Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 28, 2014 | Oct. 28, 2014 | |
Entity Information [Line Items] | ' | ' |
Entity Registrant Name | 'BLUE NILE INC | ' |
Entity Central Index Key | '0001091171 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 28-Sep-14 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Current Fiscal Year End Date | '--01-04 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 11,845,623 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 28, 2014 | Dec. 29, 2013 | Sep. 29, 2013 |
In Thousands, unless otherwise specified | |||
Current assets: | ' | ' | ' |
Cash and cash equivalents | $32,324 | $115,942 | $47,930 |
Trade accounts receivable | 3,032 | 3,005 | 2,513 |
Other accounts receivable | 468 | 521 | 2,434 |
Inventories | 33,084 | 34,530 | 30,934 |
Deferred income taxes | 742 | 1,038 | 684 |
Prepaid income taxes | 297 | 247 | 1,607 |
Prepaids and other current assets | 1,536 | 1,318 | 1,239 |
Total current assets | 71,483 | 156,601 | 87,341 |
Property and equipment, net | 10,378 | 10,188 | 9,573 |
Intangible assets, net | 108 | 140 | 152 |
Deferred income taxes | 3,927 | 5,470 | 7,161 |
Note receivable | 2,000 | 2,000 | 2,000 |
Other investments | 2,280 | 2,280 | 2,280 |
Other assets | 262 | 246 | 192 |
Total assets | 90,438 | 176,925 | 108,699 |
Current liabilities: | ' | ' | ' |
Accounts payable | 72,312 | 122,322 | 73,839 |
Accrued liabilities | 6,522 | 10,751 | 7,228 |
Current portion of long-term financing obligation | 32 | 51 | 61 |
Current portion of deferred rent | 286 | 279 | 277 |
Total current liabilities | 79,152 | 133,403 | 81,405 |
Long-term financing obligation, less current portion | 497 | 574 | 580 |
Deferred rent, less current portion | 2,051 | 2,229 | 2,287 |
Other long-term liabilities | 117 | 114 | 67 |
Commitments and contingencies | ' | ' | ' |
Stockholders' equity: | ' | ' | ' |
Preferred stock, $0.001 par value; 5,000 shares authorized, none issued and outstanding | 0 | 0 | 0 |
Common stock, $0.001 par value; 300,000 shares authorized; 21,601, 21,480 and 21,107 shares issued, respectively 11,845, 12,932 and 12,589 shares outstanding, respectively | 22 | 22 | 21 |
Additional paid-in capital | 226,812 | 223,261 | 210,865 |
Accumulated other comprehensive loss | -153 | -26 | -56 |
Retained earnings | 98,658 | 93,758 | 88,827 |
Treasury stock, at cost; 9,756, 8,548 and 8,518 shares outstanding, respectively | -316,718 | -276,410 | -275,297 |
Total stockholders' equity | 8,621 | 40,605 | 24,360 |
Total liabilities and stockholders' equity | $90,438 | $176,925 | $108,699 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 28, 2014 | Dec. 29, 2013 | Sep. 29, 2013 |
In Thousands, except Per Share data, unless otherwise specified | |||
Stockholders' equity: | ' | ' | ' |
Preferred stock, par value | $0.00 | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000 | 5,000 | 5,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common stock, par value | $0.00 | $0.00 | $0.00 |
Common stock, shares authorized | 300,000 | 300,000 | 300,000 |
Common stock, shares issued | 21,601 | 21,480 | 21,107 |
Common stock, shares outstanding | 11,845 | 12,932 | 12,589 |
Treasury stock, shares outstanding | 9,756 | 8,548 | 8,518 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements Of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 |
Income Statement [Abstract] | ' | ' | ' | ' |
Net sales | $105,760 | $98,925 | $316,057 | $304,050 |
Cost of sales | 86,910 | 80,238 | 257,915 | 247,620 |
Gross profit | 18,850 | 18,687 | 58,142 | 56,430 |
Selling, general and administrative expenses | 16,290 | 16,165 | 50,787 | 49,338 |
Operating income | 2,560 | 2,522 | 7,355 | 7,092 |
Other (loss) income, net: | ' | ' | ' | ' |
Interest income, net | 19 | 20 | 91 | 84 |
Other (loss) income, net | -81 | 3 | -47 | 143 |
Total other (loss) income, net | -62 | 23 | 44 | 227 |
Income before income taxes | 2,498 | 2,545 | 7,399 | 7,319 |
Income tax expense (benefit) | 848 | -361 | 2,499 | 1,375 |
Net income | $1,650 | $2,906 | $4,900 | $5,944 |
Basic net income per share | $0.14 | $0.23 | $0.40 | $0.48 |
Diluted net income per share | $0.14 | $0.23 | $0.40 | $0.47 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements Of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 |
Other Comprehensive Income (Loss), Tax [Abstract] | ' | ' | ' | ' |
Net Income | $1,650 | $2,906 | $4,900 | $5,944 |
Other comprehensive (loss) income: | ' | ' | ' | ' |
Foreign currency translation adjustments | -108 | 55 | -127 | 44 |
Total comprehensive income | $1,542 | $2,961 | $4,773 | $5,988 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statement Of Changes In Stockholders' Equity (USD $) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Stock [Member] |
