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Exhibit 99.1

 

 

For Immediate Release

News Release

Contact:

Investor Relations

(281) 776-7575

ir@tmw.com

 

Kelly Dilts

Men’s Wearhouse, SVP, Finance & IR

 

Ken Dennard

Dennard · Lascar Associates

 

MEN’S WEARHOUSE REPORTS

FISCAL 2015 FIRST QUARTER RESULTS

 

·                  Strong first quarter performance

 

·                  Jos. A. Bank integration remains on track

 

·                  Q1 2015 GAAP diluted earnings per share were $0.21 and adjusted diluted earnings per share were $0.54

 

·                  Conference call scheduled for Thursday, June 11th at 9:00 a.m. Eastern time

 

FREMONT, CA — June 10, 2015 — The Men’s Wearhouse (NYSE: MW) today announced consolidated financial results for the fiscal first quarter ended May 2, 2015.

 

GAAP diluted EPS for fiscal first quarter 2015 was $0.21 and adjusted EPS was $0.54 excluding non-operating items(1).

 

Doug Ewert, Men’s Wearhouse chief executive officer, stated, “We are very pleased to report another strong quarter with all brands performing well.  Comparable sales increased 6.8% at Men’s Wearhouse, 0.8% at Moores and 7.3% at K&G and decreased 1.5% at Jos. A. Bank.  Traffic increased year over year at all of our U.S. brands and while Moores’ traffic decreased, their average ticket increased.  While the retail business has continued to perform well, the tuxedo business slowed this quarter with a decrease in comps of 1.2% at Men’s Wearhouse.  Based on recent studies, the overall wedding industry is experiencing a slow-down but we believe that our market share is holding and possibly increasing.

 

“We made another important step in the Jos. A. Bank integration as we completed the merchandise systems conversions at the beginning of May,” added Ewert.  “This conversion will help us in unlocking retail inventory efficiency and distribution synergies.  Cost synergies continue to be on plan and we are beginning to see some revenue synergies.  We continue to expect Jos. A. Bank comparable sales to be down in the second quarter with improvement in the back half of the year and gross margin increases to follow a similar pattern.

 

“We continue to be confident in our 2015 and 2017 EPS guidance,” concluded Ewert.

 


(1)  Adjusted information is non-GAAP financial information provided to enhance the user’s overall understanding of the Company’s current financial performance.  Reconciliations of adjusted financial information to GAAP results are included in the tables at the end of this release.

 

1



 

FIRST QUARTER SALES REVIEW

 

The table that follows is a summary of net sales for the fiscal 2015 first quarter ended May 2, 2015.  The dollars shown are U.S. dollars in millions and, due to rounded numbers, may not sum.  The Moores comparable sales change is based on the Canadian dollar.  The comparable sales shown below for Jos. A. Bank are a comparison to the Jos. A. Bank first quarter, which was prior to the acquisition on June 18, 2014. Comparable sales exclude the net sales of a store for any month of one period if the store was not owned or open throughout the same month of the prior period and include e-commerce net sales.

 

First Quarter Net Sales Summary — Fiscal 2015

 

 

 

 

 

 

 

Net Sales

 

Comparable Sales Change

 

 

 

Net Sales Change

 

Current
Quarter

 

% of Total
Sales

 

Current
Quarter

 

Prior Year
Quarter

 

Total Retail Segment

 

43.7

%

$

250.6

 

$

824.3

 

 

 

 

 

 

 

Men’s Wearhouse

 

8.4

%

$

35.4

 

$

456.4

 

52

%

6.8

%

2.9

%

Jos. A. Bank

 

n/a

 

$

216.1

 

$

216.1

 

24

%

(1.5

)%

8.4

%

Moores

 

(9.5

)%

$

(5.0

)

$

47.5

 

5

%

0.8

%

6.0

%

K&G

 

3.9

%

$

3.6

 

$

96.0

 

11

%

7.3

%

(1.2

)%

MW Cleaners

 

7.4

%

$

0.6

 

$

8.3

 

1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Apparel Segment

 

7.0

%

$

4.0

 

$

60.8

 

7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

 

40.4

%

$

254.6

 

$

885.1

 

 

 

 

 

 

 

 

Net sales at our largest brand, Men’s Wearhouse, were up 8.4% from last year’s first quarter.  Comparable sales increased 6.8% due to increases in average transactions per store, clothing product average unit retails (or the net selling price per unit) and units sold per transaction. The higher margin tuxedo rental revenues comparable sales decreased 1.2% in the first quarter of 2015.

