# Citi Trends Inc: Form 10-Q for the period ended Oct 27, 2012

- Company: [Citi Trends Inc](/companies/ctrn.md) (CIK 1318484)
- Form: 10-Q
- Filed: 2012-12-05
- Accepted by EDGAR: Dec 5, 2012, 10:01 ET
- Period: 2012-10-27
- Accession: 0001104659-12-081992
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1318484/000110465912081992/a12-23857_110q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1318484/000110465912081992/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2012-10-27.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2012-07-29 to 2012-10-27 | $149.0m | us-gaap:SalesRevenueGoodsNet |
| Revenue | 9 months, 2012-01-29 to 2012-10-27 | $479.0m | us-gaap:SalesRevenueGoodsNet |
| Cost of revenue | 3 months, 2012-07-29 to 2012-10-27 | $97.8m | us-gaap:CostOfGoodsSold |
| Cost of revenue | 9 months, 2012-01-29 to 2012-10-27 | $308.7m | us-gaap:CostOfGoodsSold |
| Gross profit | 3 months, 2012-07-29 to 2012-10-27 | $51.2m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2012-01-29 to 2012-10-27 | $170.3m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2012-07-29 to 2012-10-27 | $51.1m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2012-01-29 to 2012-10-27 | $154.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2012-07-29 to 2012-10-27 | −$6.6m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2012-01-29 to 2012-10-27 | −$3.3m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2012-07-29 to 2012-10-27 | $50.0k | us-gaap:InterestExpense |
| Interest expense | 9 months, 2012-01-29 to 2012-10-27 | $163.0k | us-gaap:InterestExpense |
| Income tax | 3 months, 2012-07-29 to 2012-10-27 | −$2.9m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2012-01-29 to 2012-10-27 | −$1.7m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2012-07-29 to 2012-10-27 | −$3.7m | us-gaap:NetIncomeLossAvailableToCommonStockholdersBasic |
| Net income | 9 months, 2012-01-29 to 2012-10-27 | −$1.5m | us-gaap:NetIncomeLossAvailableToCommonStockholdersBasic |
| Diluted EPS | 3 months, 2012-07-29 to 2012-10-27 | −$0.25 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2012-01-29 to 2012-10-27 | −$0.10 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2012-07-29 to 2012-10-27 | −$0.25 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2012-01-29 to 2012-10-27 | −$0.10 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2012-07-29 to 2012-10-27 | 14,676,817 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2012-01-29 to 2012-10-27 | 14,661,910 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2012-01-29 to 2012-10-27 | $788.0k | us-gaap:NetCashProvidedByUsedInOperatingActivitiesContinuingOperations |
| Capital expenditure | 9 months, 2012-01-29 to 2012-10-27 | $5.8m | us-gaap:PaymentsToAcquireProductiveAssets |
| Cash and equivalents | at 2012-10-27 | $36.2m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2012-10-27 | $209.1m | us-gaap:AssetsCurrent |
| Total assets | at 2012-10-27 | $302.5m | us-gaap:Assets |
| Current liabilities | at 2012-10-27 | $95.3m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2012-10-27 | $106.5m | us-gaap:Liabilities |
| Shareholders' equity | at 2012-10-27 | $196.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 23,659 characters.

### Forward-Looking Statements

Except for specific historical information, many of the matters discussed in this Form 10-Q may express or imply projections of revenues or expenditures, statements of plans and objectives for future operations, growth or initiatives, statements of future economic performance, or statements regarding the outcome or impact of pending or threatened litigation. These, and similar statements, are forward-looking statements concerning matters that involve risks, uncertainties and other factors that may cause the actual performance of the Company to differ materially from those expressed or implied by these statements. All forward-looking information should be evaluated in the context of these risks, uncertainties and other factors. The words “believe,” “anticipate,” “project,” “plan,” “expect,” “estimate,” “objective,” “forecast,” “goal,” “intend,” “will likely result,” or “will continue” and similar words and expressions generally identify forward-looking statements. The Company believes the assumptions underlying these forward-looking statements are reasonable; however, any of the assumptions could be inaccurate, and therefore, actual results may differ materially from those projected in the forward-looking statements.

