J.Jill, Inc. Announces Second Quarter 2022 Results

Continued Disciplined Execution of Operating Model Drives Strong Profitability

 Net Sales Growth of 0.7% and Comparable Sales Growth of 0.8% vs. Q2 FY2021

Gross Profit Growth of 2.9% and Gross Margin increase of 150bps vs. Q2 FY2021

Income from Operations grew 19.9% to $28.2M vs. Q2 FY2021

J.Jill, Inc. JILL today announced financial results for the second quarter ended July 30, 2022.

Claire Spofford, President and Chief Executive Officer of J.Jill, Inc. stated, "We are pleased to have delivered a record quarter of Adjusted EBITDA while navigating a volatile consumer environment. Our results reflect the disciplined execution of our operating model focused on driving full price sales, regularly flowing newness, and managing expenses."

Ms. Spofford, continued, "As we look to the remainder of the year, we plan to continue to execute against our initiatives including investing in our plans for long-term profitable growth while remaining prudent with our expectations related to the consumer. As part of our growth strategy, we are focused on modernizing the J.Jill brand to increase relevance with both new and loyal customers. We recently announced our ‘Welcome Everybody' campaign focused on delivering an elevated shopping experience online and in stores, that celebrates the totality of all women. We remain confident in our ability to deliver against our objectives and expect to leverage the operating disciplines and stronger foundation we now have in place to continue to drive results."

For the second quarter ended July 30, 2022:

  • Total net sales for the thirteen weeks ended July 30, 2022 were up 0.7% to $160.3 million compared to $159.2 million for the thirteen weeks ended July 31, 2021.
  • Total company comparable sales, which includes comparable store and direct to consumer sales, increased by 0.8% for the second quarter of fiscal 2022.
  • Direct to consumer net sales were down 0.7% compared to the second quarter of fiscal 2021 and represented 45.7% of sales.
  • Gross profit was $112.5 million compared to $109.4 million in the second quarter of fiscal 2021. Gross margin was 70.1% compared to 68.7% in the second quarter of fiscal 2021. The year over year gross margin increase was driven by strong full price selling and reduced promotions which more than offset approximately 140bps of freight expense due to supply chain disruption which began in the third quarter of fiscal 2021.
  • SG&A was $84.3 million compared to $85.8 million in the second quarter of fiscal 2021. In comparing the second quarter of fiscal 2022 to fiscal 2021, SG&A benefited from $0.6 million of lower non-recurring and other one-time expenses. Excluding the non-recurring and other one-time costs from both periods, SG&A as a percentage of total net sales was 52.6% compared to 53.5% in the second quarter of fiscal 2021.
  • Income from Operations was $28.2 million compared to $23.5 million in the second quarter of fiscal 2021. Adjusted Income from Operations*, which excludes non-recurring items and adjustments for costs to exit retail stores was $28.2 million compared to $24.1 million in the second quarter of fiscal 2021.
  • Interest expense was $4.5 million compared to $4.7 million in the second quarter of fiscal 2021.
  • During the second quarter of fiscal 2022, the Company recorded an income tax provision of $5.9 million compared to $4.4 million in the second quarter of fiscal 2021 and the effective tax rate was 24.9% compared to (22.0%) in the second quarter of fiscal 2021.
  • Net Income was $17.8 million compared to Net Loss of $24.6 million in the second quarter of fiscal 2021 which included $39.0 million related to the fair value adjustment of the warrants and the Priming Loan embedded derivative for the thirteen weeks ended July 31, 2021.
  • Net Income per Diluted Share was $1.25 compared to a Net Loss of $1.98 in the second quarter of fiscal 2021 including the impact of non-recurring items. Excluding the impact of these items, Adjusted Net Income per Diluted Share* in the second quarter of fiscal 2022 was $1.24 compared to $0.93 in the second quarter of fiscal 2021.
  • Adjusted EBITDA* for the second quarter of fiscal 2022 was $35.6 million compared to $32.7 million in the second quarter of fiscal 2021. Adjusted EBITDA margin* for the second quarter of fiscal 2022 was 22.2% compared to 20.5% in the second quarter of fiscal 2021.
  • The Company closed 2 stores in the second quarter of fiscal 2022 and ended the quarter with 247 stores.

