10-Q: Quarterly report pursuant to Section 13 or 15(d)
Published on June 10, 2021
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of |
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(I.R.S. Employer |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
(Title of each class) |
(Trading symbol) |
(Name of each exchange on which registered) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of June 4, 2021,
RH
INDEX TO FORM 10-Q
PART I
ITEM 1. FINANCIAL STATEMENTS
RH
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts) (Unaudited)
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MAY 1, |
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JANUARY 30, |
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2021 |
2021 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ |
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$ |
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Accounts receivable—net |
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Merchandise inventories |
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Prepaid expense and other current assets |
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Total current assets |
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Property and equipment—net |
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Operating lease right-of-use assets |
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Goodwill |
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Tradenames, trademarks and other intangible assets |
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Deferred tax assets |
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Equity method investments |
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Other non-current assets |
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Total assets |
$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable and accrued expenses |
$ |
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$ |
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Deferred revenue and customer deposits |
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Operating lease liabilities |
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Federal and state tax payable |
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Other current liabilities |
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Total current liabilities |
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Asset based credit facility |
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— |
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— |
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Equipment promissory notes—net |
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Convertible senior notes due 2023—net |
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Convertible senior notes due 2024—net |
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Non-current operating lease liabilities |
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Non-current finance lease liabilities |
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Other non-current obligations |
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Total liabilities |
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Commitments and contingencies (Note 16) |
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Stockholders’ equity: |
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Preferred stock—$ |
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Common stock—$ |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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Accumulated deficit |
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( |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ |
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$ |
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The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
RH
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts) (Unaudited)
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THREE MONTHS ENDED |
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MAY 1, |
MAY 2, |
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2021 |
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2020 |
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Net revenues |
$ |
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$ |
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Cost of goods sold |
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Gross profit |
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Selling, general and administrative expenses |
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Income from operations |
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Other expenses |
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Interest expense—net |
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Tradename impairment |
— |
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Loss on extinguishment of debt |
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— |
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Total other expenses |
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Income (loss) before income taxes |
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( |
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Income tax expense (benefit) |
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( |
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Income (loss) before equity method investments |
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( |
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Share of equity method investments losses |
( |
— |
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Net income (loss) |
$ |
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$ |
( |
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Weighted-average shares used in computing basic net income (loss) per share |
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Basic net income (loss) per share |
$ |
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$ |
( |
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Weighted-average shares used in computing diluted net income (loss) per share |
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Diluted net income (loss) per share |
$ |
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$ |
( |
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
PART I. FINANCIAL INFORMATION |
2021 FIRST QUARTER FORM 10-Q | 4 |
RH
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands) (Unaudited)
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THREE MONTHS ENDED |
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MAY 1, |
MAY 2, |
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2021 |
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2020 |
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Net income (loss) |
$ |
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$ |
( |
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Net gains (losses) from foreign currency translation |
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( |
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Total comprehensive income (loss) |
$ |
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$ |
( |
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
PART I. FINANCIAL INFORMATION |
2021 FIRST QUARTER FORM 10-Q | 5 |
RH
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share amounts)
(Unaudited)
THREE MONTHS ENDED |
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COMMON STOCK |
TREASURY STOCK |
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ACCUMULATED |
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RETAINED |
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ADDITIONAL |
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OTHER |
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EARNINGS |
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TOTAL |
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PAID-IN |
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COMPREHENSIVE |
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(ACCUMULATED |
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STOCKHOLDERS' |
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SHARES |
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AMOUNT |
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CAPITAL |
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INCOME (LOSS) |
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DEFICIT) |
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SHARES |
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AMOUNT |
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EQUITY |
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Balances—January 30, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
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— |
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$ |
— |
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$ |
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Stock-based compensation |
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— |
— |
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— |
— |
— |
— |
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Vested and delivered restricted stock units |
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— |
( |
— |
— |
— |
— |
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( |
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Exercise of stock options |
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— |
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— |
— |
— |
— |
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Settlement of convertible senior notes |
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— |
( |
— |
— |
( |
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( |
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Exercise of call option under bond hedge upon settlement of convertible senior notes |
( |
— |
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— |
— |
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( |
— |
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Net income |
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— |
— |
— |
— |
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— |
— |
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Net gains from foreign currency translation |
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— |
— |
— |
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— |
— |
— |
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Balances—May 1, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
