MEN'S WEARHOUSE INC FREMONT, Calif., Sept. 10, 2014 /PRNewswire/ -- The Men's Wearhouse (NYSE: MW) today announced consolidated financial results for the fiscal second quarter and six months ended August 2, 2014.
GAAP diluted EPS for fiscal second quarter 2014 was $0.25 and adjusted EPS was $1.10 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 president and chief executive officer, commented, "During the second quarter, we closed the Jos. A. Bank acquisition and we are pleased with the progress we are making on the integration.
"Second quarter adjusted earnings per share of $1.10 were driven by strong performances at Men's Wearhouse, Moores and K&G, posting comparable sales increases of 4.4%, 10.2% and 5.6%, respectively. Additional highlights include excellent results in tuxedo rental, with a U.S. comparable sales increase of 9.1%, and from our Joseph Abboud roll out, which will be complete in the coming weeks.
"While we are very early in the Jos. A. Bank integration process, we look forward to communicating our progress and continue to expect between $100 million to $150 million in synergies. Subsequent to the end of the second quarter, we secured the early termination of the Jim's Formal Wear contract to supply tuxedo rental inventory to Jos. A. Bank. We will begin leveraging our tuxedo rental inventory and logistics to serve the Jos. A. Bank rental customers for the 2015 wedding season," concluded Ewert.
FISCAL SECOND QUARTER SALES REVIEW
The tables that follow are a summary of net sales for fiscal 2014 second quarter and fiscal six months ended August 2, 2014. 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 open throughout the same month of the prior period and include e-commerce net sales.
Second Quarter Net Sales Summary - Fiscal 2014
----------------------------------------------
Net Sales Comparable Sales
Change
--------- -----------------
Net Sales Change Current Quarter Current Quarter Prior Year Quarter
Total Retail Segment 24.1% $143.0 $736.4
-------------------- ---- ------ ------
Men's Wearhouse 5.6% $23.7 $450.3 4.4% 0.7%
--------------- --- ----- ------ --- ---
Jos. A. Bank n/a $113.7 $113.7 1.0% (15.5%)
------------ --- ------ ------ --- ------
Moores 4.7% $3.5 $78.1 10.2% (4.9%)
------ --- ---- ----- ---- -----
K&G 1.6% $1.4 $86.2 5.6% (3.0%)
--- --- ---- ----- --- -----
MW Cleaners 9.0% $0.7 $8.1
----------- --- ---- ----
Corporate Apparel
Segment 23.9% $12.8 $66.7
----------------- ---- ----- -----
Total Company 24.1% $155.8 $803.1
------------- ---- ------ ------
Year-To-Date Net Sales Summary - Fiscal 2014
--------------------------------------------
Net Sales Comparable Sales
Change
--------- -----------------
Net Sales Change Current Year Current Year Prior Year
Total Retail Segment 13.6% $156.5 $1,310.1
-------------------- ---- ------ --------
Men's Wearhouse 5.2% $42.9 $871.3 3.6% 1.2%
--------------- --- ----- ------ --- ---
Jos. A. Bank n/a $113.7 $113.7 4.4% (11.9%)
------------ --- ------ ------ --- ------
Moores 1.8% $2.3 $130.6 8.4% (5.8%)
------ --- ---- ------ --- -----
K&G (2.0%) ($3.6) $178.6 2.0% (5.0%)
--- ----- ----- ------ --- -----
MW Cleaners 8.0% $1.2 $15.9
----------- --- ---- -----
Corporate Apparel
Segment 12.1% $13.3 $123.5
----------------- ---- ----- ------
Total Company 13.4% $169.8 $1,433.6
------------- ---- ------ --------
Net sales at our largest brand, Men's Wearhouse stores, which represented 56% of total second quarter sales, were up 5.6% from last year's second quarter and comparable sales increased 4.4%. On a comparable basis an increase in average transactions per store more than offset a decrease in clothing product average unit retails (or the net selling price per unit). The higher margin tuxedo rental revenues comparable sales increased 9.1% in the second quarter of 2014.