For the twenty-six weeks ended July 30, 2022:

  • Total net sales were up 10.1% to $317.4 million compared to $288.3 million for the twenty-six weeks ended July 31, 2021. Sales for the twenty-six weeks ended July 30, 2022 benefited from an increase in Retail customer traffic as well as strong full-price sales and lower levels of promotions.
  • Total company comparable sales, which includes comparable store and direct to consumer sales, increased by 11.1% for the twenty-six weeks ended July 30, 2022.
  • Direct to consumer net sales were down 1.3% over 2021 and represented 46.0% of total net sales, compared to 51.3% in the twenty-six weeks ended July 31, 2021.
  • Gross profit was $221.9 million compared to $197.2 million in the twenty-six weeks ended July 31, 2021. Gross margin was 69.9% compared to 68.4% in the twenty-six weeks ended July 31, 2021. The year over year gross margin increase was driven by strong full price selling.
  • SG&A was $169.9 million compared to $165.0 million for the twenty-six weeks ended July 31, 2021 . In comparing the twenty-six weeks ended July 30, 2022 to the twenty-six weeks ended July 31, 2021, SG&A benefited from $0.9 million of lower non-recurring and other one-time expenses. Excluding the non-recurring and other one-time costs from both periods, SG&A as a percentage of total net sales was 53.6% compared to 57.0% in the twenty-six weeks ended July 31, 2021.
  • Income from Operations was $52.1 million compared to $32.2 million in the twenty-six weeks ended July 31, 2021. Adjusted Income from Operations*, which excludes the non-recurring items and impairment charges, was $51.9 million compared to Adjusted Income from Operations* of $33.0 million in the twenty-six weeks ended July 31, 2021. For the twenty-six weeks ended July 30, 2022 the Company incurred $0.1 million of impairment charges.
  • Interest expense was $8.9 million compared to $9.6 million in the twenty-six weeks ended July 31, 2021.
  • During the twenty-six weeks ended July 30, 2022, the Company recorded an income tax provision of $10.9 million compared to $5.8 million in the twenty-six weeks ended July 31, 2021, and the effective tax rate was 25.3% compared to (15.7%) in the twenty-six weeks ended July 31, 2021.
  • Net Income was $32.2 million compared to a Net Loss of $43.0 million which included $59.8 million related to the fair value adjustment of the warrants and the Priming Loan embedded derivative for the twenty-six weeks ended July 31, 2021.
  • Net Income per Diluted Share was $2.27 compared to a Net Loss of $3.88 in the twenty-six weeks ended July 31, 2021 including the impact of non-recurring items. Excluding the impact of these items, Adjusted Net Income per Diluted Share* in the twenty-six weeks ended July 30, 2022 was $2.26 compared to $1.17 in the twenty-six weeks ended July 31, 2021.
  • Adjusted EBITDA* for the twenty-six weeks ended July 30, 2022 was $66.9 million compared to $49.6 million in the twenty-six weeks ended July 31, 2021.
  • The Company closed 6 stores in the twenty-six weeks ended July 30, 2022 and ended the period with 247 stores.

Balance Sheet Highlights

  • Cash flow from operations for the twenty-six weeks ended July 30, 2022 was $35.5 million compared to $27.9 million in the twenty-six weeks ended July 31, 2021. The Company ended the second quarter of fiscal 2022 with a cash balance of $61.9 million.
  • Inventory at the end of the second quarter of fiscal 2022 was $54.4 million compared to $48.5 million at the end of the second quarter of fiscal 2021. The 12.2% increase compared to the prior year was primarily driven by elevated levels of in-transit to improve on-time deliveries of product despite continuing supply chain disruption.
  • The company continues to explore options to refinance its existing term loan credit facility.

