LE 2014.08.01 Earnings Release



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 

FORM 8-K
 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): September 10, 2014

LANDS' END, INC.
(Exact Name of Registrant as Specified in its Charter)

 
Delaware
 
001-09769
 
36-2512786
 
 
 
 
 
(State or Other Jurisdiction of
Incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)
1 Lands’ End Lane
Dodgeville, Wisconsin
 
53595
(Address of Principal Executive Offices)
 
(Zip Code)

Registrant’s telephone number, including area code: (608) 935-9341
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (See General Instructions A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))







Item 2.02     Results of Operations and Financial Condition.
Lands’ End, Inc. (the “Company”) is furnishing herewith a press release issued on September 10, 2014 as Exhibit 99.1, which is included herein. This press release was issued to report the Company’s second quarter 2014 results.
Item 9.01    Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number
 
Description
99.1
 
Press Release of Lands’ End, Inc. dated September 10, 2014










SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
LANDS' END, INC.
Date: September 10, 2014
By:
/s/ Michael P. Rosera
 
 
Michael P. Rosera
 
 
Title: Executive Vice President, Chief Operating Officer/Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)








EXHIBIT INDEX
Exhibit No.
 
Description
99.1
 
Press Release of Lands’ End, Inc. dated September 10, 2014




LE 2014.08.01 Exhibit 99.1


Lands’ End Announces Second Quarter of Fiscal 2014 Results

Second Quarter Operating income increased 37.6% to $25.3 million

Dodgeville, WI - September 10, 2014 - Lands’ End, Inc. (NASDAQ: LE) today announced financial results for the second quarter ended August 1, 2014.

Second Quarter Highlights:
Merchandise sales and services, net increased 5.4% to $347.2 million from the second quarter last year. This was comprised of an increase in the Direct segment of 7.1% to $292.6 million and a decrease in the Retail segment of 2.9% to $54.6 million. Same store sales increased 2.8%.
Gross margin increased 310 basis points to 48.5% from the second quarter last year.
Selling and administrative expenses increased 9.8% to $138.3 million from the second quarter last year and included approximately $3.8 million of incentive compensation expense and $2.9 million of stand-alone public company related costs compared with a $2.4 million reversal of incentive compensation expense and no stand-alone public company related costs in the second quarter last year.
Operating income increased 37.6% to $25.3 million from the second quarter last year.
Net income increased 4.9% to $11.8 million from the second quarter last year and included interest expense of $6.2 million compared with no interest expense in the second quarter last year.
Diluted earnings per share were $0.37 in the second quarter compared with $0.35 last year
Adjusted EBITDA1 increased 26.6% to $30.1 million from the second quarter last year.

Edgar Huber, Lands’ End’s President and Chief Executive Officer, stated, “We are pleased with our second quarter results and our progress towards growing the business and building Lands’ End into a global lifestyle brand.  While the overall retail environment remained challenging, we continued to see positive customer response to our merchandising and marketing initiatives and remain focused on improving the contemporary relevance of the Lands’ End brand.   Improved merchandise assortment, modern creative presentation, better inventory management and continued expense controls all contributed to another quarter of strong sales and margin increases. In the second quarter, merchandise sales and services revenue increased 5.4% to $347.2 million while gross margin improved 310 basis points to 48.5% and operating income increased 37.6% to $25.3 million. Lands’ End has now achieved double digit year-over-year Adjusted EBITDA growth for more than four consecutive quarters. We believe we are well positioned to continue executing against our strategic initiatives to drive long-term sales and earnings growth.”


Second Quarter Results
Merchandise sales and services, net increased 5.4% to $347.2 million in the second quarter of 2014 from $329.6 million in the second quarter of 2013. Merchandise sales and services, net in the Direct segment increased 7.1% to $292.6 million driven by growth in all direct businesses due to improved sell through of current season merchandise. Merchandise sales and services, net in the Retail segment decreased 2.9% to $54.6 million driven by a decrease in the number of Lands’ End Shops at Sears and a decrease in Shop Your Way redemption credits resulting from the commercial agreements entered into with Sears Holdings Corporation and its subsidiaries as part of the Company’s separation, partially offset by an increase in same store sales. Same store sales in the Retail segment increased 2.8%, driven by higher sales in the Company’s Lands’ End Shops at Sears. On August 1, 2014, the Company operated 247 Lands’ End Shops at Sears and 14 Lands’ End Inlet stores.