Jos. A. Bank was 14% of the Company's total second quarter sales reflecting sales since June 18, 2014, the acquisition date. Comparable sales for the full second quarter increased 1.0% with increases in units sold per transaction which offset decreases in clothing product average unit retails and transactions per store. Moores, our Canadian retail brand, was 10% of the total second quarter sales and had a comparable sales increase of 10.2% due to increases in units sold per transaction, average transactions per store and clothing product average unit retails. Net sales change for Moores only increased 4.7% due to an unfavorable change in the currency translation rate. K&G was 11% of the Company's total second quarter sales with a comparable sales increase of 5.6% due to increases in average transactions per store and units sold per transaction which more than offset a decrease in average unit retails. The Corporate Apparel segment, which represented 8% of total second quarter sales, had a sales increase of 23.9%.
FISCAL SECOND QUARTER CONSOLIDATED RESULTS REVIEW
Sales
Total net sales increased 24.1% or $155.8 million to $803.1 million from $647.3 million.
Retail segment sales for the quarter increased by 24.1% or $143.0 million due to $113.7 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 23.9% or $12.8 million.
Gross Margin
Total GAAP gross margin was $358.5 million. Adjusted consolidated gross margin of $365.3 million increased $56.5 million or 18.3% compared to the prior year quarter. The total adjusted gross margin rate decreased 222 basis points primarily due to lower retail margin related to the Jos. A. Bank acquisition.
Adjusted retail segment gross margin increased $53.7 million or 18.4%. The adjusted retail segment gross margin rate decreased 224 basis points including Jos. A. Bank and increased 10 basis points excluding Jos. A. Bank.
Corporate apparel gross margin increased $2.8 million or 16.2% yet decreased 197 basis points.
SG&A
GAAP SG&A expenses increased $83.3 million to $315.8 million, an increase of 35.8% or 341 basis points. Adjusted SG&A expenses were 160 basis points favorable to the prior year. On an absolute dollar basis adjusted SG&A increased by $42.4 million or 18.5% primarily due to the addition of Jos. A. Bank SG&A and an increase in advertising expense primarily related to the rollout of Joseph Abboud.
Operating Income
GAAP operating income was $42.7 million compared to GAAP operating income of $66.8 million last year. Adjusted operating income was $93.3 million, an increase of $14.1 million or 17.8% over the prior year adjusted operating income of $79.2 million.
Interest and Taxes
Net interest expense for the second quarter was $13.1 million, impacting adjusted diluted EPS by $0.18. The effective tax rate for the second quarter was 55.0%. Excluding the impact of non-deductible transaction costs, the adjusted effective tax rate was 33.9%.
Net Earnings
GAAP net earnings were $12.3 million compared to GAAP net earnings of $42.9 million last year. Adjusted net earnings were $52.9 million, or $1.10 adjusted earnings per share compared to adjusted net earnings of $51.0 million, or $1.01 adjusted diluted earnings per share last year.
Balance Sheet
In connection with the acquisition of Jos. A. Bank, debt at the end of the second quarter was $1.7 billion. Inventories increased $444.7 million to $1,044.5 million from $599.8 million. Approximately $425 million is due to the Jos. A. Bank acquisition and inventory at the Joseph Abboud factory. Additionally, approximately $10 million of the increase was related to an inventory build for our corporate apparel business to service existing customers and the remaining increase was primarily driven by new store openings at Men's Wearhouse.
FISCAL SIX MONTH CONSOLIDATED RESULTS REVIEW
Sales
Total net sales increased 13.4% or $169.8 million to $1,433.6 million from $1,263.8 million.
Year-to-date retail segment sales increased by 13.6% or $156.5 million due to $113.7 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 12.1%, or $13.3 million.
Gross Margin
Total GAAP gross margin was $641.9 million. Adjusted consolidated gross margin of $648.7 million increased $62.0 million or 10.6% compared to the prior year quarter. The total adjusted gross margin rate decreased 118 basis points primarily due to lower retail margin related to the Jos. A. Bank acquisition.
