FREMONT, Calif., Dec. 6, 2017 /PRNewswire/ -- Tailored Brands,
Inc. (NYSE: TLRD) today announced consolidated financial results
for the fiscal third quarter ended October
28, 2017.
Third quarter 2017 GAAP diluted earnings per share ("EPS") were
$0.75, which includes $0.03 per share from a net gain on extinguishment
of debt, compared to GAAP diluted EPS of $0.58, or adjusted diluted EPS of $0.71(1), for the third quarter last
year, which includes $0.03 per share
from a net gain on extinguishment of debt. There were no
adjusted items for the third quarter of 2017.
"While we still have more work to do, we are pleased with the
progress in our business in the third quarter. We posted positive
comparable sales at Jos. A. Bank and sequential comparable sales
improvement at Men's Wearhouse and K&G, resulting in our second
consecutive quarter of positive comparable sales for our retail
segment. Based on solid third quarter results and a good
start to the fourth quarter, we have increased our EPS outlook for
the year," said Tailored Brands CEO Doug
Ewert.
"Our new marketing campaigns are building awareness about the
solutions we provide to men of all shapes and sizes. We're bringing
new customers into our stores where we win with superior service
and selection, including custom suiting at a disruptive
price. We are encouraged by the progress we are making on our
strategic initiatives to grow our custom business and enhance our
online and in-store omni-channel capabilities. These
initiatives are part of our strategy to deliver a superior customer
experience in order to increase market share and drive long-term
sustainable growth."
Ewert added, "We also continued to make progress toward
strengthening our balance sheet. During the third quarter, we
repurchased and retired $65 million
face value of senior notes, resulting in year-to-date repurchases
of $115 million. We remain
committed to a balanced capital allocation strategy, investing to
support our growth initiatives, returning cash to shareholders via
our dividend and using excess free cash flow to reduce debt."
(1)
|
In fiscal 2017,
adjusted items currently consist of costs to terminate our tuxedo
rental license agreement with Macy's. In fiscal 2016, these
items primarily related to our store rationalization and profit
improvement initiatives as well as integration costs related to
Jos. A. Bank. Given the recurring nature of our debt reduction
transactions and to facilitate comparability, we have recast our
non-GAAP measures presentations for 2016 to remove adjustments
previously made for gains/losses on extinguishment of debt.
This changes our non-GAAP diluted EPS for the third quarter of 2016
to $0.71 from $0.68. Non-GAAP adjusted diluted EPS is referred to
as "adjusted EPS" for simplicity. See Use of Non-GAAP
Financial Measures for additional information on items excluded
from adjusted EPS.
|
Third Quarter Fiscal 2017 Net Sales and Comparable
Sales
The table that follows is a summary of total net sales for the
third quarter and year-to-date period ending October 28, 2017. Comparable sales is
defined as net sales from stores open at least twelve months at
period end and includes e-commerce sales. The Moores
comparable sales change is based on the Canadian dollar. Due
to rounded numbers, amounts may not sum.
Third Quarter Net
Sales Summary – Fiscal 2017
|
|
Net Sales (U.S.
dollars, in millions)
|
Comparable
Sales
Change
|
|
Current Quarter
|
% of Total
Sales
|
%
Change
|
$
Change
|
Current
Quarter
|
Prior
Year Quarter
|
Retail
Segment
|
$747.5
|
92.2%
|
(2.1%)
|
($16.2)
|
0.1%
|
(2.6%)
|
Men's
Wearhouse
|
$449.0
|
55.4%
|
(2.8%)
|
($12.8)
|
(1.0%)
|
0.1%
|
Jos. A.
Bank
|
$162.7
|
20.1%
|
(2.0%)
|
($3.3)
|
4.9%
|
(9.8%)
|
K&G
|
$69.6
|
8.6%
|
(1.8%)
|
($1.3)
|
(0.6%)
|
(3.0%)
|
Moores
|
$57.6
|
7.1%
|
1.9%
|
$1.1
|
(2.6%)
|
(0.4%)
|
MW
Cleaners
|
$8.7
|
1.1%
|
2.0%
|
$0.2
|
|
|
|
|
|
|
|
|
|
Corporate Apparel
Segment
|
$63.3
|
7.8%
|
(24.0%)
|
($19.9)
|
|
|
|
|
|
|
|
|
|
Total
Company
|
$810.8
|
|
(4.3%)
|
($36.1)
|
|
|
Year-To-Date Net
Sales Summary – Fiscal 2017
|
|
Net Sales (U.S.
dollars, in millions)
|
Comparable
Sales
Change
|
|
YTD
|
% of Total
Sales
|
%
Change
|
$
Change
|
Current
Year
|
Prior Year
|
Retail
Segment
|
$2,265.8
|
92.7%
|
(4.0%)
|
($94.3)
|
(1.1%)
|
(4.5%)
|
Men's
Wearhouse
|
$1,327.8
|
54.3%
|
(4.2%)
|
($58.6)
|
(2.1%)
|
(0.1%)
|
Jos. A.
