| Guarantor Subsidiaries |
13. Guarantor Subsidiaries On March 5, 2010, Express, LLC and Express Finance (the “Subsidiary Issuers”), both wholly-owned indirect subsidiaries of the Company, issued the Senior Notes. The Company (“Guarantor”) and certain of the Company’s indirect wholly-owned subsidiaries (“Guarantor Subsidiaries”) have fully and unconditionally guaranteed, on a joint and several basis, the Company’s obligations under the Senior Notes. The following consolidating schedules present the condensed financial information on a combined basis. EXPRESS, INC. CONDENSED CONSOLIDATING BALANCE SHEET (Amounts in Thousands) (Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | July 30, 2011 | | Express, Inc. | | Subsidiary Issuers | | Guarantor Subsidiaries | | Other Subsidiaries | | Eliminations | | Consolidated Total | Assets |
| |
| |
| |
| |
| |
| Current assets |
| |
| |
| |
| |
| |
| Cash and cash equivalents | $ | 1,574 |
| | $ | 142,973 |
| | $ | — |
| | $ | 5 |
| | $ | — |
| | $ | 144,552 |
| Receivables, net | — |
| | 8,716 |
| | — |
| | — |
| | — |
| | 8,716 |
| Inventories | — |
| | 207,430 |
| | — |
| | — |
| | — |
| | 207,430 |
| Prepaid minimum rent | — |
| | 22,399 |
| | — |
| | — |
| | — |
| | 22,399 |
| Intercompany receivable | — |
| | 427 |
| | 17,069 |
| | — |
| | (17,496 | ) | | — |
| Other | 618 |
| | 28,670 |
| | — |
| | 4,946 |
| | — |
| | 34,234 |
| Total current assets | 2,192 |
| | 410,615 |
| | 17,069 |
| | 4,951 |
| | (17,496 | ) | | 417,331 |
| Property and equipment, net | — |
| | 219,161 |
| | — |
| | — |
| | — |
| | 219,161 |
| Tradename/domain name | — |
| | 197,474 |
| | — |
| | — |
| | — |
| | 197,474 |
| Investment in subsidiary | 180,025 |
| | 3,127 |
| | — |
| | 174,521 |
| | (357,673 | ) | | — |
| Deferred tax asset | 968 |
| | 3,652 |
| | — |
| | 893 |
| | — |
| | 5,513 |
| Other assets | — |
| | 17,254 |
| | — |
| | — |
| | — |
| | 17,254 |
| Total assets | $ | 183,185 |
| | $ | 851,283 |
| | $ | 17,069 |
| | $ | 180,365 |
| | $ | (375,169 | ) | | $ | 856,733 |
| Liabilities and stockholders’ equity |
| |
| |
| |
| |
| |
| Current liabilities |
| |
| |
| |
| |
| |
| Accounts payable | $ | — |
| | $ | 166,314 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 166,314 |
| Deferred revenue | — |
| | 1,615 |
| | 13,800 |
| | — |
| | — |
| | 15,415 |
| Accrued bonus | — |
| | 10,992 |
| | — |
| | — |
| | — |
| | 10,992 |
| Accrued expenses | — |
| | 82,081 |
| | — |
| | 17 |
| | — |
| | 82,098 |
| Accounts payable and accrued expenses—related parties | — |
| | 3,890 |
| | — |
| | — |
| | — |
| | 3,890 |
| Intercompany payable | 102 |
| | 17,026 |
| | — |
| | 368 |
| | (17,496 | ) | | — |
| Total current liabilities | 102 |
| | 281,918 |
| | 13,800 |
| | 385 |
| | (17,496 | ) | | 278,709 |
| Long-term debt | — |
| | 317,149 |
| | — |
| | — |
| | — |
| | 317,149 |
| Other long-term liabilities | 446 |
| | 77,695 |
| | — |
| | 97 |
| | — |
| | 78,238 |
| Total liabilities | 548 |
| | 676,762 |
| | 13,800 |
| | 482 |
| | (17,496 | ) | | 674,096 |
| Commitments and Contingencies (Note 12) |
| |
| |
| |
| |
| |
| Total stockholders’ equity | 182,637 |
| | 174,521 |
| | 3,269 |
| | 179,883 |
| | (357,673 | ) | | 182,637 |
| Total liabilities and stockholders’ equity | $ | 183,185 |
| | $ | 851,283 |
| | $ | 17,069 |
| | $ | 180,365 |
| | $ | (375,169 | ) | | $ | 856,733 |
|