In Thousands | ||||||
Balance at Dec. 29, 2013 | $40,605 | $22 | $223,261 | $93,758 | ($26) | ($276,410) |
Balance, shares at Dec. 29, 2013 | ' | -21,480 | ' | ' | ' | -8,548 |
Net income | 4,900 | ' | ' | 4,900 | ' | ' |
Other comprehensive loss | -127 | ' | ' | ' | -127 | ' |
Tax deficiency from exercise of stock options | -1,798 | ' | -1,798 | ' | ' | ' |
Exercise of common stock options | 2,266 | 0 | 2,266 | ' | ' | ' |
Exercise of common stock options, shares | ' | 93 | ' | ' | ' | ' |
Issuance of common stock to directors | 60 | 0 | 60 | ' | ' | ' |
Issuance of common stock to directors, shares | ' | 2 | ' | ' | ' | ' |
Vesting of restricted stock units, shares | ' | 34 | ' | ' | ' | ' |
Vesting of restricted stock units, value | 0 | 0 | ' | ' | ' | ' |
Shares withheld related to net share settlement of equity awards, shares | ' | -8 | ' | ' | ' | ' |
Shares withheld related to net share settlement of equity awards, value | -244 | 0 | -244 | ' | ' | ' |
Stock-based compensation | 3,267 | ' | 3,267 | ' | ' | ' |
Repurchase of common stock, shares | ' | ' | ' | ' | ' | -1,208 |
Repurchase of common stock, value | -40,308 | ' | ' | ' | ' | -40,308 |
Balance at Sep. 28, 2014 | $8,621 | $22 | $226,812 | $98,658 | ($153) | ($316,718) |
Balance, shares at Sep. 28, 2014 | ' | -21,601 | ' | ' | ' | -9,756 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements Of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 28, 2014 | Sep. 29, 2013 |
Operating activities: | ' | ' |
Net income | $4,900 | $5,944 |
Adjustments to reconcile net income to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 2,742 | 2,363 |
Loss on disposal of property and equipment | 0 | 3 |
Stock-based compensation | 3,245 | 3,765 |
Deferred income taxes | 1,839 | 867 |
Tax deficiency from exercise of stock options | -1,798 | -147 |
Excess tax benefit from exercise of stock options | -173 | -250 |
Changes in assets and liabilities: | ' | ' |
Receivables | 26 | 115 |
Inventories | 1,446 | 2,336 |
Prepaid federal income taxes | -50 | -1,607 |
Prepaid expenses and other assets | -234 | -85 |
Accounts payable | -50,071 | -42,146 |
Accrued liabilities | -4,229 | -5,211 |
Other long term liabilities | 3 | 43 |
Deferred rent and other | -171 | 130 |
Net cash used in operating activities | -42,525 | -33,880 |
Investing activities: | ' | ' |
Purchases of property and equipment | -2,820 | -4,109 |
Purchases of other investments | 0 | -280 |
Net cash used in investing activities | -2,820 | -4,389 |
Financing activities: | ' | ' |
Repurchase of common stock | -40,308 | -9,320 |
Proceeds from stock option exercises | 2,266 | 8,269 |
Taxes paid for net share settlement of equity awards | -244 | 0 |
Excess tax benefit from exercise of stock options | 173 | 250 |
Principal payments under long-term financing obligation | -96 | -45 |
Net cash used in financing activities | -38,209 | -846 |
Effect of exchange rate changes on cash and cash equivalents | -64 | 28 |
Net decrease in cash and cash equivalents | -83,618 | -39,087 |
Cash and cash equivalents, beginning of period | 115,942 | 87,017 |
Cash and cash equivalents, end of period | 32,324 | 47,930 |
Supplemental disclosure of cash flow information: | ' | ' |
Cash paid for income taxes | 2,506 | 4,965 |
Non-cash investing and financing activities: | ' | ' |
Receivable from stock option exercises | $0 | $1,578 |
Description_Of_Our_Business_An
Description Of Our Business And Summary Of Significant Accounting Policies | 9 Months Ended |
Sep. 28, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Description Of Our Business And Summary Of Significant Accounting Policies | ' |
Description of Our Business and Summary of Significant Accounting Policies | |
The Company | |
Blue Nile, Inc. ("Blue Nile", the “Company”, "we" or "our") is a leading online retailer of high-quality diamonds and fine jewelry. In addition to sales of diamonds and fine jewelry, the Company provides education, guidance and support to enable customers to more effectively learn about and purchase diamonds and fine jewelry. The Company, a Delaware corporation based in Seattle, Washington, was formed in March 1999. The Company serves consumers in over 40 countries and territories all over the world through its website at www.bluenile.com. Information found on the Company’s website is not incorporated by reference into this Quarterly Report on Form 10-Q or any of its other filings with the U.S. Securities and Exchange Commission (the “SEC”). | |
Basis of Presentation | |
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 29, 2013, filed with the SEC on February 25, 2014 (the "Annual Report"). The same accounting policies are followed for preparing quarterly and annual financial statements. In the opinion of management, all adjustments necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods have been included and are of a normal, recurring nature. | |
