Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 29, 2016 | Nov. 30, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | New York & Company, Inc. | |
Entity Central Index Key | 1,211,351 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 29, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-28 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 64,447,073 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2016 | Oct. 31, 2015 | Oct. 29, 2016 | Oct. 31, 2015 | |
Condensed Consolidated Statements of Operations | ||||
Net sales | $ 213,901 | $ 219,750 | $ 662,758 | $ 678,836 |
Cost of goods sold, buying and occupancy costs | 149,917 | 156,055 | 471,837 | 483,761 |
Gross profit | 63,984 | 63,695 | 190,921 | 195,075 |
Selling, general and administrative expenses | 66,087 | 68,612 | 197,082 | 203,802 |
Operating loss | (2,103) | (4,917) | (6,161) | (8,727) |
Interest expense, net of interest income of $1, $1, $3, and $9, respectively | 320 | 325 | 925 | 923 |
Loss before income taxes | (2,423) | (5,242) | (7,086) | (9,650) |
Provision for income taxes | 109 | 94 | 217 | 503 |
Net loss | $ (2,532) | $ (5,336) | $ (7,303) | $ (10,153) |
Basic loss per share | $ (0.04) | $ (0.08) | $ (0.12) | $ (0.16) |
Diluted loss per share | $ (0.04) | $ (0.08) | $ (0.12) | $ (0.16) |
Weighted average shares outstanding: | ||||
Basic shares of common stock (in shares) | 63,459 | 63,224 | 63,399 | 63,127 |
Diluted shares of common stock (in shares) | 63,459 | 63,224 | 63,399 | 63,127 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2016 | Oct. 31, 2015 | Oct. 29, 2016 | Oct. 31, 2015 | |
Condensed Consolidated Statements of Operations | ||||
Interest income | $ 1 | $ 1 | $ 3 | $ 9 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2016 | Oct. 31, 2015 | Oct. 29, 2016 | Oct. 31, 2015 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||||
Comprehensive loss | $ (2,440) | $ (5,161) | $ (7,025) | $ (9,830) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 29, 2016 | Jan. 30, 2016 | [1] | Oct. 31, 2015 |
Current assets: | ||||
Cash and cash equivalents | $ 54,012 | $ 61,432 | $ 44,980 | |
Restricted cash | 1,509 | |||
Accounts receivable | 37,076 | 8,208 | 12,630 | |
Income taxes receivable | 47 | 47 | 73 | |
Inventories, net | 123,819 | 87,777 | 129,006 | |
Prepaid expenses | 18,790 | 19,442 | 19,669 | |
Other current assets | 1,226 | 858 | 1,335 | |
Total current assets | 234,970 | 177,764 | 209,202 | |
Property and equipment, net | 88,703 | 88,831 | 87,412 | |
Intangible assets | 14,879 | 14,879 | 14,879 | |
Deferred income taxes | 6,316 | |||
Other assets | 2,026 | 1,986 | 1,505 | |
Total assets | 340,578 | 283,460 | 319,314 | |
Current liabilities: | ||||
Current portion-long-term debt | 841 | 841 | 840 | |
Accounts payable | 109,586 | 82,225 | 107,139 | |
Accrued expenses | 54,584 | 52,424 | 54,871 | |
Income taxes payable | 149 | 239 | 599 | |
Deferred income taxes | 6,316 | |||
Total current liabilities | 165,160 | 135,729 | 169,765 | |
Long-term debt, net of current portion | 11,695 | 12,326 | 12,537 | |
Deferred rent | 31,211 | 34,351 | 37,791 | |
Other liabilities | 44,145 | 7,283 | 6,996 | |
Total liabilities | 252,211 | 189,689 | 227,089 | |
Stockholders' equity: | ||||
Common stock, voting, par value $0.001; 300,000 shares authorized; 65,773, 65,479 and 65,478 shares issued and 64,351, 64,479 and 64,478 shares outstanding at October 29, 2016, January 30, 2016 and October 31, 2015, respectively | 66 | 65 | 65 | |
Additional paid-in capital | 180,717 | 178,195 | 177,305 | |
Retained deficit | (86,484) | (79,181) | (79,265) | |
Accumulated other comprehensive loss | (1,633) | (1,911) | (2,483) | |
Treasury stock at cost; 1,423, 1,000 and 1,000 shares at October 29, 2016, January 30, 2016 and October 31, 2015, respectively | (4,299) | (3,397) | (3,397) | |
Total stockholders' equity | 88,367 | 93,771 | 92,225 | |
Total liabilities and stockholders' equity | $ 340,578 | $ 283,460 | $ 319,314 | |
[1] | Derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2016. |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Oct. 29, 2016 | Jan. 30, 2016 | Oct. 31, 2015 |
Condensed Consolidated Balance Sheets | |||
Common stock, voting, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Common stock, voting, shares authorized | 300,000 | 300,000 | 300,000 |
Common stock, voting, shares issued | 65,773 | 65,479 | 65,478 |
Common stock, voting, shares outstanding | 64,351 | 64,479 | 64,478 |
Treasury stock at cost, shares | 1,423 | 1,000 | 1,000 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | ||
Oct. 29, 2016 | Oct. 31, 2015 | ||
Operating activities | |||
Net loss | $ (7,303) | $ (10,153) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 17,291 | 18,590 | |
Loss from impairment charges | 271 | 287 | |
Amortization of deferred financing costs | 142 | 154 | |
Share-based compensation expense | 2,720 | 2,948 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | (28,868) | (5,224) | |
Income taxes receivable | 26 | ||
