EXPRESS, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS. (Form 10-Q)
The following discussion summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity, and cash flows of the Company as of the dates and for the periods presented below. The following discussion and analysis should be read in conjunction with our Annual Report on Form 10-K for the year ended
January 29, 2022("Annual Report") and our unaudited Consolidated Financial Statements and the related Notes included in Item 1 of this Quarterly Report on Form 10-Q ("Quarterly Report"). This discussion contains forward-looking statements that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors. See " Forward-Looking Statements ."
All references herein to “first quarter 2022” and “first quarter 2021” represent the thirteen weeks ended
Our management report and our analysis of the financial situation and results of operations are presented in the following sections:
Page Overview 23 COVID-19 Pandemic and Other Trends 23 Financial Details 24 Outlook & First Quarter Update 25 How We Assess the Performance of Our Business 26 Results of Operations 29 Liquidity and Capital Resources 32 Critical Accounting Policies 34 OVERVIEW Express is a modern, multichannel apparel and accessories brand grounded in versatility, guided by its purpose - We Create Confidence. We Inspire Self-Expression. - and powered by a styling community. Launched in 1980 with the idea that style, quality and value should all be found in one place, Express has been a part of some of the most important and culture-defining fashion trends. The Express Edit design philosophy ensures that the brand is always 'of the now' so people can get dressed for every day and any occasion knowing that Express can help them look the way they want to look and feel the way they want to feel. We operate 561 retail and factory outlet stores in
the United Statesand Puerto Rico, the express.com online store and the Express mobile app.
COVID-19 PANDEMIC AND OTHER TRENDS
March 2020, the World Health Organizationdeclared the novel strain of coronavirus ("COVID-19") a global pandemic and recommended containment and mitigation measures. Our business operations and financial performance have been materially impacted by the COVID-19 pandemic. Due to the continued evolution of the pandemic, we continue to see certain disruptions and volatility in our business. While trends in new cases of COVID-19 in the United Statesimproved during the first quarter of fiscal 2022 compared to the fourth quarter of fiscal 2021, caseloads have been increasing recently in many parts of the country and we cannot reasonably estimate the extent to which our business will continue to be affected by the COVID-19 pandemic. Additionally, the COVID-19 pandemic, as well as rising inflationary pressures and recent geopolitical conditions, including impacts from the ongoing conflict between Russiaand Ukraineand increased tensions between Chinaand Taiwan, have all contributed to disruptions and rising costs to global supply chains. Although we have successfully managed these challenges thus far, our ability to continue to replenish our inventory to meet continued levels of consumer demand could be impacted by further delays or disruptions. We expect these impacts to EXPRESS, INC.| Q1 2022 Form 10-Q | 23 -------------------------------------------------------------------------------- Table of Contents continue for as long as the global supply chain is experiencing these challenges. For additional information regarding risks related to the COVID-19 pandemic and these related operational and industry risks, see "Item 1A. Risk Factors: Operational and Industry Risk Factors" in our Annual Report.
FIRST QUARTER 2022 FINANCIAL DETAILS
• Net sales increased by 30% to reach
• Comparable sales increased by 31%
•Comparable retail sales (includes both retail stores and eCommerce sales) increased 32% •Comparable outlet sales increased 30% •Gross margin percentage increased 640 basis points to 29.2%
• Operating loss decreased
• Decreased net loss
• Diluted earnings per share increased
The following graphs present the main performance indicators for the first quarter of 2022 compared to the first quarter of 2021.
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EXPRESS, INC.| Q1 2022 Form 10-Q | 24 -------------------------------------------------------------------------------- Table of Contents OUTLOOK & FIRST QUARTER UPDATE
Our first quarter 2022 results generated positive same-store sales of 31%, positive double-digit same-store sales across all major categories and channels, and we had the highest number of active loyalty program members in our story. We have made significant progress against each of the four fundamental pillars of our EXPRESSway Forward strategy.
The following defines each pillar of the EXPRESSway Forward strategy and provides an update on each priority:
PRODUCT BRAND CUSTOMER EXECUTION Product
We have sought to bring more balance and versatility to our assortments, reflecting a more modern approach to building a wardrobe. Our Express Edit design and merchandising philosophy works. We are winning in the classifications we have long been known for and gaining market share in some of the most important categories that generate volume. We achieved double-digit positive comps in all major categories.
Express customers appreciate and respond to newness, so we deliver new floorsets each month and have a consistent flow of fashion and core product throughout the year.
