Quarterly report pursuant to Section 13 or 15(d)

Condensed Consolidating Information

v3.19.3.a.u2
Condensed Consolidating Information
9 Months Ended
Nov. 02, 2019
CONDENSED CONSOLIDATING FINANCIAL INFORMATION  
Condensed Consolidating Information

19. Condensed Consolidating Information

As discussed in Note 5, The Men's Wearhouse (the "Issuer") issued $600.0 million in aggregate principal amount of Senior Notes. The Senior Notes are guaranteed jointly and severally, on an unsecured basis by Tailored Brands, Inc. (the "Parent") and certain of our U.S. subsidiaries (the "Guarantors"). Our foreign subsidiaries (collectively, the "Non-Guarantors") are not guarantors of the Senior Notes. Each of the Guarantors is 100% owned and all guarantees are joint and several.  In addition, the guarantees are full and unconditional except for certain automatic release provisions related to the Guarantors.

These automatic release provisions are considered customary and include the sale or other disposition of all or substantially all of the assets or all of the capital stock of any subsidiary guarantor, the release or discharge of a guarantor's guarantee of the obligations under the Term Loan other than a release or discharge through payment thereon, the designation in accordance with the Indenture of a guarantor as an unrestricted subsidiary or the satisfaction of the requirements for defeasance or discharge of the Senior Notes as provided for in the Indenture.

The tables in the following pages present the condensed consolidating financial information for the Parent, the Issuer, the Guarantors and the Non-Guarantors, together with eliminations, as of and for the periods indicated.  The consolidating financial information may not necessarily be indicative of the financial positions, results of operations or cash flows had the Issuer, Guarantors and Non-Guarantors operated as independent entities.

As discussed in Note 2, on August 16, 2019, we completed the sale of our corporate apparel business.  Given the immateriality of the domestic portion of the corporate apparel business, we have elected not to restate the condensed consolidating financial information to reflect the change in guarantor status of the domestic portion of the corporate apparel business and instead will maintain the operational history of the guarantors.  As such, the financial information for the domestic portion of the corporate apparel business is reflected within the guarantor balances for the periods indicated, while the international portion is reflected within the non-guarantor balances for the periods indicated.   However, the condensed consolidating financial information has been recast to reflect the impact of discontinued operations for all periods presented.

Tailored Brands, Inc.

Condensed Consolidating Balance Sheet

November 2, 2019

(in thousands)

Tailored

The Men’s

Guarantor

Non-Guarantor

    

    

    

Brands, Inc.

    

Wearhouse, Inc.

    

Subsidiaries

    

Subsidiaries

    

Eliminations

    

Consolidated

 

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

$

1,073

$

1,760

$

18,360

$

$

21,193

Accounts receivable, net

30,148

178,025

48,848

(214,965)

42,056

Inventories

136,033

503,709

138,600

778,342

Other current assets

9,287

4,545

37,680

9,266

60,778

Total current assets

9,287

171,799

721,174

215,074

(214,965)

902,369

Property and equipment, net

180,273

203,570

21,157

405,000

Operating lease right-of-use assets

474,788

381,008

52,709

908,505

Rental product, net

76,463

6,836

9,486

92,785

Goodwill

6,160

52,129

21,103

79,392

Intangible assets, net

146,890

146,890

Investments in subsidiaries

115,082

1,100,045

(1,215,127)

Other assets

4,958

438

3,954

(3,900)

5,450

Total assets

$

124,369

$

2,014,486

$

1,512,045

$

323,483

$

(1,433,992)

$

2,540,391

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

$

182,242

$

81,886

$

92,053

$

68,949

$

(214,965)

$

210,165

Accrued expenses and other current liabilities

2,671

168,824

63,589

25,550

260,634

Current portion of operating lease liabilities

97,917

74,751

11,754

184,422

Current portion of long-term debt

9,000

9,000

Total current liabilities

184,913

357,627

230,393

106,253

(214,965)

664,221

Long-term debt, net

1,111,732

1,111,732

Operating lease liabilities

400,518

312,774

41,664

754,956

Deferred taxes, net and other liabilities

3,942

29,527

28,063

16,336

(3,900)

73,968

Shareholders' (deficit) equity

(64,486)

115,082

940,815

159,230

(1,215,127)

(64,486)

Total liabilities and shareholders' equity

$

124,369

$

2,014,486

$

1,512,045

$

323,483

$

(1,433,992)

$

2,540,391

Tailored Brands, Inc.

Condensed Consolidating Balance Sheet

November 3, 2018

(in thousands)

Tailored

The Men’s

Guarantor

Non-Guarantor

    

    

    

Brands, Inc.

    

Wearhouse, Inc.

