EVINE LIVE INC., 10-K filed on 4/10/2018
Annual Report
v3.8.0.1
Document and Entity Information - USD ($)
12 Months Ended
Feb. 03, 2018
Apr. 04, 2018
Jul. 28, 2017
Document and Entity Information [Abstract]      
Entity Registrant Name EVINE Live Inc.    
Entity Central Index Key 0000870826    
Current Fiscal Year End Date --02-03    
Entity Filer Category Accelerated Filer    
Document Type 10-K    
Document Period End Date Feb. 03, 2018    
Document Fiscal Year Focus 2017    
Document Fiscal Period Focus FY    
Amendment Flag false    
Entity Common Stock, Shares Outstanding   65,380,809  
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Public Float     $ 70,876,530
v3.8.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Feb. 03, 2018
Jan. 28, 2017
Current assets:    
Cash $ 23,940 $ 32,647
Restricted cash and investments 450 450
Accounts receivable, net 96,559 99,062
Inventories 68,811 70,192
Prepaid expenses and other 5,344 5,510
Total current assets 195,104 207,861
Property & equipment, net 52,048 52,715
FCC broadcasting license 0 12,000
Other assets 2,106 2,204
TOTAL ASSETS 249,258 274,780
Current liabilities:    
Accounts payable 55,614 65,796
Accrued liabilities 35,646 37,858
Current portion of long term credit facilities 2,326 3,242
Deferred revenue 35 85
Total current liabilities 93,621 106,981
Other long term liabilities 68 428
Deferred tax liability 0 3,522
Long term credit facility 71,573 82,146
Total liabilities 165,262 193,077
Commitments and contingencies
Shareholders' equity:    
Preferred stock, $.01 per share par value, 400,000 shares authorized, zero shares issued and outstanding 0 0
Common stock, $.01 per share par value, 99,600,000 shares authorized; 65,290,458 and 65,192,314 shares issued and outstanding 653 652
Additional paid-in capital 439,111 436,962
Accumulated deficit (355,768) (355,911)
Total shareholders’ equity 83,996 81,703
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 249,258 $ 274,780
v3.8.0.1
Consolidated Balance Sheets (Parentheticals) - $ / shares
Feb. 03, 2018
Jan. 28, 2017
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.01 $ 0.01
Preferred stock, shares authorized 400,000 400,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 99,600,000 99,600,000
Common stock, shares issued 65,290,458 65,192,314
Common stock, shares outstanding 65,290,458 65,192,314
v3.8.0.1
Consolidated Statements of Operations - USD ($)
$ in Thousands
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Income Statement [Abstract]      
Net sales $ 648,220 $ 666,213 $ 693,312
Cost of sales 413,108 424,686 454,832
Gross profit 235,112 241,527 238,480
Operating expense:      
Distribution and selling 199,484 207,030 209,328
General and administrative 24,442 23,386 24,520
Depreciation and amortization 6,370 8,041 8,474
Executive and management transition costs 2,145 4,411 3,549
Distribution facility consolidation and technology upgrade costs 0 677 1,347
Gain on sale of television station (551) 0 0
Total operating expense 231,890 243,545 247,218
Operating income (loss) 3,222 (2,018) (8,738)
Other income (expense):      
Interest income 17 11 8
Interest expense (5,084) (5,937) (2,720)
Loss on debt extinguishment (1,457) 0 0
Total other expense, net (6,524) (5,926) (2,712)
Loss before income taxes (3,302) (7,944) (11,450)
Income tax benefit (provision) 3,445 (801) (834)
Net income (loss) $ 143 $ (8,745) $ (12,284)
Net income (loss) per common share $ 0.00 $ (0.15) $ (0.22)
Net income (loss) per common share — assuming dilution $ 0.00 $ (0.15) $ (0.22)
Weighted average number of common shares outstanding:      
Basic 63,870,046 59,784,594 57,004,321
Diluted 63,968,299 59,784,594 57,004,321
v3.8.0.1
Consolidated Statement of Shareholders' Equity - USD ($)
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit
Common Stock, Shares, Outstanding period beginning at Jan. 31, 2015   56,448,663    
Total Shareholders' Equity period beginning at Jan. 31, 2015 $ 84,528,000 $ 564,000 $ 418,846,000 $ (334,882,000)
Net income (loss) (12,284,000) $ 0 0 (12,284,000)
Common stock issuances pursuant to equity compensation plans, Shares   721,582    
Common stock issuances pursuant to equity compensation plans, Value 2,460,000 $ 7,000 2,453,000 0
Share-based payment compensation, Shares   0    
Share-based payment compensation, Value 2,275,000 $ 0 2,275,000 0
Common Stock, Shares, Outstanding period end at Jan. 30, 2016   57,170,245    
Total Shareholders' Equity period end at Jan. 30, 2016 76,979,000 $ 571,000 423,574,000 (347,166,000)
Net income (loss) (8,745,000) $ 0 0 (8,745,000)
Common stock issuances pursuant to equity compensation plans, Shares   423,338    
Common stock issuances pursuant to equity compensation plans, Value (46,000) $ 5,000 (51,000) 0
Share-based payment compensation, Shares   0    
Share-based payment compensation, Value 1,946,000 $ 0 1,946,000 0
Common stock and warrant issuance, Shares   7,598,731    
Common stock and warrant issuance, Value $ 11,569,000 $ 76,000 11,493,000 0
Common Stock, Shares, Outstanding period end at Jan. 28, 2017 65,192,314 65,192,314.000    
Total Shareholders' Equity period end at Jan. 28, 2017 $ 81,703,000 $ 652,000 436,962,000 (355,911,000)
Net income (loss) 143,000 $ 0 0 143,000
Repurchases of common stock, Shares   (4,400,000)    
Repurchases of common stock, Value (5,055,000) $ (44,000) (5,011,000) 0
Common stock issuances pursuant to equity compensation plans, Shares   389,871    
Common stock issuances pursuant to equity compensation plans, Value 34,000 $ 4,000 30,000 0
Share-based payment compensation, Shares   0    
Share-based payment compensation, Value 2,888,000 $ 0 2,888,000 0
Common stock and warrant issuance, Shares   4,108,273    
Common stock and warrant issuance, Value $ 4,283,000 $ 41,000 4,242,000 0
Common Stock, Shares, Outstanding period end at Feb. 03, 2018 65,290,458 65,290,458.000    
Total Shareholders' Equity period end at Feb. 03, 2018 $ 83,996,000 $ 653,000 $ 439,111,000 $ (355,768,000)
v3.8.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
OPERATING ACTIVITIES:      
Net loss $ 143 $ (8,745) $ (12,284)
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:      
Depreciation and amortization 10,307 11,209 10,327
Share-based payment compensation 2,888 1,946 2,275
Gain from disposal of assets (551) 0 0
Amortization of deferred revenue (60) (86) (85)
Amortization of deferred finance costs 366 558 271
Loss on debt extinguishment 1,457 0 0
Deferred income taxes (3,522) 788 788
Changes in operating assets and liabilities:      
Accounts receivable, net 2,503 15,978 (2,674)
Inventories 1,381 (3,181) (4,384)
Prepaid expenses and other 166 423 (565)
Accounts payable and accrued liabilities (11,800) (11,606) (3,080)
Net cash provided by (used for) operating activities 3,278 7,284 (9,411)
INVESTING ACTIVITIES:      
Property and equipment additions (10,499) (10,261) (22,014)
Proceeds from the sale of assets 12,738 0 0
Cash paid for acquisition 0 (508) 0
Change in restricted cash and investments 0 0 1,650
Net cash provided by (used for) investing activities 2,239 (10,769) (20,364)
FINANCING ACTIVITIES:      
Proceeds from issuance of revolving loan 96,800 0 19,200
Proceeds of term loans 6,000 17,000 2,849
Proceeds from issuance of common stock and warrants 4,628 12,470 0
Proceeds from exercise of stock options 79 0 2,460
Payments on revolving loan (96,800) 0 0
Payments on term loans (18,780) (2,852) (2,076)
Payments for repurchases of common stock (5,055) 0 0
Payments for common stock issuance costs (452) (786) 0
Payments of Debt Extinguishment Costs (334) 0 0
Payments for deferred financing costs (265) (1,512) (537)
Payments for restricted stock issuance (45) (46) 0
Payments on capital leases 0 (39) (52)
Net cash provided by (used for) financing activities (14,224) 24,235 21,844
Net increase (decrease) in cash (8,707) 20,750 (7,931)
BEGINNING CASH 32,647 11,897 19,828
ENDING CASH $ 23,940 $ 32,647 $ 11,897
v3.8.0.1
The Company
12 Months Ended
Feb. 03, 2018
General [Abstract]  
The Company
The Company
EVINE Live Inc. and its subsidiaries ("we," "our," "us," or the "Company") are collectively a multiplatform interactive digital commerce company that offers a mix of proprietary, exclusive and name-brand merchandise in the categories of jewelry & watches, home & consumer electronics, beauty, and fashion & accessories directly to consumers 24 hours a day in an engaging and informative shopping experience via television, online and mobile devices. Evine is distributed in more than 87 million homes, primarily through cable and satellite distribution agreements and agreements with telecommunications companies. The network is also streamed live online at evine.com, is available on mobile channels and over-the-top platforms and is also distributed through a full-power television station in Boston.
The Company also operates evine.com, a comprehensive digital commerce platform that sells products which appear on its television shopping network as well as an extended assortment of online-only merchandise. The live programming and products are also marketed via mobile devices, including smartphones and tablets, and through the leading social media channels.
v3.8.0.1
Summary of Significant Accounting Policies
12 Months Ended
Feb. 03, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Fiscal Year
The Company's fiscal year ends on the Saturday nearest to January 31 and results in either a 52-week or 53-week fiscal year. References to years in this report relate to fiscal years, rather than to calendar years. The Company’s most recently completed fiscal year, fiscal 2017, ended on February 3, 2018, and consisted of 53 weeks. Fiscal 2016 ended on January 28, 2017 and consisted of 52 weeks. Fiscal 2015 ended on January 30, 2016 and consisted of 52 weeks.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.
Revenue Recognition and Accounts Receivable
Revenue is recognized at the time merchandise is shipped or when services are provided. Shipping and handling fees charged to customers are recognized as merchandise is shipped and are classified as revenue in the accompanying statements of operations in accordance with generally accepted accounting principles ("GAAP"). The Company classifies shipping and handling costs in the accompanying statements of operations as a component of cost of sales. Revenue is reported net of estimated sales returns and excludes sales taxes. Sales returns are estimated and provided for at the time of sale based on historical experience.
Accounts receivable consist primarily of amounts due from customers for merchandise sales and from credit card companies, and are reflected net of reserves for estimated uncollectible amounts of $6,008,000 at February 3, 2018 and $6,022,000 at January 28, 2017. The Company utilizes an installment payment program called ValuePay that entitles customers to purchase merchandise and generally pay for the merchandise in two or more equal monthly credit card installments. As of February 3, 2018 and January 28, 2017, the Company had approximately $88,452,000 and $91,839,000 of net receivables due from customers under the ValuePay installment program. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Provision for doubtful accounts receivable primarily related to the Company’s ValuePay program were $9,852,000, $11,949,000 and $11,795,000 for fiscal 2017, fiscal 2016 and fiscal 2015.
Cost of Sales and Other Operating Expenses
Cost of sales includes primarily the cost of merchandise sold, shipping and handling costs, inbound freight costs, excess and obsolete inventory charges, distribution facility depreciation and customer courtesy credits. Purchasing and receiving costs, including costs of inspection, are included as a component of distribution and selling expense and were approximately $10,660,000, $9,557,000 and $10,730,000 for fiscal 2017, fiscal 2016 and fiscal 2015. Distribution and selling expense consists primarily of cable and satellite access fees, credit card fees, bad debt expense and costs associated with purchasing and receiving, inspection, marketing and advertising, show production, website marketing and merchandising, telemarketing, customer service, warehousing and fulfillment. General and administrative expense consists primarily of costs associated with executive, legal, accounting and finance, information systems and human resources departments, software and system maintenance contracts, insurance, investor and public relations and director fees.
Cash
Cash consists of cash on deposit. The Company maintains its cash balances at financial institutions in demand deposit accounts that are federally insured. The Company has not experienced losses in such accounts and believes it is not exposed to any significant credit risk on its cash.
Restricted Cash and Investments
The Company had restricted cash and investments of $450,000 for both fiscal 2017 and fiscal 2016. The Company’s restricted cash and investments consist of certificates of deposit. Interest income is recognized when earned.
Inventories
Inventories, which consists of consumer merchandise held for resale, are stated at the lower of average cost or net realizable value, giving consideration to obsolescence provision write downs of $3,757,000, $5,589,000 and $7,172,000 for fiscal 2017, fiscal 2016 and fiscal 2015.
Marketing and Advertising Costs
Marketing and advertising costs are expensed as incurred and consist primarily of contractual marketing fees paid to certain cable operators for cross channel promotions and online advertising, including amounts paid to online search engine operators and customer mailings. Total marketing and advertising costs and online search marketing fees totaled $4,530,000, $3,723,000 and $3,300,000 for fiscal 2017, fiscal 2016 and fiscal 2015. The Company includes advertising costs as a component of distribution and selling expense in the Company’s consolidated statement of operations.
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Improvements and renewals that extend the life of an asset are capitalized and depreciated. Repairs and maintenance are charged to expense as incurred. The cost and accumulated depreciation of property and equipment retired or otherwise disposed of are removed from the related accounts, and any residual values are charged or credited to operations. Depreciation and amortization for financial reporting purposes are provided on a straight-line method based upon estimated useful lives. Costs incurred to develop software for internal use and for the Company’s websites are capitalized and amortized over the estimated useful life of the software. Costs related to maintenance of internal-use software and for the Company’s website are expensed as incurred.
Intangible Assets
The Company’s primary identifiable intangible assets include the Evine trademark and brand name; and an acquired online watch retailer customer list and trade name. Identifiable intangibles with finite lives are amortized and those identifiable intangibles with indefinite lives are not amortized. Identifiable intangible assets that are subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Identifiable intangible assets not subject to amortization are tested for impairment annually or more frequently if events warrant. The impairment test consists of a comparison of the fair value of the intangible asset with its carrying amount.
Stock-Based Compensation
Compensation is recognized for all stock-based compensation arrangements by the Company, including employee and non-employee stock option and restricted stock unit grants. The estimated grant date fair value of each stock-based award is recognized as compensation over the requisite service period, which is generally the vesting period. The estimated fair value of each option is calculated using the Black-Scholes option-pricing model for time-based vesting awards and a Monte Carlo valuation model for market-based vesting awards. The estimated fair value of restricted stock grants is based on the grant date closing price of the Company's stock for time-based vesting awards and a Monte Carlo valuation model for market-based vesting awards.
Income Taxes
The Company accounts for income taxes under the liability method of accounting whereby deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between financial statement and tax basis of assets and liabilities. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of the enactment of such laws. The Company assesses the recoverability of its deferred tax assets in accordance with GAAP.
The Company recognizes interest and penalties related to uncertain tax positions within income tax expense.
Net Income (Loss) Per Common Share
Basic income (loss) per share is computed by dividing reported income (loss) by the weighted average number of common shares outstanding for the reported period. Diluted net income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock of the Company during reported periods.
A reconciliation of net income (loss) per share calculations and the number of shares used in the calculation of basic net income (loss) per share and diluted net income (loss) per share is as follows:
 