We improved our performance in key areas, including all of our men’s businesses, men’s suits, men’s polo shirts, women’s jackets and women’s and men’s jeans.
“Modern tailoring” continues its resurgence, with women’s jackets and men’s suits being particularly strong. Denim has grown through assortments featuring a wide variety of fits, leg shapes, innovative fabrics, colors and washes. The Express Essentials Body Contour women’s collection had its best quarter ever.
Express is transforming from being known as a store in the mall to a brand with a purpose, powered by a styling community. We have created a compelling brand purpose: "We create confidence. We inspire self-expression. And we do it by editing the best of now for real life versatility." The Express styling community is an authentic way to bring our brand purpose to life. Members of the Express styling community - customers, associates, Style Editors, content creators, influencers, and brand partners - interact with each other in the physical and digital worlds. Building, activating, and amplifying this styling community is one of our key 2022 priorities. Our stores are the place where our community comes together. We host in-store events and simultaneously stream some of them online. These events broaden the reach of our brand purpose through the participants' social media and drive video views across all social platforms. We are reimagining the customer experience through a pilot program in select stores, and renovating and refreshing a number of stores to elevate the customer experience and present a more consistent brand identity across the fleet.
We successfully engage existing customers and acquire new ones. Our Express Insider loyalty program has attracted over three million new customers since its relaunch in Q1 2021. We ended Q1 2022 with the highest number of active members in our history.
Strong execution contributed to positive double-digit comparable sales across all channels.
Sales grew in our eCommerce channel. We introduced enhancements to our online checkout process, improved our buy-online-pick-up-in-store experience and in the coming months we will enhance personalization and make the checkout experience more streamlined.
EXPRESS, INC.| Q1 2022 Form 10-Q | 25 -------------------------------------------------------------------------------- Table of Contents Our retail stores achieved increased comparable sales in the first quarter of 2022 and our new Express Edit stores continue to acquire new customers, reactivate lapsed customers, and sign up loyalty at higher rates than the balance of our fleet. Our outlet channel also delivered increased comparable sales in the first quarter of 2022. EXPRESS, INC.| Q1 2022 Form 10-Q | 26 -------------------------------------------------------------------------------- Table of Contents HOW WE ASSESS THE PERFORMANCE OF OUR BUSINESS
To assess the performance of our business, we consider various performance and financial measures. These key metrics include net sales, comparable sales, e-commerce demand, transactions, cost of goods sold, purchase and occupancy costs, gross profit/gross margin and selling expenses, general and administrative. The following table describes and comments on these measures.
Net SalesDescription Revenue from the sale of merchandise, less returns and discounts, as well as shipping and handling revenue related to eCommerce, revenue from the rental of our LED sign in Times Square, gift card breakage and revenue earned from our private label credit card agreement.
Our business is seasonal, and we have historically realized a higher portion of our net sales in the third and fourth quarters, due primarily to the impact of the holiday season. Generally, approximately 45% of our annual net sales occur in the Spring season (first and second quarters) and 55% occur in the Fall season (third and fourth quarters). Comparable Sales Description Comparable sales is a measure of the amount of sales generated in a period relative to the amount of sales generated in the comparable prior year period. Comparable sales for the first quarter of 2022 was calculated using the thirteen weeks ended
April 30, 2022as compared to the thirteen weeks ended May 1, 2021. Comparable retail sales includes: •Sales from retail stores that were open 12 months or more as of the end of the reporting period •eCommerce shipped sales Comparable outlet sales includes: •Sales from outlet stores that were open 12 months or more as of the end of the reporting period, including conversions Comparable sales excludes: •Sales from stores where the square footage has changed by more than 20% due to remodel or relocation activity •Sales from stores in a phased remodel where a portion of the store is under construction and therefore not productive selling space •Sales from stores where the store cannot open due to weather damage or other catastrophes, including pandemics
Our business and our comparable sales are subject, at certain times, to calendar shifts, which may occur during key selling periods close to holidays such as Easter,
Thanksgiving, and Christmas, and regional fluctuations for events such as sales tax holidays. We believe comparable sales provides a useful measure for investors by removing the impact of new stores and closed stores. Management considers comparable sales a useful measure in evaluating continuing store performance. eCommerce Demand Description eCommerce demand is defined as gross orders for Express and/or third party merchandise that originate through our eCommerce platform, including the website, app, and buy online pick-up in store.
