United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-K
Annual Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
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Annual Report Pursuant To Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended February 2, 2008
(Fiscal year 2007).
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Transition Report Pursuant To Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period from
to
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[Commission
file number 0-23874]
JOS. A. BANK CLOTHIERS, INC.
(Exact name of registrant as specified in its charter)
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Delaware
(State of Incorporation)
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36-3189198
(I.R.S. Employer Identification No.)
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500 Hanover Pike, Hampstead, MD
(Address of principal executive offices)
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21074
(zip code)
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(410) 239-2700
(Registrants telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.01 par value per share
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The NASDAQ Stock Market LLC
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Securities registered pursuant to Section 12(g) of the Act: Rights to purchase units of
Series A Junior Participating Preferred Stock
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act.
Yes
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No
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Indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or Section 15(d) of the Act.
Yes
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No
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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
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No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best of the registrants knowledge,
in definitive proxy or information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K.
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer or a smaller reporting company. See definition of accelerated filer
and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act).
Yes
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No
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The aggregate market value of the voting and non-voting stock held by nonaffiliates of the
registrant, based upon the closing price of shares of Common Stock on the National Association of
Securities Dealers Automated Quotation (NASDAQ) Global Select Market at August 4, 2007 was
approximately $500.2 million. The determination of the affiliate status for purposes of this
report on Form 10-K shall not be deemed a determination as to whether an individual is an
affiliate of the registrant for any other purposes.
The number of shares of Common Stock outstanding on April 2, 2008 was 18,184,371.
DOCUMENTS INCORPORATED BY REFERENCE: The Company will disclose the information required under Part
III, Items 10-14 either by (a) incorporating the information by reference from the Companys
definitive proxy statement if filed by June 2, 2008 (the first business day following 120 days from
the close of its fiscal year ended February 2, 2008) or (b) filing an amendment to this Form 10-K
which contains the required information by June 2, 2008.
TABLE OF CONTENTS
CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 AND OTHER INFORMATION
This Annual Report on Form 10-K includes and incorporates by reference certain statements that
may be deemed to be forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. The Private Securities Litigation Reform Act of 1995 provides a
safe harbor for certain forward-looking statements so long as such information is identified as
forward-looking and is accompanied by meaningful cautionary statements identifying important
factors that could cause actual results to differ materially from those projected in the
information. When used in this Annual Report on Form 10-K, the words estimate, project, plan,
will, anticipate, expect, intend, outlook, may, believe, and other similar
expressions are intended to identify forward-looking statements and information. Actual results may
differ materially from those forecast due to a variety of factors outside of the Companys control
that can affect the Companys operating results, liquidity and financial condition. Such factors
include risks associated with economic, weather, public health and other factors affecting consumer
spending, higher energy and security costs, the successful implementation of the Companys growth
strategy including the ability of the Company to finance its expansion plans, the mix and pricing
of goods sold, the effectiveness and profitability of new concepts, the market price of key raw
materials such as wool and cotton, seasonality, merchandise trends and changing consumer
preferences, the effectiveness of the Companys marketing programs, the availability of lease sites
for new stores, the ability to source product from its global supplier base, litigations and other
competitive factors. Other factors and risks that may affect the Companys business or future
financial results are detailed in the Companys filings with the Securities and Exchange
Commission, including those described under Item 1A. Risk Factors of this Annual Report. These
cautionary statements qualify all of the forward-looking statements the Company makes herein. The
Company cannot assure you that the results or developments anticipated by the Company will be
realized or, even if substantially realized, that those results or developments will result in the
expected consequences for the Company or affect the Company, its business or its operations in the
way the Company expects. The Company cautions you not to place undue reliance on these
forward-looking statements, which speak only as of their respective dates. The Company does not
undertake an obligation to update or revise any forward-looking statements to reflect actual
results or changes in the Companys assumptions, estimates or projections. The identified risk
factors and others are more fully described under the caption Item 1A. Risk Factors.
Common Stock Dividends.
On December 14, 2005, the Companys Board of Directors declared a 25%
common stock dividend payable on February 15, 2006 to stockholders of record as of January 27,
2006. In conjunction with the distribution of the stock dividend, the Company retired all of its
previously held shares of treasury stock. Unless otherwise indicated, all historical weighted
average share and per share amounts and all references to the number of common shares elsewhere in
the consolidated financial statements, and notes thereto, have been restated to reflect the stock
dividend.
PART I
Item 1. BUSINESS
General
Jos. A. Bank Clothiers, Inc., a Delaware corporation (herein referred to as the Company,
Jos. A. Bank, or first person pronouns such as we, us, our, our company or similar
terms), is a designer, retailer and direct marketer (through stores, catalog and Internet) of mens
tailored and casual clothing and accessories. The Company sells substantially all of its products
exclusively under the Jos. A. Bank label through its 422 retail stores (as of February 2, 2008,
which includes seven outlet stores and 12 franchise stores) located throughout 42 states and the
District of Columbia in the United States, as well as through the Companys nationwide catalog and
Internet (www.josbank.com) operations.
The Companys products are targeted at the male career professional and emphasize the Jos. A.
Bank brand of high quality tailored and casual clothing and accessories. The Companys products are
offered at Three Levels of Luxury, which include the opening Jos. A. Bank Executive collection as
well as the more luxurious Jos. A. Bank Signature and Jos. A. Bank Signature Gold collections. The
Company sources substantially all of its products through third party suppliers, manufacturers
and/or agents using Jos. A. Bank designs and specifications.
1
The Company operates on a 52-53 week fiscal year ending on the Saturday closest to January 31.
The following fiscal years ended on the following dates and will be referred to herein by their
fiscal year designations:
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Fiscal year 2001
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February 2, 2002
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Fiscal year 2002
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February 1, 2003
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Fiscal year 2003
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January 31, 2004
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Fiscal year 2004
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January 29, 2005
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Fiscal year 2005
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January 28, 2006
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Fiscal year 2006
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February 3, 2007
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Fiscal year 2007
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February 2, 2008
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Fiscal year 2008
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January 31, 2009
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Fiscal years 2005 and 2007 consisted of 52 weeks and fiscal year 2006 consisted of 53 weeks.
Strategy
The Company, established in 1905, has reinvented itself over the past eight years by focusing
on its Four Pillars of Success, which consist of:
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Quality
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Service
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3.
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Inventory In-stock
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4.
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Product Innovation
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The Company instills these four factors into all aspects of its operation and believes they
help create a unique specialty retail environment that develops customer loyalty. Examples of the
Companys commitment to this strategy include:
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continually increasing the already high level of quality of its products by developing
and maintaining stringent design and manufacturing specifications;
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developing its multi-channel retailing concept by opening more stores and enhancing
direct selling through the catalog and Internet operation, thus offering multiple
convenient channels for customers to shop;
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providing outstanding customer service and emphasizing high levels of inventory
fulfillment for its customers;
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expanding its product assortment, including developing the Three Levels of Luxury and
continuing to add innovative new products; and
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increasing its product design and development capabilities while eliminating the
middleman in the sourcing of its products.
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The Brand.
The Companys branding emphasizes very high levels of quality in all aspects of its
interactions with customers, including merchandise and service. The Company has developed very
stringent specifications in its product designs to ensure consistency in the fit and quality of its
products. The merchandise assortment has Three Levels of Luxury and one unwavering level of
quality. The Three Levels of Luxury range from the original Jos. A. Bank Executive collection to
the more luxurious Jos. A. Bank Signature collection to the exclusive Jos. A. Bank Signature Gold
collection. Examples of the different levels of luxury include the wool used in suits, sport coats
and slacks, in a range of superfine qualities, and the uniqueness of tie swatches, some of which
are offered in pre-numbered, limited editions.
The Company emphasizes customer service in all aspects of its business. Sales associates focus
on developing close business relations with their customers to help serve all of the customers
clothing needs. Inventory availability is a key focus to ensure customers can purchase merchandise
when requested, whether in the stores or through the catalog or Internet. A tailor is staffed in
most stores to ensure prompt, high quality alteration service for our customers.
2
Multi-Channel Retailing.
The Companys strategy is to operate its three channels of selling as
an integrated business and to provide the same personalized service to its customers regardless of
whether merchandise is purchased through its stores, the
Internet or catalog. The Company believes the synergy between its stores, its Internet site
and its catalog offers an important convenience to its customers and a competitive advantage to the
Company. The Company leverages its three channels of selling by promoting each channel together to
create brand awareness. For example, the Internet site can be used by our sales associates to
increase the product available to store customers, provides store location listings and can be used
as a promotional source for the stores and catalog. The Company also uses its catalog to
communicate the Jos. A. Bank image, to provide customers with fashion guidance in coordinating
outfits and to generate store and Internet traffic.
As a customer convenience, the Company enables customers to purchase all products that are
offered in the catalog and Internet while in a store. Conversely, customers may have catalog
purchases shipped to a store for alteration and pickup and can return or exchange catalog and
Internet purchases at its stores.
Store Growth.
The Company had 422 stores as of fiscal year-end 2007, which included 403
Company-owned full-line stores, seven Company-owned outlet stores and 12 stores operated by
franchisees. Management believes that the chain can grow to approximately 600 stores by 2012,
depending on the performance of the Company over the next several years. As a result of
implementing its store growth plan, the Company opened 50 new stores in fiscal year 2003, 60 new
stores in fiscal year 2004, 56 new stores in fiscal year 2005, 52 new stores in fiscal year 2006
and 48 new stores in fiscal year 2007. The Company intends to open new stores primarily in core
markets which may allow the Company to leverage its existing advertising, management, distribution
and sourcing infrastructure, as well as in newer markets such as California where it is striving to
develop a critical mass of stores to gain leverage.
Product Design and Sourcing.
The Company designs and directly sources substantially all of its
products. The designs are provided to a world-wide vendor base to manufacture to the Companys
specifications. In certain cases, the Company has eliminated the middlemen (e.g. importers and
resellers) in its sourcing process and contracts directly with its manufacturers. The Company used
one agent to source approximately 39% of its total product purchases in fiscal year 2007 and
expects to continue this relationship in 2008. The Companys product design and sourcing strategies
have resulted in reduced product costs, which have enabled the Company to design additional quality
into its products, increase gross profit margins and fund the development of the infrastructure
needed to grow the chain.
Segments
The Company has two reportable segments: Stores and Direct Marketing. The Direct Marketing
segment consists of our Internet and catalog operations. The Company has included information with
regard to these segments for each of its last three fiscal years under Note 12 to its Consolidated
Financial Statements.
Stores.
The Companys Stores segment includes its 403 full-line Company owned stores, but
excludes its seven outlet stores. The Company opened 48 stores (and closed 2 stores) in fiscal year
2007 and plans to open approximately 38 to 48 stores in fiscal year 2008. The Companys real
estate strategy focuses primarily on stores located in high-end, specialty retail centers with the
proper co-tenancy that attract customers with demographics that are similar to the Companys target
customer. These specialty centers include, but are not limited to, outdoor lifestyle centers, malls
and downtown/street front/business districts. As of fiscal year-end 2007, the store mix of the 403
full-line Company owned stores consisted of 129 outdoor lifestyle centers, 74 malls, 40
downtown/street front/business districts and 160 strip centers, power centers or freestanding
stores.
The Companys current store prototype was introduced in March 2001 in Charlottesville,
Virginia and has been continually improved. The design emphasizes an open shopping experience that
coordinates the Companys successful corporate casual and sportswear with its suits, shirts, ties
and other products. The store design is based on the use of wooden fixtures with glass shelving,
numerous tables to feature fashion merchandise, carpet and abundant accent lighting and is intended
to promote a pleasant and comfortable shopping environment. Approximately 80% of the space in
stores that were opened in the last three fiscal years is dedicated to selling activities, with the
remainder allocated to stockroom, tailoring and other support areas. The full-line, Company-owned
stores averaged approximately 4,730 square feet at fiscal year-end 2007. The stores opened in
fiscal years 2006 and 2007 averaged approximately 4,120 and 4,160 square feet, respectively.
The cost to open a new store is based on store size and landlord construction allowances. In
fiscal year 2007, the average cost to build-out a new store was approximately $500,000, including
leasehold improvements, fixtures, point-of-sale equipment and tailor shop equipment. The Company
will be reimbursed an average of approximately $230,000 of the new store build-out cost for the
stores opened in fiscal year 2007. New stores also require an inventory investment, which varies
based on the season the store opens. In fiscal year 2007, store openings required an average
initial investment of approximately $300,000 of
inventory to offer a full range of products, although amounts vary by store. The inventory
levels in a new store are typically increased as the stores sales mature.
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Substantially all full-line Company-owned stores have a tailor shop, which provides a range of
tailoring services as a convenience to customers. The stores are designed to utilize Company-owned
regional overflow tailor shops which allow the use of smaller tailor shops within each store.
Operating the regional tailor shops has allowed the Company to optimize its tailoring revenues in
the stores by sending all overflow work to regional tailor shops. These overflow shops experience
higher productivity as the tailors focus solely on alterations, whereas store tailors assist with
fitting and measuring customers during the course of the day. In addition, the store managers and
certain additional store staff have been trained to fit tailored clothing for alterations. The
Company guarantees all of the tailoring work performed.
Other.
The Company has 12 franchise locations. Generally, a franchise agreement between the
Company and the franchisee provides for a ten-year term with an option, exercisable by the
franchisee under certain circumstances, to extend the term for an additional ten-year period.
Franchisees pay the Company an initial fixed franchise fee and then a percentage of its net sales.
Franchisees are required to maintain and protect the Companys reputation for high quality, classic
clothing and customer service. Franchisees purchase substantially all merchandise offered for sale
in their stores from the Company at an amount above the Companys cost.
The Company has seven outlet stores which are used to liquidate excess merchandise and offer
certain first quality products at a reduced price. Because of the classic character of the
Companys merchandise and aggressive store clearance promotions, historically, the Company has been
able to sell substantially all of its products through its full-line Company-owned stores, Internet
and outlet stores and has not been required to sell significant amounts of inventory to third party
liquidators.
At February 2, 2008, the Company operated 422 retail stores (including seven outlet stores and
12 franchise stores) in 42 states and the District of Columbia. The following table sets forth the
stores that were open at that date.
4
JOS. A. BANK STORES
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Total #
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State
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Of Stores
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Alabama(a)
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9
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Arizona
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4
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Arkansas
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4
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California
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25
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Colorado
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9
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Connecticut
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11
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Delaware
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1
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Florida
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27
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Georgia(a)(b)
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20
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Idaho
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1
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Illinois(a)
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27
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Indiana
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8
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Iowa
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3
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Kansas
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3
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Kentucky
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4
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Louisiana(a)
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6
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Maryland(b)
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19
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Massachusetts
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11
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Michigan
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13
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Minnesota
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5
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Mississippi(a)
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1
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Missouri
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5
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Nebraska
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2
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Nevada
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3
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New Hampshire
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1
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New Jersey
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20
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New Mexico
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1
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New York
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17
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North Carolina(a)
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20
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Ohio
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19
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Oklahoma
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4
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Pennsylvania(b)
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23
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Rhode Island
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2
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South Carolina(a)
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9
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South Dakota
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1
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Tennessee(a)
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9
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Texas
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39
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Utah
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2
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Virginia(b)
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20
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Washington
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3
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Washington, D.C.
