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Men's Wearhouse Reports Fiscal 2014 Results

- Legacy business continued strong performance

- Integration synergy run-rate ahead of schedule

- Company increases fiscal year 2017 EPS guidance to include K&G

- Conference call scheduled for Thursday, March 12th at 9:00 a.m. Eastern time

FREMONT, Calif., March 11, 2015 /PRNewswire/ -- The Men's Wearhouse (NYSE: MW) today announced consolidated financial results for the fiscal fourth quarter and year ended January 31, 2015.

GAAP loss per share for fiscal fourth quarter 2014 was $0.75 and adjusted loss per share was $0.03 excluding non-operating items(1).

GAAP loss per share for fiscal year 2014 was $0.01 and adjusted EPS was $2.58 excluding non-operating items(1).  Results for Jos. A. Bank are included in our financial statements beginning June 18, 2014, the date of the closing of the acquisition.

Doug Ewert, Men's Wearhouse chief executive officer, commented, "We continue to be pleased with the robust earnings performance of our legacy brands.  Fueling this performance in the fourth quarter are comparable sales increases of 6.8% at Men's Wearhouse, 8.6% at Moores and 6.8% at K&G.  And while Jos. A. Bank's comparable sales were negative 6.6%, they were above our expectations." 

Ewert added, "We are extremely proud of the work done to date to incorporate Jos. A. Bank.  We have made significant progress on integrating Jos. A. Bank into the infrastructure of Men's Wearhouse and have developed a robust process around synergy identification and realization.  In the nine months since the acquisition, Jos. A. Bank has transitioned many of the back office functions, began store training programs, began the work to instill its employees with the Men's Wearhouse culture, and launched tuxedo rental in all its Jos. A. Bank locations.  All of this progress was made while exceeding our initial synergy run-rate target of $15 million as we ended the year with run-rate synergies of $35 million.    

"Fiscal year 2015 will be the year of strategic transition for Jos. A. Bank as we work on unlocking customer facing opportunities.  Much of this work lies in systems conversions which will be completed in the second half of 2015.  As such, we are looking forward to the growth in sales and gross margins that we anticipate achieving in late 2015 and into 2016.

"We continue to be confident in our 2017 EPS guidance which has now been increased to include K&G. We expect profits to accelerate in 2016 with rebounding sales after three consecutive years of negative comps at Jos. A. Bank, realized cost synergies and modest growth in the legacy business. With the stable platform our legacy brands provide, we are able to focus on this transitional year for Jos. A. Bank as we complete the transition and integration of all the key areas during the year," concluded Ewert.

FOURTH QUARTER AND FISCAL YEAR SALES REVIEW

The tables that follow are a summary of net sales for fiscal 2014 fourth quarter and full year ended January 31, 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 full periods, not a comparison of the acquisition period since 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. 

 


Fourth Quarter Net Sales Summary – Fiscal 2014



Net Sales

Comparable Sales Change


Net Sales Change

Current Quarter

Current Quarter

Prior Year Quarter

Total Retail Segment

74.1%

$368.7

$865.9









       Men's Wearhouse

8.4%

$29.3

$379.4

6.8%

(2.5%)

       Jos. A. Bank

        n/a

$337.0

$337.0

(6.6%)

1.8%

       Moores

0.8%

$0.5

$59.0

8.6%

(2.3%)

       K&G

1.6%

$1.3

$82.6

6.8%

(7.7%)

       MW Cleaners

8.0%

$0.6

$7.9









Corporate Apparel Segment

(1.4%)

($0.9)

$62.4









Total Company

65.6%

$367.8

$928.4












Full Year Net Sales Summary – Fiscal 2014



Net Sales

Comparable Sales Change


Net Sales Change

Current Year

Current Year

Prior Year

Total Retail Segment

34.5%

$768.8

$2,995.2



       Men's Wearhouse

5.0%

$80.6

$1,686.9

3.9%

0.7%

       Jos. A. Bank

n/a

$684.0

$684.0

(2.5%)

(3.7%)

       Moores

1.6%

$4.0

$258.3

8.6%

(4.1%)

       K&G

(0.6%)

($2.2)

$334.0

3.7%

(5.5%)

       MW Cleaners

7.8%

$2.3

$31.9









Corporate Apparel Segment

4.3%

$10.6

$257.4









Total Company

31.5%

$779.3

$3,252.5










 

Net sales at our largest brand, Men's Wearhouse, which represented 41% of total fourth quarter sales, were up 8.4% from last year's fourth quarter and comparable sales increased 6.8%.  On a comparable basis, increases in clothing product average unit retails (or the net selling price per unit) and average transactions per store more than offset a decrease in units sold per transaction. The higher margin tuxedo rental revenues comparable sales increased 5.7% in the fourth quarter of 2014. 

Jos. A. Bank was 36% of the Company's total fourth quarter sales.  Comparable sales for the fourth quarter decreased 6.6% with decreases in clothing product average unit retails and average transactions per store offset somewhat by an increase in units sold per transaction.  Moores, our Canadian retail brand, was 6% of the total fourth quarter sales and had a comparable sales increase of 8.6% due to an increase in clothing product average unit retails that more than offset a decrease in average transactions per store.  However, net sales for Moores only increased 0.8% due to an unfavorable change in the currency translation rate.  K&G was 9% of the Company's total fourth quarter sales with a comparable sales increase of 6.8% due to an increase in average transactions per store which more than offset a decrease in average unit retails.  The Corporate Apparel segment, which represented 7% of total fourth quarter sales, had a sales decrease of 1.4%.

