DULUTH HOLDINGS INC. [DLTH] Filings

10-Q 1 dlth-20230730x10q.htm 10-Q dlth-20230730x10q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________

FORM 10-Q

_________________________________________


þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 30, 2023


o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number 001-37641

_________________________________________

DULUTH HOLDINGS INC.

(Exact name of registrant as specified in its charter)

_________________________________________

	99
Wisconsin	39-1564801
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

201 East Front Street Mount Horeb, Wisconsin	53572
(Address of principal executive offices)	(Zip Code)

(608) 424-1544

(Registrant’s telephone number, including area code)

_________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class B Common Stock, No Par Value	DLTH	NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	o	Accelerated Filer	þ
Non-accelerated Filer	o	Smaller Reporting Company	þ
		Emerging Growth Company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The number of shares outstanding of the Registrant’s Class A common stock, no par value, as of August 30, 2023, was 3,364,200.

The number of shares outstanding of the Registrant’s Class B common stock, no par value, as of August 30, 2023, was 31,212,128.

DULUTH HOLDINGS INC.

QUARTERLY REPORT ON FORM 10-Q

FOR QUARTER ENDED July 30, 2023

INDEX



	Part I—Financial Information	Page
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of July 30, 2023 and January 30, 2022 (Unaudited)	3
	Condensed Consolidated Statements of Operations for the three and six months ended July 30, 2023 and July 31, 2022 (Unaudited)	5
	Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and six months ended July 30, 2023 and July 31, 2022 (Unaudited)	6
	Condensed Consolidated Statement of Shareholders’ Equity for the six months ended July, 2023 (Unaudited)	7
	Condensed Consolidated Statement of Shareholders’ Equity for the six months ended July 31, 2022 (Unaudited)	8
	Condensed Consolidated Statements of Cash Flows for the six months ended July 30, 2023 and July 31, 2022 (Unaudited)	9
	Notes to Condensed Consolidated Financial Statements (Unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
	Part II—Other Information
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 6.	Exhibits	29

Signatures		30

‎

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

DULUTH HOLDINGS INC.

Condensed Consolidated Balance Sheets - Assets

(Unaudited)

(Amounts in thousands)


	July 30, 2023		January 29, 2023
ASSETS
Current Assets:
Cash and cash equivalents	$	11,148	$	45,548
Receivables		5,758		6,041
Income tax receivable		140		—
Inventory, less reserves of $1,182 and $1,837, respectively		157,126		154,922
Prepaid expenses & other current assets		17,665		15,154
Total current assets		191,837		221,665
Property and equipment, net		125,970		112,564
Operating lease right-of-use assets		126,132		131,753
Finance lease right-of-use assets, net		45,742		47,206
Available-for-sale security		5,254		5,539
Other assets, net		7,853		8,727
Deferred tax assets		353		—
Total assets	$	503,141	$	527,454

The accompanying notes are an integral part of these condensed consolidated financial statements.

‎

DULUTH HOLDINGS INC.

Condensed Consolidated Balance Sheets – Liabilities and Shareholders’ Equity

(Unaudited)

(Amounts in thousands)


	July 30, 2023		January 29, 2023
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable	$	59,259	$	56,547
Accrued expenses and other current liabilities		28,215		40,815
Income taxes payable		—		1,761
Current portion of operating lease liabilities		15,993		15,571
Current portion of finance lease liabilities		2,964		2,842
Current maturities of TRI long-term debt		807		768
Total current liabilities		107,238		118,304
Operating lease liabilities, less current maturities		110,999		117,366
Finance lease liabilities, less current maturities		35,906		37,425
TRI long-term debt, less current maturities		25,538		25,913
Deferred tax liabilities		—		1,249
Total liabilities		279,681		300,257
Shareholders' equity:
Preferred stock, no par value; 10,000 shares authorized; no shares issued or outstanding as of July 30, 2023 and January 29, 2023		—		—
Common stock (Class A), no par value; 10,000 shares authorized; 3,364 shares issued and outstanding as of July 30, 2023 and January 29, 2023		—		—
Common stock (Class B), no par value; 200,000 shares authorized; 31,371 shares issued and 31,217 shares outstanding as of July 30, 2023 and 30,191 shares issued and 30,079 shares outstanding as of January 29, 2023		—		—
Treasury stock, at cost; 154 and 112 shares as of July 30, 2023 and January 29, 2023, respectively		(1,733)		(1,459)
Capital stock		101,415		98,842
Retained earnings		127,299		133,172
Accumulated other comprehensive loss		(295)		(148)
Total shareholders' equity of Duluth Holdings Inc.		226,686		230,407
Noncontrolling interest		(3,226)		(3,210)
Total shareholders' equity		223,460		227,197
Total liabilities and shareholders' equity	$	503,141	$	527,454

The accompanying notes are an integral part of these condensed consolidated financial statements.

‎

DULUTH HOLDINGS INC.