*Non-GAAP financial measures. Please see "Non-GAAP Financial Measures" and "Reconciliation of GAAP Net Income to Adjusted EBITDA, Adjusted Income from Operations and Adjusted Net Income" for more information.

Outlook
For the third quarter of fiscal 2022, the Company expects revenues to be flat to down 3.0% compared to the third quarter of fiscal 2021, and for Adjusted EBITDA to be in the range of $21.0 million and $23.0 million.

For fiscal 2022, the Company now expects total capital expenditures of about $15.0 million and to close net 10 to 14 stores, including the opening of up to 2 new stores late in the fourth quarter.

Conference Call Information
A conference call to discuss second quarter 2022 results is scheduled for today, September 1, 2022, at 8:00 a.m. Eastern Time. Those interested in participating in the call are invited to dial (888) 330-3391 or (646) 960-0845 if calling internationally. Please dial in approximately 10 minutes prior to the start of the call and reference Conference ID 2289963 when prompted. A live audio webcast of the conference call will be available online at http://investors.jjill.com/Investors-Relations/News-Events/events.

A taped replay of the conference call will be available approximately two hours following the call and can be accessed both online and by dialing (800) 770-2030 or (647) 362-9199. The pin number to access the telephone replay is 2289963. The telephone replay will be available until Thursday, September 08, 2022.

About J.Jill, Inc.
J.Jill is a premier omnichannel retailer and nationally recognized women's apparel brand committed to delighting customers with great wear-now product. The brand represents an easy, thoughtful and inspired style that reflects the confidence of remarkable women who live life with joy, passion and purpose. J.Jill offers a guiding customer experience through 247 stores nationwide and a robust ecommerce platform. J.Jill is headquartered outside Boston. For more information, please visit www.jjill.com or http://investors.jjill.com. The information included on our websites is not incorporated by reference herein.

Non-GAAP Financial Measures
To supplement our unaudited consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), we use the following non-GAAP measures of financial performance:

  • Adjusted EBITDA, which represents net income (loss) plus interest expense, provision (benefit) for income taxes, depreciation and amortization, equity-based compensation expense, impairments of goodwill, intangible assets and other long-lived assets, fair value adjustments of warrants and derivatives and other non-recurring expenses and one-time items. We present Adjusted EBITDA on a consolidated basis because management uses it as a supplemental measure in assessing our operating performance, and we believe that it is helpful to investors, securities analysts and other interested parties as a measure of our comparative operating performance from period to period. We also use Adjusted EBITDA as one of the primary methods for planning and forecasting overall expected performance of our business and for evaluating on a quarterly and annual basis actual results against such expectations. Further, we recognize Adjusted EBITDA as a commonly used measure in determining business value and as such, use it internally to report results.
  • Adjusted Income (Loss) from Operations, which represents operating income (loss) plus impairments of goodwill, intangible assets and other long-lived assets and other non-recurring expense and one-time items. We present Adjusted Income (Loss) from Operations because management uses it as a supplemental measure in assessing our operating performance, and we believe that it is helpful to investors, securities analysts, and other interested parties as a measure of our comparative operating performance from period to period.
  • Adjusted Net Income (Loss), which represents net income (loss) plus impairments of goodwill, intangible assets and other long-lived assets, fair value adjustments of warrants and derivatives and other non-recurring expenses and one-time items. We present Adjusted Net Income (Loss) because management uses it as a supplemental measure in assessing our operating performance, and we believe that it is helpful to investors, securities analysts and other interested parties as a measure of our comparative operating performance from period to period.
  • Adjusted Net Income per Diluted Share ("Adjusted Diluted EPS") represents Adjusted Net Income (Loss) divided by the number of fully diluted shares outstanding. Adjusted Diluted EPS is presented as a supplemental measure in assessing our operating performance, and we believe that it is helpful to investors, securities analysts and other interested parties as a measure of our comparative operating performance from period to period.