Inventories, net | (36,042) | (35,215) | |
Prepaid expenses | 652 | 912 | |
Accounts payable | 27,361 | 20,658 | |
Accrued expenses | 1,330 | 2,256 | |
Income taxes payable | (90) | (111) | |
Deferred rent | (3,140) | 2,622 | |
Other assets and liabilities | 34,199 | 198 | |
Net cash provided by operating activities | 8,523 | (2,052) | |
Investing activities | |||
Capital expenditures | (13,332) | (20,835) | |
Insurance recoveries | 146 | ||
Net cash used in investing activities | (13,332) | (20,689) | |
Financing activities | |||
Repayment of long-term debt | (750) | (750) | |
Payment of financing costs | (161) | ||
Purchase of treasury stock | (909) | ||
Proceeds from exercise of stock options | 120 | 16 | |
Shares withheld for payment of employee payroll taxes | (312) | (267) | |
Principal payments on capital lease obligations | (760) | (410) | |
Net cash used in financing activities | (2,611) | (1,572) | |
Net increase (decrease) in cash and cash equivalents | (7,420) | (24,313) | |
Cash and cash equivalents at beginning of period | 61,432 | [1] | 69,293 |
Cash and cash equivalents at end of period | 54,012 | 44,980 | |
Supplementary non-cash investing activities | |||
Non-cash capital lease transactions | $ 4,102 | $ 1,080 | |
[1] | Derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2016. |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Oct. 29, 2016 | |
Organization and Basis of Presentation | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation New York & Company, Inc. (together with its subsidiaries, the “Company”) is a specialty retailer of women’s fashion apparel and accessories, and the modern wear-to-work destination for women, providing fashion that is feminine, polished, on-trend and versatile. New York & Company, Inc. helps its customers feel confident, put-together, attractive and stylish by providing affordable fashion. The Company's proprietary branded New York & Company ® merchandise is sold through its national network of retail stores and online at www.nyandcompany.com . The target customers for the Company’s merchandise are fashion‑conscious, value‑sensitive women between the ages of 25 and 45. As of October 29, 2016, the Company operated 483 stores in 41 states. The condensed consolidated financial statements as of October 29, 2016 and October 31, 2015 and for the 13 weeks (“three months”) and 39 weeks (“nine months”) ended October 29, 2016 and October 31, 2015 are unaudited and are presented pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the 52‑week fiscal year ended January 30, 2016 (“fiscal year 2015”), which were filed with the Company’s Annual Report on Form 10-K with the SEC on April 14, 2016. The 52‑week fiscal year ending January 28, 2017 is referred to herein as “fiscal year 2016.” The Company’s fiscal year is a 52‑ or 53‑week year that ends on the Saturday closest to January 31. The Company identifies its operating segments according to how its business activities are managed and evaluated. Its operating segments have been aggregated and are reported as one reportable segment based on the similar nature of products sold, production process, distribution process, target customers and economic characteristics. All of the Company’s revenues are generated in the United States. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary to present fairly the financial condition, results of operations and cash flows for the interim periods. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior fiscal year amounts and balances to conform to the presentation in the current fiscal year. These reclassifications did not impact consolidated operating loss or net loss in the prior year period presented. Due to seasonal variations in the retail industry, the results of operations for any interim period are not necessarily indicative of the results expected for the full fiscal year. Certain totals that appear in this Quarterly Report on Form 10-Q may not equal the sum of the components due to rounding. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Oct. 29, 2016 | |
New Accounting Pronouncements | |
New Accounting Pronouncements | 2. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014‑09, “Revenue from Contracts with Customers” (“ASU 2014‑09”), which supersedes the revenue recognition requirements in FASB Accounting Standards Codification™ (“ASC”) Topic 605, “Revenue Recognition” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled to in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date,” which defers the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within those reporting periods. As amended, early adoption is permitted for annual reporting periods beginning after December 15, 2016, including interim reporting periods within those reporting periods. The standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is evaluating the new standard and its impact on the Company’s financial position and results of operations . In February 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”), which is a comprehensive new lease standard that amends various aspects of existing accounting guidance for leases. The core principle of ASU 2016-02 will require lessees to present the assets and liabilities that arise from leases on their balance sheets. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, and interim periods within those fiscal years and requires modified retrospective adoption. Early adoption is permitted. The Company is currently evaluating the new standard and its impact on the Company’s financial position and results of operations but expects that the adoption of ASU 2016-02 will result in a significant increase to its long-term assets and liabilities on the condensed consolidated balance sheet. In March 2016, the FASB issued ASU 2016-09, “Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which simplifies several aspects of accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification within the statement of cash flows for certain components of share-based awards. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of ASU 2016-09 to have a material impact on the Company’s financial position or results of operations. In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”), which addresses how certain cash receipts and cash payments are classified in the statement of cash flows with the objective of reducing the existing diversity in practice related to eight specific cash flow issues. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, and requires retrospective adoption. Early adoption is permitted. The Company does not expect the adoption of ASU 2016-15 to have a material impact on the Company’s financial position or results of operations. |
Proprietary Credit Card
Proprietary Credit Card | 9 Months Ended |
Oct. 29, 2016 | |
Proprietary Credit Card | |
Proprietary Credit Card | 3. Proprietary Credit Card On July 14, 2016, the Company entered into a Second Amended and Restated Private Label Credit Card Program Agreement, effectively dated May 1, 2016, with Comenity Bank, a bank subsidiary of Alliance Data Systems Corporation (“ADS”), which replaces the existing agreement with ADS and has a term through April 30, 2026 (the “ADS Agreement”). Pursuant to the terms of the ADS Agreement, ADS will continue to have the exclusive right to provide private label credit cards to customers of the Company. In connection with the execution of the ADS Agreement, the Company will receive $40.0 million in signing bonuses. The signing bonuses are payable in two installments, of which $17.5 million was received on July 28, 2016, and $22.5 million will be received on January 10, 2017 and is included in “Accounts receivable” on the condensed consolidated balance sheet as of October 29, 2016. Upon execution of the ADS Agreement, the Company recorded $40.0 million of deferred revenue, which will be amortized on a straight-line basis over the 10-year term of the ADS Agreement. As of October 29, 2016, $34.0 million of deferred revenue is included in “Other liabilities” and $4.0 million of deferred revenue is included in “Accrued expenses” on the condensed consolidated balance sheet. In addition, over the term of the ADS Agreement, the Company will receive an increased level of royalty payments based on a percentage of private label credit card sales. Included in “Net sales” on the condensed consolidated statements of operations for the three and nine months ended October 29, 2016 is $3.1 million and $5.6 million of revenue, respectively, related to the signing bonus amortization and royalties described above. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Oct. 29, 2016 | |
Earnings (Loss) Per Share | |
Earnings (Loss) Per Share | 4. Earnings (Loss) Per Share Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. Except when the effect would be anti‑dilutive, diluted earnings (loss) per share are calculated based on the weighted average number of outstanding shares of common stock plus the dilutive effect of share‑based awards calculated under the treasury stock method. A reconciliation between basic and diluted earnings (loss) per share is as follows: Three months Three months Nine months Nine months ended ended ended ended October 29, 2016 October 31, 2015 October 29, 2016 October 31, 2015 (Amounts in thousands, except per share amounts) Net loss $ $ $ $ Basic loss per share Weighted average shares outstanding: Basic shares of common stock Basic loss per share $ $ $ $ Diluted loss per share Weighted average shares outstanding: Basic shares of common stock Plus impact of share-based awards — — — — Diluted shares of common stock Diluted loss per share $ $ $ $ The calculation of diluted loss per share for the three and nine months ended October 29, 2016 and October 31, 2015 excludes the share‑based awards listed in the following table due to their anti‑dilutive effect as determined under the treasury stock method: Three months Three months Nine months Nine months ended ended ended ended October 29, 2016 October 31, 2015 October 29, 2016 October 31, 2015 (Amounts in thousands) Stock options Stock appreciation rights(1) Restricted stock and units Total anti-dilutive shares (1) Each stock appreciation right (“SAR”) referred to above represents the right to receive a payment measured by the increase in the fair market value of one share of common stock from the date of grant of the SAR to the date of exercise of the SAR. Upon exercise, the SARs will be settled in stock. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Oct. 29, 2016 | |