The factors that may result in actual results differing from such forward-looking information include, but are not limited to: transportation and distribution delays or interruptions; changes in freight rates; the Company’s ability to negotiate effectively the cost and purchase of merchandise; inventory risks due to shifts in market demand; the Company’s ability to gauge fashion trends and changing consumer preferences; changes in consumer spending on apparel; changes in product mix; interruptions in suppliers’ businesses; a deterioration in general economic conditions caused by acts of war or terrorism or other factors; temporary changes in demand due to weather patterns; seasonality of the Company’s business; delays associated with building, opening and operating new stores; delays associated with building, opening or expanding new or existing distribution centers; and other factors described in the section titled “Item 1A. Risk Factors” and elsewhere in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2012 and in Part II, “Item 1A. Risk Factors” and elsewhere in the Company’s Quarterly Reports on Form 10-Q and any amendments thereto and in the other documents the Company files with the SEC, including reports on Form 8-K.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Form 10-Q. Except as may be required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements contained herein to reflect events or circumstances occurring after the date of this Form 10-Q or to reflect the occurrence of unanticipated events. Readers are advised, however, to read any further disclosures the Company may make on related subjects in its public disclosures or documents filed with the SEC, including reports on Form 8-K.

### Overview

We are a value-priced retailer of urban fashion apparel and accessories for the entire family. Our merchandise offerings are designed to appeal to the preferences of fashion conscious consumers, particularly African-Americans. We operated 513 stores in both urban and rural markets in 29 states as of October 27, 2012.

We measure performance using key operating statistics. One of the main performance measures we use is comparable store sales growth. We define a comparable store as a store that has been opened for an entire fiscal year. Therefore, a store will not be considered a comparable store until its 13th month of operation at the earliest or until its 24th month at the latest. As an example, stores opened in fiscal 2011 and fiscal 2012 are not considered comparable stores in fiscal 2012. Relocated and expanded stores are included in the comparable store sales results. We also use other operating statistics, most notably average sales per store, to measure our performance. As we typically occupy existing space in established shopping centers rather than sites built specifically for our stores, store square footage (and therefore sales per square foot) varies by store. We focus on overall store sales volume as the critical driver of profitability. The average sales per store has increased over the years, as we have increased comparable store sales and opened new stores that are generally larger than our historical store base. Average sales per store have increased from $0.8 million in fiscal 2000 to $1.3 million in fiscal 2011.

In addition to sales, we measure gross profit as a percentage of sales and store operating expenses, with a particular focus on labor, as a percentage of sales. These results translate into store level contribution, which we use to evaluate overall performance of each individual store. Finally, we monitor corporate expenses against budgeted amounts. All of the statistics discussed above are critical components of earnings before interest, taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA (comprised of EBITDA plus non-cash asset impairment expense), which are considered our most important operating statistics. Although EBITDA and Adjusted EBITDA provide useful information on an operating cash flow basis, they are limited measures in that they exclude the impact of cash requirements for capital expenditures, income taxes and interest expense. Therefore, EBITDA and Adjusted EBITDA should be used as supplements to results of operations and cash flows as reported under U.S. GAAP and should not be used as a singular measure of operating performance or as a substitute for U.S. GAAP results. Provided below is a reconciliation of net income (loss) to EBITDA and to Adjusted EBITDA for the thirty-nine and thirteen week periods ended October 27, 2012, and October 29, 2011:

|  | Thirty-Nine Weeks Ended October 27, 2012 | October 29, 2011 | Thirteen Weeks Ended October 27, 2012 | October 29, 2011 |
| --- | ---: | ---: | ---: | ---: |
| Net loss | $(1,521) | $(4,699) | $(3,700) | $(6,761) |
| Plus: |  |  |  |  |
| Interest expense | 163 | 27 | 50 | 17 |
| Income tax expense | — | — | — | — |
| Depreciation and amortization | 18,153 | 18,389 | 5,970 | 6,454 |
| Less: |  |  |  |  |
| Interest income | (194) | (180) | (66) | (61) |
| Income tax benefit | (1,736) | (3,982) | (2,869) | (5,246) |
| EBITDA | 14,865 | 9,555 | (615) | (5,597) |
| Asset impairment | 660 | 2,305 | 660 | 696 |
| Adjusted EBITDA | $15,525 | $11,860 | $45 | $(4,901) |

