þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 36-3189198 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer | |
Identification No.) | ||
500 Hanover Pike, Hampstead, MD | 21074-2095 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if smaller reporting company) |
Class | Outstanding as of May 25, 2011 | |
Common Stock, $.01 par value | 27,626,304 |
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EX-31.1 | ||||||||
EX-31.2 | ||||||||
EX-32.1 | ||||||||
EX-32.2 | ||||||||
EX-101 INSTANCE DOCUMENT | ||||||||
EX-101 SCHEMA DOCUMENT | ||||||||
EX-101 CALCULATION LINKBASE DOCUMENT | ||||||||
EX-101 LABELS LINKBASE DOCUMENT | ||||||||
EX-101 PRESENTATION LINKBASE DOCUMENT |
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Item 1. | Unaudited Condensed Consolidated Financial Statements |
Three Months Ended | ||||||||
May 1, 2010 | April 30, 2011 | |||||||
(In thousands, except per share information) | ||||||||
Net sales |
$ | 178,125 | $ | 193,270 | ||||
Cost of goods sold |
64,809 | 67,957 | ||||||
Gross profit |
113,316 | 125,313 | ||||||
Operating expenses: |
||||||||
Sales and marketing, including occupancy costs |
70,519 | 78,852 | ||||||
General and administrative |
16,736 | 17,424 | ||||||
Total operating expenses |
87,255 | 96,276 | ||||||
Operating income |
26,061 | 29,037 | ||||||
Other income (expense): |
||||||||
Interest income |
115 | 132 | ||||||
Interest expense |
(90 | ) | (3 | ) | ||||
Total other income (expense) |
25 | 129 | ||||||
Income before provision for income taxes |
26,086 | 29,166 | ||||||
Provision for income taxes |
10,278 | 11,356 | ||||||
Net income |
$ | 15,808 | $ | 17,810 | ||||
Per share information: |
||||||||
Earnings per share: |
||||||||
Basic |
$ | 0.57 | $ | 0.64 | ||||
Diluted |
$ | 0.57 | $ | 0.64 | ||||
Weighted average shares outstanding: |
||||||||
Basic |
27,527 | 27,622 | ||||||
Diluted |
27,818 | 27,928 |
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January 29, 2011 | April 30, 2011 | |||||||
(In thousands) | ||||||||
(Audited) | (Unaudited) | |||||||
ASSETS |
||||||||
CURRENT ASSETS: |
||||||||
Cash and cash equivalents |
$ | 80,979 | $ | 83,465 | ||||
Short-term investments |
189,789 | 168,954 | ||||||
Accounts receivable, net |
9,525 | 14,449 | ||||||
Inventories: |
||||||||
Finished goods |
222,251 | 245,771 | ||||||
Raw materials |
11,059 | 16,107 | ||||||
Total inventories |
233,310 | 261,878 | ||||||
Prepaid expenses and other current assets |
19,494 | 23,667 | ||||||
Total current assets |
533,097 | 552,413 | ||||||
NONCURRENT ASSETS: |
||||||||
Property, plant and equipment, net |
128,603 | 132,224 | ||||||
Other noncurrent assets |
337 | 310 | ||||||
Total assets |
$ | 662,037 | $ | 684,947 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
CURRENT LIABILITIES: |
||||||||
Accounts payable |
$ | 31,505 | $ | 46,755 | ||||
Accrued expenses |
88,165 | 76,370 | ||||||
Deferred tax liability current |
5,276 | 5,301 | ||||||
Total current liabilities |
124,946 | 128,426 | ||||||
NONCURRENT LIABILITIES: |
||||||||
Deferred rent |
49,279 | 49,754 | ||||||
Deferred tax liability noncurrent |
4,147 | 4,540 | ||||||
Other noncurrent liabilities |
989 | 1,055 | ||||||
Total liabilities |
179,361 | 183,775 | ||||||
COMMITMENTS AND CONTINGENCIES |
||||||||
STOCKHOLDERS EQUITY: |
||||||||
Common stock |
275 | 275 | ||||||
Additional paid-in capital |
86,792 | 87,478 | ||||||
Retained earnings |
395,531 | 413,341 | ||||||
Accumulated other comprehensive income |
78 | 78 | ||||||
Total stockholders equity |
482,676 | 501,172 | ||||||
Total liabilities and stockholders equity |
$ | 662,037 | $ | 684,947 | ||||
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Three Months Ended | ||||||||
May 1, 2010 | April 30, 2011 | |||||||
(In thousands) | ||||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 15,808 | $ | 17,810 | ||||
Adjustments to reconcile net income to net cash provided by
(used in) operating activities: |
||||||||
Depreciation and amortization |
5,856 | 6,246 | ||||||
Loss on disposals of property, plant and equipment |
23 | 61 | ||||||
Non-cash equity compensation |
| 558 | ||||||
Increase (decrease) in deferred taxes |
(813 | ) | 418 | |||||
Net (increase) in operating working capital and other components |
(22,147 | ) | (37,978 | ) | ||||
Net cash (used in) operating activities |
(1,273 | ) | (12,885 | ) | ||||
Cash flows from investing activities: |
||||||||
Capital expenditures |
(3,978 | ) | (5,592 | ) | ||||
Proceeds from maturities of short-term invenstments |
64,922 | 179,814 | ||||||
Payments to acquire short-term investments |
