Tailored Brands, Inc. Reports Fiscal 2015 Fourth Quarter And Full Year Results

- Fiscal year 2015 adjusted EPS(1) of $1.80 and GAAP loss per share of $21.26 primarily due to non-cash impairment charges

- Fourth quarter 2015 adjusted loss per share(1) of $0.30 and GAAP loss per share of $21.86

- Conference call scheduled for Thursday, March 10th at 9:00 a.m. Eastern time

FREMONT, Calif., March 9, 2016 /PRNewswire/ -- Tailored Brands, Inc. (NYSE: TLRD) today announced consolidated financial results for the fiscal fourth quarter and full year ended January 30, 2016.

Fiscal fourth quarter 2015 GAAP loss per share was $21.86.  GAAP operating loss includes a $1,153.3 million goodwill and intangible asset impairment charge, a $25.8 million asset impairment charge and an $11.0 million inventory write-down.  These non-cash charges related to Jos. A. Bank and a store rationalization program initiated in the fourth quarter.  Fiscal fourth quarter 2015 adjusted loss per share(1) was $0.30 excluding items not indicative of the Company's core operating results, certain items related to the acquisition and integration of Jos. A. Bank and non-cash impairment charges. 

The fiscal year 2015 GAAP loss per share was $21.26 and adjusted EPS(1) was $1.80 excluding non-operating items and the non-cash charges described above.

As reported in the Company's preliminary results released on February 16, 2016, fourth quarter comparable sales increased 4.3% at Men's Wearhouse with clothing comps of 4.3% driven by an increase in average unit retail (or the net selling price per unit) and rental comps of 4.9%.  Jos. A. Bank comparable sales decreased 31.9%.  K&G comparable sales increased 1.9% driven by an increase in units per transaction offset somewhat by lower average transactions per store.  Moores comparable sales decreased 2.7% primarily driven by macro-economic conditions in Canada.

Doug Ewert, Tailored Brands chief executive officer stated, "While our fourth quarter and full year results were consistent with our revised guidance, we remain very disappointed by the weak Jos. A. Bank results.  Our transition away from unsustainable promotions has proven significantly more difficult and expensive than we expected.  We do, however, remain confident that Jos. A. Bank offers a longer-term opportunity to profitably grow market share in the menswear business.  Additionally, our Men's Wearhouse, Moores, and K&G brands continue to perform well, with profitability in line or ahead of our expectations.

"Over the past several months we completed a comprehensive operational review of the Tailored Brands businesses and are in the process of taking actions we believe will right-size our store base, optimize our cost structure, return Jos. A. Bank to profitability and improve other operating aspects of Tailored Brands.

"As part of our store rationalization program we plan to close approximately 250 stores during fiscal year 2016. The store closures fall into three categories. First, we expect to close 80 to 90 full-line Jos. A. Bank stores which we believe have limited potential for meaningful profit improvement. Second, we will close all Jos. A. Bank (49) and Men's Wearhouse (9) outlet stores. We have determined that outlet stores, which collectively were not profitable, are not sufficiently differentiated enough from our core offerings and have not resonated with our customers. Lastly, we intend to close between 100 and 110 MW Tux stores. These closings are a continuation of our strategy of migrating tuxedo rentals to full line stores and reflective of our new partnership with Macy's, Tuxedo Shop @ Macy's.  We have refined our Tuxedo Shop @ Macy's rollout schedule and now plan to open 166 stores in 2016 with the balance of 122 stores to be opened in 2017." 

Ewert continued, "We have also embarked on an extensive profit improvement program that we believe will reduce our expenses by approximately $50 million in 2016.  This program includes reduced distribution costs, cost reductions in our organizational structure, payroll and employee benefit reductions and savings in occupancy and goods-not-for-resale.

"We estimate the cash costs to complete the store rationalization and profit improvement programs to be between $45 and $60 million for 2016.  This is in addition to the non-cash charges recorded in 2015.

"Reflective of the many operational changes being made and the expectation for a slow recovery at Jos. A. Bank, we believe that fiscal year 2016 adjusted EPS will be in the range of $1.55 to $1.85.  This includes comparable sales of negative mid-teens and significant product margin improvement for Jos. A. Bank."  Ewert concluded, "We are working hard to restore Jos. A. Bank's profitability and strengthen the rest of our portfolio of brands.   While our current initiatives are expansive, we are closely monitoring our progress and will make adjustments as necessary to create value for all our stakeholders."  Ewert concluded, "We look forward to providing you with more details on our call Thursday morning, March 10th."

