dELiA*s, Inc. Announces Third Quarter 2012 Results

  dELiA*s, Inc. Announces Third Quarter 2012 Results

Business Wire

NEW YORK -- November 20, 2012

dELiA*s, Inc. (NASDAQ: DLIA), a multi-channel retail company comprised of two
lifestyle brands primarily targeting teenage girls and young women, today
announced the results for its third quarter of fiscal 2012.

Third Quarter Fiscal 2012 Highlights:

  *Total revenue decreased 4.0% to $55.7 million from $58.1 million in the
    third quarter of fiscal 2011. Revenue from the retail segment decreased
    2.8% to $35.2 million, due to a reduction in store count, partially offset
    by a comparable store sales increase of 2.4%. Revenue from the direct
    segment decreased 6.1% to $20.6 million on a catalog circulation decrease
    of 14.4%.
  *Consolidated gross margin increased to 33.9% compared to 32.3% in the
    prior year quarter.
  *Net loss was $2.0 million, or $0.06 per diluted share. Net loss for the
    third quarter of fiscal 2011 was $4.4 million, or $0.14 per diluted share.

Walter Killough, Chief Executive Officer, commented, “We achieved our third
consecutive quarter of positive comparable store sales and merchandise margin
improvement for the retail segment. While we were pleased with the results of
our back-to-school season, our sales trends slowed in late September and
October. Hurricane Sandy also had a significant effect on both segments of our
business during the first week of the new quarter, although we expect its
impact on our overall fourth quarter results to be minimal. Subsequent to the
storm, sales trends improved, and we have been pleased with the strong
response to our Holiday assortment in both our dELiA*s retail and direct
businesses. We believe that we are well-positioned with compelling
merchandise, timely inventory flow and a strong marketing program in place,
and remain on track to deliver improved sales and margins as we continue to
execute on our strategic initiatives.”

Results by Segment

Retail Segment Results

Total revenue for the retail segment for the third quarter of fiscal 2012
decreased 2.8% to $35.2 million from $36.2 million in the third quarter of
fiscal 2011 due to a reduction in store count. Retail comparable store sales
increased 2.4% for the third quarter of fiscal 2012 compared to a decrease of
1.7% for the third quarter of fiscal 2011.

Gross margin for the retail segment, which includes distribution, occupancy
and merchandising costs, was 29.7% for the third quarter of fiscal 2012
compared to 26.0% in the prior year period. The increase in gross margin
resulted primarily from higher merchandise margins, driven by increased full
price selling and fewer markdowns, and the leveraging of reduced occupancy
costs.

Selling, general and administrative (SG&A) expenses for the retail segment
were $11.6 million, or 33.1% of sales, in the third quarter of fiscal 2012
compared to $12.1 million, or 33.5% of sales, in the prior year period. The
decrease in SG&A expenses in dollars resulted from reduced selling and
depreciation expenses.

The operating loss for the third quarter of fiscal 2012 for the retail segment
was $1.0 million compared to $2.7 million in the prior year period. Included
in the third quarter of fiscal 2012 were store closing costs of $0.5 million.

The Company closed two stores during the third quarter of fiscal 2012, ending
the period with 107 stores.

Direct Segment Results

Total revenue for the direct segment for the third quarter of fiscal 2012
decreased 6.1% to $20.6 million from $21.9 million in the third quarter of
fiscal 2011. Catalog circulation was reduced by 14.4% compared to the third
quarter of fiscal 2011.

Gross margin for the direct segment was 41.2% for the third quarter of fiscal
2012 compared to 42.7% in the third quarter of fiscal 2011. The decrease in
gross margin resulted primarily from higher shipping and handling costs
partially offset by higher merchandise margins.

SG&A expenses for the direct segment were $10.9 million, or 53.2% of sales, in
the third quarter of fiscal 2012 compared to $10.9 million, or 50.0% of sales,
in the prior year period. The increase in SG&A expenses as a percent of sales
reflects the deleveraging of selling, overhead and depreciation expenses.

Operating loss for the third quarter of fiscal 2012 for the direct segment was
$0.8 million as compared to $1.5 million in the prior year period. Included in
the third quarter of fiscal 2012 was incremental gift card breakage income of
$1.6 million.

Balance Sheet Highlights

At the end of the third quarter of fiscal 2012, cash and cash equivalents were
$5.9 million compared with $15.8 million at the end of the third quarter of
fiscal 2011.

Total net inventories at the end of the third quarter of fiscal 2012 were
$38.8 million compared with $41.7 million at the end of the third quarter of
fiscal 2011. Inventory per average retail store was down 11.2% compared to the
prior year period, and inventory for the direct segment was up 2.6% compared
to the prior year.

First Nine Month Results

For the nine-month period ended October 27, 2012, total revenue increased 3.2%
to $156.5 million from $151.6 million for the prior year period. Total gross
margin was 33.5% compared to 31.1% for the prior year period. SG&A expenses
were $65.6 million, or 41.9% of sales, for the first nine months of fiscal
2012, compared to $66.4 million, or 43.8% of sales, for the prior year period.