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4
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West Virginia
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1
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Wisconsin
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6
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Total(c)
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422
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(a)
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Includes one or more franchise stores
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(b)
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Includes one or more outlet stores
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(c)
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Does not include four stores opened subsequent to fiscal 2007 year-end through April 2, 2008.
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Direct Marketing.
The Companys Direct Marketing segment, consisting of its catalog and
Internet channels, is a key part of the Companys multi-channel concept. In fiscal year 2007, the
Direct Marketing segment accounted for approximately 11% of net sales and recorded a sales increase
of 13.1%. The Companys Direct Marketing segment offers potential and existing customers
convenience in ordering the Companys merchandise. In fiscal years 2006 and 2007, the Company
distributed approximately 9.7 million and 9.4 million catalogs, respectively.
The catalog and Internet site offer potential and existing customers an easy way to order the
full range of Jos. A. Bank products. They are significant resources used to communicate the
Companys high-quality image, providing customers with guidance in coordinating outfits, generating
store traffic and providing useful market data on customers. The Company believes customers are
very confident purchasing traditional business attire through the catalog and Internet, as suits
represented approximately 26% of orders in the Direct Marketing segment in fiscal year 2007.
5
To make catalog and online shopping as convenient as possible, the Company maintains a
toll-free telephone number accessible 24 hours a day, seven days a week. Catalog sales associates
can help customers select merchandise and can provide detailed information regarding size, color,
fit and other merchandise features. In some cases, sample merchandise is available for catalog
sales associates to view, thereby allowing them to better assist customers. Merchandise purchased
from the catalog or online may be returned to the Company through any of its stores or by mail.
The Company has experienced strong growth in its Internet sales in each of the past five
fiscal years. The Company has approximately 3,100 active affiliate arrangements which have helped
increase Internet sales. The Company typically pays a fee to the affiliate based on a percentage of
net sales generated through such affiliate. The Company expects to continue to pursue affiliate
arrangements to help fuel future Internet sales increases.
The Companys Internet site has many customer-friendly features, including high processing
speed, real-time inventory status, order confirmation, product search capabilities and an online
catalog. The site has enabled the Company to be responsive to trends thereby affording the Company
an opportunity to increase sales. The Company expects to upgrade its Internet site within the next
12 to 24 months to meet the increasing capacity needs and to add
certain features to further enhance the
customer shopping experience.
To process catalog orders, sales associates enter orders online into a computerized catalog
order entry system, while Internet orders are placed by the customer and are linked to the same
order entry system. After an order is placed, it updates files and permits the Company to measure
the response to individual catalog mailings and Internet email promotions. Computer processing of
orders is performed by the warehouse management system which permits efficient picking of inventory
from the warehouses. The Companys order entry and fulfillment systems permit the shipment of most
orders no later than the day after the order is placed (assuming the merchandise is in stock).
Orders are shipped primarily by second day delivery or, if requested, by expedited delivery
services, such as United Parcel Service priority. Sales and inventory information is available to
the Companys merchants the day after the sales transaction.
Merchandising
The Company believes it fills a niche of providing upscale classic, professional mens
clothing with superior quality at a reasonable price. The Companys merchandising strategy focuses
on achieving an updated classic look with extreme attention to detail in quality materials and
workmanship. The Company offers a distinctive collection of clothing and accessories necessary to
dress the career man from head to toe, including formal, business and business casual, as well as
sportswear and golf apparel, all sold under the Jos. A. Bank label. Its product offering includes
tuxedos, suits, shirts, vests, ties, sport coats, pants, sportswear, overcoats, sweaters, belts and
braces, socks and underwear, among other items. The Company also sells branded shoes from several
vendors, which are substantially the only products it sells not using the Jos. A. Bank brand. In
fiscal year 2005, the Company introduced shoes under the Jos. A. Bank brand, which are available
for sale through the Direct Marketing segment and in selected stores.
The Companys branding emphasizes very high levels of quality in all aspects of its
interactions with customers, including merchandise and service. The Company has developed very
stringent specifications in its product designs to ensure consistency in the fit and quality of the
product. The merchandise assortment has Three Levels of Luxury and one unwavering level of
quality. The Three Levels of Luxury range from the Companys original Jos. A. Bank Executive
collection, to the more luxurious Jos. A. Bank Signature collection to the exclusive Jos. A. Bank
Signature Gold collection. Examples of the different levels of luxury include the wool used in
suits, sport coats and slacks, in a range of superfine qualities, and the uniqueness of tie
swatches, some of which are offered in pre-numbered, limited editions.
The Company believes its merchandise offering is well positioned to meet the changing trends
of business dress for its target customers. Suits accounted for approximately 24% and 25% of the
Companys merchandise sales in fiscal years 2006 and 2007, respectively, and serve as the
foundation of the Companys extensive offering of other products. When the corporate work
environment trended to casual over the past decade, the Companys product offerings were modified
to meet the needs of the Jos. A. Bank customer.
The Company has many unique products to serve its customers needs and believes that continued
development of innovative products is one of its Pillars of Success. The TRIO collection is one
of the Companys solutions to corporate casual attire. The TRIO consists of a tailored jacket with
two pairs of pants, one matching the jacket and one in a coordinating pattern. Therefore, the
outfit can be worn as a suit, sportcoat/slack combination or as a casual outfit. The Company also
offers its Separates collection, a concept for purchasing suits that allows customers to customize
their suits by selecting separate, but perfectly matched, jackets and pants from one of three coat
styles, plain front or pleated pants, and numerous updated fabric choices including superfine wool
and natural stretch wool. The Separates line allows a customer to buy a suit that will fit his
unique body size with minimum alterations, for a custom fit. Jos. A. Bank is one of the few
retailers in the country that has successfully developed this concept in better quality suits,
which the Company believes is a competitive advantage.
The Company also has a very successful line of wrinkle resistant all cotton dress shirts that
are made using a patented process that is owned by the vendor. The Company offers its
Vacation-in-Paradise (VIP) line of casual vacation wear and its David Leadbetter golf apparel,
which includes sportshirts, sweaters and casual trousers, in its sportswear category.
6
In early fiscal year 2004, the Company introduced a wrinkle resistant, stain resistant
traveler cotton pique polo shirt and machine washable traveler wool pants, as part of its
successful Traveler collection of products. In late fiscal year 2004, it introduced a wrinkle
resistant, stain-resistant suit as part of its Separates Collection. The Traveler Suit Separates
program is designed to take advantage of our expertise in suit separates with perfectly matched
suit coats and pants sold in the customers size for a better fit. The 100% wool Traveler Suit
Separates are stain resistant and made with new stretch comfort waist bands and stretch linings and
include extra interior pockets. In fiscal year 2005, the Company introduced the Stays Cool suit,
which features innovative fabrics and linings using a variety of technologies, to keep the customer
cool and comfortable in any climate. The Company continued to add products using the Stays Cool
features in fiscal years 2006 and 2007.
Design and Purchasing
Jos. A. Bank merchandise is designed through the coordinated efforts of the Companys
merchandising and planning staffs, working in conjunction with suppliers, manufacturers and/or
agents around the world. The process of creating a new garment begins up to 18 months before the
products expected in-stock date. Substantially all products are made to the Companys rigorous
specifications, thus ensuring consistent fit and feel for the customer. The merchandise staff
oversees the development of each products style, color and fabrication. The Companys planning
staff is responsible for providing each channel of business with the correct amount of products.
The Company believes that it gains a distinct advantage over many of its competitors in terms
of quality and price by designing its tailored and other products, selecting and, in certain cases,
purchasing raw materials (finished wool fabric) and then having merchandise manufactured to its own
specifications by third party contract manufacturers. Since the Companys designs are focused on
updated classic clothing, the Company believes it experiences much less fashion risk than other
retailers that offer fashions that change more frequently. Substantially all products manufactured
must conform to the Companys rigorous specifications with respect to standardized sizing and
quality.
The Company buys its shirts from leading U.S. and overseas shirt manufacturers who also supply
shirts to many of the Companys competitors. Approximately 12% of the total product purchases
(including piece goods) in fiscal year 2007 were sourced from United States suppliers, and
approximately 88% were sourced from suppliers in other countries. In fiscal year 2007,
approximately 43% of the total product purchases were manufactured in China (including 21% from
Hong Kong) and 20% in Mexico. No other country represented more than 8% of total product purchases
in fiscal year 2007.
The Company uses one agent to source a significant portion of its products from various
companies that are located in or near Asia (China, including Hong Kong, Indonesia, Korea, Thailand,
and Bangladesh). Purchases through this agent represented approximately 39% of the total product
purchases in fiscal year 2007. The Company also makes other purchases
from manufacturers and suppliers in Asia. Two other suppliers combined represented
approximately 20% of total product purchases in fiscal year 2007.
The total product purchases discussed above include direct purchases of raw materials by the
Company that are subsequently sent to manufacturers for cutting and sewing. The Company purchases
the raw materials for approximately 11% of its finished products, of which five vendors accounted
for over 79% of the raw materials purchased directly by the Company in fiscal year 2007. The
remainder of its finished products are purchased as finished units, with the vendor responsible for
the acquisition of the raw materials based on the Companys specifications.
The Company transacts substantially all of its business on an order-by-order basis and does
not maintain any long-term or exclusive contracts, commitments or arrangements to purchase from any
finished good supplier, piece goods vendor or contract manufacturer. The Company ordinarily places
orders for the purchase of inventory approximately six to twelve months in advance.
The Company does business with all of its vendors in U.S. currency and has not experienced any
material difficulties as a result of any foreign political, economic or social instabilities. The
Company believes that it has good relationships with its piece goods vendors, finished goods
suppliers, contract manufacturers and agents and that there will be adequate sources to produce a
sufficient supply of quality goods in a timely manner and on satisfactory economic terms, but it
cannot make any assurances of such results. The Company is affected by the devaluation of the U.S.
dollar against the foreign currencies of its suppliers countries. The Company is attempting to
mitigate these risks through aggressive price negotiation and resourcing. Further devaluation of
the U.S. dollar may be manifested in the Companys results as an increase in the cost of goods
purchased for resale.
7
Marketing, Advertising and Promotion
Strategy.
The Company has historically used mass media advertising (such as local radio,
national cable television and direct mail marketing) and promotional activities in support of its
store and catalog/Internet operations. The Company also sends email promotions to its store and
Internet customers. Core to each marketing campaign, while primarily promotional, is the
identification of the Jos. A. Bank name as synonymous with high quality, upscale classic clothing
offered at a value. The Company has a database of over 3.8 million names of people who have
previously made a purchase from one of the Companys retail stores, its Internet site or catalog or
have requested a catalog or other information from the Company. Of these, approximately 2.2 million
individuals have made such purchases or information requests in the past 24 months. The Company
evaluates its database for its mailings and selects names based on expectations of response to
specific promotions, which allows the Company to efficiently use its marketing dollars.
In the fourth quarter of 2004, the Company began testing national cable television advertising
as a method to increase its brand awareness and to drive customers to its stores. The Company
expanded its use of television in 2005, 2006 and 2007 and expects to continue marketing through
television advertising in 2008.
Throughout each season, the Company promotes specific items or categories at specific prices
that are below the initial retail price originally offered to customers. These sales are used to
complement promotional events and to meet customer needs. At the end of each season, the Company
conducts clearance sales to promote the sale of that seasons merchandise.
Corporate Card.
Certain organizations and companies can participate in our corporate card
program, through which all of their employees are eligible to receive a 20% discount off
regularly-priced Jos. A. Bank merchandise and for whom we develop specific marketing events
throughout the year. The card is honored at all full-line stores, as well as for catalog and
Internet purchases. Over 256,000 companies nationally, from small privately-owned companies to
large public companies, are members of the program, representing an increase of approximately 38%
over the approximately 185,000 member companies last year. Participating companies are able to
promote the card as a free benefit to their employees. As the number of participants in the
corporate card program have increased significantly in the past several years, sales to these
customers have become a substantial portion of total sales.
Apparel Incentive Program.
Jos. A. Bank Clothiers apparel incentive gift certificates are used
by various companies as a reward for employee achievement or for employee recognition. The Company
also redeems proprietary gift certificates and gift cards marketed by major premium/incentive
companies.
Distribution
The Company uses a centralized distribution system, under which all merchandise is received,
processed and distributed through the Companys distribution facilities located in Hampstead,
Maryland. A portion of the merchandise received at the
distribution centers is inspected to ensure expected quality in workmanship and conformity to
Company specifications. The merchandise is then allocated to individual stores or to warehouse
stock (to support the Direct Marketing segment and to replenish store inventory as merchandise is
sold). Merchandise allocated to stores is then packed for delivery and shipped, principally by
common carrier. Each store generally receives a shipment of merchandise two to three times a week
from the distribution centers; however, when necessary because of a stores size or volume, a store
can receive shipments more frequently. Inventory of basic merchandise in stores is replenished
regularly based on sales tracked through point-of-sale terminals. Shipments to customers purchasing
through the Direct Marketing segment are also made from the central distribution facilities and,
less frequently, from stores.
To support new store growth, the Company upgraded its distribution system over the past six
years and it is capable of handling approximately 500 stores in most of its distribution center
functions. In late 2004, the Company increased its distribution center capacity by leasing and
equipping approximately 289,000 square feet of space in a facility that is adjacent to its facility
in Hampstead, MD. This location became fully operational in early 2005. The Company expects to
increase its distribution capacity in the next 12 to 24 months.
Management Information Systems
In August 1998, the Company installed and implemented the then-current version of its
merchandising, warehouse, sales audit, accounts payable and general ledger system. While several
newer updates of this system have been released by the software vendor but not installed by the
Company, the system meets the Companys current business needs. In fiscal year 1999, the Company
replaced its point-of-sale (POS) system and upgraded this system in fiscal years 2005 and 2007. In
fiscal year 2007, the Company added a wide-area network to its POS system, which, among other
functionality, enables electronic orders to be placed from the stores by a sales associate to the
Companys centralized fulfillment center. In fiscal year 2000, the Company upgraded its catalog
order processing system to the then-current version, which was again updated in fiscal year 2007.
The Company also designed and implemented a new Internet site in fiscal year 2000 and increased its
capacity and processing speed in fiscal year 2006. In fiscal year 2007, the Company implemented a
new system that increased its ability to communicate design specifications to its worldwide vendor
base, which replaced a system installed in fiscal year 2003. In fiscal year 2004, the Company
developed systems that allow increased management and reporting of pricing elements such as gross
margins. The Company outsources to a third party the storage and maintenance of its customer
relationships management (CRM) database. The Company can access the CRM database which it uses to
select names for customer promotions. By using these systems, the Company is able to capture
greater customer data and has increased its marketing efficiency using such data.