### Accounting Periods

The following discussion contains references to fiscal years 2012 and 2011, which represent fiscal years ending or ended on February 2, 2013 and January 28, 2012, respectively. Fiscal 2012 has a 53-week accounting period and fiscal 2011 had a 52-week accounting period. This discussion and analysis should be read with the unaudited condensed consolidated financial statements and the notes thereto.

### Results of Operations

The following discussion of the Company’s financial performance is based on the unaudited condensed consolidated financial statements set forth herein. The nature of the Company’s business is seasonal. Historically, sales in the first and fourth quarters have been higher than sales achieved in the second and third quarters of the fiscal year. Expenses and, to a greater extent, operating income, vary by quarter. Results of a period shorter than a full year may not be indicative of results expected for the entire year. Furthermore, the seasonal nature of the Company’s business may affect comparisons between periods.

### Thirty-nine Weeks Ended October 27, 2012 and October 29, 2011

*Net Sales.* Net sales increased $16.5 million, or 3.6%, to $479.0 million in the thirty-nine weeks ended October 27, 2012 from $462.5 million in the thirty-nine weeks ended October 29, 2011. The increase in net sales was due primarily to the opening of 55 new stores throughout fiscal 2011 and four new stores in the thirty-nine weeks ended October 27, 2012, partially offset by a 3.1% decrease in comparable store sales and the effect of closing five stores in fiscal 2011 and two stores in fiscal 2012. Comparable stores include locations that have been relocated or expanded. There were 14 stores relocated or expanded in fiscal 2011 and three stores relocated or expanded in the 39 weeks ended October 27, 2012. Sales in comparable relocated and expanded stores increased 0.4% in the first thirty-nine weeks of 2012, while sales in all other comparable stores decreased 3.3%. The 3.1% overall decrease in comparable store sales was reflected entirely in a decline in the average ticket, as the number of customer transactions was up 1.6% from last year. Comparable store sales changes by major merchandise class were as follows in the first thirty-nine weeks of 2012: Accessories +7%; Men’s 0%; Home -2%; Children’s -4%; and Women’s -12%.

The new stores opened in 2011 and 2012, net of closed stores, accounted for an increase of $30.0 million in total sales, while the 3.1% sales decrease in the 454 comparable stores totaled $13.5 million.

*Gross Profit.* Gross profit increased $3.6 million, or 2.1%, to $170.3 million in the first thirty-nine weeks of 2012 from $166.7 million in last year’s first thirty-nine weeks. The increase in gross profit is a result of the increase in sales discussed above, partially offset by a decline in the gross margin to 35.5% from 36.0% in last year’s first thirty-nine weeks. The lower gross margin was impacted by a 30 basis point increase in freight costs attributable primarily to freight incurred on shipments of merchandise from the distribution centers to the stores in connection with raising inventory levels this year. Additionally, shrinkage expense increased 20 basis points.

*Selling, General and Administrative Expenses.* Selling, general and administrative expenses decreased $0.1 million, or 0.1%, to $154.7 million in the first thirty-nine weeks of 2012 from $154.8 million in last year’s first thirty-nine weeks. The decrease in these expenses was due primarily to $1.2 million of severance expense incurred last year related to a reduction-in-force that eliminated 40 positions in our corporate offices, distribution centers and store organization, which when combined with the decrease in our ongoing payroll expense from the reduction-in-force, virtually offset the additional store level, distribution and corporate costs arising from opening new stores throughout fiscal 2011 and

2012\. As a percentage of sales, selling, general and administrative expenses decreased to 32.3% in the first thirty-nine weeks of fiscal 2012 from 33.5% in the first thirty-nine weeks of fiscal 2011 due primarily to the benefits associated with the reduction-in-force.