Adjusted retail segment gross margin increased $59.5 million or 10.8%. The adjusted retail segment gross margin rate decreased 117 basis points including Jos. A. Bank and increased 3 basis points excluding Jos. A. Bank.
Corporate apparel gross margin increased $2.5 million or 7.1% yet decreased 139 basis points.
SG&A
GAAP SG&A expenses increased $114.0 million to $571.9 million, an increase of 24.9% or 367 basis points. Adjusted SG&A expenses were 101 basis points favorable to the prior year. On an absolute dollar basis adjusted SG&A increased by $46.7 million or 10.3% primarily due to the addition of Jos. A. Bank SG&A and an increase in advertising expense.
Operating Income
GAAP operating income was $70.0 million compared to GAAP operating income of $119.3 million last year. Adjusted operating income was $147.0 million, an increase of $15.3 million or 11.6% over the prior year adjusted operating income of $131.7 million.
Interest and Taxes
Net interest expense for the six months was $14.1 million, impacting adjusted diluted EPS by $0.19.
The effective tax rate for the six months was 46.3%. Excluding the impact of non-deductible transaction costs, the adjusted effective tax rate was 35.2%.
Net Earnings
GAAP net earnings were $28.7 million compared to GAAP net earnings of $76.0 million last year. Adjusted net earnings were $86.0 million, or $1.78 adjusted earnings per share compared to adjusted net earnings of $84.1 million, or $1.66 adjusted diluted earnings per share last year.
CONFERENCE CALL AND WEBCAST INFORMATION
At 9:00 a.m. Eastern time on Thursday, September 11, 2014, Company management will host a conference call and real time webcast to review fiscal 2014 second quarter and six month results.
To access the conference call, dial 719-457-2604. 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 September 18, 2014 by calling 719-457-0820 and entering the access code of 7619322#, or a webcast archive will be available free on the website for approximately 90 days.
STORE INFORMATION
August 2, 2014 August 3, 2013 February 1, 2014
-------------- -------------- ----------------
Number of Sq. Ft. Number of Sq. Ft. Number of Sq. Ft.
Stores Stores Stores
(000's) (000's) (000's)
------ ------ ------
Men's Wearhouse 679 3,867.0 652 3,722.6 661 3,774.3
--------------- --- ------- --- ------- --- -------
Jos. A. Bank
(a) 629 2,861.8 - - - -
------------ --- ------- --- --- --- ---
Men's Wearhouse
and Tux 233 322.2 269 370.1 248 344.0
--------------- --- ----- --- ----- --- -----
Moores,
Clothing for
Men 121 769.1 120 764.4 121 769.3
------------- --- ----- --- ----- --- -----
K&G (b) 94 2,228.8 96 2,271.7 94 2,228.8
------ --- ------- --- ------- --- -------
Total 1,756 10,048.9 1,137 7,128.8 1,124 7,116.4
(a) Excludes 15 franchise
stores.
(b) 85, 88 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 1,756 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, 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.
These forward-looking statements are based upon management's current beliefs or expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. The following factors, among others, could cause actual results to differ materially from those expressed or implied in the forward-looking statements: (1) the possibility that the expected benefits from the Jos. A. Bank transaction will not be realized within the anticipated time period, (2) the risks related to the costs and difficulties related to the integration of Jos. A. Bank's business and operations with Men's Wearhouse's business and operations, (3) the inability to obtain, or delays in obtaining, cost savings and synergies from the transaction, (4) unexpected costs, charges or expenses resulting from the transaction, (5) litigation relating to the transaction, (6) the inability to retain key personnel and (7) the possible disruption that may be caused by the transaction to the business and operations of Men's Wearhouse and its relationships with customers, employees and other third parties.
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.mooresclothing.com, www.kgstores.com, www.twinhill.com, www.dimensions.co.uk and www.alexandra.co.uk.
Contact:
Kelly Dilts, SVP, Finance & IR
(281) 776-7239
Ken Dennard
Dennard ? Lascar Associates
(713) 529-6600
(1) Adjusted EPS 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.
