Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Nov. 30, 2015 | Feb. 25, 2016 | May. 29, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | Differential Brands Group Inc. | ||
Entity Central Index Key | 844,143 | ||
Document Type | 10-K | ||
Document Period End Date | Nov. 30, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --11-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 8,422,000 | ||
Entity Common Stock, Shares Outstanding | 12,403,240 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Nov. 30, 2015 | Nov. 30, 2014 |
Current assets | ||
Cash and cash equivalents | $ 1,937 | $ 1,054 |
Accounts receivable, net | 526 | 1,279 |
Factored accounts receivable, net | 7,741 | 11,105 |
Inventories, net | 12,919 | 25,354 |
Deferred income taxes, net | 1,322 | 6,065 |
Prepaid expenses and other current assets | 563 | 1,212 |
Current portion of assets held for sale | 57,050 | |
Total current assets | 25,008 | 103,119 |
Property and equipment, net | 381 | 2,897 |
Goodwill | 8,394 | 8,394 |
Intangible assets | 42,037 | 56,773 |
Deferred financing costs | 1,611 | |
Other assets | 438 | 958 |
Assets held for sale, net of current portion | 30,197 | |
Total assets | 76,258 | 203,949 |
Current liabilities | ||
Accounts payable and accrued expenses | 18,913 | 11,651 |
Line of credit | 4,235 | 31,338 |
Short-term debt | 59,003 | |
Buy-out payable-short term | 1,668 | 3,277 |
Current liabilities held for sale | 11,680 | |
Total current liabilities | 24,816 | 116,949 |
Convertible notes | 27,469 | 24,733 |
Deferred income taxes, net | 11,131 | 17,765 |
Deferred rent | 1,738 | 1,579 |
Other liabilities | 81 | 643 |
Long-term liabilities held for sale | 1,283 | |
Total liabilities | $ 65,235 | $ 162,952 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock, $0.10 par value: 100,000 shares authorized, 70,917 shares issued and 70,083 outstanding (2015) and 69,822 shares issued and 69,297 outstanding (2014) | $ 7,094 | $ 6,984 |
Additional paid-in capital | 113,371 | 111,010 |
Accumulated deficit | (106,007) | (73,679) |
Treasury stock, 834 shares (2015) and 524 shares (2014) | (3,435) | (3,318) |
Total stockholders' equity | 11,023 | 40,997 |
Total liabilities and stockholders' equity | $ 76,258 | $ 203,949 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Nov. 30, 2015 | Nov. 30, 2014 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 70,917 | 69,822 |
Common stock, shares outstanding | 70,083 | 69,297 |
Treasury stock, shares | 834 | 524 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) shares in Thousands | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||
Net sales | $ 80,199,000 | $ 84,225,000 | $ 28,417,000 |
Cost of goods sold | 47,920,000 | 44,502,000 | 14,451,000 |
Gross profit | 32,279,000 | 39,723,000 | 13,966,000 |
Operating expenses | |||
Selling, general and administrative | 48,228,000 | 42,329,000 | 21,956,000 |
Impairment of goodwill | 23,585,000 | ||
Impairment of intangibles | 12,400,000 | 0 | |
Depreciation and amortization | 3,208,000 | 3,637,000 | 1,319,000 |
Retail stores impairment | 1,732,000 | 840,000 | |
Total operating expenses | 65,568,000 | 70,391,000 | 23,275,000 |
Operating loss from continuing operations | (33,289,000) | (30,668,000) | (9,309,000) |
Interest expense, net | 6,621,000 | 5,141,000 | 1,032,000 |
Other (income) expense | (2,268,000) | 209,000 | |
Loss from continuing operations, before Income tax benefit | (39,910,000) | (33,541,000) | (10,550,000) |
Income tax benefit | (2,554,000) | (5,059,000) | (3,134,000) |
Loss from continuing operations | (37,356,000) | (28,482,000) | (7,416,000) |
Income from discontinued operations, net of tax | 5,028,000 | 766,000 | 102,000 |
Net loss and comprehensive loss | $ (32,328,000) | $ (27,716,000) | $ (7,314,000) |
Earnings (loss) per common share - basic | |||
Loss from continuing operations (in dollars per share) | $ (0.54) | $ (0.42) | $ (0.11) |
Earnings from discontinued operations - basic (in dollars per share) | 0.07 | 0.01 | 0 |
Loss per common share - basic (in dollars per share) | (0.47) | (0.41) | (0.11) |
Earnings (loss) per common share - diluted | |||
Loss from continuing operations - diluted (in dollars per share) | (0.54) | (0.42) | (0.11) |
Earnings from discontinued operations - diluted (in dollars per share) | 0.07 | 0.01 | 0 |
Loss per common share - diluted (in dollars per share) | $ (0.47) | $ (0.41) | $ (0.11) |
Weighted average shares outstanding | |||
Basic (in shares) | 69,444 | 68,226 | 67,163 |
Diluted (in shares) | 69,444 | 68,226 | 67,163 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock | Total |
Balance at Nov. 30, 2012 | $ 6,732 | $ 106,747 | $ (38,649) | $ (3,091) | $ 71,739 |
Balance (in shares) at Nov. 30, 2012 | 67,294,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss and comprehensive loss | (7,314) | (7,314) | |||
Stock-based compensation, net of withholding taxes | 1,127 | 1,127 | |||
Exercise of stock options | $ 2 | 25 | $ 27 | ||
Exercise of stock options (in shares) | 22,000 | 21,794 | |||
Issuance of restricted common stock | $ 156 | (156) | |||
Issuance of restricted common stock (in shares) | 1,562,000 | ||||
Excess tax benefit on stock-based compensation | 190 | $ 190 | |||
Balance at Nov. 30, 2013 | $ 6,890 | 107,933 | (45,963) | (3,091) | 65,769 |
Balance (in shares) at Nov. 30, 2013 | 68,878,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss and comprehensive loss | (27,716) | (27,716) | |||
Stock-based compensation, net of withholding taxes | 941 | 941 | |||
Issuance of restricted common stock | $ 94 | (94) | |||
Issuance of restricted common stock (in shares) | 944,000 | ||||
Excess tax benefit on stock-based compensation | 121 | 121 | |||
Embedded conversion feature net of taxes | 2,109 | 2,109 | |||
Stock repurchase | (227) | (227) | |||
Balance at Nov. 30, 2014 | $ 6,984 | 111,010 | (73,679) | (3,318) | $ 40,997 |
Balance (in shares) at Nov. 30, 2014 | 69,822,000 | 69,822,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss and comprehensive loss | (32,328) | $ (32,328) | |||
Stock-based compensation, net of withholding taxes | 1,175 | 1,175 | |||
Issuance of restricted common stock | $ 110 | (110) | |||
Issuance of restricted common stock (in shares) | 1,095,000 | ||||
Excess tax benefit on stock-based compensation | 1,296 | 1,296 | |||
Stock repurchase | (117) | (117) | |||
Balance at Nov. 30, 2015 | $ 7,094 | $ 113,371 | $ (106,007) | $ (3,435) | $ 11,023 |
Balance (in shares) at Nov. 30, 2015 | 70,917,000 | 70,917,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Loss from continuing operations | $ (37,356,000) | $ (28,482,000) | $ (7,416,000) |
Adjustment to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 3,208,000 | 3,637,000 | 1,319,000 |
Change in fair value of embedded conversion derivative | (2,270,000) | 204,000 | |
Impairment of goodwill | 23,585,000 | ||
Impairment of intangibles | 12,400,000 | 0 | |
Retail stores impairment | 1,732,000 | 840,000 | 0 |
Amortization of deferred financing costs | 1,511,000 | 420,000 | 70,000 |
Amortization of convertible notes discount | 1,836,000 | 1,646,000 | 257,000 |
Amortization of term loan discount | 922,000 | 238,000 | 40,000 |
PIK Interest on convertible note discount | 900,000 | 875,000 | |
Stock-based compensation | 1,261,000 | 1,284,000 | 1,687,000 |
Excess tax benefit on stock-based compensation | 1,296,000 | 121,000 | 190,000 |
Provision for non-factored customer credits and doubtful accounts | 122,000 | 561,000 | 12,000 |
Decrease in deferred taxes | (1,891,000) | (4,294,000) | 153,000 |
Other liabilities | (562,000) | 393,000 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 631,000 | 1,579,000 | (2,129,000) |
Factored accounts receivable | 3,364,000 | 2,639,000 | 62,000 |
Inventories | 12,435,000 | (2,603,000) | 1,015,000 |
Prepaid expenses and other assets | 1,269,000 | 1,284,000 | 991,000 |
Accounts payable and accrued expenses | 7,262,000 | (4,891,000) | 2,048,000 |
Buy-out note payable | (1,609,000) | (3,025,000) | 6,302,000 |
Due to/from related parties | (195,000) | ||
Deferred rent | 159,000 | 340,000 | 410,000 |
Net cash provided by (used in) continuing operations | 8,890,000 | (6,123,000) | 5,020,000 |
Net cash provided by (used in) discontinued operations | (291,000) | (4,210,000) | 2,962,000 |
Net cash provided by (used in) operating activities | 8,599,000 | (10,333,000) | 7,982,000 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchase of Hudson Clothing, Inc., net of cash acquired | (418,000) | (65,218,000) | |
Purchases of property and equipment | (123,000) | (341,000) | (1,480,000) |
Net cash used in continuing investing activities | (123,000) | (759,000) | (66,698,000) |
Net cash used in discontinued investing activities | (362,000) | (424,000) | (655,000) |
Net cash used in investing activities | (485,000) | (1,183,000) | (67,353,000) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Payments on factor borrowing, net | (7,411,000) | ||
Payment of deferred financing costs | (3,051,000) | ||
Proceeds from (payment of) line of credit, net | (27,756,000) | 9,031,000 | 32,000 |
Payment of promissory note | (1,235,000) | ||
Proceeds from term loan | (59,925,000) | (75,000) | 60,000,000 |
Payment of term loan | 80,000,000 | ||
Exercise of stock options | 27,000 | ||
Purchase of treasury stock | (117,000) | (227,000) | |
Payment of taxes on restricted stock units | (86,000) | (343,000) | (560,000) |
Net cash provided by (used in) continuing financing activities | (7,884,000) | 7,151,000 | 49,037,000 |
Net cash provided by (used in) discontinued financing activities | 653,000 | 4,634,000 | (2,307,000) |
Net cash provided by (used in) financing activities | (7,231,000) | 11,785,000 | 46,730,000 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 883,000 | 269,000 | (12,641,000) |
CASH AND CASH EQUIVALENTS, at beginning of period | 1,054,000 | 785,000 | 13,426,000 |
CASH AND CASH EQUIVALENTS, at end of period | $ 1,937,000 | $ 1,054,000 | $ 785,000 |
Business Description and Basis
Business Description and Basis of Presentation | 12 Months Ended |
Nov. 30, 2015 | |
Business Description and Basis of Presentation | |
Business Description and Basis of Presentation | 1. Business Description and Basis of Presentation As of November 30, 2015, our principal business activity involved the design, development and worldwide marketing of apparel products, which include denim jeans, related casual wear and accessories that bear the brand Hudson®. Before the Asset Sale (defined below), our principal business activity also included the design, development and worldwide marketing or apparel products bearing the brand Joe's®. For fiscal 2015, our primary operating subsidiaries were Joe's Jeans Subsidiary, Inc., or Joe's Jeans Subsidiary (which has changed its name to DBG Subsidiary Inc. in connection with the Merger (defined below)), and Hudson Clothing, LLC, or Hudson. In addition, we have other subsidiaries, including Joe's Jeans Retail Subsidiary, Inc. (which changed its name to DBG Holdings Subsidiary Inc. in connection with the Merger (defined below)), Innovo West Sales, Inc., Hudson Clothing Holdings, Inc. and HC Acquisition Holding, Inc. All significant inter company transactions have been eliminated. We completed the acquisition of Hudson on September 30, 2013 and the information presented includes the results of operations of Hudson from the date of acquisition. On September 11, 2015, we completed the sale of certain of our operating and intellectual property assets related to the Joe's® brand and business to two separate purchasers for an aggregate purchase price of $80 million (the " Asset Sale "), the proceeds of which were used to repay all of our indebtedness outstanding under our term loan credit agreement (the " Garrison Term Loan Credit Agreement ") with Garrison Loan Agency Service LLC (" Garrison ") and a portion of our indebtedness outstanding under our revolving credit agreement (the " CIT Revolving Credit Agreement ") with CIT Commercial Services, Inc., a unit of CIT Group (" CIT "). As a result of the Asset Sale, we reported the operating results of our Joe's business in "Income from discontinued operations, net of tax" in our condensed consolidated statements of net loss and comprehensive loss for all periods presented. In addition, the assets and liabilities associated with our Joe's business are reported as held for sale (discontinued operations), in the condensed consolidated balance sheet at November 30, 2014. (see "Note 4—Discontinued Operations"). Unless otherwise indicated, the disclosures accompanying the condensed consolidated financial statements reflect our continuing operations. Our reportable business segments are Wholesale and Retail. We manage, evaluate and aggregate our operating segments for segment reporting purposes primarily on the basis of business activity and operation. As of November 30, 2015, our Wholesale segment was comprised of sales of Hudson® products to retailers, specialty stores and international distributors, includes revenue from licensing agreements and records expenses from sales, trade shows, distribution, product samples and customer service departments. As of November 30, 2015, our Retail segment was comprised of sales to consumers through ten of our Joe's branded full price retail stores, 11 outlet stores and through our online retail site at www.hudsonjeans.com. Our Corporate and other is comprised of expenses from corporate operations, which include the executive, finance, legal, human resources, design and production departments and general advertising expenses associated with our brands. Sales of our Joe's® and else™ products for our wholesale segment and for those retail stores being transferred pursuant to that certain asset purchase agreement, dated as of September 8, 2015, by and between us and GBG USA Inc., a Delaware corporation (" Operating Assets Purchaser ") (the " Operating Asset Purchase Agreement "), are presented as discontinued operations in our condensed consolidated financial statements for all periods presented. Our fiscal year end was November 30 for all periods presented. Each fiscal year, as presented, is 52 weeks. See "Note 2—Subsequent Events" for a discussion of additional changes to our business, including our fiscal year end and Reverse Stock Split (as defined below). |
Subsequent Events
Subsequent Events | 12 Months Ended |
Nov. 30, 2015 | |
Subsequent Events | |
Subsequent Events | 2. Subsequent Events Merger and Related Transactions On January 28, 2016, we completed the acquisition of all of the outstanding equity interests of RG Parent LLC, (" RG "), as contemplated by the Agreement and Plan of Merger, dated as of September 8, 2015 (the " Merger Agreement "), by and among RG, JJ Merger Sub LLC, our wholly-owned subsidiary (" Merger Sub ") and us, for an aggregate of $81.0 million in cash and 8,870,968 shares of our common stock (after giving effect to the Reverse Stock Split (as defined below)). Pursuant to the Merger Agreement, among other things, Merger Sub was merged with and into RG, so that RG, as the surviving entity, became our wholly-owned subsidiary (the " Merger "). RG is engaged in the design, development, sales and licensing of apparel products and accessories that bear the brand name Robert Graham®. In connection with the Merger, we changed our fiscal year end to December 31 st and will report our results after the effective date of the Merger with RG as the accounting acquirer. RG was determined to be the accounting acquirer as a result of RG members owning a majority of our issued and outstanding equity after the Merger. Effective upon consummation of the Merger, we changed our name to Differential Brands Group Inc. and effected a reverse stock split (the " Reverse Stock Split ") of our issued and outstanding common stock such that each thirty shares of our issued and outstanding common stock was reclassified into one share of our issued and outstanding common stock. The Reverse Stock Split did not change the par value or the amount of authorized shares of our common stock. The primary purpose of the Reverse Stock Split was to increase the per-share market price of our common stock in order to maintain our listing on The Nasdaq Capital Market maintained by The Nasdaq Stock Market LLC (" NASDAQ "). There have been no adjustments to our financial statements to reflect the Reverse Stock Split. In connection with the Merger, on January 28, 2016, we completed issuance and sale of an aggregate of fifty thousand (50,000) shares of our preferred stock designated as "Series A Convertible Preferred Stock" (the " Series A Preferred Stock" ), for an aggregate purchase price of $50 million in cash, as contemplated by the stock purchase agreement, dated as of September 8, 2015 (the " Stock Purchase Agreement "), by and between us and TCP Denim, LLC (the " Series A Purchaser "). We used the proceeds from the Stock Purchase Agreement and the debt financing provided by the credit facilities under the New Credit Agreements (as defined below) to, among other things, consummate the Merger and the transactions contemplated by the Merger Agreement. Also in connection with the completion of Merger, on January 28, 2016, we completed the exchange of our outstanding convertible notes for (i) 1,167,317 shares of common stock (after giving effect to the Reverse Stock Split); (ii) a cash payment of approximately $8.6 million; and (iii) an aggregate principal amount of approximately $16.5 million of modified convertible notes (the " Modified Convertible Notes "), as contemplated by the rollover agreement, dated September 8, 2015 (the " Rollover Agreement "), between us and the holders of our convertible notes. As of the closing of the Asset Sale, we retained and operated 32 Joe's® brand retail stores. Pursuant to the terms of the Operating Asset Purchase Agreement, we transferred 18 Joe's® brand retail stores to the Operating Assets Purchaser on January 28, 2016 for no additional consideration. As of February 29, 2016, the remaining 14 Joe's® brand retail stores were closed. New Credit Agreements On January 28, 2016 (the " Closing Date "), all outstanding loans under the CIT Revolving Credit Agreement were repaid and it was terminated in connection with entering into (i) a new credit and security agreement (the " ABL Credit Agreement ") with Wells Fargo Bank, National Association, as lender, and (ii) a new credit and security agreement with TCW Asset Management Company, as agent, and the lenders party thereto (the " Term Credit Agreement ", and together with the ABL Credit Agreement, the " New Credit Agreements "). The ABL Credit Agreement provides for a senior secured asset-based revolving credit facility (the " Revolving Facility ") with commitments in an aggregate principal amount of $40 million. The Term Credit Agreement provides for a senior secured term loan credit facility (the " Term Facility ", and together with the Revolving Facility, the " Credit Facilities ") in an aggregate principal amount of $50 million. The Term Facility matures on January 28, 2021. The Revolving Facility matures on October 30, 2020. The amount available to be drawn under the Revolving Facility will be based on the borrowing base values attributed to eligible accounts receivable and eligible inventory. Certain of our domestic subsidiaries are co-borrowers under the New Credit Agreements. The obligations under the New Credit Agreements are guaranteed by all of our domestic subsidiaries and are secured by substantially all of our assets, including the assets of our domestic subsidiaries. There are no scheduled payments under the Revolving Facility. The Term Facility is subject to quarterly payments of principal as follows: (i) 0.25% for each of the first four fiscal quarters; (ii) 0.625% for each of the four fiscal quarters thereafter; (iii) 1.25% for each of the next following four fiscal quarters; (iv) 1.875% for each of the next following four fiscal quarters; and (v) 2.50% for each fiscal quarter thereafter, with the balance payable at maturity. The Term Facility includes mandatory prepayments customary for credit facilities of its nature, including, subject to certain exceptions: (i) 100% of the net cash proceeds from issuances of debt that is not permitted and certain equity issuances; (ii) 100% of the net cash proceeds from certain non-ordinary course asset sales, subject to customary exceptions and reinvestment rights; (iii) 100% of certain insurance proceeds and condemnation recoveries, subject to customary exceptions and reinvestment rights; (iv) 100% of the net cash proceeds from certain extraordinary receipts; and (v) a variable percentage of excess cash flow of 50% or 25% depending on our senior leverage ratio. Outstanding loans under the Term Facility may be prepaid at any time at our option subject to customary "breakage" costs with respect to LIBO rate loans. Subject to certain exceptions, prepayments of loans under the Term Facility are subject to a prepayment premium of (i) 2.00% during the first year after the Closing Date and (ii) 1.00% during the second year after the Closing Date. The Revolving Facility is required to be prepaid to the extent extensions of credit thereunder exceed the applicable borrowing base. Outstanding loans under the Revolving Facility may be prepaid at any time at our option without premium or penalty, other than customary "breakage" costs with respect to LIBO rate loans. The ABL Credit Agreement provides that, subject to customary conditions, we, and certain of our subsidiaries that are borrowers, may seek to obtain incremental commitments under the Revolving Facility in an aggregate amount not to exceed $10 million. The Term Credit Agreement provides that, subject to customary conditions, we, and certain of our subsidiaries that are borrowers, may seek to obtain incremental term loans under the Term Facility in an aggregate amount not to exceed $50 million. We do not currently have any commitments for such incremental loans under either Facility. Borrowings under the New Credit Agreements will bear interest at a rate equal to either, at our option, an adjusted base rate or the LIBO rate (subject to a 0.50% floor for borrowings under the Term Facility), in each case plus an applicable margin. The applicable margins for borrowing under the Term Facility (which varies based on our senior leverage ratio) range from 8.00% to 6.00% for base rate loans and 9.00% to 7.00% for LIBO rate loans. The applicable margin for borrowings under the Revolving Facility is 0.50% for base rate loans and 1.75% for LIBO rate loans. An unused commitment fee equal to 0.25% per annum of the average daily amount by which the total commitments under the Revolving Facility exceeds the outstanding usage under the Revolving Facility will be payable monthly in arrears. The New Credit Agreements contain customary representations and warranties, events of default and covenants, including, among other things and subject to certain exceptions, covenants that restrict our ability, along with our subsidiaries', to incur additional indebtedness, create or permit liens on assets, engage in mergers or consolidations, dispose of assets, make prepayments of certain indebtedness, pay certain dividends and other restricted payments, make investments, and engage in transactions with affiliates. The Term Credit Agreement requires us to comply with financial maintenance covenants to be tested quarterly (beginning with the second fiscal quarter ending after the Closing Date), consisting of a maximum senior leverage ratio, a maximum net senior rent adjusted leverage ratio and a minimum fixed charge coverage ratio. The ABL Credit Agreement requires us to comply with a minimum fixed charge coverage ratio to be tested monthly if excess availability under the Revolving Facility is less than 10% of the lesser of the commitments under the Revolving Facility and the borrowing base or during specified events of defaults. If an event of default under a Credit Agreement occurs and continues, the commitments may be terminated and the principal amount outstanding, together with all accrued and unpaid interest and other amounts owed may be declared immediately due and payable. In addition, the Amended and Restated Factoring Agreement (as discussed in Note 5 below) was amended, superseded replaced in its entirety by the Amended and Restated Deferred Purchase Factoring Agreement with CIT, Robert Graham Designs, LLC and Hudson (the " A&R Factoring Agreement "). The A&R Factoring Agreement is substantially similar to the Amended and Restated Factoring Agreement with the exception of the fees. Under the A&R Factoring Agreement, we pay a factoring rate of (i) 0.20 percent for certain major department store accounts, (ii) 0.40 percent for all other accounts for which CIT bears the credit risk, subject to discretionary surcharges, and (iii) 0.35 percent for accounts for which we bear the credit risk, but in no event less than $3.50 per invoice. The A&R Factoring Agreement may be terminated by CIT upon 60 days' written notice or immediately upon the occurrence of an event of default as defined in the agreement. The A&R Factoring Agreement may be terminated by us upon 60 days' written notice prior to December 31, 2020 or annually with 60 days' written notice prior to December 31st of each year thereafter. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Nov. 30, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with United States generally accepted accounting principles 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Revenue Recognition Wholesale revenues are recorded on the accrual basis of accounting when title transfers to the customer, which is typically at the shipping point. We record estimated reductions to revenue for customer programs, including co-op advertising, other advertising programs or allowances, based upon a percentage of sales. We also allow for returns based upon pre-approval or in the case of damaged goods. Such returns are estimated based on historical experience and an allowance is provided at the time of sale. Retail store revenue is recognized net of estimated returns at the time of sale to consumers. E-commerce sales of products ordered through our retail internet sites known as www.joesjeans.com and www.hudsonjeans.com are recognized upon estimated delivery and receipt of the shipment by the customers. E- commerce revenue is also reduced by an estimate of returns. Retail store revenue and E-commerce revenue exclude sales taxes. Revenue from licensing arrangements are recognized when earned in accordance with the terms of the underlying agreements, generally based upon the higher of (a) contractually guaranteed minimum royalty levels and (b) estimates of sales and royalty data received from our licensees. Payments received in consideration of the grant of a license or advanced royalty payments are recognized ratably as revenue over the term of the license agreement and are reflected under the caption of "Deferred Licensing Revenue" on the Consolidated Balance Sheets. The revenue recognized ratably over the term of the license agreement will not exceed royalty payments received. The unrecognized portion of the upfront payments are included in deferred royalties and accrued expenses depending on the long or short term nature of the payments to be recognized. There were no advanced payments under our licensing agreements during our fiscal year ended November 30, 2013 and 2015. For our fiscal year ended November 30, 2014, we received $60,000 in advanced payments under our intimates' license agreement. Accounts Receivable, Due To Factor and Allowance for Customer Credits and Doubtful Allowances We evaluate our ability to collect on accounts receivable and charge-backs (disputes from the customer) based upon a combination of factors. Whether a receivable is past due is based on how recently payments have been received and in certain circumstances where we are aware of a specific customer's inability to meet its financial obligations (e.g., bankruptcy filings, substantial downgrading of credit sources). A specific reserve for bad debts is taken against amounts due to reduce the net recognized receivable to the amount reasonably expected to be collected. Amounts are charged off against the reserve once it is established that amounts are not likely to be collected. We recognize reserves for charge-backs based on our historical collection experience. See "Notes to Consolidated Financial Statements—Note 5—Factored Accounts and Receivables" for further discussion. Inventory Inventory is valued at the lower of cost or market with cost determined by the first-in, first-out method. Inventory consists of finished goods, work-in-process and raw materials. We continually evaluate our inventories by assessing slow moving current product. Market value of non-current inventory is estimated based on historical sales trends for this category of inventory for individual product lines, the impact of market trends, an evaluation of economic conditions and the value of current orders relating to future sales of this type of inventory. Inventory reserves establish a new cost basis for inventory. Such reserves are not reversed until the related inventory is sold or otherwise disposed. Costs capitalized in inventory include the purchase price of raw materials and contract labor, plus in- bound transportation costs and import fees and duties. Deferred Financing Costs Deferred financing costs are amortized using the straight-line method over the term of the related agreements (five years) and recorded as a component of interest expense in the accompanying consolidated statement of comprehensive loss. During fiscal year 2015, we accelerated the amortization of deferred financing costs due to a new line of credit with CIT and a change in our borrowing capacity. Amortization of deferred financing costs included in interest expense was approximately $1,511,000, $420,000 and $70,000 for the year ended November 30, 2015, 2014 and 2013. Costs of Goods Sold Costs of goods sold include product cost, freight in, freight out, inventory reserves, inventory markdowns and other various charges. Selling, General and Administrative Expenses Selling, general and administrative expenses include salaries and benefits, travel and entertainment, professional fees, advertising, marketing, sample expenses, stock based compensation expenses, facilities, fulfillment and distribution costs, bad debt expenses and write down of other assets. Earnings Per Share Basic earnings per share, or EPS, is computed using the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period except for periods of net loss for which no common share equivalents are included because their effect would be anti-dilutive. Dilutive common equivalent shares consist of common stock issuable upon exercise of stock options, restricted stock and restricted stock units using the treasury stock method. Dilutive common stock equivalent shares issuable upon conversion of the convertible notes are calculated using the if-converted method. EPS has been adjusted to reflect the Reverse Stock Split. Deferred Rent When a lease includes lease incentives (such as a rent holiday) or requires fixed escalations of the minimum lease payments, rental expense is recognized on a straight-line basis over the term of the lease and the difference between the average rental amount charged to expense and amounts payable under the lease is included in deferred rent in the accompanying consolidated balance sheets. Advertising Costs Advertising costs are charged to expense as incurred, except in the case of seasonal media campaigns. The production and other related costs of seasonal media campaigns are capitalized and amortized over the expected period of future benefits, which is typically six months or less. Advertising and tradeshow expenses included in selling, general and administrative expenses were approximately $2,928,000, $4,121,000 and $824,000 for fiscal 2015, 2014 and 2013, respectively. Financial Instruments The fair values of our financial instruments (which consist of cash, accounts receivable, factored accounts receivable, accounts payable, accrued expenses and a line of credit) do not differ materially from their recorded amounts because of the relatively short period of time between origination of the instruments and their expected realization. The fair value of our term debt and convertible notes is based on the amount of future cash flows associated with the instrument discounted using our incremental borrowing rate. We do not hold or have any obligations under financial instruments that possess off-balance sheet credit or market risk. Impairment of Long-Lived Assets and Intangibles We assess the impairment of long-lived assets, identifiable intangibles and goodwill annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors considered important that could trigger an impairment review other than on an annual basis include the following: • A significant underperformance relative to expected historical or projected future operating results; • A significant change in the manner of the use of the acquired asset or the strategy for the overall business; or • A significant negative industry or economic trend. When we determine that the carrying value of long-lived assets, such as property and equipment and purchased intangibles subject to amortization, may not be recoverable based upon the existence of one or more of the aforementioned factors and the carrying value exceeds the estimated undiscounted cash flows expected to be generated by the asset, impairment is measured based on a projected discounted cash flow method using a discount rate determined by management. These cash flows are calculated by netting future estimated sales against associated merchandise costs and other related expenses such as payroll, occupancy and marketing. The impairment loss calculations require management to apply judgment in estimating future cash flows and the discount rates that reflect the risk inherent in future cash flows. Future expected cash flows for store assets are based on management's estimates of future cash flows over the remaining lease period or expected life, if shorter. We consider historical trends, expected future business trends and other factors when estimating each store's future cash flow. We also consider factors such as: the local environment for each store location, including mall traffic and competition; our ability to successfully implement strategic initiatives; and the ability to control variable costs such as cost of sales and payroll, and in some cases, renegotiate lease costs. The estimated cash flows used for this nonrecurring fair value measurement are considered a Level 3 input as defined in Note 10. If actual results are not consistent with the assumptions and judgments used in estimating future cash flows and asset fair values, there may be additional exposure to future impairment losses that could be material to our results of operations. During fiscal 2015 and 2014, we recorded store impairment charges of $1,732,000 and $840,000, respectively, related to our retail stores. Based on the operating performance of these stores, we believed that we could not recover the carrying value of property and equipment located at these stores. There was no impairment recorded for our retail stores during fiscal 2013. Business acquisitions are accounted for under the purchase method by assigning the purchase price to tangible and intangible assets acquired and liabilities assumed. Assets acquired and liabilities assumed are recorded at their fair values and the excess of the purchase price over the amounts assigned is recorded as goodwill. Purchased intangible assets, such as customer relationships and designs, with finite lives are amortized over their estimated useful lives. Goodwill and other intangible assets, such as trademarks, with indefinite lives are not amortized but are tested at least annually for impairment. On September 30, 2013, we acquired Hudson, which included all of the goodwill and intangible assets related to the Hudson® logos and marks. We have assigned an indefinite life to the remaining intangible assets relating to the trademarks acquired, and therefore, no amortization expenses are expected to be recognized. However, we will test the assets for impairment annually in accordance with our critical accounting policies. We evaluate goodwill for impairment at least annually using a two-step process. The first step is to determine the fair value of each reporting unit and compare this value to its carrying value. If the fair value exceeds the carrying value, no further work is required and no impairment loss would be recognized. The second step is performed if the carrying value exceeds the fair value of the assets. The implied fair value of the reporting unit's goodwill must be determined and compared to the carrying value of the goodwill. We review our other indefinite-lived intangible assets for impairment on an annual basis, or when circumstances indicate their carrying value may not be recoverable. We calculate the value of the indefinite-lived intangible assets using a discounted cash flow method, based on the relief from royalty concept. Our annual impairment testing date is September 30 of each year or when circumstances indicate their carrying value may not be recoverable. As part of our annual testing for fiscal 2015, we determined that the carrying value of our Hudson trademark may not be recoverable and therefore, we impaired the Hudson trademark by $12,400,000. We determined that there was no impairment of our goodwill. For fiscal 2014, based on our under-performance in the fourth quarter of fiscal 2014, we determined that it was appropriate to perform our impairment testing as of November 30, 2014. Based on our testing we determined that the goodwill allocated to our Hudson wholesale reporting unit was impaired by $23,585,000, and there was no impairment of our other indefinite-lived intangible assets. For fiscal 2013, we determined that there was no impairment of our goodwill or indefinite lived intangible assets. Cash Equivalents We consider all highly liquid investments that are both readily convertible into known amounts of cash and mature within 90 days from their date of purchase to be cash equivalents. Concentration of Risk Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash, cash equivalents, accounts receivable and amounts due from factor. We maintain cash and cash equivalents with various financial institutions. The policy is designed to limit exposure to any one institution. We perform periodic evaluations of the relative credit rating of those financial institutions that are considered in our investment strategy. We do not require collateral for trade accounts receivable. However, we sell a portion of our accounts receivable to CIT on a non-recourse basis. In that instance, we are no longer at risk if the customer fails to pay. However, for accounts receivable that are not sold to CIT or sold on a recourse basis, we continue to be at risk if these customers fail to pay. We provide an allowance for estimated losses to be incurred in the collection of accounts receivable based upon the aging of outstanding balances and other account monitoring analysis. The net carrying value approximates the fair value for these assets. Such losses have historically been within management's expectations. Uncollectible accounts are written off once collection efforts are deemed by management to have been exhausted. For fiscal 2015, 2014 and 2013, sales to customers or customer groups representing greater than 10 percent of net sales are as follows: 2015 2014 2013 Nordstrom, Inc. % % % Macy's Inc. % % % Our 10 largest customers and customer groups accounted for approximately 72 percent of our net sales during fiscal 2015. In addition, our international sales were $4,083,000, $5,700,000 and $1,472,000 in fiscal 2015, 2014 and 2013, respectively. In addition, we utilize two manufacturing contractors, Top Jeans in Mexico and Atomic Denim in the United States, for our Hudson® products. Purchases from these two manufacturing contractors accounted for approximately 22 percent of our Hudson® purchases for fiscal 2015. Stock-Based Compensation We measure the cost of all employee stock-based compensation awards based on the grant date fair value of those awards and record that cost as compensation expense over the period during which the employee is required to perform service in exchange for the award (generally over the vesting period of the award). An entity may elect either an accelerated recognition method or a straight-line recognition method for awards subject to graded vesting based on a service condition, regardless of how the fair value of the award is measured. For all stock based compensation awards that contain graded vesting based on service conditions, we have elected to apply a straight-line recognition method to account for these awards. Property and Equipment Property and equipment are stated at the lower of cost or fair value in the case of impaired assets. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the lives of the respective leases or the estimated service lives of the improvements, whichever is shorter. Maintenance and repairs are charged to expense as incurred. Upon sale or retirement, the asset cost and related accumulated depreciation or amortization is removed from the accounts, and any related gain or loss is included in the determination of net income. Income Taxes We use the liability method of accounting for income taxes. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The likelihood of a material change in our expected realization of these assets depends on our ability to generate sufficient future taxable income. Our ability to generate enough taxable income to utilize our deferred tax assets depends on many factors, among which is our ability to deduct tax loss carry-forwards against future taxable income, the effectiveness of tax planning strategies and reversing deferred tax liabilities. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based upon the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based upon the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. Our policy is to recognize interest and penalties that would be assessed in relation to the settlement value of unrecognized tax benefits as a component of income tax expense. Discontinued Operations In accordance with the provisions of ASC 205-20, the results of operations of a component of an entity that has either been disposed of or is classified as held for sale is required to be reported as discontinued operations in the consolidated financial statements. In order to be considered a discontinued operation, both the operations and cash flows of the component have been (or will be) eliminated from the ongoing operations of an entity and the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction. The accompanying consolidated financial statements reflect the results of operations and financial position of our "Joe's Business" as discontinued operations. Other Recently Issued Financial Accounting Standards In April 2014, the FASB issued authoritative guidance which raises the threshold for disposals to qualify as discontinued operations. Under this new guidance, a discontinued operation is (1) a component of an entity or group of components that have been disposed of or are classified as held for sale and represent a strategic shift that has or will have a major effect on an entity's operations and financial results, or (2) an acquired business that is classified as held for sale on the acquisition date. This guidance also requires expanded or new disclosures for discontinued operations, individually material disposals that do not meet the definition of a discontinued operation, an entity's continuing involvement with a discontinued operation following disposal and retained equity method investments in a discontinued operation. This guidance is effective for fiscal periods beginning after December 15, 2014. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements. In May 2014, the FASB issued a comprehensive new revenue recognition standard which will supersede previous existing revenue recognition guidance. The standard creates a five-step model for revenue recognition that requires companies to exercise judgment when considering contract terms and relevant facts and circumstances. The five-step model includes (1) identifying the contract, (2) identifying the separate performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations and (5) recognizing revenue when each performance obligation has been satisfied. The standard also requires expanded disclosures surrounding revenue recognition. The standard is effective for fiscal periods beginning after December 15, 2016 and allows for either full retrospective or modified retrospective adoption. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements. In August 2014, the FASB issued Accounting Standards Update No. 2014-15 to communicate amendments to FASB Accounting Standards Codification Subtopic 205-40, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, or ASC amendments. The ASC amendments establish new requirements for management to evaluate a company's ability to continue as a going concern and to provide certain related disclosures. The ASC amendments are effective for the annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted, but we have not yet adopted such guidance. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (" ASU 2015-17 ") which will require entities to present deferred tax assets (" DTAs ") and deferred tax liabilities (" DTLs ") as noncurrent in a classified balance sheet. ASU 2015-17 simplifies the current guidance, which requires entities to separately present DTAs and DTLs as current and noncurrent in a classified balance sheet. For public business entities, the amendments in ASU 2015-17 are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early application is permitted as of the beginning of an interim or annual reporting period. ASU 2015-17 is effective for us beginning January 1, 2017. Adoption of ASU 2015-17 is not expected to have a material effect on our results of operations, financial position or cash flows. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Nov. 30, 2015 | |
Discontinued Operations | |
Discontinued Operations | 4. Discontinued Operations On September 11, 2015, we completed the Asset Sale related to the Joe's Business. See "Note 1—Business Description and Basis of Presentation " for a further discussion of the Asset Sale. Accordingly, the Joe's Business was classified as "held for sale" and its results of operations are presented as discontinued operations in the accompanying consolidated statements of net loss and comprehensive loss for all periods presented. The assets and liabilities of the discontinued operations have been reclassified as assets and liabilities held for sale within our consolidated balance sheet at November 30, 2014. The operating results of discontinued operations for fiscal 2015, 2014 and 2013 are as follows (in thousands): Year ended November 30, 2015 November 30, 2014 November 30, 2013 Net sales $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from discontinued operations (including fiscal year 2015 gain on disposal of $15,369) before provision for income taxes Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from discontinued operations $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The components of major assets and liabilities held for sale at November 30, 2014 were as follows (in thousands): November 30, 2014 ASSETS: Current assets: Accounts receivable, net $ Factored accounts receivable, net Inventories, net Prepaid expenses and other current assets ​ ​ ​ ​ ​ Total Current assets ​ ​ ​ ​ ​ Noncurrent assets: Property and equipment, net Goodwill Intangible assets Other assets ​ ​ ​ ​ ​ Total Noncurrent assets ​ ​ ​ ​ ​ Assets held for sale $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES: Current liabilities: Accounts payable and accrued expenses $ ​ ​ ​ ​ ​ Total Current liabilities ​ ​ ​ ​ ​ Noncurrent liabilities: Deferred rent ​ ​ ​ ​ ​ Total Noncurrent liabilities ​ ​ ​ ​ ​ Liabilities held for sale $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Factored Accounts and Receivabl
Factored Accounts and Receivables | 12 Months Ended |
Nov. 30, 2015 | |
Factored Accounts and Receivables | |
Factored Accounts and Receivables | 5. Factored Accounts and Receivables. Factored accounts and receivables consisted of the following (in thousands): November 30, 2015 November 30, 2014 Non-recourse receivables assigned to factor $ $ Client recourse receivables ​ ​ ​ ​ ​ ​ ​ ​ Total receivables assigned to factor Allowance for customer credits ) ) ​ ​ ​ ​ ​ ​ ​ ​ Factor accounts receivable, net of allowance $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-factored accounts receivable $ $ Allowance for customer credits ) ) Allowance for doubtful accounts ) ) ​ ​ ​ ​ ​ ​ ​ ​ Accounts receivable, net of allowance $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Of the total amount of receivables sold by us as of November 30, 2015 and November 30, 2014, we hold the risk of payment of $34,000 and $1,919,000, respectively, in the event of non-payment by the customers. On September 30, 2013, we entered into an amended and restated factoring agreement, or the Amended and Restated Factoring Agreement, with CIT, which replaces all prior agreements relating to factoring and inventory security. The Amended and Restated Factoring Agreement provides that we sell and assign to CIT certain of our accounts receivable, including accounts arising from or related to sales of inventory and the rendition of services. We pay a factoring rate of 0.50 percent for accounts for which CIT bears the credit risk, subject to discretionary surcharges, and 0.35 percent for accounts for which we bear the credit risk, but in no event less than $3.50 per invoice. The Amended and Restated Factoring Agreement may be terminated by CIT upon 60 days' written notice or immediately upon the occurrence of an event of default as defined in the agreement. The accounts receivable agreement may be terminated by us upon 60 days' written notice prior to September 30, 2018 or annually with 60 days' written notice prior to September 30th of each year thereafter. The Amended and Restated Factoring Agreement remains effective until it is terminated. As of November 30, 2015, our cash balance was $1,937,000 and our cash availability with CIT was approximately $3,163,000. This amount with CIT fluctuates on a daily basis based upon invoicing and collection related activity by CIT on our behalf for the receivables sold. In November 2014, we received an initial notice of default and event of default and demand for payment of default interest from Garrison, as term loan agent, under the term loan facility entered into on September 30, 2013. As a result of the event of default under the Garrison Term Loan Credit Agreement, this also triggered a default and an event of default under the terms of the CIT Revolving Credit Agreement. On February 10, 2015, we received additional notices of default and events of default for failure to comply with certain financial and other covenants and a demand for continued payment of default interest from both Garrison and CIT. In September 2015, we paid the Garrison Term Loan Agreement in full and entered into the CIT Amended and Restated Revolving Credit Agreement. In January 2016, we paid the CIT Amended and Restated Revolving Credit Agreement in full and entered into the A&R Factoring Agreement, as discussed in Note 2 above. |
Inventories, Net
Inventories, Net | 12 Months Ended |
Nov. 30, 2015 | |
Inventories, Net | |