 

Jos. A. Bank comparable sales for the first quarter decreased 1.5% with a decrease in clothing product average unit retails moderated by increases in both units sold per transaction and average transactions per store.  Moores, our Canadian retail brand, had a comparable sales increase of 0.8% due to an increase in clothing product average unit retails mostly offset by a decrease in average transactions per store and units sold per transaction.  However, net sales for Moores decreased 9.5% due to an unfavorable change in the currency translation rate.  K&G comparable sales increased 7.3% due to an increase in average transactions per store.  The Corporate Apparel segment had a sales increase of 7.0%.

 

FIRST QUARTER GAAP OPERATING RESULTS

 

Total net sales increased 40.4%, or $254.6 million, to $885.1 million.  Retail segment net sales increased by 43.7%, or $250.6 million.  Corporate apparel sales increased by 7.0% or $4.0 million.

 

Total gross margin was $381.6 million, an increase of $98.2 million, or 34.7%.  As a percent of sales, total gross margin decreased 184 basis points to 43.1% of net sales.

 

Advertising expense increased $21.9 million to $50.7 million.  This increase represented a 116 basis point increase in expense.

 

2



 

Selling, general and administrative expenses (“SG&A”) increased $48.3 million to $275.6 million, a 492 basis points decrease.

 

Operating income increased $28.0 million to $55.3 million, representing 6.3% of net sales compared to 4.3% in the prior year.

 

FIRST QUARTER ADJUSTED OPERATING RESULTS (1)

 

In our fourth quarter earnings release we provided historical baselines of operating results for fiscal year 2014 in order to provide comparable results to fiscal year 2015.  These baselines include Jos. A. Bank operations for the 2014 full year and exclude items we believe are not indicative of our core operating results as well as certain items related to the acquisition of Jos. A. Bank.  Below is a comparison of the consolidated first quarter FY 2015 adjusted operating results to first quarter FY 2014 baseline.

 

 

 

Q1 FY15

 

Q1 FY15

 

Q1 FY14

 

Q1 FY14

 

Variance

 

 

 

$

 

% of Sales

 

$

 

% of Sales

 

Dollar

 

%

 

Basis Points

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail clothing product

 

$

666,862

 

75.34

%

$

632,136

 

74.55

%

$

34,726

 

5.49

%

0.79

 

Tuxedo rental services

 

103,129

 

11.65

%

106,147

 

12.52

%

(3,018

)

-2.84

%

(0.87

)

Alteration and other services

 

54,280

 

6.13

%

52,788

 

6.23

%

1,492

 

2.83

%

(0.09

)

Total retail sales

 

824,271

 

93.13

%

791,071

 

93.30

%

33,200

 

4.20

%

(0.17

)

Corporate apparel clothing product

 

60,818

 

6.87

%

56,825

 

6.70

%

3,993

 

7.03

%

0.17

 

Total net sales

 

885,089

 

100.00

%

847,896

 

100.00

%

37,193

 

4.39

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin: (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail clothing product

 

373,218

 

55.97

%

357,691

 

56.58

%

15,527

 

4.34

%

(0.62

)

Tuxedo rental services

 

87,045

 

84.40

%

89,083

 

83.92

%

(2,038

)

-2.29

%

0.48

 

Alteration and other services

 

18,130

 

33.40

%

15,983

 

30.28

%

2,147

 

13.43

%

3.12

 

Occupancy costs

 

(112,810

)

-13.69

%

(108,405

)

-13.70

%

(4,405

)

4.06

%

0.02

 

Total retail gross margin

 

365,583

 

44.35

%

354,352

 

44.79

%

11,231

 

3.17

%

(0.44

)

Corporate apparel clothing product

 

