Exhibit 99.1
     
The Men’s Wearhouse, Inc.
  (MEN’S WEARHOUSE LOGO)
 
   
     News Release
  For Immediate Release
MEN’S WEARHOUSE REPORTS THIRD QUARTER 2005 RESULTS
Conference call to discuss third quarter results at 5:00 pm eastern today
HOUSTON — November 16, 2005 — The Men’s Wearhouse (NYSE: MW) today announced its consolidated financial results for the third quarter ended October 29, 2005.
THIRD QUARTER RESULTS
                                 
Third Quarter Sales Summary — Fiscal 2005
    U.S. dollars, in millions   Total Sales   Comparable Store
    Current Year   Prior Year   Change %   Sales Change %
 
Total Company
  $ 392.7     $ 357.8       9.8 %        
 
United States
  $ 348.7     $ 318.5       9.5 %     6.6 %
 
Canada
  $ 44.0     $ 39.3       12.1 %(A)     3.1 %
 
(A)   Total sales change % using Canadian dollars was 3.8%.
Diluted earnings per share increased to $0.44 for the third quarter ended October 29, 2005 compared to $0.23 last year. Net earnings were $24.1 million compared to $12.9 million last year. Excluding Eddie Rodriguez net operating losses and a charge related to the impairment of certain technology assets from last year, diluted earnings per share increased from $0.27 last year to $0.44 this year.
The 2005 third quarter diluted earnings per share of $0.44 are not directly comparable to the previous guidance for the third quarter of $0.33 to $0.35 per diluted earnings per share. The primary difference relates to the positive impact of a lower than expected effective tax rate for the third quarter. The company recognized an adjustment of $2.0 million to tax reserves associated with favorable developments on certain outstanding income tax matters, which added $0.04 to diluted earnings per share. The effective tax rate was also lower than previously estimated due to an increase in the estimated amount of tax exempt income for the current fiscal year. This caused net tax expense to be $0.9 million less than previously expected and added $0.02 to diluted earnings per share.
Excluding these tax related increases in 2005’s third quarter diluted earnings per share, adjusted diluted earnings per share were up 41% to $0.38 over comparable 2004’s third quarter results of $0.27 per diluted share excluding charges.
Page 1

 


 

YEAR-TO-DATE RESULTS
                                 
Nine Months Sales Summary — Fiscal 2005
    U.S. dollars, in millions   Total Sales   Comparable Store
    Current Year   Prior Year   Change %   Sales Change %
 
Total Company
  $ 1,227.9     $ 1,088.0       12.9 %        
 
United States
  $ 1,094.0     $ 969.3       12.9 %     9.4 %
 
Canada
  $ 133.9     $ 118.7       12.8 %(B)     3.5 %
 
(B)   Total sales change % using Canadian dollars was 3.9%.
Diluted earnings per share increased to $1.28 for year-to-date ended October 29, 2005 compared to $0.84 last year. Net earnings were $71.2 million compared to $46.3 million last year. Excluding Eddie Rodriguez net operating losses in the prior and current years, and a charge related to the impairment of certain technology assets from last year, adjusted diluted earnings per share increased from $0.90 last year to $1.39 this year.
Additionally, excluding tax related increases in 2005’s third quarter diluted earnings per share, adjusted diluted earnings per share were up 48% to $1.33 for the nine month period, compared to 2004’s nine month’s results of $0.90 per diluted share excluding charges.
2005 GUIDANCE
The Company closed all six of its Eddie Rodriguez stores by the end of the second quarter. There have been no additional losses on the Eddie Rodriguez stores, therefore, the loss for fiscal 2005 is expected to be $0.11 diluted earnings per share. The loss for the fourth quarter of fiscal year 2004 was $0.02 and for the full fiscal year of 2004 was $0.05 diluted earnings per share.
For the fourth quarter, the Company expects diluted earnings per share in a range of $0.46 to $0.48 based on a 3% to 4% same store sales increase in the U.S. and 2% to 3% same store sales increases in Canada, an effective tax rate of approximately 39.0% and fully diluted shares outstanding of 54.1 million.
In the fourth quarter, the Company expects to incur additional taxes on dividends to be repatriated from its Canadian subsidiary under the American Jobs Creation Act of 2004 (the Jobs Creation Act). The Jobs Creation Act created a one-time deduction for certain qualifying dividends from earnings of non-U.S. subsidiaries that are repatriated during a one-year qualifying period. This special deduction will have the effect of substantially reducing the U.S. tax applicable to non-U.S. subsidiary earnings that are repatriated and eligible for this benefit. The Company anticipates repatriating approximately $75 million of its Canadian subsidiary earnings as dividends that will qualify under the Jobs Creation Act. The effect on the fourth quarter will increase the Company’s tax provision by an estimated $1.4 million, net of foreign tax credits, or the equivalent of $0.03 cents in diluted earnings per share which is included in our fourth quarter and full year 2005 guidance.
Page 2