Share-Based Compensation | |
Share-Based Compensation | 5. Share‑Based Compensation The Company accounts for all share‑based payments in accordance with FASB ASC Topic 718, “Compensation—Stock Compensation” (“ASC 718”). ASC 718 requires that the cost resulting from all share‑based payment transactions be treated as compensation and recognized in the consolidated financial statements. The Company recorded share-based compensation expense in the amount of $0.7 million and $1.2 million for the three months ended October 29, 2016 and October 31, 2015, respectively, and $2.7 million and $2.9 million for the nine months ended October 29, 2016 and October 31, 2015, respectively. During the nine months ended October 29, 2016, 45,615 shares of common stock were issued upon exercise of previously issued stock options and SARs. |
Pension Plan
Pension Plan | 9 Months Ended |
Oct. 29, 2016 | |
Pension Plan | |
Pension Plan | 6. Pension Plan The Company sponsors a single employer defined benefit pension plan (“plan”) covering substantially all union employees. Employees covered by collective bargaining agreements are primarily non-management store associates, representing approximately 7% of the Company’s workforce at October 29, 2016. The collective bargaining agreement with the Local 1102 unit of the Retail, Wholesale and Department Store Union AFL‑CIO is in effect through August 31, 2018. The Company believes its relationship with its employees is good. The plan provides retirement benefits for union employees who have attained the age of 21 and complete 1,000 or more hours of service in any calendar year following the date of employment. The plan provides benefits based on length of service. The Company’s funding policy for the pension plan is to contribute annually the amount necessary to provide for benefits based on accrued service and to contribute at least the minimum required by ERISA rules. Net periodic benefit cost includes the following components: Three months Three months Nine months Nine months ended ended ended ended October 29, 2016 October 31, 2015 October 29, 2016 October 31, 2015 (Amounts in thousands) Service cost $ $ $ $ Interest cost Expected return on plan assets Amortization of unrecognized losses Amortization of prior service credit Net periodic benefit cost $ $ $ $ In accordance with FASB ASC Topic 220, “Comprehensive Income,” comprehensive income (loss) reported on the Company’s condensed consolidated statements of comprehensive income (loss) includes net income (loss) and other comprehensive income (loss). For the Company, other comprehensive income (loss) consists of the reclassification of unrecognized losses and prior service credits related to the Company’s minimum pension liability. The total amount of unrecognized losses and prior service credits reclassified out of “Accumulated other comprehensive loss” on the condensed consolidated balance sheets and into “Selling, general, and administrative expenses” on the Company’s condensed consolidated statements of operations for the three months ended October 29, 2016 and October 31, 2015 was approximately $92,000 and $175,000, respectively, and for the nine months ended October 29, 2016 and October 31, 2015 was approximately $278,000 and $323,000, respectively. As of January 30, 2016, the Company reported a minimum pension liability of $2.1 million due to the underfunded status of the plan. The minimum pension liability is reported in “Other liabilities” on the condensed consolidated balance sheets. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 29, 2016 | |
Income Taxes | |
Income Taxes | 7. Income Taxes The Company files U.S. federal income tax returns and income tax returns in various state and local jurisdictions. The Company is no longer subject to U.S. federal income tax examinations for tax years through 2012. With limited exception, the Company is no longer subject to state and local income tax examinations for tax years through 2011. At January 30, 2016, the Company reported a total liability for unrecognized tax benefits of $4.7 million, including interest and penalties. There have been no material changes during the nine months ended October 29, 2016. Of the total $4.7 million of unrecognized tax benefits at January 30, 2016, approximately $1.1 million, if recognized, would impact the Company’s effective tax rate. The Company does not anticipate any significant increases or decreases to the balance of unrecognized tax benefits during the next 12 months. The Company continues to maintain a valuation allowance against its deferred tax assets until the Company believes it is more likely than not that these assets will be realized in the future. If sufficient positive evidence arises in the future indicating that all or a portion of the deferred tax assets meet the more‑likely‑than‑not standard under ASC Topic 740, “Income Taxes,” the valuation allowance would be reversed accordingly in the period that such determination is made. As of October 29, 2016, the Company’s valuation allowance against its deferred tax assets was $69.4 million. |