Bank
|
$504.2
|
20.6%
|
(4.9%)
|
($26.2)
|
5.4%
|
(14.2%)
|
K&G
|
$244.1
|
10.0%
|
(3.1%)
|
($7.9)
|
(3.5%)
|
(1.5%)
|
Moores
|
$163.7
|
6.7%
|
(1.5%)
|
($2.5)
|
(2.2%)
|
(1.8%)
|
MW
Cleaners
|
$26.0
|
1.1%
|
3.6%
|
$0.9
|
|
|
|
|
|
|
|
|
|
Corporate Apparel
Segment
|
$178.7
|
7.3%
|
(20.7%)
|
($46.7)
|
|
|
|
|
|
|
|
|
|
Total
Company
|
$2,444.5
|
|
(5.5%)
|
($141.0)
|
|
|
For the third quarter of 2017, total net sales decreased 4.3% to
$810.8 million. Retail net sales
decreased 2.1% primarily due to the impact of last year's store
closures, with retail segment comparable sales up 0.1%.
Corporate apparel net sales decreased 24.0%, in line with
expectations, primarily due to anniversarying last year's rollout
of a large new uniform program.
Comparable sales at Men's Wearhouse decreased 1.0%. Comparable
sales for clothing increased slightly primarily due to an increase
in transactions and units per transaction partially offset by a
decrease in average unit retail. Comparable rental services revenue
decreased 4.3%, primarily reflecting a consumer shift to purchase
suits for special occasions.
Jos. A. Bank comparable sales increased 4.9% primarily due to an
increase in transactions and average unit retail that more than
offset a decrease in units per transaction.
K&G comparable sales decreased 0.6% primarily due to lower
transactions partially offset by increases in average unit retail
and units per transaction.
Moores comparable sales decreased 2.6% primarily due to
decreases in both units per transaction and transactions that more
than offset an increase in average unit retail.
Gross Margin
On a GAAP basis, total gross margin was $358.8 million, a decrease of $18.4 million, primarily due to a decrease in
corporate apparel net sales. As a percent of sales, total
gross margin decreased 30 basis points to 44.2%. On an
adjusted basis, total gross margin decreased 20 basis points.
On a GAAP basis, retail gross margin was $342.1 million, a decrease of $8.2 million. As a percent of sales, retail
gross margin decreased 10 basis points to 45.8%. On an
adjusted basis, retail gross margin decreased $7.3 million and the retail gross margin rate was
flat compared to last year.
Advertising Expense
Advertising expense decreased $7.0
million to $38.7 million and
decreased 60 basis points as a percent of total sales to
4.8%. The decrease in advertising expense was driven
primarily by reductions in television advertising reflecting a
shift to digital advertising, as well as the timing of marketing
spend.
Selling, General and Administrative Expenses
On a GAAP basis, selling, general and administrative expenses
("SG&A") decreased $27.0 million
to $243.5 million and decreased 190
basis points as a percent of total sales.
On an adjusted basis, SG&A expenses decreased $13.7 million, primarily due to decreases in
store-related costs resulting from last year's store
rationalization program as well as lower employee-related benefit
costs, partially offset by increased incentive compensation
expense. As a percent of total sales, SG&A expenses
decreased 40 basis points to 30.0%.
Operating Income
On a GAAP basis, operating income was $76.6 million compared to $61.1 million last year. As a percent of
sales, operating margin increased 230 basis points to 9.5%.
On an adjusted basis, operating income was $76.6 million, up 4.4% compared to $73.4 million last year. As a percent of
sales, operating margin increased 80 basis points to 9.5%.
Net Interest Expense and Net Gain on Extinguishment of
Debt
Net interest expense was $24.3
million compared to $25.4
million last year, as we reduced our outstanding debt.
Net gain on extinguishment of debt was $2.5 million compared to $1.8 million last year resulting from the
Company's repurchase of senior notes.
Effective Tax Rate
On a GAAP basis, the effective tax rate was 32.8% compared to
24.1% last year.
On an adjusted basis, the effective tax rate was 32.8% compared
to 30.6% last year.
Net Earnings and EPS
On a GAAP basis, net earnings were $36.9
million compared to $28.4
million last year. Diluted EPS was $0.75 compared to $0.58 last year.