Gross profit increased 12.5% to $168.4 million and gross margin increased 310 basis points to 48.5% in the second quarter of 2014 compared with $149.7 million and 45.4%, respectively, in the second quarter of





2013. The increase in gross margin was driven by increases in gross margin in the Direct segment, which improved 320 basis points to 49.2%, and in the Retail segment of 200 basis points to 44.7%. The Gross margin increases in both the Direct and Retail segments were attributable to improved merchandise assortment architecture and a more targeted promotional strategy.

Selling and administrative expenses increased 9.8% to $138.3 million in the second quarter of 2014 from $125.9 million in the second quarter of 2013. The second quarter of 2014 included approximately $3.8 million of incentive compensation expenses and $2.9 million of stand-alone public company related expenses. In the second quarter of 2013, the company had a $2.4 million reversal of incentive compensation expenses due to changes in the estimated annual incentive compensation and no stand-alone public company related expenses. The net increase in stand-alone public company and incentive compensation related expenses in the second quarter of 2014 from the second quarter of 2013 was approximately $9.1 million.

Depreciation and amortization expense decreased 9.7% to $4.8 million in the second quarter of 2014 from $5.3 million in the second quarter of 2013 primarily attributable to an increase in fully depreciated assets.

As a result of the above factors, Operating income in the second quarter of 2014 increased 37.6% to $25.3 million from $18.4 million in the second quarter of 2013.

Interest expense was $6.2 million in the second quarter of 2014 and was attributable to higher debt levels and costs related to the issuance of the term loan used to pay a $500 million dividend to a subsidiary of Sears Holdings Corporation immediately prior to the separation.

Income tax expense was $7.5 million for the second quarter of 2014 compared with $7.1 million in the second quarter of 2013. The effective tax rate was 38.6% in the second quarter of 2014 compared with 38.7% in the second quarter of 2013.
 
Net income increased 4.9% to $11.8 million, or $0.37 per diluted share, in the second quarter of 2014 compared with $11.3 million, or $0.35 per diluted share, in the second quarter of 2013.

Adjusted EBITDA1 increased 26.6% to $30.1 million in the second quarter of 2014 from $23.8 million in the second quarter of 2013.


Balance Sheet and Cash Flow Highlights

Cash was $132.8 million on August 1, 2014 compared to $28.3 million on August 2, 2013. Net cash provided by operations for the 26 weeks ended August 1, 2014 was $79.2 million more than the same period last year due to:

Improved inventory management

The net effect of changes in settlement methods with our former parent company and certain suppliers resulting from the separation
Increased Operating income
Offset by interest payments on debt

Inventory decreased 11.8% to $366.2 million on August 1, 2014 from $415.2 million on August 2, 2013.

The net effect of changes in settlement methods with our former parent company and certain suppliers included approximately $35 million in Accounts payable less $5 million in Accounts receivable as of August 1, 2014. These items would have been included in equity as part of Net parent company investment prior to our separation April 4, 2014 from Sears Holdings Corporation.






The Company had $163.7 million of availability under its asset-based senior secured credit facility and had long-term debt of $508.6 million as of August 1, 2014.

About Lands’ End, Inc.

Lands' End, Inc. (NASDAQ: LE) is a leading multi-channel retailer of casual clothing, accessories, footwear and home products. We offer products through catalogs, online at www.landsend.com and affiliated specialty and international websites, and through retail locations, primarily at Lands’ End Shops at Sears® and standalone Lands’ End Inlet® Stores. We are a classic American lifestyle brand with a passion for quality, legendary service and real value, and seek to deliver timeless style for men, women, kids and the home.