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
For the Three Months Ended August 2, 2014 and August 3, 2013
(In thousands, except per share data)
Three Months Ended Variance
------------------ --------
% of % of Basis
2014 Sales 2013 Sales Dollar % Points
---- ----- ---- ----- ------ --- ------
Net sales:
Retail clothing product $530,728 66.09% $408,683 63.14% $122,045 29.86% 2.95
Tuxedo rental services 161,096 20.06% 147,701 22.82% 13,395 9.07% (2.76)
Alteration and other services 44,598 5.55% 37,056 5.73% 7,542 20.35% (0.17)
------ ---- ------ ---- ----- ----- -----
Total retail sales 736,422 91.70% 593,440 91.69% 142,982 24.09% 0.01
Corporate apparel clothing product sales 66,656 8.30% 53,815 8.31% 12,841 23.86% (0.01)
------ ---- ------ ---- ------ ----- -----
Total net sales 803,078 100.00% 647,255 100.00% 155,823 24.07% 0.00
Total cost of sales 444,536 55.35% 338,461 52.29% 106,075 31.34% 3.06
Gross margin (a):
Retail clothing product 287,374 54.15% 231,105 56.55% 56,269 24.35% (2.40)
Tuxedo rental services 134,868 83.72% 125,123 84.71% 9,745 7.79% (0.99)
Alteration and other services 11,699 26.23% 8,130 21.94% 3,569 43.90% 4.29
Occupancy costs (95,423) (12.96%) (72,791) (12.27%) (22,632) (31.09%) (0.69)
------- ------- ------- ------- ------- ------- -----
Total retail gross margin 338,518 45.97% 291,567 49.13% 46,951 16.10% (3.16)
Corporate apparel clothing product margin 20,024 30.04% 17,227 32.01% 2,797 16.24% (1.97)
------ ----- ------ ----- ----- ----- -----
Total gross margin 358,542 44.65% 308,794 47.71% 49,748 16.11% (3.06)
Selling, general and administrative expenses 315,838 39.33% 232,505 35.92% 83,333 35.84% 3.41
Goodwill impairment charge - 0.00% 9,501 1.47% (9,501) NM (1.47)
--- ---- ----- ---- ------ --- -----
Operating income 42,704 5.32% 66,788 10.32% (24,084) (36.06%) (5.00)
Net interest (13,074) (1.63%) (359) (0.06%) (12,715) 3541.78% (1.57)
Loss on extinguishment of debt (2,158) (0.27%) - 0.00% (2,158) NM (0.27)
------ ------ --- ---- ------ --- -----
Earnings before income taxes 27,472 3.42% 66,429 10.26% (38,957) (58.64%) (6.84)
Provision for income taxes 15,104 1.88% 23,451 3.62% (8,347) (35.59%) (1.74)
----- ----- ------ ------
Net earnings including non-controlling interest 12,368 1.54% 42,978 6.64% (30,610) (71.22%) (5.10)
Net earnings attributable to non-controlling interest (112) (0.01%) (35) (0.01%) (77) (220.00%) (0.01)
---- ------ --- ------ --- -------- -----
Net earnings attributable to common shareholders $12,256 1.53% $42,943 6.63% $(30,687) (71.46%) (5.11)
======= ==== ======= ==== ======== ======= =====
Net earnings per diluted common share attributable to common shareholders $0.25 $0.85
===== =====
Weighted-average diluted common shares outstanding: 48,143 50,133
====== ======
(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 EARNINGS
(Unaudited)
For the Six Months Ended August 2, 2014 and August 3, 2013
(In thousands, except per share data)
Six Months Ended Variance
---------------- --------
% of % of Basis
2014 Sales 2013 Sales Dollar % Points
---- ----- ---- ----- ------ --- ------
Net sales:
Retail clothing product $963,752 67.23% $832,420 65.87% $131,332 15.78% 1.36
Tuxedo rental services 262,759 18.33% 246,183 19.48% 16,576 6.73% (1.15)
Alteration and other services 83,560 5.83% 75,018 5.94% 8,542 11.39% (0.11)
------ ---- ------ ---- ----- ----- -----
Total retail sales 1,310,071 91.39% 1,153,621 91.28% 156,450 13.56% 0.10
Corporate apparel clothing product sales 123,481 8.61% 110,170 8.72% 13,311 12.08% (0.10)