Inventories, Net | 6. Inventories, Net Inventory is valued at the lower of cost or market with cost determined by the first-in, first-out method. Inventories consisted of the following (in thousands): November 30, 2015 November 30, 2014 Finished goods $ $ Finished goods consigned to others Work in progress Raw materials ​ ​ ​ ​ ​ ​ ​ ​ Less allowance for obsolescence and slow moving items ) ) ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Property and Equipment
Property and Equipment | 12 Months Ended |
Nov. 30, 2015 | |
Property and Equipment | |
Property and Equipment | 7. Property and Equipment Property and equipment consisted of the following (in thousands): Useful lives (years) November 30, 2015 November 30, 2014 Computer and equipment 3 - 7 $ $ Furniture and fixtures 3 - 7 Leasehold improvements 5 - 10 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net property and equipment $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation expenses aggregated $871,000, $1,300,000 and $929,000 for fiscal 2015, 2014 and 2013, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Nov. 30, 2015 | |
Intangible Assets | |
Intangible Assets | 8. Intangible Assets Intangible assets are recorded at cost, less accumulated amortization. Amortization of intangible assets with definite lives is provided for over their estimated useful lives. The life of the trade names is indefinite. Intangible assets consisted of the following (in thousands): Amortization Period Gross Amount Impairment Accumulated Amortization Net Amount Trade names Indefinite $ $ $ — $ Designs 6 Years — Customer relationships 10 Years — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization expense related to the intangible assets amounted to approximately $2,337,000 for the year ended November 30, 2015, $2,337,000 for the year ended November 30, 2014 and $390,000 for the year ended November 30, 2013. Estimated amortization expense for the next five years is as follows (in thousands) at November 30, 2015: 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Debt
Debt | 12 Months Ended |
Nov. 30, 2015 | |
Debt | |
Debt | 9. Debt The five-year payment schedule of our term debt and convertible notes is as follows (in thousands): Payments due by period (in thousands) Total 2016 2017 2018 2019 2020 Thereafter Long term debt $ — $ — $ — $ — $ — $ — $ — Convertible notes — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ — $ — $ $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Convertible Notes We issued convertible notes in connection with the acquisition of Hudson with different interest rates and conversion features for Hudson's management stockholders and Fireman, respectively. In connection with the Merger with RG, we exchanged the outstanding convertible notes for a combination of stock, cash and Modified Convertible Notes. See "Note 2—Subsequent Events" for a further discussion of the Modified Convertible Notes. Interest on the convertible notes was paid in a combination of cash and additional paid in kind notes, or PIK notes. All of the convertible notes were structurally and contractually subordinated to our senior debt and matured on March 31, 2019. The face amount of the notes were $22,885,000 for Hudson management and $9,560,000 for Fireman. All of the notes were expressly junior and subordinated in right of payment to all amounts due and owing upon any indebtedness outstanding under the revolving credit facility and the term loan facility (as discussed below). The management notes accrued interest quarterly on the outstanding principal amount (i) from September 30, 2013 until the earlier to occur of the date of conversion of the notes or November 30, 2014 at a rate of 10 percent per annum, which was payable 7.68 percent in cash and 2.32 percent in PIK Notes, (ii) from December 1, 2014 until the earlier to occur of the date of conversion of the notes or September 30, 2016 at a rate of 10 percent per annum payable in cash, and (iii) from October 1, 2016 until the earlier to occur of the date of conversion of the notes or the date such principal amount would be paid in full at a rate of 10.928 percent per annum payable in cash. Payment of interest at the cash pay rate under clause (ii) or (iii), as applicable, for any payment date was subject to satisfaction of certain financial conditions for us. As of December 1, 2014, we did not meet such financial conditions, and therefore, the interest continued to accrue quarterly at a rate of 10 percent per annum, which was payable 7.68 percent in cash and 2.32 percent in PIK notes. In addition, because we were prohibited from making any payments under the subordinated convertible notes, as of January 1, 2015, we began to accrue an additional two percent interest under the default rate in cash. The management notes became convertible by each of the holders beginning on September 30, 2015 until maturity on March 31, 2019 into shares of our common stock, cash, or a combination of cash and common stock, with the settlement choice at our election. The Fireman note accrued interest quarterly on the outstanding principal amount (i) from September 30, 2013 until the earlier to occur of the date of conversion of the notes or November 30, 2014 at a rate of 6.5 percent per annum, which was payable 3 percent in cash and 3.5 percent in PIK Notes, (ii) from December 1, 2014 until the earlier to occur of the date of conversion of the notes or September 30, 2016 at a rate of 6.5 percent per annum payable in cash, and (iii) from October 1, 2016 until the earlier to occur of the date of conversion of the notes or the date such principal amount would be paid in full at a rate of 7 percent per annum payable in cash. Payment of interest at the cash pay rate under clause (ii) or (iii), as applicable, for any payment date was subject to satisfaction of certain financial conditions for us. As of December 1, 2014, we did not meet such financial conditions, and therefore, the interest continued to accrue quarterly at a rate of 6.5 percent per annum, which was payable 3 percent in cash and 3.5 percent in PIK notes. In addition, because we were prohibited from making any payments under the subordinated convertible notes, as of January 1, 2015, we began to accrue an additional two and a half percent interest under the default rate in cash. The Fireman note became convertible by the holder on October 14, 2014 until maturity on March 31, 2019 into shares of common stock, cash, or a combination of cash and common stock, with the settlement choice at our election. Each of the notes were convertible, in whole but not in part, at a conversion price of $1.78 per share, subject to certain adjustments, into approximately 19,200,000 shares of our common stock. The Fireman note could be converted at its sole election and the management notes may be converted at either a majority of the holders' election or individually, depending on the holder. If the we elected to pay cash with respect to a conversion of the notes, the amount of cash to be paid per share would have been equal to (a) the number of shares of common stock issuable upon such conversion multiplied by (b) the average of the closing prices for the common stock over the 20 trading day period immediately preceding the notice of conversion. We had the right to prepay all or any portion of the principal amount of the notes at any time by paying 103 percent of the principal amount of the portion of any management note subject to prepayment or 100 percent of the principal amount of the portion of the Fireman note subject to prepayment. The holders of the convertible notes also had demand and piggyback registration rights associated with their notes in a separate agreement pursuant to which they have the right to require us to prepare and file a registration statement on Form S-1 or S-3 or any similar form or successor to such forms under the Securities Act, or any other appropriate form under the Securities Act or the Exchange Act, for the resale of all or part of their shares that may be issued under the convertible notes. Embedded Conversion Derivative FASB Accounting Standards Codification (ASC) Topic 470 (ASC 470), Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement) requires the issuer of convertible debt that may be settled in shares or cash upon conversion at their option, such as our convertible notes, to account for their liability and equity components separately by bifurcating the embedded conversion derivative, or the derivative, from the host debt instrument. Although ASC 470 has no impact on our actual past or future cash flows, it requires us to record non-cash interest expense as the debt discount is amortized. As a result of the issuance of convertible notes in September 2013, the total potential shares of common stock that could be issued exceeded the amount of shares we were eligible to issue under NASDAQ rules as of that date. Therefore, we were required to value the derivative and recognize the fair value as a long-term liability. The fair value of this derivative at the time of issuance of the convertible notes was $5,496,000 and was recorded as the original debt discount for the purposes of accounting for the debt component of the convertible notes. This debt discount on the Fireman and management notes are being amortized as interest expense using an effective interest rate of 8.32 percent and 4.31 percent, respectively, over the remaining 5.5 year term of the convertible notes. On May 8, 2014, we obtained stockholder approval for our ability to issue the common stock underlying the convertible notes in compliance with NASDAQ rules. The derivative liability has been reassessed and it was determined that it should be reclassified to stockholders' equity as of May 8, 2014. We determined the fair value of the derivative using a binomial lattice model at that date. The key assumptions for determining the fair value at May 8, 2014 included the remaining time to maturity of approximately four years and ten months, volatility of 60 percent, and the risk-free interest rate of 1.63 percent. The fair value of the embedded conversion derivative was $5,700,000 and $3,430,000 at November 30, 2013 and May 8, 2014, respectively. The decrease in the fair value of the embedded conversion derivative from November 30, 2013 to May 8, 2014 resulted in a gain of $2,270,000, which has been recorded as other income. The primary reason for the decrease in fair value was due to the change in our stock price as compared to the conversion price. The following table (in thousands) is a summary of the recorded value of the convertible note as of November 30, 2015. The value of the convertible note reflects the present value of the contractual cash flows from the convertible notes and resulted in an original issue discount of $10,490,000 including the additional original discount attributed to the embedded conversion derivative of $5,496,000, that were recorded on September 30, 2013, the issuance date. Convertible notes—Face value $ Less: Original issue discount ) Less: Debt discount related to the embedded derivative liability ) ​ ​ ​ ​ ​ Convertible notes recorded value on issue date Accretion of debt discounts for 14 months ended November 30, 2015 PIK Interest paid October 1, 2013 - November 30, 2015 ​ ​ ​ ​ ​ Convertible notes value Plus: Embedded derivative liability—fair market value — ​ ​ ​ ​ ​ Debt as of November 30, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table (in thousands) is a summary of our total interest expense as follows: Year ended November 30, 2015 November 30, 2014 November 29, 2013 Contractual coupon interest $ $ $ Amortization of discount and deferred financing costs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total interest expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Promissory Notes In connection with the acquisition, we issued approximately $1,235,000 in aggregate principal amount of promissory notes bearing no interest that were paid on April 1, 2014 to certain option holders of Hudson. CIT Revolving Credit Agreement In connection with the acquisition of Hudson, we entered into a CIT Revolving Credit Agreement that provided us with a revolving credit facility up to $50,000,000 comprised of a revolving A-1 commitment of up to $1,000,000 and a revolving A commitment of up to $50,000,000 minus the revolving A-1 commitment. Our actual maximum credit availability under the revolving facility varied from time to time and was determined by calculating a borrowing base, which was based on the value of the eligible accounts and eligible inventory minus reserves imposed by CIT. The revolving facility also provided for swingline loans, up to $5,000,000 sublimit, and letters of credit, up to $1,000,000 sublimit. Proceeds from advances under the revolving facility were to be used for working capital needs and general corporate purposes and were initially used to pay a portion of the consideration for the acquisition of Hudson, fees and expenses associated with that acquisition and to repay our existing factor loans. As of November 30, 2015, $4,235,000 was outstanding under our revolving credit facility and cash availability of approximately $3,163,000. Until we entered into a forbearance agreement and amendments to the CIT Revolving Credit Agreement and Garrison Term Loan Credit Agreement in June 2015, we were not in compliance with the covenants under the CIT Revolving Credit Agreement as a result of events of default under the Garrison Term Loan Credit Agreement. In connection with the Asset Sale, a portion of our indebtedness under the CIT Revolving Credit Agreement was repaid, and on September 11, 2015, we entered into the CIT Amended and Restated Revolving Credit Agreement, which was further amended on December 29, 2015. Among other things, the CIT Amended and Restated Revolving Credit Agreement (i) amended and restated the CIT Revolving Credit Agreement as it had been amended from time to time and (ii) waived the "Existing Defaults" and "Forbearance Defaults" (each as defined under the CIT Forbearance Agreement) and certain other defaults. Pursuant to a separate consent and agreement, CIT and the lenders consented to the Asset Sale. The CIT Amended and Restated Revolving Credit Agreement provided for a revolving facility (the " CIT Revolving Facility ") with a revolving commitment of up to $10,000,000 (the " CIT Revolving Commitment "). Our actual maximum credit availability under the CIT Revolving Facility varied from time to time and was equal to the lesser of (i) the CIT Revolving Commitment minus an availability block of $2.5 million, or $7.5 million, and (ii) a calculated borrowing base, which was based on the value of the eligible accounts and eligible inventory minus the availability block of $2.5 million minus reserves imposed by the revolving lenders, all as were specified in the CIT Amended and Restated Revolving Credit Agreement. The CIT Revolving Facility provided for swingline loans, up to $1 million sublimit, and letters of credit, up to $1 million sublimit, within such credit availability limits. Proceeds from advances under the CIT Revolving Facility were to be used (i) to pay fees and expenses in connection with the CIT Amended and Restated Revolving Credit Agreement and the Asset Sale and (ii) for working capital needs and general corporate purposes. All unpaid loans under the CIT Revolving Facility were to mature on February 8, 2016. We had the right at any time and from time to time to (i) terminate the commitments under the CIT Revolving Facility in full and (ii) prepay any borrowings under the CIT Revolving Facility, in whole or in part, without terminating or reducing the commitment under the CIT Revolving Facility. The CIT Revolving Facility was guaranteed by us and all of our subsidiaries and secured by liens on substantially all of our assets. Advances under the CIT Revolving Facility were in the form of either base rate loans or LIBOR rate loans. The interest rate for base rate loans under the CIT Revolving Commitment fluctuated and were equal to (x) the greatest (the " Alternate Base Rate ") of (a) JPMorgan Chase Bank prime rate; (b) the Federal funds rate plus 0.50%; and (c) the rate per annum equal to the 90 day LIBOR published in the New York City edition of the Wall Street Journal under "Money Rates" (the " 90-Day LIBO Rate ") plus 1.0%, in each case, plus (y) 3.50%. The interest rate for LIBOR rate loans under the CIT Revolving Commitment was equal to the 90-Day LIBO Rate per annum plus 4.50%. Interest on the CIT Revolving Facility was payable on the first day of each calendar month and the maturity date. Among other fees, we were required to pay a commitment fee of 0.25% per annum (due quarterly) on the average daily amount of the unused revolving commitment under the CIT Revolving Facility. We also were required to pay fees with respect to any letters of credit issued under the CIT Revolving Facility. The CIT Revolving Facility contained usual and customary negative covenants for transactions of this type, including, but not limited to, restrictions on our and our subsidiaries' ability, to create or incur indebtedness; create liens; consolidate, merge, liquidate or dissolve; sell, lease or otherwise transfer any of its assets (with the Asset Sale expressly permitted); substantially change the nature of our business; make investments or acquisitions; pay dividends; enter into transactions with affiliates; amend material documents, prepay certain indebtedness and make capital expenditures. The negative covenants were subject to certain exceptions as specified in the CIT Amended and Restated Revolving Credit Agreement. Additionally, in connection with the Asset Sale, Joe's Sub, Hudson, the Operating Assets Purchaser and CIT entered into the Reassignment and Termination Agreement, pursuant to which, Joe's Sub was terminated as a party to the amended and restated factoring agreement. Subject to the terms and conditions provided in the Reassignment and Termination Agreement, CIT reassigned to Joe's Sub all of its accounts factored with CIT which were outstanding as of the date of the Reassignment and Termination Agreement. On January 28, 2016, all outstanding loans under the CIT Amended and Restated Revolving Credit Agreement were repaid and it was terminated in connection with entering into the New Credit Agreements. See "Note 2—Subsequent Events" for a further discussion of the New Credit Agreements. Garrison Term Loan Credit Agreement Our indebtedness outstanding under the Garrison Term Loan Credit Agreement was fully repaid with a portion of the proceeds of the Asset Sale. As a result, the Garrison Term Loan Credit Agreement was terminated on September 11, 2015. The Garrison Term Loan Credit Agreement provided for term loans of up to $60,000,000 and was fully funded to us as of September 30, 2013. The term loan proceeds were used to finance a portion of the consideration for the acquisition of Hudson and to pay fees and expenses associated with the acquisition. The term loan was to mature on September 30, 2018. We were allowed to prepay the term loan at any time, in whole or in part, subject to the payment of a prepayment fee if we prepay prior to September 30, 2016. The prepayment fee was two percent at the time we repaid the term loan. In addition, while the term loan was outstanding, we were required to make prepayments out of extraordinary receipts, certain percentage of the excess cash flow and certain net proceeds of certain asset sales or equity issuances, in each case (other than a prepayment in connection with excess cash flow), subject to the payment of the prepayment fee. The term loan facility was guaranteed by us and all of our subsidiaries, and was secured by liens on substantially all assets owned by us, including a first- priority lien on intellectual property owned by us and a second-priority lien on the revolving credit priority collateral. The interest rate for the term loan fluctuated and was equal to the rate per annum equal to the British Banker Association Interest Settlement Rate for deposits in Dollars with a term of three months, as appears on the Bloomberg BBAM Screen, plus 10.75 percent. Interest was payable on the first day of each calendar month and the maturity date. In addition, because we were in default under the Garrison Term Loan Credit Agreement, we were paying an additional two percent interest under the default rate. Our average interest rate, including the default rate, was approximately 14 percent. The Garrison Term Loan Credit Agreement contained usual and customary negative covenants for transactions of this type, including, but not limited to, restrictions on our ability and our subsidiaries' ability to create or incur indebtedness; create liens; consolidate, merge, liquidate or dissolve; sell, lease or otherwise transfer any of its assets; substantially change the nature of its business; make investments or acquisitions; pay dividends; enter into transactions with affiliates; amend material documents, prepay certain indebtedness and make capital expenditures. The negative covenants were subject to certain exceptions as specified in the Garrison Term Loan Credit Agreement. In addition, the Garrison Term Loan Credit Agreement also required us to maintain certain financial covenants. Until we entered into a forbearance agreement and amendments to the CIT Revolving Credit Agreement and Garrison Term Loan Credit Agreement in June 2015, we were not in compliance with certain of the financial covenants under the Garrison Term Loan Credit Agreement. |
Fair Value Disclosures
Fair Value Disclosures | 12 Months Ended |
Nov. 30, 2015 | |
Fair Value Disclosures | |
Fair Value Disclosures | 10. Fair Value Disclosures Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. Accounting guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. We review the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. The following table presents our fair value hierarchy for assets measured at fair value on a non-recurring basis as of November 30, 2015 and 2014 (in thousands): As of November 30, 2015 Total Level 1 Level 2 Level 3 Total Losses Property and equipment, net $ $ — $ — $ $ Trade names $ $ — $ — $ $ As of November 30, 2014 Total Level 1 Level 2 Level 3 Total Losses Property and equipment, net $ $ — $ — $ $ Goodwill $ $ — $ — $ $ |
Income Taxes
Income Taxes | 12 Months Ended |
Nov. 30, 2015 | |
Income Taxes | |
Income Taxes | 11. Income Taxes The provision (benefit) for income taxes is as follows: Year ended (in thousands) 2015 2014 2013 Current: Federal $ ) $ ) $ ) State ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred: Federal ) ) ) State ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax assets and liabilities result from the following temporary differences between the book and tax basis of assets and liabilities: Year ended (in thousands) 2015 2014 Current: Deferred tax assets: Allowance for customer credits and doubtful accounts $ $ Inventory valuation Inventory capitalization State tax deduction Accrued vacation Debt financing costs — Capitalized transaction costs — Installment sales — Other — Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total current deferred taxes ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: Prepaid expenses ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total current deferred taxes ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net current deferred tax assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noncurrent: Deferred tax assets: Benefit of net operating loss carryforwards $ $ Property and equipment basis difference — Stock compensation expense Deferred rent Tax Credits State tax deduction Other — Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net noncurrent deferred tax assets ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: Property and equipment basis difference — ) Amortizable intangible assets ) ) Debt discount ) ) Long lived intangible asset ) ) Other ) — ​ ​ ​ ​ ​ ​ ​ ​ Total noncurrent deferred tax liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net noncurrent deferred tax liability $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ A valuation allowance is required when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Annually, management reassesses the need for a valuation allowance. Realization of deferred income tax assets is dependent upon taxable income in prior carryback years, estimates of future taxable income, tax planning strategies and reversals of existing taxable temporary differences. Based on our assessment of these items for fiscal 2014, we determined that the deferred tax assets were more likely than not to be realized with the exception of a valuation allowance of $640,000 that was recorded against a state net operating loss deferred tax asset. For fiscal 2015 we recorded a valuation allowance of $12,260,000 against all net deferred tax assets, excluding deferred tax liabilities associated with trademarks. We considered all available evidence, both positive and negative, in our assessment of the valuation allowance needed as of November 30, 2015. We concluded that the valuation allowance of $12,260,000 as of November 30, 2015 is required based on our cumulative earnings history. The increases to the valuation allowance that were recognized as part of continuing operations tax expense in 2015, 2014 and 2013 were $12,076,000, $508,000 and $342,000, respectively. The reconciliation of the effective income tax rate to the federal statutory rate for the years ended is as follows: Year ended 2015 2014 2013 Computed tax provision at the statutory rate % % % State income tax % — % Transaction costs — % )% Acquisition basis difference — )% )% Effect of uncertain tax positions — )% )% Change in valuation allowance )% — — Prior year adjustment % — — Goodwill impairment — )% — Other adjustments )% % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective tax rate % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ We are subject to United States federal income tax as well as income tax in multiple state jurisdictions. To the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses were generated and carried forward, and make adjustments up to the amount of the net operating loss carryforward amount. We are no longer subject to United States federal and California income tax examinations by tax authorities for years prior to fiscal 2011. We are currently not being examined by any tax authorities. We had net operating loss carryforwards of $20,338,000 at the end of fiscal 2015 for federal tax purposes that will expire from fiscal 2019 through fiscal 2035. We also had $13,117,000 of net operating loss carryforwards available for California that will expire from fiscal 2016 through fiscal 2034. Certain limitations may be placed on net operating loss carryforwards as a result of "changes in control" as defined in Section 382 of the Internal Revenue Code. In the event a change in control occurs, it will have the effect of limiting the annual usage of the carryforwards in future years. Additional changes in control in future periods could result in further limitations of our ability to offset taxable income. Management believes that certain changes in control have occurred which resulted in limitations on its net operating loss carryforwards, however, management has determined that these limitations will not impact the ultimate utilization of the net operating loss carryforwards. As of November 30, 2015 and 2014, we provided a liability of $298,000 and $400,000, respectively, for unrecognized tax benefits related to various federal and state income tax matters. Included in the balance sheet at November 30, 2015 and November 30. 2014 are $298,000 and $339,000, respectively, net of tax related benefits that impact the effective income tax rate if recognized. The following presents a roll forward of its unrecognized tax benefits (in thousands): Balance at November 30, 2013 $ Increase for tax positions taken during the prior period Decrease for tax positions expired during the current period ) ​ ​ ​ ​ ​ Balance at November 30, 2014 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Decrease for tax positions expired during the current period ) Settlements ) ​ ​ ​ ​ ​ Balance at November 30, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ We recognized interest and penalties related to unrecognized tax benefits of $6,000 and $28,000 in the provision for income taxes in our statements of comprehensive (loss) income for fiscal 2015 and 2014, respectively. For fiscal 2015 and 2014, we had approximately $30,000 and $36,000, respectively, of interest accrued as of November 30, 2015 and 2014, respectively. For the payment of any penalty, we accrued $57,000 and $62,000 as of November 30, 2015 and 2014, respectively. The penalty accrual at November 30, 2014 was related to the acquisition of Hudson and local income taxes. We expect $303,000 of unrecognized tax benefits to reverse in fiscal 2015 due to the expiration of the applicable statute of limitations. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Nov. 30, 2015 | |