8
Competition
The Company competes primarily with other specialty retailers of mens apparel, department
stores and other catalogers engaged in the retail sale of mens apparel, and to a lesser degree
with other retailers of mens apparel. The Company is one of only a few national multi-channel
retailers focusing exclusively on mens apparel, which the Company believes provides a competitive
edge. The Company believes that it maintains its competitive position based not only on its ability
to offer its high quality career clothing at reasonable prices, but also on its broad selection of
merchandise, friendly customer service and product innovation as part of its Four Pillars of
Success. The Company competes with, among others, Brooks Brothers, Macys, Lands End, Mens
Wearhouse and Nordstrom, as well as local and regional competitors in each stores market. Many of
these competitors are considerably larger and have substantially greater financial, marketing and
other resources than the Company.
Trademarks
The Company is the owner or exclusive licensee in the United States of the marks JOS. A.
BANK
®
, JOS. A. BANK V.I.P.
®
, JOS. A. BANK VACATION IN PARADISE
®
,
VACATION IN PARADISE
®
, and THE MIRACLE COLLECTION
®
(collectively, the Jos.
A. Bank Marks). These trademarks are registered in the United States Patent and Trademark Office.
A Federal registration is renewable indefinitely if the trademark is still in use at the time of
renewal. The Companys rights in the Jos. A. Bank Marks are a material part of the Companys
business. Accordingly, the Company intends to maintain its use of the Jos. A. Bank Marks. The
Company is not aware of any claims of infringement or other material challenges to the Companys
right to use the Jos. A. Bank Marks in the United States.
In addition, the Company has registered josbank.com and various other Internet domain names.
The Company intends to renew its registration of domain names from time to time for the conduct and
protection of its e-commerce business.
Seasonality
The Companys net sales, net income and inventory levels fluctuate on a seasonal basis and
therefore the results for one quarter are not necessarily indicative of the results that may be
achieved for a full fiscal year. The increased traffic during the holiday season and the Companys
increased marketing efforts during this peak selling time have resulted in profits generated during
the fourth quarter becoming a larger portion of annual profits. Seasonality is also impacted by
growth as more new stores are opened in the second half of the year. During the fourth quarters of
fiscal years 2005, 2006 and 2007, the Company generated approximately 53%, 58% and 53%,
respectively, of its annual net income.
Employees
As of April 2, 2008, the Company had approximately 4,069 employees, consisting of 1,046
part-time employees and 3,023 full-time employees.
As of April 2, 2008, approximately 219 employees worked in the Hampstead, Maryland tailoring
overflow shop and distribution centers, most of whom are represented by the union, UNITE-HERE. The
current collective bargaining agreement with UNITE-HERE extends to February 28, 2009. The Company
believes that union relations are good, as there have been no work stoppages in more than 20 years.
The Company believes that its relations with its non-union employees are also good.
Approximately 56 sales associates are union members under a separate contract which extends to
April 30, 2009. The Company maintains a good relationship with these employees and their union and
does not anticipate any significant disruption in its operating workforce.
Available Information
The Companys principal executive offices are located at 500 Hanover Pike, Hampstead, Maryland
21074. The Companys telephone number is (410) 239-2700 and its website address is www.josbank.com.
The Company makes its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K, and amendments to these reports available on its website free of charge as soon as
practicable after they are filed with, or furnished to, the Securities and Exchange Commission. In
addition, the public may read and copy any materials filed or furnished by the Company with the SEC
at the SECs public reference room at 450 Fifth Street, N.W., Washington D.C. 20549. The public may
obtain information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. Also, the SEC maintains an Internet site (www.sec.gov) that contains reports, proxy
and information statements and other information regarding issuers that file electronically.
9
Item 1A. RISK FACTORS
You should consider carefully the risks described below, together with the other information
contained in this report. If any of the identified risks actually occurs, or is adversely resolved,
the Companys consolidated financial statements could be materially, adversely impacted in a
particular fiscal quarter or year and the Companys business, financial condition and results of
operations may suffer materially. As a result, the market price of the Companys common stock could
decline and you could lose all or part of your investment in the Company.
If we are not able to continue profitably opening new stores, our growth may be adversely affected.
A significant portion of our growth has resulted and is expected to continue to result from
the opening of new stores. While we believe that we will continue to be able to obtain suitable
locations for new stores, negotiate acceptable lease terms, hire qualified personnel and open and
operate new stores on a timely and profitable basis, we cannot make any such assurances. As we
continue our expansion program, the proposed expansion may place increased demands on our
operational, managerial and administrative resources. These increased demands could cause us to
operate our business less effectively, which in turn could cause deterioration in our financial
performance. The opening of new stores may adversely affect catalog and Internet sales and profits.
In addition, the opening of new stores in existing markets may adversely affect sales and profits
of established stores in those markets. We expect to fund our expansion through use of existing
cash, cash flows from operations and, if needed, by borrowings under our line of credit. However,
if we experience limitations on our ability to utilize these sources of liquidity, our performance
declines or other factors so dictate, we may slow or discontinue store openings. If we fail to
successfully implement our expansion program, our business, financial condition and results of
operations could be materially adversely affected.
We face significant competition and may not be able to maintain or improve our competitive position
or profitability.
The retail apparel business is highly competitive and is expected to remain so. We compete
primarily with specialty and discount store chains, independent retailers, national and local
department stores, Internet retail stores and other catalogers engaged in the retail sale of mens
apparel, and to a lesser degree with other apparel retailers. Many of these competitors are much
larger than we are and have significantly greater financial, marketing and other resources than we
have. In many cases, our primary competitors sell their products in stores that are located in the
same shopping malls or retail centers as our stores. Moreover, in addition to competing for sales,
we compete for favorable site locations and lease terms in shopping malls and retail centers. We
believe that our emphasis on classic styles make our business less vulnerable to changes in
merchandise trends than many apparel retailers; however, our sales and profitability depend upon
the continued demand for our classic styles. We face a variety of competitive challenges including:
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anticipating and quickly responding to changing consumer demands;
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maintaining favorable brand recognition and effectively marketing our products to
consumers in several diverse market segments;
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developing innovative, high-quality new products and/or product/brand extensions in
sizes, colors and styles that appeal to consumers of varying age groups and tastes;
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competitively pricing our products and achieving customer perception of value; and
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providing strong and effective marketing support.
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Increased competition or our failure to meet these competitive challenges could result in
price reductions, increased marketing expenditures and loss of market share, any of which could
have a material adverse effect on our business, financial condition and results of operations.
10
Our business is tied to consumer spending for discretionary items and negative changes to consumer
confidence could have an adverse affect on our business.
Our business is sensitive to a number of factors that influence the levels of consumer
spending, including political and economic conditions, consumer confidence and the levels of
disposable consumer income which is impacted by consumer debt, interest rates and gasoline and
energy costs, among other factors. Consumer confidence may be adversely affected by national and
international security concerns such as war, terrorism or the threat of war or terrorism. In
addition, because apparel and accessories generally are discretionary purchases, declines in
consumer spending patterns may impact us more negatively as a specialty retailer and could have a
material adverse effect on our business, financial condition and results of operations.
Our success is dependant on our key personnel and our ability to attract and retain key personnel.
We believe that we have benefited substantially from the contributions of our senior
management team. In addition, our ability to anticipate and effectively respond to changing
merchandise trends depends in part on our ability to attract and retain key personnel in our
design, merchandising, marketing and other departments. We face intense competition in hiring and
retaining these personnel. If we fail to retain and motivate our current personnel and attract new
personnel, our business, financial condition and results of operations could be materially
adversely affected.
We rely heavily on a limited number of key suppliers, the loss of any of which could cause a
significant disruption to our business and negatively affect our business.
Historically, we have purchased a substantial portion of our products from a limited number of
suppliers throughout the world. The loss of any one of these suppliers or any significant
interruption in our product supply, such as manufacturing problems or shipping delays, could have
an adverse effect on our business due to lost sales, cancellation charges, excessive markdowns or
delays in finding alternative sources, and could result in increased costs. Although we have not
experienced any material disruptions in our sourcing in the past several years any significant
disruption of supply from any of these sources could have a material adverse effect on our
business, financial condition and results of operations.
Our reliance on foreign sources of production exposes us to a number of risks of doing business on
an international basis.
We expect to continue our sourcing to suppliers throughout the world, which may result in
additional concentration of our sources. As a result, we face a variety of risks generally
associated with doing business in foreign markets and importing merchandise from abroad, including:
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political instability of foreign countries;
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imposition of new legislation or rules relating to imports that may limit the quantity
of goods which may be imported into the United States from countries or regions;
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imposition of duties, taxes and other charges on imports;
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local business practice and political issues, including issues relating to compliance
with domestic or international labor standards which may result in adverse publicity;
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migration and development of manufacturers, which can affect where our products are or
will be produced;
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potential delays or disruptions in shipping and related pricing impacts;
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volatile fuel supplies and costs; and;
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the devaluation of the U.S. dollar against the foreign currencies of our suppliers
countries could adversely affect our product costs.
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Any significant disruption of production from any of these sources could have a material
adverse effect on our business, financial condition and results of operations.
11
Our business could be adversely affected if the foreign manufacturers of our products do not use
acceptable labor practices.
We require manufacturers of the goods that we sell to operate in compliance with applicable
laws and regulations. While our staff and agents periodically visit and monitor the operations of
our independent manufacturers, we do not control these manufacturers or their labor practices. The
violation of labor or other laws by these independent manufacturers could interrupt, or otherwise
disrupt the shipment of products to us. The divergence of an independent manufacturers labor
practices from those generally accepted as ethical in the United States could damage our
reputation, which may result in a decrease in customer traffic to our stores, as well as purchasing
through our catalogs and Internet site, and therefore could adversely affect our sales, net
earnings, business, financial condition and results of operations.
Our business could be adversely affected by increased costs of the raw materials and other
resources that are important to our business.
Our products are manufactured using several key raw materials, including wool and cotton,
which are subject to fluctuations in price and availability. We purchase the raw materials for
approximately 11% of our finished products, of which five vendors accounted for over 79% of the raw
materials purchased directly by us in fiscal year 2007. The remainder of our finished products are
purchased as finished units, with the vendor responsible for the acquisition of the raw materials.
Changes in raw materials costs to the vendors or to us may impact the long-term cost of our
finished products. Fuel costs and labor costs could also have an adverse impact on our vendors
manufacturing costs and on our freight and other costs. Any significant fluctuations in price or
availability of our raw materials and other resources or any significant increase in the price or
decrease in the availability of the raw materials and other resources that are important to our
business could have a material adverse impact on our business, financial condition and results of
operations.
Our success depends, in part, on our ability to meet the changing preferences of our customers.
We must successfully gauge merchandise trends and changing consumer preferences to succeed.
Our success is dependent upon our ability to gauge the tastes of our customers and to provide
merchandise that satisfies customer demand in a timely manner. The retail clothing business
fluctuates according to changes in consumer preferences dictated, in part, by fashion, performance,
luxury and seasonality. To the extent the market for our merchandise weakens, sales will be
adversely affected and the markdowns required to move the resulting excess inventory will adversely
affect our business, financial condition and results of operations.
Fluctuations in the demand for tailored and casual clothing and accessories affect our
inventory levels. As our business is becoming more seasonal in nature, we must carry a significant
amount of inventory prior to peak selling seasons when we build up our inventory levels. We issue
purchase orders for the purchase and manufacture of merchandise well in advance of
the applicable selling season. As a result, we are vulnerable to demand and pricing shifts and
to suboptimal selection and timing of merchandise purchases. In addition, lead times for many of
our purchases are long, which may make it more difficult for us to respond rapidly to new or
changing merchandise trends or consumer acceptance for our products. As a result, our business,
financial condition and results of operations could be materially adversely affected.
Our success depends, in part, on the volume of retail traffic in our geographic locations and the
availability of suitable lease space.
Many of our stores are located in shopping malls or retail centers. Sales at these stores are
affected, in part, by the volume of traffic in those malls and retail centers. Our sales volume
and mall or retail center traffic may be adversely affected by economic downturns in a particular
area and the closing of nearby stores. In addition, a decline in the desirability of the shopping
environment in a particular mall or retail center, or a decline in the popularity of mall shopping
or retail center among our target consumers, could adversely affect our business, financial
condition and results of operations.
Part of our future growth is significantly dependent on our ability to operate stores in
desirable locations with capital investment and lease costs that allow us to maintain our
profitability. We cannot be sure as to when or whether desirable locations will become available at
reasonable costs. In addition, we must be able to renew our existing store leases on terms that
meet our financial targets. Our failure to secure favorable locations and lease terms generally,
and upon renewal, could result in our loss of market share and could have an adverse effect on our
business, financial condition and results of operations.
12
Our dependence on third party delivery services exposes us to business interruptions and service
issues that are beyond our control.
The success of our stores is impacted by our timely receipt of merchandise from our
distribution facilities, and the success of our Direct Marketing segment is impacted by the timely
delivery of merchandise to our customers. Third party transportation companies deliver our
merchandise to substantially all of our stores and our customers. Some of these third parties
employ personnel represented by a labor union. Disruptions in the delivery of merchandise or work
stoppages by employees of any of these third parties could delay the timely receipt of merchandise,
which could result in cancelled sales, a loss of loyalty to our brand and excess inventory. We may
be required to respond in a number of ways, many of which could decrease our gross profits and net
income and our business, financial condition and results of operations could be materially
adversely affected.
Our dependence on our centralized distribution centers and centralized computer systems exposes us
to the risk of a substantial disruption to our business.
We centralize the distribution of our products in two adjacent distribution centers located in
Hampstead, Maryland. Substantially all of the merchandise that we purchase is shipped directly to
these distribution centers, where the merchandise is prepared for shipment to our stores or our
customers. If these distribution centers were to shut down or lose significant capacity for any
reason, our operations would likely be seriously disrupted. As a result, we could incur longer lead
times associated with distributing our products to our stores and customers and significantly
higher operating costs during the period prior to and after our reopening or replacing these
distribution centers. In addition, we are increasingly dependent on the Internet and centralized
computer systems and networks (collectively, Systems) to process and transmit transactions and to
store electronic information. It is critical that we maintain uninterrupted access to and operation
of the Systems. The Systems, including our back-up systems, are subject to damage or interruption
from power outages, computer and telecommunications failures, computer viruses, security breaches
and catastrophic events such as fires, tornadoes and other natural disasters. If the Systems are
damaged or cease to function properly, we may suffer interruptions in our operations and we may
have to make significant investment to fix or replace them. Although we maintain business
interruption and property insurance, we cannot assure you that our insurance will be sufficient, or
that insurance proceeds will be timely paid to us, in the event our distribution centers or Systems
are shut down for any reason. Such shut-downs could result in a material adverse effect on our
business, financial condition and results of operations.
13
Our business could be adversely affected by increased paper, printing and mailing costs
Increases in postal rates, paper or printing costs would affect the cost of producing and
distributing our catalog and promotional mailings and sales and marketing expenses. We rely on
discounts from the basic postal rate structure, such as discounts for bulk mailings and sorting by
zip code and carrier routes. The unavailability of these discounts, as well as increases in future
paper, printing and postal costs could adversely impact our earnings if we are unable to offset
these increases by raising prices or by implementing more efficient printing, mailing, delivery and
order fulfillment systems. This could result in a material adverse effect on our business,
financial condition and results of operations.