Long-Term Debt and Credit Facil
Long-Term Debt and Credit Facilities | 9 Months Ended |
Oct. 29, 2016 | |
Long-Term Debt and Credit Facilities | |
Long-Term Debt and Credit Facilities | 8. Long‑Term Debt and Credit Facilities On October 24, 2014, Lerner New York, Inc., Lernco, Inc. and Lerner New York Outlet, LLC (f.k.a. Lerner New York Outlet, Inc.), wholly-owned indirect subsidiaries of New York & Company, Inc., entered into a Fourth Amended and Restated Loan and Security Agreement (the “Loan Agreement”) with Wells Fargo Bank, National Association, as Agent and Term Loan Agent and the lender party thereto. The obligations under the Loan Agreement are guaranteed by New York & Company, Inc. and its other subsidiaries. The Loan Agreement consists of: (i) a revolving credit facility that provides the Company with up to $100 million of credit, consisting of a $75 million revolving credit facility (which includes a sub-facility for issuance of letters of credit up to $45 million) with a fully committed accordion option that allows the Company to increase the revolving credit facility up to $100 million or decrease it to a minimum of $60 million, subject to certain restrictions, and (ii) a $15 million, 5-year term loan, bearing interest at the Adjusted Eurodollar Rate plus 4.50% (the “Term Loan”). The Company used a portion of the proceeds from the Term Loan to pay for costs associated with the relocation and build-out of its new corporate headquarters at 330 West 34 th Street, New York, New York and for general corporate purposes. Under the terms of the Loan Agreement, the interest rates applicable to Revolving Loans are, at the Company’s option, either at a floating rate equal to the Adjusted Eurodollar Rate plus a margin of between 1.50% and 1.75% per year for Eurodollar Rate Loans or a floating rate equal to the Prime Rate plus a margin of between 0.50% and 0.75% per year for Prime Rate Loans, depending upon the Company’s Average Compliance Excess Availability. The Company pays to the lender under the revolving credit facility a monthly fee on outstanding commercial letters of credit at a rate of between 0.75% and 0.875% per year and on standby letters of credit at a rate of between 1.50% and 1.75% per year, depending upon the Company’s Average Compliance Excess Availability, plus a monthly fee on a proportion of the unused commitments under the revolving credit facility at a rate of 0.25% per year. The maximum borrowing availability under the Company’s revolving credit facility is determined by a monthly borrowing base calculation based on applying specified advance rates against eligible inventory and certain other eligible assets. As of October 29, 2016, the Company had availability under its revolving credit facility of $54.3 million, net of letters of credit outstanding of $15.7 million, as compared to availability of $36.6 million, net of letters of credit outstanding of $15.6 million, as of January 30, 2016, and availability of $51.2 million, net of letters of credit outstanding of $20.3 million, as of October 31, 2015. The $15.7 million in letters of credit outstanding at October 29, 2016 represents $1.4 million of trade letters of credit and $14.2 million of standby letters of credit primarily related to the Company’s new corporate headquarters and certain insurance contracts. Under the terms of the Loan Agreement, the Company is subject to a Minimum Excess Availability covenant of $7.5 million. The Loan Agreement contains other covenants and conditions, including restrictions on the Company’s ability to pay dividends on its common stock, prepay the Term Loan, incur additional indebtedness and to prepay, redeem, defease or purchase other indebtedness. Subject to such restrictions, the Company may incur more indebtedness for working capital, capital expenditures, stock repurchases, acquisitions and for other purposes. The lender has been granted a pledge of the common stock of Lerner New York Holding, Inc. and certain of its subsidiaries, and a first priority security interest in substantially all other tangible and intangible assets of New York & Company, Inc. and its subsidiaries, as collateral for the Company’s obligations under the Loan Agreement. In addition, New York & Company, Inc. and certain of its subsidiaries have fully and unconditionally guaranteed the obligations under the Loan Agreement, and such guarantees are joint and several. As of October 29, 2016, January 30, 2016, and October 31, 2015, the Company had $7.3 million, $3.9 million, and $2.8 million of capital lease obligations outstanding, respectively. The Company’s capital lease obligations are generally required to be repaid ratably over a five-year term beginning on the respective lease commencement date. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Oct. 29, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | 9. Fair Value Measurements The Company measures fair value in accordance with FASB ASC Topic 820, “Fair Value Measurements” (“ASC 820”). ASC 820 establishes a three-level fair value hierarchy that requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs used to measure fair value are as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data and require the reporting entity to develop its own assumptions. The Company’s financial instruments consist of cash and cash equivalents, restricted cash, short-term trade receivables, accounts payable, and long-term debt. The carrying values on the balance sheets for cash and cash equivalents, restricted cash, short-term trade receivables and accounts payable approximate their fair values due to the short-term maturities of such items. The carrying amount of long-term debt on the balance sheets approximates its fair value due to the variable interest rate it carries. The Company classifies long-lived store assets within Level 3 of the fair value hierarchy. The Company evaluates the impairment of long-lived assets in accordance with ASC Topic 360, “Property, Plant and Equipment.” Long-lived assets are evaluated for recoverability whenever events or changes in circumstances indicate that an asset may have been impaired. The evaluation is performed at the individual store level, which is the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. In evaluating long-lived assets for recoverability, the Company estimates the future cash flows at the individual store level that are expected to result from the use of each store’s assets based on historical experience, omni-channel strategy, knowledge and market data assumptions. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the long-lived assets, an impairment loss, equal to the excess of the carrying amount over the fair value of the assets, is recognized. During the three months ended October 29, 2016 and October 31, 2015, the Company recorded $0.3 million and $0.1 million, respectively, and $0.3 million and $0.3 million during the nine months ended October 29, 2016 and October 31, 2015, respectively, of non-cash impairment charges related to underperforming store assets in “Selling, general and administrative expenses” on the Company’s condensed consolidated statement of operations. |
Share Repurchases
Share Repurchases | 9 Months Ended |
Oct. 29, 2016 | |
Share Repurchases | |
Share Repurchases | 10. Share Repurchases Effective July 14, 2016, the Company’s board of directors authorized the repurchase of up to $5 million of the Company’s common stock over the subsequent 12 months, as described in the Company’s press release issued on July 14, 2016. Repurchases will be made from time to time in the manner the Company believes appropriate, through open market or private transactions including through pre-established trading plans. Purchases will be made in compliance with SEC rules and regulations, subject to market conditions, applicable legal requirements, and other relevant factors. The Company is not obligated to acquire any particular amount of common stock. During the three months ended October 29, 2016, the Company repurchased 422,720 shares of its common stock for a total cost of approximately $1.0 million, including commission. |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Oct. 29, 2016 | |
Earnings (Loss) Per Share | |
Schedule of reconciliation between basic and diluted earnings ( loss) per share | Three months Three months Nine months Nine months ended ended ended ended October 29, 2016 October 31, 2015 October 29, 2016 October 31, 2015 (Amounts in thousands, except per share amounts) Net loss $ $ $ $ Basic loss per share Weighted average shares outstanding: Basic shares of common stock Basic loss per share $ $ $ $ Diluted loss per share Weighted average shares outstanding: Basic shares of common stock Plus impact of share-based awards — — — — Diluted shares of common stock Diluted loss per share $ $ $ $ |
Schedule listing the share-based awards excluded from the computation of diluted earnings (loss) per share due to their anti-dilutive effect | Three months Three months Nine months Nine months ended ended ended ended October 29, 2016 October 31, 2015 October 29, 2016 October 31, 2015 (Amounts in thousands) Stock options Stock appreciation rights(1) Restricted stock and units Total anti-dilutive shares Each stock appreciation right (“SAR”) referred to above represents the right to receive a payment measured by the increase in the fair market value of one share of common stock from the date of grant of the SAR to the date of exercise of the SAR. Upon exercise, the SARs will be settled in stock. |