EXPRESS, INC. CONDENSED CONSOLIDATING BALANCE SHEET (Amounts in Thousands) (Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | January 29, 2011 | | Express, Inc. | | Subsidiary Issuers | | Guarantor Subsidiaries | | Other Subsidiaries | | Eliminations | | Consolidated Total | Assets |
| |
| |
| |
| |
| |
| Current assets |
| |
| |
| |
| |
| |
| Cash and cash equivalents | $ | 1,647 |
| | $ | 186,115 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 187,762 |
| Receivables, net | — |
| | 9,908 |
| | — |
| | — |
| | — |
| | 9,908 |
| Inventories | — |
| | 185,209 |
| | — |
| | — |
| | — |
| | 185,209 |
| Prepaid minimum rent | — |
| | 22,284 |
| | — |
| | — |
| | — |
| | 22,284 |
| Intercompany receivable | — |
| | — |
| | 26,029 |
| | 311 |
| | (26,340 | ) | | — |
| Other | — |
| | 22,130 |
| | — |
| | — |
| | — |
| | 22,130 |
| Total current assets | 1,647 |
| | 425,646 |
| | 26,029 |
| | 311 |
| | (26,340 | ) | | 427,293 |
| Property and equipment, net | — |
| | 211,319 |
| | — |
| | — |
| | — |
| | 211,319 |
| Tradename/domain name | — |
| | 197,414 |
| | — |
| | — |
| | — |
| | 197,414 |
| Investment in subsidiary | 127,260 |
| | 3,147 |
| | — |
| | 121,757 |
| | (252,164 | ) | | — |
| Deferred tax asset | 968 |
| | 3,652 |
| | — |
| | 893 |
| | — |
| | 5,513 |
| Other assets | — |
| | 21,210 |
| | — |
| | — |
| | — |
| | 21,210 |
| Total assets | $ | 129,875 |
| | $ | 862,388 |
| | $ | 26,029 |
| | $ | 122,961 |
| | $ | (278,504 | ) | | $ | 862,749 |
| Liabilities and stockholders’ equity |
| |
| |
| |
| |
| |
| Current liabilities |
| |
| |
| |
| |
| |
| Accounts payable | $ | — |
| | $ | 85,843 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 85,843 |
| Deferred revenue | — |
| | 2,185 |
| | 22,882 |
| | — |
| | — |
| | 25,067 |
| Accrued bonus | — |
| | 14,268 |
| | — |
| | — |
| | — |
| | 14,268 |
| Accrued expenses | (444 | ) | | 96,535 |
| | — |
| | (4,299 | ) | | — |
| | 91,792 |
| Accounts payable and accrued expenses—related parties | — |
| | 79,865 |
| | — |
| | — |
| | — |
| | 79,865 |
| Intercompany payable | — |
| | 26,340 |
| | — |
| | — |
| | (26,340 | ) | | — |
| Total current liabilities | (444 | ) | | 305,036 |
| | 22,882 |
| | (4,299 | ) | | (26,340 | ) | | 296,835 |
| Long-term debt | — |
| | 366,157 |
| | — |
| | — |
| | — |
| | 366,157 |
| Other long-term liabilities | 157 |
| | 69,438 |
| | — |
| | — |
| | — |
| | 69,595 |
| Total liabilities | (287 | ) | | 740,631 |
| | 22,882 |
| | (4,299 | ) | | (26,340 | ) | | 732,587 |
| Commitments and Contingencies (Note 12) |
| |
| |
| |
| |
| |
| Total stockholders’ equity | 130,162 |
| | 121,757 |
| | 3,147 |
| | 127,260 |
| | (252,164 | ) | | 130,162 |
| Total liabilities and stockholders’ equity | $ | 129,875 |
| | $ | 862,388 |
| | $ | 26,029 |
| | $ | 122,961 |
| | $ | (278,504 | ) | | $ | 862,749 |
|
EXPRESS, INC. CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME (Amounts in Thousands) (Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | Thirteen Weeks Ended July 30, 2011 | | Express, Inc. | | Subsidiary Issuers | | Guarantor Subsidiaries | | Other Subsidiaries | | Eliminations | | Consolidated Total | Net sales | $ | — |
| | $ | 446,041 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 446,041 |
| Cost of goods sold, buying, and occupancy costs | — |
| | 296,113 |
| | — |
| | 96 |
| | — |
| | 296,209 |
| Gross profit | — |
| | 149,928 |
| | — |
| | (96 | ) | | — |
| | 149,832 |
| Selling, general, and administrative expenses | 257 |
| | 117,433 |
| | (52 | ) | | 44 |
| | — |
| | 117,682 |
| Other operating expense (income), net | — |