SALES REVIEW

The table that follows is a summary of net sales for the fourth quarter and full year ended January 30, 2016.  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 full year sales shown below for Jos. A. Bank are a comparison to the Jos. A. Bank fiscal year 2014 sales, a portion of which was prior to the acquisition on 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 2015



Net Sales

Comparable Sales Change


Net Sales Change

Current
Quarter

% of Total
Sales

Current
Quarter

Prior Year
Quarter







Total Retail Segment

(11.3%)

($98.0)

$767.9

93%



       Men's Wearhouse

5.3%

$20.0

$399.5

48%

4.3%

6.8%

       Jos. A. Bank

(31.7%)

($106.8)

$230.2

28%

(31.9%)

(6.6%)

       K&G

(2.0%)

($1.7)

$80.9

10%

1.9%

6.8%

       Moores

(16.5%)

($9.8)

$49.3

6%

(2.7%)

8.6%

       MW Cleaners

2.3%

$0.2

$8.1

1%










Corporate Apparel Segment

(7.5%)

($4.7)

$57.8

7%










Total Company

(11.1%)

($102.7)

$825.7




 

Full Year Net Sales Summary – Fiscal 2015



Net Sales

Comparable Sales Change


Net Sales Change

Current
Year

% of Total
Sales

Current Year

Prior Year







Total Retail Segment

8.6%

$257.3

$3,252.5

93%



       Men's Wearhouse

6.2%

$104.4

$1,791.2

51%

4.9%

3.9%

       Jos. A. Bank

26.7%

$182.9

$866.9

25%

(16.4%)

(2.5%)

       K&G

1.3%

$4.3

$338.4

10%

5.0%

3.7%

       Moores

(13.8%)

($35.8)

$222.6

6%

(1.7%)

8.6%

       MW Cleaners

4.7%

$1.5

$33.4

1%










Corporate Apparel Segment

(5.3%)

($13.6)

$243.8

7%










Total Company

7.5%

$243.7

$3,496.3




 

Net sales for the fourth quarter at our largest brand, Men's Wearhouse, were up 5.3% and comparable sales increased 4.3% from last year's fourth quarter.  Comparable clothing sales increased 4.3% primarily due to an increase in clothing product average unit retails. Comparable rental revenue increased 4.9% in the fourth quarter of 2015 due to a higher average paid per rental unit. 

Jos. A. Bank comparable sales for the fourth quarter decreased 31.9%.  K&G comparable sales increased 1.9% primarily due to an increase in units sold per transaction offset somewhat by lower average transactions per store.  Net sales for Moores, our Canadian retail brand, decreased 16.5% primarily due to unfavorable currency fluctuations. Moores had a comparable sales decrease of 2.7% due to decreases in both average transactions per store and units sold per transaction driven by weakening macro-economic conditions in Canada.  The Corporate Apparel segment had an expected sales decrease of 7.5% primarily driven by an unfavorable change in the currency translation rate and lower sales from existing customer programs.

FOURTH QUARTER GAAP RESULTS

Total net sales decreased 11.1%, or $102.7 million, to $825.7 million.  Retail segment net sales decreased by 11.3%, or $98.0 million.  Corporate apparel sales decreased by 7.5% or $4.7 million.

Total gross margin was $311.2 million, a decrease of $36.3 million, or 10.5% due primarily to a decrease in clothing sales at Jos. A. Bank, an $11.0 million inventory write-down associated with the store rationalization program and a $4.8 million write-down of discontinued rental product.  As a percent of sales, total gross margin increased 26 basis points to 37.7% of net sales.

Advertising expense increased $2.2 million to $61.4 million.  This increase represented a 106 basis point increase in expense. 

Selling, general and administrative expenses ("SG&A") decreased $65.1 million to $265.1 million, a 347 basis point decrease primarily due to lower acquisition and integration related costs.

Non-cash goodwill and intangible asset impairment charges were $1,153.3 million and non-cash asset impairment charges were $25.8 million.  The goodwill and intangible asset impairment charges included (1) the entire carrying amount of Jos. A. Bank's goodwill, $769.0 million, (2) an additional $335.8 million charge for the Jos. A. Bank tradename, which reduced the remaining value of the tradename to $113.2 million, (3) the entire carrying amount of the Jos. A. Bank customer relationship, $41.5 million and (4) a $7.0 million charge associated with the write-down of favorable leases originally recorded in connection with the Jos. A. Bank acquisition. 

Operating loss for the quarter was $1,194.3 million compared to operating loss of $42.0 million last year.

Net interest expense for the fourth quarter was $26.5 million for both 2015 and 2014.

The effective tax rate for the fourth quarter was 13.4% for 2015 and 47.5% for 2014.  Due to the loss before tax, the result was a tax benefit in both years. 

The net loss for the quarter was $1,057.7 million compared to net loss of $35.9 million last year.  The diluted loss per share was $21.86 compared to diluted loss of $0.75 in the prior year quarter. 

FULL YEAR GAAP RESULTS

Total net sales increased 7.5%, or $243.7 million, to $3,496.3 million.  Retail segment net sales increased by 8.6%, or $257.3 million.  Corporate apparel sales decreased by 5.3% or $13.6 million.

Total gross margin was $1,484.4 million, an increase of $125.8 million, or 9.3%.  As a percent of sales, total gross margin increased 69 basis points to 42.5% of net sales.

Advertising expense increased $36.7 million to $205.0 million.  This increase represented a 69 basis point increase in expense. 

SG&A decreased $30.9 million to $1,085.9 million, a 328 basis point decrease.

Non-cash goodwill and intangible asset impairment charges were $1,243.4 million.  Non-cash asset impairment charge was $27.5 million.