Pension Plan (Tables)
Pension Plan (Tables) | 9 Months Ended |
Oct. 29, 2016 | |
Pension Plan | |
Schedule of net periodic benefit cost | Three months Three months Nine months Nine months ended ended ended ended October 29, 2016 October 31, 2015 October 29, 2016 October 31, 2015 (Amounts in thousands) Service cost $ $ $ $ Interest cost Expected return on plan assets Amortization of unrecognized losses Amortization of prior service credit Net periodic benefit cost $ $ $ $ |
Organization and Basis of Pre20
Organization and Basis of Presentation (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Oct. 29, 2016item | Oct. 31, 2015 | Oct. 29, 2016segmentitem | Oct. 31, 2015 | Jan. 28, 2017 | Jan. 30, 2016 | |
Organization and basis of presentation | ||||||
Number of stores operated | 483 | 483 | ||||
Number of states in which entity operated the stores | 41 | 41 | ||||
Length of period | 91 days | 91 days | 273 days | 273 days | ||
Length of fiscal year | 364 days | 364 days | ||||
Number of reportable segments | segment | 1 | |||||
Minimum | ||||||
Organization and basis of presentation | ||||||
Age of women targeted as customers | 25 | |||||
Length of fiscal year | 364 days | |||||
Maximum | ||||||
Organization and basis of presentation | ||||||
Age of women targeted as customers | 45 | |||||
Length of fiscal year | 371 days |
Proprietary Credit Card (Detail
Proprietary Credit Card (Details) - ADS - Second Amended and Restated Label Credit Card Program Agreement $ in Millions | Jul. 28, 2016USD ($) | Jul. 14, 2016USD ($)installment | Oct. 29, 2016USD ($) | Oct. 29, 2016USD ($) |
Proprietary credit card | ||||
Required signing bonuses to be received | $ 40 | |||
Number of installments for signing bonuses payments | installment | 2 | |||
Signing bonuses received | $ 17.5 | |||
Deferred revenue | $ 40 | |||
Amortization period of deferred revenue | 10 years | |||
Royalty revenue recognized | $ 3.1 | $ 5.6 | ||
Other liabilities | ||||
Proprietary credit card | ||||
Deferred revenue | 34 | 34 | ||
Accounts receivable | ||||
Proprietary credit card | ||||
Second installment signing bonuses required to be received | 22.5 | 22.5 | ||
Accrued expenses | ||||
Proprietary credit card | ||||
Deferred revenue | $ 4 | $ 4 |
Earnings (Loss) Per Share - Rec
Earnings (Loss) Per Share - Reconciliation between basic and diluted loss per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2016 | Oct. 31, 2015 | Oct. 29, 2016 | Oct. 31, 2015 | |
Earnings (Loss) Per Share | ||||
Net income (loss) | $ (2,532) | $ (5,336) | $ (7,303) | $ (10,153) |
Weighted average shares outstanding: | ||||
Basic shares of common stock (in shares) | 63,459 | 63,224 | 63,399 | 63,127 |
Basic earnings (loss) per share (in dollars per share) | $ (0.04) | $ (0.08) | $ (0.12) | $ (0.16) |
Weighted average shares outstanding: | ||||
Basic shares of common stock (in shares) | 63,459 | 63,224 | 63,399 | 63,127 |
Diluted shares of common stock (in shares) | 63,459 | 63,224 | 63,399 | 63,127 |
Diluted earnings (loss) per share (in dollars per share) | $ (0.04) | $ (0.08) | $ (0.12) | $ (0.16) |
Earnings (Loss) Per Share - Ant
Earnings (Loss) Per Share - Antidilutive shares (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2016 | Oct. 31, 2015 | Oct. 29, 2016 | Oct. 31, 2015 | |
Shares excluded from calculation of diluted earnings per share | ||||
Anti-dilutive shares | 8,295,000 | 7,643,000 | 7,731,000 | 7,054,000 |
Stock options | ||||
Shares excluded from calculation of diluted earnings per share | ||||
Anti-dilutive shares | 310,000 | 454,000 | 346,000 | 476,000 |
Stock appreciation rights | ||||
Shares excluded from calculation of diluted earnings per share | ||||
Anti-dilutive shares | 7,380,000 | 6,767,000 | 6,729,000 | 5,883,000 |
Number of shares of common stock for which increase in fair market value considered as basis for measurement of payment | 1 | |||
Restricted stock and units | ||||
Shares excluded from calculation of diluted earnings per share | ||||
Anti-dilutive shares | 605,000 | 422,000 | 656,000 | 695,000 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2016 | Oct. 31, 2015 | Oct. 29, 2016 | Oct. 31, 2015 | |
Share-Based Compensation | ||||
Share-based compensation expense | $ 0.7 | $ 1.2 | $ 2.7 | $ 2.9 |
Stock options and SARs | ||||
Share-Based Compensation | ||||
Number of shares of common stock issued upon exercise of stock options and SARs | 45,615 |
Pension Plan (Details)
Pension Plan (Details) | 3 Months Ended | 9 Months Ended | |||
Oct. 29, 2016USD ($) | Oct. 31, 2015USD ($) | Oct. 29, 2016USD ($)item | Oct. 31, 2015USD ($) | Jan. 30, 2016USD ($) | |
Pension Plan | |||||
Employees covered by collective bargaining agreements (as a percent) | 7.00% | 7.00% | |||