16,995

 

27.94

%

17,078

 

30.05

%

(83

)

-0.49

%

(2.11

)

Total gross margin

 

382,578

 

43.22

%

371,430

 

43.81

%

11,148

 

3.00

%

(0.58

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertising expense

 

50,656

 

5.72

%

41,987

 

4.95

%

8,669

 

20.65

%

0.77

 

Selling, general and administrative expenses

 

263,985

 

29.83

%

262,099

 

30.91

%

1,886

 

0.72

%

(1.09

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

67,937

 

7.68

%

$

67,344

 

7.94

%

$

593

 

0.88

%

(0.27

)

 


(1) See Use of Non-GAAP Financial Measures for reconcilation to GAAP.

(2) Gross margin percent of related sales.

 

Total net sales increased 4.4%, or $37.2 million from $847.9 million baseline net sales.  Retail segment net sales for the quarter increased by 4.2%, or $33.2 million, to $824.3 million due primarily to an increase in comparable sales in the legacy brands.  Corporate apparel sales increased by 7.0%, or $4.0 million.

 

Total adjusted gross margin of $382.6 million increased $11.1 million or 3.0% and decreased 58 basis points compared to baseline total gross margin.  Excluding Jos. A. Bank, total adjusted gross margin decreased 30 basis points.  Adjusted retail segment gross margin increased $11.2 million, or 3.2%, and decreased 44 basis points from prior year baseline primarily due to lower retail clothing margin offset somewhat by higher tuxedo and alteration and other services margin.  The adjusted retail segment gross margin rate decreased 11 basis points excluding Jos. A. Bank.  Corporate apparel gross margin decreased $0.1 million, or 0.5%, and decreased 211 basis points.

 

On a stand-alone basis, total Jos. A. Bank adjusted retail gross margin (including tuxedo margin, alteration margin and occupancy) decreased 167 basis points from 40.5% to 38.8%.  Jos. A. Bank adjusted retail clothing margin decreased 106 basis points from 58.3% to 57.3%.

 

3



 

Advertising expense was $50.7 million.  This represents an increase of $8.7 million or 77 basis points, compared to the prior year baseline primarily due to increased advertising expense to support branding initiatives.

 

Adjusted SG&A expenses of $264.0 million were 109 basis points favorable to the prior year baseline primarily due to lower payroll related costs and other synergies.  On an absolute dollar basis, adjusted SG&A increased by $1.9 million, or 0.7%, to prior year baseline.

 

Adjusted operating income was $67.9 million, an increase of $0.6 million, or 0.9%, over the prior year baseline operating results of $67.3 million.

 

INTEREST AND TAXES

 

GAAP net interest expense for the first quarter was $26.5 million.  Loss on extinguishment of debt was $12.7 million and was adjusted for as a non-operating item.  The loss was the result of our $400 million partial refinancing of our term loan to a fixed rate of 5.0%.

 

The effective tax rate for the first quarter was 35.8%.  Excluding the impact of integration costs, the adjusted effective tax rate was 37.3%.

 

NET EARNINGS

 

GAAP net earnings were $10.4 million compared to GAAP net earnings of $16.5 million last year.  GAAP EPS was $0.21 compared to $0.34 in the prior year quarter.  Adjusted net earnings were $26.0 million, or $0.54 adjusted EPS.

 

BALANCE SHEET

 

In connection with the acquisition of Jos. A. Bank, debt at the end of the first quarter 2015 was approximately $1.7 billion.

 

Inventories increased $340.7 million to $986.5 million at the end of the first quarter 2015 from $645.8 million at prior year first quarter due primarily to Jos. A. Bank and inventory related to Joseph Abboud.

 

Capital expenditures for the first quarter of fiscal year 2015 were $30.4 million compared to $22.5 million in the prior year.

 

4



 

CALL AND WEBCAST INFORMATION

 

At 9:00 a.m. Eastern time on Thursday, June 11, 2015, management will host a conference call and real time webcast to discuss fiscal 2015 first quarter results.