Operating income decreased $1,150.5 million to a $1,077.3 million loss, representing (30.8%) of net sales compared to 2.3% in the prior year.

Net interest expense was $105.8 million in 2015 and $65.7 million in the prior year.  Loss on extinguishment of debt was $12.7 million.  The loss was a result of the $400 million partial refinancing of our term loan to a fixed rate of 5.0%.

The effective tax rate for the full year was 14.1% for 2015 and 101.8% for 2014.  Due to the loss before tax in 2015, the result was a tax benefit. 

Net loss for the full year was $1,026.7 million compared to $0.4 million last year.  Diluted loss per share was $21.26 compared to $0.01 in the prior year. 

FOURTH QUARTER ADJUSTED RESULTS (1)

Below is a comparison table and discussion of the consolidated adjusted fourth quarter FY 2015 to adjusted fourth quarter FY 2014 operating results. 

Consolidated Adjusted Fourth Quarter FY 2015 Comparison to Adjusted Fourth Quarter FY 2014 Operating Results  (1)


Q4 FY15


Q4 FY15


Q4 FY14


Q4 FY14


Variance


$


% of Sales


$


% of Sales


Dollar

%

Basis Points

Net sales:












     Retail clothing product

$ 668,008


80.91%


$ 767,264


82.65%


$ (99,256)

-12.94%

(1.74)

     Rental services

50,669


6.14%


47,417


5.11%


3,252

6.86%

1.03

     Alteration and other services

49,226


5.96%


51,258


5.52%


(2,032)

-3.96%

0.44

Total retail sales

767,903


93.00%


865,939


93.28%


(98,036)

-11.32%

(0.27)

Corporate apparel clothing product

57,759


7.00%


62,420


6.72%


(4,661)

-7.47%

0.27

Total net sales

825,662


100.00%


928,359


100.00%


(102,697)

-11.06%

-













Gross margin: (2)












     Retail clothing product

369,523


55.32%


406,502


52.98%


(36,979)

-9.10%

2.34

     Rental services

36,809


72.65%


37,522


79.13%


(713)

-1.90%

(6.49)

     Alteration and other services

12,902


26.21%


14,825


28.92%


(1,923)

-12.97%

(2.71)

     Occupancy costs

(112,124)


-14.60%


(112,816)


-13.03%


692

-0.61%

(1.57)

Total retail gross margin

307,110


39.99%


346,033


39.96%


(38,923)

-11.25%

0.03

Corporate apparel clothing product

16,527


28.61%


17,228


27.60%


(701)

-4.07%

1.01

Total gross margin

323,637


39.20%


363,261


39.13%


(39,624)

-10.91%

0.07













Advertising expense

61,357


7.43%


59,194


6.38%


2,163

3.65%

1.06

Selling, general and administrative expenses

258,380


31.29%


279,173


30.07%


(20,793)

-7.45%

1.22

























Operating income

$    3,900


0.47%


$   24,894


2.68%


$ (20,994)

-84.33%

(2.21)


(1) See Use of Non-GAAP Financial Measures for reconciliation to GAAP.

(2) Gross margin percent of related sales.

 

Total net sales decreased 11.1%, or $102.7 million.  Retail segment net sales for the quarter decreased by 11.3% or $98.0 million due primarily to a decrease in clothing sales at Jos. A. Bank.  Corporate apparel sales decreased 7.5%, or $4.7 million.

Total gross margin decreased $39.6 million but increased 7 basis points.  Retail gross margin decreased $38.9 million primarily due to lower sales but increased 3 basis points primarily due to a higher retail clothing margin rate, offset by occupancy deleverage and lower rental and alteration margin rates.  The rental margin rate decreased due to a $4.8 million write-down of discontinued rental product.  As expected, corporate apparel gross margin decreased $0.7 million.  Corporate apparel gross margin rate increased 101 basis points primarily due to customer mix.

On a stand-alone basis, Jos. A. Bank total retail gross margin decreased 122 basis points from 40.1% to 38.8% primarily due to occupancy and alteration cost deleverage.  Retail clothing margin increased 480 basis points from 51.6% to 56.4% due mostly to an increase in the average unit retail. 

Excluding Jos. A. Bank, total gross margin increased by 74 basis points and retail gross margin increased 59 basis points.

Advertising expense was $61.4 million.  This represents a planned increase of $2.2 million or 106 basis points, compared to the prior year. 

SG&A expenses decreased $20.8 million primarily due to lower payroll related costs and cost synergies.  Due to the decrease in sales, SG&A deleveraged 122 basis points.

Operating income decreased $21.0 million or 84.3%.

The effective tax rate was 34.9%. 

Adjusted net loss was $14.7 million, or $0.30 adjusted diluted loss per share.

FULL YEAR ADJUSTED RESULTS (1)

In our 2014 fourth quarter earnings release, we provided historical baselines of operating results for fiscal year 2014 in order to provide comparable results to fiscal year 2015.  These baselines include Jos. A. Bank operations for the 2014 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.  Below is a comparison table and discussion of consolidated FY 2015 adjusted operating results to FY 2014 baseline.