 


 

For fiscal year 2005, the Company expects adjusted diluted earnings per share, excluding the Eddie Rodriguez results, to be in a range of $1.85 to $1.87 based on high single digit same store sales increase in the U.S. and low single digit same store sales increase in Canada for the fiscal year. Including the Eddie Rodriguez net operating losses, the fiscal year 2005 adjusted diluted earnings per share are expected to be in a range of $1.74 to $1.76. The Company’s full year 2005 guidance includes the effect of the previously discussed favorable tax events that occurred in the third quarter of 2005.
UPDATED CONFERENCE CALL TIME (5:00 PM) AND WEBCAST INFORMATION
At 5:00 p.m. Eastern time today, company management will host a conference call and real-time webcast to review the financial results of The Men’s Wearhouse, Inc.’s third quarter. To access the conference call, dial 706-758-9606. To access the live webcast presentation, visit the Investor Relations section of the company’s website at www.menswearhouse.com. A telephonic replay will be available through November 23 by calling 706-645-9291 and entering the access code of 2126433, or a webcast archive will be available free on the website for approximately 90 days.
STORE INFORMATION
                                                 
    October 29, 2005   October 30, 2004   January 29, 2005
    Number   Sq. Ft.   Number   Sq. Ft.   Number   Sq. Ft.
    of Stores   (000’s)   of Stores   (000's)   of Stores   (000's)
 
Men’s Wearhouse
    525       2,887.0       514       2,801.4       517       2,825.3  
 
 
                                               
Moores, Clothing for Men
    115       714.8       114       704.3       114       705.3  
 
 
                                               
K&G (C)
    77       1,829.4       74       1,712.1       76       1,770.1  
 
 
                                               
Total
    717       5,431.2       702       5,217.8       707       5,300.7  
 
(C)   51, 38 and 43 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 717 stores. The stores carry a full selection of designer, brand name and private label suits, sport coats, furnishings and accessories, including tuxedo rentals available in the Men’s Wearhouse and Moores stores.
Page 3

 


 

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. These forward-looking statements may be significantly impacted by various factors, including unfavorable local, regional and national economic developments, disruption in retail buying trends due to homeland security concerns, severe weather conditions, aggressive advertising or marketing activities of competitors and other factors described herein and in the Company’s annual report on Form 10-K for the year ended January 29, 2005 and subsequent Forms 10-Q.
For additional information on Men’s Wearhouse, please visit the Company’s website at www.menswearhouse.com.
         
 
  CONTACT:   Claudia Pruitt, Men’s Wearhouse (713) 592-7200
Ken Dennard, DRG&E (713) 529-6600
— Tables to Follow —
Page 4

 


 

     
(MEN’S WEARHOUSE LOGO)
  THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)
FOR THE NINE MONTHS ENDED
October 29, 2005 AND October 30, 2004

(In thousands, except per share data)
                                 
    Nine Months Ended  
            % of             % of  
    2005     Sales     2004     Sales  
                    (as restated) (1)          
Net sales
  $ 1,227,920       100.00 %   $ 1,088,004       100.00 %
Cost of goods sold, including buying, distribution and occupancy costs
    736,012       59.94 %     665,382       61.16 %
     
Gross margin
    491,908       40.06 %     422,622       38.84 %
 
                               
Selling, general and administrative expenses
    382,181       31.12 %     345,565       31.76 %
     
 
                               