    

Subsidiaries

    

Subsidiaries

    

Eliminations

    

Consolidated

 

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

$

981

$

2,133

$

53,179

$

$

56,293

Accounts receivable, net

25,010

223,001

55,299

(268,673)

34,637

Inventories

149,157

500,579

122,470

772,206

Other current assets

220

26,657

34,718

4,468

66,063

Current assets - discontinued operations

46,470

118,888

165,358

Total current assets

220

201,805

806,901

354,304

(268,673)

1,094,557

Property and equipment, net

190,905

204,147

21,009

416,061

Rental product, net

83,554

4,367

14,619

102,540

Goodwill

6,160

52,128

21,187

79,475

Intangible assets, net

154,144

154,144

Investments in subsidiaries

157,114

1,344,748

(1,501,862)

Other assets

16,046

635

80,786

(80,235)

17,232

Non-current assets - discontinued operations

2,045

23,486

25,531

Total assets

$

157,334

$

1,843,218

$

1,224,367

$

515,391

$

(1,850,770)

$

1,889,540

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

$

134,700

$

188,583

$

88,627

$

74,877

$

(268,673)

$

218,114

Accrued expenses and other current liabilities

7,952

170,406

100,839

23,585

302,782

Current portion of long-term debt

9,000

9,000

Current liabilities - discontinued operations

6,635

27,026

33,661

Total current liabilities

142,652

367,989

196,101

125,488

(268,673)

563,557

Long-term debt, net

1,167,906

1,167,906

Deferred taxes, net and other liabilities

5,195

150,209

46,186

22,783

(80,235)

144,138

Non-current liabilities - discontinued operations

1,451

3,001

4,452

Shareholders' equity

9,487

157,114

980,629

364,119

(1,501,862)

9,487

Total liabilities and shareholders' equity

$

157,334

$

1,843,218

$

1,224,367

$

515,391

$

(1,850,770)

$

1,889,540

Tailored Brands, Inc.

Condensed Consolidating Balance Sheet

February 2, 2019

(in thousands)

Tailored

The Men’s

Guarantor

Non-Guarantor

    

    

    

Brands, Inc.

    

Wearhouse, Inc.

    

Subsidiaries

    

Subsidiaries

    

Eliminations

    

Consolidated

 

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

$

970

$

1,434

$

30,267

$

$

32,671

Accounts receivable, net

23,954

255,091

53,610

(297,969)

34,686

Inventories

149,923

429,952

144,211

724,086

Other current assets

30,699

37,621

3,773

(5,270)

66,823

Current assets - discontinued operations

41,404

129,972

171,376

Total current assets

205,546

765,502

361,833

(303,239)

1,029,642

Property and equipment, net

194,290

207,934

22,092

424,316

Rental product, net

81,809

3,426

14,535

99,770

Goodwill

6,160

52,128

21,203

79,491

Intangible assets, net

153,711

153,711

Investments in subsidiaries

160,057

1,234,005

(1,394,062)

Other assets

7,590

640

5,059

(4,800)

8,489

Non-current assets - discontinued operations

1,906

23,165

25,071

Total assets

$

160,057

$

1,729,400

$

1,185,247

$

447,887

$

(1,702,101)

$

1,820,490

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

$

142,701

$

201,799

$

67,044

$

91,200

$

(297,969)

$

204,775

Accrued expenses and other current liabilities

6,697

146,683

105,022

29,044

(5,270)

282,176

Current portion of long-term debt

11,619

11,619

Current liabilities - discontinued operations

7,073

32,952

40,025

Total current liabilities

149,398

360,101

179,139

153,196

(303,239)

538,595

Long-term debt, net

1,153,242

1,153,242

Deferred taxes, net and other liabilities

7,028

56,000

43,495

17,822

(4,800)

119,545

Non-current liabilities - discontinued operations

1,574

3,903

5,477

Shareholders' equity

3,631

160,057

961,039

272,966

(1,394,062)

3,631

Total liabilities and shareholders' equity

$

160,057

$

1,729,400

$

1,185,247

$

447,887

$

(1,702,101)

$

1,820,490

Tailored Brands, Inc.

Condensed Consolidating Statement of Earnings (Loss)

(in thousands)

Tailored

The Men’s

Guarantor

Non-Guarantor

    

    

    

Brands, Inc.

    

Wearhouse, Inc.