------- ---- ------- ---- ------ ----- -----
Total net sales 1,433,552 100.00% 1,263,791 100.00% 169,761 13.43% 0.00
Total cost of sales 791,646 55.22% 677,077 53.58% 114,569 16.92% 1.65
Gross margin (a):
Retail clothing product 528,921 54.88% 469,359 56.38% 59,562 12.69% (1.50)
Tuxedo rental services 221,214 84.19% 209,107 84.94% 12,107 5.79% (0.75)
Alteration and other services 22,939 27.45% 17,674 23.56% 5,265 29.79% 3.89
Occupancy costs (168,270) (12.84%) (144,065) (12.49%) (24,205) (16.80%) (0.36)
-------- ------- -------- ------- ------- ------- -----
Total retail gross margin 604,804 46.17% 552,075 47.86% 52,729 9.55% (1.69)
Corporate apparel clothing product margin 37,102 30.05% 34,639 31.44% 2,463 7.11% (1.39)
------ ----- ------ ----- ----- ---- -----
Total gross margin 641,906 44.78% 586,714 46.42% 55,192 9.41% (1.65)
Selling, general and administrative expenses 571,921 39.90% 457,872 36.23% 114,049 24.91% 3.67
Goodwill impairment charge - 0.00% 9,501 0.75% (9,501) NM (0.75)
--- ---- ----- ---- -----
Operating income 69,985 4.88% 119,341 9.44% (49,356) (41.36%) (4.56)
Net interest (14,148) (0.99%) (582) (0.05%) (13,566) 2330.93% (0.94)
Loss on extinguishment of debt (2,158) (0.15%) - 0.00% (2,158) NM (0.15)
------ ------ --- ---- ------ --- -----
Earnings before income taxes 53,679 3.74% 118,759 9.40% (65,080) (54.80%) (5.65)
Provision for income taxes 24,853 1.73% 42,825 3.39% (17,972) (41.97%) (1.65)
------ ---- ------ ---- ------- ------- -----
Net earnings including non-controlling interest 28,826 2.01% 75,934 6.01% (47,108) (62.04%) (4.00)
Net (earnings) loss attributable to non-controlling interest (84) (0.01%) 100 0.01% (184) NM (0.01)
--- ------ --- ---- ---- --- -----
Net earnings attributable to common shareholders $28,742 2.00% $76,034 6.02% $(47,292) (62.20%) (4.01)
======= ==== ======= ==== ======== ======= =====
Net earnings per diluted common share attributable to common shareholders $0.60 $1.50
===== =====
Weighted-average diluted common shares outstanding: 48,059 50,460
====== ======
(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)
August 2, August 3,
2014 2013
---- ----
ASSETS
------
Current assets:
Cash and cash equivalents $67,235 $32,488
Accounts receivable, net 89,195 56,083
Inventories 1,044,520 599,811
Other current assets 105,475 71,835
-------
Total current assets 1,306,425 760,217
Property and equipment, net 573,911 397,129
Tuxedo rental product, net 146,464 144,171
Goodwill 874,955 76,510
Intangible assets, net 676,861 30,022
Other assets 45,983 6,485
------ -----
Total assets $3,624,599 $1,414,534
==========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $214,766 $136,629
Accrued expenses and other current liabilities 273,974 172,446
Income taxes payable 1,201 3,554
Current maturities of long-term debt 11,000 -
------
Total current liabilities 500,941 312,629
Long-term debt 1,678,196 -
Deferred taxes and other liabilities 393,413 86,836
------- ------
Total liabilities 2,572,550 399,465
---------
Shareholders' equity:
Preferred stock - -
Common stock 481 708
Capital in excess of par 423,169 382,519
Retained earnings 583,903 1,162,933
Accumulated other comprehensive income 33,380 26,234
Treasury stock, at cost (3,303) (569,860)
-------
Total equity attributable to common shareholders 1,037,630 1,002,534
Non-controlling interest 14,419 12,535
------
Total equity 1,052,049 1,015,069
---------
Total liabilities and equity $3,624,599 $1,414,534
==========