(34,875 | ) | (158,979 | ) | ||||
Net cash provided by investing activities |
26,069 | 15,243 | ||||||
Cash flows from financing activities: |
||||||||
Income tax benefit from exercise of stock options |
| 61 | ||||||
Net proceeds from exercise of stock options |
| 67 | ||||||
Net cash provided by financing activities |
| 128 | ||||||
Net increase in cash and cash equivalents |
24,796 | 2,486 | ||||||
Cash and cash equivalents beginning of period |
21,853 | 80,979 | ||||||
Cash and cash equivalents end of period |
$ | 46,649 | $ | 83,465 | ||||
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1. | BASIS OF PRESENTATION |
Fiscal year 2006 |
February 3, 2007 | |||
Fiscal year 2007 |
February 2, 2008 | |||
Fiscal year 2008 |
January 31, 2009 | |||
Fiscal year 2009 |
January 30, 2010 | |||
Fiscal year 2010 |
January 29, 2011 | |||
Fiscal year 2011 |
January 28, 2012 |
2. | SIGNIFICANT ACCOUNTING POLICIES |
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3. | SUPPLEMENTAL CASH FLOW DISCLOSURE |
Three Months Ended | ||||||||
May 1, 2010 | April 30, 2011 | |||||||
(In Thousands) | ||||||||
(Increase) in accounts receivable |
$ | (9,621 | ) | $ | (4,924 | ) | ||
(Increase) in inventories |
(3,881 | ) | (28,568 | ) | ||||
(Increase) in prepaids and other assets |
(372 | ) | (4,146 | ) | ||||
Increase in accounts payable |
12,476 | 15,250 | ||||||
(Decrease) in accrued expenses |
(19,612 | ) | (16,131 | ) | ||||
Increase (decrease) in deferred rent and other noncurrent liabilities |
(1,137 | ) | 541 | |||||
Net (increase) in operating working capital and other components |
$ | (22,147 | ) | $ | (37,978 | ) | ||
Three Months Ended | ||||||||
May 1, 2010 | April 30, 2011 | |||||||
(In Thousands) | ||||||||
Interest paid |
$ | 86 | $ | 2 | ||||
Income taxes paid |
$ | 26,585 | $ | 23,460 |
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4. | EARNINGS PER SHARE |
Three Months Ended | ||||||||
May 1, 2010 | April 30, 2011 | |||||||
(In thousands) | ||||||||
Weighted average shares
outstanding for basic EPS |
27,527 | 27,622 | ||||||
Dilutive effect of common stock
equivalents |
291 | 306 | ||||||
Weighted average shares
outstanding for diluted EPS |
27,818 | 27,928 | ||||||
5. | INCOME TAXES |
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The effective income tax rate for the first quarter of fiscal year 2011 was 38.9% as compared with 39.4% for the first quarter of fiscal year 2010. The rate decrease for the first quarter of fiscal year 2011 was primarily driven by lower state income taxes. We anticipate that this lower state income tax rate will continue for the remainder of fiscal year 2011, assuming no significant changes to U.S. federal or state tax rules. | ||
Significant changes to U.S. federal or state income tax rules could occur as part of future legislation. Such changes could influence our future income tax expense and/or the timing of income tax deductions. The impact of such changes on our business operations and financial statements remains uncertain. However, as the possibility of any enactment progresses, we will continue to monitor current developments and assess the potential implications of these tax law changes on our business and consolidated financial statements. | ||
We file a federal income tax return and state and local income tax returns in various jurisdictions. The Internal Revenue Service (IRS) has audited tax returns through fiscal year 2008, including its examination of the tax returns for fiscal years 2007 and 2008 which was finalized in October 2010. No material adjustments were required to these tax returns as a result of the examination by the IRS. For the years before fiscal year 2007, the majority of our state and local income tax returns are no longer subject to examinations by taxing authorities. |
6. | SEGMENT REPORTING |
We have two reportable segments: Stores and Direct Marketing. The Stores segment includes all Company-owned stores excluding Outlet and Factory stores (Full-line Stores). The Direct Marketing segment includes catalog and Internet. While each segment offers a similar mix of mens clothing to the retail customer, the Stores segment also provides complete alterations, while the Direct Marketing segment provides certain limited alterations. | ||
The accounting policies of the segments are the same as those described in the summary of significant policies. We evaluate performance of the segments based on four wall contribution, which excludes any allocation of overhead from the corporate office and the distribution centers (except order fulfillment costs, which are allocated to Direct Marketing), interest and income taxes. | ||