We believe e-commerce demand is a useful operational metric for investors and management because it provides visibility into orders placed but not yet shipped.
EXPRESS, INC.| Q1 2022 Form 10-Q | 27 -------------------------------------------------------------------------------- Table of Contents Transactions Description Transactions are defined as the number of customer point of sale interactions with customers.
We believe this metric is useful as it provides a better indicator of acceptance of our product.
Cost of Goods Sold, Buying and Occupancy Costs Description Includes the following: •Direct cost of purchased merchandise •Inventory shrink and other adjustments •Inbound and outbound freight •Merchandising, design, planning and allocation, and manufacturing/production costs •Occupancy costs related to store operations (such as rent and common area maintenance, utilities, and depreciation on assets) •Logistics costs associated with our eCommerce business •Impairments on long-lived assets and right of use lease assets
Our cost of goods sold typically increases in higher volume quarters because the direct cost of goods purchased is tied to sales.
The primary drivers of individual commodity costs are raw materials, labor in the countries our goods originate from, and the logistics costs associated with transporting our goods.
Store purchase and occupancy costs are largely fixed and do not necessarily increase as volume increases.
Changes in the range of products sold by product type or by channel can also affect the overall cost of goods sold, purchasing and occupancy costs.
Extended periods of declining business and sales could result in further impairment of our assets.
Gross Profit/Gross Margin Description Gross profit is net sales minus cost of goods sold, buying and occupancy costs. Gross margin measures gross profit as a percentage of net sales.
Gross profit/gross margin is influenced by the price at which we are able to sell our goods and the cost of our product.
We review our inventory levels on an on-going basis in order to identify slow-moving merchandise and generally use markdowns to clear such merchandise. The timing and level of markdowns are driven primarily by seasonality and customer acceptance of our merchandise and have a direct effect on our gross margin.
Any marked down merchandise that is not sold is marked out of stock. We use third-party vendors to eliminate this out-of-stock merchandise.
Selling, General, and Administrative Expenses Description Includes operating costs not included in cost of goods sold, buying and occupancy costs such as: •Payroll and other expenses related to operations at our corporate offices •Store expenses other than occupancy costs •Marketing expenses, including production, mailing, print, and digital advertising costs, among other things
With the exception of store payroll, certain marketing expenses, and incentive compensation, selling, general, and administrative expenses generally do not vary proportionally with net sales. As a result, selling, general, and administrative expenses as a percentage of net sales are usually higher in lower volume quarters and lower in higher volume quarters.
EXPRESS, INC.| Q1 2022 Form 10-Q | 28
Table of Contents RESULTS OF OPERATIONS
The first quarter of 2022 compared to the first quarter of 2021
Net SalesThirteen Weeks Ended April 30, 2022 May 1, 2021 Net sales (in thousands) $ 450,785 $ 345,759Comparable retail sales 32 % 11 % Comparable outlet sales 30 % (19) % Total comparable sales percentage change 31 % 5 % Gross square footage at end of period (in thousands) 4,664
Number of: Stores open at beginning of period 561 570 New retail stores - - New outlet stores - - New Express Edit stores 1 1 New UpWest stores 3 1 Closed stores (4) (9) Stores open at end of period 561 563 Net sales in the first quarter of 2022 increased approximately
$105.0 millioncompared to the first quarter of 2021. The increase in sales was primarily attributed to our product and brand strategies resonating with our customers coupled with the continued recovery of our business from the impacts of the COVID-19 pandemic, as compared to the first quarter of 2021 which continued to be negatively impacted by COVID-19.
