kirk-10q_20210501.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended May 1, 2021

☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ______to ______.

Commission file number: 000-49885

Kirkland’s, Inc.

(Exact name of registrant as specified in its charter)

Tennessee	62-1287151
(State or other jurisdiction of	(IRS Employer Identification No.)
incorporation or organization)

5310 Maryland Way
Brentwood, Tennessee	37027
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (615) 872-4800

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	KIRK	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, no par value – 14,252,579 shares outstanding as of May 21, 2021.

KIRKLAND’S, INC.

TABLE OF CONTENTS

		Page

PART I	FINANCIAL INFORMATION	3
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets (Unaudited) as of May 1, 2021, January 30, 2021 and May 2, 2020	3
	Condensed Consolidated Statements of Operations (Unaudited) for the 13-week periods ended May 1, 2021 and May 2, 2020	4
	Condensed Consolidated Statement of Shareholders’ Equity (Unaudited) for the 13-week periods ended May 1, 2021 and May 2, 2020	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the 13-week periods ended May 1, 2021 and May 2, 2020	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21

PART II	OTHER INFORMATION	22
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 6.	Exhibits	22

SIGNATURES		23

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

KIRKLAND’S, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share data)

	May 1,			January 30,			May 2,
	2021			2021			2020
ASSETS
Current assets:
Cash and cash equivalents	$	72,275		$	100,337		$	30,140
Inventories, net		76,259			62,083			99,075
Income taxes receivable		107			162			22,014
Prepaid expenses and other current assets		8,638			8,116			7,950
Total current assets		157,279			170,698			159,179
Property and equipment:
Equipment		20,361			20,463			20,974
Furniture and fixtures		72,001			72,775			76,892
Leasehold improvements		108,307			109,501			116,311
Computer software and hardware		79,837			79,260			81,038
Projects in progress		2,049			1,429			2,316
Property and equipment, gross		282,555			283,428			297,531
Accumulated depreciation		(222,873	)		(220,018	)		(220,156	)
Property and equipment, net		59,682			63,410			77,375
Operating lease right-of-use assets		142,003			147,334			183,789
Other assets		6,036			5,670			5,621
Total assets	$	365,000		$	387,112		$	425,964
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	53,107		$	55,173		$	45,876
Accrued expenses		31,142			37,454			24,403
Operating lease liabilities		44,280			44,973			50,792
Total current liabilities		128,529			137,600			121,071
Operating lease liabilities		135,383			148,976			188,221
Revolving line of credit		—			—			40,000
Other liabilities		5,776			5,614			6,821
Total liabilities		269,688			292,190			356,113
Shareholders’ equity:
Preferred stock, no par value, 10,000,000 shares authorized; no shares issued or outstanding at May 1, 2021, January 30, 2021, and May 2, 2020, respectively		—			—			—
Common stock, no par value; 100,000,000 shares authorized; 14,274,317; 14,292,250; and 14,014,503 shares issued and outstanding at May 1, 2021, January 30, 2021, and May 2, 2020, respectively		174,418			174,391			173,219
Accumulated deficit		(79,106	)		(79,469	)		(103,368	)
Total shareholders’ equity		95,312			94,922			69,851
Total liabilities and shareholders’ equity	$	365,000		$	387,112		$	425,964

The accompanying notes are an integral part of these financial statements.

Table of Contents

KIRKLAND’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)

	13-Week Period Ended
	May 1,			May 2,
	2021			2020
Net sales	$	123,569		$	77,247
Cost of sales		83,314			67,011
Gross profit		40,255			10,236
Operating expenses:
Compensation and benefits		19,113			18,578
Other operating expenses		17,165			14,567
Depreciation (exclusive of depreciation included in cost of sales)		1,613			1,501
Asset impairment		310			3,184
Total operating expenses		38,201			37,830
Operating income (loss)		2,054			(27,594	)
Interest expense		85			220
Other income		(80	)		(120	)
Income (loss) before income taxes		2,049			(27,694	)
Income tax expense (benefit)		330			(20,256	)
Net income (loss)	$	1,719		$	(7,438	)

Earnings (loss) per share:
Basic	$	0.12		$	(0.53	)
Diluted	$	0.11		$	(0.53	)
Weighted average shares outstanding:
Basic		14,295			13,990
Diluted

SEC Form 10-Q filed by Kirkland&#39;s, Inc.

SEC Form 10-Q filed by Kirkland's, Inc.