-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MO3mHBxxo+ZL8jENvh046j+BcT8sk0zPE8TA/3fXLhtTmqh1b1CnufVbi91Gqm9N 4nyAq9nkKNlSk7zvKD20wg== /in/edgar/work/20000613/0000950169-00-000595/0000950169-00-000595.txt : 20000919 0000950169-00-000595.hdr.sgml : 20000919 ACCESSION NUMBER: 0000950169-00-000595 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000429 FILED AS OF DATE: 20000613 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANK JOS A CLOTHIERS INC /DE/ CENTRAL INDEX KEY: 0000920033 STANDARD INDUSTRIAL CLASSIFICATION: [5600 ] IRS NUMBER: 363189198 STATE OF INCORPORATION: DE FISCAL YEAR END: 0130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-14657 FILM NUMBER: 654112 BUSINESS ADDRESS: STREET 1: 500 HANOVER PIKE CITY: HAMPSTEAD STATE: MD ZIP: 21074 BUSINESS PHONE: 4102392700 10-Q 1 0001.txt JOS. A. BANK CLOTHIERS, INC. United States Securities and Exchange Commission Washington, DC 20549 FORM 10 - Q x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended April 29, 2000 -------------- or Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 0-23874 ------- Jos. A. Bank Clothiers, Inc. Delaware 5611 36-3189198 -------- ----------------- ---------------- (State incorporation) (Primary Standard (I.R.S. Employer Industrial Identification Classification Number) Code Number) 500 Hanover Pike, Hampstead, MD 21074-2095 - ------------------------------- ------------ none ---- (Former name or former address, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ] Indicate the number of shares of each of the issuer's classes of common stock, as of the latest practicable date: Class Outstanding as of June 9, 2000 - ----------------- ------------------------------ Common stock. $.01 par value 5,955,627 Jos. A. Bank Clothiers, Inc. Index ----- Part I. Financial Information Page No. --------------------- -------- Item 1. Financial Statements Condensed Consolidated Statements 3 of Operations - Three Months ended April 29, 2000 and May 1, 1999 Condensed Consolidated Balance 4 Sheets - as of April 29, 2000 and January 29, 2000 Condensed Consolidated Statements 5 of Cash Flows -Three Months ended April 29, 2000 and May 1, 1999 Notes to Condensed Consolidated 6-9 Financial Statements Item 2. Management's Discussion and Analysis 9-12 of Results of Operations and Financial Condition Part II. Other Information ----------------- Item 6. Exhibits and Reports on Form 8-K 13 (a) Exhibits - Exhibit 27-Financial Data Schedule (EDGAR filing only) Signatures 14 - ---------- 2 PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (In thousands except per share data) (Unaudited)
Three Months Ended ------------------ April 29, May 1, 2000 1999 --------- ------ Net sales $46,408 $43,607 Costs and expenses: Cost of goods sold 23,166 21,499 General and administrative 4,848 4,344 Sales and marketing 16,316 16,609 Store opening costs 13 53 ------- ------- 44,343 42,505 ------- ------- Operating income 2,065 1,102 Interest expense, net 293 328 ------- ------- Income from continuing operations before provision for income taxes 1,772 774 Provision for income taxes 691 302 ------- ------- Net income $ 1,081 $ 472 ======= ======= Earnings per share: Net income: Basic $.16 $.07 Diluted $.16 $.07 Weighted average shares outstanding: Basic 6,679 6,792 Diluted 6,818 6,971
See accompanying notes. 3 JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands) (Unaudited)
April 29, January 29, 2000 2000 --------- ----------- ASSETS Current Assets: Cash and cash equivalents $ 1,782 $ 1,087 Accounts receivable 3,791 2,601 Inventories: Raw materials 2,543 3,351 Finished goods 45,413 43,036 -------- -------- Total inventories 47,956 46,387 -------- -------- Prepaid expenses and other current assets 4,971 3,178 Deferred income taxes 2,479 2,479 -------- -------- Total current assets 60,979 55,732 -------- -------- Property, plant and equipment, at cost 56,479 56,140 Accumulated depreciation and amortization (29,568) (28,893) -------- -------- Net property, plant and equipment 26,911 27,247 -------- -------- Deferred income taxes 1,699 1,699 Other assets 49 73 -------- -------- Total Assets $ 89,638 $ 84,751 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $ 16,130 $ 13,195 Accrued expenses 16,632 14,573 Current portion of long-term debt 1,198 1,218 Net current liabilities of discontinued operations 118 254 -------- -------- Total current liabilities 34,078 29,240 Long-term liabilities 13,796 11,725 -------- -------- Total liabilities 47,874 40,965 -------- -------- Shareholders' equity: Common stock 71 70 Additional paid-in capital 56,534 56,500 Accumulated deficit (9,783) (10,864) -------- -------- 46,822 45,706 Less treasury stock (5,058) (1,920) -------- -------- Total shareholders' equity 41,764 43,786 -------- -------- Total liabilities and shareholders' equity $ 89,638 $ 84,751 ======== ========