The financial information as of December 29, 2013 is derived from the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended December 29, 2013, included in Item 8 of the Annual Report. | |
Due to a number of factors, including the seasonal nature of the retail industry and other factors described in this quarterly report, quarterly results are not necessarily indicative of the results for the full fiscal year or any other subsequent interim period. | |
Principles of Consolidation | |
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All transactions and balances between the Company and its wholly-owned subsidiaries are eliminated in consolidation. | |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates include the allowance for sales returns, accounting for income taxes, and assumptions used to determine stock-based compensation expense. Actual results could differ materially from those estimates. | |
Foreign Currency | |
The functional currency of most of the Company's subsidiaries is the applicable local currency. The assets and liabilities of our subsidiaries have been translated to U.S. dollars using the exchange rates effective on the balance sheet dates, while income and expense accounts are translated at the average rates in effect during the periods presented. The resulting translation adjustments are recorded as a component of other comprehensive income (loss) within stockholders' equity. | |
The Company offers customers the ability to transact in 24 currencies. Some of the Company’s subsidiaries engage in transactions denominated in currencies other than the Company’s functional currency. Gains or losses arising from these transactions are recorded in other income, net in the condensed consolidated statements of operations. | |
Note Receivable and Other Investments | |
The Company holds a minority ownership of a privately-held company in the form of convertible preferred shares, purchased for an aggregate amount of $2.0 million, which we account for under the cost method of accounting. | |
The Company holds a $2.0 million note receivable (the "Note") from the same privately-held company. The interest rate changes over the term of the Note to LIBOR plus a predetermined rate per annum. The Note is recorded at its face amount on the Company's condensed consolidated balance sheet. | |
The Company holds a minority ownership in another privately-held company in the form of common stock and warrants, purchased for $280,000, which we account for under the cost method of accounting. | |
The Company reviews its investments for impairment when events and circumstances indicate that the decline in fair value of the assets below the carrying value is other-than-temporary. No other-than-temporary impairment charges were recorded for the year to date ended September 28, 2014. | |
Credit Agreement | |
On February 21, 2014, the Company renewed its Credit Agreement (the "Credit Agreement") with U.S. Bank National Association (the "Lender"). The Credit Agreement provides for a $40.0 million (the "Credit Limit") unsecured, revolving credit facility (the "Revolving Loan") with an option to increase the Credit Limit to $50.0 million. Under the terms and conditions of the Credit Agreement, the Company may borrow from the Lender for one year with annual renewals at the Lender's discretion. The Company also has the ability to term out the outstanding line balance to a term of up to five years. The aggregate principal amounts outstanding at any one time shall not exceed the Credit Limit. | |
As of September 28, 2014, the Company does not have any amounts outstanding under the Credit Agreement and is in compliance with the covenants of the Credit Agreement. | |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2014-09 (“ASU 2014-09”), “Revenue from Contracts with Customers (Topic 606)” which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. Early adoption is not permitted. ASU 2014-09 is effective for the Company in the first quarter of its fiscal year 2017. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. | |
In August 2014, the FASB issued Accounting Standards Update No. 2014-15 (“ASU 2014-15”), “Presentation of Financial Statements - Going Concern.” The new standard provides guidance around management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on our financial statements and related disclosures. |
Stockbased_Compensation
Stock-based Compensation | 9 Months Ended | ||||||||||
Sep. 28, 2014 | |||||||||||
Share-based Compensation [Abstract] | ' | ||||||||||