Stock Holders' Equity | |
Stockholders' Equity | 12. Stockholders' Equity Stock Incentive Plans On June 3, 2004, we adopted the 2004 Stock Incentive Plan, or the 2004 Incentive Plan, and in October 2011, we adopted an Amended and Restated 2004 Stock Incentive Plan, or the Restated Plan, to update it with respect to certain provisions and changes in the tax code since its original adoption. Under the Restated Plan, the number of shares authorized for issuance is 6,825,000 shares of common stock. After the adoption of the Restated Plan in October 2011, we will no longer grant awards pursuant to the 2004 Incentive Plan; however, it remains in effect for awards outstanding as of the adoption of the Restated Plan. Under the Restated Plan, grants may be made to employees, officers, directors and consultants under a variety of awards based upon underlying equity, including, but not limited to, stock options, restricted common stock, restricted stock units or performance shares. The Restated Plan limits the number of shares that can be awarded to any employee in one year to 1,250,000. The exercise price for incentive options may not be less than the fair market value of our common stock on the date of grant and the exercise period may not exceed ten years. Vesting periods, terms and types of awards are determined by the Board of Directors and/or our Compensation and Stock Option Committee, or Compensation Committee. The Restated Plan includes a provision for the acceleration of vesting of all awards upon a change of control as well as a provision that allows forfeited or unexercised awards that have expired to be available again for future issuance. Since fiscal 2008, we have issued both restricted common stock and restricted common stock units, or RSUs, to our officers, directors and employees pursuant to our various plans. The RSUs represent the right to receive one share of common stock for each unit on the vesting date provided that the employee continues to be employed by us. On the vesting date of the RSUs, we expect to issue the shares of common stock to each participant upon vesting and expect to withhold an equivalent number of shares at fair market value on the vesting date to fulfill tax withholding obligations. Any RSUs withheld or forfeited will be shares available for issuance in accordance with the terms of the Restated Plan. The shares of common stock issued upon exercise of a previously granted stock option or a grant of restricted common stock or RSUs are considered new issuances from shares reserved for issuance in connection with the adoption of the various plans. We require that the option holder provide a written notice of exercise in accordance with the option agreement and plan to the stock plan administrator and full payment for the shares be made prior to issuance. All issuances are made under the terms and conditions set forth in the applicable plan. As of November 30, 2015, 2,715,345 shares remained available for issuance under the Restated Plan. For all stock compensation awards that contain graded vesting with time-based service conditions, we have elected to apply a straight-line recognition method to account for all of these awards. For existing grants that were not fully vested at November 30, 2014 and grants made in fiscal 2015, there was a total of $1,261,000 of stock based compensation expense recognized during fiscal 2015. The following table summarizes option grants, restricted common stock and RSUs issued to members of our Board of Directors for the fiscal years 2002 through fiscal 2014 (in actual amounts) for service as a member. No grants were made in fiscal 2015. November 30, 2015 Granted as of: Number of options Exercise price 2002 $ 2002 $ 2003 $ 2004 $ 2005 $ 2006 $ Number of restricted shares isssued 2007 2008 2009 2010 2011 — 2012 2013 — 2014 2015 — Stock option activity in the aggregate for the periods indicated was as follows (in actual amounts): Options Weighted average exercise price Weighted average remaining contractual Life (Years) Aggregate Intrinsic Value Outstanding at November 30, 2014 $ Granted Exercised — — Expired ) Forfeited — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding and exercisable at November 30, 2015 $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average per option fair value of options granted during the year N/A Options Weighted average exercise price Weighted average remaining contractual Life (Years) Aggregate Intrinsic Value Outstanding at November 30, 2013 $ Granted — — Exercised — — Expired ) Forfeited — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding and exercisable at November 30, 2014 $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average per option fair value of options granted during the year N/A Options Weighted average exercise price Weighted average remaining contractual Life (Years) Aggregate Intrinsic Value Outstanding at November 30, 2012 $ Granted — — Exercised ) Expired — — Forfeited — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding and exercisable at November 30, 2013 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average per option fair value of options granted during the year N/A The total intrinsic value of options exercised during the fiscal years ended November 30, 2013 was $11,000. There were no options exercised during the year ended November 30, 2014 or 2015. Exercise prices for options outstanding and exercisable as of November 30, 2015 are as follows: Options Outstanding and Exercisable Exercise Price Number of shares Weighted-Average Remaining Contractual Life $1.02 $0.38 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table summarizes stock option activity by plan. There are no stock options outstanding under our Restated Plan. Total Number of Shares 2004 Incentive Plan 2000 Director Plan Outstanding at November 30, 2014 — Granted — Exercised — — — Forfeited / Expired ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding and exercisable at November 30, 2015 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at November 30, 2013 — Granted — — — Exercised — — — Forfeited / Expired ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding and exercisable at November 30, 2014 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at November 30, 2012 Granted — — — Exercised ) — ) Forfeited / Expired — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding and exercisable at November 30, 2013 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ A summary of the status of restricted common stock and RSUs as of November 30, 2015, and changes during the year, are presented below: Weighted-Average Grant-Date Fair Value Restricted Shares Restricted Stock Units Total Shares Restricted Shares Restricted Stock Units Outstanding at November 30, 2014 $ $ Granted — — Issued ) ) ) Cancelled — ) ) — Forfeited — ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at November 30, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at November 30, 2013 $ $ Granted Issued ) ) ) Cancelled — ) ) — Forfeited — ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at November 30, 2014 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at November 30, 2012 $ $ Granted Issued ) ) ) Cancelled — ) ) — Forfeited — ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at November 30, 2013 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of November 30, 2015, there was $242,000 of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Restated Plan. The unrecognized compensation cost is expected to be recognized over a weighted-average of 1.4 years. In fiscal 2015, there were 40,000 options granted, no RSUs granted and 600,000 shares of restricted stock granted. In fiscal 2015, we issued 495,195 shares of our common stock to holders of RSUs, 1,292,303 shares of restricted stock and withheld, cancelled or forfeited 278,675 RSUs or restricted stock. Convertible Notes In connection with the acquisition of Hudson, we issued the sellers convertible notes. See "Note 9—Debt" for a further discussion of the convertible notes. Earnings Per Share Earnings per share are computed using weighted average common shares and dilutive common equivalent shares outstanding. Potentially dilutive securities consist of outstanding options and warrants. A reconciliation of the numerator and denominator of basic earnings per share and diluted earnings per share is as follows: Year Ended (in thousands, except per share data) November 30, 2015 November 30, 2014 November 30, 2013 Basic (loss) earnings per share computation: Numerator: Loss from continuing operations $ ) $ ) $ ) Income from discontinued operatoins ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: Weighted average common shares outstanding Earnings (loss) per common share—basic Loss from continuing operations ) ) ) Earnings from discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) per common share—basic $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted income (loss) per share computation: Numerator: Loss from continuing operations $ ) $ ) $ ) Income from discontinued operatoins ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: Weighted average common shares outstanding Effect of dilutive securities: Restricted shares, RSU's, convertible securities and options — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dilutive potential common shares ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) per common share—diluted Loss from continuing operations ) ) ) Earnings from discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss per common share—diluted $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For fiscal 2015, 2014 and 2013, currently exercisable options, convertible notes, unvested restricted shares and unvested RSUs in the aggregate of 19,672,751, 20,970,505, and 21,618,876, respectively, have been excluded from the calculation of the diluted loss per share as their effect would have been anti-dilutive. Shares Reserved for Future Issuance As of November 30, 2015, shares reserved for future issuance include (i) 88,333 shares of common stock issuable upon the exercise of stock options granted under the incentive plans; (ii) 259,981 shares of common stock issuable upon the vesting of RSUs; (iii) an aggregate of 2,715,345shares of common stock available for future issuance under the Restated Plan; and (iv) 19,224,437 shares of common stock issuable pursuant to the convertible notes. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Nov. 30, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13. Commitments and Contingencies Operating Lease Obligations and Other Obligations Related to Operations We lease certain equipment and office and retail space under separate lease arrangements. The leases generally contain renewal provisions. Equipment and office/retail rental expenses under such leases for the years ended November 30, 2015, November 30, 2014 and November 30, 2013, were approximately $4,965,000, $4,946,000 and $4,204,000, respectively. Our principal place of business is located in Commerce, Los Angeles County, California, where we have lease that expires on August 31, 2017 for approximately 30,915 square feet of design and administrative offices at 1231 South Gerhart Avenue, Commerce, California. As of November 30, 2015, we leased retail store locations under operating lease agreements expiring on various dates through 2024 or 5 to 10 years from the rent commencement date. Some of these leases required us to make periodic payments for property taxes, utilities and common area operating expenses. Certain retail store leases provide for rents based upon the minimum annual rental amount and a percentage of annual sales volume, generally ranging from 6% to 8%, when specific sales volumes are exceeded. Some leases include lease incentives, rent abatements and fixed rent escalations, which are amortized and recorded over the initial lease term on a straight-line basis. After the closing of the Operating Asset Purchase Agreement and the IP Asset Purchase Agreement, we retained and operated 32 Joe's® brand retail stores, of which we transferred 18 retail stores to the Operating Assets Purchaser on January 28, 2016 for no additional consideration. As of February 29, 2016, the remaining 14 Joe's® brand retail stores were closed. As of November 30, 2015, the future minimum rental payments under non-cancelable retail operating leases with lease terms in excess of one year were as follows (in thousands): 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase commitments in the aggregate amount of $9,321,000 are all expected to be fulfilled within the next 12 months. Advertising Commitments From time to time, we enter into various agreements for short term billboard, taxi cab top, bus or other advertising spaces in various locations in and around New York and Los Angeles and for print advertising. However, we do not have any commitment to pay a minimum amount or any long term commitments for such advertising. Letters of Credit We had a no contingent liability for letters of credit as of November 30, 2015. Contingent Consideration Payments and Buy-Out Agreement As part of the consideration paid in connection with the merger with JD Holdings in October of 2007 and without regard to continued employment, until February 12, 2013, Mr. Dahan was entitled to a certain percentage of the gross profit earned by us in any applicable fiscal year until October 2017. On February 18, 2013, we entered into a new agreement with Mr. Dahan that provided certainty of payments to him by removing the contingencies related to the contingent consideration payments to be made to Mr. Dahan as an earn out under the original merger agreement. This agreement fixed the overall amount to be paid by us for the remaining months of year six through year 10 in the original merger agreement. The payments are now made over an accelerated time period until November 2015 instead of October 2017. Under the agreement, beginning on February 22, 2013 until November 27, 2015, Mr. Dahan is entitled to receive the total aggregate fixed amount of $9,168,000 through weekly installment payments. In the first quarter of fiscal 2013, we recorded a charge of $8,732,000 as contingent consideration buy-out expense in connection with this agreement. This amount represented the net present value of the total fixed amount that Mr. Dahan would receive. The entire amount was expensed during the first quarter of fiscal 2013 as the amount payable represented a present obligation due to Mr. Dahan. Mr. Dahan was not required to perform any services or remain employed to receive the fixed amount. Mr. Dahan also agreed to an additional restrictive covenant relating to non-competition and non-solicitation until November 30, 2016 that added to the original restrictive covenant in the merger agreement. In connection with the Asset Sale, Mr. Dahan was repaid a portion of the buy-out payment owed to him and the remainder was paid at the closing of the Merger and the Merger Transactions. Litigation We are involved from time to time in routine legal matters incidental to our business. In the opinion of our management, resolution of such matters will not have a material effect on our financial position or results of operations. |
Segment Reporting and Operation
Segment Reporting and Operations by Geographic Areas | 12 Months Ended |
Nov. 30, 2015 | |
Segment Information | |
Segment Reporting and Operations by Geographic Areas | 14. Segment Reporting and Operations by Geographic Areas Segment Reporting The following table (in thousands) contains summarized financial information concerning our reportable segments: Year ended 2015 2014 2013 Net sales: Wholesale $ $ $ Retail ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit: Wholesale $ $ $ Retail ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating (loss) income: Wholesale $ $ $ Retail ) ) ) Corporate and other ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures: Wholesale $ — $ — $ Retail — Corporate and other Assets held for sale ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets: Wholesale $ $ $ Retail Corporate and other Assets held for sale — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operations by Geographic Areas Currently, we do not have any material reportable operations outside of the United States. |
Related Party and Other Transac
Related Party and Other Transactions | 12 Months Ended |
Nov. 30, 2015 | |
Related Party and Other Transactions | |
Related Party and Other Transactions | 15. Related Party and Other Transactions Joe Dahan Since the acquisition of the Joe's® brand as a result of a merger in October 2007 through February 18, 2013, Mr. Dahan was entitled to a certain percentage of our gross profit in any applicable fiscal year until October 2017. At the time of the acquisition, pursuant to ASC 805— Business Combinations, we assessed this original contingent consideration arrangement as compensatory and expensed such amounts over the term of the earn out period at the defined percentage amounts. For the fiscal year ended 2013, expense of $311,000 was recorded in the statement of comprehensive loss related to the contingent consideration expense made to Mr. Dahan under the original agreement. On February 18, 2013, we entered into a new agreement with Mr. Dahan that fixed the overall amount to be paid by us for the remaining months of year six through year 10 in the original merger agreement at $9,168,000 through weekly installment payments beginning on February 22, 2013 until November 27, 2015. In the first quarter of fiscal 2013, we recorded a charge of $8,732,000 as contingent consideration buy-out expense in connection with this agreement. This amount represented the net present value of the total fixed amount that Mr. Dahan would receive. The entire amount was expensed during the first quarter of fiscal 2013 as the amount payable represented a present obligation due to Mr. Dahan. In connection with the Asset Sale, Mr. Dahan was repaid a portion of the buy-out payment owed to him and the remainder was paid at the closing of the Merger and the Merger Transactions. Ambre Dahan In January 2013, we entered in to a consulting arrangement with Ambre Dahan, the spouse of Mr. Dahan, for design director services that pays her $175,000 per annum on a bi-weekly basis. For the fiscal year ended 2014, we paid Ms. Dahan $175,000 under this arrangement. This arrangement was terminated effective as of November 17, 2014. Mr. Dahan is not a party to this arrangement, and we do not consider this arrangement material to us. Albert Dahan In April 2009, we entered into a commission-based sales agreement with Albert Dahan, brother of Mr. Dahan, for the sale of our products into the off- price channels of distribution that was subsequently terminated beginning in fiscal 2014. Under the agreement, Mr. Albert Dahan was entitled to a commission for purchase orders entered into by us where he acts as a sales person. For the fiscal year ended 2014 and 2015, there were no payments made to Mr. Albert Dahan under this arrangement. For fiscal years ended 2013, payments of $453,000 were made to Mr. Albert Dahan under this arrangement. In October 2011, we entered into an agreement with Ever Blue LLC, or Ever Blue, an entity for which Albert Dahan is the sole member, for the sale of children's products. Ever Blue has an exclusive right to produce, distribute and sell children's products bearing the Joe's® brand on a worldwide basis, subject to certain limitations on the channels of distribution. In exchange for the license, Ever Blue pays to us a royalty on net sales with certain guaranteed minimum sales for each term. In connection with this agreement, we provided initial funding to Ever Blue for inventory purchases, which such amount has been repaid in full. For the fiscal years ended 2015, 2014 and 2013, we recognized $45,000, $504,000 and $612,000, respectively in royalty income under the license agreement. In connection with the Asset Sale, this agreement was assigned to the Operating Assets Purchaser. Peter Kim We entered into several agreements, including a stock purchase agreement, a convertible note, a registration rights agreement, an employment agreement and a non-competition agreement with Peter Kim in connection with the acquisition of Hudson. In connection with the Merger, we entered into a Rollover Agreement pursuant to which the convertible notes were exchanged for a combination of cash, stock and Modified Convertible Notes and a new employment agreement with Mr. Kim. Employment Agreements with Officers and Directors During fiscal 2015, we entered into a consulting agreement with Marc Crossman, our former President and Chief Executive Officer and an employment agreement with Hamish Sandhu, our Chief Financial Officer. We also had employment agreements with Joe Dahan, our Creative Director and Peter Kim, our Chief Executive Office of our Hudson subsidiary. Marc Crossman On May 30, 2008, we entered into an employment agreement with Mr. Crossman to serve as our President and Chief Executive Officer. The employment agreement was effective as of December 1, 2007, the commencement of our 2008 fiscal year, had an initial term of two years and automatically renewed for additional two year periods on December 1, 2009, December 1, 2011 and December 1, 2013, respectively. The employment agreement automatically renewed for additional two year periods if neither we nor Mr. Crossman provided 180 days' advanced notice of non-renewal prior to the end of the term or upon the occurrence of a change in control. Under the employment agreement, Mr. Crossman was entitled to an annual salary of $429,300, an annual discretionary bonus targeted at 50 percent of his base salary based upon the achievement of financial and other performance criteria that the Compensation Committee of the Board of Directors deemed appropriate in its sole and absolute discretion, an annual grant of equity compensation pursuant to our stock incentive plans, life and disability insurance policies paid on his behalf and other discretionary benefits that the Compensation Committee of the Board of Directors deemed appropriate in its sole and absolute discretion. The employment agreement provided for severance payment of up to two years if terminated under certain circumstances. On January 19, 2015, our Board of Directors accepted the resignation of Mr. Crossman. The Board and Mr. Crossman also agreed that Mr. Crossman would become a consultant for a period of twelve (12) months pursuant to a Consulting Agreement. In exchange for a release of all claims related to Mr. Crossman's employment and the provision of consulting services by Mr. Crossman, we agreed to pay Mr. Crossman the following: (i) payment of $35,775.00 per month for a period of twelve (12) months, (ii) acceleration of the unvested equity awards previously granted to Mr. Crossman, (iii) a grant of restricted common stock in the amount of 600,000 shares that vested 1/12 th on a monthly basis over the twelve (12) month period, and (iv) reimbursement for health and dental COBRA payments for a period of twelve (12) months or until he is eligible for coverage under a successor employer's group health plan. Joe Dahan On October 25, 2007, we entered into an employment agreement for Mr. Dahan to serve as Creative Director for the Joe's brand. The initial term of employment was for five years, or until October 25, 2012, and then automatically renewed for successive one year periods unless terminated earlier in accordance with the agreement. Under the employment agreement, Mr. Dahan was entitled to an annual salary of $300,000 and other discretionary benefits that the Compensation Committee of the Board of Directors deemed appropriate in its sole and absolute discretion. The employment agreement provided for severance payment of up to one year if terminated under certain circumstances. In connection with the Asset Sale, we entered into a settlement and mutual release with Mr. Dahan pursuant to which his employment agreement was terminated. Peter Kim On September 30, 2013, we entered into an employment agreement with Mr. Kim to serve as Chief Executive Officer of our Hudson subsidiary for a term of three years. Under the employment agreement, Mr. Kim was entitled to a base salary of $500,000 per year and eligible to receive an annual discretionary bonus targeted at 50 percent of his base salary, based on the satisfaction of criteria and performance standards as established in advance and agreed to by Mr. Kim and the Compensation Committee of the Board of Directors. Mr. Kim was also entitled to other discretionary benefits that the Compensation Committee of the Board of Directors may deem appropriate in its sole and absolute discretion. The employment agreement provided for severance payment of up to one year if terminated under certain circumstances. In connection with the Merger, we entered into a new employment agreement with Mr. Kim that became effective as of the close of the Merger. Hamish Sandhu Effective as of June 30, 2015, we entered into an employment agreement with Mr. Sandhu to serve as our Chief Financial Officer for a period of one year. The employment agreement automatically renews for additional one year periods as long as either party does not provide 90 days' advanced notice of non-renewal prior to the end of the term. Mr. Sandhu receives an annual salary of $325,000 and is entitled to receive other cash and non-cash compensation, including an annual discretionary cash and equity bonus of not less than 10 percent of his base salary based upon the achievement of financial and other performance criteria as set forth in the Employment Agreement, premiums for health insurance paid on his behalf and for his family and life and disability insurance policies paid on his behalf. The employment agreement provided for a severance payment of one year if terminated under certain circumstances. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Nov. 30, 2015 | |
