UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 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): July
10, 2014
Joe’s Jeans Inc.
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(Exact Name of Registrant as Specified in Its Charter)
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Delaware
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(State or Other Jurisdiction of Incorporation)
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0-18926
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11-2928178
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(Commission File Number)
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(IRS Employer Identification No.)
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2340 S. Eastern Avenue, Commerce, California
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90040
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(Address of Principal Executive Offices)
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(Zip Code)
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(323) 837-3700
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(Registrant’s Telephone Number, Including Area Code)
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
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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 Instruction 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
On July 10, 2014, Joe’s Jeans Inc. (the “Company”) issued the
press release attached hereto as Exhibit 99.1 and incorporated herein by
reference regarding its financial statements to be included in its
Quarterly Report on Form 10-Q for the period ended May 31, 2014 to be
filed with the Securities and Exchange Commission on July 10, 2014.
The information, including Exhibit 99.1 attached hereto, in
this Current Report on Form 8-K is being furnished and shall not be
deemed filed for the purposes of Section 18 of the Securities Exchange
Act of 1934, as amended, or otherwise subject to the liabilities of that
Section. The information in this Current Report shall not be
incorporated by reference into any registration statement or other
document pursuant to the Securities Act of 1933, except as otherwise
expressly stated in such filing.
ITEM 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit
Number Description
99.1 Press Release dated July 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 thereunto duly authorized.
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JOE’S JEANS INC.
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(Registrant)
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Date: July 10, 2014
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By:
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/s/ Marc Crossman
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Marc Crossman
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President and Chief Executive Officer
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(Principal Executive Officer)
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Exhibit Index
Exhibit
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Number
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Description
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99.1
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Press Release dated July 10, 2014
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3
Exhibit 99.1
Joe’s
Jeans Reports 56% Increase in Net Sales to $48.2 Million for the 2nd
Quarter of Fiscal 2014
LOS ANGELES--(BUSINESS WIRE)--July 10, 2014--Joe’s Jeans Inc. (the
“Company”) (NASDAQ: JOEZ) today announced financial results for the
second quarter ended May 31, 2014. Highlights were:
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Second quarter net sales increased 56% to $48.2 million;
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Wholesale net sales increased 66%;
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Retail store net sales increased 19%; and
-
Operating income increased 55% to $3.3 million compared to $2.1
million in the prior year period.
For the second quarter ended May 31, 2014, overall net sales were $48.2
million compared to $30.9 million in the prior year comparative period,
or a 56% increase. We completed our acquisition of Hudson Clothing
Holdings, Inc. (“Hudson”) on September 30, 2013 and our results for the
second quarter of fiscal 2014 reflect the operation of Hudson as one of
our wholly-owned subsidiaries.
Our overall gross profit for the quarter increased to $22.6 million from
$13.5 million in the prior year comparative period, or a 67% increase.
Our overall gross margin in the second quarter of fiscal 2014 was 47%
compared to 44% in the second quarter of fiscal 2013. Operating expense
in the second quarter of fiscal 2014 was $19.3 million compared to $11.4
million a year ago. Our operating income was $3.3 million compared to
$2.1 million in the prior year comparative period. We had net income of
$2.3 million compared to $1.2 million in the prior year period. As a
result, our fully diluted earnings per share was $0.01 for the second
quarter of fiscal 2014 compared to $0.02 in same period a year ago.
Marc Crossman, President and Chief Executive Officer, commented, “We
have been working these past two quarters to position both companies to
realize the cost savings benefits from our acquisition of Hudson. We
expect to begin to see the benefit of that work in the third quarter of
fiscal 2014. We expect the savings to continue to ramp up during the
fourth quarter and by year end, we expect to be running at an annualized
cost savings rate in excess of $10 million per year.” Mr. Crossman
concluded, “Furthermore, we expect our core results, excluding these
cost savings, to pick up in the back half of the year, as we are already
seeing improvement in our same store sales comps at our company owned
retail stores.”