 
For the Years Ended
 
 
February 3,
2018
 
January 28,
2017
 
January 30,
2016
Net income (loss) (a)
 
$
143,000

 
$
(8,745,000
)
 
$
(12,284,000
)
Weighted average number of common shares outstanding — Basic
 
63,870,046

 
59,784,594

 
57,004,321

Dilutive effect of stock options, non-vested shares and warrants (b)
 
98,253

 

 

Weighted average number of common shares outstanding — Diluted
 
63,968,299

 
59,784,594

 
57,004,321

 
 
 
 
 
 
 
Net income (loss) per common share
 
$
0.00

 
$
(0.15
)
 
$
(0.22
)
Net income (loss) per common share — assuming dilution
 
$
0.00

 
$
(0.15
)
 
$
(0.22
)

(a) The net income (loss) for fiscal 2017, fiscal 2016 and fiscal 2015 includes executive and management transition costs of $2,145,000, $4,411,000 and $3,549,000. The net income for fiscal 2017 includes a loss on debt extinguishment of $1,457,000 and a gain on the sale of television station of $551,000. In addition, fiscal 2016 and fiscal 2015 net losses include distribution facility consolidation and technology upgrade costs of $677,000 and $1,347,000.
(b) For fiscal 2016 and fiscal 2015, approximately 119,000 and -0- incremental in-the-money potentially dilutive common share stock options and, with respect to fiscal 2016, warrants have been excluded from the computation of diluted earnings per share, as the effect of their inclusion would be anti-dilutive.
Fair Value of Financial Instruments
GAAP requires disclosures of fair value information about financial instruments for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. GAAP excludes certain financial instruments and all non-financial instruments from its disclosure requirements.
The Company used the following methods and assumptions in estimating its fair values for financial instruments. The carrying amounts reported in the accompanying consolidated balance sheets approximate the fair value for cash, short-term investments, accounts receivable, trade payables and accrued liabilities, due to the short maturities of those instruments. The fair value of the Company’s $74 million PNC Credit Facility is estimated based on rates available to the Company for issuance of debt. As of February 3, 2018 and January 28, 2017, the Company's Credit Facilities had a carrying amount and an estimated fair value of $74 million and $85 million.
Fair Value Measurements on a Nonrecurring Basis
Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to the Company's tangible fixed assets and intangible FCC broadcasting license asset, which was sold during the fourth quarter of fiscal 2017 as discussed further in Note 4 - "Intangible Assets". These assets and liabilities are remeasured when estimated fair value is below carrying value on the consolidated balance sheets. For these assets, the Company does not periodically adjust its carrying value to fair value except in the event of impairment. If the Company determines that impairment has occurred, the carrying value of the asset is reduced to fair value and the difference is recorded as a loss within operating income in the consolidated statement of operations. The Company had no remeasurements of such assets or liabilities to fair value during fiscal 2017, fiscal 2016 and fiscal 2015.
Use of Estimates
The preparation of financial statements in conformity with GAAP in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during reporting periods. These estimates relate primarily to the carrying amounts of accounts receivable and inventories, the realizability of certain long-term assets and the recorded balances of certain accrued liabilities and reserves. Ultimate results could differ from these estimates.
Recently Adopted Accounting Standards
In July 2015, the Financial Accounting Standards Board issued Simplifying the Measurement of Inventory, Topic 330 (ASU No 2015-11). ASU 2015-11 changes the measurement principle for inventory from the lower of cost or market to lower of cost or net realizable value. The new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2016. The Company adopted this standard in the first quarter of fiscal 2017, applying it prospectively. The adoption of ASU 2015-11 did not have a material impact on the Company's consolidated financial statements.
In March 2016, the Financial Accounting Standards Board issued Compensation-Stock Compensation, Topic 718 (ASU No. 2016-09). This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. In addition, the ASU also clarifies the statement of cash flows presentation for certain components of share-based awards. The new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. The Company adopted ASU 2016-09 in the first quarter of fiscal 2017 and has elected to continue estimating forfeitures each period. Prospectively, beginning January 29, 2017, excess tax benefits/deficiencies, along with the full valuation allowance, have been reflected as income tax benefit/expense in the statement of operations resulting in no impact on the tax provision in fiscal 2017. Additionally, the statement of cash flows classification of prior periods has not changed as a result of adoption.
In August 2016, the Financial Accounting Standards Board issued Statement of Cash Flows, Topic 230 (ASU No. 2016-15). This amendment provides guidance on the presentation and classification of specific cash flow items to improve consistency in practice. The standard provides guidance in a number of situations including, among others, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and debt prepayment or extinguishment costs. The new standard is effective retrospectively for the Company for fiscal years and interim periods beginning after December 15, 2017, with early adoption permitted. The Company elected to early adopt this standard in the first quarter of fiscal 2017, applying it retrospectively. The adoption of ASU 2016-15 had no impact on the Company's consolidated financial statements.
Recently Issued Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board issued Revenue from Contracts with Customers, Topic 606 (ASU No. 2014-09), which provides a framework for the recognition of revenue, with the objective that recognized revenues properly reflect amounts an entity is entitled to receive in exchange for goods and services. The guidance also includes additional disclosure requirements regarding revenue, cash flows and obligations related to contracts with customers. In July 2015, the Financial Accounting Standards Board approved a one year deferral of the effective date of ASU 2014-09. The standard will now become effective for interim and annual reporting periods beginning after December 15, 2017.
The Company will adopt the accounting guidance in the first quarter of fiscal 2018. The Company has completed its evaluation of the impact of ASU 2014-09, including related amendments and interpretive guidance, on the Company's consolidated financial statements, financial systems and controls. The Company has concluded that it will recognize revenue at the time merchandise is shipped, which is consistent with current practice. The Company has also concluded that it will continue to act as principal in certain vendor arrangements. The Company will make certain changes to its accounting policies, including the presentation of estimated merchandise returns as both an asset (equal to the inventory value expected to be returned) and a corresponding return liability, compared to the current practice of recording an estimated net return liability. In addition, the Company will elect the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component when its payment terms are less than one year, as well as the practical expedient to exclude from the measurement of the transaction price sales taxes collected from customers. The Company will apply the modified retrospective method of transition, which will not have a material cumulative adjustment to retained earnings.
In February 2016, the Financial Accounting Standards Board issued Leases, Topic 842 (ASU No 2016-02). ASU 2016-02 establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2016-02 on the Company's consolidated financial statements.
v3.8.0.1
Property and Equipment
12 Months Ended
Feb. 03, 2018
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment Disclosure [Text Block]
Property and Equipment
Property and equipment in the accompanying consolidated balance sheets consisted of the following:
 
 
Estimated Useful Life (In Years)
 
February 3, 2018
 
January 28, 2017
Land and improvements
 
 
$
3,236,000

 
$
3,394,000

Buildings and improvements
 
5-40
 
39,087,000

 
38,358,000

Transmission and production equipment
 
5-10
 
6,918,000

 
7,308,000

Office and warehouse equipment
 
3-15
 
18,827,000

 
18,942,000

Computer hardware, software and telephone equipment
 
3-10
 
86,421,000

 
88,478,000

Leasehold improvements
 
3-5
 
2,637,000

 
2,681,000

 
 
 
 
157,126,000

 
159,161,000

Less — Accumulated depreciation
 
 
 
(105,078,000
)
 
(106,446,000
)
 
 
 
 
$
52,048,000

 
$
52,715,000

Depreciation expense in fiscal 2017, fiscal 2016 and fiscal 2015 was $10,141,000, $11,118,000 and $10,266,000.
v3.8.0.1
Intangible Assets
12 Months Ended
Feb. 03, 2018
Intangible Assets [Abstract]  
Intangible Assets
Intangible Assets
Intangible assets in the accompanying consolidated balance sheets consisted of the following:
 
 
Estimated Useful Life
(In Years)
 
February 3, 2018
 
January 28, 2017
 
 
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Gross
Carrying
Amount
 
Accumulated
Amortization
Finite-lived intangible assets
 
5-15
 
$
1,786,000

 
$
(336,000
)
 
$
1,786,000

 
$
(171,000
)
Indefinite-lived intangible assets:
 
 
 
 
 
 
 
 
 
 
FCC broadcast license
 
 
 
$

 
 
 
$
12,000,000

 
 