While we believe that Adjusted EBITDA, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS are useful in evaluating our business, they are non-GAAP financial measures that have limitations as analytical tools. Adjusted EBITDA, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS should not be considered alternatives to, or substitutes for, Net Income (Loss) or EPS, which are calculated in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate Adjusted EBITDA, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS differently or not at all, which reduces the usefulness of such non-GAAP financial measures as tools for comparison. We recommend that you review the reconciliation and calculation of Adjusted EBITDA, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS to Net Income (Loss) and EPS, the most directly comparable GAAP financial measures, under "Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA and Adjusted Net Income (Loss) as well as Reconciliation of GAAP Operating Income (Loss) to Adjusted Income (Loss) from Operations" and not rely solely on Adjusted EBITDA, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss), Adjusted Diluted EPS or any single financial measure to evaluate our business.

Forward-Looking Statements
This press release contains, and oral statements made from time to time by our representatives may contain, "forward-looking statements." Forward-looking statements include statements under "Outlook" and other statements identified by words such as "could," "may," "might," "will," "likely," "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "continues," "projects" and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements are based on our current expectations and assumptions regarding capital market conditions, our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, regional, national or global political, economic, business, competitive, market and regulatory conditions, including risks regarding our ability to manage inventory or anticipate consumer demand; changes in consumer confidence and spending; our competitive environment; our failure to open new profitable stores or successfully enter new markets; the impact of the COVID-19 epidemic on the Company and the economy as a whole; post-pandemic changes in customer behavior and the timeline of economic recovery; and other factors set forth under "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended January 29, 2022. Any forward-looking statement made in this press release speaks only as of the date on which it is made. J.Jill undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

(Tables Follow)

J.Jill, Inc.

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

(Amounts in thousands, except share and per share data)

 

 

 

For the Thirteen Weeks Ended

 

 

 

July 30, 2022

 

 

July 31, 2021

 

Net sales

 

$

160,343

 

 

$

159,236

 

Costs of goods sold

 

 

47,869

 

 

 

49,883

 

Gross profit

 

 

112,474

 

 

 

109,353

 

Selling, general and administrative expenses

 

 

84,281

 

 

 

85,846

 

Operating income

 

 

28,193

 

 

 

23,507

 

Fair value adjustment of derivative

 

 

 

 

 

625

 

Fair value adjustment of warrants - related party (a)

 

 

 

 

 

38,338

 

Interest expense

 

 

3,547

 

 

 

4,217

 

Interest expense, net - related party

 

 

929

 

 

 

529

 

Income (loss) before provision for income taxes

 

 

23,717

 

 

 

(20,202

)

Income tax provision

 

 

5,912

 

 

 

4,446

 

Net income (loss) and total comprehensive income (loss)

 

$

17,805

 

 

$

(24,648

)

Net income (loss) per common share attributable to common shareholders

 

 

 

 

 

 

Basic

 

$

1.28

 

 

$

(1.98

)

Diluted

 

$

1.25

 

 

$

(1.98

)

Weighted average number of common shares outstanding

 

 

 

 

 

 

Basic

 

 

13,930,366

 

 

 

12,450,351

 

Diluted

 

 

14,252,429

 

 

 

12,450,351

 

  1. The fair value adjustment of warrants due to the increase in J.Jill's stock price from January 30, 2021 to May 31,2021.
 

J.Jill, Inc.

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

(Amounts in thousands, except share and per share data)

 

 

 

For the Twenty-Six Weeks Ended

 

 

 

July 30, 2022

 

 

July 31, 2021

 

Net sales

 

$

317,412

 

 

$

288,322

 

Costs of goods sold

 

 

95,475

 

 

 

91,143

 

Gross profit

 

 

221,937

 

 

 

197,179

 

Selling, general and administrative expenses

 

 

169,859

 

 

 

164,985

 

Operating income

 

 

52,078

 

 

 

32,194

 

Fair value adjustment of derivative

 

 

 

 

 

2,775

 