See accompanying notes. 4 JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited)
Three Months Ended ------------------ April 29, May 1, 2000 1999 --------- ------ Cash flows from operating activities: Net income $ 1,081 $ 472 Adjustments to reconcile net income Net cash used in operating activities: Decrease in deferred taxes -- 191 Depreciation and amortization 1,015 937 Stock based compensation -- 21 Net (increase) decrease in operating working capital 584 (2,998) -------- -------- Net cash provided by (used in) operating activities of continuing operations 2,680 (1,377) -------- -------- Cash flows from investing activities: Additions to property, plant and equipment (821) (1,786) -------- -------- Net cash used in investing activities of continuing operations (821) (1,786) -------- -------- Cash flows from financing activities: Borrowings under long-term Credit Agreement 16,224 13,345 Repayment under long-term Credit Agreement (14,028) (10,431) Repayment of other long-term debt (121) (81) Repurchase of Common Stock (3,138) -- Net proceeds from Issuance of Common Stock 35 -- -------- -------- Net cash provided by (used in) financing activities of continuing operations (1,028) 2,833 Net cash provided by (used in) discontinued operations (136) 397 -------- -------- Net increase in cash and cash equivalents 695 67 Cash and cash equivalents - beginning of period 1,087 748 -------- -------- Cash and cash equivalents - end of period $ 1,782 $ 815 ======== ========
See accompanying notes. 5 Jos. A. Bank Clothiers, Inc. S.E.C. Form 10-Q, 4/29/00 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------------- (Unaudited) 1. BASIS OF PRESENTATION Jos. A. Bank Clothiers, Inc. (the Company) is a nationwide retailer of classic men's clothing through conventional retail stores, catalog and internet direct marketing and franchises. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant 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 such operations. These adjustments are of a normal recurring nature. 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 the Company's January 29, 2000 Annual Report on Form 10-K. 2. SIGNIFICANT ACCOUNTING POLICIES Inventories are stated at the lower of first-in, first-out, cost or market. The Company capitalizes into inventories certain warehousing and delivery costs associated with getting its inventory to the point of sale. Costs related to mail order catalogs and promotional materials are included in prepaid expenses and other current assets. These costs are amortized over the expected periods of benefit, not to exceed six months. The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109 - Accounting for Income Taxes (SFAS 109). This standard requires, among other things, recognition of future tax benefits, measured by enacted tax rates attributable to deductible temporary differences between financial statement and income tax basis of assets and liabilities and to tax net operating loss carryforwards, to the extent that realization of such benefits is more likely than not. Reclassifications - Certain reclassifications have been made to the May 1, 1999 financial statements in order to conform with the April 29, 2000 presentation. 6 Jos. A. Bank Clothiers, Inc. S.E.C. Form 10-Q, 4/29/00 3. WORKING CAPITAL The net change in operating working capital is composed of the following:
Three Months Ended --------------------- April 29, May 1, 2000 1999 --------- ------ Increase in accounts receivable $(1,190) $(1,276) Increase in inventories (1,569) (3,557) Increase in prepaids and other assets (1,769) (428) Increase in accounts payable 2,935 641 Increase in accrued expenses and other liabilities 2,177 1,622 ------- ------- Net (increase) decrease in operating working capital $ 584 $(2,998) ======= =======
4. EARNINGS PER SHARE Earnings Per Share - Statement of Financial Accounting Standards (SFAS) No. 128 requires presentation of basic earnings per share and diluted earnings per share. The weighted average shares used to calculate basic and diluted earnings per share in accordance with SFAS No. 128 is as follows:
Three Months Ended ------------------ April 29, May 1, 2000 1999 --------- ------ Weighted average shares outstanding for basic EPS 6,679 6,792 Diluted EPS: Dilutive effect of common stock equivalents 139 179 ----- ----- Weighted average shares outstanding for diluted EPS 6,818 6,971 ===== =====
Weighted average shares outstanding for calculating dilutive EPS include basic shares outstanding, plus shares issuable upon the exercise of stock options, using the treasury stock method. 5. STOCK REPURCHASE On April 12, 2000, the Company announced a repurchase of approximately 13% of its then outstanding stock. In a private transaction, the Company purchased 896,400 shares at $3.50 per share. The purchase has been recorded in the accompanying Consolidated Balance Sheets as treasury stock. 7 Jos. A. Bank Clothiers, Inc. S.E.C. Form 10-Q, 4/29/00 6. DISCONTINUED OPERATIONS Summarized financial information for the discontinued operations is as follows (in thousands):
As of As of April 29, Jan. 29, 2000 2000 --------- -------- Current assets $ 493 $ 580 Current liabilities 611 834 ----- ----- Net current (liabilities) $(118) $(254) ===== =====
Net current and noncurrent assets/liabilities of discontinued operations noted above includes deferred income taxes, pension costs, severance and other transaction costs associated with the discontinued manufacturing operations. 7. SUBSEQUENT EVENTS Subsequent to the end of the first quarter, the Company canceled a source of supply agreement through which 36% of its finished product was purchased in fiscal 1999. The Company anticipates no significant disruption to its purchase of product. 8. SEGMENT REPORTING The Company has two reportable segments: full line stores and catalog/internet direct marketing. While each segment offers a similar mix of men's clothing to the retail customer, the full line stores also provide alterations. The accounting policies of the segments are the same as those described in the Company's January 29, 2000 Annual Report on Form 10K. The Company evaluates performance of the segments based on "four wall" contribution which excludes any allocation of "management company" costs, distribution center costs (except order fulfillment costs which are allocated to catalog/internet), interest and income taxes. The Company's segments are strategic business units that offer similar products to the retail customer by two distinctively different methods. In full line stores the typical customer travels to the store and purchases men's clothing and/or alterations and takes their purchases with them. The catalog/internet direct marketing customer receives a catalog in his or her home, office and/or visits our web page via the internet and either calls, mails, faxes or places an order on- line. The merchandise is then shipped to the customer. The detail segment data is presented in the following table:
Quarter ended April 29, 2000 Full line Catalog & Internet (in thousands) Stores direct marketing Other Total --------- ------------------ -------- ------- Net sales $39,469 $ 5,250 $ 1,689 (a) $46,408 Depreciation and amortization 772 5 238 1,015 Operating income (loss) (b) 6,564 754 (5,253) 2,065 Identifiable assets (c) 51,749 10,212 27,677 89,638 Capital Expenditures (d) 92 415 314 821
(table continued on page 9) 8 Jos. A. Bank Clothiers, Inc S.E.C.Form 10-Q 4/29/00
Quarter ended May 1, 1999 Full line Catalog & Internet (in thousands) Stores direct marketing Other Total --------- ------------------ ------- ------- Net sales $36,721 $5,391 $ 1,495(a) $43,607 Depreciation and amortization 741 4 192 937 Operating income (loss) (b) 5,002 748 (4,648) 1,102 Identifiable assets (c) 47,895 9,542 27,314 84,751 Capital Expenditures (d) 720 40 1,026 1,786
(a) Revenue from segments below the quantitative thresholds are attributable primarily to four operating segments of the Company. Those segments include factory stores, outlet stores, franchise and regional tailor shops. None of these segments has ever met any of the quantitative thresholds for determining reportable segments. (b) Operating income represents profit before allocations of overhead from corporate office and the distribution center, interest and income taxes. (c) Identifiable assets include cash, accounts receivable, inventories, prepaid expenses and fixed assets residing in or related to the reportable segment. Assets included in Other are primarily fixed assets associated with the corporate office and distribution center, deferred tax assets, and inventory which has not been assigned to one of the reportable segments. (d) Capital Expenditures include purchases of property, plant and equipment made for the reportable segment. Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition The following discussion should be read in conjunction with the attached condensed consolidated financial statements and notes thereto and with the Company's audited financial statements and notes thereto for the fiscal year ended January 29, 2000. Overview - Net income for the quarter ended April 29, 2000 increased 129% to - -------- $1.1 million or $.16 per share from $.5 million or $.07 per share for the same period in the prior year. The improvement in net income was due primarily to higher sales and lower marketing costs. The Company opened two new stores during the first quarter of both fiscal 1999 and 2000 and has 112 stores open as of May 2000. The Company expects to open four to six new stores during the remainder of fiscal 2000. The Company has significant borrowing availability under its current borrowing arrangements. The Company's availability under the Credit Agreement was $28 million with $9 million of debt outstanding as of April 29, 2000 compared to availability of $29.2 million and $7.4 million outstanding at the same time last year. The decrease in availability was due primarily to the repurchase of approximately 13% of the Company's outstanding stock for $3.1 million during the first quarter and capital expenditures of $5.8 million since April 1999 mostly offset by cash generated by operations during the same period. Results of Operations - The following table is derived from the Company's - --------------------- condensed consolidated statements of income and sets forth, for the periods indicated, the items included in the condensed consolidated statements of income, expressed as a percentage of net sales. 9 Jos. A. Bank Clothiers, Inc. S.E.C.Form 10-Q 4/29/00
Percentage of Net Sales Three Months Ended ----------------------- April 29, May 1, 2000 1999 ----------- -------- Net Sales............................. 100.0% 100.0% Cost of goods sold.................... 49.9 49.3 ----- ----- Gross profit.......................... 50.1 50.7 General and administrative expenses... 10.5 10.0 Sales and marketing expenses.......... 35.2 38.1 Store opening costs................... -- 0.1 ----- ----- Operating income...................... 4.4 2.5 Interest expense, net................. 0.6 0.7 ----- ----- Income from continuing operations before income taxes.................. 3.8 1.8 Provision for income taxes............ 1.5 0.7 ----- ----- Net income............................ 2.3% 1.1% ===== =====
Net Sales - Net sales increased 6.4% or $2.8 million to $46.4 million in the - --------- first quarter of fiscal 2000 compared to $43.6 million in 1999. This increase was due primarily to a 5.5% increase in comparable store sales and sales in new stores. Sales of sportcoats, slacks and sportswear increased to 37% of merchandise sales compared to 31% in the same period last year while suits decreased to 36% from 41% last year. This shift reflects the increased emphasis on corporate casual business. Internet sales during the first quarter increased 600% and catalog sales decreased 14% on a planned 10% decrease in circulation. Gross Profit - Gross profit (sales less cost of goods sold) increased $1.1 - ------------ million to $23.2 million in the first quarter of 2000 from $22.1 million in 1999. Gross profit as a percent of sales decreased to 50.1% from 50.7% in 1999. The increase in gross profit dollars was the result of higher net sales while the decrease in gross profit percent of sales was due primarily to aggressive sales promotion in February when we achieved a 20% comparable store sales increase. General and Administrative Expenses - General and administrative expenses were - ----------------------------------- $4.8 million in the first quarter of 2000 compared to $4.3 million during the same period in 1999. This increase was due primarily to an increase in accrued incentive compensation expense partially offset by decreases in various other expenses including professional fees. Sales and Marketing Expenses - Sales and marketing expenses decreased $.3 to - ---------------------------- $16.3 million, or 35.2% of net sales, in the first quarter of fiscal 2000 from $16.6 million, or 38.1% in the first quarter of 1999. This decrease was the result of reduced promotional spending in 2000. Store Opening Costs - Store opening costs decreased to $13 thousand during the ------------------- first quarter from $53 thousand in the prior year. The Company opened two factory stores in the first quarter of 2000 for which the Company does not run an opening advertising campaign which it does for the opening of full line stores. 