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— |
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$ |
— |
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$ |
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Balances—February 1, 2020 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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— |
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$ |
— |
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$ |
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Stock-based compensation |
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— |
— |
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— |
— |
— |
— |
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Vested and delivered restricted stock units |
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— |
( |
— |
— |
— |
— |
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( |
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Exercise of stock options |
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— |
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— |
— |
— |
— |
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Repurchases of common stock |
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( |
— |
— |
— |
— |
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( |
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( |
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Net loss |
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— |
— |
— |
— |
( |
— |
— |
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( |
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Net losses from foreign currency translation |
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— |
— |
— |
( |
— |
— |
— |
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( |
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Balances—May 2, 2020 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
PART I. FINANCIAL INFORMATION |
2021 FIRST QUARTER FORM 10-Q | 6 |
RH
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
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THREE MONTHS ENDED |
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MAY 1, |
MAY 2, |
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2021 |
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2020 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net income (loss) |
$ |
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$ |
( |
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Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
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Depreciation and amortization |
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Non-cash operating lease cost |
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Tradename impairment |
— |
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Asset impairments |
— |
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Amortization of debt discount |
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Accretion of debt discount upon settlement of debt |
( |
— |
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Stock-based compensation expense |
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Non-cash finance lease interest expense |
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Product recalls |
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— |
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Loss on extinguishment of debt |
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— |
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Share of equity method investments losses |
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— |
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Other non-cash items |
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( |
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Change in assets and liabilities: |
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Accounts receivable |
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( |
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Merchandise inventories |
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( |
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( |
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Prepaid expense and other assets |
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( |
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( |
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Landlord assets under construction—net of tenant allowances |
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( |
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( |
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Accounts payable and accrued expenses |
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( |
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( |
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Deferred revenue and customer deposits |
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Other current liabilities |
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Current and non-current operating lease liabilities |
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( |
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( |
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Other non-current obligations |
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( |
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( |
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Net cash provided by (used in) operating activities |
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( |
RH
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(In thousands) (Unaudited)
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THREE MONTHS ENDED |
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MAY 1, |
MAY 2, |
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2021 |
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2020 |
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CASH FLOWS FROM INVESTING ACTIVITIES |
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Capital expenditures |
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( |
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( |
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Equity method investments |
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( |
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— |
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Net cash used in investing activities |
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( |
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( |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Borrowings under asset based credit facility |
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— |
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Repayments under asset based credit facility |
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— |
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( |
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Repayments under promissory and equipment security notes |
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( |
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( |
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Repayments of convertible senior notes |
( |
— |
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Principal payments under finance leases |
( |
( |
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Proceeds from exercise of stock options |
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Tax withholdings related to issuance of stock-based awards |
( |
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( |
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Net cash provided by (used in) financing activities |
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( |
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Effects of foreign currency exchange rate translation |
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( |
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Net increase (decrease) in cash and cash equivalents and restricted cash equivalents |
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( |
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Cash and cash equivalents and restricted cash equivalents |
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Beginning of period—cash and cash equivalents |
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Beginning of period—restricted cash equivalents (acquisition related escrow deposits) |
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— |
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Beginning of period—cash and cash equivalents |
$ |
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$ |
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End of period—cash and cash equivalents |
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End of period—restricted cash equivalents (acquisition related escrow deposits) |
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— |
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End of period—cash and cash equivalents and restricted cash equivalents |
$ |
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$ |
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Non-cash transactions: |
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Property and equipment additions in accounts payable and accrued expenses at period-end |
$ |
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$ |
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Landlord asset additions in accounts payable and accrued expenses at period-end |
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Shares issued on settlement of convertible senior notes |
( |
— |
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Shares received on exercise of call option under bond hedge upon settlement of convertible senior notes |
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— |
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
PART I. FINANCIAL INFORMATION |
2021 FIRST QUARTER FORM 10-Q | 8 |
RH
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1—THE COMPANY
Nature of Business
RH, a Delaware corporation, together with its subsidiaries (collectively, “we,” “us,” “our” or the “Company”), is a leading luxury retailer in the home furnishings market that offers merchandise assortments across a number of categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, and child and teen furnishings. These products are sold through our retail locations, websites and Source Books.