On an adjusted basis, net earnings were $36.9 million compared to $34.6 million last year. Adjusted diluted
EPS was $0.75, an increase of 5.6%
compared to $0.71 last
year.
Balance Sheet Highlights
Cash and cash equivalents at the end of the third quarter of
2017 were $126.2 million, an increase
of $91.3 million compared to the end
of the third quarter of 2016. There were no borrowings
outstanding on our revolving credit facility at the end of the
third quarter of 2017. As previously announced, the Company
amended its revolving credit facility, expanding availability to
$550 million at a lower cost and
extending its maturity from June 2019
to October 2022.
Inventories decreased $74.9
million, or 7.1%, to $973.0
million at the end of the third quarter of 2017 compared to
the end of the third quarter of 2016, primarily due to lower
inventories across all of our retail brands.
Total debt at the end of the third quarter of 2017 was
approximately $1.5 billion.
During the third quarter, the Company repurchased and retired
$65.0 million in face value of its
senior notes for a year-to-date total of $115.0 million. In addition, the Company
made its scheduled $1.8 million
payment on its term loan.
Cash flow from operating activities for the nine months ended
October 28, 2017 was $252.5 million compared to $176.9 million in the same period last
year. The increase was primarily driven by higher earnings,
expected lower rental product and inventory purchases, and timing
of income tax payments, partially offset by anniversarying last
year's income tax refund.
Capital expenditures for the nine months ended October 28, 2017 were $56.0 million compared to $80.6 million in the same period last year.
FISCAL 2017 FULL YEAR OUTLOOK
- Earnings per Share: The Company now expects to achieve
GAAP diluted EPS in the range of $1.80 to $1.85, and
adjusted diluted EPS of $2.03 to
$2.08.
- Comparable Sales: The Company continues to expect
comparable sales for Men's Wearhouse and Moores to be down
low-single digits and comparable sales for Jos. A. Bank to increase
mid-single digits. The Company now expects comparable sales for
K&G to be down low-single digits.
- Effective Tax Rate: The Company continues to expect the
effective tax rate to be approximately 33%.
- Capital Expenditures: The Company continues to expect
capital expenditures of approximately $90
million.
- Real Estate: In addition to closing all 170 tuxedo shops
at Macy's, the Company continues to expect approximately net 20
store closures in 2017 resulting from its continuous review of its
real estate portfolio for opportunities to optimize its fleet as
lease terms expire.
The Company noted that fiscal 2017 is a 53-week year versus the
52-week fiscal 2016.
CALL AND WEBCAST INFORMATION
At 5:00 p.m. Eastern time on
Wednesday, December 6, 2017, management will host a
conference call and real time webcast to discuss fiscal 2017 third
quarter results. To access the conference call, please dial
412-902-0030. To access the live webcast, visit the Investor
Relations section of the Company's website at
http://ir.tailoredbrands.com. A telephonic replay will be
available through December 13, 2017,
by calling 201-612-7415 and entering the access code of 13672669#,
or a webcast archive will be available free on the website for
approximately 90 days.
STORE INFORMATION
|
October 28,
2017
|
October 29,
2016
|
January 28,
2017
|
|
Number
of Stores
|
Sq.
Ft. (000's)
|
Number
of Stores
|
Sq.
Ft. (000's)
|
Number
of Stores
|
Sq.
Ft. (000's)
|
|
|
|
|
|
|
|
Men's Wearhouse
(a)
|
720
|
4,040.9
|
713
|
4,010.2
|
716
|
4,021.7
|
|
|
|
|
|
|
|
Jos. A. Bank
(b)
|
493
|
2,318.3
|
550
|
2,588.7
|
506
|
2,388.9
|
|
|
|
|
|
|
|
Men's Wearhouse and
Tux
|
51
|
77.0
|
61
|
90.1
|
58
|
86.0
|
|
|
|
|
|
|
|
The Tuxedo Shop @
Macy's (c)
|
-
|
-
|
170
|
84.0
|
170
|
84.0
|
|
|
|
|
|
|
|
Moores, Clothing for
Men
|
126
|
787.5
|
126
|
789.0
|
126
|
789.0
|
|
|
|
|
|
|
|
K&G
(d)
|
90
|
2,076.3
|
90
|
2,101.5
|
91
|
2,113.5
|
|
|
|
|
|
|
|
Total
|
1,480
|
9,300.0
|
1,710
|
9,663.5
|
1,667
|
9,483.1
|
|
|
(a)
Includes one Joseph
Abboud store.
|
(b)
Excludes 14 franchise
stores.
|
(c)
All Tuxedo Shop @
Macy's stores were closed in the second quarter of 2017.
|
(d) 86, 82 and 86 stores offering women's apparel at the
end of each period, respectively.
|
As the leading specialty retailer of men's suits and largest
men's formalwear provider in the U.S. and Canada, Tailored Brands helps men love the way
they look for work and special occasions. We serve our
customers through an expansive omni-channel network that includes
over 1,400 locations in the U.S. and Canada as well as our branded e-commerce
websites. Our brands include Men's Wearhouse, Jos. A. Bank,
Joseph Abboud, Moores Clothing for
Men and K&G. We also operate an international corporate
apparel and workwear group consisting of Dimensions, Alexandra and
Yaffy in the United Kingdom and
Twin Hill in the United States.