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended August 2, 2014 and August 3, 2013
(In thousands)
Six Months Ended
----------------
2014 2013
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings including non-controlling interest $28,826 $75,934
Non-cash adjustments to net earnings:
Depreciation and amortization 49,778 43,450
Tuxedo rental product amortization 19,961 19,004
Deferred financing costs amortization 1,121 243
Discount on long-term debt amortization 196 -
Loss on extinguishment of debt 2,158 -
Goodwill impairment charge - 9,501
Other (1,654) 5,624
Changes in operating assets and liabilities (86,507) (52,514)
--------
Net cash provided by operating activities 13,879 101,242
------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (40,837) (52,261)
Acquisition of business, net of cash (1,491,393) -
Proceeds from sales of property and equipment - 191
Net cash used in investing activities (1,532,230) (52,070)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from new term loan 1,089,000 -
Payments on previous term loan (97,500) -
Proceeds from asset-based revolving credit facility 340,000 -
Payments on asset-based revolving credit facility (340,000) -
Proceeds from bond issuance 600,000 -
Deferred financing costs (50,938) (1,776)
Proceeds from issuance of common stock 6,167 5,409
Cash dividends paid (17,460) (18,350)
Tax payments related to vested deferred stock units (6,869) (3,865)
Excess tax benefits from share-based plans 3,687 1,114
Repurchases of common stock (251) (152,129)
-----
Net cash provided by (used in) financing activities 1,525,836 (169,597)
---------
Effect of exchange rate changes 498 (3,150)
---
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 7,983 (123,575)
Balance at beginning of period 59,252 156,063
Balance at end of period $67,235 $32,488
=======
THE MEN'S WEARHOUSE, INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS - NON-GAAP
(In thousands, except per share amounts)
Use of Non-GAAP Financial Measures
We have provided adjusted earnings per
share 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. A reconciliation
of this non-GAAP information to our
actual results is as follows and may not
sum due to rounded numbers:
Three Months Ended August 2, 2014
---------------------------------
GAAP Acquisition Purchase Other (1) Adjusted
Results & Integration Acctg Allocation Results
Net sales $803,078 $ - $ - $ - $803,078
Retail gross margin 338,518 - 6,771 - 345,289
Corporate apparel
product margin 20,024 - - - 20,024
------ --- --- --- ------
Total gross margin 358,542 - 6,771 - 365,313
Selling, general and
administrative
expenses 315,838 (41,812) (906) (1,111) 272,009
Goodwill impairment
charge - - - - -
--- --- --- --- ---
Operating income 42,704 41,812 7,677 1,111 93,304
Net interest (13,074) - - - (13,074)
Loss on extinguishment
of debt (2,158) 2,158 - - -
------ ----- --- --- ---
Earnings before income
taxes 27,472 43,970 7,677 1,111 80,230
Provision for income
taxes 15,104 9,106 2,601 377 27,188
------ ----- ----- --- ------
Net earnings including
non-controlling
interest 12,368 34,864 5,075 735 53,042
Net earnings
attributable to non-
controlling interest (112) - - - (112)
---- --- --- --- ----
Net earnings
attributable to
common shareholders $12,256 $34,864 $5,075 $735 $52,930
======= ======= ====== ==== =======
Net earnings per
diluted common share
attributable to
common shareholders $0.25 $0.72 $0.11 $0.02 $1.10
===== ===== ===== ===== =====
(1) Other relates to K&G strategic alternative
review.
