MEN'S WEARHOUSE INC 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 Sq. Ft. Number of Sq. Ft.
Stores Stores
(000's) (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