 

To access the conference call, dial 412-902-0030.  To access the live webcast presentation, visit the Investor Relations section of the Company’s website at http://ir.menswearhouse.com. A telephonic replay will be available through June 18, 2015 by calling 201-612-7415 and entering the access code of 13609463#, or a webcast archive will be available free on the website for approximately 90 days.

 

STORE INFORMATION

 

 

 

May 2, 2015

 

May 3, 2014

 

January 31, 2015

 

 

 

Number of
Stores

 

Sq. Ft.
(000’s)

 

Number of
Stores

 

Sq. Ft.
(000’s)

 

Number of
Stores

 

Sq. Ft.
(000’s)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Men’s Wearhouse (a)

 

702

 

3,963.4

 

670

 

3,820.4

 

698

 

3,955.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jos. A. Bank (b)

 

636

 

2,923.2

 

 

 

636

 

2,922.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Men’s Wearhouse and Tux

 

207

 

287.9

 

244

 

338.9

 

210

 

291.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Moores, Clothing for Men

 

124

 

783.1

 

120

 

764.8

 

123

 

779.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

K&G (c)

 

89

 

2,109.0

 

94

 

2,228.8

 

91

 

2,164.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

1,758

 

10,066.6

 

1,128

 

7,152.9

 

1,758

 

10,112.5

 

 


(a)  Includes one Joseph Abboud store.

(b)  Excludes 15 franchise stores.

(c)  81, 85 and 83 stores, respectively, offering women’s apparel.

 

Founded in 1973, Men’s Wearhouse is one of North America’s largest specialty retailers of men’s apparel with 1,758 stores.  The Men’s Wearhouse, Jos. A. Bank, Moores and K&G stores carry a full selection of suits, sport coats, furnishings and accessories in exclusive and non-exclusive merchandise brands and Men’s Wearhouse and Tux stores carry a limited selection.  Most K&G stores carry a full selection of women’s apparel.  Tuxedo rentals are available in the Men’s Wearhouse, Jos. A. Bank, Moores and Men’s Wearhouse and Tux stores.  Additionally, Men’s Wearhouse operates a global corporate apparel and workwear group consisting of Twin Hill in the United States and Dimensions, Alexandra and Yaffy in the United Kingdom.

 

This press release contains forward-looking information.  The forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are not guarantees of future performance and a variety of factors could cause actual results to differ materially from the anticipated or expected results expressed in or suggested by these forward-looking statements.  These forward-looking statements may be significantly impacted by various factors, including, but not limited to: actions by governmental entities, domestic and international economic activity and inflation, success, or lack thereof, in executing our internal operating plans and new store and new market expansion plans, as well as integration of acquisitions, including Jos. A. Bank, performance issues with key suppliers, disruption in buying trends due to homeland security concerns, severe weather, foreign currency fluctuations, government export and import policies, advertising or marketing activities of competitors, and legal proceedings. Future results will also be dependent upon our ability to continue to identify and complete successful expansions and penetrations into existing and new markets and our ability to integrate such expansions with our existing operations.

 

5



 

The forward-looking statements in this press release speak only as of the date hereof. Except for the ongoing obligations of Men’s Wearhouse to disclose material information under the federal securities laws, Men’s Wearhouse undertakes no obligation to revise or update publicly any forward-looking statement, except as required by law.  Other factors that may impact the forward-looking statements are described in Men’s Wearhouse’s annual report on Form 10-K for the fiscal year ended January 31, 2015.  For additional information on Men’s Wearhouse, please visit the Company’s websites at www.menswearhouse.com, www.josbank.com, www.josephabboud.com, www.mooresclothing.com, www.kgstores.com, www.twinhill.com, www.dimensions.co.uk and www.alexandra.co.uk.