Our efforts to protect and enforce our intellectual property rights or protect ourselves from the
claims of third-parties may not be effective.
Our trademarks are important to our success and competitive position. We are the owner or
exclusive licensee in the United States of the marks JOS. A. BANK
®
, JOS. A. BANK V.I.P.
®
, JOS. A.
BANK VACATION IN PARADISE
®
, VACATION IN PARADISE
®
, and THE MIRACLE COLLECTION
®
, each of which is
registered in the United States Patent and Trademark Office. We are susceptible to others imitating
our products and infringing on our intellectual property rights. Imitation or counterfeiting of our
products or other infringement of our intellectual property rights could diminish the value of our
brands or otherwise adversely affect our revenues. The actions we have taken to establish and
protect our trademarks may not be adequate to prevent imitation of our products by others or to
prevent others from seeking to invalidate our trademarks or block sales of our products in
violation of the trademarks and intellectual property rights of others. In addition, others may
assert rights in, or ownership of, our trademarks and other intellectual property rights or in
marks that are similar to the marks that we license and we may not be able to successfully resolve
these types of conflicts to our satisfaction. In some cases, there may be trademark owners who have
prior rights to our marks because the laws of certain foreign countries may not protect
intellectual property rights to the same extent as do the laws of the United States. In other
cases, there may be holders who have prior rights to similar marks. Our failure to adequately
protect and enforce our intellectual property rights or protect ourselves from the claims of third
parties could result in a material adverse effect on our business, financial condition and results
of operations.
We are exposed to a number of risks involving the acceptance and processing of credit cards, the
occurrence of which could substantially harm our business, financial condition and results of
operations.
Our acceptance of credit cards at our stores and through our catalog and Internet channels
necessarily involves the gathering and storage of sensitive, personal information regarding our
customers. Although we believe our systems are sound, no system is completely invulnerable to
attack or loss of data. A loss of data could subject us to financial and legal risks, as well as
diminish our reputation and customer loyalty. Further, our continued ability to accept and process
credit cards is dependent, in part, on our contractual relationships with our acquiring bank (i.e.
the bank at which we maintain our account for collecting credit card payments from customers) and
our credit card processor (i.e. the third party that submits on our behalf credit card transactions
to our acquiring bank). Any disruption or change in these contractual relationships could interrupt
our business or increase our costs. The occurrence of any of the foregoing risks, or other risks
associated with the acceptance and processing of credit cards, could have a material adverse effect
on our business, financial condition and results of operations.
We face a number of risks relating to our use of consumer information.
We maintain a customer database which is important to our marketing efforts. Any limitations
imposed on the use of this consumer data, whether imposed by federal or state governments or
business partners, could have an adverse effect on our future marketing activity. In addition, to
the extent that our security procedures and protection of customer information prove to be
insufficient or inadequate, we may become subject to litigation, which could expose us to liability
and cause damage to our reputation or brand, in addition to the negative effect on our business,
financial condition and results of operations.
14
Our business has become increasingly dependent on a strong holiday season.
Our net sales, net income and inventory levels fluctuate on a seasonal basis and therefore the
results for one quarter are not necessarily indicative of the results that may be achieved for a
full fiscal year. During the fourth quarters of fiscal years
2005, 2006 and 2007, we generated approximately 53%, 58% and 53%, respectively, of our annual
net income, which resulted, in part, from increased traffic during the holiday season and our
increased marketing efforts during this peak selling time. Any decrease in sales or margins during
this period could have a disproportionate effect on our business, financial condition and results
of operations. In addition, major winter storms could negatively impact our sales and result in a
material adverse effect on our business, financial condition and results of operations.
We will face a number of risks if we pursue growth by acquisitions or other strategic
opportunities.
We may from time to time hold discussions and negotiations regarding strategic opportunities,
including with (i) potential investors who express an interest in making an investment in or
acquiring us, (ii) potential joint venture partners looking toward the formation of strategic
alliances and (iii) companies that represent potential acquisition or investment opportunities for
us. We cannot assure you that any definitive agreement will be reached regarding the foregoing, nor
do we believe that any such agreement is necessary to implement successfully our strategic plans.
Pursuing growth by acquisitions or other strategic opportunities will expose us to the various
risks that arise there from, which could result in a material adverse effect on our business,
financial condition and results of operations.
Our stock price may continue to be volatile.
The market price of our common stock has fluctuated substantially in the past and may continue
to do so in the future. The following, among other factors, may cause the market price of our
common stock to fluctuate:
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Our sales and profitability results and those of others in the retail industry;
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Anticipation regarding our future operating results and those generally operating in
the retail industry; and
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Changes in earnings estimates by research analysts.
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In addition, the stock market has experienced price and volume fluctuations that have affected
the market price of our common stock, as well as that of other companies, including our
competitors, and which may be unrelated to our operating performance or the operating performance
of these other companies.
Our charter documents, our Rights Agreement and Delaware law may inhibit a takeover that
stockholders may consider favorable.
Provisions in our restated certificate of incorporation, our amended and restated by-laws, our
Rights Agreement and Delaware law could delay or prevent a change of control or change in
management that would provide stockholders with a premium to the market price of their common
stock. Our Rights Agreement has significant anti-takeover effects by causing substantial dilution
to a person or group that attempts to acquire us on terms not approved by our Board of Directors.
In addition, the authorization of undesignated preferred stock gives our Board of Directors the
ability to issue preferred stock with voting or other rights or preferences that could impede the
success of any attempt to change control of us. If a change of control or change in management is
delayed or prevented, this premium may not be realized or the market price of our common stock
could decline.
15
Litigation or legal proceedings could expose us to significant liabilities and could divert our
managements attention and thus negatively affect our financial results
We are subject to various litigation and legal proceedings and claims (collectively, Legal
Matters), including those identified in Part I, Item 3, Legal Proceedings. Although we intend to
defend the identified matters vigorously, we are unable to predict the outcome of these matters.
Accordingly, we cannot determine whether our insurance coverage would be sufficient to cover the
costs or potential losses, if any. Regardless of their merit, Legal Matters may result in a
diversion of our managements attention and resources and could be disruptive to our operations. In
addition, costs and potential losses associated with Legal Matters could adversely affect our
business, financial condition and results of operations.
Item 1B. UNRESOLVED STAFF COMMENTS
None.
Item 2. PROPERTIES
The Company owns one facility located in Hampstead, Maryland, which houses, among other
things, its principal executive offices and a distribution center, and leases its other
distribution center also located in Hampstead, Maryland, adjacent to its owned facility. The
Company believes that its existing facilities are well maintained and in good operating condition.
The table below presents certain information relating to the Companys property as of April 2,
2008:
|
|
|
|
|
|
|
|
|
|
|
Gross
|
|
|
|
|
|
|
Square
|
|
Owned/
|
|
|
Location
|
|
Feet
|
|
Leased
|
|
Primary Function
|
Hampstead, Maryland
|
|
|
315,000
|
|
|
Owned
|
|
Offices, distribution center, catalog and
Internet
order and fulfillment and regional tailoring
overflow shop
|
|
|
|
|
|
|
|
|
|
Hampstead, Maryland
|
|
|
289,000
|
|
|
Leased
|
|
Distribution center and offices
|
The Company also leases two overflow tailoring facilities in Atlanta, Georgia and Kansas City,
Kansas, as well as overflow tailoring operations in several of its larger stores. These facilities
receive customers goods from full-line stores, which are altered and returned to the selling store
for customer pickup. Additional office space of approximately 3,000 square feet is leased in
Florida.
As of February 2, 2008, the Company operated 422 stores (including its seven outlet stores and
12 franchise stores). All Company-owned full-line stores were leased. The full-line stores average
approximately 4,730 square feet as of fiscal year-end 2007, including selling, storage, tailor shop
and service areas. The full-line stores range in size from approximately 1,000 square feet to
approximately 18,900 square feet. In most cases the Company pays a fixed annual base rent plus a
pro rata share of common area maintenance costs, real estate taxes and insurance. Certain store
leases require contingent rental fees based on sales in addition to or in the place of annual
rental fees. Most of the Companys leases provide for an increase in annual fixed rental payments
during the lease term. In addition, the Company has entered into an agreement to purchase a retail
location for approximately $2.1 million. Closing under the agreement is expected to occur in fiscal
year 2008.
Item 3. LEGAL PROCEEDINGS
On July 24, 2006, a lawsuit was filed against the Company and Robert N. Wildrick, the
Companys Chief Executive Officer, in the United States District Court for the District of Maryland
by Roy T. Lefkoe, Civil Action Number 1:06-cv-01892-WMN (the Class Action). On August 3, 2006, a
lawsuit substantially similar to the Class Action was filed in the United States District Court for
the District of Maryland by Tewas Trust UAD 9/23/86, Civil Action Number 1:06-cv-02011-WMN (the
Tewas Trust Action). The Tewas Trust Action was filed against the same defendants as those in the
Class Action and purported to assert the same claims and seek the same relief. On November 20,
2006, the Class Action and the Tewas Trust
Action were consolidated under the Class Action case number (1:06-cv-01892-WMN) and the Tewas
Trust Action was administratively closed.
16
Massachusetts Labor Annuity Fund has been appointed the lead plaintiff in the Class Action and
has filed a Consolidated Class Action Complaint. R. Neal Black, the Companys President, and David
E. Ullman, the Companys Executive Vice President and Chief Financial Officer, have been added as
defendants. On behalf of purchasers of the Companys stock between December 5, 2005 and June 7,
2006 (the Class Period), the Class Action purports to make claims under Sections 10(b) and 20(a)
and Rule 10b-5 of the Securities Exchange Act of 1934, based on the Companys disclosures during
the Class Period. The Class Action seeks unspecified damages, costs, and attorneys fees. The
Companys Motion to Dismiss the Class Action was not granted. The Company intends to defend
vigorously the Class Action.
On August 11, 2006, a lawsuit was filed against the Companys directors and, as nominal
defendant, the Company in the United States District Court for the District of Maryland by Glenn
Hutton (Hutton), Civil Action Number 1:06-cv-02095-BEL (the Hutton Action). The lawsuit
purported to be a shareholder derivative action. The lawsuit purported to make claims for various
violations of state law that allegedly occurred from January 5, 2006 through August 11, 2006 (the
Relevant Period). It sought on behalf of the Company against the directors unspecified damages,
equitable relief, costs and attorneys fees.
On August 28, 2006, a lawsuit substantially similar to the Hutton Action was filed in the
United States District Court for the District of Maryland by Robert Kemp, Civil Action Number
1:06-cv-02232-BEL (the Kemp Action). The Kemp Action was filed against the same defendants as
those in the Hutton Action and purported to assert substantially the same claims and sought
substantially the same relief.
On October 17, 2006, the Hutton Action and the Kemp Action were consolidated under the Hutton
Action case number (1:06-cv-02095-BEL) and are now known as In re Jos. A. Bank Clothiers, Inc.
Derivative Litigation (the Derivative Action). The Amended Shareholder Derivative Complaint in
the Derivative Action was filed against the same defendants as those in the Hutton Action, extended
the Relevant Period to October 20, 2006 and purported to assert substantially the same claims and
seek substantially the same relief.
The Companys Motion to Dismiss the Derivative Action was granted on September 13, 2007. Among
the reasons for dismissal was the failure of the plaintiff to demand that the Board of Directors
pursue on behalf of the Company the claims alleged in the Derivative Action. By letter dated
September 17, 2007 (the Demand Letter), Hutton, by and through his attorneys, made such demand.
The Board appointed a Special Litigation Committee (the SLC) to investigate, and determine the
position of the Company with respect to, all matters relating to the Demand Letter. The SLC, with
the assistance of independent counsel, conducted an investigation into the claims presented in the
Demand Letter. The SLC issued its findings in a Report of the Special Litigation Committee of Jos.
A. Bank Clothiers, Inc., dated February 7, 2008 (the Report). In the Report, the SLC concludes
that, for a variety of reasons, the institution of a lawsuit [as proposed in the Demand Letter] is
neither appropriate nor in the best interest of the Company.... First, and most important [among
those reasons, the SLC found that] the proposed lawsuit is entirely without merit. The Report has
been delivered to Huttons attorneys.
By letter dated November 27, 2007, the Company received from the Norfolk County Retirement
System (NCRS) a demand pursuant to Section 220 of the Delaware General Corporation Law for
inspection of certain of the Companys books and records for the purpose of investigating, among
other matters, claims that appear substantially similar to those raised in the Derivative Action.
The Company asked that the demand be withdrawn or held in abeyance until the SLC reported on its
investigation. On January 3, 2008, NCRS filed in the Court of Chancery of the State of Delaware
(Case Number 3443-VCP) a Verified Complaint against the Company seeking to compel an inspection of
the Companys books and records. The Company has answered the Complaint and intends to defend
vigorously the action.
The resolution of the foregoing matters cannot be accurately predicted and there is no
estimate of costs or potential losses, if any. Accordingly, the Company cannot determine whether
its insurance coverage would be sufficient to cover such costs or potential losses, if any, and has
not recorded any provision for cost or loss associated with these actions. It is possible that the
Companys consolidated financial statements could be materially impacted in a particular fiscal
quarter or year by an unfavorable outcome or settlement of these actions.
From time to time, other legal matters in which the Company may be named as a defendant arise
in the normal course of the Companys business activities. The resolution of these legal matters
against the Company cannot be accurately predicted.
The Company does not anticipate that the outcome of such matters will have a material adverse
effect on the business, net assets or financial position of the Company.
17
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Companys security holders during the quarter ended
February 2, 2008.
PART II
|
|
Item 5.
|
MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
|
Market Information.
The Companys Common Stock is listed on The Nasdaq Global Select Market under the trading
symbol JOSB. The following table sets forth, for the periods indicated, the range of high and
low sales prices for the Common Stock, as reported on the Nasdaq Global Select Market.
On December 14, 2005, the Companys Board of Directors declared a 25% common stock dividend
payable on February 15, 2006 to stockholders of record as of January 27, 2006. In conjunction with
the distribution of the stock dividend, the Company retired all of its previously held shares of
treasury stock. Unless otherwise indicated, all historical weighted average share and per share
amounts and all references to the number of common shares elsewhere in this Annual Report on Form
10-K, including in the Consolidated Financial Statements, and Notes thereto, have been restated to
reflect this stock dividend.
|
|
|
|
|
|
|
|
|
|
|
High
|
|
|
Low
|
|
1st Quarter fiscal 2008 (through April 2, 2008)
|
|
$
|
27.15
|
|
|
$
|
18.81
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2006
|
|
|
Fiscal Year 2007
|
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
1st Quarter
|
|
$
|
48.12
|
|
|
$
|
40.58
|
|
|
$
|
40.07
|
|
|
$
|
29.08
|
|
2nd Quarter
|
|
|
43.39
|
|
|
|
22.14
|
|
|
|
46.16
|
|
|
|
31.88
|
|
3rd Quarter
|
|
|
31.41
|
|
|
|
23.50
|
|
|
|
37.79
|
|
|
|
26.43
|
|
4th Quarter
|
|
|
33.31
|
|
|
|
28.58
|
|
|
|
32.63
|
|
|
|
19.50
|
|
On April 2, 2008, the closing sale price of the Common Stock was $21.24.