The following table shows the cost of goods sold, purchase and occupancy costs, gross profit in dollars and gross margin percentage for the periods indicated:
Thirteen weeks over
April 30, 2022 May 1, 2021 (in thousands, except percentages) Cost of goods sold, buying and occupancy costs $ 319,285
$ 266,955Gross profit $ 131,500 $ 78,804Gross margin percentage 29.2 % 22.8 % The 640 basis point increase in gross margin percentage, or gross profit as a percentage of net sales, in the first quarter of 2022 compared to the first quarter of 2021 was comprised of an increase in merchandise margin of 20 basis points and a decrease in buying and occupancy costs as a percentage of net sales of 620 basis points. The increase in merchandise margin was primarily driven by positive customer response to our product, higher full-priced selling and a significant reduction in promotional activity. The improvement was achieved despite the negative impact associated with ongoing supply chain challenges. The improvement in buying and occupancy leverage was driven by the sales increase. EXPRESS, INC. | Q1 2022 Form 10-Q | 29 -------------------------------------------------------------------------------- Table of Contents Selling, General, and Administrative Expenses
The following table presents selling, general and administrative expenses in dollars and as a percentage of net sales for the periods indicated:
Thirteen Weeks Ended April 30, 2022 May 1, 2021 (in thousands, except percentages) Selling, general, and administrative expenses $ 141,093
Selling, general and administrative expenses as a percentage of net sales
31.3 % 34.5 % The
$21.7 millionincrease in selling, general, and administrative expenses in the first quarter of 2022 as compared to the first quarter of 2021 was primarily driven by an increase in variable costs due to the sales increase, store payroll nearing pre-pandemic levels, incremental investments in marketing, higher labor costs and general inflationary pressures.
Interest expense, net
The following table shows interest expense in dollars for the stated periods: Thirteen Weeks Ended April 30, 2022 May 1, 2021 (in thousands) Interest expense, net
$ 3,494 $ 5,252The $1.8 milliondecrease in interest expense in the first quarter of 2022 as compared to the first quarter of 2021 was the result of lower overall borrowing levels under our Amended Revolving Credit Facility and Term Loan Facility, which bear interest at variable rates. In addition, the first quarter of 2021 included higher amortization costs associated with our delayed draw term loan facility. Refer to Note 7 in our unaudited Consolidated Financial Statements included elsewhere in this Quarterly Report for further discussion regarding our borrowings during the thirteen weeks ended April 30, 2022.
The following table shows income tax benefit in dollars for the stated periods: Thirteen Weeks Ended April 30, 2022 May 1, 2021 (in thousands) Income tax benefit
$ (483) $ (84)The effective tax rate was 3.9% and 0.2% for the thirteen weeks ended April 30, 2022and May 1, 2021, respectively. The effective tax rate for the thirteen weeks ended April 30, 2022reflects the impact of non-deductible executive compensation and the recording of an additional valuation allowance of $5.0 millionagainst current year losses. The effective tax rate for the thirteen weeks ended May 1, 2021reflects the impact of recording an additional valuation allowance of $10.0 millionagainst current year losses.
Operating loss, net loss, diluted earnings per share and EBITDA
Included in the table below is operating loss, net loss, diluted earnings per share and earnings before interest, taxes, depreciation, and amortization ("EBITDA") for the thirteen weeks ended
April 30, 2022and May 1, 2021, respectively. We supplement the reporting of our financial information determined under United Statesgenerally accepted accounting principles ("GAAP") with certain non-GAAP financial measures: adjusted operating loss, adjusted net loss, adjusted diluted earnings per share and EBITDA. The following table presents these financial measures, each a non-GAAP financial measure, for the stated periods which eliminate certain non-core operating costs: EXPRESS, INC.| Q1 2022 Form 10-Q | 30
Table of Contents Thirteen Weeks Ended April 30, 2022 May 1, 2021 (in thousands, except per share amounts) Operating loss $ (9,103)
$ (40,556)Adjusted operating loss (Non-GAAP) $ (9,103) * $ (40,556)* Net loss $ (11,914) $ (45,724)Adjusted net loss (Non-GAAP) $ (6,961) $ (35,747)Diluted earnings per share $ (0.18) $ (0.70)Adjusted diluted earnings per share (Non-GAAP) $ (0.10) $ (0.55)EBITDA (Non-GAAP) $ 5,833 $ (23,802)
* No adjustments were made to operating loss for the thirteen weeks ended
Adjusted operating loss, net loss and adjusted diluted earnings per share
Adjusted net loss, adjusted operating loss, and adjusted diluted earnings per share are adjusted for certain non-recurring items that we do not believe are directly related to our underlying operations and may not be indicative of recurring business operations.
How these measures are useful
We believe that these non-GAAP measures provide additional useful information to assist stockholders in understanding our financial results and assessing its prospects for future performance. Management believes adjusted net loss, adjusted operating loss, and adjusted diluted earnings per share are important indicators of our business performance because they exclude items that may not be indicative of, or are unrelated to, our underlying operating results, and may provide a better baseline for analyzing trends in the business.