Forward-Looking Statements
This press release contains forward-looking statements. Forward-looking statements are subject to risks and uncertainties that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include, without limitation, information concerning our future financial performance, business strategy, plans, goals and objectives. Statements preceded or followed by, or that otherwise include, the words “believes,” “expects,” “anticipates,” “intends,” “project,” “estimates,” “plans,” “forecast,” “is likely to” and similar expressions or future or conditional verbs such as “will,” “may,” “would,” “should” and “could” are generally forward-looking in nature and not historical facts. Such statements are based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: our ability to offer merchandise and services that customers want to purchase; changes in customer preference for our branded merchandise; customers’ use of our digital platform; the success of our overall marketing strategies; our dependence on information technology and a failure of information technology systems, including with respect to our e-commerce operations, or an inability to upgrade or adapt our systems; fluctuations and increases in the costs of raw materials; impairment of our relationships with our vendors; our failure to maintain the security of customer, employee or company information; our failure to compete effectively in the apparel industry; the performance of our “store within a store” business model; if Sears, Roebuck and Co. sells or disposes of its retail stores or if its retail business does not attract customers or does not adequately promote the Lands’ End Shops at Sears; legal, regulatory, economic and political risks associated with international trade and those markets in which we conduct business and source our merchandise; our failure to protect or preserve the image of our brands and our intellectual property rights; increases in postage, paper and printing costs; failure by third parties who provide us with services in connection with certain aspects of our business to perform their obligations; our failure to timely and effectively obtain shipments of products from our vendors and deliver merchandise to our customers; reliance on promotions and markdowns to encourage consumer purchases; our failure to efficiently manage inventory levels; unseasonal or severe weather conditions; the seasonal nature of our business; the adverse effect on our reputation if our independent vendors do not use ethical business practices or comply with applicable laws and regulations; assessments for additional state taxes; our exposure to periodic litigation and other regulatory proceedings, including with respect to product liability claims; incurrence of charges due to impairment of goodwill, other intangible assets and long-lived assets; our failure to retain our executive management team and to attract qualified new





personnel; the impact on our business of adverse worldwide economic and market conditions, including economic factors that negatively impact consumer spending on discretionary items; the inability of our past performance generally, as reflected on our historical financial statements, to be indicative of our future performance; the impact of increased costs due to a decrease in our purchasing power following the separation from Sears Holdings and other losses of benefits associated with being a subsidiary of Sears Holdings; the failure of Sears Holdings or its subsidiaries to perform under various transaction agreements that have been executed in connection with the separation or our failure to have necessary systems and services in place when certain of the transaction agreements expire; potential indemnification liabilities to Sears Holdings pursuant to the separation and distribution agreement; our inability to engage in certain corporate transactions after the separation; our difficulty in operating as a separate entity following the separation; our failure to achieve some or all of the expected benefits of the separation, and adverse effects of the separation on our business; potential liabilities under fraudulent conveyance and transfer laws and legal capital requirements; increases in our expenses and administrative burden in relation to becoming a public company, in particular to bring us into compliance with certain provisions of the Sarbanes-Oxley Act of 2002; and other risks, uncertainties and factors discussed in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended January 31, 2014. We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available, except as required by law.


Contacts

ICR
John Rouleau / Rachel Schacter
203-682-8200
John.Rouleau@icrinc.com
Rachel.Schacter@icrinc.com

Lands’ End, Inc.
Michele Casper
Director of Public Relations
(608) 935-4633
Michele.Casper@landsend.com

Lands’ End, Inc.
Mike Rosera
Chief Operating Officer and Chief Financial Officer
(608) 935-9341




-Financial Tables Follow-






LANDS’ END, INC.
Condensed Consolidated and Combined Balance Sheets
(Unaudited)
(in thousands, except share data)
 
August 1,
2014
 
August 2,
2013
 
January 31, 2014
ASSETS
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
Cash
 