Holders of Record of Common Stock
As of April 2, 2008, there were 79 holders of record of the Companys Common Stock.
Dividend Policy
The Company intends to retain its earnings to finance the development and expansion of its
business and for working capital purposes, and therefore does not anticipate paying any cash
dividends in the foreseeable future. The Company has not declared or paid any cash dividends in the
last two fiscal years. In addition, the Amended and Restated Credit Agreement pursuant to which the
Company maintains its line of credit (the Credit Agreement) prohibits the Company from paying
cash dividends without prior approval from the lender.
Authorized Common Shares
At the 2006 annual meeting of shareholders held on June 23, 2006, the shareholders voted to
approve an amendment to the Companys restated certificate of incorporation to increase the number
of authorized shares of common stock of the Company from 20 million shares to 45 million shares.
19
Performance Graph
The graph below compares changes in the cumulative total stockholder return (change in stock
price plus reinvested dividends) for the period from January 31, 2003 through February 1, 2008 of
an initial investment of $100 invested in (a) Jos. A. Banks Common Stock, (b) the Total Return
Index for the NASDAQ Stock Market (U.S.) (NASDAQ U.S.) and (c) the Total Return Index for NASDAQ
Retail Trade Stocks (NASDAQ Retail). The measurement date for each point on the graph is the last
trading day of the fiscal year noted on the horizontal axis. Total Return Index values are
provided by NASDAQ and prepared by the Center for Research in Security Prices at the University of
Chicago. The stock price performance is not included to forecast or indicate future price
performance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return
|
|
|
Total Return
|
|
|
|
|
|
|
|
Index
|
|
|
Index
|
|
|
|
Jos. A. Bank
|
|
|
NASDAQ
|
|
|
NASDAQ
|
|
|
|
Clothiers,
|
|
|
Stock Market
|
|
|
Retail Trade
|
|
|
|
Inc.
|
|
|
(U.S.)
|
|
|
Stocks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31, 2003
|
|
$
|
100.00
|
|
|
$
|
100.00
|
|
|
$
|
100.00
|
|
January 30, 2004
|
|
$
|
204.25
|
|
|
$
|
155.64
|
|
|
$
|
146.62
|
|
January 28, 2005
|
|
$
|
248.85
|
|
|
$
|
153.96
|
|
|
$
|
175.60
|
|
January 27, 2006
|
|
$
|
437.72
|
|
|
$
|
175.35
|
|
|
$
|
190.43
|
|
February 2, 2007
|
|
$
|
341.32
|
|
|
$
|
189.02
|
|
|
$
|
209.23
|
|
February 1, 2008
|
|
$
|
297.16
|
|
|
$
|
182.51
|
|
|
$
|
185.24
|
|
This information shall not be deemed to be filed for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in
any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such filing.
20
Item 6. SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data with respect to fiscal years 2003 through
2007 have been derived from the Companys audited Consolidated Financial Statements. All fiscal
years end on the Saturday closest to January 31 of the respective year. Fiscal years 2003 through
2005 and fiscal year 2007 consisted of 52 weeks, while fiscal year 2006 consisted of 53 weeks. The
information should be read in conjunction with the Consolidated Financial Statements and Notes
thereto that appear elsewhere in this Annual Report on Form 10 K and Item 7, Managements
Discussion and Analysis of Financial Condition and Results of Operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
2003
|
|
|
2004
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
|
(In thousands, except per share information and stores)
|
|
Consolidated Statements of Income Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
299,663
|
|
|
$
|
372,500
|
|
|
$
|
464,633
|
|
|
$
|
546,385
|
|
|
$
|
604,010
|
|
Cost of goods sold
|
|
|
127,364
|
|
|
|
147,674
|
|
|
|
177,006
|
|
|
|
207,947
|
|
|
|
225,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
172,299
|
|
|
|
224,826
|
|
|
|
287,627
|
|
|
|
338,438
|
|
|
|
378,646
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
111,769
|
|
|
|
144,770
|
|
|
|
179,902
|
|
|
|
212,890
|
|
|
|
242,655
|
|
General and administrative
|
|
|
30,554
|
|
|
|
38,003
|
|
|
|
45,930
|
|
|
|
52,453
|
|
|
|
53,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
142,323
|
|
|
|
182,773
|
|
|
|
225,832
|
|
|
|
265,343
|
|
|
|
295,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
29,976
|
|
|
|
42,053
|
|
|
|
61,795
|
|
|
|
73,095
|
|
|
|
82,751
|
|
Total other income (expense)
|
|
|
(1,623
|
)
|
|
|
(1,696
|
)
|
|
|
(1,794
|
)
|
|
|
(938
|
)
|
|
|
1,582
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
28,353
|
|
|
|
40,357
|
|
|
|
60,001
|
|
|
|
72,157
|
|
|
|
84,333
|
|
Provision for income taxes
|
|
|
12,073
|
|
|
|
15,876
|
|
|
|
24,751
|
|
|
|
28,935
|
|
|
|
34,165
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
16,280
|
|
|
$
|
24,481
|
|
|
$
|
35,250
|
|
|
$
|
43,222
|
|
|
$
|
50,168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share informationdiluted(a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share
|
|
$
|
0.94
|
|
|
$
|
1.38
|
|
|
$
|
1.95
|
|
|
$
|
2.36
|
|
|
$
|
2.72
|
|
Diluted weighted average number of shares
|
|
|
17,354
|
|
|
|
17,789
|
|
|
|
18,031
|
|
|
|
18,342
|
|
|
|
18,420
|
|
Balance Sheet Information (as of end of fiscal
year):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
875
|
|
|
$
|
1,425
|
|
|
$
|
7,344
|
|
|
$
|
43,080
|
|
|
$
|
82,082
|
|
Working capital
|
|
|
76,214
|
|
|
|
69,620
|
|
|
|
96,856
|
|
|
|
136,562
|
|
|
|
187,134
|
|
Total assets
|
|
|
200,645
|
|
|
|
233,304
|
|
|
|
304,832
|
|
|
|
368,392
|
|
|
|
440,098
|
|
Total debt
|
|
|
29,863
|
|
|
|
6,859
|
|
|
|
5,797
|
|
|
|
412
|
|
|
|
|
|
Total noncurrent liabilities (including debt)
|
|
|
51,521
|
|
|
|
41,024
|
|
|
|
44,595
|
|
|
|
46,416
|
|
|
|
52,712
|
|
Stockholders equity
|
|
|
86,454
|
|
|
|
114,324
|
|
|
|
153,800
|
|
|
|
208,234
|
|
|
|
261,165
|
|
Other Data (as of end of fiscal year):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of stores(b)
|
|
|
210
|
|
|
|
269
|
|
|
|
324
|
|
|
|
376
|
|
|
|
422
|
|
|
|
|
(a)
|
|
On December 14, 2005, the Companys Board of Directors declared a 25% common stock dividend
payable on February 15, 2006 to stockholders of record as of January 27, 2006. Unless otherwise
indicated, all historical weighted average share and per share amounts and all references to the
number of common shares elsewhere in the Consolidated Financial Statements, and Notes thereto, have
been restated to reflect the stock dividend.
|
|
(b)
|
|
Includes franchise stores.
|
21
|
|
Item 7.
|
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
The information that follows should be read in conjunction with the Consolidated Financial
Statements and Notes thereto that appear elsewhere in this Annual Report on Form 10-K. Fiscal years
2005 and 2007 consisted of 52 weeks, while fiscal 2006 consisted of 53 weeks. All comparisons
between fiscal years 2006 and 2007 are 53-week versus 52-week results, respectively, unless
otherwise noted.
Overview
Net income in fiscal year 2007 increased 16.1% to approximately $50.2 million, as compared
with approximately $43.2 million in fiscal year 2006. The increased earnings in fiscal year 2007
were primarily attributable to:
|
|
|
10.5% increase in net sales, with increases in both the Stores and Direct Marketing
segments, while generating an increase in gross profit margins of 80 basis points;
|
|
|
|
|
3.8% increase in comparable store sales; and
|
|
|
|
|
a 40 basis points increase in operating costs (sales and marketing and general and
administrative costs) as a percentage of sales, as compared with the prior year, caused
primarily by the opening of 48 stores during the year, offset somewhat by the leveraging of
general and administrative costs.
|
The Company had 422 stores as of the end of fiscal year 2007, which consisted of 403
Company-owned full-line stores, seven Company-owned outlet stores and 12 stores operated by
franchisees. Management believes that the chain can grow to approximately 600 stores by 2012,
depending on the performance of the Company over the next several years. The Company plans to open
approximately 38 to 48 stores in fiscal year 2008 as part of its plan to grow the chain to this
targeted long-term store level. The store growth is part of a strategic plan the Company initiated
in fiscal year 2000. In the past seven years, the Company has continued to open new stores as
infrastructure and performance have improved. As such, there were 21 new stores opened in fiscal
year 2001, 25 new stores opened in fiscal year 2002, 50 new stores opened in fiscal year 2003, 60
new stores opened in fiscal year 2004, 56 new stores opened in fiscal year 2005, 52 new stores
opened in fiscal year 2006 and 48 new stores opened in fiscal year 2007.
Capital expenditures are expected to be approximately $30 to $35 million in fiscal year 2008,
primarily to fund the opening of approximately 38 to 48 new stores, the renovation and/or
relocation of several stores, the purchase and renovation of a retail location, the potential
expansion of distribution center capacity and the implementation of various systems projects. The
capital expenditures include the cost of the construction of leasehold improvements for new stores
and several stores to be renovated or relocated, of which $9 to $12 million is expected to be
reimbursed through landlord contributions. The Company also expects inventories to increase in 2008
to support new store openings and sales growth in both the Companys Stores and Direct Marketing
segments.
The Company ended fiscal year 2007 with no revolving debt under its Credit Agreement, no term
debt and $82.1 million of cash. The Company generated $63.7 million of cash from operating
activities in fiscal year 2007, which was primarily used to fund $27.7 million in property, plant
and equipment expenditures and reflected a $23.4 million increase in inventory levels primarily to
support the opening of 48 new stores, the expansion of certain core products and sales growth in
both the Companys Stores and Direct Marketing segments. The Credit Agreement has a maturity date
of April 30, 2010 and currently allows the Company to borrow a maximum revolving amount of $100
million. Subject to certain limitations, the Company has the option to increase the maximum
revolving amount to $125 million, if requested by April 30, 2008, if needed and if supported by its
borrowing base formula under the Credit Agreement. After giving effect to all then outstanding
obligations and other limitations under the Credit Agreement, the amount that the Company was
entitled to borrow under the Credit Agreement (Excess Availability) was $99.6 million at fiscal
year-end 2007.
Common Stock Dividends.
On December 14, 2005, the Companys Board of Directors declared a 25%
common stock dividend payable on February 15, 2006 to stockholders of record as of January 27,
2006. In conjunction with the distribution of the stock dividend, the Company retired all of its
previously held shares of treasury stock. Unless otherwise indicated, all historical weighted
average share and per share amounts and all references to the number of common shares elsewhere in
the consolidated financial statements, and notes thereto, have been restated to reflect the stock
dividend.
22
Critical Accounting Policies and Estimates
In preparing the consolidated financial statements, a number of assumptions and estimates are
made that, in the judgment of management, are proper in light of existing general economic and
company-specific circumstances. For a detailed discussion on the application of these and other
accounting policies, see Note 1 in the Consolidated Financial Statements in this Annual Report on
Form 10-K.
Inventory.
The Company records inventory at the lower of cost or market (LCM). Cost is
determined using the first-in, first-out method. The estimated market value is based on
assumptions for future demand and related pricing. The Company reduces the carrying value of
inventory to net realizable value where cost exceeds estimated selling price less costs of
disposal.
Managements sales assumptions are based on the Companys experience that most of the
Companys inventory is sold through the Companys primary sales channels with virtually no
inventory being liquidated through bulk sales to third parties. The Companys LCM reserve estimates
for inventory that have been made in the past have been very reliable as a significant portion of
its sales (over two-thirds in fiscal year 2007) are of classic traditional products that are
on-going programs and that bear low risk of write-down. These products include items such as navy
and gray suits, navy blazers and white and blue button-down shirts, etc. The portions of products
that have fashion elements are monitored closely to ensure that aging goals are achieved to limit
the need to sell significant amounts of product below cost. In addition, the Companys strong gross
profit margins enable the Company to sell substantially all of its products at levels above cost.
To calculate the estimated market value of its inventory, the Company periodically performs a
detailed review of all of its major inventory classes and stock-keeping units and performs an
analytical evaluation of aged inventory on a quarterly basis. Semi-annually, the Company compares
the on-hand units and season-to-date unit sales (including actual selling prices) to the sales
trend and estimated prices required to sell the units in the future, which enables the Company to
estimate the amount which may have to be sold below cost. The units sold below cost are sold in the
Companys outlet stores, through the Internet website or on clearance at the retail stores,
typically within twenty-four months of purchase. The Companys costs in excess of selling price for
units sold below cost totaled $1.9 million, $1.3 million and $1.9 million in fiscal years 2005,
2006 and 2007, respectively. The Company reduced the carrying amount of its current inventory
value for product in its inventory as of the end of the fiscal year that may be sold below its cost
in future periods. If the amount of inventory which is sold below its cost differs from the
estimate, the Companys inventory valuation adjustment could change.
Asset Valuation.
Long-lived assets, such as property, plant and equipment subject to
depreciation, are reviewed for impairment to determine whether events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset to estimated
undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an
asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by
which the carrying amount of the asset exceeds the fair value of the asset. The asset valuation
estimate is principally dependent on the Companys ability to generate profits at both the Company
and store levels. These levels are principally driven by the sales and gross profit trends that are
closely monitored by the Company. During fiscal year 2007, the Company recognized an impairment
charge of $0.8 million relating to several stores within its Stores segment which was included in
Sales and marketing in the Consolidated Statements of Income. There were no asset impairment
charges in either fiscal year 2005 or fiscal year 2006.
Lease Accounting.
The Company uses a consistent lease period (generally, the initial
non-cancelable lease term plus renewal option periods provided for in the lease that can be
reasonably assured) when calculating depreciation of leasehold improvements and in determining
straight-line rent expense and classification of its leases as either an operating lease or a
capital lease. The lease term and straight-line rent expense commences on the date when the Company
takes possession and has the right to control use of the leased premises. Funds received from the
lessor intended to reimburse the Company for the costs of leasehold improvements are recorded as a
deferred credit resulting from a lease incentive and amortized over the lease term as a reduction
to rent expense.
While the Company has taken reasonable care in preparing these estimates and making these
judgments, actual results could and probably will differ from the estimates. Management believes
any difference in the actual results from the estimates will not have a material effect upon the
Companys financial position or results of operations. These
estimates were discussed by Management
with the Companys Audit Committee.