Supplemental Cash Flow Information | |
Supplemental Cash Flow Information | 16. Supplemental Cash Flow Information Year ended (in thousands) 2015 2014 2013 Significant Non-cash transactions Write off of fully depreciated fixed assets $ $ $ — Sale of fixed assets at net carrying value $ $ — $ — Additional cash flow information Cash paid during the year for interest $ $ $ Cash paid during the year for income taxes $ $ — $ |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Nov. 30, 2015 | |
Employee Benefit Plans | |
Employee Benefit Plans | 17. Employee Benefit Plans On December 1, 2002, we established a tax qualified defined contribution 401(k) Profit Sharing Plan, or the Joe's Plan for our Joe's employees. All employees who have worked for us for 30 consecutive days may participate in the Joe's Plan and may contribute up to 100 percent, subject to certain limitations, of their salary. We may make company matched contributions on a discretionary basis. All employees who have worked 500 hours qualify for profit sharing in the event at the end of each year we decide to do so. Costs of the Joe's Plan charged to operations were $30,000, $27,000 and $22,000 for fiscal 2015, 2014 and 2013, respectively. In addition, we match our Joe's employees' contributions, which are subject to a vesting schedule, in the lesser of the following amounts: (i) up to 2 percent of the employee's compensation, or (ii) 1 / 3 of the employee's contribution up to 6 percent of the employee's salary. For fiscal 2015, 2014 and 2013, we contributed $134,000, $154,000 and $141,000, respectively, to employees under the match portion of the Joe's Plan. The Hudson Clothing LLC 401(k) Plan, or the Hudson Plan, was established on January 1, 2009 and covers employees employed by our Hudson subsidiary. All employees who have worked for Hudson after 6 months may participate in the Hudson Plan and may contribute up to the maximum amount allowed by law of their salary to the plan. We may make company matched contributions on a discretionary basis. All employees who have worked 1,000 hours qualify for profit sharing in the event at the end of each year we decide to do so. No costs of the Hudson Plan were charged to operations for fiscal 2013 since the acquisition. In addition, we match our Hudson employees' contributions, which are subject to a vesting schedule, of $0.50 for each $1.00 of the employee's contribution up to 3 percent of the employee's contribution. For fiscal 2015 and 2014, we contributed $75,000 and $63,000, respectively, to employees under the match portion of the Hudson's Plan. |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Nov. 30, 2015 | |
Quarterly Results of Operations (Unaudited) | |
Quarterly Results of Operations (Unaudited) | 18. Quarterly Results of Operations (Unaudited) The following is a summary of the quarterly results of operations for the years ended November 30, 2015 and November 30, 2014: Quarter ended (in thousands, except per share data) 2015 February 28 May 31 August 31 November 30 Net sales $ $ $ $ Gross profit Loss before taxes ) ) ) ) Income tax (benefit) expense ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) from continuing operations ) ) ) Income (loss) from discontinued operations, net of tax ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income and comprehensive (loss) income $ ) $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income per share: Income (loss) from continuing operations ) ) ) Income (loss) from discontinued operations ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Loss) income per common share—basic $ ) $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) from continuing operations ) ) ) Income (loss) from discontinued operations ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Loss) income per common share—diluted $ ) $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarter ended (in thousands, except per share data) 2014 February 29 May 31 August 31 November 30 Net sales $ $ $ $ Gross profit (Loss) income before taxes ) ) ) Income tax (benefit) expense ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) from continuing operations ) ) ) Income (loss) from discontinued operations, net of tax ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income and comprehensive (loss) income $ ) $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income per share: Income (loss) from continuing operations $ ) $ $ ) $ ) Income (loss) from discontinued operations ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Loss) income per common share—basic $ ) $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) from continuing operations $ ) $ $ ) $ ) Income (loss) from discontinued operations ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Loss) income per common share—diluted $ ) $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule II Valuation of Qualif
Schedule II Valuation of Qualifying Accounts | 12 Months Ended |
Nov. 30, 2015 | |
Schedule II Valuation of Qualifying Accounts | |
Schedule II Valuation of Qualifying Accounts | Schedule II Valuation of Qualifying Accounts (in thousands) Description Balance at Beginning of Period Additions Charged to Costs & Expenses Charged to Other Accounts Deductions(1) Balance at End of Period Allowance for doubtful accounts: Year ended November 30, 2015 $ — ) $ Year ended November 30, 2014 $ — ) $ Year ended November 30, 2013 $ — — (2) — $ Allowance for customer credits: Year ended November 30, 2015 $ — ) $ Year ended November 30, 2014 $ — ) $ Year ended November 30, 2013 $ (2) ) $ Allowances for inventories: Year ended November 30, 2015 $ — ) $ Year ended November 30, 2014 $ — — ) $ Year ended November 30, 2013 $ — — (2) ) $ (1) Deductions represent the actual amount of write-off of an asset against a reserve previously recorded. In the case of inventories, a deduction could represent the write-off upon disposition or a markdown of carrying value. (2) Amounts represent fair value adjustments established on the acquisition date of Hudson and tracked by us through the reserve account. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Nov. 30, 2015 | |
Summary of Significant Accounting Policies | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with United States generally accepted accounting principles 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Revenue Recognition | Revenue Recognition Wholesale revenues are recorded on the accrual basis of accounting when title transfers to the customer, which is typically at the shipping point. We record estimated reductions to revenue for customer programs, including co-op advertising, other advertising programs or allowances, based upon a percentage of sales. We also allow for returns based upon pre-approval or in the case of damaged goods. Such returns are estimated based on historical experience and an allowance is provided at the time of sale. Retail store revenue is recognized net of estimated returns at the time of sale to consumers. E-commerce sales of products ordered through our retail internet sites known as www.joesjeans.com and www.hudsonjeans.com are recognized upon estimated delivery and receipt of the shipment by the customers. E- commerce revenue is also reduced by an estimate of returns. Retail store revenue and E-commerce revenue exclude sales taxes. Revenue from licensing arrangements are recognized when earned in accordance with the terms of the underlying agreements, generally based upon the higher of (a) contractually guaranteed minimum royalty levels and (b) estimates of sales and royalty data received from our licensees. Payments received in consideration of the grant of a license or advanced royalty payments are recognized ratably as revenue over the term of the license agreement and are reflected under the caption of "Deferred Licensing Revenue" on the Consolidated Balance Sheets. The revenue recognized ratably over the term of the license agreement will not exceed royalty payments received. The unrecognized portion of the upfront payments are included in deferred royalties and accrued expenses depending on the long or short term nature of the payments to be recognized. There were no advanced payments under our licensing agreements during our fiscal year ended November 30, 2013 and 2015. For our fiscal year ended November 30, 2014, we received $60,000 in advanced payments under our intimates' license agreement. |
Accounts Receivable, Due To Factor and Allowance for Customer Credits and Doubtful Allowances | Accounts Receivable, Due To Factor and Allowance for Customer Credits and Doubtful Allowances We evaluate our ability to collect on accounts receivable and charge-backs (disputes from the customer) based upon a combination of factors. Whether a receivable is past due is based on how recently payments have been received and in certain circumstances where we are aware of a specific customer's inability to meet its financial obligations (e.g., bankruptcy filings, substantial downgrading of credit sources). A specific reserve for bad debts is taken against amounts due to reduce the net recognized receivable to the amount reasonably expected to be collected. Amounts are charged off against the reserve once it is established that amounts are not likely to be collected. We recognize reserves for charge-backs based on our historical collection experience. See "Notes to Consolidated Financial Statements—Note 5—Factored Accounts and Receivables" for further discussion. |
Inventory | Inventory Inventory is valued at the lower of cost or market with cost determined by the first-in, first-out method. Inventory consists of finished goods, work-in-process and raw materials. We continually evaluate our inventories by assessing slow moving current product. Market value of non-current inventory is estimated based on historical sales trends for this category of inventory for individual product lines, the impact of market trends, an evaluation of economic conditions and the value of current orders relating to future sales of this type of inventory. Inventory reserves establish a new cost basis for inventory. Such reserves are not reversed until the related inventory is sold or otherwise disposed. Costs capitalized in inventory include the purchase price of raw materials and contract labor, plus in- bound transportation costs and import fees and duties. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs are amortized using the straight-line method over the term of the related agreements (five years) and recorded as a component of interest expense in the accompanying consolidated statement of comprehensive loss. During fiscal year 2015, we accelerated the amortization of deferred financing costs due to a new line of credit with CIT and a change in our borrowing capacity. Amortization of deferred financing costs included in interest expense was approximately $1,511,000, $420,000 and $70,000 for the year ended November 30, 2015, 2014 and 2013. |
Costs of Goods Sold | Costs of Goods Sold Costs of goods sold include product cost, freight in, freight out, inventory reserves, inventory markdowns and other various charges. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expenses include salaries and benefits, travel and entertainment, professional fees, advertising, marketing, sample expenses, stock based compensation expenses, facilities, fulfillment and distribution costs, bad debt expenses and write down of other assets. |
Earnings Per Share | Earnings Per Share Basic earnings per share, or EPS, is computed using the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period except for periods of net loss for which no common share equivalents are included because their effect would be anti-dilutive. Dilutive common equivalent shares consist of common stock issuable upon exercise of stock options, restricted stock and restricted stock units using the treasury stock method. Dilutive common stock equivalent shares issuable upon conversion of the convertible notes are calculated using the if-converted method. EPS has been adjusted to reflect the Reverse Stock Split. |
Deferred Rent | Deferred Rent When a lease includes lease incentives (such as a rent holiday) or requires fixed escalations of the minimum lease payments, rental expense is recognized on a straight-line basis over the term of the lease and the difference between the average rental amount charged to expense and amounts payable under the lease is included in deferred rent in the accompanying consolidated balance sheets. |
Advertising Costs | Advertising Costs Advertising costs are charged to expense as incurred, except in the case of seasonal media campaigns. The production and other related costs of seasonal media campaigns are capitalized and amortized over the expected period of future benefits, which is typically six months or less. Advertising and tradeshow expenses included in selling, general and administrative expenses were approximately $2,928,000, $4,121,000 and $824,000 for fiscal 2015, 2014 and 2013, respectively. |
Financial Instruments | Financial Instruments The fair values of our financial instruments (which consist of cash, accounts receivable, factored accounts receivable, accounts payable, accrued expenses and a line of credit) do not differ materially from their recorded amounts because of the relatively short period of time between origination of the instruments and their expected realization. The fair value of our term debt and convertible notes is based on the amount of future cash flows associated with the instrument discounted using our incremental borrowing rate. We do not hold or have any obligations under financial instruments that possess off-balance sheet credit or market risk. |
Impairment of Long-Lived Assets and Intangibles | Impairment of Long-Lived Assets and Intangibles We assess the impairment of long-lived assets, identifiable intangibles and goodwill annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors considered important that could trigger an impairment review other than on an annual basis include the following: • A significant underperformance relative to expected historical or projected future operating results; • A significant change in the manner of the use of the acquired asset or the strategy for the overall business; or • A significant negative industry or economic trend. When we determine that the carrying value of long-lived assets, such as property and equipment and purchased intangibles subject to amortization, may not be recoverable based upon the existence of one or more of the aforementioned factors and the carrying value exceeds the estimated undiscounted cash flows expected to be generated by the asset, impairment is measured based on a projected discounted cash flow method using a discount rate determined by management. These cash flows are calculated by netting future estimated sales against associated merchandise costs and other related expenses such as payroll, occupancy and marketing. The impairment loss calculations require management to apply judgment in estimating future cash flows and the discount rates that reflect the risk inherent in future cash flows. Future expected cash flows for store assets are based on management's estimates of future cash flows over the remaining lease period or expected life, if shorter. We consider historical trends, expected future business trends and other factors when estimating each store's future cash flow. We also consider factors such as: the local environment for each store location, including mall traffic and competition; our ability to successfully implement strategic initiatives; and the ability to control variable costs such as cost of sales and payroll, and in some cases, renegotiate lease costs. The estimated cash flows used for this nonrecurring fair value measurement are considered a Level 3 input as defined in Note 10. If actual results are not consistent with the assumptions and judgments used in estimating future cash flows and asset fair values, there may be additional exposure to future impairment losses that could be material to our results of operations. During fiscal 2015 and 2014, we recorded store impairment charges of $1,732,000 and $840,000, respectively, related to our retail stores. Based on the operating performance of these stores, we believed that we could not recover the carrying value of property and equipment located at these stores. There was no impairment recorded for our retail stores during fiscal 2013. Business acquisitions are accounted for under the purchase method by assigning the purchase price to tangible and intangible assets acquired and liabilities assumed. Assets acquired and liabilities assumed are recorded at their fair values and the excess of the purchase price over the amounts assigned is recorded as goodwill. Purchased intangible assets, such as customer relationships and designs, with finite lives are amortized over their estimated useful lives. Goodwill and other intangible assets, such as trademarks, with indefinite lives are not amortized but are tested at least annually for impairment. On September 30, 2013, we acquired Hudson, which included all of the goodwill and intangible assets related to the Hudson® logos and marks. We have assigned an indefinite life to the remaining intangible assets relating to the trademarks acquired, and therefore, no amortization expenses are expected to be recognized. However, we will test the assets for impairment annually in accordance with our critical accounting policies. We evaluate goodwill for impairment at least annually using a two-step process. The first step is to determine the fair value of each reporting unit and compare this value to its carrying value. If the fair value exceeds the carrying value, no further work is required and no impairment loss would be recognized. The second step is performed if the carrying value exceeds the fair value of the assets. The implied fair value of the reporting unit's goodwill must be determined and compared to the carrying value of the goodwill. We review our other indefinite-lived intangible assets for impairment on an annual basis, or when circumstances indicate their carrying value may not be recoverable. We calculate the value of the indefinite-lived intangible assets using a discounted cash flow method, based on the relief from royalty concept. Our annual impairment testing date is September 30 of each year or when circumstances indicate their carrying value may not be recoverable. As part of our annual testing for fiscal 2015, we determined that the carrying value of our Hudson trademark may not be recoverable and therefore, we impaired the Hudson trademark by $12,400,000. We determined that there was no impairment of our goodwill. For fiscal 2014, based on our under-performance in the fourth quarter of fiscal 2014, we determined that it was appropriate to perform our impairment testing as of November 30, 2014. Based on our testing we determined that the goodwill allocated to our Hudson wholesale reporting unit was impaired by $23,585,000, and there was no impairment of our other indefinite-lived intangible assets. For fiscal 2013, we determined that there was no impairment of our goodwill or indefinite lived intangible assets. |
Cash Equivalents | Cash Equivalents We consider all highly liquid investments that are both readily convertible into known amounts of cash and mature within 90 days from their date of purchase to be cash equivalents. |
Concentration of Credit Risk | Concentration of Risk Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash, cash equivalents, accounts receivable and amounts due from factor. We maintain cash and cash equivalents with various financial institutions. The policy is designed to limit exposure to any one institution. We perform periodic evaluations of the relative credit rating of those financial institutions that are considered in our investment strategy. We do not require collateral for trade accounts receivable. However, we sell a portion of our accounts receivable to CIT on a non-recourse basis. In that instance, we are no longer at risk if the customer fails to pay. However, for accounts receivable that are not sold to CIT or sold on a recourse basis, we continue to be at risk if these customers fail to pay. We provide an allowance for estimated losses to be incurred in the collection of accounts receivable based upon the aging of outstanding balances and other account monitoring analysis. The net carrying value approximates the fair value for these assets. Such losses have historically been within management's expectations. Uncollectible accounts are written off once collection efforts are deemed by management to have been exhausted. For fiscal 2015, 2014 and 2013, sales to customers or customer groups representing greater than 10 percent of net sales are as follows: 2015 2014 2013 Nordstrom, Inc. % % % Macy's Inc. % % % Our 10 largest customers and customer groups accounted for approximately 72 percent of our net sales during fiscal 2015. In addition, our international sales were $4,083,000, $5,700,000 and $1,472,000 in fiscal 2015, 2014 and 2013, respectively. In addition, we utilize two manufacturing contractors, Top Jeans in Mexico and Atomic Denim in the United States, for our Hudson® products. Purchases from these two manufacturing contractors accounted for approximately 22 percent of our Hudson® purchases for fiscal 2015. |
Stock-Based Compensation | Stock-Based Compensation We measure the cost of all employee stock-based compensation awards based on the grant date fair value of those awards and record that cost as compensation expense over the period during which the employee is required to perform service in exchange for the award (generally over the vesting period of the award). An entity may elect either an accelerated recognition method or a straight-line recognition method for awards subject to graded vesting based on a service condition, regardless of how the fair value of the award is measured. For all stock based compensation awards that contain graded vesting based on service conditions, we have elected to apply a straight-line recognition method to account for these awards. |
Property and Equipment | Property and Equipment Property and equipment are stated at the lower of cost or fair value in the case of impaired assets. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the lives of the respective leases or the estimated service lives of the improvements, whichever is shorter. Maintenance and repairs are charged to expense as incurred. Upon sale or retirement, the asset cost and related accumulated depreciation or amortization is removed from the accounts, and any related gain or loss is included in the determination of net income. |