 

6



 

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

 

For the Three Months Ended May 2, 2015 and May 3, 2014

(In thousands, except per share data)

 

 

 

Three Months Ended

 

Variance

 

 

 

 

 

% of

 

 

 

% of

 

 

 

 

 

Basis

 

 

 

2015

 

Sales

 

2014

 

Sales

 

Dollar

 

%

 

Points

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail clothing product

 

$

666,862

 

75.34

%

$

433,024

 

68.68

%

$

233,838

 

54.00

%

6.66

 

Tuxedo rental services

 

103,129

 

11.65

%

101,663

 

16.12

%

1,466

 

1.44

%

(4.47

)

Alteration and other services

 

54,280

 

6.13

%

38,962

 

6.18

%

15,318

 

39.32

%

(0.05

)

Total retail sales

 

824,271

 

93.13

%

573,649

 

90.99

%

250,622

 

43.69

%

2.14

 

Corporate apparel clothing product

 

60,818

 

6.87

%

56,825

 

9.01

%

3,993

 

7.03

%

(2.14

)

Total net sales

 

885,089

 

100.00

%

630,474

 

100.00

%

254,615

 

40.38

%

0.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cost of sales

 

503,537

 

56.89

%

347,110

 

55.06

%

156,427

 

45.07

%

1.84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin (a):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail clothing product

 

372,478

 

55.86

%

241,547

 

55.78

%

130,931

 

54.21

%

0.07

 

Tuxedo rental services

 

87,045

 

84.40

%

86,346

 

84.93

%

699

 

0.81

%

(0.53

)

Alteration and other services

 

18,130

 

33.40

%

11,240

 

28.85

%

6,890

 

61.30

%

4.55

 

Occupancy costs

 

(113,096

)

(13.72

)%

(72,847

)

(12.70

)%

(40,249

)

(55.25

)%

(1.02

)

Total retail gross margin

 

364,557

 

44.23

%

266,286

 

46.42

%

98,271

 

36.90

%

(2.19

)

Corporate apparel clothing product

 

16,995

 

27.94

%

17,078

 

30.05

%

(83

)

(0.49

)%

(2.11

)

Total gross margin

 

381,552

 

43.11

%

283,364

 

44.94

%

98,188

 

34.65

%

(1.84

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertising expense

 

50,656

 

5.72

%

28,771

 

4.56

%

21,885

 

76.07

%

1.16

 

Selling, general and administrative expenses

 

275,607

 

31.14

%

227,312

 

36.05

%

48,295

 

21.25

%

(4.92

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

55,289

 

6.25

%

27,281

 

4.33

%

28,008

 

102.66

%

1.92

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest

 

(26,455

)

(2.99

)%

(1,074

)

(0.17

)%

(25,381

)

2363.22

%

(2.82

)

Loss on extinguishment of debt

 

(12,675

)

(1.43

)%

 

 

(12,675

)

 

(1.43

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

16,159

 

1.83

%

26,207

 

4.16

%

(10,048

)

(38.34

)%

(2.33

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

5,790

 

0.65

%

9,749

 

1.55

%

(3,959

)

(40.61

)%

(0.89

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings including non-controlling interest

 

10,369

 

1.17

%

16,458

 

2.61

%

(6,089

)

(37.00

)%

(1.44

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to non-controlling interest

 

 

 

28

 

0.00

%

(28

)

 

0.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to common shareholders

 

$

10,369

 

1.17

%

$

16,486

 

2.61

%

$

(6,117

)

(37.10

)%

(1.44

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings per diluted common share attributable to common shareholders

 

$

0.21

 

 

 

$

0.34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average diluted common shares outstanding:

 

48,429

 

 

 

47,974

 

 

 

 

 

 

 

 

 

 


(a)  Gross margin percent of sales is calculated as a percentage of related sales.

 

7



 

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

May 2,

 

May 3,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

61,802

 

$

95,923

 

Accounts receivable, net

 

83,169

 

67,778

 

Inventories

 

986,457

 

645,772

 

Other current assets

 

170,278

 

84,803

 

 

 

 

 

 

 

Total current assets

 

1,301,706

 

894,276

 

Property and equipment, net

 

560,141

 

406,784

 

Tuxedo rental product, net

 

146,050

 

148,120

 

Goodwill

 

893,435

 

127,098

 

Intangible assets, net

 

664,935

 

57,966

 

Other assets

 

36,832

 

6,734

 

 

 

 

 

 

 

Total assets

 

$

3,603,099

 

$

1,640,978

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

233,066

 

$

168,826

 

Accrued expenses and other current liabilities

 