Our segments are strategic business units that offer similar products to the retail customer by two distinctively different methods. In the Stores segment, a typical customer travels to the store and purchases our merchandise and/or alterations and takes their purchases with them. The Direct Marketing customer receives a catalog in his or her home and/or office and/or visits our Internet web sites and places an order by phone, mail, fax or online. The merchandise is then shipped to the customer. |
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Segment data is presented in the following tables: |
Corporate and | ||||||||||||||||
Stores | Direct Marketing | Other | Total | |||||||||||||
(In thousands) | ||||||||||||||||
Net sales (a) |
$ | 169,855 | $ | 18,724 | $ | 4,691 | $ | 193,270 | ||||||||
Depreciation and amortization |
5,212 | 177 | 857 | 6,246 | ||||||||||||
Operating income (loss) (b) |
38,769 | 7,541 | (17,273 | ) | 29,037 | |||||||||||
Capital expenditures (c) |
4,931 | 8 | 653 | 5,592 |
Corporate and | ||||||||||||||||
Stores | Direct Marketing | Other | Total | |||||||||||||
(In thousands) | ||||||||||||||||
Net sales (a) |
$ | 159,812 | $ | 15,336 | $ | 2,977 | $ | 178,125 | ||||||||
Depreciation and amortization |
5,069 | 115 | 672 | 5,856 | ||||||||||||
Operating income (loss) (b) |
37,855 | 6,321 | (18,115 | ) | 26,061 | |||||||||||
Capital expenditures (c) |
2,404 | 47 | 1,527 | 3,978 | ||||||||||||
(a) | Stores net sales represent all Full-line store sales. Direct Marketing net sales represent catalog call center and Internet sales. | |
Net sales from segments below the GAAP quantitative thresholds are attributable primarily to our two other operating segments. Those segments are Outlet and Factory stores and Franchise stores. These segments have never met any of the quantitative thresholds for determining reportable segments and are included in Corporate and Other. | ||
(b) | Operating income (loss) for the Stores and Direct Marketing segments represents profit before allocations of overhead from the corporate office and the distribution centers, interest and income taxes (four wall contribution). Total Company shipping costs to customers of approximately $2.9 million and $2.3 million for the first quarter of fiscal years 2011 and 2010, respectively, were recorded to Sales and marketing, including occupancy costs in the Condensed Consolidated Statements of Income. Operating income (loss) for Corporate and Other consists primarily of costs included in general and administrative costs and operating income or loss related to the Outlet and Factory stores and the Franchise stores operating segments. Total operating income represents profit before interest and income taxes. | |
(c) | Capital expenditures include payments for property, plant and equipment made for the reportable segment. |
7. | LEGAL MATTERS |
We are a party to routine litigation matters that are incidental to our business. From time to time, other legal matters in which we may be named as a defendant are expected to arise in the normal course of our business activities. The resolution of our litigation matters cannot be accurately predicted and there is no estimate of costs or potential losses, if any. Accordingly, we cannot determine whether our insurance coverage, if any, would be sufficient to cover such costs or potential losses, if any, and we have not recorded any provision for cost or loss associated with these actions. It is possible that our consolidated financial statements could be materially impacted in a particular fiscal quarter or year by an unfavorable outcome or settlement of any of these actions. |
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| 8.5% increase in net sales, driven by a 22.1% increase in the Direct Marketing segment sales and a 6.3% increase in the Stores segment sales; | ||
| 0.1% increase in comparable store sales as we are testing our customers response to higher retail prices which helped to increase gross profit margins during the quarter; comparable store sales increased by 10.4% during the first quarter of fiscal year 2010; | ||
| 120 basis point increase in gross profit margins mainly as a result of higher initial mark-ups driven primarily by retail price increases in certain product categories and improved sourcing; | ||
| 120 basis point increase in sales and marketing costs as a percentage of sales driven primarily by higher other variable selling (including increased shipping costs to customers), occupancy and Stores and Direct Marketing payroll and benefits costs as a percentage of sales; and | ||