Finite-lived Intangible Assets
The finite-lived intangible assets are included in Other Assets in the accompanying balance sheets and consist of the Evine trademark and the Princeton Watches trade name and customer list (as further described below). Amortization expense related to the finite-lived intangible assets was $165,000, $91,000 and $62,000 for fiscal 2017, fiscal 2016 and fiscal 2015. Estimated amortization expense is $165,000 for each fiscal year through fiscal 2020, $157,000 for fiscal 2021 and $96,000 for fiscal 2022.
On December 16, 2016, the Company completed the acquisition of Princeton Enterprises, LTD (dba Princeton Watches, "Princeton Watches"), an online retail enterprise engaged in the sale of watches, clocks and related accessories. The Company acquired substantially all of Princeton's assets and select liabilities. The assets acquired include the Princeton Watches trade name and Princeton Watches customer list valued at $336,000 and $347,000 and are being amortized over their estimated useful lives of 15 and five years. The acquisition of Princeton was intended to help expand on the Company's strong watch and clock offerings as well as to broaden the Company's online distribution channels. See Note 11 - "Business Acquisition" for additional information.
FCC Broadcast License and Sale of Boston Television Station, WWDP
As of January 28, 2017, the Company had an intangible FCC broadcasting license with a carrying value of $12,000,000 and an estimated fair value of $13,400,000. On August 28, 2017, the Company entered into two agreements with unrelated parties to sell its Boston television station, WWDP, including the Company's FCC broadcast license, for an aggregate of $13,500,000.
On August 28, 2017, the Company entered into a channel sharing and facilities agreement (the “Channel Sharing Agreement”) with NRJ Boston OpCo, LLC and NRJ TV Boston License Co., LLC (collectively, “NRJ”) to allow NRJ to operate its local Boston television station on one-third of the spectrum used in the operation of the Company's television broadcast station, WWDP(TV), Norwell, Massachusetts (the “Station”), in perpetuity. The total consideration payable to the Company under the Channel Sharing Agreement was $3,500,000, of which $2,500,000 was received in October 2017 upon the grant of a required construction permit by the FCC and $1,000,000 was received in December 2017 upon the closing of the sale of substantially all of the remaining television station assets.
On August 28, 2017, the Company also entered into an asset purchase agreement to sell substantially all of the assets primarily related to the Station to affiliates of WRNN-TV Associates Limited Partnership (“Buyers”). The purchase price for the Station's assets was $10,000,000 in cash, subject to an escrow holdback amount of $1,000,000, which is payable to the Company when the Station is being carried by certain designated carriers at or following the closing of the transaction. The escrow holdback is payable back to the Buyers in monthly installments beginning approximately 14 months after the closing if the station is not being carried by certain designated carriers. The asset purchase agreement includes customary representations, warranties, covenants and indemnification obligations of the parties. The sale of assets pursuant to the purchase agreement closed during the fourth quarter of fiscal 2017 and $9,333,000 of the purchase price was received, which included $333,000 of the escrow holdback amount. The Company used the proceeds received from the transaction to pay off the remaining amounts due under the Company's term loan with GACP Finance Co., LLC, with the remaining proceeds used for general working capital purposes.
The Company recorded a pre-tax operating gain on the television station sale of $551,000 during the fourth quarter of fiscal 2017 upon the closing of the transaction. As of February 3, 2018, $667,000 of the sales price remained in escrow pending the Station being carried by certain designated carriers. The Company has not recorded any additional gain relating to the remaining escrow amount and will not record the remaining gain until the contingency is resolved.
v3.8.0.1
Accrued Liabilities
12 Months Ended
Feb. 03, 2018
Accrued Liabilities, Current [Abstract]  
Accrued Liabilities, Current [Abstract]
Accrued Liabilities
Accrued liabilities in the accompanying consolidated balance sheets consisted of the following:
 
 
February 3, 2018
 
January 28, 2017
Accrued cable access fees
 
$
22,120,000

 
$
19,480,000

Accrued salaries and related
 
2,105,000

 
4,406,000

Reserve for product returns
 
3,544,000

 
3,723,000

Other
 
7,877,000

 
10,249,000

 
 
$
35,646,000

 
$
37,858,000

v3.8.0.1
Evine Private Label Consumer Credit Card Program
12 Months Ended
Feb. 03, 2018
Private Label Consumer Credit Card Program [Abstract]  
Evine Private Label Consumer Credit Card Program
Evine Private Label Consumer Credit Card Program
The Company has a private label consumer credit card program (the "Program"). The Program is made available to all qualified consumers to finance Evine purchases and provides benefits including instant purchase credits, free or reduced shipping promotions throughout the year and promotional low-interest financing on qualifying purchases. Use of the Evine credit card enhances customer loyalty, reduces total credit card expense and reduces the Company’s overall bad debt exposure since the credit card issuing bank bears the risk of loss on Evine credit card transactions except those in the Company's ValuePay installment payment program. In July 2017, the Company extended the Program through 2020 by entering into a Private Label Consumer Credit Card Program Agreement Amendment with Synchrony Financial, the issuing bank for the Program.
Synchrony Financial was previously indirectly majority-owned by the General Electric Company ("GE"), which is also the parent company of GE Equity. Prior to the sale of Evine common stock to ASF Radio on April 29, 2016, GE Equity had a beneficial ownership in Evine and had certain rights as further described in Note 18 - "Related Party Transactions".
v3.8.0.1
Fair Value Measurements
12 Months Ended
Feb. 03, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements
GAAP utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to observable quoted prices (unadjusted) in active markets for identical assets and liabilities (Level 1 measurement), then priority to quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market (Level 2 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).
As of February 3, 2018 and January 28, 2017 the Company had $450,000 in Level 2 investments in the form of bank certificates of deposit. The Company's investments in certificates of deposits were measured using inputs based upon quoted prices for similar instruments in active markets and, therefore, were classified as Level 2 investments. As of February 3, 2018 and January 28, 2017 the Company also had long-term variable rate Credit Facilities, classified as Level 2, with carrying values of $73,899,000 and $85,388,000. As of February 3, 2018 and January 28, 2017, $2,326,000 and $3,242,000 was classified as current. The fair value of the variable rate Credit Facilities approximates and is based on its carrying value. The Company has no Level 3 investments that use significant unobservable inputs.
Non Financial Assets Measured at Fair Value - Nonrecurring Basis
As of January 28, 2017 the Company had an intangible FCC broadcasting license asset with a carrying value of $12,000,000. The intangible FCC broadcasting license, which was included in the Boston television station sale, WWDP, was sold during the fourth quarter of fiscal 2017. See Note 4 - "Intangible Assets" for additional information. Prior to such sale, the Company estimated the fair value of its FCC television broadcast license asset primarily by using income-based discounted cash flow models. In determining fair value, the Company considered, among other factors, the advice of an independent outside fair value consultant. The discounted cash flow models utilized a range of assumptions including revenues, operating profit margin, projected capital expenditures and an unobservable input discount rate of 10.0%. The Company concluded that the inputs used in its intangible FCC broadcasting license asset valuation were Level 3 inputs.
The following table provides a reconciliation of the beginning and ending balances of non-financial assets measured at fair value on a nonrecurring basis that use significant unobservable inputs (Level 3):
 
 
February 3,
2018
 
January 28,
2017
Intangible FCC Broadcasting License Asset:
 
 
 
 
Beginning balance
 
$
12,000,000

 
$
12,000,000

Losses included in earnings (asset impairment)
 

 

Net gain recognized in earnings upon sale
 
551,000

 

Sale
 
(12,551,000
)
 

Ending balance
 
$

 
$
12,000,000

v3.8.0.1
Credit Agreements
12 Months Ended
Feb. 03, 2018
Debt Disclosure [Abstract]  
Credit Agreements [Text Block]
Credit Agreements
The Company's long-term credit facilities consist of:
 
 
February 3, 2018
 
January 28, 2017
PNC Credit Facility
 
 
 
 
PNC revolving loan due March 21, 2022, principal amount
 
$
59,900,000

 
$
59,900,000

 
 
 
 
 
PNC term loan due March 21, 2022, principal amount
 
14,148,000

 
10,637,000

Less unamortized debt issuance costs
 
(149,000
)
 
(181,000
)
PNC term loan due March 21, 2022, carrying amount
 
13,999,000

 
10,456,000

 
 
 
 
 
GACP Credit Agreement
 
 
 
 
GACP term loan due March 9, 2021, principal amount
 

 
16,292,000

Less unamortized debt issuance costs
 

 
(1,260,000
)
GACP term loan due March 9, 2021, carrying amount
 

 
15,032,000

 
 
 
 
 
Total long-term credit facilities
 
73,899,000

 
85,388,000

Less current portion of long-term credit facilities
 
(2,326,000
)
 