289,956

 

220,452

 

Income taxes payable

 

1,328

 

4,277

 

Current maturities of long-term debt

 

7,000

 

10,000

 

 

 

 

 

 

 

Total current liabilities

 

531,350

 

403,555

 

 

 

 

 

 

 

Long-term debt

 

1,679,634

 

85,000

 

Deferred taxes and other liabilities

 

412,575

 

109,696

 

 

 

 

 

 

 

Total liabilities

 

2,623,559

 

598,251

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Preferred stock

 

 

 

Common stock

 

485

 

480

 

Capital in excess of par

 

442,743

 

417,622

 

Retained earnings

 

538,716

 

580,373

 

Accumulated other comprehensive income

 

789

 

33,302

 

Treasury stock, at cost

 

(3,193

)

(3,407

)

 

 

 

 

 

 

Total equity attributable to common shareholders

 

979,540

 

1,028,370

 

 

 

 

 

 

 

Non-controlling interest

 

 

14,357

 

 

 

 

 

 

 

Total shareholders’ equity

 

979,540

 

1,042,727

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

3,603,099

 

$

1,640,978

 

 

8



 

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the Three Months Ended May 2, 2015 and May 3, 2014

(In thousands)

 

 

 

Three Months Ended

 

 

 

2015

 

2014

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

Net earnings including non-controlling interest

 

$

10,369

 

$

16,458

 

Non-cash adjustments to net earnings:

 

 

 

 

 

Depreciation and amortization

 

31,906

 

21,929

 

Tuxedo rental product amortization

 

7,604

 

7,497

 

Deferred financing costs amortization

 

1,796

 

140

 

Discount on long-term debt amortization

 

340

 

 

Loss on extinguishment of debt

 

12,675

 

 

Loss on disposition of assets

 

424

 

1,357

 

Other

 

12,480

 

(2,977

)

Changes in operating assets and liabilities

 

(28,609

)

25,409

 

 

 

 

 

 

 

Net cash provided by operating activities

 

48,985

 

69,813

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

Capital expenditures

 

(30,384

)

(22,543

)

 

 

 

 

 

 

Net cash used in investing activities

 

(30,384

)

(22,543

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

Proceeds from asset-based revolving credit facility

 

3,000

 

 

Payments on asset-based revolving credit facility

 

(3,000

)

 

Payments on new term loan

 

(4,500

)

 

Payments on previous term loan

 

 

(2,500

)

Deferred financing costs

 

(3,566

)

(1,389

)

Cash dividends paid

 

(8,863

)

(8,812

)

Proceeds from issuance of common stock

 

908

 

4,373

 

Tax payments related to vested deferred stock units

 

(4,506

)

(5,732

)

Excess tax benefits from share-based plans

 

981

 

3,002

 

Repurchases of common stock

 

(277

)

(251

)

 

 

 

 

 

 

Net cash used in financing activities

 

(19,823

)

(11,309

)

 

 

 

 

 

 

Effect of exchange rate changes

 

763

 

710

 

 

 

 

 

 

 

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

 

(459

)

36,671

 

 

 

 

 

 

 

Balance at beginning of period

 

62,261

 

59,252

 

Balance at end of period

 

$

61,802

 

$

95,923

 

 

9



 

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

UNAUDITED NON-GAAP FINANCIAL MEASURES

(In thousands, except per share amounts)

 

Use of Non-GAAP Financial Measures

 

In addition to providing financial results in accordance with GAAP, we have provided adjusted information for fiscal first quarter 2015 and a historical consolidated baseline for fiscal first quarter 2014 which includes Jos. A. Bank results.  This non-GAAP financial information is provided to enhance the user’s overall understanding of the Company’s current financial performance.  Specifically, we believe the adjusted and baseline results provide useful information by excluding items we believe are not indicative of our core operating results as well as certain items related to the acquisition and integration of Jos. A. Bank.

 

The non-GAAP financial information should be considered in addition to, not as a substitute for or as being superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP.  A reconciliation of this non-GAAP information to our actual results follows and may not sum due to rounded numbers.