For additional information on Tailored Brands, please visit the
Company's websites at www.tailoredbrands.com,
www.menswearhouse.com, www.josbank.com, www.josephabboud.com,
www.mooresclothing.com, www.kgstores.com, www.mwcleaners.com,
www.dimensions.co.uk, www.alexandra.co.uk. and
www.twinhill.com.
This press release contains forward-looking information,
including the Company's statements regarding its 2017 outlook for
earnings per share, comparable sales, effective tax rate, capital
expenditures and net store closures. In addition, words such as
"expects," "anticipates," "envisions," "targets," "goals,"
"projects," "intends," "plans," "believes," "seeks," "estimates,"
"guidance," "may," "projections," and "business outlook,"
variations of such words and similar expressions are intended to
identify such forward-looking statements. The forward-looking
statements are made pursuant to the Safe Harbor provisions of the
Private Securities Litigation Reform Act of 1995. Any
forward-looking statements that we make herein are not guarantees
of future performance and actual results may differ materially from
those in such forward-looking statements as a result of various
factors. Factors that might cause or contribute to such
differences include, but are not limited to: actions by
governmental entities; domestic and international macro-economic
conditions; inflation or deflation; the loss of, or changes in, key
personnel; success, or lack thereof, in executing our internal
strategies and operating plans including new store and new market
expansion plans; cost reduction initiatives, store rationalization
plans, profit improvement plans, and revenue enhancement
strategies; the impact of the termination of our tuxedo rental
license agreement with Macy's; changes in demand for clothing or
rental product; market trends in the retail business; customer
confidence and spending patterns; changes in traffic trends in our
stores; customer acceptance of our merchandise strategies;
performance issues with key suppliers; disruptions in our supply
chain; severe weather; foreign currency fluctuations; government
export and import policies; advertising or marketing activities of
competitors; and legal proceedings.
Forward-looking statements are intended to convey the
Company's expectations about the future, and speak only as of the
date they are made. We undertake no obligation to publicly
update or revise any forward-looking statements that may be made
from time to time, whether as a result of new information, future
developments or otherwise, except as required by applicable
law. However, any further disclosures made on related
subjects in our subsequent reports on Forms 10-K, 10-Q and 8-K
should be consulted. This discussion is provided as permitted by
the Private Securities Litigation Reform Act of 1995, and all
written or oral forward-looking statements that are made by or
attributable to us are expressly qualified in their entirety by the
cautionary statements contained or referenced in this
section.
TAILORED BRANDS,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
|
(Unaudited)
|
|
For the Three
Months Ended October 28, 2017 and October 29, 2016
|
(In thousands, except
per share data)
|
|
|
Three Months
Ended
|
|
|
%
of
|
|
%
of
|
|
2017
|
Sales
|
2016
|
Sales
|
|
|
|
|
|
Net sales:
|
|
|
|
|
Retail clothing product
|
$
575,203
|
70.9%
|
$
575,046
|
67.9%
|
Rental services
|
126,410
|
15.6%
|
138,724
|
16.4%
|
Alteration and other services
|
45,909
|
5.7%
|
49,919
|
5.9%
|
Total retail sales
|
747,522
|
92.2%
|
763,689
|
90.2%
|