Limits to the usefulness of these measures
Because non-GAAP financial measures are not standardized, adjusted net loss, adjusted operating loss, and adjusted diluted earnings per share may differ from similarly titled measures used by other companies due to different methods of calculation. These adjusted financial measures should not be considered in isolation or as a substitute for reported net loss, operating loss, or diluted earnings per share. These non-GAAP financial measures reflect an additional way of viewing our operations that, when viewed with the GAAP results provide a more complete understanding of our business. A reconciliation to the most directly comparable GAAP measure are set forth below:
Thirteen weeks over
Diluted Weighted Average (in thousands, except per share Operating Loss Income Tax Impact Net Loss Earnings per Diluted Shares amounts) Share Outstanding Reported GAAP Measure
$ (9,103) $ (11,914) $ (0.18)67,211 Valuation allowance on deferred taxes (a) - 4,953 4,953 0.08 Adjusted Non-GAAP Measure $ (9,103) $ (6,961) $ (0.10)
has. Valuation allowance provisioned on 2022 losses.
Thirteen weeks over
Diluted Weighted Average (in thousands, except per share Operating Loss Income Tax Impact Net Loss Earnings per Diluted Shares amounts) Share Outstanding Reported GAAP Measure
$ (40,556) $ (45,724) $ (0.70)65,200 Valuation allowance on deferred taxes (a) - 9,977 9,977 0.15 Adjusted Non-GAAP Measure $ (40,556) $ (35,747) $ (0.55)
has. Valuation allowance provisioned on 2021 losses.
EXPRESS, INC.| Q1 2022 Form 10-Q | 31
Table of Contents EBITDA
EBITDA is defined as net loss before interest expense (net of interest income), income tax recovery and amortization expense.
How these measures are useful
When used in conjunction with GAAP financial measures, EBITDA is a supplemental measure of operating performance that we believe is a useful measure to facilitate comparisons to historical performance. EBITDA is used as a performance measure in our long-term executive compensation program for purposes of determining the number of equity awards that are ultimately earned and is also a metric used in our short-term cash incentive compensation plan.
Limits to the usefulness of these measures
Because non-GAAP financial measures are not standardized, EBITDA may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of EBITDA is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. EBITDA excludes certain normal recurring expenses. Therefore, these measures may not provide a complete understanding of our performance and should be reviewed in conjunction with the GAAP financial measures. A reconciliation of EBITDA to the most directly comparable GAAP measures, is set forth below. Thirteen Weeks Ended (in thousands) April 30, 2022 May 1, 2021 Net loss
$ (11,914) $ (45,724)Interest expense, net 3,494 5,252 Income tax benefit (483) (84) Depreciation and amortization 14,736 16,754 EBITDA (Non-GAAP Measure) $ 5,833 $ (23,802)
CASH AND CAPITAL RESOURCES
Forward-looking discussion on liquidity
Our liquidity position benefits from the fact that we generally collect cash from sales to customers the same day or, in the case of credit or debit card transactions, within three to five days of the related sale, and we have up to 75 days to pay certain merchandise vendors and 45 days to pay the majority of our non-merchandise vendors. We also have commitments under lease agreements and debt agreements that will require future cash outlays. Based upon the sales and results of operations seen during the thirteen weeks ended
April 30, 2022, as well as the availability of additional liquidity under the Amended Revolving Credit Facility, and expense control and other measures taken to date, our liquidity position has improved significantly. We continue to be in compliance with the financial covenants under our Amended Revolving Credit Facility and Term Loan Facility and plan to continue our cost reduction measures taken to date, and we are forecasting continued strength in both sales and profitability for the remainder of 2022. We believe this will result in sufficient cash flows to support our ongoing operations and to meet our covenant requirements under the Amended Revolving Credit Facility and Term Loan Facility for one year following the date that these unaudited Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report are issued and beyond. To fund our normal working capital requirements we will continue to utilize our Amended Revolving Credit Facility and have $95.6 millionoutstanding under our Term Loan Facility including $6.7 millionoutstanding that will be repaid upon receipt of the CARES Act receivable. We have (and in the future may continue to have) a negative working capital balance. Our current liabilities include current operating lease liabilities, for which the corresponding operating right of use assets are recorded as non-current on our unaudited Consolidated Balance Sheets. However, the cash collected from our sales is typically collected before payment is due on our current liabilities. The Amended Revolving Credit Facility and the Term Loan Facility contain certain affirmative and negative covenants. Refer to Note 7 of our unaudited Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10- EXPRESS, INC. | Q1 2022 Form 10-Q | 32 -------------------------------------------------------------------------------- Table of Contents Q for additional information on our Amended Revolving Credit Facility and Term Loan Facility. Analysis of Cash Flows