Operating income
    109,727       8.94 %     77,057       7.08 %
 
                               
Interest income
    (2,122 )     (0.17 %)     (953 )     (0.09 %)
Interest expense
    4,427       0.36 %     4,204       0.39 %
     
 
                               
Earnings before income taxes
    107,422       8.75 %     73,806       6.78 %
 
                               
Provision for income taxes
    36,253       2.95 %     27,493       2.53 %
     
 
                               
Net earnings
  $ 71,169       5.80 %   $ 46,313       4.26 %
     
 
                               
Net earnings per share (2):
                               
Basic
  $ 1.32             $ 0.86          
 
                           
Diluted
  $ 1.28             $ 0.84          
 
                           
 
                               
Weighted average common shares outstanding (2):
                               
Basic
    54,050               53,984          
 
                           
Diluted
    55,765               55,064          
 
                           
 
(1)   The Company’s Annual Report on Form 10-K for fiscal year 2004 included a restatement of certain historical information as discussed in Note 13 to the consolidated financial statements.
 
(2)   All earnings per share and weighted average common share information reflects a three-for-two stock split in the form of a stock dividend effective at the close of business on June 13, 2005.
Page 5

 


 

     
(MEN’S WEARHOUSE LOGO)
  THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)
FOR THE THREE MONTHS ENDED
October 29, 2005 AND October 30, 2004

(In thousands, except per share data)
                                 
    Three Months Ended  
            % of             % of  
    2005     Sales     2004     Sales  
                    (as restated) (1)          
Net sales
  $ 392,695       100.00 %   $ 357,795       100.00 %
Cost of goods sold, including buying, distribution and occupancy costs
    234,866       59.81 %     218,439       61.05 %
     
Gross margin
    157,829       40.19 %     139,356       38.95 %
 
                               
Selling, general and administrative expenses
    123,380       31.42 %     117,638       32.88 %
     
 
                               
Operating income
    34,449       8.77 %     21,718       6.07 %
 
                               
Interest income
    (557 )     (0.14 %)     (316 )     (0.09 %)
Interest expense
    1,428       0.36 %     1,431       0.40 %
     
 
                               
Earnings before income taxes
    33,578       8.55 %     20,603       5.76 %
 
                               
Provision for income taxes
    9,499       2.42 %     7,725       2.16 %
     
 
                               
Net earnings
  $ 24,079       6.13 %   $ 12,878       3.60 %
     
 
                               
Net earnings per share (2):
                               
Basic
  $ 0.45             $ 0.24          
 
                           
Diluted
  $ 0.44             $ 0.23          
 
                           
 
                               
Weighted average common shares outstanding (2):
                               
Basic
    53,661               53,792          
 
                           
Diluted
    54,971               55,038          
 
                           
 
(1)   The Company’s Annual Report on Form 10-K for fiscal year 2004 included a restatement of certain historical information as discussed in Note 13 to the consolidated financial statements.
 
(2)   All earnings per share and weighted average common share information reflects a three-for-two stock split in the form of a stock dividend effective at the close of business on June 13, 2005.
Page 6

 


 

     
(MEN’S WEARHOUSE LOGO)
  THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)
(Unaudited)
                 
    October 29,     October 30,  
    2005     2004  
            (as restated) (1)  
ASSETS
               
 
               
Current assets:
               
Cash and cash equivalents
  $ 27,645     $ 95,179  
Short-term investments
    69,925        
Accounts receivable, net
    17,710       17,763  
Inventories
    465,719       434,271  
Other current assets
    30,686       33,708  
 
           
 
               
Total current assets
    611,685       580,921  
Property and equipment, net
    269,629       242,368  
Goodwill
    57,020       56,025  
Other assets, net
    60,764       47,480  
 
           
 
               
Total assets
  $ 999,098     $ 926,794  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
 
               
Current liabilities
  $ 228,381     $ 205,681  
Long-term debt
    130,000       131,000  
Deferred taxes and other liabilities
    50,446       49,844  
Shareholders’ equity
    590,271       540,269  
 
           
 
               
Total liabilities and equity
  $ 999,098     $ 926,794  
 
           
 
(1)   The Company’s Annual Report on Form 10-K for fiscal year 2004 included a restatement of certain historical information as discussed in Note 13 to the consolidated financial statements.
Page 7

