J.Jill, Inc. [JILL] Filings

10-Q 1 jill-20221029.htm 10-Q 10-Q

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 October 29, 2022

☐ 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: 001-38026

J.Jill, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware		45-1459825
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4 Batterymarch Park, Quincy, MA 02169		02169
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (617) 376-4300

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


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	JILL	New York Stock Exchange

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, 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 ☒

Securities registered pursuant to Section 12(g) of the Act: None

As of December 1, 2022, the registrant had 10,151,938 shares of common stock, $0.01 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets (Unaudited)	2
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)	3
	Condensed Consolidated Statements of Shareholders’ Deficit (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows (Unaudited)	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	24
Exhibit Index		24
Signatures		26

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

J.Jill, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share data)


	October 29, 2022			January 29, 2022
Assets
Current assets:
Cash and cash equivalents	$	90,080		$	35,957
Accounts receivable, net		7,979			5,811
Inventories, net		60,129			56,024
Prepaid expenses and other current assets		26,490			25,456
Total current assets		184,678			123,248
Property and equipment, net		49,030			57,329
Intangible assets, net		75,069			80,711
Goodwill		59,697			59,697
Operating lease assets, net		120,848			130,744
Other assets		78			120
Total assets	$	489,400		$	451,849
Liabilities and Shareholders’ Deficit
Current liabilities:
Accounts payable	$	47,843		$	49,924
Accrued expenses and other current liabilities		63,724			48,853
Current portion of long-term debt		2,739			7,692
Current portion of operating lease liabilities		34,517			32,276
Total current liabilities		148,823			138,745
Long-term debt, net of discount and current portion		196,446			196,511
Long-term debt, net of discount - related party		8,428			5,605
Deferred income taxes		10,233			10,704
Operating lease liabilities, net of current portion		126,205			143,207
Other liabilities		1,257			1,731
Total liabilities		491,392			496,503
Commitments and contingencies (see Note 11)
Shareholders’ Deficit
Common stock, par value $0.01 per share; 50,000,000 shares authorized; 10,151,938 and 10,001,422 shares issued and outstanding at October 29, 2022 and January 29, 2022, respectively		102			100
Additional paid-in capital		211,268			209,747
Accumulated deficit		(213,362	)		(254,501	)
Total shareholders’ deficit		(1,992	)		(44,654	)
Total liabilities and shareholders’ deficit	$	489,400		$	451,849

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

Table of Contents

J.Jill, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(in thousands, except share and per share data)


	For the Thirteen Weeks Ended				For the Thirty-Nine Weeks Ended
	October 29, 2022		October 30, 2021		October 29, 2022		October 30, 2021
Net sales	$	150,204	$	151,731	$	467,616	$	440,053
Costs of goods sold (exclusive of depreciation and amortization)		45,181		47,196		140,656		138,339
Gross profit		105,023		104,535		326,960		301,714
Selling, general and administrative expenses		84,873		85,531		254,624		250,516
Impairment of long-lived assets		1,300		—		1,408		—
Operating income		18,850		19,004		70,928		51,198
Fair value adjustment of derivative (Note 5)		—		—		—		2,775
Fair value adjustment of warrants - related party (Note 8)		—		—		—		56,984
Interest expense, net		4,348		4,567		11,553		13,130
Interest expense, net - related party		1,092		607		2,823		1,597
Income (loss) before provision for income taxes		13,410		13,830		56,552		(23,288	)
Income tax provision		4,491		2,592		15,413		8,430
Net income (loss) and total comprehensive income (loss)	$	8,919	$	11,238	$	41,139	$	(31,718	)
Per share data (Note 8):
Net income (loss) per common share:
Basic	$	0.64	$	0.81	$	2.95	$	(2.65	)
Diluted	$	0.62	$	0.79	$	2.89	$	(2.65	)
Weighted average common shares:
Basic		13,962,467		13,798,130		13,922,460		11,971,405
Diluted		14,297,925		14,174,218		14,240,486		11,971,405

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

Table of Contents

J.Jill, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT (UNAUDITED)

(in thousands, except common share data)


						Additional						Total
	Common Stock					Paid-in			Accumulated			Shareholders’
	Shares			Amount		Capital			Deficit			Equity (Deficit)
Balance, January 29, 2022		10,001,422		$	100	$	209,747		$	(254,501	)	$	(44,654	)
Vesting of restricted stock units		146,852			—		—			—			—
Surrender of shares to pay withholding taxes		(48,430	)		—		(821	)		—			(821	)
Equity-based compensation		—			—		742			—			742
Net income		—			—		—			14,415			14,415
Balance, April 30, 2022		10,099,844		$	100	$	209,668		$	(240,086	)	$	(30,318	)
Vesting of restricted stock units		62,090			2		(2	)		—			—
Surrender of shares to pay withholding taxes		(13,430	)		—		(244	)		—			(244	)
Equity-based compensation		—			—		976			—			976
Net income		—			—		—			17,805			17,805
Balance, July 30, 2022		10,148,504		$	102	$	210,398		$	(222,281	)	$	(11,781	)
Vesting of restricted stock units		4,863			—		—			—			—
Surrender of shares to pay withholding taxes		(1,429	)		—		(27	)		—			(27	)
Equity-based compensation		—			—		897			—			897
Net income		—			—		—			8,919			8,919
Balance, October 29, 2022		10,151,938		$	102	$	211,268		$	(213,362	)	$	(1,992	)