| 40 basis point decrease in general and administrative costs as a percentage of sales due primarily to lower corporate compensation costs (which include total company performance-based incentive compensation other than commissions) and group medical costs as a percentage of sales. |
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Percentage of Net Sales | ||||||||
Three Months Ended | ||||||||
May 1, 2010 | April 30, 2011 | |||||||
Net sales |
100.0 | % | 100.0 | % | ||||
Cost of goods sold |
36.4 | 35.2 | ||||||
Gross profit |
63.6 | 64.8 | ||||||
Sales and marketing expenses |
39.6 | 40.8 | ||||||
General and administrative expenses |
9.4 | 9.0 | ||||||
Total operating expenses |
49.0 | 49.8 | ||||||
Operating income |
14.6 | 15.0 | ||||||
Total other income |
| 0.1 | ||||||
Income before provision for income taxes |
14.6 | 15.1 | ||||||
Provision for income taxes |
5.8 | 5.9 | ||||||
Net income |
8.9 | % | 9.2 | % | ||||
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Three Months Ended | ||||||||||||||||
May 1, 2010 | April 30, 2011 | |||||||||||||||
Square | Square | |||||||||||||||
Stores | Feet* | Stores | Feet* | |||||||||||||
Stores open at the
beginning of the period |
473 | 2,131 | 506 | 2,282 | ||||||||||||
Stores opened |
3 | 11 | 9 | 43 | ||||||||||||
Stores closed |
| | | | ||||||||||||
Stores open at the
end of the period |
476 | 2,142 | 515 | 2,325 | ||||||||||||
* | Square feet are presented in thousands and exclude the square footage of our franchise stores. |
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Three Months Ended | ||||||||
May 1, 2010 | April 30, 2011 | |||||||
(In Thousands) | ||||||||
Cash provided by (used in): |
||||||||
Operating activities |
$ | (1,273 | ) | $ | (12,885 | ) | ||
Investing activities |
26,069 | 15,243 | ||||||
Financing activities |
| 128 | ||||||
Net increase in cash and cash equivalents |
$ | 24,796 | $ | 2,486 | ||||
| an increase in inventory of $28.6 million primarily as a result of the replenishment of units sold in fiscal 2010, new store openings, continued sales growth and higher inventory sourcing costs; | ||
| an increase in accounts receivable of $4.9 million due primarily to higher credit card receivables from transactions through American Express, MasterCard and Visa as a result of increased sales near the end of the first quarter of fiscal year 2011 as compared with the end of fiscal year 2010; | ||
| an increase in prepaid and other assets of $4.1 million due primarily to an increase in prepaid income taxes and an increase in landlord contributions as a result of the new store openings during 2011; |
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| a reduction in accrued expenses totaling $16.1 million (excluding accrued property, plant and equipment) related primarily to the payment of income taxes and incentive compensation that had been accrued at the end of fiscal year 2010; and | ||
| an increase in accounts payable of $15.3 million due primarily to the timing of payments to vendors. |
Amounts | ||||||||||||||||
Amounts | Collected | Amounts | ||||||||||||||
Collected in | YTD in | Outstanding | ||||||||||||||
Negotiated | Fiscal Year | Fiscal Year | April 30, | |||||||||||||
Amounts | 2010 | 2011 | 2011 | |||||||||||||
(In Thousands ) | ||||||||||||||||
Full Fiscal Year 2010 Store Openings, Renovations and
Relocations (36 Stores) |
$ | 5,382 | $ | 2,599 | $ | 723 | $ | 2,060 | ||||||||
First Quarter of Fiscal Year 2011 Store Openings, Renovations and
Relocations (11 Stores) |
2,062 | | 624 | 1,438 | ||||||||||||
$ | 7,444 | $ | 2,599 | $ | 1,347 | $ | 3,498 | |||||||||
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Payments Due by Fiscal Year | ||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||
2011 | 2012-2014 | 2015-2016 | Beyond 2016 | Total(f) | ||||||||||||||||
Operating leases (a) (b) |
$ | 63,480 | $ | 168,103 | $ | 71,738 | $ | 63,731 | $ | 367,052 | ||||||||||
Inventory Purchase Commitments (c) |
314,953 | | | | 314,953 | |||||||||||||||
Related Party Agreement (d) |
825 | 1,650 | | | 2,475 | |||||||||||||||
License agreement (e) |
165 | 495 | 165 | | 825 |
(a) | Includes various lease agreements signed prior to April 30, 2011 for stores to be opened and equipment placed in service subsequent to April 30, 2011. | |
(b) | Excludes contingent rent and other lease costs. | |