 


 

     
(MEN’S WEARHOUSE LOGO)
  THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
FOR THE NINE MONTHS ENDED
October 29, 2005 AND October 30, 2004

(In thousands)
                 
    Nine Months Ended  
    2005     2004  
            (as restated) (1)  
CASH FLOWS FROM OPERATING ACTIVITIES:
               
Net earnings
  $ 71,169     $ 46,313  
Non-cash adjustments to net earnings:
               
Depreciation and amortization
    46,719       39,393  
Other
    307       3,711  
Changes in assets and liabilities
    (66,052 )     (55,073 )
 
           
 
               
Net cash provided by operating activities
    52,143       34,344  
 
           
 
               
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Capital expenditures
    (52,109 )     (56,130 )
Purchases of available-for-sale investments
    (99,000 )      
Proceeds from sales of available-for-sale investments
    29,075        
Net assets acquired
          (11,000 )
Other
    (69 )     (291 )
 
             
 
             
 
               
Net cash used in investing activities
    (122,103 )     (67,421 )
 
           
 
               
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from issuance of common stock
    22,192       6,165  
Purchase of treasury stock
    (90,280 )     (11,186 )
Other
          (276 )
 
           
 
               
Net cash used in financing activities
    (68,088 )     (5,297 )
 
           
 
               
Effect of exchange rate changes
    685       1,407  
 
           
 
               
DECREASE IN CASH AND CASH EQUIVALENTS
    (137,363 )     (36,967 )
 
               
Balance at beginning of period
    165,008       132,146  
 
           
Balance at end of period
  $ 27,645     $ 95,179  
 
           
 
(1)   The Company’s Annual Report on Form 10-K for fiscal year 2004 included a restatement of certain historical information as discussed in Note 13 to the consolidated financial statements.
Page 8

 


 

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES
UNAUDITED NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(A Non-GAAP Financial Measure)

(In thousands, except per share amounts)
Use of Non-GAAP Financial Measures
We have provided non-GAAP adjusted earnings per share information for the nine months ended October 29, 2005, the nine months ended October 30, 2004, the three months ended October 30, 2004, the three months ended January 29, 2005 and the twelve months ended January 29, 2005 in this press release in addition to providing financial results in accordance with GAAP. This information reflects, on a non-GAAP adjusted basis, our net earnings and earnings per diluted share after excluding the net operating losses from the Eddie Rodriguez stores and the effects of a charge related to the impairment of certain technology assets. These losses were:
$6.3 million, net of tax, or $0.11 diluted earnings per share for the nine months ended October 29, 2005
$3.3 million, net of tax, or $0.06 diluted earnings per share for the nine months ended October 30, 2004
$2.1 million, net of tax, or $0.04 diluted earnings per share in the third quarter of fiscal 2004
$0.9 million, net of tax, or $0.02 diluted earnings per share for the fourth quarter of fiscal 2004
$4.2 million, net of tax, or $0.08 diluted earnings per share for the full year of fiscal 2004
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 non-GAAP adjusted results provide useful information to both management and investors by excluding an expense item that we believe is not indicative of our core operating results. 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 for the nine months ended October 29, 2005, the nine months ended October 30, 2004, the three months ended October 30, 2004, the three months ended January 29, 2005, and the twelve months ended January 29,2005 is as follows:
Non-GAAP Financial Measures
                         
    Nine Months Ended October 29, 2005  
                    NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 1,227,920     $ (1,791 )   $ 1,226,129  
Cost of goods sold, including buying, distribution and occupancy costs
    736,012       (5,116 )     730,896  
 
                 
Gross margin
    491,908       3,325       495,233  
Selling, general and administrative expenses
    382,181       (6,492 )     375,689  
 
                 
Operating Income
    109,727       9,817       119,544  
Interest income
    (2,122 )           (2,122 )
Interest expense
    4,427             4,427  
 
                 
Earnings before income taxes
    107,422       9,817       117,239  
Provision for income taxes
    36,253       3,552       39,805  
 
                 
Net earnings
  $ 71,169     $ 6,265     $ 77,434  
 
                 
Net earnings per diluted share (1)
  $ 1.28     $ 0.11     $ 1.39  
 
                 
Weighted average diluted common shares outstanding
    55,765               55,765  
 