Consolidated Adjusted FY 2015 Comparison to Baseline FY 2014 Operating Results (1)





YTD FY15


YTD FY15


YTD FY14


YTD FY14


Variance


$


% of Sales


$


% of Sales


Dollar

%

Basis Points

Net sales:












     Retail clothing product

$ 2,599,934


74.36%


$ 2,680,036


74.51%


$ (80,102)

-2.99%

(0.15)

     Rental services

443,290


12.68%


451,384


12.55%


(8,094)

-1.79%

0.13

     Alteration and other services

209,250


5.98%


208,024


5.78%


1,226

0.59%

0.20

Total retail sales

3,252,474


93.03%


3,339,444


92.84%


(86,970)

-2.60%

0.18

Corporate apparel clothing product

243,797


6.97%


257,376


7.16%


(13,579)

-5.28%

(0.18)

Total net sales

3,496,271


100.00%


3,596,820


100.00%


(100,549)

-2.80%

-













Gross margin: (2)












     Retail clothing product

1,451,651


55.83%


1,481,720


55.29%


(30,069)

-2.03%

0.55

     Rental services

366,564


82.69%


373,543


82.76%


(6,979)

-1.87%

(0.06)

     Alteration and other services

63,398


30.30%


60,433


29.05%


2,965

4.91%

1.25

     Occupancy costs

(453,070)


-13.93%


(450,408)


-13.49%


(2,662)

0.59%

(0.44)

Total retail gross margin

1,428,543


43.92%


1,465,288


43.88%


(36,745)

-2.51%

0.04

Corporate apparel clothing product

70,336


28.85%


76,718


29.81%


(6,382)

-8.32%

(0.96)

Total gross margin

1,498,879


42.87%


1,542,006


42.87%


(43,127)

-2.80%

(0.00)













Advertising expense

204,985


5.86%


190,386


5.29%


14,599

7.67%

0.57

Selling, general and administrative expenses

1,055,360


30.19%


1,071,215


29.78%


(15,855)

-1.48%

0.40

























Operating income

$    238,533


6.82%


$    280,405


7.80%


$ (41,872)

-14.93%

(0.97)


(1) See Use of Non-GAAP Financial Measures for reconciliation to GAAP.

(2) Gross margin percent of related sales.

 

Total net sales decreased 2.8%, or $100.5 million.  Retail segment net sales decreased by 2.6%, or $87.0 million, due primarily to a decrease in clothing sales at Jos. A. Bank.  Corporate apparel sales decreased by 5.3%, or $13.6 million.

Total gross margin decreased $43.1 million and was flat to last year for basis points.  Retail gross margin decreased $36.7 million but increased 4 basis points.  Corporate apparel gross margin decreased $6.4 million or 96 basis points.

On a stand-alone basis, Jos. A. Bank total retail gross margin decreased 25 basis points from 38.9% to 38.6% primarily due to occupancy and alteration deleverage offset by a higher clothing margin rate.  Jos. A. Bank retail clothing margin increased 231 basis points from 54.5% to 56.9%. 

Excluding Jos. A. Bank, total gross margin decreased 20 basis points and retail gross margin excluding Jos. A. Bank decreased 25 basis points.

Advertising expense was $205.0 million.  This represents an increase of $14.6 million, or 57 basis points, primarily due to increased advertising expense to support branding initiatives.

SG&A expenses decreased $15.9 million but increased by 40 basis points. 

Operating income decreased $41.9 million or 14.9%.

The effective tax rate was 34.0%.

Net earnings were $87.6 million, or $1.80 adjusted EPS.

BALANCE SHEET

Total debt at the end of the fourth quarter 2015 was approximately $1.66 billion.  The Company did not make any pre-payments on its debt during the quarter.  There were no borrowings outstanding on our revolving credit facility at the end of the fourth quarter 2015.

Inventories increased $84.2 million to $1,022.5 million at the end of the fourth quarter 2015 from $938.3 million at the end of the prior year fourth quarter due primarily to increased inventory at Jos. A. Bank due to the lower sales, modest increase in inventory at Men's Wearhouse due to the mix of higher priced product and increased corporate apparel inventory due to the build up of product for a large, new customer rollout occurring in fiscal 2016.

Capital expenditures for the fiscal year 2015 were $115.5 million compared to $96.4 million in the prior year.

CALL AND WEBCAST INFORMATION

At 9:00 a.m. Eastern time on Thursday, March 10, 2016, management will host a conference call and real time webcast to discuss fiscal 2015 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.tailoredbrands.com. A telephonic replay will be available through March 17, 2016 by calling 201-612-7415 and entering the access code of 13630668#, or a webcast archive will be available free on the website for approximately 90 days.

STORE INFORMATION


January 30, 2016

January 31, 2015


Number of
Stores

Sq. Ft.

(000's)

Number of
Stores

Sq. Ft.

(000's)






Men's Wearhouse (a)

714

4,025.7

698

3,955.7






Jos. A. Bank (b)

625

2,880.7

636

2,922.2






Men's Wearhouse and Tux

160

223.5

210

291.2






The Tuxedo Shop @ Macy's

12

6.5

-

-






K&G (c)

89

2,102.1

91

2,164.4

Moores, Clothing for Men

124

779.8

123

779.0






Total

1,724

10,018.3

1,758

10,112.5



(a)

Includes one Joseph Abboud store in fiscal year 2015.