The operating loss for the first nine months of fiscal 2012 decreased to $10.3
million, compared to $19.0 million for the first nine months of fiscal 2011.

Net loss for the first nine months of fiscal 2012 decreased to $10.9 million,
or $0.35 per diluted share, compared to a net loss of $18.5 million, or $0.59
per diluted share, for the first nine months of fiscal 2011. Included in the
first nine months of fiscal 2012 is gift card breakage of $2.8 million, or
$0.09 per diluted share, compared to $0.2 million, or $0.01 per diluted share,
in first nine months of fiscal 2011.

The provision for income taxes for first nine months of fiscal 2012 was $0.1
million, or $0.00 per diluted share, compared to an income tax benefit of $0.9
million, or $0.03 per diluted share, for first nine months of fiscal 2011.

Conference Call and Webcast Information

A conference call to discuss third quarter 2012 results is scheduled for
Tuesday, November 20, 2012 at 10:00 A.M. Eastern Time. The conference call
will be webcast live at www.deliasinc.com. A replay of the call will be
available until December 20, 2012 and can be accessed by dialing (877)
870-5176 and providing the pass code number 7021640.

During the conference call, the Company may discuss and answer questions
concerning business and financial developments and trends. The Company’s
responses to questions, as well as other matters discussed during the
conference call, may contain or constitute information that has not been
disclosed previously.

About dELiA*s, Inc.

dELiA*s, Inc. is a multi-channel retail company comprised of two lifestyle
brands primarily targeting teenage girls and young women. Its brands – dELiA*s
and Alloy – generate revenue by selling apparel, accessories and footwear to
consumers through direct mail catalogs, websites, and dELiA*s mall-based
retail stores.

Forward-Looking Statements

This announcement may contain forward-looking statements made in reliance upon
the safe harbor provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
including statements regarding our expectations and beliefs regarding our
future results or performance. Because these statements apply to future
events, they are subject to risks and uncertainties. When used in this
announcement, the words “anticipate”, “believe”, “estimate”, “expect”,
“expectation”, “should”, “would”, “project”, “plan”, “predict”, “intend” and
similar expressions are intended to identify such forward-looking statements.
Our actual results could differ materially from those projected in the
forward-looking statements. Additionally, you should not consider past results
to be an indication of our future performance. For a discussion of risk
factors that may affect our results, see the “Risk Factors That May Affect
Future Results” section of our filings with the Securities and Exchange
Commission, including our annual report on Form 10-K and quarterly reports on
Form 10-Q. We do not intend to update any of the forward-looking statements
after the date of this announcement to conform these statements to actual
results, to changes in management's expectations or otherwise, except as may
be required by law.


dELiA*s, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value and share data)
(unaudited)
                                                           
                                           October 27, 2012   October 29, 2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                  $   5,919          $   15,778
Inventories, net                               38,849             41,655
Prepaid catalog costs                          3,689              3,654
Other current assets                          3,487            3,741     
                                                              
TOTAL CURRENT ASSETS                           51,944             64,828
                                                              
PROPERTY AND EQUIPMENT, NET                    38,340             44,843
GOODWILL                                       4,462              4,462
INTANGIBLE ASSETS, NET                         2,419              2,419
OTHER ASSETS                                  938              852       
TOTAL ASSETS                               $   98,103        $   117,404   
                                                              
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable                           $   24,008         $   21,787
Accrued expenses and other current             11,585             16,941
liabilities
Income taxes payable                          916              891       
TOTAL CURRENT LIABILITIES                      36,509             39,619
                                                              
DEFERRED CREDITS AND OTHER LONG-TERM          9,825            11,676    
LIABILITIES
TOTAL LIABILITIES                             46,334           51,295    
                                                              
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred Stock, $.001 par value;
25,000,000 shares authorized, none             -                  -
issued
Common Stock, $.001 par value;
100,000,000 shares authorized;                 32                 31
31,684,387 and 31,432,531 shares issued
and outstanding, respectively
Additional paid-in capital                     99,788             99,081
Accumulated deficit                           (48,051   )       (33,003   )
TOTAL STOCKHOLDERS' EQUITY                    51,769           66,109    
                                                              
TOTAL LIABILITIES AND STOCKHOLDERS'        $   98,103        $   117,404   
EQUITY
                                                                            

                                                                             
dELiA*s, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
                                                                
                     For the Thirteen Weeks Ended
                     October 27, 2012             October 29, 2011
                                                                             
                                                                             
NET REVENUES         $  55,723          100.0 %   $  58,067          100.0 %
Cost of goods sold     36,808         66.1  %     39,336         67.7  %
                                                                             
GROSS PROFIT           18,915         33.9  %     18,731         32.3  %
Selling, general
and administrative      22,572          40.5  %      23,081          39.7  %
expenses
Other operating        (1,822      )   -3.3  %     (122        )   -0.2  %
income
TOTAL OPERATING        20,750         37.2  %     22,959         39.5  %
EXPENSES
OPERATING LOSS          (1,835      )   -3.3  %      (4,228      )   -7.3  %
Interest expense,      159            0.3   %     171            0.3   %
net
LOSS BEFORE INCOME      (1,994      )   -3.6  %      (4,399      )   -7.6  %
TAXES
Provision for          3              0.0   %     26             0.0   %
income taxes
NET LOSS             $  (1,997      )   -3.6  %   $  (4,425      )   -7.6  %
                                                                             