(3,242,000
)
Long-term credit facilities, excluding current portion
 
$
71,573,000

 
$
82,146,000


PNC Credit Facility
On February 9, 2012, the Company entered into a credit and security agreement (as amended through September 25, 2017, the "PNC Credit Facility") with PNC Bank, N.A. ("PNC"), a member of The PNC Financial Services Group, Inc., as lender and agent. The PNC Credit Facility, which includes CIBC Bank USA (formerly known as The Private Bank) as part of the facility, provides a revolving line of credit of $90.0 million and provides for a term loan on which the Company had originally drawn to fund improvements at the Company's distribution facility in Bowling Green, Kentucky and subsequently to pay down the Company's GACP Term Loan (as defined below). The PNC Credit Facility also provides an accordion feature that would allow the Company to expand the size of the revolving line of credit by another $25.0 million at the discretion of the lenders and upon certain conditions being met. On March 21, 2017, the Company entered into the Eighth Amendment to the PNC Credit Facility, which among other things, increased the term loan by $6,000,000, extended the term of the PNC Credit Facility from May 1, 2020 to March 21, 2022, and authorized the proceeds from the term loan to be used as part of a voluntary prepayment on its GACP Term Loan.
All borrowings under the PNC Credit Facility mature and are payable on March 21, 2022. Subject to certain conditions, the PNC Credit Facility also provides for the issuance of letters of credit in an aggregate amount up to $6.0 million which, upon issuance, would be deemed advances under the PNC Credit Facility. Maximum borrowings and available capacity under the revolving line of credit under the PNC Credit Facility are equal to the lesser of $90.0 million or a calculated borrowing base comprised of eligible accounts receivable and eligible inventory. The PNC Credit Facility is secured by a first security interest in substantially all of the Company’s personal property, as well as the Company’s real properties located in Eden Prairie, Minnesota and Bowling Green, Kentucky. Under certain circumstances, the borrowing base may be adjusted if there were to be a significant deterioration in value of the Company’s accounts receivable and inventory.
The revolving line of credit under the PNC Credit Facility bears interest at LIBOR plus a margin of between 3% and 4.5% based on the Company's trailing twelve-month reported EBITDA (as defined in the PNC Credit Facility) measured quarterly in fiscal 2016 and semi-annually thereafter as demonstrated in its financial statements. The term loan bears interest at either a Base Rate or LIBOR plus a margin consisting of between 4% and 5% on Base Rate term loans and 5% to 6% on LIBOR Rate term loans based on the Company’s leverage ratio as demonstrated in its audited financial statements.
As of February 3, 2018, the Company had borrowings of $59.9 million under its revolving credit facility. Remaining available capacity under the revolving credit facility as of February 3, 2018 is approximately $18.4 million, and provides liquidity for working capital and general corporate purposes. The PNC Credit Facility also provides for a term loan on which the Company has drawn to fund an expansion and improvements at the Company's distribution facility in Bowling Green, Kentucky and to partially pay down the Company's GACP Term Loan. As of February 3, 2018, there was approximately $14.1 million outstanding under the PNC Credit Facility term loan of which $2.3 million was classified as current in the accompanying balance sheet.
Principal borrowings under the term loan are to be payable in monthly installments over an 84-month amortization period commencing on April 1, 2017 and are also subject to mandatory prepayment in certain circumstances, including, but not limited to, upon receipt of certain proceeds from dispositions of collateral. Borrowings under the term loan are also subject to mandatory prepayment in an amount equal to fifty percent (50%) of excess cash flow for such fiscal year, with any such payment not to exceed $2.0 million in any such fiscal year. The PNC Credit Facility is also subject to other mandatory prepayment in certain circumstances. In addition, if the total PNC Credit Facility is terminated prior to maturity, the Company would be required to pay an early termination fee of 3.0% if terminated on or before March 21, 2018, 1.0% if terminated on or before March 21, 2019, 0.5% if terminated on or before March 21, 2020; and no fee if terminated after March 21, 2020. As of February 3, 2018, the imputed effective interest rate on the PNC term loan was 8.0%.
Interest expense recorded under the PNC Credit Facility was $4,128,000, $3,819,000 and $2,702,000 for fiscal 2017, fiscal 2016 and fiscal 2015.
The PNC Credit Facility contains customary covenants and conditions, including, among other things, maintaining a minimum of unrestricted cash plus unused line availability of $10.0 million at all times and limiting annual capital expenditures. As the Company's unused line availability was greater than $10.0 million at February 3, 2018, no additional cash was required to be restricted. Certain financial covenants, including minimum EBITDA levels (as defined in the PNC Credit Facility) and a minimum fixed charge coverage ratio of 1.1 to 1.0, become applicable only if unrestricted cash plus unused line availability falls below $10.8 million. As of February 3, 2018, the Company's unrestricted cash plus unused line availability was $42.4 million and the Company was in compliance with applicable financial covenants of the PNC Credit Facility and expects to be in compliance with applicable financial covenants over the next twelve months. In addition, the PNC Credit Facility places restrictions on the Company’s ability to incur additional indebtedness or prepay existing indebtedness, to create liens or other encumbrances, to sell or otherwise dispose of assets, to merge or consolidate with other entities, and to make certain restricted payments, including payments of dividends to common shareholders.
Costs incurred to obtain amendments to the PNC Credit Facility totaling $1,406,000 and unamortized costs incurred to obtain the original PNC Credit Facility totaling $466,000 have been deferred and are being expensed as additional interest over the five-year term of the PNC Credit Facility. Deferred financing costs, net of amortization, related to the revolving line of credit are included within other assets within the Company's balance sheet.
Great American Capital Partners Credit Agreement
On March 10, 2016, the Company entered into a term loan credit and security agreement (as amended through September 25, 2017, the "GACP Credit Agreement") with GACP Finance Co., LLC ("GACP") for a term loan of $17.0 million which was fully paid off during fiscal 2017 (as described below). Proceeds from the GACP Term Loan were used to provide for working capital and general corporate purposes and to help strengthen the Company's total liquidity position. The term loan under the GACP Credit Agreement (the "GACP Term Loan") was secured on a first lien priority basis by the proceeds of any sale of the Company's Boston television station FCC license and on a second lien priority basis by the Company's accounts receivable, equipment, inventory and certain real estate as well as other assets as described in the GACP Credit Agreement. The Company had also pledged the stock of certain subsidiaries to secure such obligations on a second lien priority basis.
On March 21, 2017, the Company made a voluntary principal prepayment of $9,500,000 on its GACP Term Loan. The principal payment was funded by a combination of cash on hand and $6,000,000 from the Company’s lower interest PNC Credit Facility term loan. The Company recorded a loss on extinguishment of debt totaling $913,000 in connection with the principal prepayment, which includes early termination and lender fees of $199,000 and unamortized debt issuance costs of $714,000, which represents the proportionate amount of unamortized debt issuance costs attributable to the extinguished debt.
On October 18, 2017, the Company made a voluntary principal prepayment of $2,500,000 on its GACP Term Loan. The principal payment was funded by proceeds received by the Company under the Channel Sharing Agreement, as discussed in Note 4 - "Intangible Assets". The Company recorded a loss on extinguishment of debt totaling $221,000 in connection with the principal prepayment, which includes early termination and lender fees of $50,000 and unamortized debt issuance costs of $171,000, which represents the proportionate amount of unamortized debt issuance costs attributable to the extinguished debt.
On December 6, 2017, the Company made a voluntary principal prepayment of $3,513,000 to fully retire its GACP Term Loan. The principal payment was funded by proceeds received upon the sale of the Boston television station, WWDP, as discussed in Note 4 - "Intangible Assets". The Company recorded a loss on extinguishment of debt totaling $323,000 in connection with the principal prepayment, which includes early termination and lender fees of $85,000 and unamortized debt issuance costs of $238,000, which represents the remaining amount of unamortized debt issuance costs attributable to the GACP Term Loan.
The GACP Term Loan bore interest at either (i) a fixed rate based on the greater of LIBOR for interest periods of one, two or three months or 1% plus a margin of 11.0%, or (ii) a daily floating Alternate Base Rate plus a margin of 10.0%. Principal borrowings under the GACP Term Loan were payable in consecutive monthly installments of $70,833 each, commencing on April 1, 2016, with a final installment due at the end of the five- year term equal to the aggregate principal amount of all loans outstanding on such date. The GACP Term Loan could be prepaid voluntarily at any time and, if terminated prior to maturity, the Company would be required to pay an early termination fee of 2.0% if terminated on or before March 10, 2018; 1.0% if terminated on or before March 10, 2019; and no fee if terminated after March 10, 2019. Interest expense recorded under the GACP Credit Agreement was $940,000 and $2,099,000 for fiscal 2017 and fiscal 2016.
Costs incurred to obtain the GACP Credit Agreement totaled $1,565,000, which were deferred and expensed as additional interest over the original five-year term of the GACP Credit Agreement, less costs written-off for the March 21, 2017 and October 18, 2017 partial debt extinguishments totaling $885,000. The remaining $238,000 of deferred costs were written-off as a loss on debt extinguishment in December 2017, when the remaining principal was paid in full.
The aggregate maturities of the Company's long-term credit facilities as of February 3, 2018 are as follows:
 
 
PNC Credit Facility
 
 
Fiscal year
 
Term loan
 
Revolving loan
 
Total
2018
 
$
2,326,000

 
$

 
$
2,326,000

2019
 
2,132,000

 

 
2,132,000

2020
 
2,326,000

 

 
2,326,000

2021
 
2,326,000

 

 
2,326,000

2022
 
5,038,000

 
59,900,000

 
64,938,000

 
 
$
14,148,000

 
$
59,900,000

 
$
74,048,000

v3.8.0.1
Shareholders' Equity
12 Months Ended
Feb. 03, 2018
Equity [Abstract]  
Shareholders' Equity
Shareholders' Equity
Common Stock
The Company currently has authorized 99,600,000 shares of undesignated capital stock, of which 65,290,458 shares were issued and outstanding as common stock as of February 3, 2018. The board of directors may establish new classes and series of capital stock by resolution without shareholder approval; however, in certain circumstances the Company is required to obtain approval under our PNC Credit Facility.
Preferred Stock
The Company authorized 400,000 Series A Junior Participating Cumulative Preferred Stock, $0.01 par value, during fiscal 2015 as part of the Shareholder Rights Plan. As of February 3, 2018, there were zero shares issued and outstanding. See Note 12 - "Income Taxes" for additional information.
Dividends
The Company has never declared or paid any dividends with respect to its capital stock. The Company is restricted from paying dividends on its stock by its PNC Credit Facility.
Registered Direct Offering
On May 23, 2017, the Company entered into Common Stock Purchase Agreements with certain accredited investors to which the Company sold, in the aggregate, 4,008,273 shares of common stock in a registered direct offering pursuant to a shelf registration statement on Form S-3 (File No. 333-203209), filed with the SEC on May 13, 2015. The shares were sold at a price of $1.12 per share, except for shares purchased by investors who are directors or executive officers of the Company, which were sold at a price of $1.15 per share. The closing of this sale occurred on May 30, 2017 and the Company received gross proceeds of approximately $4.5 million and incurred approximately $323,000 of issuance costs. The Company has used the proceeds for general working capital purposes.
Private Placement Securities Purchase Agreements
On September 14, 2016, the Company entered into private placement securities purchase agreements ("Purchase Agreements") with certain accredited investors to which the Company: (a) sold, in the aggregate, 5,952,381 shares of the Company's common stock at a price of $1.68 per share; (b) issued five-year warrants ("Warrants") to purchase 2,976,190 shares of the Company's common stock at an exercise price of $2.90 per share, and (c) issued an option by which certain investors may purchase additional shares of Company's common stock and additional warrants to purchase shares of common stock ("Options").
The Company received gross proceeds of $10.0 million and incurred approximately $852,000 of issuance costs. The Warrants will expire on September 19, 2021 and were not exercisable until March 19, 2017. Except as noted below, the term of each option was six months and expired on March 19, 2017. The option exercise price was equal to the five-day volume weighted average price per share of the Company's common stock as of the day immediately prior to exercise. Upon exercise of the Options, two-thirds of the option securities would be issued in the form of common stock, and one-third would be issued in the form of warrants ("Option Warrants"). These Option Warrants have an exercise price at a 50% premium to the Company's closing stock price one-day prior to the option exercise and will expire five years after issuance. If all of the Warrants, Options and Option Warrants issued by the Company are all exercised, the total shares of common stock issued in connection with this offering cannot be more than approximately 19.99% of the Company's total issued and outstanding shares following such exercises.
The Company allocated the $10 million proceeds of the stock offering to each of the issued freestanding financial instruments based on their fair value at the time of issuance. The Warrants are indexed to the Company's publicly traded stock and were classified as equity. As a result, the portion of the proceeds allocated to the fair value of the Warrants was recorded as an increase to additional paid-in capital. The fair value of the Options was determined to be nominal. The par value of the shares issued was recorded within common stock, with the remainder of the proceeds, less offering costs, recorded as additional paid in capital in the Company's balance sheet. The Company has used the proceeds for general working capital purposes.
As part of the Purchase Agreements, the Company agreed to register the shares of common stock sold in the private placement and the shares of common stock issuable upon exercise of the Warrants, Options and certain of the Option Warrants. The Company has filed registration statements on Form S-3 to register the common stock sold in the private placement and issuable upon exercise of the Warrants, Options and the outstanding Option Warrants. The Company agreed to keep the shelf registration statement effective until the earlier of the second anniversary of the closing or such time as all registrable securities may be sold pursuant to Rule 144 under the Securities Act of 1933, without the need for current public information or other restriction.
During the fourth quarter of fiscal 2016, three investors exercised their Options. These exercises resulted in the Company's issuance, in the aggregate, of (a) 1,646,350 shares of the Company's common stock at a price ranging from $1.20 - $1.94 per share, resulting in aggregate proceeds of $2.5 million; and (b) five-year Option Warrants to purchase an additional 823,175 shares of the Company's common stock at an exercise price ranging from $1.76 - $3.00 per share and expire between November 10, 2021 and January 23, 2022. The Company incurred, in the aggregate, approximately $49,000 of issuance costs related to the Options exercised during the fourth quarter of fiscal 2016.
On March 16, 2017, the Company entered into the First Amendment and Restated Option (the "Amended Option") with TH Media Partners, LLC, one of the September 14, 2016 Securities Purchase Agreement investors. Under the terms of the Amended Option, the investor has the right to exercise its Option in two tranches. The first tranche reflects rights to purchase 150,000 shares of the Company’s common stock, which were issuable in the form of 100,000 common shares and a warrant to purchase an additional 50,000 common shares and was exercised on March 16, 2017. The exercise resulted in the issuance of (a) 100,000 shares of the Company's common stock at a price of $1.33 per share, resulting in aggregate proceeds of $133,000; and (b) a five-year Option Warrant to purchase an additional 50,000 shares of the Company's common stock at an exercise price of $1.92 per share and expiring on March 16, 2022. The second tranche reflected the right to purchase up to 1,073,945 shares of the Company’s common stock issuable in the form of 715,963 common shares and an Option Warrant to purchase an additional 357,982 common shares. The second tranche expired unexercised on September 19, 2017. The exercise price of the Option and Option Warrants for the first and second tranches were not modified by the Amended Option. The Company incurred, in the aggregate, approximately $23,000 of issuance costs related to the Options exercised during the first quarter of fiscal 2017.
Stock Purchase from NBCU
On January 31, 2017, the Company purchased from NBCUniversal Media, LLC (“NBCU”) 4,400,000 shares of the Company's common stock for approximately $5 million or $1.12 per share pursuant to the Repurchase Letter Agreement. Immediately following the Company's share purchase, the direct equity ownership of NBCU in the Company consisted of 2,741,849 shares of common stock, or 4.5% of the Company's outstanding common stock. Upon the settlement, the NBCU Shareholder Agreement was terminated pursuant to the Repurchase Letter Agreement. As of February 3, 2018, the Company believes that NBCU sold its remaining shares of the Company's common stock. See Note 18 - "Related Party Transactions" for additional information.
Stock-Based Compensation - Stock Options
Compensation is recognized for all stock-based compensation arrangements by the Company. Stock-based compensation expense for fiscal 2017, fiscal 2016 and fiscal 2015 related to stock option awards was $915,000, $522,000 and $611,000. The Company has not recorded any income tax benefit from the exercise of stock options due to the uncertainty of realizing income tax benefits in the future.
As of February 3, 2018, the Company had one omnibus stock plan for which stock awards can be currently granted: the 2011 Omnibus Incentive Plan that provides for the issuance of up to 9,500,000 shares of the Company's stock. The 2004 Omnibus Stock Plan expired on June 22, 2014. No further awards may be made under the 2004 Omnibus Plan, but any award granted under the 2004 Omnibus Plan and outstanding on June 22, 2014 will remain outstanding in accordance with its terms. The 2001 Omnibus Stock Plan expired on June 21, 2011 and as of February 3, 2018, there were no stock awards outstanding under the 2001 Omnibus Plan. The 2011 plan is administered by the human resources and compensation committee of the board of directors and provides for awards for employees, directors and consultants. All employees and directors of the Company and its affiliates are eligible to receive awards under the plan. The types of awards that may be granted under this plan include restricted and unrestricted stock, restricted stock units, incentive and nonstatutory stock options, stock appreciation rights, performance units, and other stock-based awards. Incentive stock options may be granted to employees at such exercise prices as the human resources and compensation committee may determine but not less than 100% of the fair market value of the underlying stock as of the date of grant. No incentive stock option may be granted more than 10 years after the effective date of the respective plan's inception or be exercisable more than 10 years after the date of grant. Options granted to outside directors are nonstatutory stock options with an exercise price equal to 100% of the fair market value of the underlying stock as of the date of grant. With the exception of market-based options, options granted generally vest over three years in the case of employee stock options and vest immediately on the date of grant in the case of director options, and have contractual terms of 10 years from the date of grant.
The fair value of each time-based vesting option award is estimated on the date of grant using the Black-Scholes option pricing model that uses assumptions noted in the following table. Expected volatilities are based on the historical volatility of the Company's stock. Expected term is calculated using the simplified method taking into consideration the option's contractual life and vesting terms. The Company uses the simplified method in estimating its expected option term because it believes that historical exercise data cannot be accurately relied upon at this time to provide a reasonable basis for estimating an expected term due to the extreme volatility of its stock price and the resulting unpredictability of its stock option exercises. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected dividend yields were not used in the fair value computations as the Company has never declared or paid dividends on its common stock and currently intends to retain earnings for use in operations.
 
