EX-99 3 q2fy2004pr.txt EXHIBIT 99.1- PRESS RELEASE DATED AUGUST 21, 2003 For Information, Contact: David A. Levin President and Chief Executive Officer Casual Male Retail Group, Inc. (781) 828-9300 Dennis R. Hernreich Executive Vice President, COO/CFO Casual Male Retail Group, Inc. (781) 828-9300 Jeff Unger Vice President of Investor Relations Casual Male Retail Group, Inc. (561) 514-0115 CASUAL MALE RETAIL GROUP INC. ANNOUNCES SECOND QUARTER FISCAL 2004 RESULTS CANTON, MA (August 21, 2003) -- Casual Male Retail Group, Inc. (NASDAQ/NMS: "CMRG"), retail brand operator of Casual Male Big & Tall, Levi's(r)/Dockers(r) Outlet by Designs, EcKo Unltd.(r) outlet stores and the George Foreman Signature Collection and Comfort Zone, today announced its operating results for the second quarter and six months ended August 2, 2003. The results include the results of the Company's acquisition of its Casual Male business since May 14, 2002. On a consolidated basis, for the second quarter of fiscal 2004, the Company reported net income of approximately $0.7 million, or $0.02 per diluted share, as compared to a net loss of $12.9 million, or $0.80 per diluted share, for the second quarter of fiscal 2003. For the six months ended August 2, 2003, the Company reported a net loss of $2.0 million, or $0.06 per diluted share, as compared to a net loss of $14.7 million, or $0.95 per diluted share for the comparable period last year. The prior year results for the second quarter and six months ended August 3, 2002 include restructuring charges totaling $11.1 million related to its Levi's(r)/Dockers(r) business. The Company's Casual Male business reported operating income for the second quarter of fiscal 2004 of approximately $4.2 million. On a pro forma basis, as if the Company owned Casual Male for the full second quarter of the prior year, the Casual Male business had operating income of approximately $3.5 million. For the six months ended August 2, 2003, the Casual Male business reported operating income of approximately $6.7 million as compared to $3.1 million on a pro forma basis for the corresponding period of the prior year. This improvement in operating income was achieved primarily through lower operating expenses notwithstanding a decrease in total sales from the Casual Male business on a pro forma basis of 3.0% and 5.0% for the three and six months ended August 2, 2003. Similarly on a pro forma basis, the Casual Male business reported comparable store sales decreases of 2.3% for the second quarter of fiscal 2004 and 3.6% for the six months ended August 2, 2003. The Company's Other Branded Apparel business, which includes its Levi's(r)/Dockers(r) outlet stores and its growing EcKo Unltd.(r) outlet stores, reported an operating loss for the second quarter of fiscal 2004 of $0.5 million as compared to an operating loss of $9.6 million for the second quarter of fiscal 2003. For the six months ended August 2, 2003, the Company's Other Branded Apparel business reported an operating loss of $2.8 million as compared to an operating loss of $11.7 million for the six months ended August 3, 2002. As mentioned, the prior year results for the three and six months ended August 3, 2002 include $11.1 million in restructuring charges of which $7.3 million relate to the continuing operations of the Company's Other Branded Apparel. The remaining $3.8 million of the charge was for stores which subsequently have closed and therefore is reflected within discontinued operations on the Company's results of operations for the three and six months ended August 3, 2002. The table below reflects actual results from continuing operations for the Company for the second quarter and six months ended August 2, 2003 and is compared to pro forma results for the second quarter and six months ended August 3, 2002 assuming that the Company's Casual Male acquisition had occurred on February 3, 2002. The Company has included in the table the historical operating results of the Casual Male business prior to the Company's acquisition. These results have been prepared on a consistent basis with the pro forma information presented in the Company's recent Form 10-K and Form 10-Q filings. The prior year pro forma results do not include any adjustments for the expected annual $20 to $25 million of cost savings and synergies for periods after the prior year. The operating results of the Company's Other Branded Apparel business on a continuing basis, exclusive of discontinued operations, which includes its EcKo Unltd.(r) outlet stores, primarily reflects the operating loss associated with the Levi's(r)/Dockers(r) outlet stores which the Company is in the process of exiting: Operating Results by Business Segment, exclusive of discontinued operations For the three months ended: August 2, 2003 August 3, 2002 (pro-forma) (in millions) Other Other Branded Branded Casual Male Apparel Combined Casual Male Apparel Combined Business business Company business business Company ------------------------------ ------------------------------ Sales $ 78.9 $ 33.1 $ 112.0 $ 81.3 $ 36.6 $ 117.9 Gross margin, net of occupancy costs 32.2 7.9 40.1 34.2 7.5 41.7 Gross margin rate 40.8% 23.9% 35.8% 42.1% 20.5% 35.4% Selling, general and administrative 26.4 7.8 34.2 28.8 8.6 37.4 Provision for impairment of assets, store closings and severance - - - - 7.3 7.3 Depreciation and amortization 1.6 0.6 2.2 1.9 1.2 3.1 -------- -------- -------- ------- -------- -------- Operating income (loss) $ 4.2 $ (0.5) $ 3.7 $ 3.5 $ (9.6) $ (6.1) ======== ======== ======== ======= ======== ======== For the six months ended: August 2, 2003 August 3, 2002 (pro-forma) (in millions) Other Other Branded Branded Casual Male Apparel Combined Casual Male Apparel Combined Business business Company business business Company ------------------------------ ------------------------------ Sales $ 115.7 $ 59.8 $ 211.5 $ 159.7 $ 68.6 $ 228.3 Gross margin, net of occupancy costs 62.4 13.1 75.5 67.4 14.8 82.2 Gross margin rate 41.1% 21.9% 35.7 42.2% 21.6% 36.0% Selling, general and administrative 52.6 14.7 67.3 