Income Taxes | Income Taxes We use the liability method of accounting for income taxes. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The likelihood of a material change in our expected realization of these assets depends on our ability to generate sufficient future taxable income. Our ability to generate enough taxable income to utilize our deferred tax assets depends on many factors, among which is our ability to deduct tax loss carry-forwards against future taxable income, the effectiveness of tax planning strategies and reversing deferred tax liabilities. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based upon the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based upon the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. Our policy is to recognize interest and penalties that would be assessed in relation to the settlement value of unrecognized tax benefits as a component of income tax expense. |
Discontinued Operations | Discontinued Operations In accordance with the provisions of ASC 205-20, the results of operations of a component of an entity that has either been disposed of or is classified as held for sale is required to be reported as discontinued operations in the consolidated financial statements. In order to be considered a discontinued operation, both the operations and cash flows of the component have been (or will be) eliminated from the ongoing operations of an entity and the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction. The accompanying consolidated financial statements reflect the results of operations and financial position of our "Joe's Business" as discontinued operations. |
Other Recently Issued Financial Accounting Standards | Other Recently Issued Financial Accounting Standards In April 2014, the FASB issued authoritative guidance which raises the threshold for disposals to qualify as discontinued operations. Under this new guidance, a discontinued operation is (1) a component of an entity or group of components that have been disposed of or are classified as held for sale and represent a strategic shift that has or will have a major effect on an entity's operations and financial results, or (2) an acquired business that is classified as held for sale on the acquisition date. This guidance also requires expanded or new disclosures for discontinued operations, individually material disposals that do not meet the definition of a discontinued operation, an entity's continuing involvement with a discontinued operation following disposal and retained equity method investments in a discontinued operation. This guidance is effective for fiscal periods beginning after December 15, 2014. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements. In May 2014, the FASB issued a comprehensive new revenue recognition standard which will supersede previous existing revenue recognition guidance. The standard creates a five-step model for revenue recognition that requires companies to exercise judgment when considering contract terms and relevant facts and circumstances. The five-step model includes (1) identifying the contract, (2) identifying the separate performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations and (5) recognizing revenue when each performance obligation has been satisfied. The standard also requires expanded disclosures surrounding revenue recognition. The standard is effective for fiscal periods beginning after December 15, 2016 and allows for either full retrospective or modified retrospective adoption. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements. In August 2014, the FASB issued Accounting Standards Update No. 2014-15 to communicate amendments to FASB Accounting Standards Codification Subtopic 205-40, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, or ASC amendments. The ASC amendments establish new requirements for management to evaluate a company's ability to continue as a going concern and to provide certain related disclosures. The ASC amendments are effective for the annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted, but we have not yet adopted such guidance. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (" ASU 2015-17 ") which will require entities to present deferred tax assets (" DTAs ") and deferred tax liabilities (" DTLs ") as noncurrent in a classified balance sheet. ASU 2015-17 simplifies the current guidance, which requires entities to separately present DTAs and DTLs as current and noncurrent in a classified balance sheet. For public business entities, the amendments in ASU 2015-17 are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early application is permitted as of the beginning of an interim or annual reporting period. ASU 2015-17 is effective for us beginning January 1, 2017. Adoption of ASU 2015-17 is not expected to have a material effect on our results of operations, financial position or cash flows. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Table) | 12 Months Ended |
Nov. 30, 2015 | |
Summary of Significant Accounting Policies | |
Schedule of sales to customers or customer groups representing greater than 10 percent of net sales | 2015 2014 2013 Nordstrom, Inc. % % % Macy's Inc. % % % |
Discontinued Operations (Table)
Discontinued Operations (Table) | 12 Months Ended |
Nov. 30, 2015 | |
Discontinued Operations | |
Schedule of the operating results of discontinued operations | The operating results of discontinued operations for fiscal 2 0 15, 2014 and 2013 are as follows (in thousands): Year ended November 30, 2015 November 30, 2014 November 30, 2013 Net sales $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from discontinued operations (including fiscal year 2015 gain on disposal of $15,369) before provision for income taxes Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from discontinued operations $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of the major assets and liabilities held for sale | The components of major assets and liabilities held for sale at November 30, 2014 were as follows (in thousands): November 30, 2014 ASSETS: Current assets: Accounts receivable, net $ Factored accounts receivable, net Inventories, net Prepaid expenses and other current assets ​ ​ ​ ​ ​ Total Current assets ​ ​ ​ ​ ​ Noncurrent assets: Property and equipment, net Goodwill Intangible assets Other assets ​ ​ ​ ​ ​ Total Noncurrent assets ​ ​ ​ ​ ​ Assets held for sale $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES: Current liabilities: Accounts payable and accrued expenses $ ​ ​ ​ ​ ​ Total Current liabilities ​ ​ ​ ​ ​ Noncurrent liabilities: Deferred rent ​ ​ ​ ​ ​ Total Noncurrent liabilities ​ ​ ​ ​ ​ Liabilities held for sale $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Factored Accounts and Receiva29
Factored Accounts and Receivables (Table) | 12 Months Ended |
Nov. 30, 2015 | |
Factored Accounts and Receivables | |
Schedule of factored accounts and receivables | Factored accounts and receivables consisted of the following (in thousands): November 30, 2015 November 30, 2014 Non-recourse receivables assigned to factor $ $ Client recourse receivables ​ ​ ​ ​ ​ ​ ​ ​ Total receivables assigned to factor Allowance for customer credits ) ) ​ ​ ​ ​ ​ ​ ​ ​ Factor accounts receivable, net of allowance $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-factored accounts receivable $ $ Allowance for customer credits ) ) Allowance for doubtful accounts ) ) ​ ​ ​ ​ ​ ​ ​ ​ Accounts receivable, net of allowance $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Inventories, Net (Table)
Inventories, Net (Table) | 12 Months Ended |
Nov. 30, 2015 | |
Inventories, Net | |
Schedule of inventories | Inventory is valued at the lower of cost or market with cost determined by the first-in, first-out method. Inventories consisted of the following (in thousands): November 30, 2015 November 30, 2014 Finished goods $ $ Finished goods consigned to others Work in progress Raw materials ​ ​ ​ ​ ​ ​ ​ ​ Less allowance for obsolescence and slow moving items ) ) ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Property and Equipment (Table)
Property and Equipment (Table) | 12 Months Ended |
Nov. 30, 2015 | |
Property and Equipment | |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): Useful lives (years) November 30, 2015 November 30, 2014 Computer and equipment 3 - 7 $ $ Furniture and fixtures 3 - 7 Leasehold improvements 5 - 10 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net property and equipment $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Intangible Assets (Table)
Intangible Assets (Table) | 12 Months Ended |
Nov. 30, 2015 | |
Intangible Assets | |
Schedule of intangible assets | The life of the trade names is indefinite. Intangible assets consisted of the following (in thousands): Amortization Period Gross Amount Impairment Accumulated Amortization Net Amount Trade names Indefinite $ $ $ — $ Designs 6 Years — Customer relationships 10 Years — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of estimated amortization expense | Estimated amortization expense for the next five years is as follows (in thousands) at November 30, 2015: 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Debt (Table)
Debt (Table) | 12 Months Ended |
Nov. 30, 2015 | |
Debt | |
Schedule of five year payment of term debt and convertible notes | The five-year payment schedule of our term debt and convertible notes is as follows (in thousands): Payments due by period (in thousands) Total 2016 2017 2018 2019 2020 Thereafter Long term debt $ — $ — $ — $ — $ — $ — $ — Convertible notes — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ — $ — $ $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of summary of recorded value of the convertible note | The following table (in thousands) is a summary of the recorded value of the convertible note as of November 30, 2015. The value of the convertible note reflects the present value of the contractual cash flows from the convertible notes and resulted in an original issue discount of $10,490,000 including the additional original discount attributed to the embedded conversion derivative of $5,496,000, that were recorded on September 30, 2013, the issuance date. Convertible notes—Face value $ Less: Original issue discount ) Less: Debt discount related to the embedded derivative liability ) ​ ​ ​ ​ ​ Convertible notes recorded value on issue date Accretion of debt discounts for 14 months ended November 30, 2015 PIK Interest paid October 1, 2013 - November 30, 2015 ​ ​ ​ ​ ​ Convertible notes value Plus: Embedded derivative liability—fair market value — ​ ​ ​ ​ ​ Debt as of November 30, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of interest expense | The following table (in thousands) is a summary of our total interest expense as follows: Year ended November 30, 2015 November 30, 2014 November 29, 2013 Contractual coupon interest $ $ $ Amortization of discount and deferred financing costs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total interest expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Fair Value Disclosures (Table)
Fair Value Disclosures (Table) | 12 Months Ended |
Nov. 30, 2015 | |
Fair Value Disclosures | |
Schedule of fair value hierarchy for liabilities measured at fair value on a recurring basis | The following table presents our fair value hierarchy for assets measured at fair value on a non-recurring basis as of November 30, 2015 and 2014 (in thousands): As of November 30, 2015 Total Level 1 Level 2 Level 3 Total Losses Property and equipment, net $ $ — $ — $ $ Trade names $ $ — $ — $ $ As of November 30, 2014 Total Level 1 Level 2 Level 3 Total Losses Property and equipment, net $ $ — $ — $ $ Goodwill $ $ — $ — $ $ |
Income Taxes (Table)
Income Taxes (Table) | 12 Months Ended |
Nov. 30, 2015 | |
Income Taxes | |
Schedule of provision (benefit) for income taxes | Year ended (in thousands) 2015 2014 2013 Current: Federal $ ) $ ) $ ) State ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred: Federal ) ) ) State ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of net deferred tax assets and liabilities resulting from temporary differences between book and tax basis of assets and liabilities | Year ended (in thousands) 2015 2014 Current: Deferred tax assets: Allowance for customer credits and doubtful accounts $ $ Inventory valuation Inventory capitalization State tax deduction Accrued vacation Debt financing costs — Capitalized transaction costs — Installment sales — Other — Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total current deferred taxes ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: Prepaid expenses ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total current deferred taxes ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net current deferred tax assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noncurrent: Deferred tax assets: Benefit of net operating loss carryforwards $ $ Property and equipment basis difference — Stock compensation expense Deferred rent Tax Credits State tax deduction Other — Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net noncurrent deferred tax assets ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: Property and equipment basis difference — ) Amortizable intangible assets ) ) Debt discount ) ) Long lived intangible asset ) ) Other ) — ​ ​ ​ ​ ​ ​ ​ ​ Total noncurrent deferred tax liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net noncurrent deferred tax liability $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of reconciliation of the effective income tax rate to the federal statutory rate | Year ended 2015 2014 2013 Computed tax provision at the statutory rate % % % State income tax % — % Transaction costs — % )% Acquisition basis difference — )% )% Effect of uncertain tax positions — )% )% Change in valuation allowance )% — — Prior year adjustment % — — Goodwill impairment — )% — Other adjustments )% % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective tax rate % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of roll forward of unrecognized tax benefits | The following presents a roll forward of its unrecognized tax benefits (in thousands): Balance at November 30, 2013 $ Increase for tax positions taken during the prior period Decrease for tax positions expired during the current period ) ​ ​ ​ ​ ​ Balance at November 30, 2014 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Decrease for tax positions expired during the current period ) Settlements ) ​ ​ ​ ​ ​ Balance at November 30, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Stockholders' Equity (Table)
Stockholders' Equity (Table) | 12 Months Ended |
Nov. 30, 2015 | |
Stock Holders' Equity | |
Schedule of option grants, restricted common stock and RSUs issued to members of the Board of Directors | November 30, 2015 Granted as of: Number of options Exercise price 2002 $ 2002 $ 2003 $ 2004 $ 2005 $ 2006 $ Number of restricted shares isssued 2007 2008 2009 2010 2011 — 2012 2013 — 2014 2015 — |
Schedule of stock option activity in the aggregate | Options Weighted average exercise price Weighted average remaining contractual Life (Years) Aggregate Intrinsic Value Outstanding at November 30, 2014 $ Granted Exercised — — Expired ) Forfeited — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding and exercisable at November 30, 2015 $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average per option fair value of options granted during the year N/A Options Weighted average exercise price Weighted average remaining contractual Life (Years) Aggregate Intrinsic Value Outstanding at November 30, 2013 $ Granted — — Exercised — — Expired ) Forfeited — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding and exercisable at November 30, 2014 $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average per option fair value of options granted during the year N/A Options Weighted average exercise price Weighted average remaining contractual Life (Years) Aggregate Intrinsic Value Outstanding at November 30, 2012 $ Granted — — Exercised ) Expired — — Forfeited — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding and exercisable at November 30, 2013 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average per option fair value of options granted during the year N/A |
Schedule of exercise prices for options outstanding and exercisable | Exercise prices for options outstanding and exercisable as of November 30, 2015 are as follows: Options Outstanding and Exercisable Exercise Price Number of shares Weighted-Average Remaining Contractual Life $1.02 $0.38 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of stock option activity by plan | Total Number of Shares 2004 Incentive Plan 2000 Director Plan Outstanding at November 30, 2014 — Granted — Exercised — — — Forfeited / Expired ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding and exercisable at November 30, 2015 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at November 30, 2013 — Granted — — — Exercised — — — Forfeited / Expired ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding and exercisable at November 30, 2014 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at November 30, 2012 Granted — — — Exercised ) — ) Forfeited / Expired — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding and exercisable at November 30, 2013 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of the status of restricted common stock and RSUs and changes | Weighted-Average Grant-Date Fair Value Restricted Shares Restricted Stock Units Total Shares Restricted Shares Restricted Stock Units Outstanding at November 30, 2014 $ $ Granted — — Issued ) ) ) Cancelled — ) ) — Forfeited — ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at November 30, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at November 30, 2013 $ $ Granted Issued ) ) ) Cancelled — ) ) — Forfeited — ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at November 30, 2014 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at November 30, 2012 $ $ Granted Issued ) ) ) Cancelled — ) ) — Forfeited — ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at November 30, 2013 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of reconciliation of numerator and denominator of basic and diluted earnings per share | Year Ended (in thousands, except per share data) November 30, 2015 November 30, 2014 November 30, 2013 Basic (loss) earnings per share computation: Numerator: Loss from continuing operations $ ) $ ) $ ) Income from discontinued operatoins ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: Weighted average common shares outstanding Earnings (loss) per common share—basic Loss from continuing operations ) ) ) Earnings from discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) per common share—basic $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted income (loss) per share computation: Numerator: Loss from continuing operations $ ) $ ) $ ) Income from discontinued operatoins ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: Weighted average common shares outstanding Effect of dilutive securities: Restricted shares, RSU's, convertible securities and options — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dilutive potential common shares ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) per common share—diluted Loss from continuing operations ) ) ) Earnings from discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss per common share—diluted $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Commitments and Contingencies (
Commitments and Contingencies (Table) | 12 Months Ended |
Nov. 30, 2015 | |
Commitments and Contingencies | |
Schedule of future minimum rental payments under non-cancelable retail operating leases with lease terms in excess of one year | As of November 30, 2015, the future minimum rental payments under non-cancelable retail operating leases with lease terms in excess of one year were as foll ows (in thousands): 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Segment Reporting and Operati38
Segment Reporting and Operations by Geographic Areas (Table) | 12 Months Ended |
Nov. 30, 2015 | |
Segment Information | |
Summary of financial information concerning reportable segments | The following table (in thousands) contains summarized financial information concerning our reporta ble segments: Year ended 2015 2014 2013 Net sales: Wholesale $ $ $ Retail ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit: Wholesale $ $ $ Retail ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating (loss) income: Wholesale $ $ $ Retail ) ) ) Corporate and other ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures: Wholesale $ — $ — $ Retail — Corporate and other Assets held for sale ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets: Wholesale $ $ $ Retail Corporate and other Assets held for sale — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Supplemental Cash Flow Inform39
Supplemental Cash Flow Information (Table) | 12 Months Ended |
Nov. 30, 2015 | |
Supplemental Cash Flow Information | |
Schedule of supplemental cash flow information | Year ended (in thousands) 2015 2014 2013 Significant Non-cash transactions Write off of fully depreciated fixed assets $ $ $ — Sale of fixed assets at net carrying value $ $ — $ — Additional cash flow information Cash paid during the year for interest $ $ $ Cash paid during the year for income taxes $ $ — $ |
Quarterly Results of Operatio40
Quarterly Results of Operations (Unaudited) (Table) | 12 Months Ended |
Nov. 30, 2015 | |
Quarterly Results of Operations (Unaudited) | |
Summary of quarterly results of operations | Quarter ended (in thousands, except per share data) 2015 February 28 May 31 August 31 November 30 Net sales $ $ $ $ Gross profit Loss before taxes ) ) ) ) Income tax (benefit) expense ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) from continuing operations ) ) ) Income (loss) from discontinued operations, net of tax ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income and comprehensive (loss) income $ ) $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income per share: Income (loss) from continuing operations ) ) ) Income (loss) from discontinued operations ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Loss) income per common share—basic $ ) $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) from continuing operations ) ) ) Income (loss) from discontinued operations ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Loss) income per common share—diluted $ ) $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarter ended (in thousands, except per share data) 2014 February 29 May 31 August 31 November 30 Net sales $ $ $ $ Gross profit (Loss) income before taxes ) ) ) Income tax (benefit) expense ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) from continuing operations ) ) ) Income (loss) from discontinued operations, net of tax ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income and comprehensive (loss) income $ ) $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income per share: Income (loss) from continuing operations $ ) $ $ ) $ ) Income (loss) from discontinued operations ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Loss) income per common share—basic $ ) $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) from continuing operations $ ) $ $ ) $ ) Income (loss) from discontinued operations ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Loss) income per common share—diluted $ ) $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Business Description and Basi41
Business Description and Basis of Presentation (Details) $ in Millions | 12 Months Ended | |||
Nov. 30, 2015segmentstore | Nov. 30, 2014 | Nov. 30, 2013 | Sep. 11, 2015USD ($)item | |
Number of reportable business segments | segment | 2 | |||
Length of fiscal year | 364 days | 364 days | 364 days | |
Retail | ||||
Number of Joe's branded full price retail stores | 10 | |||
Number of outlet stores | 11 | |||
Certain operating and intellectual property assets of Joe's brand and business | Completed sale of assets | ||||
Number of Purchasers | item | 2 | |||
Total consideration | $ | $ 80 |
Subsequent Events - Meger (Deta
Subsequent Events - Meger (Details) | Feb. 29, 2016item | Feb. 28, 2016item | Jan. 28, 2016USD ($)itemshares |
Merger and Related Transactions | |||
Number of stores transferred | 18 | ||
Joe's Brand retail stores closed | 14 | ||
Modified Convertible Notes | Conversion of Convertible Notes into Common Stock | |||
Merger and Related Transactions | |||
Shares issued (in shares) | shares | 1,167,317 | ||
Subsequent event | |||
Merger and Related Transactions | |||
Number of stores transferred | 18 | ||
Joe's Brand retail stores closed | 14 | ||
Number of stores to be retained and operated | 32 | ||
Subsequent event | Modified Convertible Notes | Conversion of Convertible Notes into Common Stock | |||
Merger and Related Transactions | |||
Cash payment | $ | $ 8,600,000 | ||
Aggregate principal amount of modified convertible notes | $ | $ 16,500,000 | ||
Subsequent event | Common Stock | |||
Merger and Related Transactions | |||
Reverse stock split ratio (as a percent) | 0.03333 | ||
Subsequent event | R G Parent, LLC | |||
Merger and Related Transactions | |||
Cash payment | $ | $ 81,000,000 | ||
Subsequent event | R G Parent, LLC | Common Stock | |||
Merger and Related Transactions | |||
Aggregate Stock Consideration | shares | 8,870,968 | ||
Subsequent event | Private placement | Series A Preferred Stock | Series A Purchaser | |||
Merger and Related Transactions | |||
Shares issued (in shares) | shares | 50,000 | ||
Aggregate amount | $ | $ 50,000,000 |
Subsequent Events - New Credit
Subsequent Events - New Credit Agreements (Details) - USD ($) | Jan. 28, 2016 | Nov. 30, 2015 |
A&R Factoring Agreement | ||
New Credit Agreements | ||
Accounts receivable factoring agreement factoring ratio of accounts for which factor of certain major department stores bore credit risk | 0.20% | |
Accounts Receivable, Factoring Agreement Factoring Rate of Accounts for which Factor Bore Credit Risk Amount of Invoices Factored | $ 0.40 | |
Accounts Receivable, Factoring Agreement Factoring Rate of Accounts for which Entity Bore Credit Risk | 0.35% | |