 

GAAP to Adjusted Statements of Earnings Information

GAAP to Adjusted - Three Months Ended May 2, 2015

 

 

 

GAAP

 

Acquisition

 

Purchase

 

 

 

Adjusted

 

 

 

Results

 

& Integration (1)

 

Acctg Allocation

 

Other (2)

 

Results

 

Net sales

 

$

885,089

 

$

 

$

 

$

 

$

885,089

 

 

 

 

 

 

 

 

 

 

 

 

 

Total retail gross margin

 

364,557

 

 

1,026

 

 

365,583

 

Corporate apparel clothing product

 

16,995

 

 

 

 

16,995

 

Total gross margin

 

381,552

 

 

1,026

 

 

382,578

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertising expense

 

50,656

 

 

 

 

50,656

 

Selling, general and administrative expenses

 

275,607

 

(5,949

)

(2,069

)

(3,604

)

263,985

 

Operating income

 

55,289

 

5,949

 

3,095

 

3,604

 

67,937

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest

 

(26,455

)

 

 

 

(26,455

)

Loss on extinguishment of debt

 

(12,675

)

12,675

 

 

 

 

Provision for income taxes

 

5,790

 

7,184

 

1,154

 

1,344

 

15,473

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings including non-controlling interest

 

10,369

 

11,440

 

1,941

 

2,260

 

26,009

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to non-controlling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to common shareholders

 

$

10,369

 

$

11,440

 

$

1,941

 

$

2,260

 

$

26,009

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings per diluted common share attributable to common shareholders

 

$

0.21

 

$

0.24

 

$

0.04

 

$

0.05

 

$

0.54

 

 


(1) Acquisition, integration and loss on extinguishment of debt relates to Jos. A. Bank.

(2) Other relates to separation costs with former executives.

 

10



 

GAAP to Historical Baselines of Operating Results — First Quarter Fiscal Year 2014

 

Historical Consolidated Baseline First Quarter FY 2014 - Three Months Ended May 3, 2014

 

 

 

 

 

 

 

Purchase

 

Acquisition,

 

 

 

 

 

MW GAAP

 

JOSB GAAP

 

Accounting

 

Integration &

 

Historical

 

 

 

Results

 

Results (1)

 

Adjustments (2)

 

Other (3)

 

Baseline

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

Retail clothing product

 

$

433,024

 

$

199,112

 

$

 

$

 

$

632,136

 

Tuxedo rental services

 

101,663

 

4,484

 

 

 

106,147

 

Alteration and other services

 

38,962

 

13,826

 

 

 

52,788

 

Total retail sales

 

573,649

 

217,422

 

 

 

791,071

 

Corporate apparel clothing product

 

56,825

 

 

 

 

56,825

 

Total net sales

 

630,474

 

217,422

 

 

 

847,896

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin:

 

 

 

 

 

 

 

 

 

 

 

Retail clothing product

 

241,547

 

116,135

 

9

 

 

357,691

 

Tuxedo rental services

 

86,346

 

2,737

 

 

 

89,083

 

Alteration and other services

 

11,240

 

4,743

 

 

 

15,983

 

Occupancy costs

 

(72,847

)

(34,474

)

(1,084

)

 

(108,405

)

Total retail gross margin

 

266,286

 

89,141

 

(1,075

)

 

354,352

 

Corporate apparel clothing product

 

17,078

 

 

 

 

 

17,078

 

Total gross margin

 

283,364

 

89,141

 

(1,075

)

 

371,430

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertising expense

 

28,771

 

13,216

 

 

 

41,987

 

Selling, general and administrative expenses

 

227,312

 

136,630

 

 

(101,843

)

262,099

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

27,281

 

$

(60,705

)

$

(1,075

)

$

101,843

 

$

67,344

 

 


(1) As filed in Jos. A. Bank’s 10-Q and reclassified to be consistent with Men’s Wearhouse reporting.

(2) Adjustments to Jos. A. Bank’s 10-Q reported balances for change from FIFO to average weighted cost and elimination of tenant improvement allowance credits.

(3) Other relates primarily to strategic alternative review and SG&A reduction program costs.

 

11