As of May 1, 2021, we operated a total of
Basis of Presentation
The accompanying unaudited interim condensed consolidated financial statements have been prepared from the Company’s records and, in our senior leadership team’s opinion, include all adjustments, consisting of normal recurring adjustments, necessary to fairly state our financial position as of May 1, 2021, and the results of operations for the three months ended May 1, 2021, and May 2, 2020. Our current fiscal year, which consists of 52 weeks, ends on January 29, 2022 (“fiscal 2021”).
Certain information and disclosures normally included in the notes to annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted for purposes of these interim condensed consolidated financial statements.
The preparation of our condensed consolidated financial statements in conformity with GAAP requires our senior leadership team to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and such differences could be material to the condensed consolidated financial statements.
We have assessed various accounting estimates and other matters, including those that require consideration of forecasted financial information, in context of the unknown future impacts of the novel coronavirus disease (“COVID-19” or “the pandemic”) using information that is reasonably available to us at this time. The accounting estimates and other matters we have assessed include, but were not limited to, sales return reserve, inventory reserve, allowance for doubtful accounts, goodwill, intangible and other long-lived assets. Our current assessment of these estimates is included in our condensed consolidated financial statements as of and for the three months ended May 1, 2021. As additional information becomes available to us, our future assessment of these estimates, including our expectations at the time regarding the duration, scope and severity of the pandemic, as well as other factors, could materially and adversely impact our condensed consolidated financial statements in future reporting periods.
These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2021 (the “2020 Form 10-K”).
The results of operations for the three months ended May 1, 2021, presented herein are not necessarily indicative of the results to be expected for the full fiscal year. Our business, like the businesses of retailers generally, is subject to uncertainty surrounding the financial impact of the novel coronavirus disease as discussed in Recent Developments—COVID-19 below.
PART I. FINANCIAL INFORMATION |
2021 FIRST QUARTER FORM 10-Q | 9 |
Recent Developments—COVID-19
The COVID-19 outbreak in the first quarter of fiscal 2020 caused disruption to our business operations. In our initial response to the health crisis, we undertook immediate adjustments to our business operations including temporarily closing all of our retail locations and Restaurants, curtailing expenses, and delaying investments including scaling back some inventory orders while we assessed the status of our business. Our approach to the crisis evolved quickly as our business trends substantially improved during the second through fourth fiscal quarters of fiscal 2020 as a result of both the reopening of most of our retail locations and also strong consumer demand for our products. Operational restrictions related to the COVID-19 pandemic affecting our Galleries and hospitality locations continued to fluctuate in the first quarter of 2021 based upon changes in local conditions and regulations. As of June 4, 2021, substantially all of our Galleries, Outlets, and Restaurants were open, although many of our Restaurants and Galleries continue to conduct business with occupancy limitations and other operational restrictions.
Our overall customer demand in specific markets has generally correlated favorably with our customers’ ability to access our Galleries and Outlets. Although our business has strengthened during the period from the second quarter of fiscal 2020 and continuing into fiscal 2021, consumer spending patterns may shift away from spending on the home and home-related categories, such as home furnishings, as pandemic restrictions are lifted and consumers return to pre-COVID consumption trends, such as spending on travel and leisure and other activities. In addition, various constraints in our merchandise supply chain have resulted in some delays in our ability to convert business demand into revenues at normal historical rates. We anticipate that the backlog of orders for merchandise from our vendors, coupled with business conditions related to the pandemic, will continue to adversely affect the capacity of our vendors and supply chain to meet our merchandise demand levels during fiscal 2021. It may take several quarters for inventory receipts and manufacturing to catch up to the increase in customer demand and as a result the exact timing cannot be accurately predicted due to ongoing uncertainty of the continuing impact of the pandemic on our global supply chain. In particular, business circumstances and operational conditions in numerous international locations where our vendors operate are subject to ongoing risks, and regions in which our vendors have production facilities, such as India, have experienced various spikes in cases related to the pandemic. As a result, the pandemic may continue to adversely affect business operations in these jurisdictions, which could, in turn, have a negative impact on our vendors and therefore on our business as well, as including our ability to source products.