(b)

Excludes 14 and 15 franchise stores, respectively.

(c)

82 and 83 stores, respectively, offering women's apparel.

 

Tailored Brands, Inc. is the largest specialty retailer of men's suits and the largest provider of rental product in the U.S. and Canada with over 1,700 stores including tuxedo shops within Macy's.  The Company's brands include Men's Wearhouse, Jos. A. Bank, Joseph Abboud, Moores Clothing for Men and K&G Fashion Superstores.  Tailored Brands also 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. 

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.twinhill.com, www.dimensions.co.uk and www.alexandra.co.uk.

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 macro-economic conditions, inflation or deflation, success, or lack thereof, in executing our internal strategic and operating plans including new store and new market expansion plans and cost reduction initiatives, store rationalization plans, profit improvement plans, revenue enhancement strategies, the impact of opening tuxedo shops within Macy's stores, changes in demand for clothing, 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. 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 Tailored Brands to disclose material information under the federal securities laws, Tailored Brands 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 our latest annual report on Form 10-K and our filings on Form 10-Q. 

Contact:
Investor Relations
(281) 776-7575
ir@tailoredbrands.com

Kelly Dilts
Tailored Brands, Inc., SVP, Finance & IR

Ken Dennard
Dennard ▪ Lascar Associates

(1)

See Use of Non-GAAP Financial Measures for additional information. Non-GAAP adjusted loss per share is referred to as "adjusted loss per share" and Non-GAAP adjusted EPS is referred to as "adjusted EPS" for simplicity

 


TAILORED BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS

(Unaudited)


For the Three Months Ended January 30, 2016 and January 31, 2015

(In thousands, except per share data)



Three Months Ended


Variance



% of


% of




Basis


2015

Sales

2014

Sales


Dollar

%

Points










Net sales:









          Retail clothing product

$   668,008

80.91%

$ 767,264

82.65%


$    (99,256)

(12.94%)

(1.74)

          Rental services

50,669

6.14%

47,417

5.11%


3,252

6.86%

1.03

          Alteration and other services   

49,226

5.96%

51,258

5.52%


(2,032)

(3.96%)

0.44

               Total retail sales

767,903

93.00%

865,939

93.28%


(98,036)

(11.32%)

(0.27)

               Corporate apparel clothing product

57,759

7.00%

62,420

6.72%


(4,661)

(7.47%)

0.27

                    Total net sales

825,662

100.00%

928,359

100.00%


(102,697)

(11.06%)

0.00










                   Total cost of sales

514,463

62.31%

580,856

62.57%


(66,393)

(11.43%)

(0.26)










Gross margin (a):









        Retail clothing product

358,467

53.66%

390,854

50.94%


(32,387)

(8.29%)

2.72

        Rental services

36,809

72.65%

37,522

79.13%


(713)

(1.90%)

(6.49)

        Alteration and other services

12,902

26.21%

14,825

28.92%


(1,923)

(12.97%)

(2.71)

        Occupancy costs

(113,506)

(14.78%)

(112,926)

(13.04%)


(580)

(0.51%)

(1.74)

               Total retail gross margin

294,672

38.37%

330,275

38.14%


(35,603)

(10.78%)

0.23

               Corporate apparel clothing product

16,527

28.61%

17,228

27.60%


(701)

(4.07%)

1.01

                   Total gross margin

311,199

37.69%

347,503

37.43%


(36,304)

(10.45%)

0.26










Advertising expense

61,357

7.43%

59,194

6.38%


2,163

3.65%

1.06

Selling, general and administrative expenses

265,110

32.11%

330,259

35.57%


(65,149)

(19.73%)

(3.47)

Goodwill and intangible asset impairment charges

1,153,254

139.68%

-

0.00%


1,153,254

NM

139.68

Asset impairment charges

25,785

3.12%

-

0.00%


25,785

NM

3.12










Operating loss

(1,194,307)

(144.65%)

(41,950)

(4.52%)


(1,152,357)

NM

(140.13)










Net interest

(26,455)

(3.20%)

(26,522)

(2.86%)


67

(0.25%)

(0.35)










Loss before income taxes

(1,220,762)

(147.85%)

(68,472)

(7.38%)


(1,152,290)

NM

(140.48)










Benefit for income taxes

(163,049)

(19.75%)

(32,550)

(3.51%)


(130,499)

400.92%

(16.24)










Net loss attributable to common shareholders

$(1,057,713)

(128.10%)

$(35,922)

(3.87%)


$(1,021,791)

NM

(124.24)










Net loss per diluted common share allocated to common shareholders

$      (21.86)


$    (0.75)















Weighted-average diluted common shares outstanding:

48,376


48,043







(a)  Gross margin percent of sales is calculated as a percentage of related sales.