*Depreciation and Amortization.* Depreciation and amortization expense decreased $0.2 million, or 1.3%, to $18.2 million in the first thirty-nine weeks of 2012 from $18.4 million in the first thirty-nine weeks of 2011, due to the slowing of our store opening pace in 2012.

*Asset Impairment.* Impairment charges for property and equipment at certain underperforming stores decreased $1.6 million, or 71.4% to $0.7 million in the first thirty-nine weeks of 2012 from $2.3 million in the first thirty-nine weeks of 2011.

*Income Tax Benefit.* Income tax benefit decreased $2.3 million, or 56.4%, to $1.7 million in this year’s first thirty-nine weeks from $4.0 million in the first thirty-nine weeks of 2011 due primarily to a decrease in pretax loss, partially offset by an increase in the effective income tax benefit rate to 53.3% from 45.9%. The income tax benefit rate for the first thirty-nine weeks of 2012 was higher than the rate for last year’s first thirty-nine weeks, partially due to a valuation allowance of $0.7 million which was established in the second quarter of 2011 when the Company concluded that its ability to utilize certain tax credits in one state was no longer more likely than not. The effect of the 2011 valuation allowance on the tax rate comparison between years was partially offset by the effect on 2012 of the expiration of the Work Opportunity Tax Credit (WOTC) which reduced the amount of these credits available to the Company in 2012 compared to the same period in 2011.

*Net Loss.* Net loss decreased 67.6% to $1.5 million in the first thirty-nine weeks of 2012 from a net loss of $4.7 million in the first thirty-nine weeks of 2011 due to the factors discussed above.

### Thirteen Weeks Ended October 27, 2012 and October 29, 2011

*Net Sales.* Net sales increased $5.9 million, or 4.1%, to $149.0 million in the thirteen weeks ended October 27, 2012 from $143.1 million in the thirteen weeks ended October 29, 2011. The increase in net sales was due primarily to the opening of 26 new stores in the third quarter of fiscal 2011 and nine new stores opened since last year’s third quarter, together with a 0.5% increase in comparable store sales, partially offset by the effect of closing three stores since last year’s third quarter. Comparable stores include locations that have been relocated or expanded. There were four stores relocated or expanded in the third quarter of fiscal 2011 and four other stores relocated or expanded since last year’s third quarter. Sales in all comparable relocated and expanded stores decreased 0.8% in the third quarter of 2012, while sales in all other comparable stores increased 0.5%. The 0.5% overall increase in comparable store sales was reflected in an increase in the number of customer transactions of 4.3% from last year, partially offset by a decline in the average ticket. Comparable store sales changes by major merchandise class were as follows in the third quarter of 2012: Accessories +12%; Home +4%; Men’s +1%; Children’s -4%; and Women’s -12%.

The new stores opened in 2011 and 2012, net of closed stores, accounted for an increase of $5.3 million in total sales, while the 0.5% sales increase in the 454 comparable stores totaled $0.6 million.

*Gross Profit.* Gross profit increased $3.0 million, or 6.3%, to $51.2 million in the third quarter of 2012 from $48.2 million in last year’s third quarter. The increase in gross profit is a result of the increase in sales discussed above and an increase in the gross margin to 34.4% from 33.7% in last year’s third quarter. The higher gross margin was due to an increase in the core merchandise margin (initial mark-up, net of markdowns) of 140 basis points resulting from a greater need for clearance markdowns in the third quarter of fiscal 2011 when comparable store sales declined 9.3%. An increase in freight and shrinkage expense of 50 basis points and 20 basis points, respectively, partially offset the improvement in the core merchandise margin. The higher freight costs were attributable primarily to freight incurred on shipments of merchandise from the distribution centers to the stores in connection with raising inventory levels this year.