Fiscal 2017
 
Fiscal 2016
 
Fiscal 2015
Expected volatility
81%
 
81
%
-
84%
 
75
%
-
82%
Expected term (in years)
6 years
 
6 years
 
6 years
Risk-free interest rate
2.0
%
-
2.2%
 
1.4
%
-
2.2%
 
1.7
%
-
1.9%

A summary of the status of the Company’s stock option activity as of February 3, 2018 and changes during the year then ended is as follows:
 
 
2011
Incentive
Stock
Option
Plan
 
Weighted
Average
Exercise
Price
 
2004
Incentive
Stock
Option
Plan
 
Weighted
Average
Exercise
Price
 
2001
Incentive
Stock
Option
Plan
 
Weighted
Average
Exercise
Price
Balance outstanding, January 28, 2017
 
2,543,000

 
$
2.19

 
301,000

 
$
5.41

 
77,000

 
$
10.73

Granted
 
1,627,000

 
$
1.31

 

 
$

 

 
$

Exercised
 
(72,000
)
 
$
1.08

 

 
$

 

 
$

Forfeited or canceled
 
(714,000
)
 
$
2.90

 
(189,000
)
 
$
5.73

 
(77,000
)
 
$
10.73

Balance outstanding, February 3, 2018
 
3,384,000

 
$
1.64

 
112,000

 
$
4.86

 

 
$

Options exercisable at:
 
 
 
 
 
 
 
 
 
 
 
 
February 3, 2018
 
927,000

 
$
2.35

 
112,000

 
$
4.86

 

 
$

January 28, 2017
 
648,000

 
$
3.53

 
292,000

 
$
5.43

 
77,000

 
$
10.73

January 30, 2016
 
995,000

 
$
3.97

 
652,000

 
$
6.22

 
399,000

 
$
7.78


The following table summarizes information regarding stock options outstanding at February 3, 2018:
 
 
Options Outstanding
 
Options Vested or Expected to Vest
Option Type
 
Number of
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life
(Years)
 
Aggregate
Intrinsic
Value
 
Number of
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life
(Years)
 
Aggregate
Intrinsic
Value
2011 Incentive:
 
3,384,000

 
$
1.64

 
8.4
 
$
58,000

 
3,078,000

 
$
1.67

 
8.2
 
$
55,000

2004 Incentive:
 
112,000

 
$
4.86

 
5.8
 
$

 
112,000

 
$
4.86

 
5.8
 
$

2001 Incentive:
 

 
$

 
0.0
 
$

 

 
$

 
0.0
 
$


The weighted average grant-date fair value of options granted in fiscal 2017, fiscal 2016 and fiscal 2015 was $0.91, $0.96 and $3.95. The total intrinsic value of options exercised during fiscal 2017, fiscal 2016 and fiscal 2015 was $15,000, $0 and $1,441,000. As of February 3, 2018, total unrecognized compensation cost related to stock options was $1,454,000 and is expected to be recognized over a weighted average period of approximately 1.9 years.
Stock Option Tax Benefit
The exercise of certain stock options granted under the Company’s stock option plans give rise to compensation, which is included in the taxable income of the applicable employees and deductible by the Company for federal and state income tax purposes. Such compensation results from increases in the fair market value of the Company’s common stock subsequent to the date of grant of the applicable exercised stock options and these increases are not recognized as an expense for financial accounting purposes, as the options were originally granted at the fair market value of the Company’s common stock on the date of grant. The related tax benefits will be recorded if and when realized, and totaled $6,000, $0 and $526,000 in fiscal 2017, fiscal 2016 and fiscal 2015. The Company has not recorded any income tax benefit from the exercise of stock options in these fiscal years, due to the uncertainty of realizing income tax benefits in the future.
Stock-Based Compensation - Restricted Stock
Compensation expense recorded in fiscal 2017, fiscal 2016 and fiscal 2015 relating to restricted stock grants was $1,973,000, $1,424,000 and $1,664,000. As of February 3, 2018, there was $1,700,000 of total unrecognized compensation cost related to non-vested restricted stock grants. That cost is expected to be recognized over a weighted average period of 1.5 years. The total fair value of restricted stock vested during fiscal 2017, fiscal 2016 and fiscal 2015 was $409,000, $761,000 and $378,000.
During the fourth quarters of fiscal 2017, fiscal 2016 and fiscal 2015, the Company granted a total of 20,000, 10,000 and 37,000 shares of time-based restricted stock units to certain key employees as part of the Company's long-term incentive program. The restricted stock vests in three equal annual installments beginning one year from the grant date. The aggregate market value of the restricted stock at the date of grant was $28,000, $21,000 and $86,360 for the fourth quarters of fiscal 2017, fiscal 2016 and fiscal 2015. The grants are being amortized as compensation expense over the three-year vesting period. During the fourth quarter of fiscal 2016, the Company also granted a total of 20,045 shares of restricted stock units to a new board member as part of the Company's annual director compensation program. The restricted stock vested on June 13, 2017, the day immediately preceding the Company's 2017 annual meeting of shareholders. The aggregate market value of the restricted stock at the date of grant was $40,000 and was amortized as director compensation expense over the vesting period.
During the third quarters of fiscal 2017, fiscal 2016 and fiscal 2015, the Company granted a total of 3,000, 34,563 and 32,000 shares of time-based restricted stock units to certain key employees as part of the Company's long-term incentive program. The restricted stock vests in three equal annual installments beginning one year from the grant date. The aggregate market value of the restricted stock at the date of grant was $3,000, $57,000 and $80,640 for the third quarters of fiscal 2017, fiscal 2016 and fiscal 2015. The awards are being amortized as compensation expense over the three-year vesting period. During the third quarter of fiscal 2016, the Company also granted a total of 28,119 shares of restricted stock units to a board member as part of the Company's annual director compensation program. The restricted stock vested on June 13, 2017, the day immediately preceding the Company's 2017 annual meeting of shareholders. The aggregate market value of the restricted stock at the date of grant was $51,000 and was amortized as director compensation expense over the vesting period.
During the third quarter of fiscal 2016, Robert Rosenblatt was appointed as permanent Chief Executive Officer and entered into an executive employment agreement. In conjunction with the employment agreement, the Company granted to Mr. Rosenblatt 231,799 shares of market-based restricted stock performance units as part of the Company's long-term incentive program. The number of restricted stock units earned is based on the Company's total shareholder return ("TSR") relative to a group of industry peers over a three-year performance measurement period. The total grant date fair value was estimated to be $422,000, or $1.82 per share and is being amortized over the three-year performance period. Grant date fair values were determined using a Monte Carlo valuation model based on assumptions, which included a weighted average risk-free interest rate of 0.76%, a weighted average expected life of three years and an implied volatility of 77%. The percent of the target market-based performance vested restricted stock unit award that will be earned based on the Company's TSR relative to the peer group is as follows:
Percentile Rank
 
Percentage of
Units Vested
< 33%
 
0%
33%
 
50%
50%
 
100%
100%
 
150%

On August 18, 2016 the Company granted an additional 625,000 shares of restricted stock in conjunction with Mr. Rosenblatt's employment agreement. The restricted stock vests in three tranches. Tranche 1 (one-third of the shares subject to the award) vested on the date of grant. Tranche 2 (one-third) will vest on the date the Company's average closing stock price for 20 consecutive trading days equals or exceeds $4.00 per share and the executive has been continuously employed at least one year. Tranche 3 (one-third) will vest on the date the Company's average closing stock price for 20 consecutive trading days equals or exceeds $6.00 per share and the executive has been continuously employed at least two years. The vesting of the second and third tranches can occur any time on or before the tenth anniversary of the grant date. The total grant date fair value was estimated to be $958,000 and is being amortized over the derived service periods for each tranche.
Grant date fair values and derived service periods for each tranche were determined using a Monte Carlo valuation model based on assumptions, which included a weighted average risk-free interest rate of 1.5%, a weighted average expected life of 1.2 years and an implied volatility of 86% and were as follows for each tranche:
 
 
Fair Value (Per Share)
 
Derived Service Period
Tranche 1 (immediate)
 