 

TAILORED BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS

(Unaudited)


For the Twelve Months Ended January 30, 2016 and January 31, 2015

(In thousands, except per share data)



Twelve Months Ended


Variance



% of


% of




Basis


2015

Sales

2014

Sales


Dollar

%

Points










Net sales:









          Retail clothing product

$2,599,934

74.36%

$2,365,463

72.73%


$   234,471

9.91%

1.64

          Rental services

443,290

12.68%

442,866

13.62%


424

0.10%

(0.94)

          Alteration and other services   

209,250

5.98%

186,843

5.74%


22,407

11.99%

0.24

               Total retail sales

3,252,474

93.03%

2,995,172

92.09%


257,302

8.59%

0.94

               Corporate apparel clothing product

243,797

6.97%

257,376

7.91%


(13,579)

(5.28%)

(0.94)

                    Total net sales

3,496,271

100.00%

3,252,548

100.00%


243,723

7.49%

0.00










                    Total cost of sales

2,011,848

57.54%

1,893,934

58.23%


117,914

6.23%

(0.69)










Gross margin (a):









        Retail clothing product

1,439,611

55.37%

1,266,913

53.56%


172,698

13.63%

1.81

        Rental services

366,564

82.69%

357,888

80.81%


8,676

2.42%

1.88

        Alteration and other services

63,398

30.30%

52,616

28.16%


10,782

20.49%

2.14

        Occupancy costs

(455,486)

(14.00%)

(395,521)

(13.21%)


(59,965)

(15.16%)

(0.80)

               Total retail gross margin

1,414,087

43.48%

1,281,896

42.80%


132,191

10.31%

0.68

               Corporate apparel clothing product

70,336

28.85%

76,718

29.81%


(6,382)

(8.32%)

(0.96)

                   Total gross margin

1,484,423

42.46%

1,358,614

41.77%


125,809

9.26%

0.69










Advertising expense

204,985

5.86%

168,266

5.17%


36,719

21.82%

0.69

Selling, general and administrative expenses

1,085,900

31.06%

1,116,836

34.34%


(30,936)

(2.77%)

(3.28)

Goodwill and intangible asset impairment charges

1,243,354

35.56%

-

0.00%


1,243,354

NM

35.56

Asset impairment charges

27,480

0.79%

302

0.01%


27,178

9004.86%

0.78










Operating (loss) income

(1,077,296)

(30.81%)

73,210

2.25%


(1,150,506)

NM

(33.06)










Net interest

(105,790)

(3.03%)

(65,676)

(2.02%)


(40,114)

61.08%

(1.01)

Loss on extinguishment of debt

(12,675)

(0.36%)

(2,158)

(0.07%)


(10,517)

487.35%

(0.30)










(Loss) income before income taxes

(1,195,761)

(34.20%)

5,376

0.17%


(1,201,137)

NM

(34.37)










(Benefit) provision for income taxes

(169,042)

(4.83%)

5,471

0.17%


(174,513)

NM

(5.00)










Net loss including non-controlling interest

(1,026,719)

(29.37%)

(95)

0.00%


(1,026,624)

NM

(29.36)










Net earnings attributable to non-controlling interest

-

0.00%

(292)

(0.01%)


292

NM

0.01










Net loss attributable to common shareholders

$(1,026,719)

(29.37%)

$       (387)

(0.01%)


$(1,026,332)

NM

(29.35)










Net loss per diluted common share allocated to common shareholders

$     (21.26)


$      (0.01)















Weighted-average diluted common shares outstanding:

48,288


47,899







(a)  Gross margin percent of sales is calculated as a percentage of related sales.

 


TAILORED BRANDS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)




January 30,


January 31,



2016


2015






ASSETS









Current assets:





Cash and cash equivalents

$             29,980


$              62,261


Accounts receivable, net

63,890


73,266


Inventories

1,022,504


938,336


Other current assets

145,681


169,809







   Total current assets

1,262,055


1,243,672

Property and equipment, net

521,824


566,074

Rental product, net

157,460


132,672

Goodwill

118,586


887,936

Intangible assets, net

178,510


668,259

Other assets

20,891


9,599







   Total assets

$        2,259,416


$         3,508,212






LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY









Current liabilities:





Accounts payable

$           237,114


$            209,867


Accrued expenses and other current liabilities

255,589


268,935


Income taxes payable

3,308


1,609


Current portion of long-term debt

42,451


11,000







   Total current liabilities

538,462


491,411






Long-term debt, net

1,613,473


1,637,686

Deferred taxes and other liabilities

207,567


409,326







   Total liabilities

2,359,502


2,538,423






Shareholders' (deficit) equity:





Preferred stock

-


-


Common stock

485


482


Capital in excess of par

455,765


440,907


(Accumulated deficit) retained earnings

(524,876)


537,263


Accumulated other comprehensive loss

(28,486)


(5,671)


Treasury stock, at cost

(2,974)


(3,192)







   Total shareholders' (deficit) equity

(100,086)


969,789







    Total liabilities and shareholders' (deficit) equity

$         2,259,416


$         3,508,212

 

TAILORED BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the Twelve Months Ended January 30, 2016 and January 31, 2015

(In thousands)




Twelve Months Ended



2015


2014






CASH FLOWS FROM OPERATING ACTIVITIES:





Net loss including non-controlling interest

$      (1,026,719)


$                (95)


Non-cash adjustments to net loss:





   Depreciation and amortization

132,329


112,659


   Rental product amortization

34,592


34,424


   Goodwill and other intangible asset impairment charges

1,243,354


-


   Asset impairment charges

27,480


302


   Loss on extinguishment of debt

12,675


2,158


   Amortization of deferred financing costs

6,817


4,903


   Amortization of discount on long-term debt

1,098


982


   Loss on disposition of assets

3,548


12,328


   Other

(184,696)


3,873


Changes in operating assets and liabilities

(118,781)


(76,770)







        Net cash provided by operating activities

131,697


94,764






CASH FLOWS FROM INVESTING ACTIVITIES:





Capital expenditures

(115,498)


(96,420)


Acquisition of business, net of cash

-


(1,491,393)


Proceeds from sales of property and equipment

2,617


160







        Net cash used in investing activities

(112,881)


(1,587,653)






CASH FLOWS FROM FINANCING ACTIVITIES:





Proceeds from new term loan

-


1,089,000


Payments on new term loan

(8,000)


(2,750)


Payments on previous term loan

-


(97,500)


Proceeds from asset-based revolving credit facility

180,500


348,000


Payments on asset-based revolving credit facility

(180,500)


(348,000)


Proceeds from issuance of senior notes

-


600,000


Deferred financing costs

(3,566)


(51,080)


Purchase of non-controlling interest

-


(6,651)


Cash dividends paid

(34,980)


(34,785)


Proceeds from issuance of common stock

2,974


8,082


Tax payments related to vested deferred stock units

(4,538)


(6,940)


Excess tax benefits from share-based plans

1,584


3,766


Repurchases of common stock

(277)


(251)







        Net cash (used in) provided by financing activities

(46,803)


1,500,891







Effect of exchange rate changes

(4,294)


(4,993)






(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

(32,281)


3,009







Balance at beginning of period

62,261


59,252


Balance at end of period

$            29,980


$           62,261

 

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 for fiscal fourth quarter and twelve months of 2015 and a historical consolidated baseline for fiscal fourth quarter and twelve months of 2014 which includes Jos. A. Bank results.  This non-GAAP financial information is provided to enhance the user's overall understanding of the Company's financial performance.  Specifically, we believe the adjusted and baseline 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 and integration 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 financial information prepared in accordance with GAAP.  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 Non-GAAP Adjusted - Three Months Ended January 30, 2016


GAAP


Acquisition


Purchase


Profit


Goodwill & Intangible 


Other (5)


Non-GAAP


Results


& Integration (1)


Acctg Allocation (2) 


Improvement(3)


Asset Impairments (4)




Adjusted Results

Net sales

$     825,662


$                         -


$                        -


$                      -


$                            -


$                   -


$          825,662















Total retail gross margin

294,672


542


887


11,009


-


-


307,110

Corporate apparel clothing product

16,527


-


-


-


-


-


16,527

Total gross margin

311,199


542


887


11,009


-


-


323,637















Advertising expense

61,357


-


-




-


-


61,357

Selling, general and administrative expenses

265,110


(2,239)


(2,054)


(1,775)


-


(662)


258,380

Goodwill and intangible asset impairment charges

1,153,254






(5,533)


(1,147,721)


-


-

Asset impairment charges

25,785


-


-


(23,146)


-


(2,639)


-

Operating (loss) income

(1,194,307)


2,781


2,941


41,463


1,147,721


3,301


3,900















Net interest

(26,455)


-


-


-


-


-


(26,455)

Loss on extinguishment of debt

-


-


-


-


-


-


-

(Benefit) provision for income taxes

(163,049)


970


1,026


14,460


137,576


1,151


(7,866)















Net (loss) earnings including non-controlling interest

(1,057,713)


1,811


1,915


27,003


1,010,145


2,150


(14,689)















Net earnings attributable to non-controlling interest

-


-


-


-


-


-


-















Net (loss) earnings attributable to common shareholders

$ (1,057,713)


$                 1,811


$                1,915


$            27,003


$              1,010,145


$           2,150


$           (14,689)















Net (loss) earnings per diluted common share allocated to common shareholders

$        (21.86)


$                   0.04


$                  0.04


$                0.56


$                     20.88


$             0.04


$               (0.30)















(1) Acquisition & integration primarily relates to Jos. A. Bank.

(2) Includes depreciation step up amounts in cost of sales and amortization of intangibles and depreciation step up amounts in SG&A.

(3) Includes costs associated with our store rationalization and profit improvement programs.

(4) Goodwill & intangible asset impairment consists of non-cash goodwill, tradename, customer relationship and favorable lease impairments for Jos. A. Bank.

(5) Other includes store impairment charges, severance and holding company costs.

 


GAAP to Non-GAAP Adjusted - Three Months Ended January 31, 2015


GAAP


Acquisition


Purchase


Other (3)


Non-GAAP


Results


& Integration (1)


Acctg Allocation (2) 




Adjusted 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 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 allocated to common shareholders

$           (0.75)


$                 (0.15)


$                   0.30


$             0.56


$                   (0.03)











(1) Acquisition & integration primarily relates to Jos. A. Bank and Joseph Abboud.