23
Recently Issued Accounting Standards
In September 2006, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value
Measurements. (SFAS 157). SFAS
157 defines fair value, establishes a framework for measuring fair value under generally
accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157
does not require any new fair value measurements, but provides guidance on how to measure fair
value by providing a fair value hierarchy used to classify the source of the information. This
statement is effective for fiscal year 2008, except as it relates to nonfinancial assets and
liabilities, for which the statement is effective for fiscal year 2009. The Company is evaluating
the impact, if any, of this statement on its consolidated financial statements.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets
and Financial
Liabilities including an amendment of FASB Statement No. 115, (SFAS 159). SFAS
159 permits entities to choose to measure many financial instruments and certain other assets and
liabilities at fair value on an instrument-by-instrument basis (the fair value option). SFAS 159
becomes effective for fiscal year 2008. The Company is evaluating the impact, if any, of this
statement on its consolidated financial statements.
In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141(R),
Business Combinations (SFAS 141(R)). SFAS 141(R) replaces SFAS 141, Business Combinations,
but retains the requirement that the purchase method of accounting for acquisitions be used for all
business combinations. SFAS No. 141(R) amends the principles and requirements for how an acquirer
recognizes and measures in its financial statements the identifiable assets acquired, the
liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS
141(R) also requires expanded disclosures in addition to that previously required by SFAS 141. SFAS
141(R) will be effective for all business combinations with an acquisition date on or after
February 1, 2009, the start of our fiscal year 2009, and early adoption is not permitted. The
Company is currently evaluating the impact SFAS No. 141(R) will have on the Companys consolidated
financial statements.
In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160,
Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB No. 51 (SFAS
160). SFAS 160 requires that noncontrolling (or minority) interests in subsidiaries be reported in
the equity section of the companys balance sheet, rather than in the balance sheet between
liabilities and equity. SFAS 160 also changes the manner in which the net income of the subsidiary
is reported and disclosed in the controlling companys income statement and establishes guidelines
for accounting for changes in ownership percentages and for deconsolidation. SFAS 160 will be
effective beginning February 1, 2009. The Company is currently assessing the impact, if any, of
this statement on its consolidated financial statements.
Results of Operations
The following table is derived from the Companys Consolidated Statements of Income and sets
forth, for the periods indicated, certain items included in the Consolidated Statements of Income
expressed as a percentage of net sales.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Net Sales
|
|
|
|
Fiscal Year
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
Net sales
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
Cost of goods sold
|
|
|
38.1
|
|
|
|
38.1
|
|
|
|
37.3
|
|
Gross profit
|
|
|
61.9
|
|
|
|
61.9
|
|
|
|
62.7
|
|
Sales and marketing expenses
|
|
|
38.7
|
|
|
|
39.0
|
|
|
|
40.2
|
|
General and administrative expenses
|
|
|
9.9
|
|
|
|
9.6
|
|
|
|
8.8
|
|
Total operating expenses
|
|
|
48.6
|
|
|
|
48.6
|
|
|
|
49.0
|
|
Operating income
|
|
|
13.3
|
|
|
|
13.4
|
|
|
|
13.7
|
|
Total other income (expense)
|
|
|
(0.4
|
)
|
|
|
(0.2
|
)
|
|
|
0.3
|
|
Income before provision for income taxes
|
|
|
12.9
|
|
|
|
13.2
|
|
|
|
14.0
|
|
Provision for income taxes
|
|
|
5.3
|
|
|
|
5.3
|
|
|
|
5.7
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
7.6
|
%
|
|
|
7.9
|
%
|
|
|
8.3
|
%
|
|
|
|
|
|
|
|
|
|
|
24
Fiscal Year 2007 Compared to Fiscal Year 2006
Net Sales
Net sales increased 10.5% to $604.0 million in fiscal year 2007 compared with
$546.4 million in fiscal year 2006. The Stores segment sales increased 10.5% in fiscal year 2007
due primarily to a 3.8% increase in comparable store sales and the opening of 48 new stores (and
the closing of 2 stores) as shown below. The comparable store sales increase is based on a
comparison of the 52 weeks of fiscal year 2007 with the first 52 weeks of fiscal year 2006.
Comparable store sales include
merchandise sales generated in all full-line stores that have been open for at least thirteen
full months. The 3.8% increase in comparable store sales in fiscal year 2007 was led by increased
traffic (as measured by number of transactions), while items per transaction and dollars per
transaction decreased. Comparing fiscal year 2007 to fiscal year 2006, Direct Marketing sales
increased 13.1%, primarily driven by an increase in Internet sales offset by a decline in catalog
sales.
The following table provides information regarding the number of stores opened and closed
during fiscal years 2006 and 2007:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2006
|
|
|
Fiscal Year 2007
|
|
|
|
|
|
|
|
Square
|
|
|
|
|
|
|
Square
|
|
|
|
Stores
|
|
|
Feet
|
|
|
Stores
|
|
|
Feet*
|
|
Stores open at the beginning of the year
|
|
|
324
|
|
|
|
1,543
|
|
|
|
376
|
|
|
|
1,745
|
|
Stores opened
|
|
|
52
|
|
|
|
202
|
|
|
|
48
|
|
|
|
206
|
|
Stores closed
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
(16
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stores open at the end of the year
|
|
|
376
|
|
|
|
1,745
|
|
|
|
422
|
|
|
|
1,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Square feet is presented in thousands and excludes the square footage of the Companys
franchise stores. Square feet includes a net increase of 6 square feet due to relocations or
renovations in several stores.
|
All major product categories generated net sales increases in fiscal year 2007, led by sales
of suits followed by sales of dress shirts and sportswear. Sales of the more luxurious Signature
and Signature Gold suits, which together represented over 40% of suit sales in fiscal year 2007,
increased approximately 16% over fiscal year 2006 sales. For fiscal years 2006 and 2007, suits
represented approximately 24% and 25% of total merchandise sales, respectively. Merchandise sales
exclude tailoring and franchise fee revenue.
Gross Profit
Gross profit (net sales less cost of goods sold) in fiscal year 2007 increased
over the prior year both in absolute dollars and as a percentage of sales, increasing to $378.6
million or 62.7% of net sales in fiscal year 2007 from $338.4 million or 61.9% of net sales in
fiscal year 2006. The 80 basis point improvement in gross profit margin was driven primarily by
lower costs resulting from vendor sourcing shifts. In addition, gross profit margin improvements
were realized across all major product categories, except the sportswear category which was
impacted by clearance activity and holiday promotions.
The Companys gross profit classification may not be comparable to the classification used by
certain other entities. Some entities include distribution (including depreciation), store
occupancy, buying and other costs in cost of goods sold. Other entities (including the Company)
exclude such costs from gross profit, including them instead in general and administrative and/or
sales and marketing expenses.
Sales and Marketing Expenses
Sales and marketing expenses, which consist primarily of a)
full-line store, outlet store and direct marketing occupancy, payroll, selling and other variable
costs and b) total Company advertising and marketing expenses, increased to $242.7 million in
fiscal year 2007 from $212.9 million in fiscal year 2006. As a percent of net sales, sales and
marketing expenses increased to 40.2% in fiscal year 2007, as compared with 39.0% in fiscal year
2006. The $29.8 million increase in sales and marketing expenses relates primarily to expenses
supporting the opening of the 48 new stores in fiscal year 2007, a full year of costs from the 52
new stores opened in fiscal year 2006, and expanded advertising programs. The higher costs include
a) $10.8 million of occupancy costs, b) $9.4 million of payroll, benefits and related costs, c)
$5.5 million of media advertising, catalog and other marketing
costs, and d) $4.1 million of credit
card and other variable selling costs. The Company expects sales and marketing expenses to increase
in fiscal year 2008 primarily as a result of opening approximately 38 to 48 new stores, the full
year operation of stores that were opened during fiscal year 2007, an increase in advertising
expenditures, and anticipated increases in postage used in the mailing of catalogs and direct mail
advertising pieces
.
General and Administrative Expenses
General and administrative expenses (G&A), which consist
primarily of corporate and distribution center costs, increased $0.8 million in fiscal year 2007,
as compared with fiscal year 2006. Total corporate costs, including payroll, incentive
compensation, taxes and other corporate overhead costs, increased $0.2 million. The net increase in
corporate costs was primarily driven by a) higher payroll and incentive compensation costs of $1.3
million and higher travel costs of $0.5 million, b) lower benefits costs of $1.1 million due
primarily to lower claims experience related to the Companys group healthcare costs, c) a benefit
of $0.5 million related to a state grant that was recognized as a result of
targeted employment levels being achieved, d) lower professional fees of $0.4 million, and e)
higher other corporate costs of $0.4 million. Continued growth in the Stores and Direct Marketing
segments may result in further increases in G&A.
25
Distribution center costs increased $0.6 million in fiscal year 2007, primarily due to a)
higher payroll and benefits costs of $0.2 million, and b) higher occupancy, supplies, postage and
other miscellaneous costs of $0.4 million. The Company expects distribution center costs to
increase in the future as it expects to process an increasing amount of inventory units to support
future growth in the Stores and Direct Marketing segments. In addition, the Company may expand its
distribution center capacity in the next 12 to 24 months.
Interest Income, net
Interest income, net was $1.6 million in fiscal year 2007 compared to
interest expense, net of $0.9 million in fiscal year 2006, a favorable improvement of $2.5 million.
The change was due to the Company having no revolving debt under the Credit Agreement in fiscal
year 2007, compared to an average revolving balance of $7.2 million in fiscal year 2006. Interest
expense was $0.4 million in fiscal year 2007 compared to $1.4 million in fiscal year 2006. The
interest expense in fiscal year 2007 was comprised primarily of unused line fees related to the
revolving facility. In addition, the Company had higher average cash and short-term investment
levels in fiscal year 2007 compared to fiscal year 2006 and as a result earned more interest income
($1.9 million in fiscal year 2007 compared to $0.5 million in fiscal year 2006). The Company
anticipates having higher average cash and short-term investment levels throughout much of fiscal
year 2008, as compared with fiscal year 2007, which may result in higher net interest income
depending on the level of interest rates on investments during fiscal year 2008.
Income Taxes
The fiscal year 2007 effective income tax rate increased to 40.5%, as compared
with 40.1% in fiscal year 2006. The income tax rate for fiscal year 2006 reflected a reduction of
previously recorded income tax liabilities settled or otherwise resolved in fiscal year 2006 of
approximately $0.7 million. The Internal Revenue Service (IRS) has audited tax returns through
fiscal year 2004 and is in the process of examining the tax return for fiscal year 2005. The
majority of the Companys state and local returns are no longer subject to examinations by taxing
authorities for the years before fiscal year 2002.
Fiscal Year 2006 Compared to Fiscal Year 2005
Net Sales
Net sales increased 17.6% to $546.4 million in fiscal year 2006 compared with $464.6
million in fiscal year 2005. The Stores segment sales increased 17.1% in fiscal year 2006 due
primarily to a 4.3% increase in comparable store sales and the opening of 52 new stores as shown
below. The comparable store sales increase is based on a comparison of the 53 weeks of fiscal year
2006 with the corresponding 53 weeks of the prior year. Comparable store sales, which include
merchandise sales generated in all full-line stores that have been open for at least thirteen full
months, increased 4.3% in fiscal year 2006. The increase in comparable store sales was led by
increased traffic (as measured by number of transactions), while items and dollars per transaction
decreased. Direct Marketing sales increased 26.5%, primarily driven by increases in Internet sales
over fiscal year 2005, while catalog sales declined as compared with the prior fiscal year.
Most major product categories generated net sales increases in fiscal year 2006, led by sales
of dress shirts which increased nearly 15% over fiscal year 2005 sales and sales of sportswear
which increased nearly 7% over fiscal year 2005 sales. Sales of the more luxurious Signature and
Signature Gold suits, which together represented over 40% of suit sales in fiscal year 2006,
increased more than 21% over fiscal year 2005 sales. For fiscal years 2006 and 2005, suits
represented approximately 24% and 25% of total merchandise sales, respectively. Merchandise sales
exclude tailoring and franchise fee revenue.
26
Net sales also increased as a result of the opening of new stores. The following table
provides information regarding the number of stores opened and closed during fiscal years 2005 and
2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2005
|
|
|
Fiscal Year 2006
|
|
|
|
|
|
|
|
Square
|
|
|
|
|
|
|
Square
|
|
|
|
Stores
|
|
|
Feet
|
|
|
Stores
|
|
|
Feet*
|
|
Stores open at the beginning of the year
|
|
|
269
|
|
|
|
1,318
|
|
|
|
324
|
|
|
|
1,543
|
|
Stores opened
|
|
|
56
|
|
|
|
233
|
|
|
|
52
|
|
|
|
202
|
|
Stores closed
|
|
|
(1
|
)
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stores open at the end of the year
|
|
|
324
|
|
|
|
1,543
|
|
|
|
376
|
|
|
|
1,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Square feet is presented in thousands and excludes the square footage of the Companys
franchise stores. Square feet includes a net reduction of 8 square feet due to relocations or
renovations in several stores.
|
Gross Profit
Gross profit (net sales less cost of goods sold) in fiscal year 2006 remained
consistent with the prior year as a percentage of sales, increasing to $338.4 million or 61.94% of
net sales in fiscal year 2006 from $287.6 million or 61.90% of net sales in fiscal year 2005. The
slight increase in gross profit margin was driven by higher initial markups.
The Companys gross profit classification may not be comparable to the classification used by
certain other entities. Some entities include distribution, store occupancy, buying and other costs
in cost of goods sold. Other entities (including the Company) exclude such costs from gross profit,
including them instead in general and administrative and/or sales and marketing expenses.
Sales and Marketing Expenses
Sales and marketing expenses, which consist primarily of a)
full-line store, outlet store and direct marketing occupancy, payroll, selling and other variable
costs and b) total Company advertising and marketing expenses, increased to $212.9 million in
fiscal year 2006 from $179.9 million in fiscal year 2005. As a percent of net sales, sales and
marketing expenses increased slightly to 39.0% in fiscal year 2006, as compared with 38.7% in
fiscal year 2005. The $33.0 million increase in sales and marketing expenses relates primarily to
expenses supporting the opening of 52 new stores in fiscal year 2006, a full year of costs from the
56 new stores opened in fiscal year 2005, and expanded advertising programs. The higher costs
include a) $14.0 million of occupancy costs, b) $13.4 million of payroll, benefits and related
costs, and c) $5.6 million of media advertising, catalog and other marketing costs and credit card
and other variable selling costs.
General and Administrative Expenses
G&A increased $6.5 million in fiscal year 2006, as
compared with fiscal year 2005. Total corporate costs, including payroll, incentive compensation,
taxes and other corporate overhead costs, increased $5.3 million. The increases in corporate
payroll and overhead costs were primarily due to a) higher payroll and incentive compensation costs
($4.2 million), b) higher depreciation, occupancy and other administrative costs related to the
expansion of the corporate offices in the middle of fiscal year 2005 ($0.7 million), and c) higher
professional fees ($0.4 million).