$1.60
 
0 Years
Tranche 2 ($4.00/share)
 
$1.52
 
1.46 Years
Tranche 3 ($6.00/share)
 
$1.48
 
2.22 Years

During the second quarters of fiscal 2017, fiscal 2016 and fiscal 2015, the Company granted a total of 472,720, 167,142 and 182,334 shares of restricted stock units to non-employee directors as part of the Company's annual director compensation program. Each restricted stock grant vests or vested on the day immediately preceding the next annual meeting of shareholders following the date of grant. The aggregate market value of the restricted stock at the date of grant was $520,000, $292,000 and $520,000 for the second quarters of fiscal 2017, fiscal 2016 and fiscal 2015. The grants are amortized as director compensation expense over the twelve-month vesting period. During the second quarters of fiscal 2017, fiscal 2016 and fiscal 2015, the Company also granted a total of 318,360, 60,916 and 26,810 shares of time-based restricted stock units to certain key employees as part of the Company's long-term incentive program. The restricted stock vests in three equal annual installments beginning one year from the grant date. The aggregate market value of the restricted stock at the date of grant was $395,000, $78,000 and $158,000 for the second quarters of fiscal 2017, fiscal 2016 and fiscal 2015. The grants are being amortized as compensation expense over the three-year vesting period.
During the first quarters of fiscal 2017, fiscal 2016 and fiscal 2015, the Company granted a total of 317,219, 188,991 and 67,786 shares of time-based restricted stock units to certain key employees as part of the Company's long-term incentive program. The restricted stock vests in three equal annual installments beginning one year from the grant date. The aggregate market value of the restricted stock at the date of grant was $422,000, $187,000 and $417,593 for the first quarters of fiscal 2017, fiscal 2016 and fiscal 2015. The grants are being amortized as compensation expense over the three-year vesting period. During the first quarter of fiscal 2017, the Company also granted a total of 327,738 shares of time-based restricted stock units to employees as part of the Company's annual merit process. The restricted stock vests one year after the date of the grant on April 24, 2018. The aggregate market value of the restricted stock at the date of grant was $446,000 and is being amortized as compensation expense over the one-year vesting period.
During the first quarter of fiscal 2017, the Company also granted a total of 7,096 shares of restricted stock units to a newly appointed board member as part of the Company's annual director compensation program. The restricted stock vested on June 13, 2017, the day immediately preceding the Company's 2017 annual meeting of shareholders. The aggregate market value of the restricted stock at the date of grant was $9,000 and was amortized as director compensation expense over the vesting period.
During the first quarters of fiscal 2017, fiscal 2016 and fiscal 2015, the Company granted a total of 561,981, 179,156 and 106,963 shares of market-based restricted stock performance units to certain executives as part of the Company's long-term incentive program. The number of restricted stock units earned is based on the Company's total shareholder return ("TSR") relative to a group of industry peers over a three-year performance measurement period. Grant date fair values were determined using a Monte Carlo valuation model based on assumptions as follows:
 
Fiscal 2017
 
Fiscal 2016
 
Fiscal 2015
Total grant date fair value
$860,000
 
$224,000
 
$777,000
Total grant date fair value per share
$1.53
 
$0.98
-
$1.72
 
$7.26
Expected volatility
75%
 
71
%
-
73%
 
54
%
-
55%
Weighted average expected life (in years)
3 years
 
3 years
 
3 years
Risk-free interest rate
1.5%
 
0.9
%
-
1.0%
 
0.9%

The percent of the target market-based performance vested restricted stock unit award that will be earned based on the Company's TSR relative to the peer group is as follows:
Percentile Rank
 
Percentage of
Units Vested
< 33%
 
0%
33%
 
50%
50%
 
100%
100%
 
150%
A summary of the status of the Company’s non-vested restricted stock activity as of February 3, 2018 and changes during the twelve-month period then ended is as follows:
 
 
Shares
 
Weighted
Average
Grant Date
Fair Value
Non-vested outstanding, January 28, 2017
 
1,620,000

 
$2.00
Granted
 
2,028,000

 
$1.32
Vested
 
(352,000
)
 
$1.95
Forfeited
 
(467,000
)
 
$2.72
Non-vested outstanding, February 3, 2018
 
2,829,000

 
$1.40
v3.8.0.1
Business Segments and Sales by Product Group
12 Months Ended
Feb. 03, 2018
Sales by Product Group [Abstract]  
Business Segments and Sales by Product Group
Business Segments and Sales by Product Group
The Company has one reporting segment, which encompasses its interactive digital commerce retailing. The Company markets, sells and distributes its products to consumers primarily through its video commerce television, online website, evine.com and mobile platforms. The Company's television shopping, online and mobile platforms have similar economic characteristics with respect to products, product sourcing, vendors, marketing and promotions, gross margins, customers, and methods of distribution. In addition, the Company believes that its television shopping program is a key driver of traffic to both the evine.com website and mobile applications whereby many of the online sales originate from customers viewing the Company's television program and then placing their orders online or through mobile devices. All of the Company's sales are made to customers residing in the United States. The chief operating decision maker is the Chief Executive Officer of the Company.
Information on net sales by significant product groups are as follows (in thousands):
 
 
 
For the Years Ended
 
 
 
February 3,
2018
 
January 28,
2017
 
January 30,
2016
Jewelry & Watches
 
 
$
230,376

 
$
245,202

 
$
248,951

Home & Consumer Electronics
 
 
155,619

 
151,313

 
193,931

Beauty
 
 
92,979

 
94,451

 
87,184

Fashion & Accessories
 
 
108,409

 
109,615

 
105,616

All other (primarily shipping & handling revenue)
 
 
60,837

 
65,632

 
57,630

Total
 
 
$
648,220

 
$
666,213

 
$
693,312

v3.8.0.1
Business Acquisition
12 Months Ended
Feb. 03, 2018
Business Combinations [Abstract]  
Business Acquisition [Text Block]
Business Acquisition
On December 16, 2016, Evine entered into an asset purchase agreement and acquired substantially all the assets and select liabilities of Princeton Enterprises, LTD (dba Princeton Watches, "Princeton"), an online retail enterprise engaged in the sale of watches, clocks and related accessories. The acquisition of Princeton will help expand on the Company's strong watch and clock offerings as well as broaden the Company's online distribution channels.
The acquisition has been accounted for under the purchase method of accounting, and accordingly, the purchase price has been allocated to the identifiable assets and liabilities assumed pursuant to the asset purchase agreement based on fair values at the acquisition date. The operating results of Princeton have been included in the consolidated financial statements of the Company since December 16, 2016, the date of acquisition. The supplementary proforma information, assuming this acquisition occurred as of the beginning of the prior period, and the operations of Princeton for the period from the December 16, 2016 acquisition date through the end of fiscal 2016 were immaterial.
The terms of the asset purchase agreement included an upfront cash payment of $508,000, a working capital holdback of $67,000 together with earn-out payments. The earn-out payments are scheduled to be paid in two annual installments based on Princeton's EBITDA for each of two years after the closing date.
The following table summarizes the fair value of consideration transferred as of the acquisition date:
Cash consideration
 
$
575,000

Fair value of contingent consideration
 
600,000

 
 
$
1,175,000


The following table summarizes our allocation of the Princeton purchase consideration:
Inventories
 
$
1,171,000

Identifiable intangible assets acquired:
 


Existing customer list
 
347,000

Trade Names
 
336,000

Accounts payable
 
(796,000
)
All other net tangible assets and liabilities
 
117,000

 
 
$
1,175,000


The fair value of identifiable intangible assets were determined using an income-based approach, which includes market participant expectations of cash flows that an asset will generate over the remaining useful life discounted to present value using an appropriate rate of return.
The Company incurred $22,000 of acquisition-related costs and are included in general and administrative expense in the accompanying fiscal 2016 consolidated statement of operations.
v3.8.0.1
Income Taxes
12 Months Ended
Feb. 03, 2018
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The Company records deferred taxes for differences between the financial reporting and income tax bases of assets and liabilities, computed in accordance with tax laws in effect at that time. The deferred taxes related to such differences as of February 3, 2018 and January 28, 2017 were as follows (in thousands):
 
 
February 3, 2018
 
January 28, 2017
Accruals and reserves not currently deductible for tax purposes
 
$
4,220

 
$
6,632

Inventory capitalization
 
1,354

 
2,207

Differences in depreciation lives and methods
 
(475
)
 
1,151

Differences in basis of intangible assets
 
23

 
(3,522
)
Differences in investments and other items
 
629

 
447

Net operating loss carryforwards
 
80,880

 
125,279

Valuation allowance
 
(86,631
)
 
(135,716
)
Net deferred tax liability
 
$

 
$
(3,522
)

The income tax benefit (provision) consisted of the following (in thousands):
 
 
For the Years Ended
 
 
February 3, 2018
 
January 28, 2017
 
January 30, 2016
Current
 
$
(60
)
 
$
(13
)
 
$
(46
)
Deferred
 
3,505

 
(788
)
 
(788
)
 
 
$
3,445

 
$
(801
)
 
$
(834
)

A reconciliation of the statutory tax rates to the Company’s effective tax rate is as follows:
 
 
For the Years Ended
 
 
February 3, 2018
 
January 28, 2017
 
January 30, 2016
Taxes at federal statutory rates
 
33.8
 %
 
35.0
 %
 
35.0
 %
State income taxes, net of federal tax benefit
 
40.4

 
11.9

 
(0.6
)
Reestablishment of state net operating losses
 

 

 
6.0

Provision to return true-up
 
(41.6
)
 
18.1

 

Non-cash stock option vesting expense
 
(12.2
)
 
(2.3
)
 
(1.9
)
FCC license deferred tax liability impact on valuation allowance
 
100.4

 
(9.4
)
 
(6.5
)
Impact of Tax Act on deferred tax valuation
 
(1,382.3
)
 

 

Valuation allowance and NOL carryforward benefits
 
1,365.3

 
(60.9
)
 
(44.2
)
Other
 
0.5

 
(2.5
)
 