(2) Includes inventory and depreciation step up amounts in cost of sales and amortization of intangibles and depreciation step up amounts in SG&A.

(3) Other relates to a Joseph Abboud licensee arbitration settlement, K&G strategic alternative review, costs related to store closures and cost reduction initiatives offset by a settlement with Visa/Mastercard.

 

GAAP to Non-GAAP Adjusted - Twelve Months Ended January 30, 2016


GAAP


Acquisition


Purchase


Profit


Goodwill & Intangible 


Other (5)


Non-GAAP


Results


& Integration (1)


Acctg Allocation (2) 


Improvement(3)


Asset Impairments (4)




Adjusted Results

Net sales

$     3,496,271


$                    -


$                     -


$                     -


$                               -


$                 -


$          3,496,271















Total retail gross margin

1,414,087


867


2,580


11,009


-


-


1,428,543

Corporate apparel clothing product

70,336


-


-


-


-


-


70,336

Total gross margin

1,484,423


867


2,580


11,009


-


-


1,498,879















Advertising expense

204,985


-


-


-


-


-


204,985

Selling, general and administrative expenses

1,085,900


(17,836)


(8,121)


(1,775)


-


(3,068)


1,055,100

Goodwill and intangible asset impairment charges

1,243,354






(5,533)


(1,237,821)


-


-

Asset impairment charges

27,480


-


-


(23,146)


-


(4,074)


260

Operating (loss) income

(1,077,296)


18,703


10,701


41,463


1,237,821


7,142


238,533















Net interest

(105,790)


-


-


-


-


-


(105,790)

Loss on extinguishment of debt

(12,675)


12,675


-


-


-


-


-

(Benefit) provision for income taxes

(169,042)


10,662


3,636


14,089


183,334


2,427


45,106















Net (loss) earnings including non-controlling interest

(1,026,719)


20,715


7,065


27,374


1,054,487


4,715


87,637















Net earnings attributable to non-controlling interest

-


-


-


-


-


-


-















Net (loss) earnings attributable to common shareholders

$    (1,026,719)


$           20,715


$             7,065


$            27,374


$                1,054,487


$         4,715


$               87,637















Net (loss) earnings per diluted common share allocated to common shareholders

$           (21.26)


$               0.43


$               0.15


$                0.57


$                       21.84


$           0.10


$                   1.80


(1) Acquisition & integration primarily relates to Jos. A. Bank.

(2) Includes inventory and depreciation step up amounts in cost of sales and amortization of intangibles and depreciation step up amounts in SG&A.

(3) Includes costs associated with our store rationalization and profit improvement programs.

(4) Goodwill & intangible asset impairment consists of non-cash goodwill, tradename, customer relationship and favorable lease impairments for Jos. A. Bank.

(5) Other primarily relates to separation costs with former executives, store impairment charges, severance and holding company costs offset by a gain on the sale of property.

 


GAAP to Non-GAAP Adjusted - Twelve Months Ended January 31, 2015


GAAP


Acquisition


Purchase


Other (3)


Non-GAAP


Results


& Integration (1)


Acctg Allocation (2) 




Adjusted 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

1,116,836


(88,165)


(6,107)


(46,836)


975,727

Asset impairment charges

302


-


-


-


302

Operating income

73,512


98,717


38,854


46,836


257,919











Net interest

(65,676)


-


-


-


(65,676)

Loss on extinguishment of debt

(2,158)


2,158


-


-


-

(Benefit) provision for income taxes

5,471


31,536


13,533


16,313


66,853











Net (loss) earnings including non-controlling interest

207


69,339


25,321


30,523


125,390











Net earnings attributable to non-controlling interest

(292)


-


-


-


(292)











Net (loss) earnings attributable to common shareholders

$                (85)


$           69,339


$             25,321


$      30,523


$              125,098











Net (loss) earnings per diluted common share allocated to common shareholders

$             (0.01)


$               1.44


$                 0.53


$          0.63


$                    2.58


(1) Acquisition & integration primarily relates to Jos. A. Bank.

(2) Includes inventory and depreciation step up amounts in cost of sales and amortization of intangibles and depreciation step up amounts in SG&A.

(3) Other relates to a Joseph Abboud licensee arbitration settlement, K&G strategic alternative review, costs related to store closures and cost reduction initiatives offset by a settlement with Visa/Mastercard.

 

 GAAP to Non-GAAP Adjusted - Three Months Ended January 31, 2015 


 GAAP 


Purchase


 Acquisition, 


 Non-GAAP 


 Results 


Accounting


 Integration & 


 Adjusted 

 Net sales: 



Allocation (2)


 Other (3) 


 Results 

      Retail clothing product 

$       767,264


$                  -


$                  -


$      767,264

      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

      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.   

 

GAAP to Historical Baselines of Operating Results



 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.

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/tailored-brands-inc-reports-fiscal-2015-fourth-quarter-and-full-year-results-300233744.html

SOURCE Tailored Brands, Inc.