(c) | Represents the value of expected future inventory purchases for receipts out to the end of fiscal year 2012 for which purchase orders have been issued or other commitments have been made to vendors as of April 30, 2011. | |
(d) | Relates to consulting agreement with our current Chairman of the Board to consult on matters of strategic planning and initiatives. | |
(e) | Related to an agreement with David Leadbetter, a golf professional, which allows us to produce golf and other apparel under his name. | |
(f) | Obligations related to unrecognized tax benefits and related penalties and interest of $0.9 million have been excluded from the above table as the amount to be settled in cash and the specific payment dates are not known. |
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Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
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Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Our advertising, marketing and promotional activities are highly regulated. |
Item 6. | Exhibits |
31.1 | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101. | The following financial information from Jos. A. Bank Clothiers, Inc.s Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Income; (ii) Condensed Consolidated Balance Sheets; (iii) Condensed Consolidated Statements of Cash Flows; and (iv) the Notes to Condensed Consolidated Financial Statements.** | |
** | Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. |
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Jos. A. Bank Clothiers, Inc. (Registrant) |
||||
Dated: June 1, 2011 | /s/ DAVID E. ULLMAN | |||
David E. Ullman | ||||
Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer and Duly Authorized Officer) |
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31.1 | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101. | The following financial information from Jos. A. Bank Clothiers, Inc.s Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Income; (ii) Condensed Consolidated Balance Sheets; (iii) Condensed Consolidated Statements of Cash Flows; and (iv) the Notes to Condensed Consolidated Financial Statements. ** | |
** | Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. |
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1. | I have reviewed this quarterly report on Form 10-Q of Jos. A. Bank Clothiers, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: June 1, 2011 | /s/ R. Neal Black | |||
R. Neal Black | ||||
President, Chief Executive Officer and Director |
1. | I have reviewed this quarterly report on Form 10-Q of Jos. A. Bank Clothiers, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: June 1, 2011 | /s/ David E. Ullman | |||
David E. Ullman | ||||
Chief Financial Officer |
June 1, 2011 | /s/ R. Neal Black | |||
R. Neal Black | ||||
President, Chief Executive Officer and Director |
June 1, 2011 | /s/ David E. ULLMAN | |||
David E. Ullman | ||||
Chief Financial Officer | ||||
Document and Entity Information (USD $)
In Millions, except Share data |
3 Months Ended | ||
---|---|---|---|
Apr. 30, 2011
|
May 25, 2011
|
Jul. 31, 2010
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Document and Entity Information [Abstract] | Â | Â | Â |
Entity Registrant Name | BANK JOS A CLOTHIERS INC /DE/ | Â | Â |
Entity Central Index Key | 0000920033 | Â | Â |
Document Type | 10-Q | Â | Â |
Document Period End Date | Apr. 30, 2011 | ||
Amendment Flag | false | Â | Â |
Document Fiscal Year Focus | 2011 | Â | Â |
Document Fiscal Period Focus | Q1 | Â | Â |
Current Fiscal Year End Date | --01-28 | Â | Â |
Entity Well-known Seasoned Issuer | No | Â | Â |
Entity Voluntary Filers | No | Â | Â |
Entity Current Reporting Status | Yes | Â | Â |
Entity Filer Category | Large Accelerated Filer | Â | Â |
Entity Public Float | Â | Â | $ 930.2 |
Entity Common Stock, Shares Outstanding | Â | 27,626,304 | Â |
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Earnings Per Share
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Earnings Per Share [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE |
Basic earnings per share (“EPS”) is calculated by dividing net income by the weighted
average number of common shares outstanding for the period. Diluted EPS is calculated by
dividing net income by the diluted weighted average common shares, which reflects the
potential dilution of common stock equivalents. The weighted average shares used to calculate
basic and diluted EPS are as follows:
We use the treasury method for calculating the dilutive effect of common stock
equivalents. For the quarters ended May 1, 2010 and April 30, 2011, there were no
anti-dilutive common stock equivalents.