FISCAL FOURTH QUARTER CONSOLIDATED RESULTS REVIEW

Sales
Total net sales increased 65.6%, or $367.8 million, to $928.4 million from $560.6 million. 

Retail segment sales for the quarter increased by 74.1%, or $368.7 million, due to $337.0 million in sales at Jos. A. Bank and an increase in comparable sales at all other retail brands. 

Corporate apparel sales decreased by 1.4%, or $0.9 million.

Gross Margin
Total GAAP gross margin was $347.5 million.  Adjusted consolidated gross margin of $363.3 million increased $154.5 million or 74.0% compared to the prior year quarter.  The total adjusted gross margin rate increased 188 basis points primarily due to increased margin rates in all of our legacy retail brands.

Adjusted retail segment gross margin increased $155.5 million, or 81.6%.  The adjusted retail segment gross margin rate increased 164 basis points including Jos. A. Bank and increased 158 basis points excluding Jos. A. Bank. 

Corporate apparel gross margin decreased $1.0 million, or 5.5%, and decreased 122 basis points.

Advertising
Advertising expenses increased $26.7 million to $59.2 million, an increase of 82.1%, or 58 basis points, compared to the prior quarter primarily due to Jos. A. Bank advertising expenses.

SG&A
GAAP SG&A expenses increased $104.2 million, including the $42.6 million arbitration settlement, to $330.3 million, an increase of 46.1% but a decrease of 475 basis points.  Adjusted SG&A expenses were 687 basis points favorable to the prior year with the leverage of Jos. A. Bank SG&A primarily achieved from the higher mix of retail clothing sales in the fourth quarter.  Additionally, all legacy retail brands had favorable basis point decreases.  On an absolute dollar basis, adjusted SG&A increased by $72.1 million, or 34.8%, primarily due to the addition of Jos. A. Bank SG&A and payroll related costs at Men's Wearhouse. 

Operating Income/Loss
GAAP operating loss was $42.0 million compared to GAAP operating loss of $49.7 million last year.  Adjusted operating income was $24.9 million, an increase of $55.7 million, or 180.9%, over the prior year adjusted operating loss of $30.8 million.

Interest and Taxes
Net interest expense for the fourth quarter was $26.5 million. 

The effective tax rate for the fourth quarter was 47.5%.  Excluding the impact of acquisition and integration costs, the adjusted effective tax rate was 19.4%.  The 19.4% rate is a benefit as the fourth quarter is a loss.

Net Loss
GAAP net loss was $35.9 million compared to GAAP net loss of $30.4 million last year.  GAAP loss per share was $0.75 compared to $0.64 in the prior year quarter.  Adjusted net loss was $1.3 million, or $0.03 adjusted loss per share, compared to adjusted net loss of $17.9 million, or $0.38 adjusted loss per share last year.

JOS. A. BANK STANDALONE FISCAL FOURTH QUARTER HIGHLIGHTS(2) 

Total sales decreased 5.4% to $337.0 million from prior year fourth quarter.  Total clothing margin excluding occupancy costs decreased 165 basis points to 51.6%. 

Occupancy costs increased from $35.7 million in the prior year, or 10.0% of total sales, to $37.1 million, or 11.0% of total sales in the current period primarily due to deleveraging caused by the decrease in Jos. A. Bank comparable sales and the impact of new stores.

FISCAL YEAR RESULTS REVIEW

Sales
Total net sales increased 31.5%, or $779.3 million, to $3,252.5 million, up from $2,473.2 million. 

Year-to-date retail segment sales increased by 34.5%, or $768.8 million, due to $684.0 million in sales at Jos. A. Bank since the closing of the acquisition and an increase in comparable sales at all other retail brands. 

Corporate apparel sales increased by 4.3%, or $10.6 million.

Gross Margin
Total GAAP gross margin was $1,358.6 million.  Adjusted consolidated gross margin of $1,401.9 million was an increase of $312.9 million, or 28.7%, compared to the prior year.  The total adjusted gross margin rate decreased 93 basis points primarily due to lower margins at Jos. A. Bank.

Adjusted retail segment gross margin increased $309.7 million, or 30.5%.  The adjusted retail segment gross margin rate decreased 137 basis points including Jos. A. Bank and increased 49 basis points excluding Jos. A. Bank. 

Corporate apparel gross margin increased $3.2 million, or 4.4%, and increased 4 basis points.

Advertising
Advertising expenses increased $67.2 million to $168.3 million, an increase of 66.5% or 109 basis points, primarily due to the Jos. A. Bank advertising expenses and the brand advertising associated with the rollout of Joseph Abboud.

SG&A
GAAP SG&A expenses increased $268.3 million to $1,117.1 million, an increase of 31.6% and 3 basis points.  Adjusted SG&A expenses were 312 basis points favorable to the prior year.  On an absolute dollar basis adjusted SG&A increased by $156.6 million, or 19.1%, primarily due to the addition of Jos. A. Bank SG&A. 