A summary of cash provided or used for operating, investing and financing activities is presented in the following table:
Thirteen Weeks Ended
April 30, 2022 May 1, 2021(in thousands)
Used in operating activities
$ (75,879) $ (1,580)Used in investing activities (5,142) (3,562) Provided by financing activities 76,985 33,340 (Decrease)/Increase in cash and cash equivalents (4,036) 28,198 Cash and cash equivalents at end of period $ 37,140 $ 84,072Operating Activities Our business relies on cash flows from operations as our primary source of liquidity, with the majority of those cash flows being generated in the fourth quarter of the year. Our primary operating cash needs are for merchandise inventories, payroll, store rent and marketing. For the thirteen weeks ended April 30, 2022, our cash flows used in operating activities were $75.9 millioncompared to $1.6 millionused in operating activities for the thirteen weeks ended May 1, 2021. This $74.3 milliondecrease in cash flows from operating activities for the thirteen weeks ended April 30, 2022as compared to the same period in 2021 was primarily driven by changes in working capital offset by a decrease in net loss of $33.8 millioncompared to the first quarter of 2021. The changes in working capital were primarily driven by a decrease in accounts payable due to the payment of inventory related amounts on the unaudited Consolidated Balance Sheets at January 29, 2022. Operating cash flows for the thirteen weeks ended May 1, 2021were positively impacted by the receipt of approximately $15.4 millionof CARES Act receivable.
We also use cash for investing activities. Our capital expenditures consist primarily of new and remodeled store construction and fixtures and investments in information technology. We had capital expenditures of approximately
$5.1 millionand $3.6 millionfor the thirteen weeks ended April 30, 2022and May 1, 2021, respectively. The $1.6 millionincrease in investing activities was primarily driven by investments in information technology to support our strategic business initiatives. We expect capital expenditures for the remainder of 2022 to be approximately $50.0 million, primarily driven by new and remodeled store construction and investments in information technology.
During the first quarter of 2022 we borrowed a net additional
$80.0 millionon our Amended Revolving Credit Facility to fund normal working capital needs. In addition, we made a $1.1 millionmandatory repayment on our $90.0 millionFILO Term Loan. As of April 30, 2022, the net amount outstanding under our facilities was $208.0 million, of which $4.5 millionis classified as short-term debt and $203.5 millionis classified as long-term debt on the unaudited Consolidated Balance Sheet, net of unamortized costs, and approximately $65.8 millionwas available for borrowing under our Amended Revolving Credit Facility subject to certain borrowing base limitations and after outstanding letters of credit in the amount of $34.6 million, primarily related to our third party logistics contract. Refer to Note 7 of our unaudited Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for additional information on our Amended Revolving Credit Facility and Term Loan Facility.
November 28, 2017, the Board approved a share repurchase program that authorizes us to repurchase up to $150.0 millionof our outstanding common stock using available cash. During the thirteen weeks ended April 30, 2022and May 1, 2021, respectively, we did not repurchase shares under the stock repurchase program. EXPRESS, INC.| Q1 2022 Form 10-Q | 33 -------------------------------------------------------------------------------- Table of Contents ATM Equity Offering Sales Agreement On June 3, 2021, we entered into an ATM Equity Offering Sales Agreement (the "Sales Agreement") with BofA Securities, Inc.("BofA"), as the sales agent to sell up to 15.0 million shares of our common stock, par value $0.01per share, through an "at-the-market" offering program. Such shares are issued pursuant to the Company's shelf registration statement on Form S-3 (Registration No. 333-253368) filed with the SECon April 6, 2021. During the thirteen weeks ended April 30, 2022, we did not sell any shares under the Sales Agreement. We intend to use net proceeds, if any, from the sale of the common stock pursuant to the Sales Agreement for general corporate purposes, which may include investments in working capital, or capital expenditures, including the acceleration of investments to grow and enhance our eCommerce channel and omni-channel assets, the repayment of indebtedness, and other investments.
CRITICAL ACCOUNTING METHODS
Management has determined that our most critical accounting policies are those related to store asset impairment, merchandise inventory valuation and valuation allowance on deferred tax assets. We continue to monitor our accounting policies to ensure proper application of current rules and regulations. There have been no significant changes to the policies discussed in our Annual Report.
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