10 Jos. A. Bank Clothiers, Inc. S.E.C.Form 10-Q 4/29/00 Interest Expense - Interest expense decreased slightly in the first quarter - ---------------- compared to the prior year due primarily to the lower average outstanding balance in the current year being partially offset by higher interest rates. Income Taxes - The first quarter fiscal 2000 effective income tax rate is 39% - ------------ which is the same as 1999. Liquidity and Capital Resources - The Company has significant availability under - ------------------------------- its current borrowing agreement. At April 29, 2000 the Company had outstanding borrowings of $9.0 with $28 million of availability under its Credit Agreement compared to borrowings of $7.4 million and availability of $29.2 million. The increase in borrowing and decrease in availability resulted primarily from the repurchase by the Company of approximately 13% of its then outstanding common stock for $3.1 million during the first quarter of fiscal 2000. The following table summarizes the Company's sources and uses of funds as reflected in the condensed consolidated statements of cash flows:
Three Months Ended April 29, May 1, 2000 1999 --------- ------ Cash provided by (used in): Operating activities $ 2,680 $(1,377) Investing activities (821) (1,786) Financing activities (1,028) 2,833 Discontinued operations (136) 397 ------- ------- Net increase in cash and cash equivalents $ 695 $ 67 ======= =======
Cash provided by operating activities was primarily from income generated from operations, an increase in payables partially offset by seasonal increases in receivables, inventories, prepaids and other assets. Cash used in investing activities primarily relates to the purchase and installation of the Company's new e-commerce website and the opening of two new stores. Cash used in financing activities primarily represents the repurchase of common stock partially offset by borrowings on the revolving portion of the Credit Agreement. Cash used in discontinued operations was due primarily to the severance payments and other expenses related to its former manufacturing facility. The Company expects to spend between $3 and $4 million on capital expenditures in fiscal 2000, primarily to open between four and eight new stores, to relocate, downsize or renovate at least two stores and to install a new e-commerce website to replace its existing site and to install an inventory planning system. The capital expenditures will be financed through operations, the Credit Agreement and possibly leasing arrangements. The Company's Credit Agreement expires in April, 2001 based on its original term. The Company expects to obtain extended financing prior to the end of 2000 and does not anticipate any problems obtaining its financing, however, there can be no assurance that such financing will be obtained on acceptable terms. 11 Jos. A. Bank Clothiers, Inc. S.E.C.Form 10-Q 4/29/00 The Company's plans and beliefs concerning future operations contained herein are forward-looking statements within the meaning of the Private Securities Litigation reform Act of 1995. Actual results may differ materially from those forecast due to a variety of factors that can adversely affect the Company's operating results, liquidity and financial condition such as risks associated with economic, weather and other factors affecting consumer spending, the ability of the Company to finance its expansion plans, mix of goods sold, pricing, availability of lease sites for new stores and other competitive factors. These risks should be carefully reviewed before making any investment decisions. 12 PART II. OTHER INFORMATION Item 6. Exhibits - ----------------- Exhibit 27.0 Financial Data Schedule. 13 Jos. A. Bank Clothiers, Inc S.E.C. Form 10-Q, 4/29/00 Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: June 12, 2000 Jos. A. Bank Clothiers, Inc. (Registrant) /s/ David E. Ullman -------------------------------------- David E. Ullman Executive Vice President, Chief Financial Officer 14 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 3-MOS FEB-03-2001 APR-29-2000 1,782 0 3,791 0 47,956 60,979 56,479 29,568 89,638 34,078 0 0 0 71 41,693 89,638 46,408 46,408 23,166 21,177 0 0 293 1,772 691 1,081 0 0 0 1,081 0.16 0.16
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