$
132,837

 
$
28,299

 
$
22,411

Restricted cash
 
3,300

 
3,300

 
3,300

Accounts receivable, net
 
24,818

 
18,046

 
33,617

Inventories, net
 
366,192

 
415,208

 
369,928

Prepaid expenses and other current assets
 
28,060

 
27,382

 
21,993

Total current assets
 
555,207

 
492,235

 
451,249

Property and equipment
 
98,574

 
101,276

 
101,096

Goodwill
 
110,000

 
110,000

 
110,000

Intangible assets, net
 
530,027

 
532,656

 
531,342

Other assets
 
23,286

 
670

 
588

TOTAL ASSETS
 
$
1,317,094

 
$
1,236,837

 
$
1,194,275

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
Accounts payable
 
$
163,249

 
$
139,614

 
$
115,387

Deferred tax liabilities
 
3,681

 
6,493

 
4,019

Other current liabilities
 
97,845

 
75,558

 
83,955

Total current liabilities
 
264,775

 
221,665

 
203,361

Long-term debt
 
508,563

 

 

Long-term deferred tax liabilities
 
170,461

 
195,303

 
195,534

Other liabilities
 
15,839

 
3,197

 
3,066

TOTAL LIABILITIES
 
959,638

 
420,165

 
401,961

Commitments and contingencies
 

 

 

STOCKHOLDERS' EQUITY
 
 
 
 
 
 
Common stock, par value $0.01- authorized: 480,000,000 shares; issued and outstanding: 31,956,521
 
320

 

 

Additional paid-in capital
 
340,958

 

 

Retained earnings
 
17,791

 

 

Net parent company investment
 

 
821,002

 
794,309

Accumulated other comprehensive loss
 
(1,613
)
 
(4,330
)
 
(1,995
)
Total stockholders’ equity
 
357,456

 
816,672

 
792,314

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
1,317,094

 
$
1,236,837

 
$
1,194,275








LANDS’ END, INC.
Condensed Consolidated and Combined Statements of Comprehensive Operations
(Unaudited)
 
 
13 Weeks Ended
 
26 Weeks Ended
(in thousands except per share data)
 
August 1, 2014
 
August 2, 2013
 
August 1, 2014
 
August 2, 2013
REVENUES
 
 
 
 
 
 
 
 
Merchandise sales and services, net
 
$
347,222

 
$
329,561

 
$
677,705

 
$
648,596

COSTS AND EXPENSES
 
 
 
 
 
 
 
 
Cost of sales (excluding depreciation and amortization)
 
178,816

 
179,887

 
347,277

 
344,334

Selling and administrative
 
138,283

 
125,889

 
276,489

 
262,865

Depreciation and amortization
 
4,825

 
5,346

 
9,827

 
10,998

Other operating expense, net
 

 
52

 
20

 
52

Total costs and expenses
 
321,924

 
311,174

 
633,613

 
618,249

Operating income
 
25,298

 
18,387

 
44,092

 
30,347

Interest expense
 
6,205

 

 
8,130

 

Other income, net
 
203

 
22

 
340

 
23

Income before income taxes
 
19,296

 
18,409

 
36,302

 
30,370

Income tax expense
 
7,451

 
7,120

 
13,589

 
11,745

NET INCOME
 
$
11,845

 
$
11,289

 
$
22,713

 
$
18,625

Other comprehensive income (loss), net of tax
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
 
(497
)
 
(364
)
 
382

 
(1,169
)
COMPREHENSIVE INCOME
 
$
11,348

 
$
10,925

 
$
23,095

 
$
17,456

NET INCOME PER COMMON SHARE ATTRIBUTABLE TO STOCKHOLDERS
 
 
 
 
 
 
 
 
Basic:
 
$
0.37

 
$
0.35

 
$
0.71

 
$
0.58

Diluted:
 
$
0.37

 
$
0.35

 
$
0.71

 
$
0.58

 
 
 
 
 
 
 
 
