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

June 09, 2010 | About:
10qk

10qk

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dELIA*s Inc. (DLIA) filed Quarterly Report for the period ended 2010-05-01.

Delia*s Inc. has a market cap of $45.4 million; its shares were traded at around $1.45 with and P/S ratio of 0.2. DLIA is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Total Selling, General and Administrative. As a percentage of revenues, total selling, general and administrative expenses (SG&A) increased to 47.2% for the quarter ended May 1, 2010 from 42.5% for the quarter ended May 2, 2009. In total dollars, selling, general and administrative expenses increased to $23.6 million in the quarter ended May 1, 2010 from $22.2 million in the quarter ended May 2, 2009. Included in the first quarter of fiscal 2010 is a pre-tax severance charge of $1.4 million. SG&A excluding the aforementioned severance charge was $22.1 million, or 44.3% of sales. The increase in SG&A expenses as a percentage of sales reflects the deleveraging of selling, overhead and depreciation expenses.

Direct Marketing Selling, General and Administrative. Direct marketing selling, general and administrative expenses, which include a severance charge of $0.7 million, increased to $11.8 million in the quarter ended May 1, 2010 from $11.6 million in the quarter ended May 2, 2009. As a percentage of related revenues, the direct marketing selling, general and administrative expenses increased to 49.3% in the quarter ended May 1, 2010 from 43.3% in the quarter ended May 2, 2009. The increase in SG&A as a percentage of sales reflects the deleveraging of selling and overhead expenses.

Retail Store Selling, General and Administrative. Retail selling, general and administrative expenses, which include a severance charge of $0.7 million, increased to $11.8 million in the quarter ended May 1, 2010 from $10.5 million in the quarter ended May 2, 2009. As a percentage of related revenues, retail selling, general and administrative expenses increased to 45.3% in the quarter ended May 1, 2010 from 41.8% for the quarter ended May 2, 2009. The increase in SG&A as a percentage of sales reflects the deleveraging of selling expenses.

Total Operating Loss. Our total operating loss, which includes the aforementioned pre-tax severance charge of $1.4 million, was $7.8 million for the quarter ended May 1, 2010 as compared to a loss of $5.3 million for the quarter ended May 2, 2009.

dELiA*s, Inc. and certain of its wholly-owned subsidiaries were parties to a Second Amended and Restated Loan and Security Agreement (the Restated Credit Facility) with Wells Fargo Retail Finance II, LLC (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 allowed for letters of credit up to an aggregate amount of $15 million, as amended.

We were a party to a mortgage loan agreement related to the purchase of our distribution center in Hanover, Pennsylvania. The mortgage note amortized on a fifteen-year schedule and was to originally mature with a balloon payment of $2.3 million in September 2008, but was subsequently extended to mature in September 2009. The loan bore interest at LIBOR plus 225 basis points and was subject to quarterly financial covenants. The mortgage loan was secured by the distribution center and related property. The Company paid off the remaining balance of the mortgage, which was approximately $2.1 million, on September 30, 2009.

Read the The complete Report

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