We will continue to closely manage our investments while considering both the overall economic environment as well as the needs of our business operations. In addition, our near-term decisions regarding the sources and uses of capital in our business will continue to reflect and adapt to changes in market conditions and our business including further developments with respect to the pandemic. For more information, refer to the section entitled “Risk Factors” in our 2020 Form 10-K.
NOTE 2—RECENTLY ISSUED ACCOUNTING STANDARDS
New Accounting Standards or Updates Adopted
Income Taxes
In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12—Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The ASU impacts various topic areas within ASC 740, including accounting for taxes under hybrid tax regimes, accounting for increases in goodwill, allocation of tax amounts to separate company financial statements within a group that files a consolidated tax return, intra period tax allocation, interim period accounting, and accounting for ownership changes in investments, among other minor codification improvements. The guidance in this ASU becomes effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. We adopted this standard in the first quarter of fiscal 2021 and the adoption did not have an impact on our condensed consolidated financial statements.
PART I. FINANCIAL INFORMATION |
2021 FIRST QUARTER FORM 10-Q | 10 |
New Accounting Standards or Updates Not Yet Adopted
Convertible Instruments and Contracts in an Entity’s Own Equity
In August 2020, the FASB issued ASU 2020-06—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Specifically, the ASU removes the separation models for convertible debt with a cash conversion feature or convertible instruments with a beneficial conversion feature. As a result, after adopting the ASU’s guidance, we will not separately present in equity an embedded conversion feature of such debt. Instead, we will account for a convertible debt instrument wholly as debt unless (i) a convertible instrument contains features that require bifurcation as a derivative or (ii) a convertible debt instrument was issued at a substantial premium. Additionally, the ASU removes certain conditions for equity classification related to contracts in an entity’s own equity (e.g., warrants) and amends certain guidance related to the computation of earnings per share for convertible instruments and contracts on an entity’s own equity. The guidance in this ASU can be adopted using either a full or modified retrospective approach and becomes effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. We will adopt the ASU in the first quarter of fiscal 2022, and we are evaluating the effects that the adoption of this ASU will have on our condensed consolidated financial statements, including the adoption approach.
NOTE 3—PREPAID EXPENSE AND OTHER ASSETS
Prepaid expense and other current assets consist of the following (in thousands):
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MAY 1, |
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JANUARY 30, |
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2021 |
2021 |
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Prepaid expense and other current assets |
$ |
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$ |
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Capitalized catalog costs |
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Promissory notes receivable, including interest (1) |
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Vendor deposits |
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Right of return asset for merchandise |
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Acquisition related escrow deposits |
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Total prepaid expense and other current assets |
$ |
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$ |
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(1) | Represents promissory notes, including principal and accrued interest, due from a related party. Refer to Note 5—Equity Method Investments. |
Other non-current assets consist of the following (in thousands):
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MAY 1, |
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JANUARY 30, |
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2021 |
2021 |
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Landlord assets under construction—net of tenant allowances |
$ |
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$ |
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Initial direct costs prior to lease commencement |
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Capitalized cloud computing costs—net (1) |
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Other deposits |
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Acquisition related escrow deposits |
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Deferred financing fees |
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Other non-current assets |
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Total other non-current assets |
$ |
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$ |
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(1) |
Presented net of accumulated amortization of $ |
PART I. FINANCIAL INFORMATION |
2021 FIRST QUARTER FORM 10-Q | 11 |
NOTE 4—GOODWILL, TRADENAMES, TRADEMARKS AND OTHER INTANGIBLE ASSETS
The following sets forth the goodwill, tradenames, trademarks and other intangible assets activity for the RH Segment and Waterworks (See Note 17—Segment Reporting), for the three months ended May 1, 2021 (in thousands):
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FOREIGN |
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JANUARY 30, |
CURRENCY |
MAY 1, |
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2021 |
ADDITIONS |
TRANSLATION |
2021 |
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RH Segment |
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Goodwill |
$ |
|
$ |
— |
$ |
|
$ |
|
||||
Tradenames, trademarks and other intangible assets |
|
|
|
|
|
— |
|
|
||||
Waterworks (1) |
|
|
|
|
|
|
||||||
Tradename (2) |
|
|
|
— |
|
— |
|
|
(1) |
Waterworks reporting unit goodwill of $ |
(2) |
Presented net of an impairment charge of $ |
Waterworks Tradename Impairment
During the first quarter of fiscal 2020, as a result of the
NOTE 5—EQUITY METHOD INVESTMENTS
Equity method investments represent our
During the three months ended May 1, 2021, we recorded our proportionate share of equity method investments losses of $
As of May 1, 2021, $
An affiliate of the managing member of the Aspen LLCs became the landlord of an additional RH Design Gallery in the first quarter of fiscal 2021.
