uses of cash totaling $8.7 million for net operating assets and liabilities.

Current wording

Net cash provided by operating activities during the thirty-nine weeks ended November 2, 2024 was $56.9 million. Key elements of cash provided by operating activities were (i) net income of $37.2 million, (ii) adjustments to reconcile net income to net cash provided by operating activities of $29.2 million, primarily driven by depreciation and amortization, loss on extinguishment of debt and equity-based compensation, and (iii) uses of cash totaling $9.5 million for net operating assets and liabilities.

Previous wording

Net cash provided by operating activities during the twenty-six weeks ended July 29, 2023 was $35.6 million. Key elements of cash provided by operating activities were (i) net income of $19.8 million, (ii) adjustments to reconcile net income to net cash provided by operating activities of $28.7 million, primarily driven by loss on debt refinancing and depreciation and amortization, and (iii) uses of cash totaling $12.9 million for net operating assets and liabilities.

Current wording

Net cash provided by operating activities during the thirty-nine weeks ended October 28, 2023 was $56.7 million. Key elements of cash provided by operating activities were (i) net income of $31.4 million, (ii) adjustments to reconcile net income to net cash provided by operating activities of $35.2 million, primarily driven by loss on debt refinancing and depreciation and amortization, and (iii) uses of cash totaling $9.9 million for net operating assets and liabilities.

Previous wording

Net cash used in investing activities during the twenty-six weeks ended August 3, 2024 and July 29, 2023 was $4.6 million and $7.1 million, respectively, representing purchases of property and equipment related investments in stores and software and technology related investments.

Current wording

Net cash used in investing activities during the thirty-nine weeks ended November 2, 2024 and October 28, 2023 was $10.0 million and $10.8 million, respectively, representing purchases of property and equipment related investments in stores and software and technology related investments.

Previous wording

Net cash used in financing activities was $67.0 million for the twenty-six weeks ended August 3, 2024 compared to $66.7 million for the twenty-six weeks ended July 29, 2023. Net cash used in financing activities for the twenty-six weeks ended August 3, 2024 primarily consisted of voluntary prepayments under the Term Loan Credit Agreement partially offset by the proceeds from the issuance of common stock. Net cash used in financing activities for the twenty-six weeks ended July 29, 2023 consisted of repayment of the previously existing Priming and Subordinated Credit Agreements offset by the proceeds from the issuance of the Term Loan Credit Agreement.

Current wording

Net cash used in financing activities was $70.3 million for the thirty-nine weeks ended November 2, 2024 compared to $68.9 million for the thirty-nine weeks ended October 28, 2023. Net cash used in financing activities for the thirty-nine weeks ended November 2, 2024 primarily consisted of voluntary prepayments under the Term Loan Credit Agreement partially offset by the proceeds from the issuance of common stock. Net cash used in financing activities for the thirty-nine weeks ended October 28, 2023 consisted of repayment of the previously existing Priming and Subordinated Credit Agreements offset by the proceeds from the issuance of the Term Loan Credit Agreement.

Previous wording

On May 14, 2024, the Board declared a quarterly cash dividend of $0.07 per share of common stock (the “Dividend”). The Dividend was paid on June 12, 2024, to all holders of record of issued and outstanding shares of the Company’s common stock as of the close of business on May 29, 2024. During the thirteen and twenty-six weeks ended August 3, 2024, the Company paid $0.8 million in dividends. The Company may pay dividends on its common stock only from net profits and surplus as determined under Delaware state law. Given the current financial position, the Dividend was paid from Additional paid-in capital rather than retained earnings as reflected in the condensed consolidated statements of shareholders’ equity for the thirteen and twenty-six weeks ended August 3, 2024.

Current wording

During the thirteen weeks ended November 2, 2024, the Board of Directors (the “Board”) declared a quarterly cash dividend payment of $0.07 per share of common stock (the “Dividend”). The Dividend was payable on October 2, 2024 to stockholders of record of issued and outstanding shares of the Company’s common stock as of September 18, 2024. During the thirteen and thirty-nine weeks ended November 2, 2024, the Company paid $1.0 million and $1.8 million, respectively, in dividends. While dividends are generally recorded as a reduction to Retained earnings, since the Company has an accumulated deficit, dividends are recorded as a reduction to Additional paid-in capital.

Previous wording

The Company did not pay any dividends during the thirteen and twenty-six weeks ended July 29, 2023.

Current wording

The Company did not pay any dividends during the thirteen and thirty-nine weeks ended October 28, 2023.