60.1 16.8 76.9 Provision for impairment of assets, store closings and severance - - - - 7.3 7.3 Depreciation and amortization 3.1 1.2 4.3 4.2 2.4 6.6 -------- -------- -------- ------- -------- ------- Operating income (loss) $ 6.7 $ (2.8) $ 3.9 $ 3.1 $ (11.7) $ (8.6) ======== ======== ======== ======= ======== ======= Dennis R. Hernreich, Executive Vice-President and Chief Financial Officer commented, "Although Casual Male's sales performance in the first half of this year was below original expectations, our strong gross margin rate and significant cost reductions continue to positively improve the operating profitability in the Casual Male business. With improvement in top-line performance, the Casual Male operating margins should improve further by leveraging upon its reduced expense base. In addition, the operating performance of our Other Branded Businesses has improved significantly from year ago levels resulting in an $8.9 million improvement in operating results on a continuing basis with a corresponding drop in sales on a year to date basis of 12.8% as compared to the prior year." David A. Levin, President and Chief Executive Officer of Casual Male Retail Group, Inc., added, "We are enthusiastic about the prospects for improved sales performance during the second half of the year as many of our new merchandising initiatives will be evident in the stores, particularly during the fourth quarter. In the second half of this year, Casual Male's major merchandising initiatives will be introduced to the stores, such as, the new key item merchandising strategy, extended sizes focused toward the tall consumer, and the expansion of our young men's assortments. We also are in the process of gearing up for next spring's launch of Comfort Zone by George Foreman and the George Foreman Signature Collection lines of big and tall apparel, which will be exclusive to our Casual Male stores, catalog, and internet. Lastly, our Levis/Dockers outlet stores continue to experience sales declines although we are pleased with its operating performance, and the EcKo outlet stores continue to perform extremely well and expect the chain to reach 22 stores by the fourth quarter." CMRG, the largest retailer of big and tall men's apparel, operates 476 Casual Male Big & Tall stores, Casual Male e-commerce site, Casual Male catalog business, 80 Levi's(r) Outlet by Designs and Dockers(r) Outlet by Designs stores, 18 Ecko Unltd(r) outlet stores and the George Foreman Signature Collection and Comfort Zone line of apparel. The Company is headquartered in Canton, Massachusetts and its common stock is listed on the Nasdaq National Market under the symbol "CMRG". The discussion of forward-looking information requires management of the Company to make certain estimates and assumptions regarding the Company's strategic direction and the effect of such plans on the Company's financial results. The Company's actual results and the implementation of its plans and operations may differ materially from forward-looking statements made by the Company. The Company encourages readers of forward-looking information concerning the Company to refer to its prior filings with the Securities and Exchange Commission that set forth certain risks and uncertainties that may have an impact on future results and direction of the Company. The Company does not report on its progress during a quarter until after the quarter has been completed and its results have been appropriately disclosed. (Tables to follow) CASUAL MALE RETAIL GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) For the three months ended For the six months ended 8/2/2003 8/3/2002 8/2/2003 8/3/2002 Sales $ 112,034 $ 110,016 $ 211,500 $ 141,987 Cost of goods sold including occupancy 71,915 71,922 136,013 96,703 --------- --------- --------- -------- Gross profit 40,119 38,094 75,487 45,284 Expenses: Selling, general and administrative 34,207 32,723 67,330 40,764 Provision for impairment of assets, store closings and severance - 7,250 - 7,250 Depreciation and amortization 2,206 2,801 4,268 4,062 ------ ------ ------- ------ Total expenses 36,413 42,774 71,598 52,076 ------ ------ ------- ------- Operating income (loss) 3,706 (4,680) 3,889 (6,792) Interest expense, net 2,976 2,706 5,861 3,060 ------ ------- -------- ------- Income (loss) from continuing operations before minority interest and income taxes 730 (7,386) (1,972) (9,852) Minority interest (20) - (92) - Provision for income taxes - 1,053 - - ------- --------- -------- --------- Net income (loss) from continuing operations 750 (8,439) (1,880) (9,852) ------- --------- -------- --------- Loss from discontinued operations (92) (4,476) (217) (4,858) -------- --------- -------- --------- Net income (loss) $ 658 $(12,915) $(2,097) $(14,710) ========= ========= ======== ========= Net income (loss) per share - basic and diluted Income (loss) from continuing operations -basic and diluted $0.02 ($0.53) ($0.05) ($0.64) Loss from discontinued operations -basic and diluted ($0.00) ($0.28) ($0.01) ($0.32) ------- -------- -------- ------- Net income (loss) -basic and duluted $0.02 ($0.80) ($0.06) ($0.95) Weighted-average number of common shares outstanding: Basic 35,839 16,050 35,796 15,421 Diluted 36,891 16,050 35,796 15,421 CASUAL MALE RETAIL GROUP, INC. CONSOLIDATED BALANCE SHEETS August 2, 2003 and February 1, 2003 (In thousands) August 2, February 1, 2003 2003 ASSETS (unaudited) ----------- ---------- Cash and investments $ 4,322 $ 4,692 Inventories 100,910 103,222 Other current assets 14,122 9,689 Property and equipment, net 66,267 64,062 Goodwill and other intangibles 81,356 81,427 Other assets 4,045 3,853 --------- --------- Total assets $ 271,022 $ 266,945 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable, accrued expenses and other liabilities $ 66,480 $ 68,285 Notes payable 50,314 55,579 Long-term debt, net of current portion 60,054 50,996 Minority interest 3,127 1,018 Stockholders' equity 91,047 91,067 Total liabilities ---------- --------- and stockholders' equity $ 271,022 $ 266,945 ========== =========