Corporate apparel clothing product
|
63,296
|
7.8%
|
83,245
|
9.8%
|
Total net sales
|
810,818
|
100.0%
|
846,934
|
100.0%
|
|
|
|
|
|
Total cost of sales
|
452,061
|
55.8%
|
469,728
|
55.5%
|
|
|
|
|
|
Gross margin
(a):
|
|
|
|
|
Retail
clothing product
|
327,910
|
57.0%
|
327,068
|
56.9%
|
Rental
services
|
105,955
|
83.8%
|
115,766
|
83.5%
|
Alteration
and other services
|
11,771
|
25.6%
|
16,393
|
32.8%
|
Occupancy
costs
|
(103,579)
|
-13.9%
|
(108,923)
|
-14.3%
|
Total retail gross margin
|
342,057
|
45.8%
|
350,304
|
45.9%
|
Corporate apparel clothing product
|
16,700
|
26.4%
|
26,902
|
32.3%
|
Total gross margin
|
358,757
|
44.2%
|
377,206
|
44.5%
|
|
|
|
|
|
Advertising
expense
|
38,664
|
4.8%
|
45,656
|
5.4%
|
Selling, general and
administrative expenses
|
243,466
|
30.0%
|
270,494
|
31.9%
|
|
|
|
|
|
Operating
income
|
76,627
|
9.5%
|
61,056
|
7.2%
|
|
|
|
|
|
Interest expense,
net
|
(24,253)
|
-3.0%
|
(25,424)
|
-3.0%
|
Gain on
extinguishment of debt, net
|
2,539
|
0.3%
|
1,808
|
0.2%
|
|
|
|
|
|
Earnings before
income taxes
|
54,913
|
6.8%
|
37,440
|
4.4%
|
|
|
|
|
|
Provision for income
taxes
|
18,021
|
2.2%
|
9,007
|
1.1%
|
|
|
|
|
|
Net
earnings
|
$
36,892
|
4.5%
|
$
28,433
|
3.4%
|
|
|
|
|
|
Net earnings per
diluted common share allocated to common shareholders
|
$
0.75
|
|
$
0.58
|
|
|
|
|
|
|
Weighted-average
diluted common shares outstanding
|
49,430
|
|
48,812
|
|
|
|
|
|
|
|
(a) Gross
margin percent of sales is calculated as a percentage of related
sales.
|
TAILORED BRANDS,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
|
(Unaudited)
|
|
For the Nine
Months Ended October 28, 2017 and October 29, 2016
|
(In thousands, except
per share data)
|
|
|
Nine Months
Ended
|
|
|
%
of
|
|
%
of
|
|
2017
|
Sales
|
2016
|
Sales
|
|
|
|
|
|
Net sales:
|
|
|
|
|
Retail clothing product
|
$
1,753,782
|
71.7%
|
$
1,806,660
|
69.9%
|
Rental services
|
373,208
|
15.3%
|
403,564
|
15.6%
|
Alteration and other services
|
138,835
|
5.7%
|
149,888
|
5.8%
|
Total retail sales
|
2,265,825
|
92.7%
|
2,360,112
|
91.3%
|
Corporate apparel clothing product
|
178,657
|
7.3%
|
225,328
|
8.7%
|
Total net sales
|
2,444,482
|
100.0%
|
2,585,440
|
100.0%
|
|
|
|
|
|
Total cost of sales
|
1,356,589
|
55.5%
|
1,446,089
|
55.9%
|
|
|
|
|
|
Gross margin
(a):
|
|
|
|
|
Retail
clothing product
|
1,004,980
|
57.3%
|
1,010,445
|
55.9%
|
Rental
services
|
312,628
|
83.8%
|
337,621
|
83.7%
|
Alteration
and other services
|
35,149
|
25.3%
|
45,803
|
30.6%
|
Occupancy
costs
|
(311,994)
|
-13.8%
|
(327,673)
|
-13.9%
|
Total retail gross margin
|
1,040,763
|
45.9%
|
1,066,196
|
45.2%
|
Corporate apparel clothing product
|
47,130
|
26.4%
|
73,155
|
32.5%
|
Total gross margin
|
1,087,893
|
44.5%
|
1,139,351
|
44.1%
|
|
|
|
|
|
Advertising
expense
|
120,804
|
4.9%
|
138,547
|
5.4%
|
Selling, general and
administrative expenses
|
750,995
|
30.7%
|
849,122
|
32.8%
|
|
|
|
|
|
Operating
income
|
216,094
|
8.8%
|
151,682
|
5.9%
|
|
|
|
|
|
Interest expense,
net
|
(74,876)
|
-3.1%
|
(77,751)
|
-3.0%
|
Gain on
extinguishment of debt, net
|
6,535
|
0.3%
|
1,737
|
0.1%
|
|
|
|
|
|
Earnings before
income taxes
|
147,753
|
6.0%
|
75,668
|
2.9%
|
|
|
|
|
|
Provision for income
taxes
|
50,551
|
2.1%
|
20,623
|
0.8%
|
|
|
|
|
|
Net
earnings
|
$
97,202
|
4.0%
|
$
55,045
|
2.1%
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
diluted common share allocated to common shareholders
|
$
1.97
|
|
$
1.13
|
|
|
|
|
|
|
Weighted-average
diluted common shares outstanding
|
49,251
|
|
48,691
|
|
|
(a) Gross
margin percent of sales is calculated as a percentage of related
sales.