On June 17, 2010, our Board of Directors declared a stock split in the form of a 50%
stock dividend which was distributed on August 18, 2010 to stockholders of record as of July
30, 2010. All share and per share amounts of common shares included in this Quarterly Report
on Form 10-Q have been adjusted to reflect this stock dividend.
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Significant Accounting Policies
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Significant Accounting Policies [Abstract] | Â | |||
SIGNIFICANT ACCOUNTING POLICIES |
Cash and Cash Equivalents — Cash and cash equivalents include bank deposit
accounts, money market accounts and other highly liquid investments with original maturities
of 90 days or less. At April 30, 2011, substantially all of the cash and cash equivalents
were invested in U.S. Treasury bills with original maturities of 90 days or less and overnight
federally-sponsored agency notes.
Short-term Investments — Short-term investments consist of investments in
securities with remaining maturities of less than one year, excluding investments with
original maturities of 90 days or less. At April 30, 2011, short-term investments consisted
solely of U.S. Treasury bills with remaining maturities ranging from one to three months.
These investments are classified as held-to-maturity and their market values approximate their
carrying values.
Inventories — We record inventory at the lower of cost or market (“LCM”). Cost
is determined using the first-in, first-out method. We capitalize into inventory certain
warehousing and freight delivery costs associated with shipping our merchandise to the point
of sale. We periodically review quantities of inventories on hand and compare these amounts to
the expected sales of each product. We record a charge to cost of goods sold for the amount
required to reduce the carrying value of inventory to net realizable value.
Landlord Contributions — We typically receive reimbursement from landlords for a
portion of the cost of leasehold improvements for new stores and, occasionally, for
renovations and relocations. These landlord contributions are initially accounted for as an
increase to deferred rent and as an increase to prepaid expenses and other current assets when
the related store is opened. When collected, we record cash and reduce the prepaid expenses
and other current assets account. The collection of landlord contributions is presented in the
Condensed Consolidated Statements of Cash Flows as an operating activity. The deferred rent is
amortized over the lease term in a manner that is consistent with our policy to straight-line
rent expense over the term of the lease. The amortization is recorded as a reduction to sales
and marketing expense which is consistent with the classification of lease expense.
Gift Cards and Certificates — We sell gift cards and gift certificates to
individuals and companies. Our incentive gift certificates are used by various companies as a
reward for achievement for their employees. We also redeem proprietary gift cards and gift
certificates marketed by third-party premium/incentive companies. We record a liability when a
gift card/certificate is purchased. As the gift card/certificate is redeemed, we reduce the
liability and record revenue. Substantially all of our gift cards/certificates do not have
expiration dates and they are all subject to state escheatment laws. Based on historical
experience, gift cards/certificates redemptions after the escheatment due date are remote and
we recognize any income (also referred to as “breakage”) on these unredeemed gift
cards/certificates on a specific identification basis at that time.
Tuxedo Rental Products — Revenues from tuxedo rental products are recognized on
a gross basis upon completion of the services to customers. When a customer orders a tuxedo
rental from us, an order is placed with a national distributor who delivers the product to our
stores, typically within several days of intended use. The national distributor owns the
product.
