dELiAs, Inc. - FORM 8-K - EX-99.1 - July 23, 2013

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EXHIBIT 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR EACH OF THE THREE FISCAL YEARS ENDED FEBRUARY 2, 2013

As previously reported, on June 4, 2013, dELiA*s, Inc., a Delaware corporation (the “Company”), entered into, and closed the transactions contemplated by, an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Alloy Merchandise, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Seller”), HRSH Acquisitions LLC, a New York limited liability company (“Buyer”), and Steven Russo and Hagai Laniado. Subject to the terms and conditions of the Asset Purchase Agreement, Seller sold to Buyer certain assets related to Seller’s Alloy business (the “Business”) and Buyer assumed certain liabilities related to the Business.

The following unaudited pro forma condensed consolidated statements of operations of the Company for the three fiscal years ended February 2, 2013 have been presented as if the Company had sold the Business as of January 31, 2010. The “Historical” column represents the condensed consolidated statements of operations reported in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 23, 2013.

In the opinion of management, the Company’s accompanying pro forma condensed consolidated statements of operations include all material adjustments necessary to reflect, on a pro forma basis, the effect of the sale of the Business. The adjustments are described in the note to the unaudited pro forma condensed consolidated statements of operations and are set forth in the “Pro Forma” adjustments column. The unaudited pro forma condensed consolidated statements of operations should be read together with the consolidated financial statements filed by the Company in its Annual Report on Form 10-K for the three fiscal years ended February 2, 2013.

The Company’s unaudited pro forma condensed consolidated statements of operations has been presented for informational purposes only and should not be relied upon to represent what our results of operations would actually have been if the Business had been reflected as discontinued operations for all periods presented, nor do they purport to project our results of operations for any future period.

dELiA*s, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For the Fiscal Year Ended February 2, 2013

(in thousands, except share and per share data)

 

                 Pro Forma  
           Discontinued     Continuing  
     Historical     Operations     Operations  

Net revenues

    $ 222,699      $ 41,549      $ 181,150   

Cost of goods sold

      149,546        25,107        124,439   
  

 

 

    

 

 

    

 

 

  

Gross profit

      73,153        16,442        56,711   
  

 

 

    

 

 

    

 

 

  

Operating expenses:

       

Selling, general and administrative expenses

      93,433        15,915        77,518   

Impairment of goodwill

      4,462        —          4,462   

Impairment of long-lived assets

      181        —          181   

Other operating income

      (4,169 )      (1,588 )      (2,581 ) 
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      93,907        14,327        79,580   
  

 

 

    

 

 

    

 

 

  

Operating (loss) income

      (20,754 )      2,115        (22,869 ) 

Interest expense, net

      726        —          726   
  

 

 

    

 

 

    

 

 

  

(Loss) income from continuing operations before taxes

      (21,480 )      2,115        (23,595 ) 

Provision (benefit) for income taxes

      74        755 (1)      (681 ) 
  

 

 

    

 

 

    

 

 

  

(Loss) income from continuing operations

    $ (21,554 )    $ 1,360      $ (22,914 ) 
  

 

 

    

 

 

    

 

 

  

Loss per share from continuing operations:

       

Basic and diluted

    $ (0.69 )      $ (0.73 ) 
  

 

 

      

 

 

  

Weighted average basic and diluted common shares outstanding

      31,350,931          31,350,931   
  

 

 

      

 

 

  

See accompanying notes to these pro forma condensed consolidated financial statements.

dELiA*s, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For the Fiscal Year Ended January 28, 2012

(in thousands, except share and per share data)

 

                 Pro Forma  
           Discontinued     Continuing  
     Historical     Operations     Operations  

Net revenues

    $ 217,152      $ 44,845      $ 172,307   

Cost of goods sold

      148,816        25,101        123,715   
  

 

 

    

 

 

    

 

 

  

Gross profit

      68,336        19,744        48,592   
  

 