Minimum Factoring Rate Per Invoice | $ 3.50 | |
Accounts Receivable, Factoring Agreement Termination by Factor Required Notice Period | 60 days | |
Subsequent event | Credit Facilities | ||
New Credit Agreements | ||
Aggregate principal amount | $ 50,000,000 | |
Minimum borrowing capacity (as a percent) | 10.00% | |
Subsequent event | Revolving Facility | ||
New Credit Agreements | ||
Aggregate principal amount | $ 40,000,000 | |
Commitment fee (as a percent) | 0.25% | |
Subsequent event | Revolving Facility | Maximum | ||
New Credit Agreements | ||
Aggregate principal amount | $ 10,000,000 | |
Subsequent event | Revolving Facility | Base Rate | ||
New Credit Agreements | ||
Margin on variable rate basis (as a percent) | 0.50% | |
Subsequent event | Revolving Facility | LIBOR rate loans | ||
New Credit Agreements | ||
Margin on variable rate basis (as a percent) | 1.75% | |
Subsequent event | Term Facility | ||
New Credit Agreements | ||
Required quarterly repayments of principal for the first four fiscal quarters (as a percent) | 0.25% | |
Required quarterly repayments of principal for the second four fiscal quarters (as a percent) | 0.625% | |
Required quarterly repayments of principal for the third four fiscal quarters (as a percent) | $ 1.25 | |
Required quarterly repayments of principal for the fourth four fiscal quarters (as a percent) | 1.875% | |
Required quarterly repayments of principal thereafter (as a percent) | 2.50% | |
Prepayment exception amounts (as a percent) | 100.00% | |
Prepayment premium during first year (as a percent) | 2.00% | |
Prepayment premium during second year (as a percent) | 1.00% | |
Interest rate floor (as a percent) | 0.50% | |
Subsequent event | Term Facility | Minimum | ||
New Credit Agreements | ||
Prepayment exception amounts (as a percent) | 25.00% | |
Subsequent event | Term Facility | Maximum | ||
New Credit Agreements | ||
Aggregate principal amount | $ 50,000,000 | |
Prepayment exception amounts (as a percent) | 50.00% | |
Subsequent event | Term Facility | Base Rate | Minimum | ||
New Credit Agreements | ||
Margin on variable rate basis (as a percent) | 6.00% | |
Subsequent event | Term Facility | Base Rate | Maximum | ||
New Credit Agreements | ||
Margin on variable rate basis (as a percent) | 8.00% | |
Subsequent event | Term Facility | LIBOR rate loans | Minimum | ||
New Credit Agreements | ||
Margin on variable rate basis (as a percent) | 7.00% | |
Subsequent event | Term Facility | LIBOR rate loans | Maximum | ||
New Credit Agreements | ||
Margin on variable rate basis (as a percent) | 9.00% |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2012 | |
Revenue Recognition | ||||
Advanced payments under licensing agreements | $ 0 | $ 60,000 | $ 0 | |
Deferred Financing Costs | ||||
Amortization period | 5 years | |||
Amortization of deferred financing costs | $ 1,511,000 | 420,000 | 70,000 | |
Advertising Costs | ||||
Maximum expected period of future benefits over which seasonal media campaigns are capitalized and amortized | 6 months | |||
Advertising and tradeshow expenses | $ 2,928,000 | 4,121,000 | 824,000 | |
Impairment of Long-Lived Assets and Intangibles | ||||
Store impairment charges | 1,732,000 | 840,000 | 0 | |
Goodwill impairment charge | $ 23,585,000 | |||
Impairment of intangibles | 12,400,000 | $ 0 | $ 0 | |
Trade names | ||||
Impairment of Long-Lived Assets and Intangibles | ||||
Impairment of intangibles | $ 12,400,000 |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - (Details 2) | 3 Months Ended | 12 Months Ended | |||||||||
Nov. 30, 2015USD ($) | Aug. 31, 2015USD ($) | May. 31, 2015USD ($) | Feb. 28, 2015USD ($) | Nov. 30, 2014USD ($) | Aug. 31, 2014USD ($) | May. 31, 2014USD ($) | Feb. 28, 2014USD ($) | Nov. 30, 2015USD ($)item | Nov. 30, 2014USD ($) | Nov. 30, 2013USD ($) | |
Concentration of Credit Risk | |||||||||||
Net sales | $ 18,933,000 | $ 18,865,000 | $ 21,001,000 | $ 21,400,000 | $ 15,269,000 | $ 25,718,000 | $ 21,850,000 | $ 21,388,000 | $ 80,199,000 | $ 84,225,000 | $ 28,417,000 |
International | |||||||||||
Concentration of Credit Risk | |||||||||||
Net sales | $ 4,083,000 | $ 5,700,000 | $ 1,472,000 | ||||||||
Supplier Concentration Risk | |||||||||||
Concentration of Credit Risk | |||||||||||
Concentration risk (as a percent) | 22.00% | ||||||||||
Number of manufacturing contractors | item | 2 | ||||||||||
Sales | Customers and customer group | Maximum | |||||||||||
Concentration of Credit Risk | |||||||||||
Concentration risk (as a percent) | 10.00% | 10.00% | 10.00% | ||||||||
Sales | Customers and customer group | Nordstrom, Inc. | |||||||||||
Concentration of Credit Risk | |||||||||||
Concentration risk (as a percent) | 34.00% | 39.60% | 25.00% | ||||||||
Sales | Customers and customer group | Macy's Inc. | |||||||||||
Concentration of Credit Risk | |||||||||||
Concentration risk (as a percent) | 14.90% | 9.80% | 14.00% | ||||||||
Sales | Customers and customer group | 10 largest customers and customer groups | |||||||||||
Concentration of Credit Risk | |||||||||||
Concentration risk (as a percent) | 72.00% |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Nov. 30, 2015 | Aug. 31, 2015 | May. 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2014 | Feb. 28, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
Operating results of discontinued operations | |||||||||||
Income from discontinued operations, net of tax | $ 6,241 | $ (1,053) | $ 690 | $ (850) | $ (2,024) | $ 769 | $ 405 | $ 1,616 | $ 5,028 | $ 766 | $ 102 |
Current Assets | |||||||||||
Total Current assets | 57,050 | 57,050 | |||||||||
Noncurrent Assets | |||||||||||
Total Noncurrent assets | 30,197 | 30,197 | |||||||||
Current Liabilities | |||||||||||
Total Current liabilities | 11,680 | 11,680 | |||||||||
Noncurrent Liabilities | |||||||||||
Total Noncurrent liabilities | 1,283 | 1,283 | |||||||||
Certain operating and intellectual property assets of Joe's brand and business | Sale of assets | |||||||||||
Operating results of discontinued operations | |||||||||||
Net Sales | 75,342 | 104,530 | 111,766 | ||||||||
Income from discontinued operations (including fiscal year 2015 gain on disposal of $15,369) before provision for income taxes | 9,690 | 1,195 | 4,719 | ||||||||
Income tax expense | 4,662 | 429 | 4,617 | ||||||||
Income from discontinued operations, net of tax | 5,028 | 766 | 102 | ||||||||
Gain on disposal | $ 15,369 | ||||||||||
Current Assets | |||||||||||
Accounts receivable, net | 1,309 | 1,309 | |||||||||
Factored accounts receivable, net | 19,316 | 19,316 | |||||||||
Inventories, net | 35,965 | 35,965 | |||||||||
Prepaid expenses and other current assets | 460 | 460 | |||||||||
Total Current assets | 57,050 | 57,050 | |||||||||
Noncurrent Assets | |||||||||||
Property and equipment, net | 2,143 | 2,143 | |||||||||
Goodwill | 3,836 | 3,836 | |||||||||
Intangible assets | 24,000 | 24,000 | |||||||||
Other assets | 218 | 218 | |||||||||
Total Noncurrent assets | 30,197 | 30,197 | |||||||||
Assets of held for sale | 87,247 | 87,247 | $ 79,943 | ||||||||
Current Liabilities | |||||||||||
Accounts payable and accrued expenses | 11,680 | 11,680 | |||||||||
Total Current liabilities | 11,680 | 11,680 | |||||||||
Noncurrent Liabilities | |||||||||||
Deferred Rent | 1,283 | 1,283 | |||||||||
Total Noncurrent liabilities | 1,283 | 1,283 | |||||||||
Liabilities held for sale | $ 12,963 | $ 12,963 |
Factored Accounts and Receiva47
Factored Accounts and Receivables (Details) - USD ($) | Sep. 30, 2013 | Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2012 |
Accounts receivable, inventory advances and due from factor | |||||
Non-recourse receivables assigned to factor | $ 11,474,000 | $ 14,314,000 | |||
Client recourse receivables | 34,000 | 1,919,000 | |||
Total receivables assigned to factor | 11,508,000 | 16,233,000 | |||
Allowance for customer credits | (3,767,000) | (5,128,000) | |||
Factor accounts receivable, net of allowance | 7,741,000 | 11,105,000 | |||
Non-factored accounts receivable | 1,492,000 | 2,123,000 | |||
Allowance for customer credits | (584,000) | (766,000) | |||
Allowance for doubtful accounts | (382,000) | (78,000) | |||
Accounts receivable, net of allowances | 526,000 | 1,279,000 | |||
Risk of payment in the event of non-payment by the customers | 34,000 | 1,919,000 | |||
Cash and cash equivalents | $ 1,937,000 | 1,054,000 | $ 785,000 | $ 13,426,000 | |
CIT | Amended And Restated Factoring Agreement | |||||
Accounts receivable, inventory advances and due from factor | |||||
Required notice period for termination of the agreement by factor | 60 days | ||||
Factoring rate of accounts for which the factor bore the credit risk, over a specified amount of invoices factored (as a percent) | 0.50% | ||||
Factoring rate of accounts for which the entity bore the credit risk (as a percent) | 0.35% | ||||
Minimum factoring charge per invoice | $ 3.50 | ||||
CIT | CIT Revolving Credit Agreement | |||||
Accounts receivable, inventory advances and due from factor | |||||
Available borrowing under facility | $ 3,163,000 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Thousands | Nov. 30, 2015 | Nov. 30, 2014 |
Inventories, Net | ||
Finished goods | $ 8,733 | $ 15,478 |
Finished goods consigned to others | 594 | 531 |
Work in progress | 2,761 | 3,157 |
Raw materials | 2,033 | 6,778 |
Inventories, gross | 14,121 | 25,944 |
Less allowance for obsolescence and slow moving items | (1,202) | (590) |
Inventories, net | $ 12,919 | $ 25,354 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
Property and equipment | |||
Gross property and equipment | $ 2,170,000 | $ 6,198,000 | |
Less accumulated depreciation | (1,789,000) | (3,301,000) | |
Net property and equipment | 381,000 | 2,897,000 | |
Depreciation expenses | 871,000 | 1,300,000 | $ 929,000 |
Computer and equipment | |||
Property and equipment | |||
Gross property and equipment | $ 1,310,000 | 1,726,000 | |
Computer and equipment | Minimum | |||
Property and equipment | |||
Useful lives | 3 years | ||
Computer and equipment | Maximum | |||
Property and equipment | |||
Useful lives | 7 years | ||
Furniture and fixtures | |||
Property and equipment | |||
Gross property and equipment | $ 552,000 | 1,759,000 | |
Furniture and fixtures | Minimum | |||
Property and equipment | |||
Useful lives | 3 years | ||
Furniture and fixtures | Maximum | |||
Property and equipment | |||
Useful lives | 7 years | ||
Leasehold improvements, primarily retail | |||
Property and equipment | |||
Gross property and equipment | $ 308,000 | $ 2,713,000 | |
Leasehold improvements, primarily retail | Minimum | |||
Property and equipment | |||
Useful lives | 5 years | ||
Leasehold improvements, primarily retail | Maximum | |||
Property and equipment | |||
Useful lives | 10 years |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 12 Months Ended | |||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2012 | |
Intangible assets | ||||
Gross Amount | $ 59,500,000 | |||
Asset Impairment Charges | 12,400,000 | $ 0 | $ 0 | |
Definite, Accumulated Amortization | 5,063,000 | |||
Net Amount | 42,037,000 | $ 56,773,000 | ||
Amortization of intangibles | 2,337,000 | $ 2,337,000 | $ 390,000 | |
Finite-Lived Intangible Assets, Net | 10,037,000 | |||
Estimated amortization expense | ||||
2,016 | 2,337,000 | |||
2,017 | 2,337,000 | |||
2,018 | 2,337,000 | |||
2,019 | 1,992,000 | |||
2,020 | 270,000 | |||
Thereafter | 764,000 | |||
Total | $ 10,037,000 | |||
Designs | ||||
Intangible assets | ||||
Amortization period | 6 years | |||
Definite, Gross Amount | $ 12,400,000 | |||
Definite, Accumulated Amortization | 4,478,000 | |||
Finite-Lived Intangible Assets, Net | 7,922,000 | |||
Estimated amortization expense | ||||
Total | $ 7,922,000 | |||
Customer relationships | ||||
Intangible assets | ||||
Amortization period | 10 years | |||
Definite, Gross Amount | $ 2,700,000 | |||
Definite, Accumulated Amortization | 585,000 | |||
Finite-Lived Intangible Assets, Net | 2,115,000 | |||
Estimated amortization expense | ||||
Total | 2,115,000 | |||
Trade names | ||||
Intangible assets | ||||
Gross Amount | 44,400,000 | |||
Asset Impairment Charges | 12,400,000 | |||
Indefinite, Net Amount | $ 32,000,000 |
Debt (Details)
Debt (Details) | Sep. 30, 2013USD ($)item$ / sharesshares | Nov. 30, 2015USD ($) | Nov. 30, 2014USD ($) | Nov. 30, 2013USD ($) | Nov. 30, 2014USD ($) | Nov. 30, 2015USD ($) | May. 08, 2014USD ($) |
Five year payment schedule of debt for the promissory notes, long term debt and convertible notes | |||||||
2,016 | $ 0 | $ 0 | |||||
2,019 | 34,220,000 | 34,220,000 | |||||
Total | 34,220,000 | 34,220,000 | |||||
Key assumptions for determining the fair value | |||||||
Change in the fair value of derivative | $ 2,270,000 | $ (204,000) | |||||
Recorded value of the convertible note | |||||||
Accretion of debt discounts | 1,836,000 | 1,646,000 | 257,000 | ||||
PIK Interest paid | 900,000 | 875,000 | |||||
Debt at the end of the period | 27,469,000 | 24,733,000 | $ 24,733,000 | 27,469,000 | |||
Components of interest expense | |||||||
Total interest expense | 6,621,000 | 5,141,000 | 1,032,000 | ||||
Buyer Notes | |||||||
Convertible Notes | |||||||
Aggregate principal amount | $ 32,445,000 | ||||||
Fair value of derivative | $ 5,496,000 | $ 5,700,000 | 5,700,000 | $ 3,430,000 | |||
Maturity term from closing date | 5 years 6 months | ||||||
Key assumptions for determining the fair value | |||||||
Remaining time to maturity | 4 years 10 months | ||||||
Volatility (as a percent) | 60.00% | ||||||
Risk-free interest rate (as a percent) | 1.63% | ||||||
Aggregate original issue discount | $ 10,490,000 | ||||||
Recorded value of the convertible note | |||||||
Convertible notes - Face value | 32,445,000 | ||||||
Less: Original issue discount | (4,994,000) | ||||||
Convertible notes recorded value on issue date | 21,955,000 | ||||||
Accretion of debt discounts | 3,739,000 | ||||||
PIK Interest paid | 1,775,000 | ||||||
Convertible notes value | 27,469,000 | 27,469,000 | |||||
Plus: Embedded derivative liability - fair market value | 5,496,000 | $ 5,700,000 | $ 5,700,000 | $ 3,430,000 | |||
Debt at the end of the period | 27,469,000 | 27,469,000 | |||||
Components of interest expense | |||||||
Contractual coupon interest | 4,421,000 | 11,523,000 | 2,195,000 | ||||
Amortization of discount and deferred financing | 2,200,000 | 2,304,000 | 367,000 | ||||
Total interest expense | 6,621,000 | 13,827,000 | $ 2,562,000 | ||||
Buyer Notes | Embedded Conversion Derivative | |||||||
Key assumptions for determining the fair value | |||||||
Change in the fair value of derivative | $ 2,270,000 | ||||||
Aggregate original issue discount | 5,496,000 | ||||||
Recorded value of the convertible note | |||||||
Less: Original issue discount | $ (5,496,000) | ||||||
Convertible Notes | |||||||
Five year payment schedule of debt for the promissory notes, long term debt and convertible notes | |||||||
2,019 | 34,220,000 | 34,220,000 | |||||
Total | $ 34,220,000 | $ 34,220,000 | |||||
CIT | Management notes | From October 1, 2016 | |||||||
Convertible Notes | |||||||
Interest rate payable in cash (as a percent) | 10.928% | ||||||
CIT | A Commitment | |||||||
Components of interest expense | |||||||
Maximum borrowing capacity | $ 50,000,000 | ||||||
CIT | Letters of credit | |||||||
Components of interest expense | |||||||
Maximum borrowing capacity | 1,000,000 | ||||||
Hudson Clothing Holdings, Inc. | Promissory Tax Notes | |||||||
Convertible Notes | |||||||
Promissory notes | $ 1,235,000 | ||||||
Annual rate on outstanding principal amount (as a percent) | 0.00% | ||||||
Hudson Clothing Holdings, Inc. | Buyer Notes | |||||||
Convertible Notes | |||||||
Conversion price (in dollars per share) | $ / shares | $ 1.78 | ||||||
Number of shares issuable upon conversion of the debt | shares | 19,200,000 | ||||||
Trading days immediately preceding the notice of conversion used for calculation of average of the closing prices for the common stock | item | 20 | ||||||
Hudson Clothing Holdings, Inc. | Management notes | |||||||
Convertible Notes | |||||||
Aggregate principal amount | $ 22,885,000 | ||||||
Redemption price as a percentage of principal amount | 103.00% | ||||||
Effective interest rate (as a percent) | 4.31% | ||||||
Recorded value of the convertible note | |||||||
Convertible notes - Face value | $ 22,885,000 | ||||||
Hudson Clothing Holdings, Inc. | Management notes | From September 30, 2013 | |||||||
Convertible Notes | |||||||
Annual rate on outstanding principal amount (as a percent) | 10.00% | 10.00% | 10.00% | ||||
Interest rate payable in cash (as a percent) | 7.68% | 7.68% | 7.68% | ||||
PIK Interest (as a percent) | 2.32% | 2.32% | 2.32% | ||||
Additional interest (as a percent) | 2.00% | ||||||
Hudson Clothing Holdings, Inc. | Management notes | From December 1, 2014 | |||||||
Convertible Notes | |||||||
Interest rate payable in cash (as a percent) | 10.00% | ||||||
Hudson Clothing Holdings, Inc. | Fireman Note | |||||||
Convertible Notes | |||||||
Redemption price as a percentage of principal amount | 100.00% | ||||||
Effective interest rate (as a percent) | 8.32% | ||||||
Hudson Clothing Holdings, Inc. | Fireman Note | From September 30, 2013 | |||||||
Convertible Notes | |||||||
Annual rate on outstanding principal amount (as a percent) | 6.50% | 6.50% | 6.50% | ||||
Interest rate payable in cash (as a percent) | 3.00% | 3.00% | 3.00% | ||||
PIK Interest (as a percent) | 3.50% | 3.50% | 3.50% | ||||
Additional interest (as a percent) | 2.50% | ||||||
Hudson Clothing Holdings, Inc. | Fireman Note | From December 1, 2014 | |||||||
Convertible Notes | |||||||
Interest rate payable in cash (as a percent) | 6.50% | ||||||
Hudson Clothing Holdings, Inc. | Fireman Note | From October 1, 2016 | |||||||
Convertible Notes | |||||||
Interest rate payable in cash (as a percent) | 7.00% |
Debt - Revolving Credit Agreeme
Debt - Revolving Credit Agreement (Details) - USD ($) | Dec. 29, 2015 | Sep. 30, 2013 | Nov. 30, 2015 |
CIT Revolving Commitment | |||
Revolving Credit Agreement | |||
Maximum borrowing capacity | $ 10,000,000 | ||
Total lender commitments | 10,000,000 | ||
Availability block used to calculate credit availability | 2,500,000 | ||
Actual maximum credit availability | $ 7,500,000 | ||
Commitment fee (as a percent) | 0.25% | ||
CIT Revolving Commitment | Base Rate | |||
Revolving Credit Agreement | |||
Margin on variable rate basis (as a percent) | 3.50% | ||
Variable rate basis | Alternate Base Rate | ||
CIT Revolving Commitment | Federal funds rate | |||
Revolving Credit Agreement | |||
Margin on variable rate basis (as a percent) | 0.50% | ||
Variable rate basis | Federal funds rate | ||
CIT Revolving Commitment | 90-Day LIBO Rate | |||
Revolving Credit Agreement | |||
Margin on variable rate basis (as a percent) | 1.00% | ||
Variable rate basis | 90-Day LIBO Rate | ||
CIT Revolving Commitment | LIBOR rate loans | |||
Revolving Credit Agreement | |||
Margin on variable rate basis (as a percent) | 4.50% | ||
Variable rate basis | 90-Day LIBO Rate | ||
CIT Revolving Commitment | Swingline loans | |||
Revolving Credit Agreement | |||
Maximum borrowing capacity | $ 1,000,000 | ||
Total lender commitments | 1,000,000 | ||
CIT Revolving Commitment | Letters of credit | |||
Revolving Credit Agreement | |||
Maximum borrowing capacity | 1,000,000 | ||
Total lender commitments | $ 1,000,000 | ||
CIT Revolving Credit Agreement | |||
Revolving Credit Agreement | |||
Borrowing outstanding under facility | $ 4,235,000 | ||
Garrison Term Loan Credit Agreement | |||
Garrison Term Loan Credit Agreement | |||
Additional interest (as a percent) | 2.00% | ||
Average Interest Rate | 14.00% | ||
Garrison Term Loan Credit Agreement | British Banker Association Interest Settlement Rate | |||
Revolving Credit Agreement | |||
Margin on variable rate basis (as a percent) | 10.75% | ||
Variable rate basis | British Banker Association Interest Settlement Rate | ||
CIT | CIT Revolving Credit Agreement | |||
Revolving Credit Agreement | |||
Maximum borrowing capacity | $ 50,000,000 | ||
Cash availability | 3,163,000 | ||
Total lender commitments | 50,000,000 | ||
Debt Instrument Covenant Amount of Unrestricted Cash that Can be Included in Excess Availability | $ 3,163,000 | ||
CIT | CIT Revolving Credit Agreement | Swingline loans | |||
Revolving Credit Agreement | |||
Maximum borrowing capacity | 5,000,000 | ||
Total lender commitments | 5,000,000 | ||
CIT | A-1 Commitment | |||
Revolving Credit Agreement | |||
Maximum borrowing capacity | 1,000,000 | ||
Total lender commitments | 1,000,000 | ||
CIT | A Commitment | |||
Revolving Credit Agreement | |||
Maximum borrowing capacity | 50,000,000 | ||
Total lender commitments | 50,000,000 | ||
Hudson Clothing Holdings, Inc. | Garrison Term Loan Credit Agreement | |||
Garrison Term Loan Credit Agreement | |||
Term Loans | $ 60,000,000 |
Fair Value Disclosures (Details
Fair Value Disclosures (Details) - USD ($) | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
Fair value disclosures | |||
Total Losses, Property and Equipment | $ 1,732,000 | $ 840,000 | $ 0 |
Total Losses, Goodwill | 23,585,000 | ||
Nonrecurring | |||
Fair value disclosures | |||
Property and equipment, net | 381,000 | 2,897,000 | |
Trade Names | 32,000,000 | ||
Goodwill | 8,398,000 | ||
Total Losses, Property and Equipment | 1,732,000 | 840,000 | |
Total Losses, Goodwill | 12,400,000 | 23,585,000 | |
Nonrecurring | Level 3 | |||
Fair value disclosures | |||
Property and equipment, net | 381,000 | 2,897,000 | |
Trade Names | $ 32,000,000 | ||
Goodwill | $ 8,394,000 |
Income Taxes - Current (Details
Income Taxes - Current (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Nov. 30, 2015 | Aug. 31, 2015 | May. 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2014 | Feb. 28, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
Current: | |||||||||||
Federal | $ (14) | $ (1,427) | $ (2,387) | ||||||||
State | (32) | 199 | (896) | ||||||||
Current income tax (benefit) expense | (46) | (1,228) | (3,283) | ||||||||
Deferred: | |||||||||||
Federal | (2,063) | (3,655) | (78) | ||||||||
State | (445) | (176) | 227 | ||||||||
Deferred tax (benefit) expense | (2,508) | (3,831) | 149 | ||||||||
Total | $ (4,252) | $ (12,801) | $ 22 | $ 14,477 | $ (4,199) | $ (174) | $ 1,189 | $ (1,875) | $ (2,554) | $ (5,059) | $ (3,134) |
Income Taxes - Deferred (Detail
Income Taxes - Deferred (Details) - USD ($) | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
Deferred tax assets: | |||
Allowance for customer credits and doubtful accounts | $ 1,154,000 | $ 2,427,000 | |
Inventory valuation | 703,000 | 2,097,000 | |
Inventory capitalization | 564,000 | 1,527,000 | |
State tax deduction | 166,000 | 73,000 | |
Accrued vacation | 169,000 | 201,000 | |
Debt financing costs | 204,000 | ||
Capitalized transaction costs | 1,089,000 | ||
Installment sales | 973,000 | ||
Other | 241,000 | ||
Valuation Allowance | (3,888,000) | (189,000) | |
Total current deferred taxes | 1,375,000 | 6,136,000 | |
Deferred tax liabilities: | |||
Prepaid expenses | (53,000) | (71,000) | |
Total current deferred taxes | (53,000) | (71,000) | |
Net current deferred tax assets | 1,322,000 | 6,065,000 | |
Deferred tax assets: | |||
Benefit of net operating loss carryforwards | 7,726,000 | 8,483,000 | |
Property and equipment basis difference | 710,000 | ||
Stock compensation expense | 83,000 | 263,000 | |
Deferred rent | 1,182,000 | 1,139,000 | |
Tax credits | 5,000 | 70,000 | |
State tax deduction | 37,000 | 69,000 | |
Other | 59,000 | ||
Valuation allowance | (8,373,000) | (451,000) | |
Net noncurrent deferred tax assets | 1,370,000 | 9,632,000 | |
Valuation allowance | 12,260,000 | 640,000 | |
Valuation allowance recorded as income tax expense | 12,076,000 | 508,000 | $ 342,000 |
Deferred tax liabilities: | |||
Property and equipment basis difference | (117,000) | ||
Amortizable intangible Assets | (1,732,000) | (2,365,000) | |
Debt discount | (2,377,000) | (3,005,000) | |
Long lived intangible asset | (8,380,000) | (21,910,000) | |
Other | (12,000) | ||
Total noncurrent deferred tax liabilities | (12,501,000) | (27,397,000) | |
Net noncurrent deferred tax liability | $ (11,131,000) | $ (17,765,000) |
Income Taxes - As a Percent (De
Income Taxes - As a Percent (Details) | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
Income Taxes | |||
Computed tax provision at the statutory rate (as a percent) | 34.00% | 34.00% | 34.00% |
State income tax (as a percent) | 0.80% | 4.20% | |
Transaction costs (as a percent) | 0.60% | (9.40%) | |
Acquisition basis difference (as a percent) | (0.80%) | (0.40%) | |
Effect of uncertain tax positions (as a percent) | (0.10%) | (0.10%) | |
Change in valuation allowance (as a percent) | (28.40%) | ||
Prior year adjustment (as a percent) | 0.10% | ||
Goodwill impairment (as a percent) | (19.00%) | ||
Other adjustments (as a percent) | (0.10%) | 0.40% | 1.40% |
Effective tax rate (as a percent) | 6.40% | 15.10% | 29.70% |
Income Taxes - Carryforwards (D
Income Taxes - Carryforwards (Details) | Nov. 30, 2015USD ($) |
Federal tax | |
Net operating losses | |
Net operating loss carryforwards | $ 20,338,000 |
California | |
Net operating losses | |
Net operating loss carryforwards | $ 13,117,000 |
Income Taxes - Rollforward (Det
Income Taxes - Rollforward (Details) - USD ($) | 12 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Income Taxes | ||
Amount net of tax related benefit that would impact the effective income tax rate, if recognized | $ 298,000 | $ 339,000 |
Unrecognized tax benefits | ||
Balance at the beginning of the period | 400,000 | 388,000 |
Increase for tax positions taken during the prior period | 20,000 | |
Decrease for tax positions expired during the current period | (84,000) | (8,000) |
Settlements | (18,000) | |
Balance at the end of the period | 298,000 | 400,000 |
Unrecognized tax benefits related to interest and penalties | 6,000 | 28,000 |
Additional disclosure | ||
Payment of accrued interest | 30,000 | 36,000 |
Penalty accrued | 57,000 | $ 62,000 |
Tax benefits to reverse | $ 303,000 |