Operating Income
GAAP operating income was $73.2 million compared to GAAP operating income of $129.6 million last year.  Adjusted operating income was $257.6 million, an increase of $89.1 million, or 52.9%, over the prior year adjusted operating income of $168.5 million.

Interest and Taxes
Net interest expense for the year was $65.7 million.

The effective tax rate for the year was 101.8%.  Excluding the impact of non-deductible transaction costs, the adjusted effective tax rate was 34.8%.

Net Earnings/Loss
GAAP net loss was $0.4 million compared to GAAP net earnings of $83.8 million last year.  GAAP loss per share was $0.01 compared to a GAAP diluted earnings of $1.70 last year.  Adjusted net earnings were $124.8 million, or $2.58 adjusted diluted earnings per share, compared to adjusted net earnings of $109.3 million, or $2.21 adjusted diluted earnings per share last year.

BALANCE SHEET

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

Inventories increased $338.9 million to $938.3 million from $599.5 million due primarily to Jos. A. Bank and inventory related to Joseph Abboud.  The remaining increase was primarily driven by new store openings at Men's Wearhouse.

Capital expenditures for the fiscal year 2014 were $96.4 million compared to $108.2 million in the prior year.

HISTORICAL CONSOLIDATED BASELINES OF OPERATING RESULTS

We are providing historical baselines of operating results for fiscal year 2014.  These baselines include Jos. A. Bank operations for the 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.  We plan to evaluate future results against this historical baseline.

Historical Consolidated Baseline for Fiscal Year 2014 by Quarter (1)






Q1


Q2


Q3


Q4


Fiscal Year










2014 Baseline

Net sales:










     Retail clothing product

$ 632,136


$ 646,189


$  634,447


$  767,264


$  2,680,036

     Tuxedo rental services

106,147


165,130


132,690


47,417


451,384

     Alteration and other services

52,788


51,953


52,025


51,258


208,024

Total retail sales

791,071


863,272


819,162


865,939


3,339,444

Corporate apparel clothing product sales

56,825


66,656


71,475


62,420


257,376

Total net sales

847,896


929,928


890,637


928,359


3,596,820











Gross margin:










     Retail clothing product

357,691


358,961


358,566


406,502


1,481,720

     Tuxedo rental services

89,083


137,234


109,704


37,522


373,543

     Alteration and other services

15,983


14,773


14,852


14,825


60,433

     Occupancy costs

(108,405)


(113,651)


(115,536)


(112,816)


(450,408)

Total retail gross margin

354,352


397,317


367,586


346,033


1,465,288

Corporate apparel clothing product

17,078


20,024


22,388


17,228


76,718

Total gross margin

371,430


417,341


389,974


363,261


1,542,006











Advertising expense

41,987


47,130


42,075


59,194


190,386

Selling, general and administrative expenses

262,099


267,728


262,214


279,173


1,071,215





















Operating income

$   67,344


$ 102,483


$    85,685


$    24,894


$     280,405











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

FINANCIAL GUIDANCE

The Company has increased its 2017 guidance to include K&G operations and now expects adjusted EPS to be in the range of $5.75 to $6.25.

For fiscal year 2015, the Company expects adjusted diluted earnings per share in a range of $2.70 to $2.90, an increase of 13.9% to 22.4% over the prior year historical baseline diluted earnings per share of $2.37.  The historical baseline diluted earnings per share is calculated using adjusted weighted average diluted shares of 48.2 million, adjusted tax rate of 34.8% and the expected fiscal year 2015 net interest expense of approximately $105 million.

The Company expects Jos. A. Bank comparable sales to continue to be down throughout the first half of the year with improvement in the second half and gross margin to increase for the year but follow a similar pattern to sales.  

CALL AND WEBCAST INFORMATION

At 9:00 a.m. Eastern time on Thursday, March 12, 2015, management will host a conference call and real time webcast to discuss fiscal 2014 fourth quarter and full year 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 March 19, 2015 by calling 201-612-7415 and entering the access code of 13602155#, or a webcast archive will be available free on the website for approximately 90 days.

STORE INFORMATION



January 31, 2015

February 1, 2014


Number of
Stores

Sq. Ft.

(000's)

Number of
Stores

Sq. Ft.

(000's)






Men's Wearhouse

698

3,955.7

661

3,774.3






Jos. A. Bank (a)

636

2,922.2

-

-






Men's Wearhouse and Tux

210

291.2

248

344.0






Moores, Clothing for Men

123

779.0

121

769.3






K&G (b)

91

2,164.4

94

2,228.8






Total

1,758

10,112.5

1,124

7,116.4



(a)

Excludes 15 franchise stores.

(b)

83 and 85 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, including successful 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, aggressive 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.

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 February 1, 2014 and quarterly reports on Form 10-Q.  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.

Contact:
Investor Relations
(281) 776-7575
ir@tmw.com

Kelly Dilts
Men's Wearhouse, SVP, Finance & IR

Ken Dennard
Dennard ▪ Lascar Associates

(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.

(2) Based on adjusted information provided to enhance the user's overall understanding of Jos. A. Bank's current financial performance and includes reclassifications to conform Jos. A. Bank's historical results with the Company's current external reporting presentation. A reconciliation of the Jos. A. Bank selected metrics is included in the table at the end of this release.