Stock-Based Compensation | ' | ||||||||||
Stock-based Compensation | |||||||||||
As of September 28, 2014, the Company had five equity plans. Additional information regarding these plans is disclosed in the Annual Report. | |||||||||||
Stock-based compensation expense, net of estimated forfeitures, is recognized on a straight-line basis over the vesting period for each stock option or restricted stock unit ("RSU") grant that is expected to vest at some point in the future. Forfeitures are estimated at the date of grant based on the Company's historical experience and future expectations. | |||||||||||
The fair value of each stock option on the date of grant is estimated using the Black-Scholes-Merton option valuation model. The fair value of each RSU is based on the Fair Market Value (as defined in the 2013 Equity Incentive Plan) of the Company's common stock on the date of the grant. | |||||||||||
There were no stock options granted during the quarter ended September 28, 2014. The following weighted average assumptions were used for the valuation of stock options granted during the fiscal year to date periods presented: | |||||||||||
Year to date ended | |||||||||||
September 28, | September 29, | ||||||||||
2014 | 2013 | ||||||||||
Expected term | 4.5 years | 4.5 years | |||||||||
Expected volatility | 46.9 | % | 56.9 | % | |||||||
Expected dividend yield | 0 | % | 0 | % | |||||||
Risk-free interest rate | 1.5 | % | 0.9 | % | |||||||
Estimated weighted average fair value per stock option granted | $ | 13.28 | $ | 14.68 | |||||||
The assumptions used to calculate the fair value of stock options granted are evaluated and revised, if necessary, to reflect market conditions and the Company’s experience. | |||||||||||
A summary of stock option activity for the year to date ended September 28, 2014 is as follows: | |||||||||||
Options | Weighted | Weighted | Aggregate | ||||||||
(in thousands) | Average | Average | Intrinsic Value | ||||||||
Exercise Price | Remaining | (in thousands) | |||||||||
Contractual | |||||||||||
Term | |||||||||||
(in years) | |||||||||||
Balance, December 30, 2013 | 1,493 | $ | 41.93 | ||||||||
Granted | 79 | 33 | |||||||||
Exercised | (93 | ) | 24.43 | ||||||||
Canceled | (302 | ) | 52.34 | ||||||||
Balance, September 28, 2014 | 1,177 | $ | 40.04 | 5.46 | $ | 519 | |||||
Vested and expected to vest at September 28, 2014 | 1,148 | $ | 40.21 | 5.39 | $ | 517 | |||||
Exercisable, September 28, 2014 | 886 | $ | 42.08 | 4.6 | $ | 496 | |||||
A summary of RSU activity for the year to date ended September 28, 2014 is as follows: | |||||||||||
RSUs | Weighted | Weighted | Aggregate | ||||||||
(in thousands) | Average Grant | Average | Intrinsic Value | ||||||||
Date Fair | Remaining | (in thousands) | |||||||||
Value | Contractual | ||||||||||
Term | |||||||||||
(in years) | |||||||||||
Balance, December 30, 2013 | 88 | $ | 31.01 | ||||||||
Granted | 90 | 32.93 | |||||||||
Vested | (34 | ) | 31.5 | ||||||||
Canceled | (25 | ) | 32.54 | ||||||||
Balance, September 28, 2014 | 119 | $ | 32.01 | 1.38 | $ | 3,519 | |||||
Vested and expected to vest at September 28, 2014 | 103 | $ | 37.42 | 1.29 | $ | 3,057 | |||||
The aggregate intrinsic value in the tables above are before applicable income taxes and represent the amount recipients would have received if all stock options had been exercised or RSUs had been released on the last business day of the period indicated, based on the closing stock price of the Company's common stock on such date. | |||||||||||
The total intrinsic value of stock options exercised during the year to date ended September 28, 2014 was $1.0 million. During the year to date ended September 28, 2014, the total fair value of stock options vested was $2.4 million. As of September 28, 2014, the Company had total unrecognized compensation costs related to unvested stock options and RSUs of $6.6 million, before income taxes. The Company expects to recognize this cost over a weighted average period of 2.1 years for the options and 2.8 years for the RSUs. |
Inventories
Inventories | 9 Months Ended | |||||||||||
Sep. 28, 2014 | ||||||||||||
Inventory Disclosure [Abstract] | ' | |||||||||||
Inventories | ' | |||||||||||
Inventories | ||||||||||||
Inventories are stated at cost and consist of the following (in thousands): | ||||||||||||
September 28, 2014 | December 29, 2013 | September 29, 2013 | ||||||||||
Loose diamonds | $ | 4,026 | $ | 3,321 | $ | 3,049 | ||||||
Fine jewelry and other | 29,058 | 31,209 | 27,885 | |||||||||
Total | $ | 33,084 | $ | 34,530 | $ | 30,934 | ||||||
Net_Income_Per_Share
Net Income Per Share | 9 Months Ended | |||||||||||||||
Sep. 28, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Net Income Per Share | ' | |||||||||||||||
