Company Quick10K Filing
J Crew Group
Price-0.00 EPS-154,673
Shares0 P/E0
MCap-0 P/FCF0
Net Debt3 EBIT-154
TEV3 TEV/EBIT-0
TTM 2019-11-02, in MM, except price, ratios
10-Q 2019-11-02 Filed 2019-12-02
10-Q 2019-08-03 Filed 2019-09-13
10-Q 2019-05-04 Filed 2019-05-29
10-K 2019-02-02 Filed 2019-03-20
10-Q 2018-11-03 Filed 2018-11-29
10-Q 2018-08-04 Filed 2018-08-28
10-Q 2018-05-05 Filed 2018-05-30
10-K 2018-02-03 Filed 2018-03-27
10-Q 2017-10-28 Filed 2017-11-21
10-Q 2017-07-29 Filed 2017-08-23
10-Q 2017-04-29 Filed 2017-06-12
10-K 2017-01-28 Filed 2017-03-21
10-Q 2016-10-29 Filed 2016-11-22
10-Q 2016-07-30 Filed 2016-08-31
10-Q 2016-04-30 Filed 2016-05-25
10-K 2016-01-30 Filed 2016-03-17
10-Q 2015-10-31 Filed 2015-12-03
10-Q 2015-08-01 Filed 2015-08-27
10-Q 2015-05-02 Filed 2015-06-04
10-K 2015-01-31 Filed 2015-03-17
10-Q 2014-11-01 Filed 2014-12-04
10-Q 2014-08-02 Filed 2014-09-04
10-Q 2014-05-03 Filed 2014-06-04
10-K 2014-02-01 Filed 2014-03-24
10-Q 2013-08-03 Filed 2013-09-11
10-Q 2013-05-04 Filed 2013-06-06
10-K 2013-02-02 Filed 2013-03-20
10-Q 2012-10-27 Filed 2012-11-28
10-Q 2012-07-28 Filed 2012-08-29
10-Q 2012-04-28 Filed 2012-05-30
10-K 2012-01-28 Filed 2012-03-19
10-Q 2011-10-29 Filed 2011-12-01
10-K 2011-01-29 Filed 2011-03-21
10-Q 2010-10-30 Filed 2010-12-07
10-Q 2010-07-31 Filed 2010-09-03
10-Q 2010-07-30 Filed 2011-09-01
10-Q 2010-05-01 Filed 2010-06-02
10-K 2010-01-30 Filed 2010-03-19
8-K 2020-05-04 Bankruptcy, Regulation FD, Exhibits
8-K 2020-05-03 Enter Agreement, Off-BS Arrangement, Other Events, Exhibits
8-K 2020-03-02 Earnings, Exhibits
8-K 2020-03-02 Enter Agreement, Exhibits
8-K 2020-01-27 Officers, Exhibits
8-K 2020-01-17 Regulation FD
8-K 2019-12-08 Enter Agreement, Exhibits
8-K 2019-12-02 Earnings, Exhibits
8-K 2019-12-02 Enter Agreement, Regulation FD, Exhibits
8-K 2019-09-13 Officers, Other Events, Exhibits
8-K 2019-09-13 Earnings, Exhibits
8-K 2019-09-13 Regulation FD, Exhibits
8-K 2019-05-29 Earnings, Exhibits
8-K 2019-04-11 Officers, Other Events
8-K 2019-03-20 Earnings, Exhibits
8-K 2019-02-01 Officers
8-K 2019-01-18 Officers
8-K 2018-11-17 Officers, Exhibits
8-K 2018-09-19 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2018-05-30 Earnings, Exhibits
8-K 2018-03-27 Earnings, Exhibits
8-K 2018-02-02 Officers
8-K 2018-01-16 Officers

JCG 10Q Quarterly Report

Part I - Financial Information
Item 1. Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosure About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 5. Other Information
Item 6. Exhibits
EX-10.1 jcg-ex101_193.htm
EX-10.2 jcg-ex102_192.htm
EX-31.1 jcg-ex311_9.htm
EX-31.2 jcg-ex312_8.htm
EX-32.1 jcg-ex321_7.htm

J Crew Group Earnings 2019-11-02

Balance SheetIncome StatementCash Flow
3.72.71.70.6-0.4-1.42012201420172020
Assets, Equity
0.80.50.2-0.2-0.5-0.82012201420172020
Rev, G Profit, Net Income
0.20.10.0-0.1-0.2-0.32012201420172020
Ops, Inv, Fin

10-Q 1 jcg-10q_20191102.htm 10-Q jcg-10q_20191102.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

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

For the quarterly period ended November 2, 2019

Or

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

Commission

File Number

 

Registrant, State of Incorporation

Address and Telephone Number

 

I.R.S. Employer

Identification No.