 


THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS

(Unaudited)


For the Three Months Ended January 31, 2015 and February 1, 2014

(In thousands, except per share data)



Three Months Ended


Variance



% of


% of




Basis


2014

Sales

2013

Sales


Dollar

%

Points










Net sales:









          Retail clothing product

$ 767,264

82.65%

$419,130

74.77%


$348,134

83.06%

7.88

          Tuxedo rental services

47,417

5.11%

43,504

7.76%


3,913

8.99%

(2.65)

          Alteration and other services   

51,258

5.52%

34,642

6.18%


16,616

47.96%

(0.66)

               Total retail sales

865,939

93.28%

497,276

88.71%


368,663

74.14%

4.56

               Corporate apparel clothing product

62,420

6.72%

63,276

11.29%


(856)

(1.35%)

(4.56)

                    Total net sales

928,359

100.00%

560,552

100.00%


367,807

65.62%

0.00










                   Total cost of sales

580,856

62.57%

351,758

62.75%


229,098

65.13%

(0.18)










Gross margin (a):









        Retail clothing product

390,854

50.94%

221,676

52.89%


169,178

76.32%

(1.95)

        Tuxedo rental services

37,522

79.13%

35,585

81.80%


1,937

5.44%

(2.67)

        Alteration and other services

14,825

28.92%

6,669

19.25%


8,156

122.30%

9.67

        Occupancy costs

(112,926)

(13.04%)

(73,375)

(14.76%)


(39,551)

(53.90%)

1.71

               Total retail gross margin

330,275

38.14%

190,555

38.32%


139,720

73.32%

(0.18)

               Corporate apparel clothing product

17,228

27.60%

18,239

28.82%


(1,011)

(5.54%)

(1.22)

                   Total gross margin

347,503

37.43%

208,794

37.25%


138,709

66.43%

0.18










Advertising expenses

59,194

6.38%

32,499

5.80%


26,695

82.14%

0.58

Selling, general and administrative expenses

330,259

35.57%

226,013

40.32%


104,246

46.12%

(4.75)










Operating loss

(41,950)

(4.52%)

(49,718)

(8.87%)


7,768

(15.62%)

4.35










Net interest

(26,522)

(2.86%)

(1,048)

(0.19%)


(25,474)

2430.73%

(2.67)










Loss before income taxes

(68,472)

(7.38%)

(50,766)

(9.06%)


(17,706)

34.88%

1.68










Benefit for income taxes

(32,550)

(3.51%)

(20,571)

(3.67%)


(11,979)

58.23%

0.16










Net loss including non-controlling interest

(35,922)

(3.87%)

(30,195)

(5.39%)


(5,727)

18.97%

1.52










Net earnings attributable to non-controlling interest

-

0.00%

(252)

(0.04%)


252

NM

0.04










Net loss attributable to common shareholders

$(35,922)

(3.87%)

$(30,447)

(5.43%)


$  (5,475)

17.98%

1.56










Net loss per diluted common share attributable to common shareholders

$    (0.75)


$    (0.64)















Weighted-average diluted common shares outstanding:

48,043


47,411















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





 

 


THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS

(Unaudited)


For the Twelve Months Ended January 31, 2015 and February 1, 2014

(In thousands, except per share data)



Twelve Months Ended


Variance



% of


% of




Basis


2014

Sales

2013

Sales


Dollar

%

Points










Net sales:









          Retail clothing product

$ 2,365,463

72.73%

$1,667,535

67.42%


$697,928

41.85%

5.30

          Tuxedo rental services

442,866

13.62%

411,864

16.65%


31,002

7.53%

(3.04)

          Alteration and other services   

186,843

5.74%

147,023

5.94%


39,820

27.08%

(0.20)

               Total retail sales

2,995,172

92.09%

2,226,422

90.02%


768,750

34.53%

2.07

               Corporate apparel clothing product

257,376

7.91%

246,811

9.98%


10,565

4.28%

(2.07)

                    Total net sales

3,252,548

100.00%

2,473,233

100.00%


779,315

31.51%

0.00










                    Total cost of sales

1,893,934

58.23%

1,384,223

55.97%


509,711

36.82%

2.26










Gross margin (a):









        Retail clothing product

1,266,913

53.56%

925,578

55.51%


341,335

36.88%

(1.95)

        Tuxedo rental services

357,888

80.81%

347,556

84.39%


10,332

2.97%

(3.57)

        Alteration and other services

52,616

28.16%

33,294

22.65%


19,322

58.03%

5.52

        Occupancy costs

(395,521)

(13.21%)

(290,896)

(13.07%)


(104,625)

(35.97%)

(0.14)

               Total retail gross margin

1,281,896

42.80%

1,015,532

45.61%


266,364

26.23%

(2.81)

               Corporate apparel clothing product

76,718

29.81%

73,478

29.77%


3,240

4.41%

0.04

                   Total gross margin

1,358,614

41.77%

1,089,010

44.03%


269,604

24.76%

(2.26)










Advertising expenses

168,266

5.17%

101,083

4.09%


67,183

66.46%

1.09

Selling, general and administrative expenses

1,117,138

34.35%

848,798

34.32%


268,340

31.61%

0.03

Goodwill impairment charge

-

0.00%

9,501

0.38%


(9,501)

