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dELIA*s Inc. Reports Operating Results (10-Q)

September 09, 2010 | About:
10qk

10qk

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dELIA*s Inc. (DLIA) filed Quarterly Report for the period ended 2010-07-31.

Delia*s Inc. has a market cap of $47.3 million; its shares were traded at around $1.51 with and P/S ratio of 0.2. DLIA is in the portfolios of Whitney Tilson of T2 Partners Management, LP, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC.

Highlight of Business Operations:

Direct Marketing SG&A. Direct marketing SG&A decreased to $9.8 million in the quarter ended July 31, 2010 from $10.8 million in the quarter ended August 1, 2009. As a percentage of related revenues, the direct marketing SG&A increased to 52.0% in the quarter ended July 31, 2010 from 49.1% in the quarter ended August 1, 2009. The reduction in dollars was driven by reduced catalog circulation. The increase in SG&A as a percentage of sales reflects the deleveraging of selling and overhead expenses.

Total Selling, General and Administrative. As a percentage of revenues, total selling, general and administrative expenses (SG&A) increased to 48.4% for the twenty-six weeks ended July 31, 2010 from 45.0% for the twenty-six weeks ended August 1, 2009. In total dollars, SG&A increased to $45.1 million in the twenty-six weeks ended July 31, 2010 from $44.0 million in the twenty-six weeks ended August 1, 2009. Included in the twenty-six weeks of fiscal 2010 is a pre-tax severance charge of $1.4 million. SG&A excluding the aforementioned severance charge was $43.7 million, or 46.9% of sales. The increase in SG&A as a percentage of sales reflects the deleveraging of selling, overhead and depreciation expenses.

Direct Marketing SG&A. Direct marketing SG&A, which include a severance charge of $0.7 million, decreased to $21.6 million in the twenty-six weeks ended July 31, 2010 from $22.4 million in the twenty-six weeks ended August 1, 2009. As a percentage of related revenues, the direct marketing SG&A increased to 50.5% in the twenty-six weeks ended July 31, 2010 from 45.9% in the twenty-six weeks ended August 1, 2009. The reduction in dollars was driven by reduced catalog circulation. The increase in SG&A as a percentage of sales reflects the deleveraging of selling and overhead expenses.

Retail Store SG&A. Retail SG&A, which include a severance charge of $0.7 million, increased to $23.5 million in the twenty-six weeks ended July 31, 2010 from $21.6 million in the twenty-six weeks ended August 1, 2009. As a percentage of related revenues, retail SG&A increased to 46.7% in the twenty-six weeks ended July 31, 2010 from 44.1% for the twenty-six weeks ended August 1, 2009. The increase in SG&A as a percentage of sales reflects the deleveraging of selling, overhead and depreciation expenses.

Total Operating Loss. Our total operating loss was $16.9 million for the twenty-six weeks ended July 31, 2010 as compared to a loss of $12.2 million for the twenty-six weeks ended August 1, 2009. Included in the twenty-six weeks of fiscal 2010 is a pre-tax severance charge of $1.4 million. Our total operating loss for the twenty-six weeks ended July 31, 2010, adjusted to exclude the aforementioned severance charge, was $15.5 million.

dELiA*s, Inc. and certain of its wholly-owned subsidiaries were parties to the Restated Credit Facility with Wells Fargo which expired by its terms on June 26, 2009. The Restated Credit Facility was a secured revolving credit facility that the Company could draw upon for working capital and capital expenditure requirements and had an initial credit limit of $25 million, which was subsequently increased to $30 million. The Restated Credit Facility, as amended, allowed for letters of credit up to an aggregate amount of $15 million.

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