333-175075

 

 

 

22-2894486

 

J.CREW GROUP, INC.

(Incorporated in Delaware)

 

225 Liberty Street

New York, New York 10281

Telephone: (212) 209-2500

 

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

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

None

 

N/A

 

N/A

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        No   

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        No   

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

 

  

Accelerated Filer

 

 

 

 

 

Non-Accelerated Filer

 

 

Smaller Reporting Company

 

 

 

 

 

 

 

 

  

Emerging growth company

 

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.        

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock

 

Outstanding at November 29, 2019

Common Stock, $.01 par value per share

 

1,000 shares

*

The Registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, but is not required to file such reports under such sections.

 

 

 

 


 

J.CREW GROUP, INC.

TABLE OF CONTENTS – FORM 10-Q

 

 

 

Page
Number

 

 

 

PART I. FINANCIAL INFORMATION

 

 

 

 

Item 1.

Condensed Consolidated Financial Statements (unaudited):

3

 

 

 

 

Condensed Consolidated Balance Sheets at November 2, 2019 and February 2, 2019

3

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the thirteen weeks ended November 2, 2019 and November 3, 2018

4

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the thirty-nine weeks ended November 2, 2019 and November 3, 2018

5

 

 

 

 

Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the thirty-nine weeks ended November 2, 2019 and November 3, 2018

6

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the thirty-nine weeks ended November 2, 2019 and November 3, 2018

7

 

 

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

8

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

 

 

 

Item 3.

Quantitative and Qualitative Disclosure About Market Risk

37

 

 

 

Item 4.

Controls and Procedures

38

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

39

 

 

 

Item 1A.

Risk Factors

39

 

 

 

Item 5.

Other Information

40

 

 

 

Item 6.

Exhibits

41

 

 

 

2


 

PART I – FINANCIAL INFORMATION

 

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

J.CREW GROUP, INC.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except share data)

 

 

 

November 2,

2019

 

 

February 2,

2019

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

28,956

 

 

$

25,738

 

Restricted cash

 

 

 

 

 

13,747

 

Accounts receivable, net

 

 

44,158

 

 

 

40,342

 

Merchandise inventories, net

 

 

484,496

 

 

 

390,470

 

Prepaid expenses and other current assets

 

 

59,997

 

 

 

84,942

 

Refundable income taxes

 

 

6,978

 

 

 

7,331

 

Total current assets

 

 

624,585

 

 

 

562,570

 

Property and equipment, net

 

 

231,489

 

 

 

243,620

 

Right-of-use lease assets

 

 

493,073

 

 

 

 

Intangible assets, net

 

 

297,536

 

 

 

301,397

 

Goodwill

 

 

107,900

 

 

 

107,900

 

Other assets

 

 

4,172

 

 

 

6,164

 

Total assets

 

$

1,758,755

 

 

$

1,221,651

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

274,027

 

 

$

259,705

 

Other current liabilities

 

 

251,853

 

 

 

244,864

 

Borrowings under the ABL Facility

 

 

217,900

 

 

 

70,800

 

Current portion of right-of-use lease liabilities

 

 

116,338

 

 

 

 

Due to Parent

 

 

41,376

 

 

 

37,462

 

Interest payable

 

 

8,368

 

 

 

23,866

 

Current portion of long-term debt

 

 

21,600

 

 

 

32,070

 

Total current liabilities

 

 

931,462

 

 

 

668,767

 

Long-term debt, net

 

 

1,663,806

 

 

 

1,673,282

 

Long-term right-of-use lease liabilities

 

 

468,364

 

 

 

 

Lease-related deferred credits, net

 

 

 

 

 

105,877

 

Deferred income taxes, net

 

 

17,034

 

 

 

16,872

 

Other liabilities

 

 

31,992

 

 

 

29,096

 

Total liabilities

 

 

3,112,658

 

 

 

2,493,894

 

Stockholders’ deficit:

 

 

 

 

 

 

 

 

Common stock $0.01 par value; 1,000 shares authorized, issued and outstanding

 

 

 

 

 

 

Additional paid-in capital

 

 

733,268

 

 

 

733,229

 

Accumulated other comprehensive loss

 

 

(3,357

)

 

 

(1,967

)

Accumulated deficit

 

 

(2,083,814

)

 

 

(2,003,505

)

Total stockholders’ deficit

 

 

(1,353,903

)

 

 

(1,272,243

)

Total liabilities and stockholders’ deficit

 

$

1,758,755

 

 

$

1,221,651

 

 

 

 

 

 

 

See notes to unaudited condensed consolidated financial statements.