|
TAILORED BRANDS,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
October 28,
|
|
October 29,
|
|
|
2017
|
|
2016
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
126,244
|
|
$
34,948
|
|
Accounts receivable,
net
|
81,193
|
|
71,898
|
|
Inventories
|
973,001
|
|
1,047,915
|
|
Other current
assets
|
53,566
|
|
60,190
|
|
|
|
|
|
|
Total
current assets
|
1,234,004
|
|
1,214,951
|
Property and
equipment, net
|
454,921
|
|
501,391
|
Rental product,
net
|
125,320
|
|
160,101
|
Goodwill
|
119,125
|
|
116,026
|
Intangible assets,
net
|
169,072
|
|
172,337
|
Other
assets
|
8,859
|
|
10,323
|
|
|
|
|
|
|
Total
assets
|
$
2,111,301
|
|
$
2,175,129
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
186,862
|
|
$
200,199
|
|
Accrued expenses and
other current liabilities
|
281,533
|
|
280,658
|
|
Income taxes
payable
|
21,224
|
|
917
|
|
Current portion of
long-term debt
|
8,750
|
|
7,000
|
|
|
|
|
|
|
Total
current liabilities
|
498,369
|
|
488,774
|
|
|
|
|
|
Long-term debt,
net
|
1,467,735
|
|
1,588,873
|
Deferred taxes and
other liabilities
|
160,197
|
|
175,179
|
|
|
|
|
|
|
Total
liabilities
|
2,126,301
|
|
2,252,826
|
|
|
|
|
|
Shareholders'
deficit:
|
|
|
|
|
Preferred
stock
|
-
|
|
-
|
|
Common
stock
|
492
|
|
487
|
|
Capital in excess of
par
|
485,299
|
|
466,817
|
|
Accumulated
deficit
|
(469,463)
|
|
(499,663)
|
|
Accumulated other
comprehensive loss
|
(31,328)
|
|
(45,338)
|
|
|
|
|
|
|
Total
shareholders' deficit
|
(15,000)
|
|
(77,697)
|
|
|
|
|
|
|
Total liabilities and shareholders' deficit
|
$
2,111,301
|
|
$
2,175,129
|
|
|
|
|
|
TAILORED BRANDS,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
For the Nine
Months Ended October 28, 2017 and October 29, 2016
|
(In
thousands)
|
|
|
|
Nine Months
Ended
|
|
|
2017
|
|
2016
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Net
earnings
|
$
97,202
|
|
$
55,045
|
|
Non-cash adjustments
to net earnings:
|
|
|
|
|
Depreciation and amortization
|
78,929
|
|
87,838
|
|
Rental
product amortization
|
32,779
|
|
35,982
|
|
Asset
impairment charges
|
2,867
|
|
4,293
|
|
Gain on
extinguishment of debt, net
|
(6,535)
|
|
(1,737)
|
|
Amortization of deferred financing costs and discount on long-term
debt
|
5,391
|
|
5,650
|
|
Loss on
disposition of assets
|
1,407
|
|
616
|
|
Other
|
15,029
|
|
(556)
|
|
Changes in operating
assets and liabilities
|
25,469
|
|
(10,257)
|
|
|
|
|
|
|
Net cash
provided by operating activities
|
252,538
|
|
176,884
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
Capital
expenditures
|
(55,956)
|
|
(80,550)
|
|
Acquisition of
business, net of cash
|
(457)
|
|
-
|
|
Proceeds from sales
of property and equipment
|
2,157
|
|
605
|
|
|
|
|
|
|
Net cash
used in investing activities
|
(54,256)
|
|
(79,945)
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
Payments on term
loan
|
(9,879)
|
|
(40,701)
|
|
Proceeds from
asset-based revolving credit facility
|
235,900
|
|
520,550
|
|
Payments on
asset-based revolving credit facility
|
(235,900)
|
|
(520,550)
|
|
Repurchase and
retirement of senior notes
|
(106,731)
|
|
(21,924)
|
|
Deferred financing
costs
|
(2,464)
|
|
-
|
|
Cash dividends
paid
|
(26,895)
|
|
(26,438)
|
|
Proceeds from
issuance of common stock
|
1,334
|
|
1,451
|
|
Tax payments related
to vested deferred stock units
|
(1,682)
|
|
(1,258)
|
|
|
|
|
|
|
Net cash
used in financing activities
|
(146,317)
|
|
(88,870)
|
|
|
|
|
|
|
Effect of exchange
rate changes
|
3,390
|
|
(3,101)
|
|
|
|
|
|
INCREASE IN
CASH AND CASH EQUIVALENTS
|
55,355
|
|
4,968
|
|
|
|
|
|
|
Balance at beginning
of period
|
70,889
|
|
29,980
|
|
Balance at end of
period
|
$
126,244
|
|
$
34,948
|
TAILORED BRANDS, INC.