NM

(0.38)










Operating income

73,210

2.25%

129,628

5.24%


(56,418)

(43.52%)

(2.99)










Net interest

(65,676)

(2.02%)

(2,820)

(0.11%)


(62,856)

2228.94%

(1.91)

Loss on extinguishment of debt

(2,158)

(0.07%)

-

0.00%


(2,158)

NM

(0.07)










Earnings before income taxes

5,376

0.17%

126,808

5.13%


(121,432)

(95.76%)

(4.96)










Provision for income taxes

5,471

0.17%

42,591

1.72%


(37,120)

(87.15%)

(1.55)










Net (loss) earnings including non-controlling interest

(95)

(0.00%)

84,217

3.41%


(84,312)

(100.11%)

(3.41)










Net earnings attributable to non-controlling interest

(292)

(0.01%)

(426)

(0.02%)


134

31.46%

0.01










Net (loss) earnings attributable to common shareholders

$        (387)

(0.01%)

$    83,791

3.39%


$(84,178)

(100.46%)

(3.40)










Net (loss) earnings per diluted common share attributable to common shareholders

$       (0.01)


$        1.70















Weighted-average diluted common shares outstanding:

47,899


49,162















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





 

 


THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)




January 31,


February 1,



2015


2014






ASSETS









Current assets:





Cash and cash equivalents

$            62,261


$             59,252


Accounts receivable, net

73,266


63,153


Inventories

938,336


599,486


Other current assets

175,574


93,206







   Total current assets

1,249,437


815,097

Property and equipment, net

566,074


408,162

Tuxedo rental product, net

132,672


142,816

Goodwill

887,936


126,003

Intangible assets, net

668,259


58,027

Other assets

42,380


5,125







   Total assets

$       3,546,758


$        1,555,230






LIABILITIES AND EQUITY









Current liabilities:





Accounts payable

$          209,867


$           148,762


Accrued expenses and other current liabilities

268,935


175,797


Income taxes payable

1,609


730


Current maturities of long-term debt

11,000


10,000







   Total current liabilities

491,411


335,289






Long-term debt

1,676,232


87,500

Deferred taxes and other liabilities

409,326


109,292







   Total liabilities

2,576,969


532,081






Equity:





Preferred stock

-


-


Common stock

482


476


Capital in excess of par

440,907


412,043


Retained earnings

537,263


572,712


Accumulated other comprehensive (loss) income

(5,671)


27,311


Treasury stock, at cost

(3,192)


(3,407)







   Total equity attributable to common shareholders

969,789


1,009,135







Non-controlling interest

-


14,014







   Total equity

969,789


1,023,149







    Total liabilities and equity

$       3,546,758


$        1,555,230

 

 

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the Twelve Months Ended January 31, 2015 and February 1, 2014

(In thousands)






Twelve Months Ended



2014


2013






CASH FLOWS FROM OPERATING ACTIVITIES:





Net (loss) earnings including non-controlling interest

$                  (95)


$          84,217


Non-cash adjustments to net (loss) earnings:





   Depreciation and amortization

112,659


88,749


   Tuxedo rental product amortization

34,424


32,266


Deferred financing costs amortization

4,903


523


Discount on long-term debt amortization

982


-


Loss on extinguishment of debt

2,158


-


Loss on disposition of assets

12,328


158


Goodwill impairment charge

-


9,501


   Other

4,175


22,347


Changes in operating assets and liabilities

(76,770)


(48,831)







        Net cash provided by operating activities

94,764


188,930






CASH FLOWS FROM INVESTING ACTIVITIES:





Capital expenditures

(96,420)


(108,200)


Acquisition of business, net of cash

(1,491,393)


(94,906)


Proceeds from sales of property and equipment

160


4,127







        Net cash used in investing activities

(1,587,653)


(198,979)






CASH FLOWS FROM FINANCING ACTIVITIES:





Proceeds from new term loan

1,089,000


-


Payments on new term loan

(2,750)


-


Proceeds from asset-based revolving credit facility

348,000


-


Payments on asset-based revolving credit facility

(348,000)


-


Proceeds from bond issuance

600,000


-


Deferred financing costs

(51,080)


(1,776)


Proceeds from previous term loan

-


100,000


Payments on previous term loan

(97,500)


(2,500)


Cash dividends paid

(34,785)


(35,549)


Purchase of non-controlling interest

(6,651)


-


Proceeds from issuance of common stock

8,082


10,739


Tax payments related to vested deferred stock units

(6,940)


(3,865)


Excess tax benefits from share-based plans

3,766


2,145


Repurchases of common stock

(251)


(152,129)







        Net cash provided by (used in) financing activities

1,500,891


(82,935)







Effect of exchange rate changes

(4,993)


(3,827)






INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

3,009


(96,811)







Balance at beginning of period

59,252


156,063


Balance at end of period

$           62,261


$          59,252

 

 

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

UNAUDITED NON-GAAP FINANCIAL MEASURES

(In thousands, except per share amounts)



Use of Non-GAAP Financial Measures


We have provided adjusted information in addition to providing financial results in accordance with GAAP.  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 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 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. 