 

3


 

J.CREW GROUP, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands)

 

 

 

For the

Thirteen

Weeks Ended

November 2, 2019

 

 

For the

Thirteen

Weeks Ended

November 3, 2018

 

Revenues:

 

 

 

 

 

 

 

 

Net sales

 

$

567,458

 

 

$

564,585

 

Other

 

 

58,179

 

 

 

57,615

 

Total revenues

 

 

625,637

 

 

 

622,200

 

Cost of goods sold, including buying and occupancy costs

 

 

371,095

 

 

 

383,762

 

Gross profit

 

 

254,542

 

 

 

238,438

 

Selling, general and administrative expenses

 

 

235,054

 

 

 

202,828

 

Impairment losses

 

 

8,009

 

 

 

2,947

 

Income from operations

 

 

11,479

 

 

 

32,663

 

Interest expense, net

 

 

37,304

 

 

 

35,141

 

Loss before income taxes

 

 

(25,825

)

 

 

(2,478

)

Provision (benefit) for income taxes

 

 

(5,968

)

 

 

3,218

 

Net loss

 

$

(19,857

)

 

$

(5,696

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

Reclassification of losses on cash flow hedges, net of tax, to earnings

 

 

1,735

 

 

 

308

 

Unrealized gain (loss) on cash flow hedges, net of tax

 

 

(492

)

 

 

343

 

Foreign currency translation adjustments

 

 

(325

)

 

 

(12

)

Comprehensive loss

 

$

(18,939

)

 

$

(5,057

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to unaudited condensed consolidated financial statements.

 

4


 

J.CREW GROUP, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands)

 

 

 

For the

Thirty-nine

Weeks Ended

November 2, 2019

 

 

For the

Thirty-nine

Weeks Ended

November 3, 2018

 

Revenues:

 

 

 

 

 

 

 

 

Net sales

 

$

1,615,246

 

 

$

1,622,832

 

Other

 

 

177,726

 

 

 

127,391

 

Total revenues

 

 

1,792,972

 

 

 

1,750,223

 

Cost of goods sold, including buying and occupancy costs

 

 

1,115,207

 

 

 

1,078,976

 

Gross profit

 

 

677,765

 

 

 

671,247

 

Selling, general and administrative expenses

 

 

632,824

 

 

 

596,323

 

Impairment losses

 

 

12,889

 

 

 

9,813

 

Income from operations

 

 

32,052

 

 

 

65,111

 

Interest expense, net

 

 

111,949

 

 

 

102,524

 

Loss before income taxes

 

 

(79,897

)

 

 

(37,413

)

Provision for income taxes

 

 

412

 

 

 

8,302

 

Net loss

 

$

(80,309

)

 

$

(45,715

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

Reclassification of losses on cash flow hedges, net of tax, to earnings

 

 

2,539

 

 

 

1,669

 

Unrealized gain (loss) on cash flow hedges, net of tax

 

 

(3,790

)

 

 

2,560

 

Foreign currency translation adjustments

 

 

(139

)

 

 

(490

)

Comprehensive loss

 

$

(81,699

)

 

$

(41,976

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to unaudited condensed consolidated financial statements.

5


 

J.CREW GROUP, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Deficit

(unaudited)

(in thousands, except shares)

 

 

 

Common stock

 

 

Additional

paid-in

 

 

Accumulated

 

 

Accumulated

other

comprehensive

 

 

Total

stockholders’

 

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit

 

 

income (loss)

 

 

deficit

 

Balance at February 3, 2018

 

 

1,000

 

 

$

 

 

$

733,071

 

 

$

(1,883,426

)

 

$

(2,603

)

 

$

(1,152,958

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(33,925

)

 

 

 

 

 

(33,925

)

Share-based compensation

 

 

 

 

 

 

 

 

46

 

 

 

 

 

 

 

 

 

46

 