*Selling, General and Administrative Expenses.* Selling, general and administrative expenses decreased $2.0 million, or 3.6%, to $51.1 million in the third quarter of 2012 from $53.1 million in last year’s third quarter. The decrease in these expenses was due primarily to $1.2 million of severance expense incurred last year related to a reduction-in-force that eliminated 40 positions in our corporate offices, distribution centers and store organization, which when combined with the decrease in our ongoing payroll expense from the reduction-in-force, more than offset the additional store level, distribution and corporate costs arising from the opening of 26 new stores in the third quarter of fiscal 2011 and nine new stores opened since last year’s third quarter. As a percentage of sales, selling, general and administrative expenses decreased to 34.3% in the third quarter of fiscal 2012 from 37.1% in the third quarter of fiscal 2011, due primarily to the benefits associated with the reduction-in-force.

*Depreciation and Amortization.* Depreciation and amortization expense decreased $0.5 million, or 7.5%, to $6.0 million in the third quarter of 2012 from $6.5 million in the third quarter of 2011, due to the slowing of our store opening pace in 2012.

*Asset Impairment.* Impairment charges for property and equipment at certain underperforming stores totaled $0.7 million in the third quarter of both 2012 and 2011.

*Income Tax Benefit.* Income tax benefit decreased $2.3 million, or 45.3%, to $2.9 million in this year’s third quarter from $5.2 million in the third quarter of 2011 due to a decrease in pretax loss, as the effective income tax rate was unchanged at 43.7%.

*Net Loss.* Net loss decreased 45.3% to $3.7 million in the third quarter of 2012 from a net loss of $6.8 million in the third quarter of 2011 due to the factors discussed above.

### Liquidity and Capital Resources

Our cash requirements are primarily for working capital, opening of new stores, remodeling of our existing stores and the improvement of our information systems. In recent years, we have met these cash requirements using cash flow from operations and short-term trade credit. We expect to be able to meet future cash requirements with cash flow from operations, short-term trade credit, existing balances of cash and investment securities and, if necessary, borrowings under our revolving credit facility.

*Current Financial Condition.* As of October 27, 2012, we had total cash and cash equivalents of $36.2 million compared to $42.0 million as of January 28, 2012. Additionally, we had $4.7 million and $15.0 million of short-term and long-term investment securities, respectively, as of October 27, 2012, compared with $0.9 million and $18.8 million, respectively, as of January 28, 2012. These securities are comprised of bank certificates of deposit and obligations of the U.S. Treasury, states and municipalities. Inventory represented 48.5% of our total assets as of October 27, 2012. Management’s ability to manage our inventory can have a significant impact on our cash flows from operations during a given interim period or fiscal year. In addition, inventory purchases can be seasonal in nature, such as the purchase of warm-weather or Christmas-related merchandise.