UNAUDITED NON-GAAP FINANCIAL
MEASURES
(In thousands, except per share amounts)
Use of Non-GAAP Financial Measures
In addition to providing financial results in accordance with
GAAP, we have provided adjusted information, if applicable, as well
as forecasted information for our fiscal year ending February 3, 2018. This non-GAAP financial
information is provided to enhance the user's overall understanding
of the Company's financial performance by removing the impacts of
large, unusual or unique transactions that we believe are not
indicative of our core business results. For fiscal 2017,
these items currently consist of costs to terminate our tuxedo
rental license agreement with Macy's. For fiscal 2016, these
costs primarily related to our store rationalization and profit
improvement programs and integration costs related to Jos. A.
Bank. Given the recurring nature of our debt reduction
transactions and to facilitate comparability, we have recast our
non-GAAP presentation for 2016 to remove adjustments previously
made for gains/losses on extinguishment of debt.
Management uses these adjusted results to assess the Company's
performance, to make decisions about how to allocate resources and
to develop expectations for future performance. In addition,
adjusted EPS is used as a performance measure in the Company's
executive compensation program to determine the number of
performance units that are ultimately earned for certain equity
awards.
The non-GAAP financial information should be considered in
addition to, not as a substitute for or as being superior to,
financial information prepared in accordance with GAAP.
Management strongly encourages investors and shareholders to review
the Company's financial statements and publicly filed reports in
their entirety and not to rely on any single financial
measure.
Reconciliations of non-GAAP information to our actual results
follow and amounts may not sum due to rounded numbers. In
addition, only the line items affected by adjustments are shown in
the tables.
GAAP to Non-GAAP Adjusted Consolidated Statements of Earnings
Information
GAAP to Non-GAAP
Adjusted - Three Months Ended October 29, 2016
(Recasted)
|
Consolidated
Results
|
GAAP
Results
|
Jos. A. Bank
Integration (1)
|
Profit
Improvement(2)
|
Other
|
Total
Adjustments
|
Non-GAAP
Adjusted Results
|
Alteration and other
services gross margin
|
$
16,393
|
$
-
|
$
7
|
$
-
|
$
7
|
$
16,400
|
Occupancy
costs
|
(108,923)
|
532
|
(1,510)
|
-
|
(978)
|
(109,901)
|
|
|
|
|
|
|
|
Total retail gross
margin
|
350,304
|
532
|
(1,503)
|
-
|
(971)
|
349,333
|
|
|
|
|
|
|
|
Total gross
margin
|
377,206
|
532
|
(1,503)
|
-
|
(971)
|
376,235
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
270,494
|
(866)
|
(12,452)
|
-
|
(13,318)
|
257,176
|
|
|
|
|
|
|
|
Operating
income(3)
|
61,056
|
1,398
|
10,949
|
-
|
12,347
|
73,403
|
|
|
|
|
|
|
|
|
Gain on
extinguishment of debt, net(4)
|
1,808
|
-
|
-
|
-
|
-
|
1,808
|
|
|
|
|
|
|
|
Provision for income
taxes(5)
|
9,007
|
|
|
|
6,220
|
15,227
|
|
|
|
|
|
|
|
Net
earnings
|
28,433
|
|
|
|
6,127
|
34,560
|
|
|
|
|
|
|
|
Net earnings per
diluted common share allocated to common shareholders
|
$
0.58
|
|
|
|
$
0.13
|
$
0.71
|
|
(1) Primarily
consisting of severance costs and accelerated
depreciation.
|
(2) Primarily
consists of $8.7 million of lease termination costs and $1.8
million of consulting costs.
|
(3) Of the $12.3
million in total adjustments to operating income, $9.9 million
relates to the retail segment and $2.4 million relates to shared
services.
|
(4) Recast to remove
adjustments previously made for gains/losses on extinguishment of
debt, which changes non-GAAP diluted EPS to $0.71 from
$0.68.
|
(5) The tax effect of
the excluded items is computed as the difference between tax
expense on a GAAP basis and tax expense on an adjusted non-GAAP
basis.