Equity Compensation —We account for our equity awards in accordance with FASB
ASC 718, “Share-Based Payment” (“ASC 718”), which requires the compensation cost resulting
from all share-based awards to be recognized in the financial statements. The amount of
compensation is measured based on the grant-date fair value of the awards and is recognized
over the vesting period of the awards. The vesting of awards to both the officers and
directors is subject to service conditions being met, currently ranging from one to three years.
Additionally, the vesting of awards to officers is subject to performance conditions being met
in the fiscal year that the awards are granted such as, among other things, the attainment of
certain annual earnings and performance goals. For these officer awards, we estimate the
probability that such goals will be attained based on results-to-date at each interim
quarter-end and record compensation cost for these awards based on the awards projected to
vest. Share-based compensation expense recognized for the first quarter of fiscal year 2011
related to equity awards issued under the Jos. A. Bank Clothiers, Inc. 2010 Equity Incentive
Plan (“Equity Incentive Plan”) was $0.5 million and the tax benefit recognized related to this
compensation was $0.2 million. There was no share based compensation expense in the first
quarter of fiscal year 2010 as the Equity Incentive Plan was not yet effective.
Recently Issued Accounting Standards — In October 2009, the FASB issued ASU
2009-13, “Multiple-Deliverable Revenue Arrangements” (“ASU 2009-13”). ASU 2009-13 addresses
revenue recognition of multiple-element sales arrangements. It establishes a selling price
hierarchy for determining the selling price of each product or service, with vendor-specific
objective evidence (“VSOE”) at the highest level, third-party evidence of VSOE at the
intermediate level, and a best estimate at the lowest level. It replaces “fair value” with
“selling price” in revenue allocation guidance. It also significantly expands the disclosure
requirements for such arrangements. ASU 2009-13 is effective prospectively for sales entered
into or materially modified in fiscal years beginning on or after June 15, 2010, with early
adoption permitted. The adoption of ASU 2009-13 for fiscal year 2011 will not have a material
impact on our consolidated financial statements.
In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement” (“ASU 2011-04”). ASU
2011-04 is intended to create consistency between U.S. GAAP and International Financial
Reporting Standards (“IFRS”) on the definition of fair value and on the guidance on how to
measure fair value and on what to disclose about fair value measurements. ASU 2011-04 will be
effective for financial statements issued for fiscal periods beginning after December 15, 2011,
with early adoption prohibited for public entities. We are currently evaluating the impact ASU
2011-04 will have on our consolidated financial statements.
Recently Proposed Amendments to Accounting Standards — In August 2010, the FASB
issued an exposure draft, “Leases” (the “Exposure Draft”), which would replace the existing
guidance in ASC 840, “Leases.” Under the Exposure Draft, a lessee’s rights and obligations
under all leases, including existing and new arrangements, would be recognized as assets and
liabilities, respectively, on the balance sheet. The comment period for the Exposure Draft
ended on December 15, 2010 and a final standard is expected to be issued in 2011. If
the proposed guidance becomes effective on the terms currently proposed by FASB, it will likely have a significant negative impact on
our consolidated financial statements. However, as the final standard has not yet been issued,
we are unable to determine at this time the impact this proposed change in accounting may have
on our consolidated financial statements.
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Income Taxes
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Income Taxes [Abstract] | Â | ||||||||||||||
INCOME TAXES |
Income taxes are accounted for under the asset and liability method in accordance with
FASB ASC 740, “Income Taxes,” (“ASC 740”), formerly SFAS No. 109, “Accounting for Income
Taxes”. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases and operating loss and tax credit carry
forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in the Consolidated Statements of Income in the period that includes the
enactment date.