						Additional						Total
	Common Stock					Paid-in			Accumulated			Shareholders’
	Shares			Amount		Capital			Deficit			Deficit
Balance, January 30, 2021		9,631,633		$	97	$	129,363		$	(226,358	)	$	(96,898	)
Vesting of restricted stock units		111,248			1		(1	)		—			—
Surrender of shares to pay withholding taxes		(31,171	)		—		(271	)		—			(271	)
Equity-based compensation		—			—		443			—			443
Net loss		—			—		—			(18,308	)		(18,308	)
Balance, May 1, 2021		9,711,710		$	98	$	129,534		$	(244,666	)	$	(115,034	)
Vesting of restricted stock units		1,075			—		—			—			—
Surrender of shares to pay withholding taxes		(318	)		—		(19	)		—			(19	)
Withholding tax on net share settlement of equity-based compensation plans							(7	)					(7	)
Equity-based compensation		—			—		649			—			649
Shares issued to Priming lenders (Note 5)		272,097			2		5,210			—			5,212
Reclass of warrants to equity (Note 8)		—			—		72,981			—			72,981
Net loss		—			—		—			(24,648	)		(24,648	)
Balance, July 31, 2021		9,984,564		$	100	$	208,348		$	(269,314	)	$	(60,866	)
Vesting of restricted stock units		4,864			—		—			—			—
Surrender of shares to pay withholding taxes		(1,429	)		—		—			—			—
Withholding tax on net share settlement of equity-based compensation plans		—			—		(28	)		—			(28	)
Equity-based compensation		—			—		789			—			789
Net income		—			—		—			11,238			11,238
Balance, October 30, 2021		9,987,999		$	100	$	209,109		$	(258,076	)	$	(48,867	)

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

Table of Contents

J.Jill, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)


	For the Thirty-Nine Weeks Ended
	October 29, 2022			October 30, 2021
Net income (loss)	$	41,139		$	(31,718	)
Operating activities:
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization		19,445			22,093
Impairment of long-lived assets		1,408			—
Adjustment for exited retail stores		(246	)		(1,181	)
Loss on disposal of fixed assets		231			887
Noncash interest expense, net		4,138			3,567
Noncash change in fair value of derivative		—			2,775
Noncash change in fair value of warrants - related party		—			56,984
Equity-based compensation		2,615			1,881
Deferred rent incentives		(539	)		(860	)
Deferred income taxes		(472	)		(58	)
Changes in operating assets and liabilities:
Accounts receivable, net		(2,168	)		(280	)
Inventories		(4,105	)		1,132
Prepaid expenses and other current assets		(1,034	)		(641	)
Accounts payable		(2,767	)		(2,288	)
Accrued expenses and other current liabilities		14,336			7,833
Operating lease assets and liabilities		(5,360	)		(6,754	)
Other noncurrent assets and liabilities		99			51
Net cash provided by operating activities		66,720			53,423
Investing activities:
Purchases of property and equipment		(5,173	)		(2,488	)
Net cash used in investing activities		(5,173	)		(2,488	)
Financing activities:
Borrowings under revolving credit facility		—			62,226
Repayments of revolving credit facility		—			(73,372	)
Repayments on debt		(6,332	)		(26,399	)
Surrender of shares to pay withholding taxes		(1,092	)		(324	)
Net cash used in financing activities		(7,424	)		(37,869	)
Net change in cash		54,123			13,066
Cash and cash equivalents:

J.Jill, Inc. [JILL] Filings
10-Q	[2022-12-06]
10-Q	[2022-09-01]
10-Q	[2022-06-08]
10-K	[2022-04-13]
10-Q	[2021-12-14]
10-Q	[2021-09-09]
10-Q	[2021-06-09]
10-K	[2021-04-12]
10-Q	[2020-12-11]
10-Q	[2020-09-10]
10-Q	[2020-07-28]
10-K	[2020-06-15]
10-Q	[2019-12-12]
10-Q	[2019-09-11]
10-Q	[2019-06-11]
10-K	[2019-04-08]
10-Q	[2018-12-13]
10-Q	[2018-09-18]
10-Q	[2018-06-14]
10-K	[2018-04-13]
10-Q	[2017-12-12]
10-Q	[2017-09-12]
10-Q	[2017-06-12]
10-K	[2017-04-28]
S-1	[2017-02-10]