 
Basic weighted average common shares outstanding
 
31,957

 
31,957

 
31,957

 
31,957

Diluted weighted average common shares outstanding
 
31,962

 
31,957

 
31,959

 
31,957

 






Use and Definition of Non-GAAP Financial Measures
1Adjusted EBITDA-In addition to our Net income determined in accordance with accounting principles
generally accepted in the United States (“GAAP”), for purposes of evaluating operating performance, we use an Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), which is adjusted to exclude certain significant items as set forth below. Our management uses Adjusted EBITDA to evaluate the operating performance of our business, as well as for executive compensation metrics, for comparable periods. Adjusted EBITDA should not be used by investors or other third parties as the sole basis for formulating investment decisions as it excludes a number of important cash and non-cash recurring items.

While Adjusted EBITDA is a non-GAAP measurement, management believes that it is an important indicator of operating performance, and useful to investors, because:
EBITDA excludes the effects of certain on-going financing and investing activities from earnings by eliminating the effects of interest and depreciation costs.
Other significant items, while periodically affecting our results, may vary significantly from period to period and have a disproportionate effect in a given period, which affects comparability of results. We have adjusted our results for these items to make our statements more comparable and therefore more useful to investors as the items are not representative of our ongoing operations. For the 13 and 26 weeks ended August 1, 2014 and August 2, 2013, we excluded the loss on disposal of property and equipment as management considers the gains or losses on disposal of assets to result from investing decisions rather than ongoing operations.

LANDS' END, INC.
Adjusted EBITDA Reconciliation
(Unaudited)
 
13 Weeks Ended
 
August 1, 2014
 
August 2, 2013
(in thousands)
$’s
 
% of
Net Sales
 
$’s
 
% of
Net Sales
Net income
$
11,845

 
3.4
 %
 
$
11,289

 
3.4
 %
Income tax expense
7,451

 
2.1
 %
 
7,120

 
2.2
 %
Other income, net
(203
)
 
(0.1
)%
 
(22
)
 
 %
Interest expense
6,205

 
1.8
 %
 

 
 %
Operating income
25,298

 
7.3
 %
 
18,387

 
5.6
 %
Depreciation and amortization
4,825

 
1.4
 %
 
5,346

 
1.6
 %
Loss on disposal of property and equipment

 
 %
 
52

 
 %
Adjusted EBITDA
$
30,123

 
8.7
 %
 
$
23,785

 
7.2
 %





 
26 Weeks Ended
 
August 1, 2014
 
August 2, 2013
(in thousands)
$’s
 
% of
Net Sales
 
$’s
 
% of
Net Sales
Net income
$
22,713

 
3.4
 %
 
$
18,625

 
2.9
 %
Income tax expense
13,589

 
2.0
 %
 
11,745

 
1.8
 %
Other income, net
(340
)
 
(0.1
)%
 
(23
)
 
 %
Interest expense
8,130

 
1.2
 %
 

 
 %
Operating income
44,092

 
6.5
 %
 
30,347

 
4.7
 %
Depreciation and amortization
9,827

 
1.5
 %
 
10,998

 
1.7
 %
Loss on disposal of property and equipment
20

 
 %
 
52

 
 %
Adjusted EBITDA
$
53,939

 
8.0
 %
 
$
41,397

 
6.4
 %







LANDS’ END, INC.
Condensed Consolidated and Combined Statements of Cash Flows
(Unaudited)

 
 
26 Weeks Ended
(in thousands)
 
August 1, 2014
 
August 2, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
Net income
 
$
22,713

 
$
18,625

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
9,827

 
10,998

Amortization of debt issuance costs
 
621

 

Loss on disposal of property and equipment
 
20

 
52

Stock-based compensation
 
782

 

Deferred income taxes
 
4,250

 
3,063

Change in operating assets and liabilities:
 
 
 
 
Inventories
 
4,801

 
(38,486
)
Accounts payable
 
50,319

 
28,765

Other operating assets
 
9,012

 
7,443

Other operating liabilities
 
2,842

 
(4,499
)
Net cash provided by operating activities
 
105,187

 
25,961

CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
Proceeds from sale of property and equipment
 