We account for uncertainties in income taxes pursuant to ASC 740, formerly FASB Financial
Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” which clarifies the
accounting for uncertainty in income taxes recognized in the financial statements. We
recognize tax liabilities for uncertain income tax positions (“unrecognized tax benefits”)
pursuant to ASC 740 where an evaluation has indicated that it is more likely than not that the
tax positions will not be sustained in an audit. We estimate the unrecognized tax benefits as
the largest amount that is more than 50% likely to be realized upon ultimate settlement. We
re-evaluate these uncertain tax positions on a quarterly basis or when new information becomes
available to management. The re-evaluations are based on many factors, including but not
limited to, changes in facts or circumstances, changes in tax law, settled issues
as a result of audits, expirations due to statutes of limitations, and new federal or state audit
activity. We also recognize accrued interest and penalties related to these unrecognized tax
benefits. Changes in these accrued items are included in the provision for income taxes in the
Condensed Consolidated Statements of Income.
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Segment Reporting
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Segment Reporting [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING |
Three months ended April 30, 2011
Three months ended May 1, 2010
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Legal Matters
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LEGAL MATTERS |
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Basis of Presentation
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Basis of Presentation [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||
BASIS OF PRESENTATION |
Jos. A. Bank Clothiers, Inc. is a nationwide designer, manufacturer, retailer and direct
marketer (through stores, catalog and Internet) of men’s tailored and casual clothing and
accessories and is a retailer of tuxedo rental products. The condensed consolidated financial
statements include the accounts of Jos. A. Bank Clothiers, Inc. and its wholly-owned
subsidiaries (collectively referred to as “we”, “our” or “us”). All intercompany balances and
transactions have been eliminated in consolidation.
The results of operations for the interim periods shown in this report are not
necessarily indicative of results to be expected for the fiscal year. In the opinion of
management, the information contained herein reflects all adjustments necessary to make the
results of operations for the interim periods a fair statement of the operating results for
these periods. These adjustments are of a normal recurring nature.
We operate on a 52-53 week fiscal year ending on the Saturday closest to January 31. The
following fiscal years ended or will end on the dates indicated and will be referred to herein
by their fiscal year designations:
Each fiscal year noted above consists of 52 weeks except fiscal year 2006, which
consisted of 53 weeks.
The accompanying unaudited condensed consolidated financial statements have been prepared
in accordance with generally accepted accounting principles in the United States of America
(“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X and therefore do not include all of the information and footnotes
required by GAAP for comparable annual financial statements. Certain notes and other
information have been condensed or omitted from the interim financial statements presented in
this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in
conjunction with our Annual Report on Form 10-K for fiscal year 2010.
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Supplemental Cash Flow Disclosure
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Supplemental Cash Flow Disclosure [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL CASH FLOW DISCLOSURE |
The net changes in operating working capital and other components consist of the
following:
Interest and income taxes paid were as follows:
As of May 1, 2010 and April 30, 2011, included in “Property, plant and equipment, net”
and “Accrued expenses” in the Condensed Consolidated Balance Sheets are $4.6 million and $6.1
million, respectively, of accrued property, plant and equipment additions that have been
incurred but not completely invoiced by vendors, and therefore, not paid by the respective
period-ends. The net increases in these amounts of $4.0 million and $4.4 million for the
first quarter of fiscal years 2010 and 2011, respectively, are excluded from payments for
capital expenditures and changes in accrued expenses in the Condensed Consolidated Statements
of Cash Flows as these changes are non-cash items.
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Condensed Consolidated Statements of Income (Unaudited) (USD $)
In Thousands, except Per Share data |
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May 01, 2010
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Condensed Consolidated Statements of Income [Abstract] | Â | Â |
Net sales | $ 193,270 | $ 178,125 |
Cost of goods sold | 67,957 | 64,809 |
Gross profit | 125,313 | 113,316 |
Operating expenses: | Â | Â |
Sales and marketing, including occupancy costs | 78,852 | 70,519 |
General and administrative | 17,424 | 16,736 |
Total operating expenses | 96,276 | 87,255 |
Operating income | 29,037 | 26,061 |
Other income (expense): | Â | Â |
Interest income | 132 | 115 |
Interest expense | (3) | (90) |
Total other income (expense) | 129 | 25 |
Income before provision for income taxes | 29,166 | 26,086 |
Provision for income taxes | 11,356 | 10,278 |
Net income | $ 17,810 | $ 15,808 |
Earnings per share: | Â | Â |
Basic | $ 0.64 | $ 0.57 |
Diluted | $ 0.64 | $ 0.57 |
Weighted average shares outstanding: | Â | Â |
Basic | 27,622 | 27,527 |
Diluted | 27,928 | 27,818 |