4.9

Effective tax rate
 
104.3
 %
 
(10.1
)%
 
(7.3
)%

Based on the Company’s recent history of losses, the Company has recorded a full valuation allowance for its net deferred tax assets as of February 3, 2018 and January 28, 2017 in accordance with GAAP, which places primary importance on the Company’s most recent operating results when assessing the need for a valuation allowance. The ultimate realization of these deferred tax assets depends on the ability of the Company to generate sufficient taxable income in the future, as well as the timing of such income. The Company intends to maintain a full valuation allowance for its net deferred tax assets until sufficient positive evidence exists to support reversal of the allowance. As of February 3, 2018, the Company has federal net operating loss carryforwards (NOLs) of approximately $321 million and state NOLs of approximately $260 million which are available to offset future taxable income. The Company's federal NOLs expire in varying amounts each year from 2023 through 2037 in accordance with applicable federal tax regulations and the timing of when the NOLs were incurred.
In the first quarter of fiscal 2011, the Company had a change in ownership (as defined in Section 382 of the Internal Revenue Code) as a result of the issuance of common stock coupled with the redemption of all the Series B preferred stock held by GE Equity. Sections 382 and 383 limit the annual utilization of certain tax attributes, including NOL carryforwards, incurred prior to a change in ownership. Currently, the limitations imposed by Sections 382 and 383 are not expected to impair the Company's ability to fully realize its NOLs; however, the annual usage of NOLs incurred prior to the change in ownership is limited. In addition, if the Company were to experience another ownership change, as defined by Sections 382 and 383, its ability to utilize its NOLs could be further substantially limited and depending on the severity of the annual NOL limitation, the Company could permanently lose its ability to use a significant amount of its accumulated NOLs.
For the year ended February 3, 2018, the income tax benefit included a non-cash tax charge of approximately $643,000 relating to changes in the Company's long-term deferred tax liability related to the tax amortization of the Company's indefinite-lived intangible FCC license asset that is not available to offset existing deferred tax assets in determining changes to the Company's income tax valuation allowance. The income tax benefit also included a net, non-cash benefit of approximately $4,147,000 generated by the reversal of the Company’s long-term deferred tax liability relating to the Company's FCC license asset. This deferred tax reversal was the result of the payments received during fiscal 2017 in connection with the sale of the Company's television broadcast station, WWDP(TV), discussed further in Note 4 - "Intangible Assets". The Company recognized a tax gain in conjunction with this transaction which will be largely offset with the Company’s available NOLs.
For the years ended January 28, 2017 and January 30, 2016, the income tax provision included a non-cash tax charge of approximately $788,000, for each fiscal year, relating to changes in the Company's long-term deferred tax liability related to the tax amortization of the Company's indefinite-lived intangible FCC license asset that is not available to offset existing deferred tax assets in determining changes to the Company's income tax valuation allowance.
As of February 3, 2018 and January 28, 2017, there were no unrecognized tax benefits for uncertain tax positions. Accordingly, a tabular reconciliation from beginning to ending periods is not provided. Further, to date, there have been no interest or penalties charged or accrued in relation to unrecognized tax benefits. The Company will classify any future interest and penalties as a component of income tax expense if incurred. The Company does not anticipate that the amount of unrecognized tax benefits will change significantly in the next twelve months.
The Company is subject to U.S. federal income taxation and the taxing authorities of various states. The Company’s tax years for 2014, 2015, and 2016 are currently subject to examination by taxing authorities. With limited exceptions, the Company is no longer subject to U.S. federal, state, or local examinations by tax authorities for years before 2014.
On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Act") was enacted. The Tax Act significantly revised U.S. corporate tax law by, among other things, (i) reducing the corporate tax rate to 21% from 35%, (ii) a repeal of the corporate alternative minimum tax (AMT), (iii) changes to tax depreciation for first-year property, (iv) a partial limitation on the deductibility of business interest expense and (v) for losses incurred in tax years beginning after December 31, 2017 the NOL deduction is limited to 80% of taxable income with an indefinite carry forward.
The phase-in of the lower corporate tax rate has resulted in a blended rate of 33.8% for fiscal 2017, as compared to the previous 35%. The income tax effects of the Tax Act required the remeasurement of our deferred tax assets and liabilities in accordance ASC Topic 740.  The Securities and Exchange Commission ('SEC') staff issued Staff Accounting Bulletin No. 118 ('SAB 118') that allows companies to record provisional estimates of the impacts of the Tax Act during a measurement period of up to one year from the enactment which is similar to the measurement period used when accounting for business combinations.  The Company has estimated the effects of the Tax Act, which have been reflected in our fiscal 2017 financial statements. The Tax Act did not have an impact on the Company's tax benefit for fiscal 2017 due to the full valuation allowance against the Company's deferred tax assets.
Shareholder Rights Plan
During the second quarter of fiscal 2015, the Company adopted a Shareholder Rights Plan to preserve the value of certain deferred tax benefits, including those generated by net operating losses. On July 10, 2015, the Company declared a dividend distribution of one purchase right (a “Right”) for each outstanding share of the Company’s common stock to shareholders of record as of the close of business on July 23, 2015 and issuable as of that date. On July 13, 2015, the Company entered into a Shareholder Rights Plan (the “Rights Plan”) with Wells Fargo Bank, N.A., a national banking association, with respect to the Rights. Except in certain circumstances set forth in the Rights Plan, each Right entitles the holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Cumulative Preferred Stock, $0.01 par value, of the Company (“Preferred Stock” and each one one-thousandth of a share of Preferred Stock, a “Unit”) at a price of $9.00 per Unit.
The Rights initially trade together with the common stock and are not exercisable. Subject to certain exceptions specified in the Rights Plan, the Rights will separate from the common stock and become exercisable following (i) the tenth calendar day after a public announcement or filing that a person or group has become an “Acquiring Person,” which is defined as a person who has acquired, or obtained the right to acquire, beneficial ownership of 4.99% or more of the common stock then outstanding, subject to certain exceptions, or (ii) the tenth calendar day (or such later date as may be determined by the board of directors) after any person or group commences a tender or exchange offer, the consummation of which would result in a person or group becoming an Acquiring Person. If a person or group becomes an Acquiring Person, each Right will entitle its holders (other than such Acquiring Person) to purchase one Unit at a price of $9.00 per Unit. A Unit is intended to give the shareholder approximately the same dividend, voting and liquidation rights as would one share of Common Stock, and should approximate the value of one share of Common Stock. At any time after a person becomes an Acquiring Person, the board of directors may exchange all or part of the outstanding Rights (other than those held by an Acquiring Person) for shares of common stock at an exchange rate of one share of common stock (and, in certain circumstances, a Unit) for each Right. The Company will promptly give public notice of any exchange (although failure to give notice will not affect the validity of the exchange).
The Rights will expire upon certain events described in the Rights Plan, including the close of business on the date of the third annual meeting of shareholders following the last annual meeting of shareholders of the Company at which the Rights Plan was most recently approved by shareholders, unless the Rights Plan is re-approved by shareholders at that third annual meeting of shareholders.  However, in no event will the Rights Plan expire later than the close of business on July 13, 2025. The Rights Plan was approved by the Company’s shareholders at the 2016 annual meeting of shareholders.
Until the close of business on the tenth calendar day after the day a public announcement or a filing is made indicating that a person or group has become an Acquiring Person, the Company may in its sole and absolute discretion amend the Rights or the Rights Plan agreement without the approval of any holders of the Rights or shares of common stock in any manner, including without limitation, amendments that increase or decrease the purchase price or redemption price or accelerate or extend the final expiration date or the period in which the Rights may be redeemed. The Company may also amend the Rights Plan after the close of business on the tenth calendar day after the day such public announcement or filing is made to cure ambiguities, to correct defective or inconsistent provisions, to shorten or lengthen time periods under the Rights Plan or in any other manner that does not adversely affect the interests of holders of the Rights. No amendment of the Rights Plan may extend its expiration date.
In connection with the issuance, administration and monitoring of the Plan, the Company incurred $446,000 of professional fees, included within general and administrative expense, during fiscal 2015.
v3.8.0.1
Commitments and Contingencies
12 Months Ended
Feb. 03, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies [Text Block]
Commitments and Contingencies
Cable and Satellite Distribution Agreements
As of February 3, 2018, the Company has entered into distribution agreements with cable operators, direct-to-home satellite providers, telecommunications companies and broadcast television stations to distribute our television network over their systems. The terms of the distribution agreements typically range from one to five years. During the fiscal year, certain agreements with cable, satellite or other distributors may expire. Under certain circumstances, the television operators or the Company may cancel the agreements prior to their expiration. Additionally, the Company may elect not to renew distribution agreements whose terms result in sub-standard or negative contribution margins. The distribution agreements generally provide that the Company will pay each operator a monthly access fee and in some cases a marketing support payment based on the number of homes receiving the Company's programming. For fiscal 2017, fiscal 2016 and fiscal 2015 the Company expensed approximately $91,270,000, $98,317,000 and $100,830,000 under these distribution agreements.
Over the past years, each of the material cable and satellite distribution agreements up for renewal have been renegotiated and renewed. Failure to maintain the cable agreements covering a material portion of the Company’s existing cable households on acceptable financial and other terms could adversely affect future growth, revenues and earnings unless the Company is able to arrange for alternative means of broadly distributing its television programming. Cable operators serving a large majority of cable households offer cable programming on a digital basis. The use of digital compression technology provides cable companies with greater channel capacity. While greater channel capacity increases the opportunity for distribution and, in some cases, reduces access fees paid by us, it also may adversely impact the Company's ability to compete for television viewers to the extent it results in less desirable channel positioning for us, placement of the Company's programming in separate programming tiers, the broadcast of additional competitive channels or viewer fragmentation due to a greater number of programming alternatives.
The Company has entered into, and will continue to enter into, distribution agreements with other television operators providing for full- or part-time carriage of the Company’s television shopping programming.
Future cable and satellite distribution cash commitments at February 3, 2018 are as follows:
 
 

Fiscal Year
Amount
 
 
2018
$
64,758,000

2019
39,774,000

2020
37,741,000

2021
1,363,000

2022 and thereafter


Employment Agreements
The Company has entered into employment agreements with some of its on-air hosts with original terms of 12 months with automatic annual one-year renewals and with the chief executive officer of the Company with an original term of 24 months followed by automatic one-year renewals. These agreements specify, among other things, the term and duties of employment, compensation and benefits, termination of employment (including for cause, which would reduce the Company’s total obligation under these agreements), severance payments and non-disclosure and non-compete restrictions. The aggregate commitment for future base compensation related to these agreements at February 3, 2018 was approximately $2,271,000.
On August 18, 2016, the Company entered into an executive employment agreement with Mr. Rosenblatt, the Company's Chief Executive Officer. Among other things, the employment agreement provides for a two-year initial term, followed by automatic one-year renewals, an initial base salary of $750,000, annual bonus stipulations, a temporary living expense allowance and participation in the Company's executive relocation program. In conjunction with the employment agreement, the Company granted Mr. Rosenblatt an award of restricted stock units, performance restricted stock units and incentive stock options under the Company's 2011 Omnibus Incentive Plan with an aggregate fair value of $1.8 million. The chief executive officer’s employment agreement also provides for severance in the event of employment termination of (i) 1.5 times the amount of his base salary, plus (ii) one times his target bonus. In the event of a change of control, as defined in the agreement, the severance shall be two times his base salary and two times his target bonus.
The Company has established guidelines regarding severance for its senior executive officers. If a senior executive officer's employment terminates for reasons other than change of control, whereby, up to 15 months of the executive's highest annual rate of base salary for those serving as Executive Vice President and up to 12 months of the executive's highest annual rate of base salary for those serving as Senior Vice President may become payable. If an Executive Vice President's employment terminates within a one-year period commencing on the date of a change in control or within six months preceding the date of a change in control, up to 18 months of the executive's highest annual rate of base salary, plus 1.5 times the target annual incentive bonus determined from such base salary may become payable. If a Senior Vice President's employment terminates within a one-year period commencing on the date of a change in control or within six months preceding the date of a change in control, up to 15 months of the executive's highest annual rate of base salary, plus 1.25 times the target annual incentive bonus determined from such base salary may become payable.
Operating Lease Commitments
The Company leases certain property and equipment under non-cancelable operating lease agreements. Property and equipment covered by such operating lease agreements include offices at subsidiary locations, satellite transponder and office equipment.
Future minimum lease payments at February 3, 2018 are as follows:
Future Minimum Lease Payments:
Amount
 
 
2018
$
1,159,000

2019
893,000

2020
559,000

2021

2022 and thereafter


Total rent expense under such agreements was approximately $1,408,000 in fiscal 2017, $1,898,000 in fiscal 2016 and $1,853,000 in fiscal 2015.
Retirement Savings Plan
The Company maintains a qualified 401(k) retirement savings plan covering substantially all employees. The plan allows the Company’s employees to make voluntary contributions to the plan. Beginning in fiscal 2016, matching contributions were contributed to the plan on a per pay period basis. In fiscal 2015, matching contributions were contributed annually to the plan in February of the following fiscal year. The Company currently provides a contribution match of $0.50 for every $1.00 contributed by eligible participants up to a maximum of 6% of eligible compensation. Company plan contributions expense totaled approximately $1,268,000, $1,321,000 and $1,156,000 for fiscal 2017, fiscal 2016 and fiscal 2015, of which $0, $0 and $1,156,000 were accrued and outstanding at February 3, 2018, January 28, 2017 and January 30, 2016.
v3.8.0.1
Litigation
12 Months Ended
Feb. 03, 2018
Litigation [Abstract]  
Litigation
Litigation
The Company is involved from time to time in various claims and lawsuits in the ordinary course of business, including claims related to products, product warranties, employment, intellectual property and consumer protection matters. In the opinion of management, none of the claims and suits, either individually or in the aggregate will have a material adverse effect on the Company's operations or consolidated financial statements.
v3.8.0.1
Supplemental Cash Flow Information
12 Months Ended
Feb. 03, 2018
Supplemental Cash Flow Elements [Abstract]  
Supplemental Cash Flow Information [Text Block]
Supplemental Cash Flow Information
Supplemental cash flow information and noncash investing and financing activities were as follows:
 
 
For the Years Ended
 
 
February 3, 2018
 
January 28, 2017
 
January 30, 2016
Supplemental Cash Flow Information:
 
 

 
 

 
 

Interest paid
 
$
4,818,000

 
$
5,061,000

 
$
2,353,000

Income taxes paid
 
$
36,000

 
$
51,000

 
$
33,000

Supplemental non-cash investing and financing activities:
 
 
 
 

 
 