|
GAAP to Non-GAAP
Adjusted - Nine Months Ended October 28, 2017
|
Consolidated
Results
|
GAAP
Results
|
Macy's
Termination (1)
|
Total
Adjustments
|
Non-GAAP
Adjusted Results
|
Rental services gross
margin
|
$
312,628
|
$
1,416
|
$
1,416
|
$
314,044
|
|
|
|
|
|
|
Total retail gross
margin
|
1,040,763
|
1,416
|
1,416
|
1,042,179
|
|
|
|
|
|
|
Total gross
margin
|
1,087,893
|
1,416
|
1,416
|
1,089,309
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
750,995
|
(15,736)
|
(15,736)
|
735,259
|
|
|
|
|
|
|
Operating
income
|
216,094
|
17,152
|
17,152
|
233,246
|
|
|
|
|
|
|
Provision for income
taxes(2)
|
50,551
|
|
5,671
|
56,222
|
|
|
|
|
|
|
Net
earnings
|
97,202
|
|
11,481
|
108,683
|
|
|
|
|
|
|
Net earnings per
diluted common share allocated to common shareholders
|
$
1.97
|
|
$
0.23
|
$
2.21
|
|
(1) Consists of $12.3
million of termination costs, $1.4 million of rental product
writeoffs, $1.2 million of asset impairment charges and $2.3
million of other costs, all related to the retail
segment.
|
(2) The tax effect of
the excluded items is computed as the difference between tax
expense on a GAAP basis and tax expense on an adjusted non-GAAP
basis.
|
GAAP to Non-GAAP
Adjusted - Nine Months Ended October 29, 2016
(Recasted)
|
Consolidated
Results
|
GAAP
Results
|
Jos. A. Bank
Integration (1)
|
Profit
Improvement(2)
|
Other
|
Total
Adjustments
|
Non-GAAP
Adjusted Results
|
Retail clothing
product gross margin
|
$
1,010,445
|
$
-
|
$
-
|
$
(23)
|
$
(23)
|
$
1,010,422
|
Alteration and other
services gross margin
|
45,803
|
-
|
295
|
-
|
295
|
46,098
|
Occupancy
costs
|
(327,673)
|
1,613
|
(3,016)
|
(564)
|
(1,967)
|
(329,640)
|
|
|
|
|
|
|
|
Total retail gross
margin
|
1,066,196
|
1,613
|
(2,721)
|
(587)
|
(1,695)
|
1,064,501
|
|
|
|
|
|
|
|
Total gross
margin
|
1,139,351
|
1,613
|
(2,721)
|
(587)
|
(1,695)
|
1,137,656
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
849,122
|
(5,431)
|
(61,846)
|
(2,637)
|
(69,914)
|
779,208
|
|
|
|
|
|
|
|
Operating
income(3)
|
151,682
|
7,044
|
59,125
|
2,050
|
68,219
|
219,901
|
|
|
|
|
|
|
|
|
Gain on
extinguishment of debt, net(4)
|
1,737
|
-
|
-
|
-
|
-
|
1,737
|
|
|
|
|
|
|
|
Provision for income
taxes(5)
|
20,623
|
|
|
|
26,745
|
47,368
|
|
|
|
|
|
|
|
Net
earnings
|
55,045
|
|
|
|
41,474
|
96,519
|
|
|
|
|
|
|
|
Net earnings per
diluted common share allocated to common shareholders
|
$
1.13
|
|
|
|
$
0.85
|
$
1.98
|
|
(1) Primarily
consisting of accelerated depreciation and severance
costs.
|
(2) Primarily
consists of $37.0 million of lease termination costs and $13.6
million of consulting costs.
|
(3) Of the $68.2
million in total adjustments to operating income, $47.4 million
relates to the retail segment and $20.8 million relates to shared
services.
(4) Recast to remove
adjustments previously made for gains/losses on extinguishment of
debt, which changes non-GAAP diluted EPS to $1.98 from
$1.96.
|
(5) The tax effect of
the excluded items is computed as the difference between tax
expense on a GAAP basis and tax expense on an adjusted non-GAAP
basis.
|
GAAP to Non-GAAP Adjusted EPS for Fiscal 2017
GAAP to Non-GAAP
Adjusted – Reconciliation of Forecasted Adjusted EPS for Fiscal
2017
|
Diluted EPS- GAAP
Basis
|
$1.80-$1.85
|
Costs to Terminate
Macy's Agreement
|
$0.23
|
Diluted EPS- Non-GAAP
Adjusted (1)
|
$2.03-$2.08
|
(1) Based on forecasted
adjusted non-GAAP tax rate of 33%
|
Contact:
Investor Relations
(281) 776-7575
ir@tailoredbrands.com
Julie MacMedan, VP, Investor
Relations
Tailored Brands, Inc.
View original
content:http://www.prnewswire.com/news-releases/tailored-brands-inc-reports-fiscal-2017-third-quarter-results-300567976.html
SOURCE Tailored Brands, Inc.