BASIC AND DILUTED
LOSS PER SHARE:
NET LOSS PER SHARE   $  (0.06       )             $  (0.14       )
                                                                             
WEIGHTED AVERAGE
BASIC AND DILUTED      31,355,085                 31,209,737  
COMMON SHARES
OUTSTANDING
                                                                             


dELiA*s, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
                                                                  
                       For the Thirty-Nine Weeks Ended
                       October 27, 2012             October 29, 2011
                                                                       
                                                                       
NET REVENUES           $  156,477         100.0 %   $  151,560         100.0 %
                                                                       
Cost of goods sold       103,992        66.5  %     104,381        68.9  %
                                                                       
GROSS PROFIT             52,485         33.5  %     47,179         31.1  %
Selling, general and
administrative            65,640          41.9  %      66,406          43.8  %
expenses
Other operating          (2,837      )   -1.8  %     (194        )   -0.1  %
income
TOTAL OPERATING          62,803         40.1  %     66,212         43.7  %
EXPENSES
OPERATING LOSS            (10,318     )   -6.6  %      (19,033     )   -12.6 %
Interest expense,        478            0.3   %     394            0.3   %
net
LOSS BEFORE INCOME        (10,796     )   -6.9  %      (19,427     )   -12.8 %
TAXES
Provision (benefit)      88             0.1   %     (921        )   -0.6  %
for income taxes
NET LOSS               $  (10,884     )   -7.0  %   $  (18,506     )   -12.2 %
                                                                       
BASIC AND DILUTED
LOSS PER SHARE:
NET LOSS PER SHARE     $  (0.35       )             $  (0.59       )
                                                                       
WEIGHTED AVERAGE
BASIC AND DILUTED        31,334,288                 31,209,737  
COMMON SHARES
OUTSTANDING
                                                                       

                                                           
dELiA*s Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
                                                              
                                           For the Thirty-Nine Weeks Ended
                                           October 27, 2012   October 29, 2011
                                                              
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                   $   (10,884   )    $   (18,506   )
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization                  7,412              8,624
Stock-based compensation                       543                571
Changes in operating assets and
liabilities:
Inventories                                    (7,912    )        (9,630    )
Prepaid catalog costs and other assets         (1,609    )        6,220
Restricted cash                                -                 8,268
Income taxes payable                           180                149
Accounts payable, accrued expenses and        (6,480    )       (4,928    )
other liabilities
                                                              
Total adjustments                             (7,866    )       9,274     
NET CASH USED IN OPERATING ACTIVITIES         (18,750   )       (9,232    )
                                                              
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                          (3,757    )       (3,064    )
NET CASH USED IN INVESTING ACTIVITIES         (3,757    )       (3,064    )
                                                              
NET DECREASE IN CASH AND CASH                  (22,507   )        (12,296   )
EQUIVALENTS
CASH AND CASH EQUIVALENTS, beginning of       28,426           28,074    
period
CASH AND CASH EQUIVALENTS, end of period   $   5,919         $   15,778    
                                                                            

                                                         
dELiA*s, Inc.
SELECTED OPERATING DATA
(in thousands, except number of stores)
(unaudited)
                                                                             
              For The Thirteen Weeks          For The Thirty-Nine Weeks
              Ended                           Ended
              October 27,     October         October 27,     October 29,
              2012            29, 2011        2012            2011
                                                                             
Channel net
revenues:
Retail        $  35,172       $ 36,186        $ 92,752        $ 89,589
Direct          20,551       21,881        63,725        61,971  
Total net     $  55,723      $ 58,067       $ 156,477      $ 151,560 
revenues
                                                                             
Comparable      2.4%         (1.7%)        7.3%          1.6%    
store sales
                                                                             
Catalogs        8,007        9,356         23,587        25,940  
mailed
                                                                             
Inventory -   $  21,250      $ 24,501       $ 21,250       $ 24,501  
retail
Inventory -   $  17,599      $ 17,154       $ 17,599       $ 17,154  
direct
                                                                             
                                                                             
Number of
stores:
Beginning        109            115             113             114
of period
Opened           -              1        **     1         *     3         **
Closed          2            2       **    7        *    3        **
End of          107          114           107           114     
period
                                                                             
Total gross
sq. ft @
end
of period       410.8        437.2         410.8         437.2   
                                                                             

* Totals include one store that was closed and relocated to an alternative
site in the same mall during the first quarter of fiscal 2012.

** Totals include one store that was closed, remodeled and reopened in the
second quarter of fiscal 2011, and one store that was closed, remodeled and
reopened during the third quarter of fiscal 2011.

Contact:

dELiA*s, Inc.
David Dick, 212-590-6200
or
ICR
Chief Financial Officer
Jean Fontana, 646-277-1214