Wholesale
Net sales for our wholesale segment in the second quarter of fiscal 2014
increased 66% to $40.4 million compared to $24.4 million in the year ago
period. Wholesale net sales for the second quarter of fiscal 2014
included $17.9 million in wholesale net sales from Hudson®. Gross margin
percentages for our wholesale segment were 43% for the second quarter of
fiscal 2014 compared to 37% in the prior year comparable quarter. For
the second quarter, wholesale operating expense increased to $5.7
million compared to $3.2 million in the year ago period. Our wholesale
operating income increased to $11.6 million in the second quarter of
fiscal 2014 compared to $5.7 million in the prior year comparative
period.
Retail
Net sales from our retail segment in the second quarter increased 19% to
$7.8 million compared to $6.5 million in the prior year comparative
period. The growth in retail sales was driven by revenue contribution of
$837,000 from Hudson’s® e-shop as well as growing our store base by
three stores in the comparative period. In addition, our same store
sales, which includes Joe’s® stores open at least 12 months and our
Joe’s® e-shop, increased 1% during the quarter. Gross margin percentages
for our retail segment decreased to 69% from 70% in the year ago period
and were impacted by increased promotional activity at our retail outlet
stores as our competitors were more promotional. Retail operating
expense increased as a result of additional expenses associated with
expanding our store base compared to the prior year period and the
addition of the operation of Hudson’s® e-shop. Overall, for the second
quarter, we had an operating income of $103,000 compared to $132,000 in
the year ago period for our retail segment.
Corporate and Other
For the second quarter of fiscal 2014, our corporate and other expenses
were $8.4 million compared to $3.7 million in the second quarter a year
ago. Corporate and other expenses increased due to $4.2 million of
expenses associated with Hudson’s corporate operations for the second
quarter of fiscal 2014.
The Company will host a conference call on Thursday, July 10, 2014 at
4:30 p.m. Eastern Time with the Company’s Chief Executive Officer, Marc
Crossman, and its Chief Financial Officer, Hamish Sandhu, to discuss
financial results for the second quarter ended May 31, 2014.
To access the live call, please dial 1(800) 264-7882 or 1(847) 413-3708.
The conference ID number and participant passcode is 37590829 and
is titled the “Q2 2014 Joe’s Jeans Inc. Earnings Conference Call.” The
information provided on the teleconference is only accurate at the time
of the conference call, and the Company will take no responsibility for
providing updated information. A telephone replay of the conference call
will be available beginning at 7:00 p.m. Eastern Time on July 10, 2014
until 2:59 a.m. Eastern Time on July 19, 2014 by dialing 1(888) 843-7419
or 1(630) 652-3042 and using the conference passcode 37590829#. In
addition, the conference call will be archived for two weeks on the
Company’s website at www.joesjeans.com.
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JOE'S JEANS INC. AND SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENTS OF NET (LOSS) INCOME AND
COMPREHENSIVE (LOSS) INCOME
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(in thousands, except per share data)
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Three months ended
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May 31, 2014
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May 31, 2013
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(unaudited)
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Net sales
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$
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48,167
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$
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30,874
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Cost of goods sold
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25,594
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17,369
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Gross profit
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22,573
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13,505
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Operating expenses
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Selling, general and administrative
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18,125
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10,840
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Depreciation and amortization
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1,160
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542
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19,285
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11,382
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Operating income
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3,288
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2,123
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Interest expense
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3,355
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127
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Other income
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(4,818)
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-
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Income before provision for taxes
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4,751
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1,996
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Income tax expense
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2,412
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823
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Net income and comprehensive income
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$
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2,339
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$
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1,173
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Earnings per common share - basic
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$
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0.03
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$
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0.02
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Earnings per common share - diluted
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$
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0.01
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$
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0.02
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Weighted average shares outstanding:
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Basic
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68,148
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67,047
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Diluted
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87,096
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68,411
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The following table sets forth certain segment information for the three
months ended May 31, 2014 and 2013, respectively:
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JOE'S JEANS INC. AND SUBSIDIARIES
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SEGMENT RESULTS
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(in thousands)
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Three months ended
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May 31, 2014
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May 31, 2013
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(unaudited)
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Net sales:
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Wholesale
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$
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40,401
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$
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24,366
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Retail
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7,766
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6,508
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$
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48,167
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$
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30,874
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Gross profit:
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Wholesale
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$
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17,218
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$
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8,955
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Retail
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5,355
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4,550
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$
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22,573
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$
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13,505
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Operating income:
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Wholesale
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$
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11,560
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$
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5,716
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Retail
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103
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132
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Corporate and other
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(8,375)
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(3,725)
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$
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3,288
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$
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2,123
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About Joe’s Jeans Inc.
