SEC Filing | Destination XL Group, Inc.

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dxlg-10q_20210731.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 July 31, 2021


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

Commission File Number: 01-34219

DESTINATION XL GROUP, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	04-2623104
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
555 Turnpike Street Canton, MA	02021
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (781) 828-9300

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


Title of each class	Trading symbol(s)	Name of each exchange on which registered
	DXLG

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.

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 ☒

As of August 13, 2021, the registrant had 63,549,426 shares of common stock, $0.01 par value per share, outstanding.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

DESTINATION XL GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

	July 31, 2021			January 30, 2021
	(Fiscal 2021)			(Fiscal 2020)

ASSETS
Current assets:
Cash and cash equivalents	$	5,845		$	18,997
Accounts receivable		2,010			6,416
Inventories		73,368			85,028
Prepaid expenses and other current assets		5,757			3,689
Total current assets		86,980			114,130

Non-current assets:
Property and equipment, net of accumulated depreciation and amortization		48,808			56,552
Operating lease right-of-use assets		124,946			134,321
Intangible assets		1,150			1,150
Other assets		568			602
Total assets	$	262,452		$	306,755

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt	$	293		$	-
Accounts payable		19,877			27,091
Accrued expenses and other current liabilities		27,492			24,825
Operating leases, current		36,938			43,598
Borrowings under credit facility		—			59,521
Total current liabilities		84,600			155,035

Long-term liabilities:
Long-term debt, net of current portion		16,541			14,869
Operating leases, non-current		122,306			135,819
Other long-term liabilities		4,579			5,109
Total long-term liabilities		143,426			155,797

Commitments and contingencies

Stockholders' equity (deficit):
Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued		—			—
Common stock, $0.01 par value, 100,000,000 shares authorized, 76,289,743 and 64,656,384 shares issued at July 31, 2021 and January 30, 2021, respectively		763			647
Additional paid-in capital		319,872			314,747
Treasury stock at cost, 12,755,873 shares at July 31, 2021 and January 30, 2021		(92,658	)		(92,658	)
Accumulated deficit		(187,444	)		(220,592	)
Accumulated other comprehensive loss		(6,107	)		(6,221	)
Total stockholders' equity (deficit)		34,426			(4,077	)
Total liabilities and stockholders' equity (deficit)	$	262,452		$	306,755

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

DESTINATION XL GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	July 31, 2021			August 1, 2020			July 31, 2021			August 1, 2020
	(Fiscal 2021)			(Fiscal 2020)			(Fiscal 2021)			(Fiscal 2020)

Sales	$	138,590		$	76,442		$	250,084		$	133,669
Cost of goods sold including occupancy costs		66,988			54,945			127,649			98,958
Gross profit		71,602			21,497			122,435			34,711

Expenses:
Selling, general and administrative		41,776			25,795			78,894			57,907
Impairment of assets		(365	)		—			(1,017	)		16,335
Depreciation and amortization		4,389			5,340			8,889			11,072
Total expenses		45,800			31,135			86,766			85,314

Operating income (loss)		25,802			(9,638	)		35,669			(50,603	)

Interest expense, net		(925	)		(1,052	)		(2,067	)		(1,793	)

Income (loss) before provision for income taxes		24,877			(10,690	)		33,602			(52,396	)
Provision for income taxes		426			24			454			44


Net income (loss)	$	24,451		$	(10,714	)	$	33,148		$	(52,440	)


Net income (loss) per share - basic	$	0.38		$	(0.21	)	$	0.53		$	(1.03	)
Net income (loss) per share - diluted	$	0.36		$	(0.21	)	$	0.50		$	(1.03	)

Weighted-average number of common shares outstanding:
Basic		63,527			51,078			62,840			50,918
Diluted		67,615			51,078			65,938			50,918

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

DESTINATION XL GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	July 31, 2021			August 1, 2020			July 31, 2021			August 1, 2020
	(Fiscal 2021)			(Fiscal 2020)			(Fiscal 2021)			(Fiscal 2020)
Net income (loss)	$	24,451		$	(10,714	)	$	33,148		$	(52,440	)

Other comprehensive income before taxes:
Foreign currency translation		(17	)		(5	)		(42	)		(39	)
Pension plans		78			253			156			495
Other comprehensive income before taxes		61			248			114			456
Tax provision related to items of other comprehensive income		—			—			—			—
Other comprehensive income, net of tax		61			248			114			456
Comprehensive income (loss)	$	24,512		$	(10,466	)	$	33,262		$	(51,984	)

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

DESTINATION XL GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands)

(Unaudited)

																	Accumulated
					Additional												Other
	Common Stock				Paid-in			Treasury Stock						Accumulated			Comprehensive
	Shares		Amounts		Capital			Shares			Amounts			Deficit			Income (Loss)			Total
Balance at January 30, 2021		64,656	$	647	$	314,747			(12,755	)	$	(92,658	)	$	(220,592	)	$	(6,221	)	$	(4,077	)
Issuance of common stock through private direct offering, net of offering costs		11,111		111		4,264															4,375
Board of directors compensation		137		1		108															109
Stock compensation expense						327															327
Issuance of common stock, upon RSUs release		308		3		(3	)														—
Accumulated other comprehensive income (loss):
Pension plan, net of taxes																		78			78
Foreign currency, net of taxes																		(25	)		(25	)
Net income															8,697						8,697
Balance at May 1, 2021		76,212	$	762	$	319,443			(12,755	)	$	(92,658	)	$	(211,895	)	$	(6,168	)	$	9,484
Board of directors compensation		70		1		109															110
Stock compensation expense						316															316
Exercise of stock options		7		—		4															4
Accumulated other comprehensive income (loss):
Pension plan, net of taxes																		78			78
Foreign currency, net of taxes																		(17	)		(17	)
Net income															24,451						24,451
Balance at July 31, 2021		76,289	$	763	$	319,872			(12,755	)	$	(92,658	)	$	(187,444	)	$	(6,107	)	$	34,426

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

DESTINATION XL GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)


																Accumulated
					Additional											Other
	Common Stock				Paid-in		Treasury Stock						Accumulated			Comprehensive
	Shares		Amounts		Capital		Shares			Amounts			Deficit			Income (Loss)		Total
Balance at February 1, 2020		63,297	$	633	$	312,933		(12,755	)	$	(92,658	)	$	(156,054	)	$	(