Net Income Per Share | ||||||||||||||||
Basic net income per share is based on the weighted average number of common shares outstanding. Diluted net income per share is based on the weighted average number of common shares and common share equivalents outstanding. Common share equivalents included in the computation represent shares issuable upon assumed exercise of outstanding stock options and conversion of unvested RSUs, except when the effect of their inclusion would be antidilutive. | ||||||||||||||||
The following tables set forth the computation of basic and diluted net income per share (in thousands, except per share data): | ||||||||||||||||
Quarter ended | Year to date ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income | $ | 1,650 | $ | 2,906 | $ | 4,900 | $ | 5,944 | ||||||||
Weighted average common shares outstanding | 11,844 | 12,431 | 12,248 | 12,441 | ||||||||||||
Basic net income per share | $ | 0.14 | $ | 0.23 | $ | 0.4 | $ | 0.48 | ||||||||
Dilutive effect of stock options and RSUs | 21 | 256 | 64 | 229 | ||||||||||||
Common stock and common stock equivalents | 11,865 | 12,687 | 12,312 | 12,670 | ||||||||||||
Diluted net income per share | $ | 0.14 | $ | 0.23 | $ | 0.4 | $ | 0.47 | ||||||||
For the quarter and year to date ended September 28, 2014, the Company excluded 1,133,355 and 1,057,421 stock option shares, respectively, from the computation of diluted net income per share due to their antidilutive effect. For the quarter and year to date ended September 29, 2013, the Company excluded 1,183,186 and 1,259,122 stock option shares, respectively, from the computation of diluted net income per share due to their antidilutive effect. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 28, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Commitments and Contingencies | |
In the ordinary course of business, the Company may be subject from time to time to various proceedings, lawsuits, disputes or claims. In addition, the Company is regularly audited by various tax authorities. Although the Company cannot predict with assurance the outcome of any litigation or audit, it does not believe there are currently any such actions that, if resolved unfavorably, would have a material impact on the Company’s financial condition, results of operations or cash flows. |
Description_Of_Our_Business_An1
Description Of Our Business And Summary Of Significant Accounting Policies (Policy) | 9 Months Ended |
Sep. 28, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 29, 2013, filed with the SEC on February 25, 2014 (the "Annual Report"). The same accounting policies are followed for preparing quarterly and annual financial statements. In the opinion of management, all adjustments necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods have been included and are of a normal, recurring nature. | |
The financial information as of December 29, 2013 is derived from the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended December 29, 2013, included in Item 8 of the Annual Report. | |
Due to a number of factors, including the seasonal nature of the retail industry and other factors described in this quarterly report, quarterly results are not necessarily indicative of the results for the full fiscal year or any other subsequent interim period. | |
Principles of Consolidation | ' |
Principles of Consolidation | |
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All transactions and balances between the Company and its wholly-owned subsidiaries are eliminated in consolidation. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates include the allowance for sales returns, accounting for income taxes, and assumptions used to determine stock-based compensation expense. Actual results could differ materially from those estimates. | |
Foreign Currency | ' |
Foreign Currency | |
The functional currency of most of the Company's subsidiaries is the applicable local currency. The assets and liabilities of our subsidiaries have been translated to U.S. dollars using the exchange rates effective on the balance sheet dates, while income and expense accounts are translated at the average rates in effect during the periods presented. The resulting translation adjustments are recorded as a component of other comprehensive income (loss) within stockholders' equity. | |
The Company offers customers the ability to transact in 24 currencies. Some of the Company’s subsidiaries engage in transactions denominated in currencies other than the Company’s functional currency. Gains or losses arising from these transactions are recorded in other income, net in the condensed consolidated statements of operations. | |
Note Receivable and Other Investments | ' |