Reclassification of realized losses on cash flow

   hedges, net of tax, to earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

996

 

 

 

996

 

Unrealized gain on cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,418

 

 

 

2,418

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(331

)

 

 

(331

)

Balance at May 5, 2018

 

 

1,000

 

 

 

 

 

 

733,117

 

 

 

(1,917,351

)

 

 

480

 

 

 

(1,183,754

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(6,094

)

 

 

 

 

 

(6,094

)

Share-based compensation

 

 

 

 

 

 

 

 

74

 

 

 

 

 

 

 

 

 

74

 

Reclassification of realized losses on cash flow

   hedges, net of tax, to earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

365

 

 

 

365

 

Unrealized loss on cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(201

)

 

 

(201

)

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(147

)

 

 

(147

)

Balance at August 4, 2018

 

 

1,000

 

 

 

 

 

 

733,191

 

 

 

(1,923,445

)

 

 

497

 

 

 

(1,189,757

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(5,696

)

 

 

 

 

 

(5,696

)

Share-based compensation

 

 

 

 

 

 

 

 

(43

)

 

 

 

 

 

 

 

 

(43

)

Reclassification of realized losses on cash flow

   hedges, net of tax, to earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

308

 

 

 

308

 

Unrealized gain on cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

343

 

 

 

343

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12

)

 

 

(12

)

Balance at November 3, 2018

 

 

1,000

 

 

$

 

 

$

733,148

 

 

$

(1,929,141

)

 

$

1,136

 

 

$

(1,194,857

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at February 2, 2019

 

 

1,000

 

 

$

 

 

$

733,229

 

 

$

(2,003,505

)

 

$

(1,967

)

 

$

(1,272,243

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(16,230

)

 

 

 

 

 

(16,230

)

Share-based compensation

 

 

 

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

4

 

Reclassification of realized gains on cash flow

   hedges, net of tax, to earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(333

)

 

 

(333

)

Unrealized loss on cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(666

)

 

 

(666

)

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

48

 

 

 

48

 

Balance at May 4, 2019

 

 

1,000

 

 

 

 

 

 

733,233

 

 

 

(2,019,735

)

 

 

(2,918

)

 

 

(1,289,420

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(44,222

)

 

 

 

 

 

(44,222

)

Share-based compensation

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

 

 

 

17

 

Reclassification of realized losses on cash flow

   hedges, net of tax, to earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,137

 

 

 

1,137

 

Unrealized loss on cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,632

)

 

 

(2,632

)

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

138

 

 

 

138

 

Balance at August 3, 2019

 

 

1,000

 

 

 

 

 

 

733,250

 

 

 

(2,063,957

)

 

 

(4,275

)

 

 

(1,334,982

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(19,857

)

 

 

 

 

 

(19,857

)

Share-based compensation

 

 

 

 

 

 

 

 

18

 

 

 

 

 

 

 

 

 

18

 

Reclassification of realized losses on cash flow

   hedges, net of tax, to earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,735

 

 

 

1,735

 

Unrealized loss on cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(492

)

 

 

(492

)

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(325

)

 

 

(325

)

Balance at November 2, 2019

 

 

1,000

 

 

$

 

 

$

733,268

 

 

$

(2,083,814

)

 

$

(3,357

)

 

$

(1,353,903

)

See notes to unaudited condensed consolidated financial statements.

6


 

J.CREW GROUP, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

 

 

 

For the

Thirty-nine

Weeks Ended

November 2, 2019

 

 

For the

Thirty-nine

Weeks Ended

November 3, 2018

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net loss

 

$

(80,309

)

 

$

(45,715

)

Adjustments to reconcile to cash flows from operating activities:

 

 

 

 

 

 

 

 

Depreciation of property and equipment

 

 

59,415

 

 

 

67,385

 

Impairment losses

 

 

12,889

 

 

 

9,813

 

Amortization of deferred financing costs and debt discount

 

 

5,387

 

 

 

5,371

 

Amortization of intangible assets

 

 

3,851

 

 

 

5,405

 

Reclassification of hedging losses to earnings

 

 

2,539

 

 

 

2,274

 

Deferred income taxes

 

 

162

 

 

 

3,695

 

Share-based compensation

 

 

39

 

 

 

77

 

Foreign currency transaction gains

 

 

(124

)

 

 

(230

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(3,816

)

 

 

(35,718

)

Merchandise inventories, net

 

 

(94,066

)

 

 