We have provided non-GAAP financial measures including adjusted statements of earnings information, historical consolidated baselines of operating results for fiscal year 2014 and Jos. A. Bank selected metrics.


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 January 31, 2015








GAAP


Acquisition


Purchase


Other (2)


Adjusted


Results


& Integration (1)


Acctg Allocation




Results

Net sales

$  928,359


$           -


$           -


$            -


$  928,359











Total retail gross margin

330,275


-


15,758


-


346,033

Corporate apparel clothing product

17,228


-


-


-


17,228

Total gross margin

347,503


-


15,758


-


363,261











Advertising expense

59,194


-


-


-


59,194

Selling, general and administrative expenses

330,259


(6,922)


(2,469)


(41,695)


279,173

Operating (loss) income

(41,950)


6,922


18,227


41,695


24,894











Net interest

(26,522)


-


-


-


(26,522)

Loss on extinguishment of debt

-


-


-


-


-

(Benefit) provision for income taxes

(32,550)


14,007


3,529


14,699


(315)











Net (loss) earnings including non-controlling interest

(35,922)


(7,085)


14,698


26,996


(1,313)











Net earnings attributable to non-controlling interest

-


-


-


-


-











Net (loss) earnings attributable to common shareholders

$   (35,922)


$ (7,085)


$ 14,698


$  26,996


$     (1,313)











Net (loss) earnings per diluted common share attributable to common shareholders

$       (0.75)


$   (0.15)


$     0.30


$      0.56


$       (0.03)











(1) Acquisition & integration relates to Jos. A. Bank and Joseph Abboud.

(2) Other relates to a Joseph Abboud licensee arbitration settlement, K&G strategic alternative review, costs related to store closure and cost reduction initiatives offset by a settlement with Visa/Mastercard.












GAAP to Adjusted - Three Months Ended February 1, 2014








GAAP


Acquisition


Purchase


Other (2)


Adjusted


Results


& Integration (1)


Acctg Allocation




Results











Net sales

$  560,552


$           -


$           -


$            -


$  560,552











Total retail gross margin

190,555


-


-


-


190,555

Corporate apparel clothing product

18,239


-


-


-


18,239

Total gross margin

208,794


-


-


-


208,794











Advertising expense

32,499


-


-


-


32,499

Selling, general and administrative expenses

226,013


(2,316)


-


(16,643)


207,054

Operating (loss) income

(49,718)


2,316


-


16,643


(30,759)











Net interest

(1,048)


-


-


-


(1,048)

Loss on extinguishment of debt

-


-


-


-


-

(Benefit) provision for income taxes

(20,571)


(1,066)


-


7,433


(14,204)











Net (loss) earnings including non-controlling interest

(30,195)


3,382


-


9,211


(17,602)











Net earnings attributable to non-controlling interest

(252)


-


-


-


(252)











Net (loss) earnings attributable to common shareholders

$   (30,447)


$   3,382


$           -


$    9,211


$   (17,854)











Net (loss) earnings per diluted common share attributable to common shareholders

$       (0.64)


$     0.07


$         -


$      0.19


$       (0.38)











(1) Acquisition & integration relates to Joseph Abboud.

(2) Other includes costs associated with various strategic projects, the shut down of K&G e-commerce and separation costs with executives.

 

 

GAAP to Adjusted - Twelve Months Ended January 31, 2015









GAAP


Acquisition


Purchase


Other (2)


Adjusted



Results


& Integration (1)


Acctg Allocation




Results


Net sales

$  3,252,548


$           -


$           -


$           -


$  3,252,548













Total retail gross margin

1,281,896


10,552


32,747


-


1,325,194


Corporate apparel clothing product

76,718


-


-


-


76,718


Total gross margin

1,358,614


10,552


32,747


-


1,401,912













Advertising expense

168,266


-


-


-


168,266


Selling, general and administrative expenses

1,117,138


(88,165)


(6,107)


(46,836)


976,029


Operating income

73,210


98,717


38,854


46,836


257,617













Net interest

(65,676)


-


-


-


(65,676)


Loss on extinguishment of debt

(2,158)


2,158


-


-


-


Provision for income taxes

5,471


31,536


13,533


16,313


66,853













Net (loss) earnings including non-controlling interest

(95)


69,339


25,321


30,523


125,088













Net earnings attributable to non-controlling interest

(292)


-


-


-


(292)













Net (loss) earnings attributable to common shareholders

$          (387)


$  69,339


$ 25,321


$  30,523


$     124,796













Net (loss) earnings per diluted common share attributable to common shareholders

$         (0.01)


$      1.44


$     0.53


$      0.63


$           2.58













(1) Acquisition & integration relates to Jos. A. Bank and Joseph Abboud.

(2) Other relates to a Joseph Abboud licensee arbitration settlement, K&G strategic alternative review, costs related to store closure and cost reduction initiatives offset by a settlement with Visa/Mastercard.




