Joe’s Jeans Inc. designs, produces and sells apparel and apparel-related
products to the retail and premium markets under the Joe's® brand and
related trademarks. The Company also acquired in September 2013 Hudson
Clothing Holdings, Inc., a leading global designer and marketer of
women’s and men’s premium branded denim apparel bearing the Hudson®
brand name, and operates it as a wholly owned subsidiary. Visit:
joesjeans.com or facebook.com/joesjeans and hudsonjeans.com or
facebook.com/HudsonJeans.
This release contains forward-looking statements within the meaning
of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, as amended. The matters discussed in this
document involved estimates, projections, goals, forecasts, assumptions,
risks and uncertainties that could cause actual results or outcomes to
differ materially from those expressed in the forward-looking statements.
All statements in this news release that are not purely historical
facts are forward-looking statements, including statements containing
the words “intend,” “believe,” “estimate,” “project,” “expect” or
similar expressions. Any forward-looking statement inherently
involves risks and uncertainties that could cause actual results to
differ materially from the forward-looking statements. Factors
that would cause or contribute to such differences include, but are not
limited to: our ability to successfully integrate the business of Hudson
Clothing Holdings, Inc., or Hudson, and realize cost savings and any
other synergies; the ability to generate significant cost savings in the
third and fourth fiscal quarters of 2014; the ability to increase our
core results; unexpected costs or unexpected liabilities that may arise
from the transaction or the operation of our business; the inability to
retain key personnel; the diversion of management's time and attention
from our ongoing business during this time period, the impact of the
acquisition on our stock price, the anticipated benefits of the
acquisition on our financial results, business performance and product
offerings, the risk that the credit ratings of the combined company or
its subsidiaries may be different from what the companies expect,
continued acceptance of our product, product demand, competition,
capital adequacy, general economic conditions and the potential
inability to raise additional capital, if required, the risk that the
Company will be unsuccessful in gauging fashion trends and changing
customer preferences; the risk that changes in general economic
conditions, consumer confidence, or consumer spending patterns will have
a negative impact on the Company’s financial performance or strategies;
the highly competitive nature of the Company’s business in the United
States and internationally and its dependence on consumer spending
patterns, which are influenced by numerous other factors; the Company’s
ability to respond to the business environment and fashion trends;
continued acceptance of the Company’s brands in the marketplace; the
ability to generate positive cash flow from operations; competitive
factors, including the possibility of major customers sourcing product
overseas in competition with our products; the risk that acts or
omissions by the Company’s first party vendors could have a negative
impact on the Company’s reputation; a possible oversupply of denim in
the marketplace; and other risks. The Company discusses certain
of these factors more fully in its additional filings with the SEC,
including its last annual report on Form 10-K filed with the SEC, and
this release should be read in conjunction with that annual report
together with all of the Company’s other filings made with the SEC
through the date of this release. The Company urges you to
consider all of these risks, uncertainties and other factors carefully
in evaluating the forward-looking statements contained in this release.
Any forward-looking statement is based on information current as of
the date of this document and speaks only as of the date on which such
statement is made, and the Company undertakes no obligation to
update these statements to reflect events or circumstances after the
date on which such statement is made. Readers are cautioned not
to place undue reliance on forward-looking statements.
CONTACT:
Joe’s Jeans Inc.
Hamish Sandhu
323-837-3700 x 304
(Investor
Relations)
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