Note Receivable and Other Investments | |
The Company holds a minority ownership of a privately-held company in the form of convertible preferred shares, purchased for an aggregate amount of $2.0 million, which we account for under the cost method of accounting. | |
The Company holds a $2.0 million note receivable (the "Note") from the same privately-held company. The interest rate changes over the term of the Note to LIBOR plus a predetermined rate per annum. The Note is recorded at its face amount on the Company's condensed consolidated balance sheet. | |
The Company holds a minority ownership in another privately-held company in the form of common stock and warrants, purchased for $280,000, which we account for under the cost method of accounting. | |
The Company reviews its investments for impairment when events and circumstances indicate that the decline in fair value of the assets below the carrying value is other-than-temporary. No other-than-temporary impairment charges were recorded for the year to date ended September 28, 2014. | |
Credit Agreement | ' |
Credit Agreement | |
On February 21, 2014, the Company renewed its Credit Agreement (the "Credit Agreement") with U.S. Bank National Association (the "Lender"). The Credit Agreement provides for a $40.0 million (the "Credit Limit") unsecured, revolving credit facility (the "Revolving Loan") with an option to increase the Credit Limit to $50.0 million. Under the terms and conditions of the Credit Agreement, the Company may borrow from the Lender for one year with annual renewals at the Lender's discretion. The Company also has the ability to term out the outstanding line balance to a term of up to five years. The aggregate principal amounts outstanding at any one time shall not exceed the Credit Limit. | |
As of September 28, 2014, the Company does not have any amounts outstanding under the Credit Agreement and is in compliance with the covenants of the Credit Agreement. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2014-09 (“ASU 2014-09”), “Revenue from Contracts with Customers (Topic 606)” which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. Early adoption is not permitted. ASU 2014-09 is effective for the Company in the first quarter of its fiscal year 2017. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. | |
In August 2014, the FASB issued Accounting Standards Update No. 2014-15 (“ASU 2014-15”), “Presentation of Financial Statements - Going Concern.” The new standard provides guidance around management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on our financial statements and related disclosures. | |
Share-based Compensation | ' |
Stock-based compensation expense, net of estimated forfeitures, is recognized on a straight-line basis over the vesting period for each stock option or restricted stock unit ("RSU") grant that is expected to vest at some point in the future. Forfeitures are estimated at the date of grant based on the Company's historical experience and future expectations. | |
The fair value of each stock option on the date of grant is estimated using the Black-Scholes-Merton option valuation model. The fair value of each RSU is based on the Fair Market Value (as defined in the 2013 Equity Incentive Plan) of the Company's common stock on the date of the grant. | |
Inventories | ' |
Inventories are stated at cost | |
Earnings Per Share | ' |
Basic net income per share is based on the weighted average number of common shares outstanding. Diluted net income per share is based on the weighted average number of common shares and common share equivalents outstanding. Common share equivalents included in the computation represent shares issuable upon assumed exercise of outstanding stock options and conversion of unvested RSUs, except when the effect of their inclusion would be antidilutive. |
Stockbased_Compensation_Tables
Stock-based Compensation (Tables) | 9 Months Ended | ||||||||||
Sep. 28, 2014 | |||||||||||
Share-based Compensation [Abstract] | ' | ||||||||||
Weighted-Average Assumptions For Valuation Of Stock Options Granted | ' | ||||||||||
Year to date ended | |||||||||||
September 28, | September 29, | ||||||||||
2014 | 2013 | ||||||||||
Expected term | 4.5 years | 4.5 years | |||||||||
Expected volatility | 46.9 | % | 56.9 | % | |||||||
Expected dividend yield | 0 | % | 0 | % | |||||||
Risk-free interest rate | 1.5 | % | 0.9 | % | |||||||
Estimated weighted average fair value per stock option granted | $ | 13.28 | $ | 14.68 | |||||||
Summary Of Stock Option Activity | ' | ||||||||||
Options | Weighted | Weighted | Aggregate | ||||||||
(in thousands) | Average | Average | Intrinsic Value | ||||||||
Exercise Price | Remaining | (in thousands) | |||||||||