| | 402 |
| | — |
| | — |
| | — |
| | 402 |
| Operating income (loss) | (257 | ) | | 32,093 |
| | 52 |
| | (140 | ) | | — |
| | 31,748 |
| Interest expense | — |
| | 10,510 |
| | — |
| | — |
| | — |
| | 10,510 |
| Interest income | — |
| | (2 | ) | | — |
| | — |
| | — |
| | (2 | ) | (Income) loss in subsidiary | (12,874 | ) | | 90 |
| | — |
| | (12,874 | ) | | 25,658 |
| | — |
| Income (loss) before income taxes | 12,617 |
| | 21,495 |
| | 52 |
| | 12,734 |
| | (25,658 | ) | | 21,240 |
| Income tax expense | (1 | ) | | 8,621 |
| | — |
| | — |
| | — |
| | 8,620 |
| Net income (loss) | $ | 12,618 |
| | $ | 12,874 |
| | $ | 52 |
| | $ | 12,734 |
| | $ | (25,658 | ) | | $ | 12,620 |
| | | | | | | | | | | | | Other comprehensive loss | — |
| | — |
| | — |
| | (2 | ) | | — |
| | (2 | ) | Comprehensive income | $ | 12,618 |
| | $ | 12,874 |
| | $ | 52 |
| | $ | 12,732 |
| | $ | (25,658 | ) | | $ | 12,618 |
|
EXPRESS, INC. CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME (Amounts in Thousands) (Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | Thirteen Weeks Ended July 31, 2010 | | Express, Inc. | | Subsidiary Issuers | | Guarantor Subsidiaries | | Other Subsidiaries | | Eliminations | | Consolidated Total | Net sales | $ | — |
| | $ | 407,277 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 407,277 |
| Cost of goods sold, buying, and occupancy costs | — |
| | 277,260 |
| | — |
| | — |
| | — |
| | 277,260 |
| Gross profit | — |
| | 130,017 |
| | — |
| | — |
| | — |
| | 130,017 |
| Selling, general, and administrative expenses | 665 |
| | 110,378 |
| | (65 | ) | | (42 | ) | | — |
| | 110,936 |
| Other operating expense (income), net | — |
| | 14,028 |
| | — |
| | 3 |
| | — |
| | 14,031 |
| Operating income (loss) | (665 | ) | | 5,611 |
| | 65 |
| | 39 |
| | — |
| | 5,050 |
| Interest expense | — |
| | 8,781 |
| | — |
| | 14,568 |
| | — |
| | 23,349 |
| Interest income | — |
| | (1 | ) | | — |
| | — |
| | — |
| | (1 | ) | (Income) loss in subsidiary | (22,678 | ) | | (65 | ) | | — |
| | (31,309 | ) | | 54,052 |
| | — |
| Other income, net | — |
| | (1,474 | ) | | — |
| | — |
| | — |
| | (1,474 | ) | Income (loss) before income taxes | 22,013 |
| | (1,630 | ) | | 65 |
| | 16,780 |
| | (54,052 | ) | | (16,824 | ) | Income tax expense (benefit) | (101 | ) | | (32,939 | ) | | — |
| | (5,898 | ) | | — |
| | (38,938 | ) | Net income (loss) | $ | 22,114 |
| | $ | 31,309 |
| | $ | 65 |
| | $ | 22,678 |
| | $ | (54,052 | ) | | $ | 22,114 |
| | | | | | | | | | | | | Other comprehensive loss | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Comprehensive income | $ | 22,114 |
| | $ | 31,309 |
| | $ | 65 |
| | $ | 22,678 |
| | $ | (54,052 | ) | | $ | 22,114 |
|
EXPRESS, INC. CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME (Amounts in Thousands) (Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | Twenty-Six Weeks Ended July 30, 2011 | | Express, Inc. | | Subsidiary Issuers | | Guarantor Subsidiaries | | Other Subsidiaries | | Eliminations | | Consolidated Total | Net sales | $ | — |
| | $ | 913,418 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 913,418 |
| Cost of goods sold, buying, and occupancy costs | — |
| | 585,176 |
| | — |
| | 96 |
| | — |
| | 585,272 |
| Gross profit | — |
| | 328,242 |
| | — |
| | (96 | ) | | — |
| | 328,146 |
| Selling, general, and administrative expenses | 955 |
| | 226,298 |
| | (122 | ) | | 44 |
| | — |
| | 227,175 |
| Other operating expense (income), net | — |
| | (200 | ) | | — |