Age of employees, after attainment of which plan provides retirement benefits | item | 21 | ||||
Minimum hours of service to be completed for plan to provide retirement benefits | 1000 hours | ||||
Net periodic benefit cost | |||||
Service cost | $ 84,000 | $ 86,000 | $ 252,000 | $ 257,000 | |
Interest cost | 86,000 | 80,000 | 258,000 | 240,000 | |
Expected return on plan assets | (122,000) | (213,000) | (369,000) | (436,000) | |
Amortization of unrecognized losses | 96,000 | 178,000 | 289,000 | 334,000 | |
Amortization of prior service credit | (4,000) | (3,000) | (11,000) | (11,000) | |
Net periodic benefit cost | 140,000 | 128,000 | 419,000 | 384,000 | |
Amounts reclassified from accumulated other comprehensive loss | $ 92,000 | $ 175,000 | $ 278,000 | $ 323,000 | |
Minimum pension liability due to the underfunded status of the plan | $ 2,100,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | Oct. 29, 2016 | Jan. 30, 2016 |
Income tax expense (benefit) | ||
Unrecognized tax benefits | $ 4.7 | |
Unrecognized tax benefit impact on effective tax rate | $ 1.1 | |
Deferred tax assets, valuation allowance | $ 69.4 |
Long-Term Debt and Credit Fac27
Long-Term Debt and Credit Facilities (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Oct. 29, 2016 | Jan. 30, 2016 | Oct. 31, 2015 | |
Long-term debt and credit facilities | |||
Minimum excess availability covenant | $ 7.5 | ||
Capital Lease Obligations | $ 7.3 | $ 3.9 | $ 2.8 |
Periods for payment of Capital lease obligations | 5 years | ||
Line of credit | |||
Long-term debt and credit facilities | |||
Maximum borrowing capacity | $ 100 | ||
Revolving credit facility | |||
Long-term debt and credit facilities | |||
Maximum borrowing capacity | $ 75 | ||
Monthly commitment fee on the unused proportion of credit facility (as a percent) | 0.25% | ||
Borrowing availability | $ 54.3 | 36.6 | 51.2 |
Outstanding letters of credit | 15.7 | $ 15.6 | $ 20.3 |
Revolving credit facility | Minimum | |||
Long-term debt and credit facilities | |||
Accordion option to increase or decrease commitments under the credit facility | 60 | ||
Revolving credit facility | Maximum | |||
Long-term debt and credit facilities | |||
Accordion option to increase or decrease commitments under the credit facility | $ 100 | ||
Revolving credit facility | Eurodollar rate | |||
Long-term debt and credit facilities | |||
Variable rate basis | Eurodollar Rate | ||
Revolving credit facility | Eurodollar rate | Minimum | |||
Long-term debt and credit facilities | |||
Interest rate margin (as a percent) | 1.50% | ||
Revolving credit facility | Eurodollar rate | Maximum | |||
Long-term debt and credit facilities | |||
Interest rate margin (as a percent) | 1.75% | ||
Revolving credit facility | Prime rate | |||
Long-term debt and credit facilities | |||
Variable rate basis | Prime Rate | ||
Revolving credit facility | Prime rate | Minimum | |||
Long-term debt and credit facilities | |||
Interest rate margin (as a percent) | 0.50% | ||
Revolving credit facility | Prime rate | Maximum | |||
Long-term debt and credit facilities | |||
Interest rate margin (as a percent) | 0.75% | ||
Commercial letters of credit | |||
Long-term debt and credit facilities | |||
Maximum borrowing capacity | $ 45 | ||
Commercial letters of credit | Minimum | |||
Long-term debt and credit facilities | |||
Monthly commitment fee letters of credit (as a percent) | 0.75% | ||
Commercial letters of credit | Maximum | |||
Long-term debt and credit facilities | |||
Monthly commitment fee letters of credit (as a percent) | 0.875% | ||
Stand by letters of credit | |||
Long-term debt and credit facilities | |||
Outstanding letters of credit | $ 14.2 | ||
Stand by letters of credit | Minimum | |||
Long-term debt and credit facilities | |||
Monthly commitment fee letters of credit (as a percent) | 1.50% | ||
Stand by letters of credit | Maximum | |||
Long-term debt and credit facilities | |||
Monthly commitment fee letters of credit (as a percent) | 1.75% | ||
Trade letters of credit | |||
Long-term debt and credit facilities | |||
Outstanding letters of credit | $ 1.4 | ||
Term loan | |||
Long-term debt and credit facilities | |||
Maximum borrowing capacity | $ 15 | ||
Length of term loan | 5 years | ||
Term loan | Eurodollar rate | |||
Long-term debt and credit facilities | |||
Variable rate basis | Eurodollar Rate | ||
Interest rate margin (as a percent) | 4.50% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2016 | Oct. 31, 2015 | Oct. 29, 2016 | Oct. 31, 2015 | |
Non-cash impairment charges | $ 271 | $ 287 | ||
Underperforming New York & Company stores | Selling, general and administrative expenses | ||||
Non-cash impairment charges | $ 300 | $ 100 | $ 300 | $ 300 |
Share Repurchases (Details)
Share Repurchases (Details) - USD ($) $ in Millions | Jul. 14, 2016 | Oct. 29, 2016 |
Share Repurchases | ||
Share repurchases authorized amount | $ 5 | |
Period of repurchase program | 12 months | |
Number of shares of common stock repurchased | 422,720 | |
Share repurchases amount | $ 1 |