Three Months Ended August 3, 2013
---------------------------------
GAAP Acquisition Purchase Other (1) Adjusted
Results & Integration Acctg Allocation Results
Net sales $647,255 $ - $ - $ - $647,255
Retail gross margin 291,567 - - - 291,567
Corporate apparel
product margin 17,227 - - - 17,227
------ --- --- --- ------
Total gross margin 308,794 - - - 308,794
Selling, general and
administrative
expenses 232,505 (645) - (2,246) 229,615
Goodwill impairment
charge 9,501 - - (9,501) -
----- --- --- ------ ---
Operating income 66,788 645 - 11,747 79,179
Net interest (359) - - - (359)
Loss on extinguishment
of debt - - - - -
--- --- --- --- ---
Earnings before income
taxes 66,429 645 - 11,747 78,820
Provision for income
taxes 23,451 227 - 4,147 27,825
------ --- --- ----- ------
Net earnings including
non-controlling
interest 42,978 418 - 7,600 50,995
Net earnings
attributable to non-
controlling interest (35) - - - (35)
--- --- --- --- ---
Net earnings
attributable to
common shareholders $42,943 $418 $ - $7,600 $50,960
======= ==== =========================== ====== =======
Net earnings per
diluted common share
attributable to
common shareholders $0.85 $0.01 $ - $0.15 $1.01
===== ===== ========================= ===== =====
(1) Other includes the non-cash write-off of K&G goodwill and separation costs associated with former executives.
Use of Non-GAAP Financial
Measures (cont'd)
Six Months Ended August 2, 2014
-------------------------------
GAAP Acquisition Purchase Other (1) Adjusted
Results & Integration Acctg Allocation Results
Net sales $1,433,552 $ - $ - $ - $1,433,552
Retail gross margin 604,804 - 6,771 - 611,575
Corporate apparel
product margin 37,102 - - - 37,102
------ --- --- --- ------
Total gross margin 641,906 - 6,771 - 648,677
Selling, general and
administrative
expenses 571,921 (62,597) (906) (6,779) 501,639
Goodwill impairment
charge - - - - -
--- --- --- --- ---
Operating income 69,985 62,597 7,677 6,779 147,038
Net interest (14,148) - - - (14,148)
Loss on extinguishment
of debt (2,158) 2,158 - - -
------ ----- --- --- ---
Earnings before income
taxes 53,679 64,755 7,677 6,779 132,890
Provision for income
taxes 24,853 16,836 2,702 2,386 46,777
------ ------ ----- ----- ------
Net earnings including
non-controlling
interest 28,826 47,920 4,974 4,393 86,113
Net earnings
attributable to non-
controlling interest (84) - - - (84)
--- --- --- --- ---
Net earnings
attributable to
common shareholders $28,742 $47,920 $4,974 $4,393 $86,029
======= ======= ====== ====== =======
Net earnings per
diluted common share
attributable to
common shareholders $0.60 $1.00 $0.10 $0.09 $1.78
===== ===== ===== ===== =====
(1) Other relates to K&G strategic alternative review and costs associated with cost reduction initiative.
Six Months Ended August 3, 2013
-------------------------------
GAAP Acquisition Purchase Other (1) Adjusted
Results & Integration Acctg Allocation Results
Net sales $1,263,791 $ - $ - $ - $1,263,791
Retail gross margin 552,075 - - - 552,075
Corporate apparel
product margin 34,639 - - - 34,639
------ --- --- --- ------
Total gross margin 586,714 - - - 586,714
Selling, general and
administrative
expenses 457,872 (645) - (2,246) 454,982
Goodwill impairment
charge 9,501 - - (9,501) -
----- --- --- ------ ---
Operating income 119,341 645 - 11,747 131,732
Net interest (582) - - - (582)
Loss on extinguishment
of debt - - - - -
--- --- --- --- ---
Earnings before income
taxes 118,759 645 - 11,747 131,150
Provision for income
taxes 42,825 147 - 4,228 47,200
------ --- --- ----- ------
Net earnings including
non-controlling
interest 75,934 497 - 7,519 83,950
Net loss attributable
to non-controlling
interest 100 - - - 100
--- --- --- --- ---
Net earnings
attributable to
common shareholders $76,034 $497 $ - $7,519 $84,050
======= ==== =========================== ====== =======
Net earnings per
diluted common share
attributable to
common shareholders $1.50 $0.01 $ - $0.15 $1.66
===== ===== ========================= ===== =====
(1) Other includes the non-cash write-off of K&G goodwill and separation costs associated with former executives.
SOURCE Men's Wearhouse