| | — |
| | — |
| | (200 | ) | Operating income (loss) | (955 | ) | | 102,144 |
| | 122 |
| | (140 | ) | | — |
| | 101,171 |
| Interest expense | — |
| | 21,515 |
| | — |
| | — |
| | — |
| | 21,515 |
| Interest income | — |
| | (5 | ) | | — |
| | — |
| | — |
| | (5 | ) | (Income) loss in subsidiary | (48,588 | ) | | 20 |
| | — |
| | (48,588 | ) | | 97,156 |
| | — |
| Income (loss) before income taxes | 47,633 |
| | 80,614 |
| | 122 |
| | 48,448 |
| | (97,156 | ) | | 79,661 |
| Income tax expense | 2 |
| | 32,026 |
| | — |
| | — |
| | — |
| | 32,028 |
| Net income (loss) | $ | 47,631 |
| | $ | 48,588 |
| | $ | 122 |
| | $ | 48,448 |
| | $ | (97,156 | ) | | $ | 47,633 |
| | | | | | | | | | | | | Other comprehensive loss | — |
|
| — |
|
| — |
|
| (2 | ) |
| — |
|
| (2 | ) | Comprehensive income | $ | 47,631 |
| | $ | 48,588 |
| | $ | 122 |
| | $ | 48,446 |
| | $ | (97,156 | ) | | $ | 47,631 |
|
EXPRESS, INC. CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME (Amounts in Thousands) (Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | Twenty-Six Weeks Ended July 31, 2010 | | Express, Inc. | | Subsidiary Issuers | | Guarantor Subsidiaries | | Other Subsidiaries | | Eliminations | | Consolidated Total | Net sales | $ | — |
| | $ | 833,739 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 833,739 |
| Cost of goods sold, buying, and occupancy costs | — |
| | 546,516 |
| | — |
| | — |
| | — |
| | 546,516 |
| Gross profit | — |
| | 287,223 |
| | — |
| | — |
| | — |
| | 287,223 |
| Selling, general, and administrative expenses | 2,140 |
| | 211,872 |
| | (143 | ) | | (23 | ) | | — |
| | 213,846 |
| Other operating expense (income), net | — |
| | 17,042 |
| | — |
| | 3 |
| | — |
| | 17,045 |
| Operating income (loss) | (2,140 | ) | | 58,309 |
| | 143 |
| | 20 |
| | — |
| | 56,332 |
| Interest expense | — |
| | 15,145 |
| | — |
| | 28,984 |
| | — |
| | 44,129 |
| Interest income | — |
| | (11 | ) | | — |
| | — |
| | — |
| | (11 | ) | (Income) loss in subsidiary | (54,714 | ) | | (143 | ) | | — |
| | (77,675 | ) | | 132,532 |
| | — |
| Other income, net | — |
| | (1,906 | ) | | — |
| | — |
| | — |
| | (1,906 | ) | Income (loss) before income taxes | 52,574 |
| | 45,224 |
| | 143 |
| | 48,711 |
| | (132,532 | ) | | 14,120 |
| Income tax expense (benefit) | (101 | ) | | (32,451 | ) | | — |
| | (6,003 | ) | | — |
| | (38,555 | ) | Net income (loss) | $ | 52,675 |
| | $ | 77,675 |
| | $ | 143 |
| | $ | 54,714 |
| | $ | (132,532 | ) | | $ | 52,675 |
| | | | | | | | | | | | | Other comprehensive loss | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Comprehensive income | $ | 52,675 |
| | $ | 77,675 |
| | $ | 143 |
| | $ | 54,714 |
| | $ | (132,532 | ) | | $ | 52,675 |
|
EXPRESS, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (Amounts in Thousands) (Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | Twenty-Six Weeks Ended July 30, 2011 | | Express, Inc. | | Subsidiary Issuers | | Guarantor Subsidiaries | | Other Subsidiaries | | Eliminations | | Consolidated Total | Operating Activities | | | | | | | | | | | | Net cash provided by (used in) operating activities | $ | (162 | ) | | $ | 41,407 |
| | $ | — |
| | $ | 7 |
| | $ | — |
| | $ | 41,252 |
| Investing Activities |
| |
| |
| |
| |
| |
| Capital expenditures | — |
| | (33,553 | ) | | — |
| | — |
| | — |
| | (33,553 | ) | Purchase of intangible assets | — |
|
| (60 | ) |
| — |
|
| — |
|
| — |
|
| (60 | ) | Net cash provided by (used in) investing activities | — |