*Cash Flows From Operating Activities*. Net cash provided by operating activities was $0.8 million in the first thirty-nine weeks of 2012 compared to $7.5 million in the same period of 2011. The main source of cash provided during the first thirty-nine weeks of 2012 was net income adjusted for noncash expenses such as depreciation and amortization, loss on disposal of property and equipment, deferred income taxes and stock-based compensation expense, totaling $18.7 million (compared to $18.4 million in the first thirty-nine weeks of 2011). Other significant sources of cash in the first thirty-nine weeks of 2012 were (1) a $7.9 million change in the income tax receivable/payable (compared to a use of cash of $8.2 million in the first thirty-nine weeks of 2011), which is comprised of income tax refunds, net of payments, totaling $9.0 million, net of the current portion of the income tax benefit of $1.1 million in the first thirty-nine weeks of 2012; and (2) a $1.9 million increase in layaway deposits (compared to $2.9 million in the first thirty-nine weeks of 2011) due to the seasonality of layaway transactions, which are low at the end of our fiscal year because all balances have to be redeemed by customers or they are cancelled by the middle of December each year. Significant uses of cash included a $15.2 million increase in inventory (compared to $5.7 million in the first thirty-nine weeks of 2011) due to (a) a strategic change in our inventory flow that resulted in the receipt of cold-weather apparel earlier this year in order to provide a larger window of opportunity to sell it at full price before marking it down after Christmas, and (b) an increase in opportunistic purchases of next-season-buy merchandise consistent with our merchandising shift back more towards the off-price philosophy that we had followed prior to 2011. Such merchandise is purchased at heavy discounts near the end of a season and held until the beginning of that same season the following year. Other significant uses of cash included (1) an $11.8 million decrease in accounts payable (compared to $3.8 million in the first thirty-nine weeks of 2011) as the result of the shift more towards next-season-buys which are held in our distribution centers for several months and, therefore, paid for prior to being offered for sale in our stores; and (2) a $1.6 million decrease in accrued compensation (compared to a source of cash of $0.3 million in the first thirty-nine weeks of 2011) as our year-end balance sheet included accrued payroll for two weeks and our third quarter balance sheet included accrued payroll for only one week due to the timing of our bi-weekly payroll.

*Cash Flows From Investing Activities.* Cash used in investing activities was $5.7 million in the first thirty-nine weeks of 2012 compared to $43.7 million in the first thirty-nine weeks of 2011. Cash used for purchases of property and equipment totaled $5.8 million and $33.8 million in the first thirty-nine weeks of 2012 and 2011, respectively, with the decrease resulting from opening three stores in the first thirty-nine weeks of fiscal 2012 compared to 50 in the first thirty-nine weeks of last year. In addition, the equipping of the new distribution center in Roland, Oklahoma occurred in the first quarter of fiscal 2011. Other uses of cash in the first thirty-nine weeks of 2011 consisted of purchases, net of sales/redemptions, of investment securities totaling $9.9 million.

*Cash Flows From Financing Activities.* Cash flows from financing activities were insignificant in the first thirty-nine weeks of both 2012 and 2011.

### Cash Requirements

Our principal sources of liquidity consist of: (i) cash and cash equivalents (which equaled $36.2 million as of October 27, 2012); (ii) short-term and long-term investment securities (which equaled $4.7 million and $15.0 million, respectively, as of October 27, 2012); (iii) short-term trade credit; (iv) cash generated from operations on an ongoing basis as we sell our merchandise inventory; and (v) a $50 million revolving credit facility. Trade credit represents a significant source of financing for inventory purchases and arises from customary payment terms and trade practices with our vendors. Historically, our principal liquidity requirements have been for working capital and capital expenditure needs.

We believe that our existing sources of liquidity will be sufficient to fund our operations and anticipated capital expenditures for at least the next 12 months.

### Critical Accounting Policies

The preparation of our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. There have been no material changes to the Critical Accounting Policies outlined in the Company’s Annual Report on Form 10-K for the year ended January 28, 2012.

## Market risk

As filed, 225 characters.

There have been no material changes in our market risk during the thirty-nine weeks ended October 27, 2012 compared to the disclosures in Part II, Item 7A of our Annual Report on Form 10-K for the year ended January 28, 2012.

## Controls and procedures

As filed, 1,553 characters.

We have carried out an evaluation under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of October 27, 2012 pursuant to Rules 13a-15 and 15d-15 of the Exchange Act. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer each concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information has been accumulated and communicated to our management, including the officers who certify our financial reports, as appropriate, to allow timely decisions regarding the required disclosures.

Our disclosure controls and procedures are designed to provide reasonable assurance that the controls and procedures will meet their objectives. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended October 27, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 189 characters.

There are no material changes to the Risk Factors described under the section “ITEM 1A. RISK FACTORS” in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2012.

Filed Dec 5, 2012.
Source: SEC EDGAR, the filing index for accession 0001104659-12-081992. Last ingested by Listed: Oct 27, 2026, 17:26 ET. No prices; not investment advice.