GAAP to Adjusted - Twelve Months Ended February 1, 2014









GAAP


Acquisition


Purchase


Other (2)


Adjusted



Results


& Integration (1)


Acctg Allocation




Results













Net sales

$  2,473,233


$           -


$           -


$           -


$  2,473,233













Total retail gross margin

1,015,532


-


-


-


1,015,532


Corporate apparel clothing product

73,478


-


-


-


73,478


Total gross margin

1,089,010


-


-


-


1,089,010













Advertising expense

101,083


-


-


-


101,083


Selling, general and administrative expenses

858,299


(6,746)


-


(32,101)


819,452


Operating income

129,628


6,746


-


32,101


168,475













Net interest

(2,820)


-


-


-


(2,820)


Loss on extinguishment of debt

-


-


-


-


-


Provision for income taxes

42,591


2,497


-


10,837


55,926













Net earnings including non-controlling interest

84,217


4,249


-


21,264


109,730













Net loss attributable to non-controlling interest

(426)


-


-


-


(426)













Net earnings attributable to common shareholders

$       83,791


$    4,249


$           -


$  21,264


$     109,304













Net earnings per diluted common share attributable to common shareholders

$           1.70


$      0.09


$         -


$      0.43


$           2.21













(1) Acquisition & integration relates to Joseph Abboud.

(2) Other includes the non-cash write-off of K&G goodwill, costs associated with the shut down of K&G e-commerce, separation costs with executives, various strategic projects and store closure costs partially offset by a gain on the sale of an office building.

 

 

GAAP to Historical Baselines of Operating Results – Fiscal Year 2014 by Quarter and Full Year


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




MW GAAP


JOSB GAAP


Purchase


Acquisition,


Historical




Results


Results (1)


Accounting


Integration &


Baseline



Net sales:





Adjustments (2)


Other (3)





      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. 






















 Historical Consolidated Baseline Second Quarter FY 2014 - Three Months Ended August 2, 2014 



 GAAP 


 JOSB Results 


Purchase


 Acquisition, 


 Historical 




 Results 


 5/4 - 6/17/14 (1) 


Accounting


 Integration & 


 Baseline 



 Net sales: 





Adjustments (2)


 Other (3) 





      Retail clothing product 

$  530,728


$ 115,461


$          -


$             -


$ 646,189



      Tuxedo rental services 

161,096


4,034


-


-


165,130



      Alteration and other services 

44,598


7,355


-


-


51,953



 Total retail sales 

736,422


126,850


-


-


863,272



 Corporate apparel clothing product 

66,656


-


-


-


66,656



 Total net sales 

803,078


126,850


-


-


929,928















 Gross margin: 












      Retail clothing product 

287,374


64,038


7,549


-


358,961



      Tuxedo rental services 

134,868


2,366


-


-


137,234



      Alteration and other services 

11,699


3,074


-


-


14,773



      Occupancy costs 

(95,423)


(17,450)


(778)


-


(113,651)



 Total retail gross margin 

338,518


52,028


6,771


-


397,317



 Corporate apparel clothing product 

20,024


-




-


20,024



 Total gross margin 

358,542


52,028


6,771


-


417,341















 Advertising expense 

38,226


8,904


-


-


47,130



 Selling, general and administrative expenses 

277,612


33,946


(906)


(42,924)


267,728



























 Operating income (loss) 

$    42,704


$     9,178


$  7,677


$   42,924


$ 102,483















 (1) Reclassified to be consistent with Men's Wearhouse reporting. 



 (2) Adjustments to 10-Q reported balances primarily for inventory write-up elimination, 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. 



 

 

Historical Consolidated Baseline Third Quarter FY 2014 - Three Months Ended November 1, 2014


GAAP


Purchase


Acquisition,


Historical


Results (1)


Accounting


Integration &


Baseline

Net sales:



Adjustments (2)


Other (3)



      Retail clothing product 

$ 634,447


$           -


$           -


$ 634,447

      Tuxedo rental services 

132,690


-


-


132,690

      Alteration and other services 

52,025


-


-


52,025

 Total retail sales 

819,162


-


-


819,162

 Corporate apparel clothing product 

71,475


-


-


71,475

 Total net sales 

890,637


-


-


890,637









 Gross margin: 








      Retail clothing product 

347,138


11,428


-


358,566

      Tuxedo rental services 

99,152


-


10,552


109,704

      Alteration and other services 

14,852


-


-


14,852

      Occupancy costs 

(114,325)


(1,211)


-


(115,536)

 Total retail gross margin 

346,817


10,217


10,552


367,586

 Corporate apparel clothing product 

22,388




-


22,388

 Total gross margin 

369,205


10,217


10,552


389,974









 Advertising expense 

42,075


-


-


42,075

 Selling, general and administrative expenses 

281,955


(2,733)


(17,008)


262,214

















 Operating income 

$   45,175


$ 12,950


$ 27,560


$   85,685









(1) As filed in the 10-Q. 

(2) Adjustments to 10-Q reported balances primarily for inventory write-up elimination and elimination of tenant improvement allowance credits. 