| | (33,613 | ) | | — |
| | — |
| | — |
| | (33,613 | ) | Financing Activities | | | | | | | | | | | | Repayments of long-term debt arrangements | — |
| | (49,775 | ) | | — |
| | — |
| | — |
| | (49,775 | ) | Costs incurred in connection with debt arrangements and Senior Notes | — |
|
| (1,161 | ) |
| — |
|
| — |
|
| — |
|
| (1,161 | ) | Proceeds from share-based compensation | 191 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 191 |
| Purchase of treasury stock | (102 | ) |
| — |
|
| — |
|
| — |
|
| — |
|
| (102 | ) | Net cash provided by (used in) financing activities | 89 |
| | (50,936 | ) | | — |
| | — |
| | — |
| | (50,847 | ) | | | | | | | | | | | | | Effect of exchange rates on cash | — |
|
| — |
|
| — |
|
| (2 | ) |
| — |
|
| (2 | ) | | | | | | | | | | | | | Net increase (decrease) in cash and cash equivalents | (73 | ) | | (43,142 | ) | | — |
| | 5 |
| | — |
| | (43,210 | ) | Cash and cash equivalents, beginning of period | 1,647 |
| | 186,115 |
| | — |
| | — |
| | — |
| | 187,762 |
| Cash and cash equivalents, end of period | $ | 1,574 |
| | $ | 142,973 |
| | $ | — |
| | $ | 5 |
| | $ | — |
| | $ | 144,552 |
|
EXPRESS, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (Amounts in Thousands) (Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | Twenty-Six Weeks Ended July 31, 2010 | | Express, Inc. | | Subsidiary Issuers | | Guarantor Subsidiaries | | Other Subsidiaries | | Eliminations | | Consolidated Total | Operating Activities | | | | | | | | | | | | Net cash provided by (used in) operating activities | $ | 5,805 |
| | $ | 71,479 |
| | $ | — |
| | $ | (35,495 | ) | | $ | — |
| | $ | 41,789 |
| Investing Activities | | | | | | | | | | | | Capital expenditures | — |
| | (28,181 | ) | | — |
| | — |
| | — |
| | (28,181 | ) | Investment in subsidiary | (170,535 | ) | | — |
| | — |
| | (5,633 | ) | | 176,168 |
| | — |
| Dividends received | 261,000 |
| | — |
| | — |
| | 432,153 |
| | (693,153 | ) | | — |
| Net cash provided by (used in) investing activities | 90,465 |
| | (28,181 | ) | | — |
| | 426,520 |
| | (516,985 | ) | | (28,181 | ) | Financing Activities |
| |
| |
| |
| |
| |
| Borrowings under Senior Notes | — |
| | 246,498 |
| | — |
| | — |
| | — |
| | 246,498 |
| Net proceeds from equity offering | 166,898 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 166,898 |
| Repayments of long term debt arrangements | — |
| | (625 | ) | | — |
| | (300,000 | ) | | — |
| | (300,625 | ) | Costs incurred in connection with debt arrangements and Senior Notes | — |
| | (11,426 | ) | | — |
| | (560 | ) | | — |
| | (11,986 | ) | Costs incurred in connection with equity offering | (6,498 | ) | | — |
| | — |
| | — |
| | — |
| | (6,498 | ) | Equity contributions | 5,633 |
| | — |
| | — |
| | 170,535 |
| | (176,168 | ) | | — |
| Repayment of notes receivable | — |
| | 5,633 |
| | — |
| | — |
| | — |
| | 5,633 |
| Distributions | (261,000 | ) | | (432,153 | ) | | — |
| | (261,000 | ) | | 693,153 |
| | (261,000 | ) | Net cash provided by (used in) financing activities | (94,967 | ) | | (192,073 | ) | | — |
| | (391,025 | ) | | 516,985 |
| | (161,080 | ) | Net increase (decrease) in cash and cash equivalents | 1,303 |
| | (148,775 | ) | | — |
| | — |
| | — |
| | (147,472 | ) | Cash and cash equivalents, beginning of period | 192 |
| | 234,212 |
| | — |
| | — |
| | — |
| | 234,404 |
| Cash and cash equivalents, end of period | $ | 1,495 |
| | $ | 85,437 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 86,932 |
|
|