 

    

 

 

    

 

 

  

Operating expenses:

       

Selling, general and administrative expenses

      92,740        16,223        76,517   

Impairment of long-lived assets

      495        —          495   

Other operating income

      (1,957 )      (757 )      (1,200 ) 
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      91,278        15,466        75,812   
  

 

 

    

 

 

    

 

 

  

Operating (loss) income

      (22,942 )      4,278        (27,220 ) 

Interest expense, net

      577        —          577   
  

 

 

    

 

 

    

 

 

  

(Loss) income from continuing operations before taxes

      (23,519 )      4,278        (27,797 ) 

(Benefit) provision for income taxes

      (849 )      1,488 (1)      (2,337 ) 
  

 

 

    

 

 

    

 

 

  

(Loss) income from continuing operations

    $ (22,670 )    $ 2,790      $ (25,460 ) 
  

 

 

    

 

 

    

 

 

  

Loss per share from continuing operations:

       

Basic and diluted

    $ (0.73 )      $ (0.82 ) 
  

 

 

      

 

 

  

Weighted average basic and diluted common shares outstanding

      31,217,185          31,217,185   
  

 

 

      

 

 

  

See accompanying notes to these pro forma condensed consolidated financial statements.

dELiA*s, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For the Fiscal Year Ended January 29, 2011

(in thousands, except share and per share data)

 

                 Pro Forma  
           Discontinued     Continuing  
     Historical     Operations     Operations  

Net revenues

    $ 220,697      $ 48,269      $ 172,428   

Cost of goods sold

      147,242        26,685        120,557   
  

 

 

    

 

 

    

 

 

  

Gross profit

      73,455        21,584        51,871   
  

 

 

    

 

 

    

 

 

  

Operating expenses:

       

Selling, general and administrative expenses

      95,746        16,784        78,962   

Impairment of goodwill

      7,611        —          7,611   

Other operating income

      (475 )      (59 )      (416 ) 
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      102,882        16,725        86,157   
  

 

 

    

 

 

    

 

 

  

Operating (loss) income

      (29,427 )      4,859        (34,286 ) 

Interest expense, net

      353        —          353   
  

 

 

    

 

 

    

 

 

  

(Loss) income from continuing operations before taxes

      (29,780 )      4,859        (34,639 ) 

(Benefit) provision for income taxes

      (8,137 )      1,725 (1)      (9,862 ) 
  

 

 

    

 

 

    

 

 

  

(Loss) income from continuing operations

    $ (21,643 )    $ 3,134      $ (24,777 ) 
  

 

 

    

 

 

    

 

 

  

Loss per share from continuing operations:

       

Basic and diluted

    $ (0.70 )      $ (0.80 ) 
  

 

 

      

 

 

  

Weighted average basic and diluted common shares outstanding

      31,111,878          31,111,878   
  

 

 

      

 

 

  

See accompanying notes to these pro forma condensed consolidated financial statements.

 

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

BASIS OF PRESENTATION

As previously reported, on June 4, 2013, dELiA*s, Inc., a Delaware corporation (the “Company”), entered into, and closed the transactions contemplated by, an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Alloy Merchandise, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Seller”), HRSH Acquisitions LLC, a New York limited liability company (“Buyer”), and Steven Russo and Hagai Laniado. Subject to the terms and conditions of the Asset Purchase Agreement, Seller sold to Buyer certain assets related to Seller’s Alloy business (the “Business”) and Buyer assumed certain liabilities related to the Business.

PRO FORMA ADJUSTMENTS

The historical condensed consolidated statements of operations for each of the three fiscal years ended February 2, 2013 have been adjusted to reflect the sale of the Business, and to reverse the Company’s allocation of shared services to the Business and to charge administrative and distribution expenses that were attributable to the Business.

The pro forma adjustments include the following:

 

  (1) To record the related tax effect of the Business as sold.

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