| Basis of Presentation and Summary of Significant Accounting Policies | (1)
Basis of Presentation and Summary of Significant Accounting Policies
(a)
Description of Business Ollie’s Bargain Outlet Holdings, Inc. and subsidiaries (collectively referred to as the “Company” or “Ollie’s”) principally buys overproduced,
overstocked, and closeout merchandise from manufacturers, wholesalers, and other retailers. In addition, the Company augments its name-brand closeout deals with directly sourced private label products featuring names exclusive to Ollie’s in order to
provide consistently value-priced goods in select key merchandise categories. Since its first store opened in 1982, the Company has grown to 482 retail locations in 29 states as of July 29, 2023. Ollie’s Bargain Outlet retail locations are
located in Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode
Island, South Carolina, Tennessee, Texas, Vermont, Virginia, and West Virginia.
(b)
Fiscal Year Ollie’s
follows a 52/53-week fiscal year, which ends on the Saturday nearer to January 31 st of the following calendar year. References to the thirteen weeks ended July 29, 2023 and July 30, 2022 refer to the thirteen weeks from April 30, 2023 to July 29, 2023 and from May 1, 2022 to July 30, 2022,
respectively. References to the year-to-date periods ended July 29, 2023 and July 30, 2022 refer to the twenty-six weeks from January 29, 2023 to July 29, 2023 and from January 30, 2022 to July 30, 2022, respectively
(c)
Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and applicable rules and
regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The . The Company’s balance sheet as of January 28, 2023, presented herein, has been derived
from the audited balance sheet included in the Company’s Annual Report on Form 10-K filed with the SEC on March 24, 2023 (“Annual Report”), but does not include all disclosures required by GAAP. These financial statements should be read in
conjunction with the financial statements for 2022 and footnotes thereto included in the Annual Report. For purposes of the disclosure requirements for segments of a business enterprise, it has been determined that the Company is comprised of one operating segment.
(d)
Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure 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.
(e)
Fair Value Disclosures Fair value is defined as the price which the Company would receive to sell an asset or pay to transfer a liability (an exit price) in an orderly
transaction between market participants on the measurement date. In determining fair value, GAAP establishes a three-level hierarchy used in measuring fair value, as follows:
●
Level 1 inputs are quoted prices available for identical assets and liabilities in active markets.
●
Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets or other inputs
that are observable or can be corroborated by observable market data.
●
Level 3 inputs are unobservable, developed using the Company’s estimates and assumptions, which reflect those that market participants would use. The Company’s financial instruments consist of cash and cash equivalents, investment securities, accounts receivable, accounts payable and the
Company’s credit facilities. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable are representative of their respective fair value because of their short-term nature. The carrying amount of the Company’s credit
facilities approximates its fair value because the interest rates are adjusted regularly based on current market conditions. Under the fair value hierarchy, the fair market values of cash equivalents and the investments in treasury bonds are Level 1 while the investments in municipal bonds
are Level 2. Since quoted prices in active markets for identical assets are not available, these prices are determined by the third-party pricing service using observable market information such as quotes from less active markets and quoted prices
of similar securities As of July 29, 2023 and January 28, 2023, the Company’s investment securities are classified as held-to-maturity since the Company has the intent and
ability to hold the investments to maturity. Such securities are carried at amortized cost plus accrued interest and consist of the following:
As of July 29, 2023
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Fair Market Value
(in thousands)
Short-term:
Treasury Bonds
$
88,891
$
-
$
(813
)
$
88,078
Municipal bonds
39,878
-
(473
)
39,405
Total
$
128,769
$
-
$
(1,286
)
$
127,483
As of J anuary
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Fair Market Value
(in thousands)
Short-term:
Treasury Bonds
$
55,274
$
-
$
(83
)
$
55,191
Municipal bonds
4,891
-
(8
)
4,883
Total
$
60,165
$
-
$
(91
)
$
60,074 Short-term investment securities as of July 29, 2023 and January 28, 2023 all mature in one year or less. |