Contractual | |||||||||||
Term | |||||||||||
(in years) | |||||||||||
Balance, December 30, 2013 | 1,493 | $ | 41.93 | ||||||||
Granted | 79 | 33 | |||||||||
Exercised | (93 | ) | 24.43 | ||||||||
Canceled | (302 | ) | 52.34 | ||||||||
Balance, September 28, 2014 | 1,177 | $ | 40.04 | 5.46 | $ | 519 | |||||
Vested and expected to vest at September 28, 2014 | 1,148 | $ | 40.21 | 5.39 | $ | 517 | |||||
Exercisable, September 28, 2014 | 886 | $ | 42.08 | 4.6 | $ | 496 | |||||
Summary Of Restricted Stock Unit Activity | ' | ||||||||||
RSUs | Weighted | Weighted | Aggregate | ||||||||
(in thousands) | Average Grant | Average | Intrinsic Value | ||||||||
Date Fair | Remaining | (in thousands) | |||||||||
Value | Contractual | ||||||||||
Term | |||||||||||
(in years) | |||||||||||
Balance, December 30, 2013 | 88 | $ | 31.01 | ||||||||
Granted | 90 | 32.93 | |||||||||
Vested | (34 | ) | 31.5 | ||||||||
Canceled | (25 | ) | 32.54 | ||||||||
Balance, September 28, 2014 | 119 | $ | 32.01 | 1.38 | $ | 3,519 | |||||
Vested and expected to vest at September 28, 2014 | 103 | $ | 37.42 | 1.29 | $ | 3,057 | |||||
Inventories_Tables
Inventories (Tables) | 9 Months Ended | |||||||||||
Sep. 28, 2014 | ||||||||||||
Inventory Disclosure [Abstract] | ' | |||||||||||
Inventories Stated At Cost | ' | |||||||||||
September 28, 2014 | December 29, 2013 | September 29, 2013 | ||||||||||
Loose diamonds | $ | 4,026 | $ | 3,321 | $ | 3,049 | ||||||
Fine jewelry and other | 29,058 | 31,209 | 27,885 | |||||||||
Total | $ | 33,084 | $ | 34,530 | $ | 30,934 | ||||||
Net_Income_Per_Share_Tables
Net Income Per Share (Tables) | 9 Months Ended | |||||||||||||||
Sep. 28, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Computation Of Basic And Diluted Net Income Per Share | ' | |||||||||||||||
Quarter ended | Year to date ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income | $ | 1,650 | $ | 2,906 | $ | 4,900 | $ | 5,944 | ||||||||
Weighted average common shares outstanding | 11,844 | 12,431 | 12,248 | 12,441 | ||||||||||||
Basic net income per share | $ | 0.14 | $ | 0.23 | $ | 0.4 | $ | 0.48 | ||||||||
Dilutive effect of stock options and RSUs | 21 | 256 | 64 | 229 | ||||||||||||
Common stock and common stock equivalents | 11,865 | 12,687 | 12,312 | 12,670 | ||||||||||||
Diluted net income per share | $ | 0.14 | $ | 0.23 | $ | 0.4 | $ | 0.47 | ||||||||
Note_Receivable_and_Other_Inve
Note Receivable and Other Investments (Details) (USD $) | 9 Months Ended | ||
Sep. 28, 2014 | Dec. 29, 2013 | Sep. 29, 2013 | |
Other Investments [Abstract] | ' | ' | ' |
Other-than-temporary Impairment Charges | $0 | ' | ' |
Investment [Line Items] | ' | ' | ' |
Cost Method Investments | 2,280,000 | 2,280,000 | 2,280,000 |
Receivables [Abstract] | ' | ' | ' |
Note receivable | 2,000,000 | 2,000,000 | 2,000,000 |
Note Receivable, Interest Rate Description | 'LIBOR plus a predetermined rate per annum | ' | ' |
Convertible Preferred Stock [Member] | ' | ' | ' |
Investment [Line Items] | ' | ' | ' |
Cost Method Investments | 2,000,000 | ' | ' |
Equity Securities [Member] | ' | ' | ' |
Investment [Line Items] | ' | ' | ' |
Cost Method Investments | $280,000 | ' | ' |
Credit_Agreement_Details
Credit Agreement (Details) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 28, 2014 |
Credit Agreement [Abstract] | ' |
Line of Credit Facility, Current Borrowing Capacity | $40 |
Line of Credit Facility, Amount Outstanding | 0 |
Line of Credit Facility, Maximum Borrowing Capacity | $50 |
Option to Term Out, Term | '5 years |
Stockbased_Compensation_Narrat
Stock-based Compensation (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended |
In Millions, except Share data in Thousands, unless otherwise specified | Sep. 28, 2014 | Sep. 28, 2014 |
Share-based Compensation [Abstract] | ' | ' |
Options, Granted | 0 | ' |
Total intrinsic value of options exercised | ' | $1 |
Total fair value of options vested | ' | 2.4 |
Total unrecognized compensation costs related to unvested stock options and RSUs, before income taxes | $6.60 | $6.60 |
Stock Options [Member] | ' | ' |
Share-based Compensation [Abstract] | ' | ' |
Options, Granted | ' | 79 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Total unrecognized compensation costs related to unvested stock options and RSUs, Weighted average period of recognition | ' | '2 years 1 month 6 days |
Restricted Stock Units (RSUs) [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Total unrecognized compensation costs related to unvested stock options and RSUs, Weighted average period of recognition | ' | '2 years 9 months 18 days |
Stockbased_Compensation_Weight
Stock-based Compensation (Weighted-Average Assumptions For Valuation Of Stock Options Granted) (Details) (USD $) | 9 Months Ended | |