Property and equipment purchases included in accounts payable
 
$
213,000

 
$
1,060,000

 
$
138,000

Common stock issuance costs included in accrued liabilities
 
$

 
$
115,000

 
$

Deferred financing costs included in accrued liabilities
 
$

 
$
14,000

 
$

v3.8.0.1
Distribution Facility Expansion, Consolidation & Technology Upgrade
12 Months Ended
Feb. 03, 2018
Distribution Facility Expansion [Abstract]  
Property, Plant and Equipment, Schedule of Significant Acquisitions and Disposals [Table Text Block]
Distribution Facility Expansion, Consolidation & Technology Upgrade
During fiscal 2014, the Company began a significant operational expansion initiative with respect to overall warehousing capacity and new equipment and system technology upgrades at the Company's Bowling Green, Kentucky distribution facility. During fiscal 2015, the Company expanded its 262,000 square foot facility to an approximately 600,000 square foot facility and moved out of the Company's leased satellite warehouse space. The updated facilities and technology upgrade includes a new high-speed parcel shipping and item sortation system coupled with a new warehouse management system to support the Company's increased level of shipments and a new call center facility to better serve our customers. The new sortation and warehouse management system were phased into production through fiscal 2016. Total cost of the physical building expansion, new sortation equipment and call center facility was approximately $25 million and was financed with our expanded PNC revolving line of credit and a $15 million PNC term loan.
As a result of the Company's distribution facility expansion, consolidation and technology upgrade initiative, the Company incurred approximately $0, $677,000 and $1,347,000 in incremental expenses during fiscal 2017, fiscal 2016 and fiscal 2015. In fiscal 2016, the expenses related primarily to increased labor and training costs associated with the Company's warehouse management system migration. For fiscal 2015, the expenses related primarily to increased labor, inventory and other warehousing transportation costs, training costs and increased equipment rental costs associated with: the move into the new expanded warehouse building, the move out of previously leased warehouse space and the preparation of our expanded facility for the new high-speed parcel shipping and item sortation system and upgraded warehouse management system.
v3.8.0.1
Executive and Management Transition Costs
12 Months Ended
Feb. 03, 2018
Executive Transition Costs [Abstract]  
Executive Transition Costs [Text Block]
Executive and Management Transition Costs
On March 23, 2017, the Company announced the elimination of the position of Senior Vice President of Sales & Product Planning. In conjunction with this executive change as well as other executive and management terminations made during fiscal 2017, the Company recorded charges to income totaling $2,145,000, which relate primarily to severance payments made as a result of the executive officer and other management terminations and other direct costs associated with the Company's 2017 executive and management transition.
On February 8, 2016, the Company announced the resignation and departure of Mark Bozek, its Chief Executive Officer, and of its Executive Vice President - Chief Strategy Officer & Interim General Counsel. On August 18, 2016, the Company announced that Robert Rosenblatt, was appointed permanent Chief Executive Officer, effective immediately and entered into an executive employment agreement with Mr. Rosenblatt. Among other things, the employment agreement provides for a two-year initial term, followed by automatic one-year renewals, an initial base salary of $750,000, annual bonus stipulations, a temporary living expense allowance and participation in the Company's executive relocation program. In conjunction with the employment agreement, the Company granted Mr. Rosenblatt an award of restricted stock units, performance restricted stock units and incentive stock options under the Company's 2011 Omnibus Incentive Plan with an aggregate fair value of $1.8 million. The chief executive officer’s employment agreement also provides for severance in the event of employment termination of (i) 1.5 times the amount of his base salary, plus (ii) one times his target bonus. In the event of a change of control, as defined in the agreement, the severance shall be two times his base salary and two times his target bonus.
In conjunction with these executive changes as well as other executive and management terminations made during fiscal 2016, the Company recorded charges to income totaling $4,411,000, which relate primarily to severance payments to be made as a result of the executive officer terminations and other direct costs associated with the Company's 2016 executive and management transition.
On March 26, 2015, the Company announced the termination and departure of three executive officers, namely its Chief Financial Officer, its Senior Vice President and General Counsel, and President. In addition, during the first quarter of fiscal 2015, the Company also announced the hiring of a new Chief Financial Officer and a new Chief Merchandising Officer. In conjunction with these executive changes as well as other management terminations made during fiscal 2015, the Company recorded charges to income of $3,549,000, which relate primarily to severance payments made as a result of the executive officer terminations and other direct costs associated with the Company's 2015 executive and management transition.
v3.8.0.1
Related Party Transactions
12 Months Ended
Feb. 03, 2018
Related Party Transactions [Abstract]  
Related Party Transactions
Related Party Transactions
Relationship with GE Equity, Comcast and NBCU
Until April 29, 2016, the Company was a party to an amended and restated shareholder agreement, dated February 25, 2009 (the “GE/NBCU Shareholder Agreement”), with GE Equity and NBCU, which provided for certain corporate governance and standstill matters. The Company has a significant cable distribution agreement with Comcast, of which NBCU is an indirect subsidiary, and believes that the terms of the agreement are comparable to those with other cable system operators. During the third quarter of fiscal 2016, the Company received a $500,000 cash payment from a wholly owned subsidiary of NBCU for the right to use a specified channel in the Boston, Massachusetts' designated market area.
In an SEC filing made on August 18, 2015, GE Equity disclosed that on August 14, 2015, GE Equity and ASF Radio, L.P. (“ASF Radio”), who was an independent third party to Evine as of that time, entered into a Stock Purchase Agreement pursuant to which GE Equity agreed to sell 3,545,049 shares of the Company’s common stock, which was all of the shares GE Equity had then owned, to ASF Radio for $2.15 per share. According to the SEC filing, ASF Radio is an affiliate of Ardian, an independent private equity investment company. The closing of this sale (the “GE/ASF Radio Sale”) occurred on April 29, 2016. In connection with the GE/ASF Radio Sale, the GE/NBCU Shareholder Agreement was terminated and the Company entered into a new Shareholder Agreement (the “NBCU Shareholder Agreement”) with NBCU described below.
Stock Purchase from NBCU
On January 31, 2017, the Company purchased from NBCU 4,400,000 shares of the Company's common stock, representing approximately 6.7% of shares then outstanding, for approximately $5 million or $1.12 per share, pursuant to a Repurchase Letter Agreement between the Company and NBCU. Following the Company's share purchase, NBCU's direct equity ownership of the Company consisted of 2,741,849 shares of common stock, or 4.5% of the Company's outstanding common stock. As of February 3, 2018, the Company believes that NBCU sold its remaining shares of the Company's common stock. The NBCU Shareholder Agreement was terminated pursuant to the Repurchase Letter Agreement.
NBCU Shareholder Agreement
The Company was a party to the NBCU Shareholder Agreement until it was terminated pursuant to the Repurchase Letter Agreement on January 31, 2017. The NBCU Shareholder Agreement replaced the GE/NBCU Shareholder Agreement. The NBCU Shareholder Agreement provided that as long as NBCU or its affiliates beneficially own at least 5% of the Company's outstanding common stock, NBCU was entitled to designate one individual to be nominated to the Company’s Board of Directors. In addition, the NBCU Shareholder Agreement provided that NBCU was able to designate its director designee to be an observer of the audit, human resources and compensation, and corporate governance and nominating committees of the Company's Board of Directors. In addition, the NBCU Shareholder Agreement required the Company to obtain the consent of NBCU prior to the Company's adoption or amendment of any shareholder’s rights plan or certain other actions that would impede or restrict the ability of NBCU to acquire the Company's voting stock or the Company taking any action that would result in NBCU being deemed to be in violation of the Federal Communications Commission multiple ownership regulations.
The NBCU Shareholder Agreement also provided that unless NBCU beneficially owned less than 5% or more than 90% of the adjusted outstanding shares of common stock, NBCU could not sell, transfer or otherwise dispose of any securities of the Company subject to limited exceptions for (i) transfers to affiliates, (ii) third party tender offers, (iii) mergers, consolidations and reorganizations and (iv) transfers pursuant to underwritten public offerings or transfers exempt from registration under the Securities Act (provided, in the case of (iv), such transfers would not result in the transferee acquiring beneficial ownership in excess of 20%).
Registration Rights Agreement
On February 25, 2009, the Company entered into an amended and restated registration rights agreement that, as further amended, provided GE Equity, NBCU and their affiliates and any transferees and assigns, an aggregate of five demand registrations and unlimited piggy-back registration rights. In connection with the GE/ASF Radio Sale, an amendment to the Amended and Restated Registration Rights Agreement was entered into removing GE Equity as a party and adding ASF Radio as a party.
2015 Letter Agreement with GE Equity
On July 9, 2015, the Company entered into a letter agreement with GE Equity (the “GE Letter Agreement”) pursuant to which GE Equity consented to the Company's adoption of a Shareholder Rights Plan in consideration for the Company's agreement to provide GE Equity, NBCU and certain of their respective affiliates with exemptions from the Shareholder Rights Plan. GE Equity’s consent was required pursuant to the terms of the GE/NBCU Shareholder Agreement. This discussion is a summary of the terms of the letter agreement. In the GE Letter Agreement, the Company agreed that if any of GE Equity, NBCU or any of their respective affiliates that holds shares of the Company's common stock from time to time (each a “Grandfathered Investor”) sells or otherwise transfers shares of the Company's common stock currently owned by such Grandfathered Investor to any third party identified to us in writing (any such third party, an “Exempt Purchaser”), the Company will take all actions necessary under the Shareholder Rights Plan so that such third party will not be deemed an Acquiring Person (as defined in the Shareholder Rights Plan) by virtue of the acquisition of such shares. The Company further agreed that, subject to certain limitations, upon request of any Grandfathered Investor or Exempt Purchaser, and in connection with a transfer by such Grandfathered Investor or Exempt Purchaser of shares of the Company's common stock to an Exempt Purchaser, the Company will enter into an agreement with the acquiring Exempt Purchaser granting such acquiring Exempt Purchaser substantially the same rights as set forth above with respect to any sale of the Company's outstanding shares of common stock to any other third party. Additionally, the Company agreed that without the consent of any Grandfathered Investor that is an affiliate of GE Equity and any Grandfathered Investor that is an affiliate of NBCU, the Company will not (i) amend the Shareholder Rights Plan in any material respect, other than to accelerate the Expiration Date (as defined in the Shareholder Rights Plan) or the Final Expiration Date (as defined in the Shareholder Rights Plan), (ii) adopt another shareholders' rights plan or (iii) amend the letter agreement.
Director Relationships
The Company entered into a service agreement with Newgistics, Inc. ("Newgistics") in fiscal 2004. Newgistics provides offsite customer returns consolidation and delivery services to the Company. The Company's Chief Executive Officer, Robert Rosenblatt, was a member of Newgistics Board of Directors until October 2017, when Newgistics was acquired by a third party. The Company made payments to Newgistics totaling approximately $4,474,000, $4,910,000 and $4,517,000 during fiscal 2017, fiscal 2016 and fiscal 2015.
One of the Company's directors, Thomas Beers, has a minority interest in one of the Company's on air food suppliers. The Company made inventory payments to this supplier totaling approximately $1,156,000, $1,866,000 and $3,467,000 during fiscal 2017, fiscal 2016 and fiscal 2015.
v3.8.0.1
Quarterly Results (Unaudited)
12 Months Ended
Feb. 03, 2018
Quarterly Financial Information Disclosure [Abstract]  
Quarterly Results (Unaudited) [Text Block]
Quarterly Results (Unaudited)
The following summarized unaudited results of operations for the quarters in fiscal 2017 and fiscal 2016 have been prepared on the same basis as the annual financial statements and reflect normal recurring adjustments that we consider necessary for a fair presentation of results of operations for the periods presented. Our results of operations have varied and may continue to fluctuate significantly from quarter to quarter due to seasonality and the timing of operating expenses. Results of operations in any period should not be considered indicative of the results to be expected for any future period.
 
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter (a)
 
Total
 
 
(In thousands, except percentages and per share amounts)
Fiscal 2017
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
156,343

 
$
148,949

 
$
150,212

 
$
192,716

 
$
648,220

Gross profit
 
56,286

 
56,480

 
57,294

 
65,052

 
235,112

Gross profit margin
 
36.0
%
 
37.9
%
 
38.1
%
 
33.8
%
 
36.3
%
Operating expenses
 
56,867

 
56,951

 
57,648

 
60,424

 
231,890

Operating income (loss) (b)
 
(581
)
 
(471
)
 
(354
)
 
4,628

 
3,222

Other expense, net
 
(2,406
<