PART I. FINANCIAL INFORMATION |
2021 FIRST QUARTER FORM 10-Q | 12 |
NOTE 6—ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accounts payable and accrued expenses consist of the following (in thousands):
|
|
MAY 1, |
|
JANUARY 30, |
||
|
2021 |
2021 |
||||
Accounts payable |
$ |
|
$ |
|
||
Accrued compensation |
|
|
|
|
||
Accrued freight and duty |
|
|
|
|
||
Accrued sales taxes |
|
|
|
|
||
Accrued occupancy |
|
|
|
|
||
Accrued catalog costs |
|
|
|
|
||
Accrued professional fees |
|
|
|
|
||
Deferred consideration for asset purchase |
— |
|
||||
Other accrued expenses |
|
|
|
|
||
Total accounts payable and accrued expenses |
$ |
|
$ |
|
Other current liabilities consist of the following (in thousands):
|
|
MAY 1, |
|
JANUARY 30, |
||
|
2021 |
2021 |
||||
Allowance for sales returns |
$ |
|
$ |
|
||
Current portion of equipment promissory notes |
|
|
|
|||
Unredeemed gift card and merchandise credit liability |
|
|
|
|
||
Finance lease liabilities |
|
|
||||
Product recall reserve |
|
|
|
|
||
Other current liabilities |
|
|
|
|
||
Total other current liabilities |
$ |
|
$ |
|
Contract Liabilities
We defer revenue associated with merchandise delivered via the home-delivery channel. We expect that substantially all of the deferred revenue and customer deposits as of May 1, 2021 will be recognized within the next six months as the performance obligations are satisfied. New membership fees are recorded as deferred revenue when collected from customers and recognized as revenue based on expected product revenues over the annual membership period, based on historical trends of sales to members. Membership renewal fees are recorded as deferred revenue when collected from customers and are recognized as revenue on a straight-line basis over the membership period, or
In addition, we defer revenue when cash payments are received in advance of performance for unsatisfied obligations related to our gift cards. During the three months ended May 1, 2021 and May 2, 2020, we recognized $
PART I. FINANCIAL INFORMATION |
2021 FIRST QUARTER FORM 10-Q | 13 |
NOTE 7—OTHER NON-CURRENT OBLIGATIONS
Other non-current obligations consist of the following (in thousands):
|
|
MAY 1, |
|
JANUARY 30, |
||
|
2021 |
2021 |
||||
Deferred payroll taxes |
$ |
|
$ |
|
||
Rollover units and profit interests (1) |
|
|
|
|
||
Unrecognized tax benefits |
|
|
|
|
||
Other non-current obligations |
|
|
|
|
||
Total other non-current obligations |
$ |
|
$ |
|
(1) | Represents rollover units and profit interests associated with the acquisition of Waterworks. Refer to Note 15—Stock-Based Compensation. |
.