(273,493

)

Prepaid expenses and other current assets

 

 

9,731

 

 

 

1,086

 

Other assets

 

 

1,522

 

 

 

(1,683

)

Accounts payable and other

 

 

2,481

 

 

 

82,009

 

Federal and state income taxes

 

 

789

 

 

 

4,069

 

Net cash used in operating activities

 

 

(79,510

)

 

 

(175,655

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(52,483

)

 

 

(35,519

)

Net cash used in investing activities

 

 

(52,483

)

 

 

(35,519

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Net borrowings under the ABL Facility

 

 

147,100

 

 

 

148,500

 

Proceeds from Notes

 

 

1,003

 

 

 

 

Costs paid in connection with refinancings of debt

 

 

 

 

 

(74

)

Principal repayments of Term Loan Facility

 

 

(26,607

)

 

 

(11,752

)

Net cash provided by financing activities

 

 

121,496

 

 

 

136,674

 

Effect of changes in foreign exchange rates on cash, cash equivalents and restricted cash

 

 

(32

)

 

 

(706

)

Decrease in cash, cash equivalents and restricted cash

 

 

(10,529

)

 

 

(75,206

)

Beginning balance

 

 

39,485

 

 

 

107,066

 

Ending balance

 

$

28,956

 

 

$

31,860

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

Income taxes paid

 

$

837

 

 

$

977

 

Interest paid

 

$

121,106

 

 

$

106,971

 

 

 

 

See notes to unaudited condensed consolidated financial statements.


7


 

J.CREW GROUP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the thirteen and thirty-nine weeks ended November 2, 2019 and November 3, 2018

(Dollars in thousands, unless otherwise indicated)

 

1. Basis of Presentation  

J.Crew Group, Inc. and its wholly owned subsidiaries (the “Company” or “Group”) were acquired (the “Acquisition”) on March 7, 2011 through a merger with a subsidiary of Chinos Holdings, Inc. (the “Parent”). The Parent was formed by investment funds affiliated with TPG Capital, L.P. (“TPG”) and Leonard Green & Partners, L.P. (“LGP” and, together with TPG, the “Sponsors”). Subsequent to the Acquisition, Group became an indirect, wholly owned subsidiary of Parent, which is owned by affiliates of the Sponsors, investors and members of management. Prior to March 7, 2011, the Company operated as a public company with its common stock traded on the New York Stock Exchange.

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. Therefore, these financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2019.

The Company’s fiscal year ends on the Saturday closest to January 31. All references to “fiscal 2019” represent the 52-week fiscal year that will end on February 1, 2020 and to “fiscal 2018” represent the 52-week fiscal year that ended February 2, 2019.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to present fairly in all material respects the Company’s financial position, results of operations and cash flows for the applicable interim periods. Certain prior year amounts have been reclassified to conform to current period presentation. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or for the fiscal year as a whole.

Management is required to make estimates and assumptions about future events in preparing financial statements in conformity with generally accepted accounting principles. These estimates and assumptions affect the amounts of assets, liabilities, revenues and expenses at the date of the unaudited condensed consolidated financial statements. While management believes that past estimates and assumptions have been materially accurate, current estimates are subject to change if different assumptions as to the outcome of future events are made. Management evaluates estimates and judgments on an ongoing basis and predicates those estimates and judgments on historical experience and on reasonable factors. Since future events and their effects cannot be determined with absolute certainty, actual results may differ from the estimates used in preparing the accompanying unaudited condensed consolidated financial statements.

 

2. Revenue Recognition

Overview

The Company generates revenue from three sources: (i) customers who shop in its brick-and-mortar stores, (ii) customers who shop on its websites and (iii) wholesale customers who buy and resell its merchandise. The Company recognizes revenue at (i) the point-of-sale in brick-and-mortar stores, (ii) the date of receipt by a customer in the e-commerce business and (iii) the time ownership is transferred in the wholesale business.

8


 

Disaggregation of Revenue  

A summary of disaggregated revenue is as follows:

 

 

For the

Thirteen

Weeks Ended

 

 

For the

Thirty-nine

Weeks Ended

 

 

 

November 2, 2019

 

 

November 3, 2018

 

 

November 2, 2019

 

 

November 3, 2018

 

J.Crew

 

$

415,802

 

 

$

430,857

 

 

$

1,190,962

 

 

$

1,251,611

 

Madewell

 

 

151,656

 

 

 

133,728