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










 Historical Consolidated Baseline Fourth Quarter FY 2014 - Three Months Ended January 31, 2015 


 GAAP 


Purchase


 Acquisition, 


 Historical 


 Results 


Accounting


 Integration & 


 Baseline 

 Net sales: 



Adjustments (2)


 Other (3) 



      Retail clothing product 

$ 767,264


$           -


$           -


$ 767,264

      Tuxedo rental services 

47,417


-


-


47,417

      Alteration and other services 

51,258


-


-


51,258

 Total retail sales 

865,939


-


-


865,939

 Corporate apparel clothing product 

62,420


-


-


62,420

 Total net sales 

928,359


-


-


928,359









 Gross margin: 








      Retail clothing product 

390,854


15,648


-


406,502

      Tuxedo rental services 

37,522


-


-


37,522

      Alteration and other services 

14,825


-


-


14,825

      Occupancy costs 

(112,926)


110


-


(112,816)

 Total retail gross margin 

330,275


15,758


-


346,033

 Corporate apparel clothing product 

17,228


-


-


17,228

 Total gross margin 

347,503


15,758


-


363,261









 Advertising expense 

59,194


-


-


59,194

 Selling, general and administrative expenses 

330,259


(2,469)


(48,617)


279,173

















 Operating (loss) income 

$ (41,950)


$ 18,227


$ 48,617


$   24,894









(1) As filed in the 10-Q. 

(2) Adjustments to 10-Q reported balances primarily for inventory write-up elimination and elimination of tenant improvement allowance credits. 

(3) Other relates primarily to a Joseph Abboud licensee arbitration settlement, acquisition and integration costs,  strategic alternative review, and SG&A reduction program costs. 

 

 


 Historical Consolidated Baseline Fiscal Year 2014 - Twelve Months Ended January 31, 2015 




 MW GAAP 


 JOSB Q1 GAAP 


 JOSB Results 


Purchase


 Acquisition, 


 Historical 


 Results 


 Results (1) 


 5/4 - 6/17/14 (1) 


Accounting


 Integration & 


 Baseline 

 Net sales: 







Adjustments (2)


 Other (3) 



      Retail clothing product 

$ 2,365,463


$ 199,112


$ 115,461


$           -


$             -


$ 2,680,036

      Tuxedo rental services 

442,866


4,484


4,034


-


-


451,384

      Alteration and other services 

186,843


13,826


7,355


-


-


208,024

 Total retail sales 

2,995,172


217,422


126,850


-


-


3,339,444

 Corporate apparel clothing product 

257,376


-


-


-


-


257,376

 Total net sales 

3,252,548


217,422


126,850


-


-


3,596,820













 Gross margin: 












      Retail clothing product 

1,266,913


116,135


64,038


34,634


-


1,481,720

      Tuxedo rental services 

357,888


2,737


2,366


-


10,552


373,543

      Alteration and other services 

52,616


4,743


3,074


-


-


60,433

      Occupancy costs 

(395,521)


(34,474)


(17,450)


(2,963)


-


(450,408)

 Total retail gross margin 

1,281,896


89,141


52,028


31,671


10,552


1,465,288

 Corporate apparel clothing product 

76,718


-


-


-


-


76,718

 Total gross margin 

1,358,614


89,141


52,028


31,671


10,552


1,542,006













 Advertising expense 

168,266


13,216


8,904


-


-


190,386

 Selling, general and administrative expenses 

1,117,138


136,630


33,946


(6,107)


(210,392)


1,071,215

























 Operating income (loss) 

$      73,210


$ (60,705)


$     9,178


$ 37,778


$ 220,944


$    280,405














(1) Reclassified to be consistent with Men's Wearhouse reporting.

(2) Adjustments to 10-Q reported balances primarily for inventory write-up elimination, change from FIFO to average weighted cost and elimination of tenant improvement allowance credits.

(3) Other relates primarily to a Joseph Abboud licensee arbitration settlement, acquisition and integration costs, strategic alternative review, and SG&A reduction program costs.

 

 

Jos. A. Bank Selected Metrics


Jos. A. Bank Selected Metrics - Three Months Ended February 1, 2014 and January 31, 2015





Q4 FY 2013


Adjustments (2)


Q4 FY 2013


Q4 FY 2014


Adjustments (4)


Q4 FY 2014


as Reported (1)




Selected Metrics


GAAP




Selected Metrics






$

% (3)






$

% (3)

Net sales:














     Retail clothing product

$ 336,191


$         -


$ 336,191

94.4%


$  319,800


$         -


$  319,800

94.9%

     Tuxedo and Alteration sales

19,923




19,923

5.6%


17,218




17,218

5.1%

Total retail net sales

356,114


-


356,114

100.0%


337,018


-


337,018

100.0%















Gross margin:














     Retail clothing product

177,901


1,049


178,950

53.2%


149,300


15,649


164,949

51.6%

     Tuxedo and alteration margin

8,953


-


8,953

44.9%


7,190


-


7,190

41.8%

     Occupancy costs

(33,675)


(2,043)


(35,718)

-10.0%


(37,258)


110


(37,148)

-11.0%















Total retail gross margin

153,179


(994)


152,185

42.7%


119,232


15,759


134,991

40.1%















Maintained product margin (net sales of retail clothing product less landed cost of goods)

$ 192,060

57.7%






$  176,895

55.8%















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

(2) Primarily reflects converting the FIFO method used by Jos. A. Bank to weighted average cost and the resetting of the straight-line rent and tenant improvement amounts.

(3) Percent of related sales.

(4) Adjusted for impact of purchase price accounting items.

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/mens-wearhouse-reports-fiscal-2014-results-300049311.html

SOURCE Men's Wearhouse