 
9

Purchases of property and equipment
 
(5,716
)
 
(1,762
)
Net cash used in investing activities
 
(5,716
)
 
(1,753
)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
Contributions from / (distributions to) parent company, net
 
8,784

 
(24,021
)
Proceeds from issuance of long-term debt
 
515,000

 

Payments on term loan facility
 
(1,287
)
 

Debt issuance costs
 
(11,396
)
 

Dividend paid to a subsidiary of Sears Holdings Corporation
 
(500,000
)
 

Net cash provided by (used in) financing activities
 
11,101

 
(24,021
)
Effects of exchange rate changes on cash
 
(146
)
 
(145
)
NET INCREASE IN CASH
 
110,426

 
42

CASH, BEGINNING OF PERIOD
 
22,411

 
28,257

CASH, END OF PERIOD
 
$
132,837

 
$
28,299

SUPPLEMENTAL INFORMATION:
 
 
 
 
Supplemental Cash Flow Data:
 
 
 
 
Unpaid liability to acquire property and equipment
 
$
1,646

 
$
1,527

Income taxes paid
 
$
7,853

 
$
3,294

Interest paid
 
$
7,959

 
$







Financial information by segment is presented in the following tables for the 13 and 26 weeks ended August 1, 2014 and August 2, 2013, respectively.
LANDS' END, INC.
Segment Financial Information
(Unaudited)
(in thousands)
 
Direct
 
Retail
 
Corporate/ Other
 
Total
13 Weeks Ended August 1, 2014
 
 
 
 
 
 
 
 
Merchandise sales and services, net
 
$
292,562

 
$
54,625

 
$
35

 
$
347,222

Costs and expenses:
 
 
 
 
 
 
 
 
Cost of sales (excluding depreciation and amortization)
 
148,600

 
30,216

 

 
178,816

Selling and administrative
 
105,442

 
23,449

 
9,392

 
138,283

Depreciation and amortization
 
3,845

 
651

 
329

 
4,825

Total costs and expenses
 
257,887

 
54,316

 
9,721

 
321,924

Operating income (loss)
 
34,675

 
309

 
(9,686
)
 
25,298

Interest expense
 

 

 
6,205

 
6,205

Other income, net
 

 

 
203

 
203

Income (loss) before income taxes
 
34,675

 
309

 
(15,688
)
 
19,296

Interest expense
 

 

 
6,205

 
6,205

Other income, net
 

 

 
203

 
203

Depreciation and amortization
 
3,845

 
651

 
329

 
4,825

Adjusted EBITDA
 
$
38,520

 
$
960

 
$
(9,357
)
 
$
30,123

 
 
 
 
 
 
 
 
 
Total assets
 
$
1,060,419

 
$
82,433

 
$
174,242

 
$
1,317,094

 
 
 
 
 
 
 
 
 
Capital expenditures
 
$
3,964

 
$
142

 
$
62

 
$
4,168






LANDS' END, INC.
Segment Financial Information
(Unaudited)
(in thousands)
 
Direct
 
Retail
 
Corporate/ Other
 
Total
13 Weeks Ended August 2, 2013
 
 
 
 
 
 
 
 
Merchandise sales and services, net
 
$
273,273

 
$
56,257

 
$
31

 
$
329,561

Costs and expenses:
 
 
 
 
 
 
 
 
Cost of sales (excluding depreciation and amortization)
 
147,667

 
32,220

 

 
179,887

Selling and administrative
 
97,637

 
24,872

 
3,380

 
125,889

Depreciation and amortization
 
4,127

 
886

 
333

 
5,346

Other operating expense, net
 

 

 
52

 
52

Total costs and expenses
 
249,431

 
57,978

 
3,765

 
311,174

Operating income (loss)
 
23,842

 
(1,721
)
 
(3,734
)
 
18,387

Other income, net
 

 

 
22

 
22

Income (loss) before income taxes
 
23,842

 
(1,721
)
 