Sep. 28, 2014 | Sep. 29, 2013 | |
Share-based Compensation [Abstract] | ' | ' |
Expected term | '4 years 6 months | '4 years 6 months |
Expected volatility | 46.90% | 56.90% |
Expected dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 1.50% | 0.90% |
Estimated weighted average fair value per stock option granted | $13.28 | $14.68 |
Stockbased_Compensation_Summar
Stock-based Compensation (Summary Of Stock Option Activity) (Details) (USD $) | 3 Months Ended | 9 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Sep. 28, 2014 | Sep. 28, 2014 |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Options, Balance, December 30, 2013 | ' | 1,493 |
Options, Granted | 0 | 79 |
Options, Exercised | ' | -93 |
Options, Cancelled | ' | -302 |
Options, Balance, September 28, 2014 | ' | 1,177 |
Options, Vested and expected to vest at September 28, 2014 | ' | 1,148 |
Options, Exercisable, September 28, 2014 | ' | 886 |
Options, Weighted Average Exercise Price, Balance, December 30, 2013 | ' | $41.93 |
Options, Weighted Average Exercise Price, Granted | ' | $33 |
Options, Weighted Average Exercise Price, Exercised | ' | $24.43 |
Options, Weighted Average Exercise Price, Cancelled | ' | $52.34 |
Options, Weighted Average Exercise Price, Balance, September 28, 2014 | ' | $40.04 |
Options, Weighted Average Exercise Price, Vested and expected to vest at September 28, 2014 | ' | $40.21 |
Options, Weighted Average Exercise Price, Exercisable, September 28, 2014 | ' | $42.08 |
Options, Weighted Average Remaining Contractual Term (in years), Balance, September 28, 2014 | ' | '5 years 5 months 16 days |
Options, Weighted Average Remaining Contractual Term (in years), Vested and expected to vest, September 28, 2014 | ' | '5 years 4 months 21 days |
Options, Weighted Average Remaining Contractual Term (in years), Exercisable, September 28, 2014 | ' | '4 years 7 months 6 days |
Options, Aggregate Intrinsic Value, Balance, September 28, 2014 | ' | $519 |
Options, Aggregate Intrinsic Value, Vested and expected to vest at September 28, 2014 | ' | 517 |
Options, Aggregate Intrinsic Value, Exercisable, September 28, 2014 | ' | $496 |
Stockbased_Compensation_Summar1
Stock-based Compensation (Summary Of RSU Activity) (Details) (Restricted Stock Units (RSUs) [Member], USD $) | 9 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Sep. 28, 2014 |
Restricted Stock Units (RSUs) [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
RSUs, Balance, December 30, 2013 | 88 |
RSUs, Granted | 90 |
RSUs, Vested | -34 |
RSUs, Canceled | -25 |
RSUs, Balance, September 28, 2014 | 119 |
RSUs, Vested and expected to vest at September 28, 2014 | 103 |
RSUs, Weighted Average Grant Date Fair Value, Balance, December 30, 2013 | $31.01 |
RSUs, Weighted Average Grant Date Fair Value, Granted | $32.93 |
RSUs, Weighted Average Grant Date Fair Value, Vested | $31.50 |
RSUs, Weighted Average Grant Date Fair Value, Canceled | $32.54 |
RSUs, Weighted Average Grant Date Fair Value, Balance, September 28, 2014 | $32.01 |
RSUs. Weighted Average Grant Date Fair Value, Vested And Expected To Vest at September 28, 2014 | $37.42 |
RSUs, Weighted Average Remaining Contractual Term (in years), Balance, September 28, 2014 | '1 year 4 months 17 days |
RSUs, Weighted Average Remaining Contractual Term, Vested and expected to vest at September 28, 2014 | '1 year 3 months 15 days |
RSUs, Aggregate Intrinsic Value, Balance, September 28, 2014 | $3,519 |
RSUs, Aggregate Intrinsic Value, Vested and expected to vest at September 28, 2014 | $3,057 |
Inventories_Inventories_Stated
Inventories (Inventories Stated At Cost) (Details) (USD $) | Sep. 28, 2014 | Dec. 29, 2013 | Sep. 29, 2013 |
In Thousands, unless otherwise specified | |||
Inventory Disclosure [Abstract] | ' | ' | ' |
Loose Diamonds | $4,026 | $3,321 | $3,049 |
Fine jewelry and other | 29,058 | 31,209 | 27,885 |
Total Inventories | $33,084 | $34,530 | $30,934 |
Net_Income_Per_Share_Narrative
Net Income Per Share (Narrative) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Stock option shares excluded from computation of diluted net income per share due to their antidilutive effect | 1,133,355 | 1,183,186 | 1,057,421 | 1,259,122 |
Net_Income_Per_Share_Computati
Net Income Per Share (Computation Basic And Diluted Net Income Per Share) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Net income | $1,650 | $2,906 | $4,900 | $5,944 |
Weighted average common shares outstanding | 11,844 | 12,431 | 12,248 | 12,441 |
Basic net income per share | $0.14 | $0.23 | $0.40 | $0.48 |
Dilutive effect of stock options and RSUs | 21 | 256 | 64 | 229 |
Common stock and common stock equivalents | 11,865 | 12,687 | 12,312 | 12,670 |
Diluted net income per share | $0.14 | $0.23 | $0.40 | $0.47 |