Distribution center costs increased $1.2 million in fiscal year 2006, primarily due to a)
higher payroll and benefits costs ($0.6 million) and b) higher occupancy, utilities and other
miscellaneous costs ($0.5 million).
Interest Expense, net
Interest expense, net decreased $0.9 million from fiscal year 2005 to
fiscal year 2006 primarily due to a lower average borrowing balance, partially offset by higher
interest rates. The average daily revolver loan borrowings decreased $9.1 million to $7.2 million
in fiscal year 2006, as compared with $16.3 million in fiscal year 2005, while the weighted average
interest rate increased to 6.8% in fiscal year 2006 as compared with 6.0% in fiscal year 2005.
Income Taxes
The fiscal year 2006 effective income tax rate decreased to 40.1% as compared
with 41.2% in fiscal year 2005. The income tax rate for fiscal year 2006 reflects a reduction of
previously recorded income tax liabilities settled or otherwise resolved in 2006 of approximately
$0.7 million related to the finalization of the IRS examination of fiscal year 2004 return.
27
Liquidity and Capital Resources
Pursuant to the Credit Agreement, the Company has a credit facility with a maturity date of
April 30, 2010. The current maximum revolving amount available under the Credit Agreement is $100
million. Subject to certain limitations, the Company has the option to increase the maximum
revolving amount to $125 million, if requested by April 30, 2008, if needed
and if supported by its borrowing base formula under the Credit Agreement. Borrowings are
limited by a formula which considers inventories and accounts receivable. Interest rates under the
Credit Agreement vary with the prime rate or LIBOR and may include a spread over or under the
applicable rate. The spreads, if any, are based upon the Companys Excess Availability from time to
time. The average interest rate, excluding unused line fees, was 6.8% for fiscal year 2006 and
there were no borrowings outstanding in fiscal year 2007. Aggregate borrowings are secured by
substantially all assets of the Company with the exception of its distribution center and certain
equipment.
The Company ended fiscal year 2007 with no revolving debt under the Credit Agreement, no term
debt and $82.1 million of cash. The Company generated $63.7 million of cash from operating
activities in fiscal year 2007, which was primarily used to fund $27.7 million in property, plant
and equipment expenditures and reflected a $23.4 million increase in inventory levels primarily to
support the opening of 48 new stores, the expansion of certain core products and sales growth in
both the Companys Stores and Direct Marketing segments. The Companys Excess Availability under
the Credit Agreement was $99.6 million at fiscal year-end 2007.
Under the provisions of the Credit Agreement, the Company must comply with certain covenants
if the Excess Availability is less than $7.5 million. The covenants include a minimum earnings
before interest, taxes, depreciation and amortization (EBITDA), limitations on capital
expenditures and additional indebtedness, and restrictions on cash dividend payments. At each of
fiscal year-end 2006 and fiscal year-end 2007, under the Credit Agreement, there were no revolving
borrowings outstanding, there was one standby letter of credit issued in the amount of $0.4 million
(to secure the payment of rent at one leased location) and the Excess Availability was $99.6
million. As of fiscal year-end 2006, the Company had $0.4 million of term debt. As of fiscal
year-end 2007, the Company had no term debt.
The average daily outstanding revolving balance under the Credit Agreement was approximately
$7.2 million for fiscal year 2006 while there was no revolving debt outstanding under the line
during fiscal year 2007.
The following table summarizes the Companys sources and uses of funds as reflected in the
Consolidated Statements of Cash Flows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
Cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
$
|
37,026
|
|
|
$
|
60,911
|
|
|
$
|
63,712
|
|
Investing activities
|
|
|
(31,577
|
)
|
|
|
(31,141
|
)
|
|
|
(27,401
|
)
|
Financing activities
|
|
|
470
|
|
|
|
5,966
|
|
|
|
2,691
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and
cash equivalents
|
|
$
|
5,919
|
|
|
$
|
35,736
|
|
|
$
|
39,002
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by the Companys operating activities in fiscal year 2007 was primarily impacted
by net income of $50.2 million and depreciation and amortization of $18.5 million, offset by an
increase in net operating working capital and other operating items of $5.0 million. The increase
in operating working capital and other operating items included an increase of $23.4 million in
inventories primarily related to the new store growth and the expansion of certain core products
during fiscal year 2007. In addition, operating working capital and other operating items included
a total increase of $21.4 million in accounts payable, accrued expenses and noncurrent lease
obligations primarily related to the store growth and higher accrued taxes related to the increased
earnings. Cash used in investing activities during fiscal year 2007 of $27.4 million relates
primarily to payments for capital expenditures for new stores, information systems and renovated
stores. Cash provided by financing activities for fiscal year 2007 of $2.7 million relates to net
proceeds from the exercise of stock options (including the related tax benefits).
Cash provided by the Companys operating activities in fiscal year 2006 was generated
primarily by increased net income and was used to support a $6.8 million increase in inventory and
$5.7 million increase in prepaid rent and other leasing costs to support new store growth. Cash
used in investing activities in fiscal year 2006 relates primarily to capital expenditures for new
store openings, renovations and relocations, and distribution center and systems projects. Cash
provided by financing activities relates primarily to $11.4 million of proceeds and excess income
tax benefits from the issuance of common stock in connection with stock option exercises, partially
offset by $5.8 million of repayments of long-term debt, including voluntary early repayments of
$5.1 million of long-term debt.
28
Cash provided by the Companys operating activities in fiscal year 2005 was generated
primarily by increased net income as compared with fiscal year 2004 and was used to support a $49
million increase in inventory to support new store growth and to increase availability of certain
core items. Cash used in investing activities in fiscal year 2005 relates primarily to capital
expenditures for new stores, distribution center and systems projects. Cash provided by financing
activities relates primarily to $1.5 million of proceeds from the issuance of common stock in
connection with stock option exercises, offset by $1.1 million of repayments of long-term debt.
For fiscal year 2008, the Company expects to spend approximately $30 to $35 million on capital
expenditures, primarily to fund the opening of approximately 38 to 48 new stores, the renovation
and/or relocation of several stores, the purchase and renovation of a retail location, the
potential expansion of distribution center capacity and the implementation of various systems
projects. Management believes that the Companys existing cash, cash flows from operating
activities and availability under its Credit Agreement will be sufficient to fund its planned
capital expenditures and operating expenses for fiscal year 2008. The capital expenditures include
the cost of the construction of leasehold improvements for new stores and several stores to be
renovated or relocated, of which $9 to $12 million is expected to be reimbursed through landlord
contributions. These amounts are typically paid by the landlords after the completion of
construction by the Company and the receipt of appropriate lien waivers from contractors. For the
stores opened and renovated in fiscal year 2007, the Company negotiated approximately $12.6 million
of landlord contributions, of which $6.0 million was collected by the fiscal year-end. The balance
is expected to be received in fiscal year 2008. In addition, at February 2, 2008, the Company had
recorded $7.7 million of accrued property, plant and equipment additions related to stores opened
in fiscal year 2007 and to be opened in fiscal year 2008 that have been incurred but not completely
invoiced by vendors which will be paid primarily in the first quarter of fiscal year 2008. Also, in
fiscal year 2007, the Company collected approximately $7.1 million of landlord contributions
related to fiscal year 2006 store openings, which were recorded within the operating activities
section of the Consolidated Statement of Cash Flows. As of February 2, 2008, the Company has
collected substantially all landlord contributions for stores opened in fiscal year 2006 and prior.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements other than
its operating lease agreements and one letter of credit outstanding under the Credit Agreement.
Disclosures about Contractual Obligations and Commercial Commitments
The Companys principal commitments are non-cancelable operating leases in connection with its
retail stores, certain tailoring spaces and equipment. Under the terms of certain of the retail
store leases, the Company is required to pay a base annual rent plus a contingent amount based on
sales. In addition, many of the retail store leases include scheduled rent increases.
The following table reflects a summary of the Companys contractual cash obligations and other
commercial commitments as of February 2, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due by Fiscal Year (in thousands)
|
|
|
|
2008
|
|
|
2009-2011
|
|
|
2012-2013
|
|
|
Beyond 2013
|
|
|
Total (d)
|
|
Operating leases (a) (b)
|
|
$
|
50,964
|
|
|
$
|
144,485
|
|
|
$
|
83,640
|
|
|
$
|
86,836
|
|
|
$
|
365,925
|
|
Stand-by letter-of-credit (c)
|
|
|
|
|
|
|
400
|
|
|
|
|
|
|
|
|
|
|
|
400
|
|
License agreement
|
|
|
165
|
|
|
|
330
|
|
|
|
|
|
|
|
|
|
|
|
495
|
|
Property, plant and equipment commitments (e)
|
|
|
2,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,100
|
|
|
|
|
(a)
|
|
Includes various lease agreements for stores to be opened and equipment placed in service
subsequent to February 2, 2008. See Note 9 to the Consolidated Financial Statements.
|
|
(b)
|
|
Excludes contingent rent and other lease costs.
|
|
(c)
|
|
To secure the payment of rent at one leased location included in Operating Leases above and
is renewable each year through the end of the lease term (2009).
|
|
(d)
|
|
Obligations related to unrecognized tax benefits of $0.3 million have been excluded from the
above table as the amount to be settled in cash and the specific payment dates are not known.
|
|
(e)
|
|
The Company has entered into an agreement to purchase a retail location. Closing under the
agreement is expected to occur in fiscal year 2008.
|
29
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
At fiscal year-end 2007, the Company was not a party to any derivative financial instruments.
In addition, the Company does not believe it is materially at risk for changes in market interest
rates or foreign currency fluctuations. Interest rates under the Credit Agreement vary with the
prime rate or LIBOR and may include a spread over or under the applicable rate. In addition, the
Company invests its excess cash in short-term investments, primarily treasury bills, where returns
effectively reflect current interest rates. As a result, market interest rate changes may impact
the Companys net interest income or expense. The impact will depend on variables such as the
magnitude of rate changes and the level of borrowings or excess cash balances. A 100 basis point
change in interest rate would have changed net interest income by approximately $0.4 million in
fiscal year 2007.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Refer to pages F-1 to F-23 of this Annual Report on Form 10-K, which are incorporated herein
by reference.
|
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
None.
Item 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures and Changes in Internal Control Over Financial Reporting
Limitations on Controls and Procedures
Because of their inherent limitations, disclosure
controls and procedures and internal control over financial reporting (collectively, Control
Systems) may not prevent or detect all failures or misstatements of the type sought to be avoided
by Control Systems. Also, projections of any evaluation of the effectiveness of the Companys
Control Systems to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate. Management, including the Companys Chief Executive Officer (the CEO) and Chief
Financial Officer (the CFO), does not expect that the Companys Control Systems will prevent all
errors or all fraud. A Control System, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the Control System are met. Further, the
design of a Control System must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the inherent
limitations in all Control Systems, no evaluation can provide absolute assurance that all control
issues and instances of fraud, if any, within the Company have been detected. These reports by
management, including the CEO and CFO, on the effectiveness of the Companys Control Systems
express only reasonable assurance of the conclusions reached.
Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures
that are designed to ensure that information required to be disclosed in the Companys reports
under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed,
summarized, and reported within the time periods specified in the SECs rules and forms, and that
such information is accumulated and communicated to management, including the CEO and CFO, as
appropriate, to allow timely decisions regarding required disclosure.
Management, with the participation of the CEO and CFO, has evaluated the effectiveness, as of
February 2, 2008, of the Companys disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, the CEO and CFO have
concluded that the Companys disclosure controls and procedures were effective as of February 2,
2008.
30
Managements Annual Report on Internal Control over Financial Reporting
Management is
responsible for establishing and maintaining adequate internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Management, with the
participation of the CEO and CFO, has evaluated the effectiveness, as of February 2, 2008, of the
Companys internal control over financial reporting. In making this evaluation, management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in its
publication Internal Control-Integrated Framework. Based on that evaluation, the CEO and CFO have
concluded that the Companys internal control over financial reporting was effective as of February
2, 2008.
Changes in Internal Control over Financial Reporting
There were no changes in the Companys
internal control over financial reporting identified in connection with the evaluation required by
paragraph (d) of Section 240.13a-15 of the Exchange Act that occurred during the Companys last
fiscal quarter (the Companys fourth quarter in the case of an annual report) that have materially
affected, or are reasonably likely to materially affect, the Companys internal control over
financial reporting.
Attestation Report of the Registered Public Accounting Firm
The Companys independent
registered public accounting firm, Deloitte & Touche, LLP, has issued the following attestation
report on the effectiveness of the Companys internal control over financial reporting:
31
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Jos. A. Bank Clothiers, Inc.:
Hampstead, Maryland
We have audited the internal control over financial reporting of Jos. A. Bank Clothiers, Inc.
and subsidiaries (the Company) as of February 2, 2008, based on criteria established in
Internal
Control Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway
Commission. The Companys management is responsible for maintaining effective internal control
over financial reporting and for its assessment of the effectiveness of internal control over
financial reporting, included in the accompanying Managements Annual Report on Internal Control
over Financial Reporting. Our responsibility is to express an opinion on the Companys internal
control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk,
and performing such other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.
A companys internal control over financial reporting is a process designed by, or under the
supervision of, the companys principal executive and principal financial officers, or persons
performing similar functions, and effected by the companys board of directors, management, and
other personnel 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. A companys internal control over financial reporting includes
those policies and procedures that (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including
the possibility of collusion or improper management override of controls, material misstatements
due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any
evaluation of the effectiveness of the internal control over financial reporting to future periods
are subject to the risk that the controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control
over financial reporting as of February 2, 2008, based on the criteria established in
Internal
Control Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway
Commission.
We have also audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the consolidated financial statements as of and for the fiscal
year ended February 2, 2008, of the Company and our report dated
April 10, 2008 expressed an
unqualified opinion on those financial statements.
DELOITTE & TOUCHE LLP
Baltimore, Maryland
April 10, 2008
32
Item 9B. OTHER INFORMATION
None.
PART III
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The disclosure required under Item 10, other than the following information concerning the
Companys code of ethics, is omitted by the Company in accordance with General Instruction G to
Form 10-K. The Company will disclose the information required under this item either by (a)
incorporating the information by reference from the Companys definitive proxy statement if filed
by June 2, 2008 (the first business day following 120 days from the close of fiscal year-end 2007)
or (b) filing an amendment to this Form 10-K which contains the required information by June 2,
2008.
The Company has adopted a code of ethics as defined by applicable rules of the Securities
and Exchange Commission and the NASDAQ Stock Market, which is applicable to, among others, its
chief executive officer, chief financial officer, principal accounting officer and other senior
financial and reporting persons and its directors. If the Company makes any amendments to the code
of ethics for its senior officers, financial and reporting persons or directors (other than
technical, administrative, or other non-substantive amendments), or grants any waivers, including
implicit waivers, from a provision of this code to such persons, the Company will disclose the
nature of the amendment or waiver, its effective date and to whom it applies on its website or in a
report on Form 8-K filed with the Securities and Exchange Commission. The Company has posted its
code of ethics on its Internet website at www.josbank.com.