    

Subsidiaries

    

Subsidiaries

    

Eliminations

    

Consolidated

 

Three Months Ended November 2, 2019

Net sales

$

$

436,671

$

386,754

$

69,270

$

(163,214)

$

729,481

Cost of sales

227,407

309,577

47,683

(163,214)

421,453

Gross margin

209,264

77,177

21,587

308,028

Operating expenses

991

131,183

129,975

14,693

(14,358)

262,484

Operating (loss) income

(991)

78,081

(52,798)

6,894

14,358

45,544

Other income and expenses, net

14,984

(626)

(14,358)

Interest (expense) income, net

(939)

(17,380)

1,036

(142)

(17,425)

Loss on extinguishment of debt, net

(77)

(77)

(Loss) earnings before income taxes

(1,930)

60,624

(36,778)

6,126

28,042

(Benefit) provision for income taxes

(45)

548

(289)

40

254

(Loss) earnings before equity in net income of subsidiaries

(1,885)

60,076

(36,489)

6,086

27,788

Equity in (loss) earnings of subsidiaries

(87,705)

(121,473)

209,178

Net (loss) earnings from continuing operations

(89,590)

(61,397)

(36,489)

6,086

209,178

27,788

Net loss from discontinued operations, net of tax

(26,308)

(6,166)

(84,904)

(117,378)

Net (loss) earnings

$

(89,590)

$

(87,705)

$

(42,655)

$

(78,818)

$

209,178

$

(89,590)

Comprehensive (loss) income

$

(62,138)

$

(64,403)

$

(31,136)

$

(79,788)

$

175,327

$

(62,138)

Three Months Ended November 3, 2018

Net sales

$

$

453,316

$

355,710

$

102,896

$

(160,181)

$

751,741

Cost of sales

219,036

273,793

73,599

(160,181)

406,247

Gross margin

234,280

81,917

29,297

345,494

Operating expenses

1,443

135,498

131,431

16,786

(14,942)

270,216

Operating (loss) income

(1,443)

98,782

(49,514)

12,511

14,942

75,278

Other income and expenses, net

14,942

(14,942)

Interest (expense) income, net

(1,062)

(20,017)

1,970

559

(18,550)

Loss on extinguishment of debt, net

(9,420)

(9,420)

(Loss) earnings before income taxes

(2,505)

69,345

(32,602)

13,070

47,308

(Benefit) provision for income taxes

(505)

17,304

(6,848)

2,570

12,521

(Loss) earnings before equity in net income of subsidiaries

(2,000)

52,041

(25,754)

10,500

34,787

Equity in earnings (loss) of subsidiaries

15,875

(36,166)

20,291

Net earnings (loss) from continuing operations

13,875

15,875

(25,754)

10,500

20,291

34,787

Net gain (loss) from discontinued operations, net of tax

176

(21,088)

(20,912)

Net earnings (loss)

$

13,875

$

15,875

$

(25,578)

$

(10,588)

$

20,291

$

13,875

Comprehensive income (loss)

$

14,799

$

20,300

$

(25,578)

$

(14,089)

$

19,367

$

14,799

Tailored

The Men’s

Guarantor

Non-Guarantor

    

Brands, Inc.

    

Wearhouse, Inc.

    

Subsidiaries

    

Subsidiaries

    

Eliminations

    

Consolidated

 

Nine Months Ended November 2, 2019

Net sales

$

$

1,285,018

$

1,147,368

$

433,343

$

(675,441)

$

2,190,288

Cost of sales

675,840

908,308

349,803

(675,441)

1,258,510

Gross margin

609,178

239,060

83,540

931,778

Operating expenses

2,487

401,100

390,436

62,458

(57,540)

798,941

Operating (loss) income

(2,487)

208,078

(151,376)

21,082

57,540

132,837

Other income and expenses, net

57,019

521

(57,540)

Interest (expense) income, net

(3,178)

(53,956)

3,611

(570)

(54,093)

Loss on extinguishment of debt, net

(77)

(77)

(Loss) earnings before income taxes

(5,665)

154,045

(90,746)

21,033

78,667

(Benefit) provision for income taxes

(2,919)

30,428

(14,997)

2,231

14,743

(Loss) earnings before equity in net income of subsidiaries

(2,746)

123,617

(75,749)

18,802

63,924

Equity in (loss) earnings of subsidiaries

(45,436)

(143,482)

188,918

Net (loss) earnings from continuing operations

(48,182)

(19,865)

(75,749)

18,802

188,918

63,924

Net (loss) gain from discontinued operations, net of tax

(25,571)

2,013

(88,548)

(112,106)

Net (loss) earnings

$

(48,182)

$

(45,436)

$

(73,736)

$

(69,746)

$

188,918

$

(48,182)

Comprehensive (loss) income

$

(47,323)

$

(38,071)

$

(73,736)

$

(76,252)

$

188,059

$

(47,323)

Nine Months Ended November 3, 2018

Net sales

$

$

1,343,248

$

1,095,988

$

303,913

$

(468,651)

$

2,274,498

Cost of sales

664,219

834,458

217,142

(468,651)

1,247,168

Gross margin

679,029

261,530

86,771

1,027,330

Operating expenses

3,408

405,344

397,110

51,305

(42,093)

815,074

Operating (loss) income

(3,408)

273,685

(135,580)

35,466

42,093

212,256

Other income and expenses, net

42,093

(42,093)

Interest (expense) income, net

(2,749)