Condensed Consolidated Statements of Operations

(Unaudited)

(Amounts in thousands, except per share figures)


	Three Months Ended				Six Months Ended
	July 30, 2023		July 31, 2022		July 30, 2023		July 31, 2022
Net sales	$	139,099	$	141,511	$	262,858	$	264,415
Cost of goods sold (excluding depreciation and amortization)		67,616		65,903		125,724		121,744
Gross profit		71,483		75,608		137,134		142,671
Selling, general and administrative expenses		72,926		71,739		143,126		139,733
Operating (loss) income		(1,443)		3,869		(5,992)		2,938
Interest expense		880		879		1,814		1,755
Other income, net		109		78		257		124
(Loss) income before income taxes		(2,214)		3,068		(7,549)		1,307
Income tax (benefit) expense		(202)		727		(1,660)		289
Net (loss) income		(2,012)		2,341		(5,889)		1,018
Less: Net loss attributable to noncontrolling interest		(8)		(27)		(16)		(56)
Net (loss) income attributable to controlling interest	$	(2,004)	$	2,368	$	(5,873)	$	1,074
Basic earnings per share (Class A and Class B):
Weighted average shares of common stock outstanding		32,952		32,766		32,912		32,732
Net (loss) income per share attributable to controlling interest	$	(0.06)	$	0.07	$	(0.18)	$	0.03
Diluted earnings per share (Class A and Class B):
Weighted average shares and equivalents outstanding		32,952		32,766		32,912		32,910
Net (loss) income per share attributable to controlling interest	$	(0.06)	$	0.07	$	(0.18)	$	0.03

The accompanying notes are an integral part of these condensed consolidated financial statements.

‎

DULUTH HOLDINGS INC.

Condensed Consolidated Statements of Comprehensive (Loss) Income

(Unaudited)

(Amounts in thousands)


	Three Months Ended				Six Months Ended
	July 30, 2023		July 31, 2022		July 30, 2023		July 31, 2022
Net (loss) income	$	(2,012)	$	2,341	$	(5,889)	$	1,018
Other comprehensive income
Securities available-for sale:
Unrealized security loss arising during the period		(118)		(202)		(197)		(651)
Income tax benefit		(30)		(51)		(50)		(164)
Other comprehensive loss		(88)		(151)		(147)		(487)
Comprehensive (loss) income		(2,100)		2,190		(6,036)		531
Comprehensive loss attributable to noncontrolling interest		(8)		(27)		(16)		(56)
Comprehensive (loss) income attributable ‎to controlling interest	$	(2,092)	$	2,217	$	(6,020)	$	587

The accompanying notes are an integral part of these condensed consolidated financial statements.

‎

DULUTH HOLDINGS INC.

Condensed Consolidated Statement of Shareholders’ Equity

(Unaudited)

(Amounts in thousands)


	Six Months Ended July 30, 2023
								Accumulated		Noncontrolling
	Capital stock							other		interest in		Total
				Treasury		Retained		comprehensive		variable interest		shareholders'
	Shares	Amount		stock		earnings		income (loss)		entity		equity
Balance at January 29, 2023	33,443	$	98,842	$	(1,459)	$	133,172	$	(148)	$	(3,210)	$	227,197
Issuance of common stock	1,081		136		—		—		—		—		136
Stock-based compensation	—		990		—		—		—		—		990
Restricted stock forfeitures	(9)		—		—		—		—		—		—
Restricted stock surrendered for taxes	(41)		—		(273)		—		—		—		(273)
Other comprehensive loss	—		—		—		—		(59)		—		(59)
Net loss	—		—		—		(3,869)		—		(8)		(3,877)
Balance at April 30, 2023	34,474	$	99,968	$	(1,732)	$	129,303	$	(207)	$	(3,218)	$	224,114
Issuance of common stock	111		153		—		—		—		—		153
Stock-based compensation	—		1,294		—		—		—		—		1,294
Restricted stock forfeitures	(4)		—		—		—		—		—		—
Restricted stock surrendered for taxes	—		—		(1)		—		—		—		(1)
Other comprehensive loss	—		—		—		—		(88)		—		(88)
Net income (loss)	—		—		—		(2,004)		—		(8)		(2,012)
Balance at July 30, 2023	34,581	$	101,415	$	(1,733)	$	127,299	$	(295)	$	(3,226)	$	223,460

The accompanying notes are an integral part of these condensed consolidated financial statements.

‎

DULUTH HOLDINGS INC.

Condensed Consolidated Statement of Shareholders’ Equity

(Unaudited)

(Amounts in thousands)


	Six Months Ended July 31, 2022
								Accumulated		Noncontrolling
	Capital stock							other		interest in		Total
				Treasury		Retained		comprehensive		variable interest		shareholders'
	Shares	Amount		stock		earnings		income		entity		equity
Balance at January 30, 2022	33,071	$	95,515	$	(1,002)	$	130,868	$	489	$	(3,152)	$	222,718
Issuance of common stock	292		166		—		—		—		—		166
Stock-based compensation	—		618		—		—		—		—		618
Restricted stock forfeitures	(1)		—		—		—		—		—		—
Restricted stock surrendered for taxes	(33)

DULUTH HOLDINGS INC. [DLTH] Filings
10-Q	[2023-09-01]
10-Q	[2023-06-02]
10-K	[2023-03-17]
10-Q	[2022-12-02]
10-Q	[2022-09-02]
10-Q	[2022-06-03]
10-K	[2022-03-25]
10-Q	[2021-12-03]
10-Q	[2021-09-03]
10-Q	[2021-06-04]
10-K	[2021-03-26]
10-Q	[2020-12-04]
10-Q	[2020-09-04]
10-Q	[2020-06-05]
10-K	[2020-03-20]
10-Q	[2019-12-06]
10-Q	[2019-09-13]
10-Q	[2019-06-14]
10-K	[2019-04-19]
10-Q	[2018-12-07]
10-Q	[2018-09-06]
10-Q	[2018-06-06]
10-K	[2018-03-21]
10-Q	[2017-12-07]
10-Q	[2017-09-06]
10-Q	[2017-06-07]
10-K	[2017-03-22]
10-Q	[2016-12-09]
10-Q	[2016-09-09]
10-Q	[2016-06-08]
10-K	[2016-04-08]
10-Q	[2015-12-18]
S-1	[2015-10-06]