(3,712
)
 
18,409

Other income, net
 

 

 
22

 
22

Depreciation and amortization
 
4,127

 
886

 
333

 
5,346

Loss on property and equipment
 

 

 
52

 
52

Adjusted EBITDA
 
$
27,969

 
$
(835
)
 
$
(3,349
)
 
$
23,785

 
 
 
 
 
 
 
 
 
Total assets
 
$
1,093,478

 
$
93,351

 
$
50,008

 
$
1,236,837

 
 
 
 
 
 
 
 
 
Capital expenditures
 
$
924

 
$

 
$
20

 
$
944







LANDS' END, INC.
Segment Financial Information
(Unaudited)
(in thousands)
 
Direct
 
Retail
 
Corporate/ Other
 
Total
26 Weeks Ended August 1, 2014
 
 
 
 
 
 
 
 
Merchandise sales and services, net
 
$
568,603

 
$
109,055

 
$
47

 
$
677,705

Costs and expenses:
 
 
 
 
 
 
 
 
Cost of sales (excluding depreciation and amortization)
 
287,712

 
59,565

 

 
347,277

Selling and administrative
 
213,108

 
46,204

 
17,177

 
276,489

Depreciation and amortization
 
7,860

 
1,295

 
672

 
9,827

Other operating expense, net
 

 

 
20

 
20

Total costs and expenses
 
508,680

 
107,064

 
17,869

 
633,613

Operating income (loss)
 
59,923

 
1,991

 
(17,822
)
 
44,092

Interest expense
 

 

 
8,130

 
8,130

Other income, net
 

 

 
340

 
340

Income (loss) before income taxes
 
59,923

 
1,991

 
(25,612
)
 
36,302

Interest expense
 

 

 
8,130

 
8,130

Other income, net
 

 

 
340

 
340

Depreciation and amortization
 
7,860

 
1,295

 
672

 
9,827

Loss on disposal of property and equipment
 

 

 
20

 
20

Adjusted EBITDA
 
$
67,783

 
$
3,286

 
$
(17,130
)
 
$
53,939

 
 
 
 
 
 
 
 
 
Total assets
 
$
1,060,419

 
$
82,433

 
$
174,242

 
$
1,317,094

 
 
 
 
 
 
 
 
 
Capital expenditures
 
$
5,431

 
$
142

 
$
143

 
$
5,716








LANDS' END, INC.
Segment Financial Information
(Unaudited)
(in thousands)
 
Direct
 
Retail
 
Corporate/ Other
 
Total
26 Weeks Ended August 2, 2013
 
 
 
 
 
 
 
 
Merchandise sales and services, net
 
$
536,595

 
$
111,957

 
$
44

 
$
648,596

Costs and expenses:
 
 
 
 
 
 
 
 
Cost of sales (excluding depreciation and amortization)
 
284,568

 
59,766

 

 
344,334

Selling and administrative
 
202,771

 
49,840

 
10,254

 
262,865

Depreciation and amortization
 
8,555

 
1,773

 
670

 
10,998

Other operating expense, net
 

 

 
52

 
52

Total costs and expenses
 
495,894

 
111,379

 
10,976

 
618,249

Operating income (loss)
 
40,701

 
578

 
(10,932
)
 
30,347

Other income, net
 

 

 
23

 
23

Income (loss) before income taxes
 
40,701

 
578

 
(10,909
)
 
30,370

Other income, net
 

 

 
23

 
23

Depreciation and amortization
 
8,555

 
1,773

 
670

 
10,998

Loss on sale of property and equipment
 

 

 
52

 
52

Adjusted EBITDA
 
$
49,256

 
$
2,351

 
$
(10,210
)
 
$
41,397

 
 
 
 
 
 
 
 
 
Total assets
 
$
1,093,478

 
$
93,351

 
$
50,008

 
$
1,236,837

 
 
 
 
 
 
 
 
 
Capital expenditures
 
$
1,737

 
$
1

 
$
24

 
$
1,762