Fair value adjustment of warrants - related party (a)

 

 

 

 

 

56,984

 

Interest expense, net

 

 

7,205

 

 

 

8,563

 

Interest expense, net - related party

 

 

1,731

 

 

 

990

 

Income (loss) before provision for income taxes

 

 

43,142

 

 

 

(37,118

)

Income tax provision

 

 

10,922

 

 

 

5,838

 

Net income (loss) and total comprehensive income (loss)

 

$

32,220

 

 

$

(42,956

)

Net loss per common share attributable to common shareholders:

 

 

 

 

 

 

Basic

 

$

2.32

 

 

$

(3.88

)

Diluted

 

$

2.27

 

 

$

(3.88

)

Weighted average number of common shares outstanding:

 

 

 

 

 

 

Basic

 

 

13,902,457

 

 

 

11,058,351

 

Diluted

 

 

14,211,768

 

 

 

11,058,351

 

  1. The fair value adjustment of warrants due to the increase in J.Jill's stock price from January 30, 2021 to May 31,2021.
 

J.Jill, Inc.

Consolidated Balance Sheets

(Unaudited)

(Amounts in thousands, except common share data)

 

 

 

July 30, 2022

 

 

January 29, 2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

61,856

 

 

$

35,957

 

Accounts receivable

 

 

4,090

 

 

 

5,811

 

Inventories, net

 

 

54,383

 

 

 

56,024

 

Prepaid expenses and other current assets

 

 

25,608

 

 

 

25,456

 

Total current assets

 

 

145,937

 

 

 

123,248

 

Property and equipment, net

 

 

50,427

 

 

 

57,329

 

Intangible assets, net

 

 

76,949

 

 

 

80,711

 

Goodwill

 

 

59,697

 

 

 

59,697

 

Operating lease assets, net

 

 

127,165

 

 

 

130,744

 

Other assets

 

 

97

 

 

 

120

 

Total assets

 

$

460,272

 

 

$

451,849

 

Liabilities and Shareholders' Deficit

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

40,184

 

 

$

49,924

 

Accrued expenses and other current liabilities

 

 

45,584

 

 

 

48,853

 

Current portion of long-term debt

 

 

2,739

 

 

 

7,692

 

Current portion of operating lease liabilities

 

 

34,667

 

 

 

32,276

 

Total current liabilities

 

 

123,174

 

 

 

138,745

 

Long-term debt, net of discount and current portion

 

 

196,009

 

 

 

196,511

 

Long-term debt, net of discount and current portion - related party

 

 

7,336

 

 

 

5,605

 

Deferred income taxes

 

 

10,704

 

 

 

10,704

 

Operating lease liabilities, net of current portion

 

 

133,295

 

 

 

143,207

 

Other liabilities

 

 

1,535

 

 

 

1,731

 

Total liabilities

 

 

472,053

 

 

 

496,503

 

Commitments and contingencies

 

 

 

 

 

 

Shareholders' Deficit

 

 

 

 

 

 

Common stock, par value $0.01 per share; 50,000,000 shares authorized; 10,148,504 and 10,001,422 shares issued and outstanding at July 30, 2022 and January 29, 2022, respectively

 

 

102

 

 

 

100

 

Additional paid-in capital

 

 

210,398

 

 

 

209,747

 

Accumulated deficit

 

 

(222,281

)

 

 

(254,501

)

Total shareholders' deficit

 

 

(11,781

)

 

 

(44,654

)

Total liabilities and shareholders' deficit

 

$

460,272

 

 

$

451,849

 

J.Jill, Inc.

Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA

(Unaudited)

(Amounts in thousands)

 

 

 

For the Thirteen Weeks Ended

 

 

 

July 30, 2022

 

 

July 31, 2021

 

Net income (loss)

 

$

17,805

 

 

$

(24,648

)

Fair value adjustment of derivative

 

 

 

 

 

625

 

Fair value adjustment of warrants - related party (a)

 

 

 

 

 

38,338

 

Interest expense, net

 

 

3,547

 

 

 

4,217

 

Interest expense, net - related party

 

 

929

 

 

 

529

 

Income tax provision

 

 

5,912

 

 

 

4,446

 

Depreciation and amortization

 

 

6,331

 

 

 

7,295

 

Equity-based compensation expense (b)

 

 

976

 

 

 

649

 

Write-off of property and equipment (c)

 

 

71

 

 

 

630

 

Adjustment for costs to exit retail stores (d)

 

 

(3

)

 

 

9

 

Other non-recurring items (e)

 

 

4

 

 

 

616

 

Adjusted EBITDA

 

$

35,572

 

 

$

32,706

 

Net sales

 

$

160,343

 

 

$

159,236

 

Adjusted EBITDA margin

 

 

22.2

%

 

 

20.5

%

 

 

For the Twenty-Six Weeks Ended

 

 

 

July 30, 2022

 

 

July 31, 2021

 

 

 

 

 

 

 

 

Net income (loss)

 

$

32,220

 

 

 

(42,956

)

Fair value adjustment of derivative

 

 

-

 

 

 

2,775

 

Fair value adjustment of warrants - related party (a)

 

 

-

 

 

 

56,984

 

Interest expense, net

 

 

7,205

 

 

 

8,563

 

Interest expense, net - related party

 

 

1,731

 

 

 

990

 

Income tax provision

 

 

10,922

 

 

 

5,838

 

Depreciation and amortization

 

 

13,044

 

 

 

14,871

 

Equity-based compensation expense (b)

 

 

1,718

 

 

 

1,092

 

Write-off of property and equipment (c)

 

 

163

 

 

 

716

 

Adjustment for costs to exit retail stores (d)

 

 

(246

)

 

 

(710

)

Impairment of long lived assets (f)

 

 

108

 

 

 

 

Other non-recurring items (e)

 

 

4

 

 

 

1,468

 

Adjusted EBITDA

 

$

66,869

 

 

$

49,631

 

Net sales

 

$

317,412

 

 

$

288,322

 

Adjusted EBITDA margin

 

 

21.1

%

 

 

17.2

%

  1. The fair value adjustment of warrants due to the increase in J.Jill's stock price through May 31, 2021.
  2. Represents expenses associated with equity incentive instruments granted to our management and board of directors. Incentive instruments are accounted for as equity-classified awards with the related compensation expense recognized based on fair value at the date of the grant.
  3. Represents the net gain or loss on the disposal of fixed assets.
  4. Represents non-cash adjustments associated with exiting store leases earlier than anticipated.
  5. Represents items management believes are not indicative of ongoing operating performance, including professional fees, retention expenses and costs related to the COVID-19 pandemic.
  6. Represents impairment of long-lived assets related to leasehold improvements.

J.Jill, Inc.

Reconciliation of GAAP Operating Income to Adjusted Income from Operations

(Unaudited)

(Amounts in thousands)

 

 

 

For the Thirteen Weeks Ended

 

 

 

July 30, 2022

 

 

July 31, 2021

 

 

 

 

 

 

 

 

Operating income

 

$

28,193

 

 

$

23,507

 

Adjustment for costs to exit retail stores (a)

 

 

(3

)

 

 

9

 

Other non-recurring items (c)

 

 

4

 

 

 

616

 

Adjusted income from operations

 

$

28,194

 

 

$

24,132

 

 

 

 

 

 

 

 

 

 

For the Twenty-Six Weeks Ended

 

 

 

July 30, 2022

 

 

July 31, 2021

 

 

 

 

 

 

 

 

Operating income

 

$

52,078

 

 

$

32,194

 

Adjustment for costs to exit retail stores (a)

 

 

(246

)

 

 

(710

)

Impairment of long-lived assets (b)

 

 

108

 

 

 

 

Other non-recurring items (c)

 

 

4

 

 

 

1,468

 

Adjusted income from operations

 

$

51,944

 

 

$

32,952

 

  1. Represents non-cash adjustments associated with exiting store leases earlier than anticipated.
  2. Represents impairment of long-lived assets related to leasehold improvements.
  3. Represents items management believes are not indicative of ongoing operating performance, including professional fees, retention expenses and costs related to the COVID-19 pandemic.