Stockholders' Equity - Incentiv
Stockholders' Equity - Incentive Plan (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2011 | Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
Stock Incentive Plans | ||||
Stock based compensation expense recognized | $ 1,261,000 | |||
Granted as of: | ||||
Granted (in shares) | 40,000 | |||
Granted (in dollars per share) | $ 0.38 | |||
Number of restricted shares issued | 40,000 | |||
Options | 2002 | ||||
Granted as of: | ||||
Granted (in shares) | 40,000 | |||
Granted (in dollars per share) | $ 1 | |||
Options | 2002 | ||||
Granted as of: | ||||
Granted (in shares) | 31,496 | |||
Granted (in dollars per share) | $ 1.27 | |||
Options | 2003 | ||||
Granted as of: | ||||
Granted (in shares) | 30,768 | |||
Granted (in dollars per share) | $ 1.30 | |||
Options | 2004 | ||||
Granted as of: | ||||
Granted (in shares) | 320,000 | |||
Granted (in dollars per share) | $ 1.58 | |||
Options | 2005 | ||||
Granted as of: | ||||
Granted (in shares) | 300,000 | |||
Granted (in dollars per share) | $ 5.91 | |||
Options | 2006 | ||||
Granted as of: | ||||
Granted (in shares) | 450,000 | |||
Granted (in dollars per share) | $ 1.02 | |||
Restricted stock and RSUs | ||||
Granted as of: | ||||
Number of restricted shares issued | 600,000 | 650,363 | 1,051,941 | |
Restricted shares | ||||
Granted as of: | ||||
Number of restricted shares issued | 600,000 | 288,121 | 420,882 | |
Restricted shares | 2007 | ||||
Granted as of: | ||||
Number of restricted shares issued | 320,000 | |||
Restricted shares | 2008 | ||||
Granted as of: | ||||
Number of restricted shares issued | 473,455 | |||
Restricted shares | 2009 | ||||
Granted as of: | ||||
Number of restricted shares issued | 371,436 | |||
Restricted shares | 2010 | ||||
Granted as of: | ||||
Number of restricted shares issued | 131,828 | |||
Restricted shares | 2012 | ||||
Granted as of: | ||||
Number of restricted shares issued | 617,449 | |||
Restricted shares | 2014 | ||||
Granted as of: | ||||
Number of restricted shares issued | 219,678 | |||
RSUs | ||||
Granted as of: | ||||
Number of restricted shares issued | 600,000 | 362,242 | 631,059 | |
Restated Plan | ||||
Stock Incentive Plans | ||||
Number of shares of common stock authorized for issuance | 6,825,000 | |||
Maximum number of shares that can be awarded to any employee in one year | 1,250,000 | |||
Exercise period | 10 years | |||
Number of shares available for issuance | 2,715,345 | |||
Restated Plan | RSUs | ||||
Stock Incentive Plans | ||||
Right to receive a specified number of shares of common stock for each unit on vesting date | 1 |
Stockholders' Equity - Option A
Stockholders' Equity - Option Activity (Details) - USD ($) | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
Stock option activity | |||
Outstanding at the beginning of the period (in shares) | 550,000 | 775,000 | 796,794 |
Granted (in shares) | 40,000 | ||
Exercised (in shares) | (21,794) | ||
Expired (in shares) | (501,667) | (225,000) | |
Outstanding at the end of the period (in shares) | 88,333 | 550,000 | 775,000 |
Weighted average exercise price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 5.02 | $ 4.03 | $ 3.96 |
Granted (in dollars per share) | 0.38 | ||
Exercised (in dollars per share) | 1.30 | ||
Expired (in dollars per share) | 5.36 | 1.62 | |
Outstanding at the end of the period (in dollars per share) | $ 0.92 | $ 5.02 | $ 4.03 |
Weighted average remaining contractual Life | |||
Outstanding and exercisable at the end of the period | 1 year 9 months 18 days | 8 months 12 days | 1 year 4 months 24 days |
Aggregate Intrinsic Value | |||
Outstanding and exercisable at the end of the period | $ 18,000 | ||
Intrinsic value | |||
Total intrinsic value of options exercised | $ 0 | $ 0 | $ 11,000 |
Stockholders' Equity - Plan Act
Stockholders' Equity - Plan Activity (Details) - $ / shares | 12 Months Ended | |||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2012 | |
Options Outstanding and Exercisable | ||||
Exercise Price (in dollars per share) | $ 0.92 | $ 5.02 | $ 4.03 | $ 3.96 |
Number of shares | 88,333 | |||
Weighted-Average Remaining Contractual Life | 1 year 9 months 18 days | |||
Stock option activity | ||||
Outstanding at the beginning of the period (in shares) | 550,000 | 775,000 | 796,794 | |
Granted (in shares) | 40,000 | |||
Exercised (in shares) | (21,794) | |||
Forfeited / Expired (in shares) | (501,667) | (225,000) | ||
Outstanding at the end of the period (in shares) | 88,333 | 550,000 | 775,000 | |
2000 Director Plan | ||||
Stock option activity | ||||
Outstanding at the beginning of the period (in shares) | 21,794 | |||
Exercised (in shares) | (21,794) | |||
2004 Stock Incentive Plan | ||||
Stock option activity | ||||
Outstanding at the beginning of the period (in shares) | 550,000 | 775,000 | 775,000 | |
Granted (in shares) | 40,000 | |||
Forfeited / Expired (in shares) | (501,667) | (225,000) | ||
Outstanding at the end of the period (in shares) | 88,333 | 550,000 | 775,000 | |
Restated Plan | ||||
Options Outstanding and Exercisable | ||||
Stock options outstanding (in shares) | 0 | |||
$ 1.02 | ||||
Options Outstanding and Exercisable | ||||
Exercise Price (in dollars per share) | $ 1.02 | |||
Number of shares | 75,000 | |||
Weighted-Average Remaining Contractual Life | 4 months 24 days | |||
$ 0.38 | ||||
Options Outstanding and Exercisable | ||||
Exercise Price (in dollars per share) | $ 0.38 | |||
Number of shares | 13,333 | |||
Weighted-Average Remaining Contractual Life | 9 years 1 month 6 days |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
Total Shares | |||
Granted (in shares) | 40,000 | ||
Unrecognized compensation cost | |||
Unrecognized compensation cost related to nonvested share-based compensation arrangements | $ 242,000 | ||
Recognition period of compensation costs | 1 year 4 months 24 days | ||
Additional disclosure | |||
Options granted (in shares) | 40,000 | ||
Restricted stock and RSUs | |||
Total Shares | |||
Outstanding at the beginning of the period (in shares) | 1,826,154 | 2,616,128 | 3,557,841 |
Granted (in shares) | 600,000 | 650,363 | 1,051,941 |
Issued (in shares) | (1,787,498) | (1,106,000) | (1,451,029) |
Cancelled (in shares) | (275,735) | (312,792) | (426,749) |
Forfeited (in shares) | (2,940) | (21,545) | (115,876) |
Outstanding at the end of the period (in shares) | 359,981 | 1,826,154 | 2,616,128 |
Restricted shares | |||
Total Shares | |||
Outstanding at the beginning of the period (in shares) | 792,303 | 954,798 | 844,236 |
Granted (in shares) | 600,000 | 288,121 | 420,882 |
Issued (in shares) | (1,292,303) | (450,616) | (310,320) |
Outstanding at the end of the period (in shares) | 100,000 | 792,303 | 954,798 |
Weighted-Average Grant-Date Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 1.08 | $ 0.90 | $ 0.85 |
Granted (in dollars per share) | 0.37 | 1.49 | 1.02 |
Issued (in dollars per share) | 0.81 | 0.95 | 0.92 |
Outstanding at the end of the period (in dollars per share) | $ 0.37 | $ 1.08 | $ 0.90 |
RSUs | |||
Total Shares | |||
Outstanding at the beginning of the period (in shares) | 1,033,851 | 1,661,330 | 2,713,605 |
Granted (in shares) | 600,000 | 362,242 | 631,059 |
Issued (in shares) | (495,195) | (655,384) | (1,140,709) |
Cancelled (in shares) | (275,735) | (312,792) | (426,749) |
Forfeited (in shares) | (2,940) | (21,545) | (115,876) |
Outstanding at the end of the period (in shares) | 259,981 | 1,033,851 | 1,661,330 |
Weighted-Average Grant-Date Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 1 | $ 0.93 | $ 0.87 |
Granted (in dollars per share) | 1.49 | 1.02 | |
Issued (in dollars per share) | 0.99 | 1.11 | 0.89 |
Cancelled (in dollars per share) | 0.92 | 0.97 | 0.89 |
Forfeited (in dollars per share) | 0.70 | 0.72 | 0.95 |
Outstanding at the end of the period (in dollars per share) | $ 1.11 | $ 1 | $ 0.93 |
Additional disclosure | |||
Shares withdrawn, cancelled or forfeited in period | 278,675 |
Stockholders' Equity - EPS (Det
Stockholders' Equity - EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Nov. 30, 2015 | Aug. 31, 2015 | May. 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2014 | Feb. 28, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
Numerator: | |||||||||||
Loss from continuing operations | $ (19,284) | $ 6,712 | $ (4,039) | $ (20,745) | $ (26,128) | $ (493) | $ 1,934 | $ (3,795) | $ (37,356) | $ (28,482) | $ (7,416) |
Income from discontinued operations, net of tax | 6,241 | (1,053) | 690 | (850) | (2,024) | 769 | 405 | 1,616 | 5,028 | 766 | 102 |
Net loss | $ (13,043) | $ 5,659 | $ (3,349) | $ (21,595) | $ (28,152) | $ 276 | $ 2,339 | $ (2,179) | $ (32,328) | $ (27,716) | $ (7,314) |
Denominator: | |||||||||||
Weighted average common shares outstanding | 69,444,000 | 68,226,000 | 67,163,000 | ||||||||
Earnings (loss) per common share - basic | |||||||||||
Loss from continuing operations (in dollars per share) | $ (0.28) | $ 0.10 | $ (0.06) | $ (0.30) | $ (0.39) | $ (0.01) | $ 0.03 | $ (0.06) | $ (0.54) | $ (0.42) | $ (0.11) |
Earnings from discontinued operations - basic (in dollars per share) | 0.09 | (0.02) | 0.01 | (0.01) | (0.03) | 0.01 | 0 | 0.03 | 0.07 | 0.01 | 0 |
Loss per common share - basic (in dollars per share) | $ (0.19) | $ 0.08 | $ (0.05) | $ (0.31) | $ (0.42) | $ 0 | $ 0.03 | $ (0.03) | $ (0.47) | $ (0.41) | $ (0.11) |
Numerator: | |||||||||||
Loss from continuing operations | $ (19,284) | $ 6,712 | $ (4,039) | $ (20,745) | $ (26,128) | $ (493) | $ 1,934 | $ (3,795) | $ (37,356) | $ (28,482) | $ (7,416) |
Income from discontinued operations, net of tax | 6,241 | (1,053) | 690 | (850) | (2,024) | 769 | 405 | 1,616 | 5,028 | 766 | 102 |
Net income and comprehensive income | $ (13,043) | $ 5,659 | $ (3,349) | $ (21,595) | $ (28,152) | $ 276 | $ 2,339 | $ (2,179) | $ (32,328) | $ (27,716) | $ (7,314) |
Denominator: | |||||||||||
Weighted average common shares outstanding | 69,444,000 | 68,226,000 | 67,163,000 | ||||||||
Effect of dilutive securities: | |||||||||||
Dilutive potential common shares | 69,444,000 | 68,226,000 | 67,163,000 | ||||||||
Income (loss) per common share - dilutive | |||||||||||
Loss from continuing operations - diluted (in dollars per share) | $ (0.28) | $ 0.10 | $ (0.06) | $ (0.30) | $ (0.39) | $ (0.01) | $ 0.03 | $ (0.06) | $ (0.54) | $ (0.42) | $ (0.11) |
Earnings from discontinued operations - diluted (in dollars per share) | 0.09 | (0.02) | 0.01 | (0.01) | (0.03) | 0.01 | 0 | 0.03 | 0.07 | 0.01 | 0 |
Loss per common share - diluted (in dollars per share) | $ (0.19) | $ 0.08 | $ (0.05) | $ (0.31) | $ (0.42) | $ 0 | $ 0.03 | $ (0.03) | $ (0.47) | $ (0.41) | $ (0.11) |
Anti-dilutive securities excluded from calculation of diluted loss per share (in shares) | 19,672,751 | 20,970,505 | 21,618,876 | ||||||||
Shares Reserved For Future Issuance | |||||||||||
Stock options granted under the incentive plans reserved for future issuance (in shares) | 88,333 | 88,333 | |||||||||
Shares of common stock issuable upon the vesting of RSUs | 259,981 | 259,981 | |||||||||
Shares of common stock available for future issuance under the Amended and Restated 2004 Stock Incentive Plan | 2,715,345 | 2,715,345 | |||||||||
Shares of common stock issuable pursuant to the convertible notes | 19,224,437 | 19,224,437 |
Commitments and Contingencies -
Commitments and Contingencies - Leases (Details) | Feb. 29, 2016item | Jan. 28, 2016item | Nov. 30, 2015USD ($)ft²store | Nov. 30, 2014USD ($) | Nov. 30, 2013USD ($) |
Retail leases | |||||
Equipment and office/retail rental expenses | $ | $ 4,965,000 | $ 4,946,000 | $ 4,204,000 | ||
Square feet of design and administrative offices | ft² | 30,915 | ||||
Number of stores transferred | 18 | ||||
Joe's Brand retail stores closed | 14 | ||||
Completed sale of assets | |||||
Retail leases | |||||
Number of stores to be retained and operated | store | 32 | ||||
Minimum | |||||
Retail leases | |||||
Operating lease agreements expiring term | 5 years | ||||
Percentage of annual sales volume | 6.00% | ||||
Maximum | |||||
Retail leases | |||||
Operating lease agreements expiring term | 10 years | ||||
Percentage of annual sales volume | 8.00% |
Commitments and Contingencies65
Commitments and Contingencies - Obligations (Details) | Nov. 30, 2015USD ($) |
Future Lease Obligations | |
2,016 | $ 4,587,000 |
2,017 | 4,425,000 |
2,018 | 4,073,000 |
2,019 | 2,889,000 |
2,020 | 2,499,000 |
Thereafter | 4,163,000 |
Future minimum rental payments | 22,636,000 |
Purchase commitments expected to be fulfilled within the next 12 months | 9,321,000 |
Letters of Credit | |
Contingent liability for letters of credit | $ 0 |
Commitments and Contingencies66
Commitments and Contingencies - Consideration (Details) - USD ($) | Feb. 18, 2013 | Feb. 18, 2013 | Feb. 28, 2013 | Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 |
Contingent Consideration Payments, Buy-Out Agreement and Earnout Subordination Agreement | ||||||
Contingent consideration expense | $ (1,609,000) | $ (3,025,000) | $ 6,302,000 | |||
Minimum | Modified merger agreement | ||||||
Contingent Consideration Payments, Buy-Out Agreement and Earnout Subordination Agreement | ||||||
Term under the original merger agreement for which overall payment has been fixed and reduced | 6 years | |||||
Maximum | Modified merger agreement | ||||||
Contingent Consideration Payments, Buy-Out Agreement and Earnout Subordination Agreement | ||||||
Term under the original merger agreement for which overall payment has been fixed and reduced | 10 years | |||||
Joe Dahan | ||||||
Contingent Consideration Payments, Buy-Out Agreement and Earnout Subordination Agreement | ||||||
Contingent consideration expense | $ 311,000 | |||||
Joe Dahan | Modified merger agreement | ||||||
Contingent Consideration Payments, Buy-Out Agreement and Earnout Subordination Agreement | ||||||
Aggregate fixed amount payable through weekly installments | $ 9,168,000 | |||||
Contingent consideration expense | $ 8,732,000 | |||||
Joe Dahan | Minimum | Modified merger agreement | ||||||
Contingent Consideration Payments, Buy-Out Agreement and Earnout Subordination Agreement | ||||||
Term under the original merger agreement for which overall payment has been fixed and reduced | 6 years | |||||
Joe Dahan | Maximum | Modified merger agreement | ||||||
Contingent Consideration Payments, Buy-Out Agreement and Earnout Subordination Agreement | ||||||
Term under the original merger agreement for which overall payment has been fixed and reduced | 10 years |
Segment Reporting and Operati67
Segment Reporting and Operations by Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Nov. 30, 2015 | Aug. 31, 2015 | May. 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2014 | Feb. 28, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
Segment information | |||||||||||
Net sales | $ 18,933 | $ 18,865 | $ 21,001 | $ 21,400 | $ 15,269 | $ 25,718 | $ 21,850 | $ 21,388 | $ 80,199 | $ 84,225 | $ 28,417 |
Gross profit | 6,203 | $ 8,323 | $ 9,304 | $ 8,449 | 7,068 | $ 12,438 | $ 10,699 | $ 9,518 | 32,279 | 39,723 | 13,966 |
Operating (loss) income | (33,289) | (30,668) | (9,309) | ||||||||
Capital expenditures | 123 | 341 | 1,480 | ||||||||
Total Capital Expenditures | 485 | 765 | 2,135 | ||||||||
Assets held for sale | (362) | (424) | (655) | ||||||||
Total assets | 76,258 | 203,949 | 76,258 | 203,949 | 223,023 | ||||||
Certain operating and intellectual property assets of Joe's brand and business | Sale of assets | |||||||||||
Segment information | |||||||||||
Assets held for sale | 362 | 424 | 655 | ||||||||
Wholesale | |||||||||||
Segment information | |||||||||||
Net sales | 66,713 | 68,377 | 15,621 | ||||||||
Gross profit | 23,022 | 29,006 | 5,227 | ||||||||
Operating (loss) income | 11,473 | 18,550 | 3,700 | ||||||||
Capital expenditures | 129 | ||||||||||
Total assets | 19,701 | 34,234 | 19,701 | 34,234 | 38,034 | ||||||
Retail | |||||||||||
Segment information | |||||||||||
Net sales | 13,486 | 15,848 | 12,796 | ||||||||
Gross profit | 9,257 | 10,717 | 8,739 | ||||||||
Operating (loss) income | (3,112) | (1,774) | (1,020) | ||||||||
Capital expenditures | 87 | 1,337 | |||||||||
Total assets | 4,092 | 6,707 | 4,092 | 6,707 | 6,534 | ||||||
Corporate and other | |||||||||||
Segment information | |||||||||||
Operating (loss) income | (41,650) | (47,444) | (11,989) | ||||||||
Capital expenditures | 123 | 254 | 14 | ||||||||
Total assets | $ 52,465 | $ 75,761 | $ 52,465 | $ 75,761 | $ 98,512 |
Related Party and Other Trans68
Related Party and Other Transactions (Details) - USD ($) | Jun. 30, 2015 | Jan. 19, 2015 | Dec. 01, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Feb. 18, 2013 | Feb. 18, 2013 | Dec. 01, 2011 | Dec. 01, 2009 | Dec. 01, 2007 | Oct. 25, 2007 | Oct. 25, 2007 | Jan. 31, 2013 | Feb. 28, 2013 | Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 |
Related party transactions | |||||||||||||||||
Contingent consideration expense | $ (1,609,000) | $ (3,025,000) | $ 6,302,000 | ||||||||||||||
Number of restricted shares issued | 40,000 | ||||||||||||||||
Maximum | Modified merger agreement | |||||||||||||||||
Related party transactions | |||||||||||||||||
Term under the original merger agreement for which overall payment has been fixed and reduced | 10 years | ||||||||||||||||
Minimum | Modified merger agreement | |||||||||||||||||
Related party transactions | |||||||||||||||||
Term under the original merger agreement for which overall payment has been fixed and reduced | 6 years | ||||||||||||||||
Joe Dahan | |||||||||||||||||
Related party transactions | |||||||||||||||||
Contingent consideration expense | 311,000 | ||||||||||||||||
Initial term of employment | 5 years | ||||||||||||||||
Period for automatic renewal of the term of the employment | 1 year | ||||||||||||||||
Annual salary | $ 300,000 | ||||||||||||||||
Joe Dahan | Modified merger agreement | |||||||||||||||||
Related party transactions | |||||||||||||||||
Contingent consideration expense | $ 8,732,000 | ||||||||||||||||
Aggregate fixed amount payable through weekly installments | $ 9,168,000 | ||||||||||||||||
Joe Dahan | Maximum | |||||||||||||||||
Related party transactions | |||||||||||||||||
Period for severance payment | 1 year | ||||||||||||||||
Joe Dahan | Maximum | Modified merger agreement | |||||||||||||||||
Related party transactions | |||||||||||||||||
Term under the original merger agreement for which overall payment has been fixed and reduced | 10 years | ||||||||||||||||
Joe Dahan | Minimum | Modified merger agreement | |||||||||||||||||
Related party transactions | |||||||||||||||||
Term under the original merger agreement for which overall payment has been fixed and reduced | 6 years | ||||||||||||||||
Albert Dahan | |||||||||||||||||
Related party transactions | |||||||||||||||||
Commission for purchase orders | $ 0 | 0 | 453,000 | ||||||||||||||
Ambre Dahan | |||||||||||||||||
Related party transactions | |||||||||||||||||
Amount paid per annum on a bi-weekly basis under the consulting arrangement | $ 175,000 | ||||||||||||||||
Amount paid under the consulting arrangement | 175,000 | ||||||||||||||||
Ever Blue LLC | |||||||||||||||||
Related party transactions | |||||||||||||||||
Royalty income recognized | $ 45,000 | $ 504,000 | $ 612,000 | ||||||||||||||
Marc Crossman | |||||||||||||||||
Related party transactions | |||||||||||||||||
Initial term of employment | 2 years | ||||||||||||||||
Period for automatic renewal of the term of the employment | 2 years | 2 years | 2 years | ||||||||||||||
Advance notice period required for non-renewal of employment agreement prior to the end of the term or upon occurrence of a change in control | 180 days | ||||||||||||||||
Annual salary | $ 429,300 | ||||||||||||||||
Annual discretionary bonus as a percentage of base salary | 50.00% | ||||||||||||||||
Agreement term | 12 months | ||||||||||||||||
Monthly payment | $ 35,775 | ||||||||||||||||
Number of restricted shares issued | 600,000 | ||||||||||||||||
Marc Crossman | Maximum | |||||||||||||||||
Related party transactions | |||||||||||||||||
Period for severance payment | 2 years | ||||||||||||||||
Peter Kim | |||||||||||||||||
Related party transactions | |||||||||||||||||
Initial term of employment | 3 years | ||||||||||||||||
Annual salary | $ 500,000 | ||||||||||||||||
Annual discretionary bonus as a percentage of base salary | 50.00% | ||||||||||||||||
Peter Kim | Maximum | |||||||||||||||||
Related party transactions | |||||||||||||||||
Period for severance payment | 1 year | ||||||||||||||||
Hamish Sandhu | |||||||||||||||||
Related party transactions | |||||||||||||||||
Initial term of employment | 1 year | ||||||||||||||||
Period for automatic renewal of the term of the employment | 1 year | ||||||||||||||||
Advance notice period required for non-renewal of employment agreement prior to the end of the term or upon occurrence of a change in control | 90 days | ||||||||||||||||
Annual salary | $ 325,000 | ||||||||||||||||
Annual discretionary bonus as a percentage of base salary | 10.00% | ||||||||||||||||
Hamish Sandhu | Maximum | |||||||||||||||||
Related party transactions | |||||||||||||||||
Period for severance payment | 1 year |
Supplemental Cash Flow Inform69
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
Significant Non-cash transactions | |||
Write off of fully depreciated fixed assets | $ 1,600 | $ 2,233 | |
Sale of fixed assets at net carrying value | 1,991 | ||
Additional cash flow information | |||
Cash paid during the year for interest | 10,373 | $ 10,639 | $ 1,710 |
Cash paid during the year for income taxes | $ 255 | $ 870 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) | 2 Months Ended | 12 Months Ended | ||
Nov. 30, 2013 | Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
Joe's Plan | ||||
Employee Benefit Plans | ||||
Eligible service period to participate in the defined contribution plan | 30 days | |||
Maximum contribution by employees as a percentage of their salary | 100.00% | |||
Eligible working hours to qualify for profit sharing | 500 hours | |||
Cost of the plan charged to operations | $ 30,000 | $ 27,000 | $ 22,000 | |
Employer matching contribution as a percentage of employee's compensation | 2.00% | |||
Employer matching contribution as a percentage of employee's contribution | 33.00% | |||
Employee's salary considered for matching employer's contribution (as a percent) | 6.00% | |||
Employer contribution under the match portion of the Plan | $ 134,000 | 154,000 | $ 141,000 | |
Hudson Plan | ||||
Employee Benefit Plans | ||||
Eligible service period to participate in the defined contribution plan | 6 months | |||
Eligible working hours to qualify for profit sharing | 1000 hours | |||
Cost of the plan charged to operations | $ 0 | |||
Employee's salary considered for matching employer's contribution (as a percent) | 3.00% | |||
Employer contribution under the match portion of the Plan | $ 75,000 | $ 63,000 | ||
Employer matching contribution for each $1.00 of employee's contribution | $ 0.50 |
Quarterly Results of Operatio71
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Nov. 30, 2015 | Aug. 31, 2015 | May. 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2014 | Feb. 28, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
Quarterly Results of Operations (Unaudited) | |||||||||||
Net sales | $ 18,933 | $ 18,865 | $ 21,001 | $ 21,400 | $ 15,269 | $ 25,718 | $ 21,850 | $ 21,388 | $ 80,199 | $ 84,225 | $ 28,417 |
Gross profit | 6,203 | 8,323 | 9,304 | 8,449 | 7,068 | 12,438 | 10,699 | 9,518 | 32,279 | 39,723 | 13,966 |
Loss before taxes | (23,536) | (6,089) | (4,017) | (6,268) | (30,327) | (667) | 3,123 | (5,670) | (39,910) | (33,541) | (10,550) |
Income tax (benefit) expense | (4,252) | (12,801) | 22 | 14,477 | (4,199) | (174) | 1,189 | (1,875) | (2,554) | (5,059) | (3,134) |
Income (loss) from continuing operations | (19,284) | 6,712 | (4,039) | (20,745) | (26,128) | (493) | 1,934 | (3,795) | (37,356) | (28,482) | (7,416) |
Income (loss) from discontinued operations | 6,241 | (1,053) | 690 | (850) | (2,024) | 769 | 405 | 1,616 | 5,028 | 766 | 102 |
Net loss and comprehensive loss | $ (13,043) | $ 5,659 | $ (3,349) | $ (21,595) | $ (28,152) | $ 276 | $ 2,339 | $ (2,179) | $ (32,328) | $ (27,716) | $ (7,314) |
Net income (loss) per share: | |||||||||||
Income (Loss) from Continuing Operations, Per Basic Share | $ (0.28) | $ 0.10 | $ (0.06) | $ (0.30) | $ (0.39) | $ (0.01) | $ 0.03 | $ (0.06) | $ (0.54) | $ (0.42) | $ (0.11) |
Income (loss) from discontinued operations, per share | 0.09 | (0.02) | 0.01 | (0.01) | (0.03) | 0.01 | 0 | 0.03 | 0.07 | 0.01 | 0 |
Earnings Per Share, Basic | (0.19) | 0.08 | (0.05) | (0.31) | (0.42) | 0 | 0.03 | (0.03) | (0.47) | (0.41) | (0.11) |
Income (Loss) from Continuing Operations, Per Diluted Share | (0.28) | 0.10 | (0.06) | (0.30) | (0.39) | (0.01) | 0.03 | (0.06) | (0.54) | (0.42) | (0.11) |
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Diluted Share | 0.09 | (0.02) | 0.01 | (0.01) | (0.03) | 0.01 | 0 | 0.03 | 0.07 | 0.01 | 0 |
(Loss) earnings per common share - diluted | $ (0.19) | $ 0.08 | $ (0.05) | $ (0.31) | $ (0.42) | $ 0 | $ 0.03 | $ (0.03) | $ (0.47) | $ (0.41) | $ (0.11) |
Schedule II Valuation of Qual72
Schedule II Valuation of Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | |
Allowance for doubtful accounts | |||
Description | |||
Balance at Beginning of Period | $ 78 | $ 30 | |
Additions Charged to Costs & Expenses | 1,220 | 87 | |
Charged to Other Accounts | $ 30 | ||
Deductions | (916) | (39) | |
Balance at End of Period | 382 | 78 | 30 |
Allowance for customer credits | |||
Description | |||
Balance at Beginning of Period | 5,894 | 2,020 | 21 |
Additions Charged to Costs & Expenses | 2,596 | 17,314 | 1,807 |
Charged to Other Accounts | 1,304 | ||
Deductions | (4,139) | (13,440) | (1,112) |
Balance at End of Period | 4,351 | 5,894 | 2,020 |
Allowances for inventories | |||
Description | |||
Balance at Beginning of Period | 590 | 594 | |
Additions Charged to Costs & Expenses | 862 | ||
Charged to Other Accounts | 595 | ||
Deductions | (250) | (4) | (1) |
Balance at End of Period | $ 1,202 | $ 590 | $ 594 |