                   
 
(1)   Due to the effect of rounding, the sum of the per share amounts may not equal the effect of the adjustments.
Page 9

 


 

Non-GAAP Financial Measures (continued)
                         
    Nine Months Ended October 30, 2004  
                    NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 1,088,004     $ (1,963 )   $ 1,086,041  
Cost of goods sold, including buying, distribution and occupancy costs
    665,382       (3,261 )     662,121  
 
                 
Gross margin
    422,622       1,298       423,920  
Selling, general and administrative expenses
    345,565       (3,960 )     341,605  
 
                 
Operating Income
    77,057       5,258       82,315  
Interest income
    (953 )           (953 )
Interest expense
    4,204             4,204  
 
                 
Earnings before income taxes
    73,806       5,258       79,064  
Provision for income taxes
    27,493       1,959       29,452  
 
                 
Net earnings
  $ 46,313     $ 3,299     $ 49,612  
 
                 
Net earnings per diluted share (1)
  $ 0.84     $ 0.06     $ 0.90  
 
                 
Weighted average diluted common shares outstanding
    55,064               55,064  
 
                   
                         
    Three Months Ended October 30, 2004  
                    NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 357,795     $ (818 )   $ 356,977  
Cost of goods sold, including buying, distribution and occupancy costs
    218,439       (1,488 )     216,951  
 
                 
Gross margin
    139,356       670       140,026  
Selling, general and administrative expenses
    117,638       (2,759 )     114,879  
 
                 
Operating Income
    21,718       3,429       25,147  
Interest income
    (316 )           (316 )
Interest expense
    1,431             1,431  
 
                 
Earnings before income taxes
    20,603       3,429       24,032  
Provision for income taxes
    7,725       1,283       9,008  
 
                 
Net earnings
  $ 12,878     $ 2,146     $ 15,024  
 
                 
Net earnings per diluted share (1)
  $ 0.23     $ 0.04     $ 0.27  
 
                 
Weighted average diluted common shares outstanding
    55,038               55,038  
 
                   
 
(1)   Due to the effect of rounding, the sum of the per share amounts may not equal the effect of the adjustments.
Page 10

 


 

Non-GAAP Financial Measures (continued)
                         
    Three Months Ended January 29, 2005  
                    NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 458,675     $ (1,215 )   $ 457,460  
Cost of goods sold, including buying, distribution and occupancy costs
    278,293       (1,870 )     276,423  
 
                 
Gross margin
    180,382       655       181,037  
Selling, general and administrative expenses
    139,351       (832 )     138,519  
 
                 
Operating Income
    41,031       1,487       42,518  
Interest income
    (573 )           (573 )
Interest expense
    1,695             1,695  
 
                 
Earnings before income taxes
    39,909       1,487       41,396  
Provision for income taxes
    14,866       554       15,420  
 
                 
Net earnings
  $ 25,043     $ 933     $ 25,976  
 
                 
Net earnings per diluted share (1)
  $ 0.45     $ 0.02     $ 0.47  
 
                 
Weighted average diluted common shares outstanding
    55,686               55,686  
 
                   
                         
    Twelve Months Ended January 29, 2005  
                    NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 1,546,679     $ (3,178 )   $ 1,543,501  
Cost of goods sold, including buying, distribution and occupancy costs
    943,675       (5,132 )     938,543  
 
                 
Gross margin
    603,004       1,954       604,958  
Selling, general and administrative expenses
    484,916       (4,792 )     480,124  
 
                 
Operating Income
    118,088       6,746       124,834  
Interest income
    (1,526 )           (1,526 )
Interest expense
    5,899             5,899  
 
                 
Earnings before income taxes
    113,715       6,746       120,461  
Provision for income taxes
    42,359       2,513       44,872  
 
                 
Net earnings
  $ 71,356     $ 4,233     $ 75,589  
 
                 
Net earnings per diluted share (1)
  $ 1.29     $ 0.08     $ 1.37  
 
                 
Weighted average diluted common shares outstanding
    55,220               55,220  
 
                   
 
(1)   Due to the effect of rounding, the sum of the per share amounts may not equal the effect of the adjustments.
Page 11