J.Jill, Inc.

Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income

(Unaudited)

(Amounts in thousands, except share and per share data)

 

 

 

 

For the Thirteen Weeks Ended

 

 

 

July 30, 2022

 

 

July 31, 2021

 

Net income (loss) and total comprehensive income (loss)

 

$

17,805

 

 

$

(24,648

)

Add: Income tax provision

 

 

5,912

 

 

 

4,446

 

Income (loss) before provision for income tax

 

 

23,717

 

 

 

(20,202

)

Add: Fair value adjustment of derivative

 

 

 

 

 

625

 

Add: Fair value adjustment of warrants - related party (a)

 

 

 

 

 

38,338

 

Add: Adjustment for costs to exit retail stores (b)

 

 

(3

)

 

 

9

 

Add: Other non-recurring items (d)

 

 

4

 

 

 

616

 

Adjusted income before income tax provision

 

 

23,718

 

 

 

19,386

 

Less: Adjusted tax provision (e)

 

 

6,024

 

 

 

6,242

 

Adjusted net income

 

$

17,694

 

 

$

13,144

 

 

 

 

 

 

 

 

Adjusted net income per share attributable to common shareholders

 

 

 

 

 

 

Basic

 

$

1.27

 

 

$

1.06

 

Diluted

 

$

1.24

 

 

$

0.93

 

Weighted average number of common shares

 

 

 

 

 

 

Basic

 

 

13,930,366

 

 

 

12,450,351

 

Diluted

 

 

14,252,429

 

 

 

14,092,520

 

 

 

For the Twenty-Six Weeks Ended

 

 

 

July 30, 2022

 

 

July 31, 2021

 

Net income (loss) and total comprehensive income (loss)

 

$

32,220

 

 

$

(42,956

)

Add: Income tax provision

 

 

10,922

 

 

 

5,838

 

Income (loss) before provision for income tax

 

 

43,142

 

 

 

(37,118

)

Add: Fair value adjustment of derivative

 

 

 

 

 

2,775

 

Add: Fair value adjustment of warrants - related party (a)

 

 

 

 

 

56,984

 

Add: Adjustment for costs to exit retail stores (b)

 

 

(246

)

 

 

(710

)

Add: Impairment of long-lived assets (c)

 

 

108

 

 

 

 

Add: Other non-recurring items (d)

 

 

4

 

 

 

1,468

 

Adjusted income before income tax provision

 

 

43,008

 

 

 

23,399

 

Less: Adjusted tax provision(e)

 

 

10,924

 

 

 

7,534

 

Adjusted net income

 

$

32,084

 

 

$

15,865

 

 

 

 

 

 

 

 

Adjusted net income per share attributable to common shareholders

 

 

 

 

 

 

Basic

 

$

2.31

 

 

$

1.43

 

Diluted

 

$

2.26

 

 

$

1.17

 

Weighted average number of common shares

 

 

 

 

 

 

Basic

 

 

13,902,457

 

 

 

11,058,351

 

Diluted

 

 

14,211,768

 

 

 

13,586,297

 

  1. The fair value adjustment of warrants due to the increase in J.Jill's stock price through May 31, 2021.
  2. Represents non-cash adjustments associated with exiting store leases earlier than anticipated.
  3. Represents impairment of long-lived assets related to leasehold improvements.
  4. Represents items management believes are not indicative of ongoing operating performance, including professional fees, retention expenses and costs related to the COVID-19 pandemic.
  5. The adjusted tax provision for adjusted net income is estimated by applying a rate of 25.4% for the second quarter of fiscal 2022 and 32.2% for the second quarter of fiscal 2021 to the adjusted income before income tax provision.
 

 

Posted In: Press Releases