(66,141)

6,115

1,587

(61,188)

Loss on extinguishment of debt, net

(30,253)

(30,253)

(Loss) earnings before income taxes

(6,157)

177,291

(87,372)

37,053

120,815

(Benefit) provision for income taxes

(1,624)

37,882

(17,075)

6,835

26,018

(Loss) earnings before equity in net income of subsidiaries

(4,533)

139,409

(70,297)

30,218

94,797

Equity in earnings (loss) of subsidiaries

81,555

(57,854)

(23,701)

Net earnings (loss) from continuing operations

77,022

81,555

(70,297)

30,218

(23,701)

94,797

Net gain (loss) from discontinued operations, net of tax

4,247

(22,022)

(17,775)

Net earnings (loss)

$

77,022

$

81,555

$

(66,050)

$

8,196

$

(23,701)

$

77,022

Comprehensive income (loss)

$

59,948

$

87,072

$

(66,050)

$

(14,395)

$

(6,627)

$

59,948

Tailored Brands, Inc.

Condensed Consolidating Statement of Cash Flows

For the Nine Months Ended November 2, 2019

(in thousands)

Tailored

The Men’s

Guarantor

Non-Guarantor

    

Brands, Inc.

    

Wearhouse, Inc.

    

Subsidiaries

    

Subsidiaries

    

Eliminations

    

Consolidated

 

Net cash provided by (used in) operating activities

$

37,836

$

329,070

$

34,951

$

(284,857)

$

(51,438)

$

65,562

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures

(21,879)

(34,687)

(6,842)

(63,408)

Proceeds from divestiture of business, net

45,034

45,034

Intercompany activities

(238,423)

(30,953)

269,376

Net cash (used in) provided by investing activities

(260,302)

(34,687)

7,239

269,376

(18,374)

CASH FLOWS FROM FINANCING ACTIVITIES:

Payments on new term loan

(9,370)

(9,370)

Proceeds from asset-based revolving credit facility

1,065,000

1,065,000

Payments on asset-based revolving credit facility

(1,046,000)

(1,046,000)

Repurchase and retirement of senior notes

(54,425)

(54,425)

Intercompany activities

(23,870)

241,808

(217,938)

Cash dividends paid

(27,938)

(27,938)

Proceeds from issuance of common stock

1,220

1,220

Tax payments related to vested deferred stock units

(1,118)

(1,118)

Repurchases of common stock

(10,000)

(10,000)

Net cash (used in) provided by financing activities

(37,836)

(68,665)

241,808

(217,938)

(82,631)

Effect of exchange rate changes

1,205

1,205

Increase (decrease) in cash and cash equivalents

103

264

(34,605)

(34,238)

Cash and cash equivalents at beginning of period

970

1,496

52,965

55,431

Cash and cash equivalents at end of period

$

$

1,073

$

1,760

$

18,360

$

$

21,193

Tailored Brands, Inc.

Condensed Consolidating Statement of Cash Flows

For the Nine Months Ended November 3, 2018

(in thousands)

Tailored

The Men’s

Guarantor

Non-Guarantor

    

Brands, Inc.

    

Wearhouse, Inc.

    

Subsidiaries

    

Subsidiaries

    

Eliminations

    

Consolidated

 

Net cash provided by (used in) operating activities

$

29,194

$

470,656

$

11,157

$

(205,357)

$

(27,833)

$

277,817

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures

(12,962)

(28,853)

(5,112)

(46,927)

Proceeds from divestiture of business

17,755

17,755

Intercompany activities

(228,450)

228,450

Net cash (used in) provided by investing activities

(241,412)

(11,098)

(5,112)

228,450

(29,172)

CASH FLOWS FROM FINANCING ACTIVITIES:

Payments on original term loan

(993,420)

(993,420)

Proceeds from new term loan

895,500

895,500

Payments on new term loan

(6,750)

(6,750)

Proceeds from asset-based revolving credit facility

465,500

465,500

Payments on asset-based revolving credit facility

(407,000)

(407,000)

Repurchase and retirement of senior notes

(199,365)

(199,365)

Deferred financing costs

(6,713)

(6,713)

Intercompany activities

(27,833)

228,450

(200,617)

Cash dividends paid

(27,833)

(27,833)

Proceeds from issuance of common stock

6,149

6,149

Tax payments related to vested deferred stock units

(7,510)

(7,510)

Net cash (used in) provided by financing activities

(29,194)

(280,081)

228,450

(200,617)

(281,442)

Effect of exchange rate changes

(2,385)

(2,385)

(Decrease) increase in cash and cash equivalents

(50,837)

59

15,596

(35,182)

Cash and cash equivalents at beginning of period

51,818

2,180

49,609

103,607

Cash and cash equivalents at end of period

$

$

981

$

2,239

$

65,205

$

$

68,425