NOTE 8—LEASES
|
THREE MONTHS ENDED |
|||||
MAY 1, |
|
MAY 2, |
||||
|
2021 |
|
2020 |
|||
Operating lease cost (1) |
|
$ |
|
$ |
|
|
Finance lease costs |
||||||
Amortization of leased assets (1) |
|
|
||||
Interest on lease liabilities (2) |
|
|
||||
Variable lease costs (3) |
|
|
||||
Sublease income (4) |
( |
( |
||||
Total lease costs—net |
$ |
|
$ |
|
(1) | Operating lease costs and amortization of finance lease right-of-use assets are included in cost of goods sold or selling, general and administrative expenses on the condensed consolidated statements of operations based on our accounting policy. Refer to Note 3—Significant Accounting Policies in the 2020 Form 10-K. |
(2) | Included in interest expense—net on the condensed consolidated statements of operations. |
(3) |
Represents variable lease payments under operating and finance lease agreements. The amounts primarily represent contingent rent based on a percentage of retail sales over contractual levels of $ |
(4) | Included in selling, general and administrative expenses on the condensed consolidated statements of operations. |
PART I. FINANCIAL INFORMATION |
2021 FIRST QUARTER FORM 10-Q | 14 |
MAY 1, |
JANUARY 30, |
|||||||
|
2021 |
|
2021 |
|||||
Balance Sheet Classification |
||||||||
Assets |
||||||||
Operating leases |
$ |
|
$ |
|
||||
Finance leases (1)(2) |
|
|
||||||
Total lease right-of-use assets |
$ |
|
$ |
|
||||
Liabilities |
||||||||
Current (3) |
||||||||
Operating leases |
$ |
|
$ |
|
||||
Finance leases |
|
|
||||||
Total lease liabilities—current |
|
|
||||||
Non-current |
||||||||
Operating leases |
|
|
||||||
Finance leases |
|
|
||||||
Total lease liabilities—non-current |
|
|
||||||
Total lease liabilities |
$ |
|
$ |
|
(1) | Finance lease right-of-use assets include capitalized amounts related to our completed construction activities to design and build leased assets, which are reclassified from other non-current assets upon lease commencement. |
(2) |
Finance lease right-of-use assets are recorded net of accumulated amortization of $ |
(3) | Current portion of lease liabilities represents the reduction of the related lease liability over the next 12 months. |
PART I. FINANCIAL INFORMATION |
2021 FIRST QUARTER FORM 10-Q | 15 |
The maturities of lease liabilities are as follows as of May 1, 2021 (in thousands):
OPERATING |
FINANCE |
||||||||||
FISCAL YEAR |
|
LEASES |
|
LEASES |
|
TOTAL |
|||||
Remainder of fiscal 2021 |
$ |
|
$ |
|
$ |
|
|||||
2022 |
|
|
|
||||||||
2023 |
|
|
|
||||||||
2024 |
|
|
|
||||||||
2025 |
|
|
|
||||||||
2026 |
|
|
|
||||||||
Thereafter |
|
|
|
||||||||
Total lease payments (1)(2) |
|
|
|
||||||||
Less—imputed interest (3) |
( |
( |
( |
||||||||
Present value of lease liabilities |
$ |
|
$ |
|
$ |
|
(1) |
Total lease payments include future obligations for renewal options that are reasonably certain to be exercised and are included in the measurement of the lease liability. Total lease payments exclude $ |
(2) |
Excludes future commitments under |
(3) | Calculated using the discount rate for each lease at lease commencement. |
Supplemental information related to leases consists of the following:
THREE MONTHS ENDED |
||||||
MAY 1, |
|
MAY 2, |
||||
2021 |
|
2020 |
||||
Weighted-average remaining lease term (years) |
||||||
Operating leases |
||||||
Finance leases |
||||||
Weighted-average discount rate |
||||||
Operating leases |
||||||
Finance leases |
PART I. FINANCIAL INFORMATION |
2021 FIRST QUARTER FORM 10-Q | 16 |
Other information related to leases consists of the following (in thousands):
THREE MONTHS ENDED |
||||||
MAY 1, |
|
MAY 2, |
||||
2021 |
|
2020 |
||||
Cash paid for amounts included in the measurement of lease liabilities |
|
|||||
Operating cash flows from operating leases |
$ |
( |
$ |
( |
||
Operating cash flows from finance leases |
( |
( |
||||
Financing cash flows from finance leases |
( |
( |
||||
Total cash outflows from leases |
$ |
( |
$ |
( |
||
Lease right-of-use assets obtained in exchange for lease obligations—net of lease terminations (non-cash) |
||||||
Operating leases |
$ |
|
$ |
|
||
Finance leases |
|
|
Long-lived Asset Impairment
During the three months ended May 2, 2020, we recognized long-lived asset impairment charges of $