Item 11. EXECUTIVE COMPENSATION
The disclosure required under Item 11 is omitted by the Company in accordance with General
Instruction G to Form 10-K. The Company will disclose the information required under this item
either by (a) incorporating the information by reference from the Companys definitive proxy
statement if filed by June 2, 2008 or (b) filing an amendment to this Form 10-K which contains the
required information by June 2, 2008.
Effective the date hereof, the Companys Compensation Committee adopted a management bonus
plan for the Companys executive officers for fiscal year 2008. Exhibit 10.15, which is
incorporated by reference herein, includes a description of this plan.
Effective the date hereof, the Companys Compensation Committee determined the amount payable
to the Companys executive officers earned under the bonus plan adopted for fiscal year 2007.
These bonuses are as follows: Robert N. Wildrick, $2,731,293, R. Neal Black, $365,000, Robert B.
Hensley, $305,000, David E. Ullman, $285,000 and Gary Merry, $180,000.
|
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
|
The disclosure required under Item 12 is omitted by the Company in accordance with General
Instruction G to Form 10-K. The Company will disclose the information required under this item
either by (a) incorporating the information by reference from the Companys definitive proxy
statement if filed by June 2, 2008 or (b) filing an amendment to this Form 10-K which contains the
required information by June 2, 2008.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The disclosure required under Item 13 is omitted by the Company in accordance with General
Instruction G to Form 10-K. The Company will disclose the information required under this item
either by (a) incorporating the information by reference from the Companys definitive proxy
statement if filed by June 2, 2008 or (b) filing an amendment to this Form 10-K which contains the
required information by June 2, 2008.
33
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The disclosure required under Item 14 is omitted by the Company in accordance with General
Instruction G to Form 10-K. The Company will disclose the information required under this item
either by (a) incorporating the information by reference from the Companys definitive proxy
statement if filed by June 2, 2008 or (b) filing an amendment to this Form 10-K which contains the
required information by June 2, 2008.
PART IV
Item 15. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES
(a) (1)
List of Financial Statements
The following Consolidated Financial Statements of Jos. A. Bank Clothiers, Inc. and the
related notes are filed as part of this Annual Report pursuant to Item 8:
|
|
|
|
|
Page
|
|
|
F-1
|
|
|
|
|
|
F-2
|
|
|
|
|
|
F-3
|
|
|
|
|
|
F-4
|
|
|
|
|
|
F-5
|
|
|
|
|
|
F-6
|
|
|
|
(a) (2)
List of Financial Statement Schedules
All required information is included within the Consolidated Financial Statements and the
notes thereto.
(a) (3)
List of Exhibits
|
|
|
|
|
3.1
|
|
|
|
Certificate of Amendment of the Restated Certificate of Incorporation of the
Company and the Restated Certificate of Incorporation of the Company.*(26)
|
|
|
|
|
|
3.2
|
|
|
|
Amended and Restated By-Laws of the Company as of April 15, 2003.*(15)
|
|
|
|
|
|
4.1
|
|
|
|
Form of Common Stock certificate.*(1)
|
|
|
|
|
|
4.2
|
|
|
|
Rights Agreement, dated as of September 6, 2007, including Exhibit B thereto
(the form of Right
Certificate).*(28)
|
|
|
|
|
|
4.3
|
|
|
|
Certificate Eliminating Reference to Series A Preferred Stock from Restated
Certificate of Incorporation of Company.*(29)
|
|
|
|
|
|
4.4
|
|
|
|
Certificate of Designation of Series A Junior Participating Preferred Stock.*(29)
|
|
|
|
|
|
10.1
|
|
|
|
1994 Incentive Plan.*(1)
|
|
|
|
|
|
10.1(a)
|
|
|
|
Amendments, dated as of October 6, 1997, to Incentive Plan.*(5)
|
|
|
|
|
|
10.2
|
|
|
|
Amended and Restated Credit Agreement, dated as of January 6, 2004, by and among
the Company, certain Lenders which are signatories thereto and Wells Fargo
Retail Finance II, LLC, as agent for such Lenders.*(17)
|
|
|
|
|
|
10.2(a)
|
|
|
|
Second Amendment to Amended and Restated Credit Agreement, dated as of January
6, 2004, by and among the Company, certain Lenders which are signatories thereto
and Wells Fargo Retail Finance II, LLC, as agent for such Lenders.*(24)
|
34
|
|
|
|
|
10.3
|
|
|
|
Amended and Restated Employment Agreement, dated as of May 15, 2002, between
David E. Ullman and Jos. A. Bank Clothiers, Inc.*(12)
|
|
|
|
|
|
10.3(a)
|
|
|
|
First Amendment, dated April 30, 2003, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between David E. Ullman and Jos. A.
Bank Clothiers, Inc.*(15)
|
|
|
|
|
|
10.3(b)
|
|
|
|
Second Amendment, dated as of April 4, 2005, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between David E. Ullman and Jos. A.
Bank Clothiers, Inc.*(20)
|
|
|
|
|
|
10.3(c)
|
|
|
|
Third Amendment, dated as of April 5, 2006, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between David E. Ullman and Jos. A.
Bank Clothiers, Inc.*(22)
|
|
|
|
|
|
10.3(d)
|
|
|
|
Fourth Amendment, dated as of April 13, 2007, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between David E. Ullman and Jos. A.
Bank Clothiers, Inc.*(27)
|
|
|
|
|
|
10.3(e)
|
|
|
|
Fifth Amendment, dated as of April 9, 2008, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between David E. Ullman and Jos. A.
Bank Clothiers, Inc.*(30)
|
|
|
|
|
|
10.4
|
|
|
|
Jos. A. Bank Clothiers, Inc. Nonqualified Deferred Compensation Trust Agreement,
dated
January 20,
2004.*(21)
|
|
|
|
|
|
10.5
|
|
|
|
Employment offer letter, dated March 14, 2008, from Jos. A. Bank Clothiers, Inc.
to Eric Singleton.*(30)
|
|
|
|
|
|
10.6
|
|
|
|
Amended and Restated Employment Agreement, dated May 15, 2002, by and between
Charles D. Frazer and Jos. A. Bank Clothiers, Inc.*(12)
|
|
|
|
|
|
10.6(a)
|
|
|
|
First Amendment, dated as of April 30, 2003, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between Charles D. Frazer and Jos.
A. Bank Clothiers, Inc.*(15)
|
|
|
|
|
|
10.6(b)
|
|
|
|
Second Amendment, dated as of April 4, 2005, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between Charles D. Frazer and Jos.
A. Bank Clothiers, Inc.*(21)
|
|
|
|
|
|
10.6(c)
|
|
|
|
Third Amendment, dated as of April 5, 2006, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between Charles D. Frazer and Jos.
A. Bank Clothiers, Inc.*(22)
|
|
|
|
|
|
10.6(d)
|
|
|
|
Fourth Amendment, dated as of April 13, 2007, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between Charles D. Frazer and Jos.
A. Bank Clothiers, Inc.*(27)
|
|
|
|
|
|
10.6(e)
|
|
|
|
Fifth Amendment, dated as of April 9, 2008, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between Charles D. Frazer and Jos.
A. Bank Clothiers, Inc.*(30)
|
|
|
|
|
|
10.7
|
|
|
|
Employment Agreement, dated as of November 1, 1999, between Robert N. Wildrick
and Jos. A. Bank Clothiers, Inc.*(7)
|
|
|
|
|
|
10.7(a)
|
|
|
|
First Amendment, dated as of March 6, 2000, to Employment Agreement, dated as of
November 1, 1999, by and between Robert N. Wildrick and Jos. A. Bank Clothiers,
Inc.*(8)
|
|
|
|
|
|
10.7(b)
|
|
|
|
Second Amendment, dated as of May 25, 2001, to Employment Agreement, dated as of
November 1, 1999, by and between Robert N. Wildrick and Jos. A. Bank Clothiers,
Inc.*(10)
|
35
|
|
|
|
|
10.7(c)
|
|
|
|
Third Amendment, dated as of October 2, 2003, to Employment Agreement, dated as
of November 1, 1999, by and between Robert N. Wildrick and Jos. A. Bank
Clothiers, Inc.*(16)
|
|
|
|
|
|
10.8
|
|
|
|
Employment Agreement, dated as of November 30, 1999, by and between Robert
Hensley and Jos. A. Bank Clothiers, Inc.*(7)
|
|
|
|
|
|
10.8(a)
|
|
|
|
First Amendment, dated as of January 1, 2000, to Employment Agreement, dated as
of November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(9)
|
|
|
|
|
|
10.8(b)
|
|
|
|
Second Amendment, dated as of March 16, 2001, to Employment Agreement, dated as
of November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(9)
|
|
|
|
|
|
10.8(c)
|
|
|
|
Third Amendment, dated as of April 15, 2002, to Employment Agreement, dated as
of November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(11)
|
|
|
|
|
|
10.8(d)
|
|
|
|
Fourth Amendment, dated as of May 28, 2002, to Employment Agreement, dated as of
November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(12)
|
|
|
|
|
|
10.8(e)
|
|
|
|
Fifth Amendment, dated as of April 30, 2003, to Employment Agreement, dated as
of November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(15)
|
|
|
|
|
|
10.8(f)
|
|
|
|
Sixth Amendment, dated as of April 4, 2005, to Employment Agreement, dated as of
November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(20)
|
|
|
|
|
|
10.8(g)
|
|
|
|
Seventh Amendment, dated as of April 5, 2006, to Employment Agreement, dated as
of November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(22)
|
|
|
|
|
|
10.8(h)
|
|
|
|
Eighth Amendment, dated as of April 13, 2007, to Employment Agreement, dated as
of November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(27)
|
|
|
|
|
|
10.8(i)
|
|
|
|
Ninth Amendment, dated as of April 9, 2008, to Employment Agreement, dated as of
November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(30)
|
|
|
|
|
|
10.9
|
|
|
|
Employment Agreement, dated as of December 21, 1999, by and between R. Neal
Black and Jos. A. Bank Clothiers, Inc.*(8)
|
|
|
|
|
|
10.9(a)
|
|
|
|
First Amendment, dated as of March 16, 2001, to Employment Agreement, dated as
of December 21, 1999, by and between R. Neal Black and Jos. A. Bank Clothiers,
Inc.*(9)
|
|
|
|
|
|
10.9(b)
|
|
|
|
Second Amendment, dated as of April 15, 2002, to Employment Agreement, dated as
of December 21, 1999, by and between Neal Black and Jos. A. Bank Clothiers,
Inc.*(11)
|
|
10.9(c)
|
|
|
|
Third Amendment, dated as of May 29, 2002, to Employment Agreement, dated as of
December 21, 1999, by and between R. Neal Black and Jos. A. Bank Clothiers,
Inc.*(12)
|
|
|
|
|
|
10.9(d)
|
|
|
|
Fourth Amendment, dated as of April 30, 2003, to Employment Agreement, dated as
of December 21, 1999, by and between R. Neal Black and Jos. A. Bank Clothiers,
Inc.*(15)
|
|
|
|
|
|
10.9(e)
|
|
|
|
Fifth Amendment, dated as of April 4, 2005 to Employment Agreement, dated as of
December 21, 1999, by and between R. Neal Black and Jos. A. Bank Clothiers,
Inc.*(20)
|
|
|
|
|
|
10.9(f)
|
|
|
|
Sixth Amendment, dated as of April 5, 2006 to Employment Agreement, dated as of
December 21, 1999, by and between R. Neal Black and Jos. A. Bank Clothiers,
Inc.*(22)
|
|
|
|
|
|
10.9(g)
|
|
|
|
Seventh Amendment, dated as of April 13, 2007 to Employment Agreement, dated as
of December 21, 1999, by and between R. Neal Black and Jos. A. Bank Clothiers,
Inc.*(27)
|
|
|
|
|
|
10.9(h)
|
|
|
|
Eighth Amendment, dated as of April 9, 2008 to Employment Agreement, dated as of
December 21, 1999, by and between R. Neal Black and Jos. A. Bank Clothiers,
Inc.*(30)
|
|
|
|
|
|
10.10
|
|
|
|
Employment offer letter, dated November 20, 2000, from Jos. A. Bank Clothiers,
Inc. to Jerry DeBoer.*(9)
|
36
|
|
|
|
|
10.10(a)
|
|
|
|
Written description of 2008 base salary for Jerry DeBoer.*(30)
|
|
|
|
|
|
10.11
|
|
|
|
Employment offer letter, dated September 18, 2000, from Jos. A. Bank Clothiers,
Inc. to Gary Merry.*(12)
|
|
|
|
|
|
10.11(a)
|
|
|
|
Written description of 2008 base salary for Gary Merry.*(30)
|
|
|
|
|
|
10.12
|
|
|
|
2002 Long-Term Incentive Plan.*(14)
|
|
|
|
|
|
10.13
|
|
|
|
Form of stock option agreement under the 2002 Long-Term Incentive Plan.*(20)
|
|
|
|
|
|
10.14
|
|
|
|
Collective Bargaining Agreement, dated March 1, 2006, by and between Joseph A.
Bank Mfg. Co., Inc. and UNITE HERE MID-ATLANTIC REGIONAL JOINT BOARD.*(25)
|
|
|
|
|
|
10.15
|
|
|
|
Description of management bonus plans.*(30)
|
|
|
|
|
|
21.1
|
|
|
|
Company subsidiaries.*(21)
|
|
|
|
|
|
23.1
|
|
|
|
Consent of Deloitte & Touche LLP.*(30)
|
|
|
|
|
|
31.1
|
|
|
|
Certification of Principal Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*(30)
|
|
|
|
|
|
31.2
|
|
|
|
Certification of Principal Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*(30)
|
|
|
|
|
|
32.1
|
|
|
|
Certification of Principal Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*(30)
|
|
|
|
|
|
32.2
|
|
|
|
Certification of Principal Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*(30)
|
|
|
|
*(1)
|
|
Incorporated by reference to the Companys Registration Statement on Form
S-1 filed May 3, 1994.
|
|
*(2)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended February 3, 1996.
|
|
*(3)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended February 1, 1997.
|
|
*(4)
|
|
Incorporated by reference to the Companys Form 8-K dated September 22, 1997.
|
|
*(5)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended January 31, 1998.
|
|
*(6)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended January 30, 1999.
|
|
*(7)
|
|
Incorporated by reference to the Companys Quarterly Report on Form 10-Q for
the quarter ended October 30, 1999.
|
|
*(8)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended January 29, 2000.
|
|
*(9)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended February 3, 2001.
|
|
*(10)
|
|
Incorporated by reference to the Companys Quarterly Report on Form 10-Q for
the quarter ended May 5, 2001.
|
|
*(11)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended February 2, 2002.
|
37
|
|
|
*(12)
|
|
Incorporated by reference to the Companys Quarterly Report on Form 10-Q for
the quarter ended May 4, 2002.
|
|
*(13)
|
|
Incorporated by reference to the Companys Current Report on Form 8-K, dated
May 8, 2002.
|
|
*(14)
|
|
Incorporated by reference to the Companys Definitive Proxy Statement on
Schedule 14(A) filed May 20, 2002.
|
|
*(15)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended February 1, 2003.
|
|
*(16)
|
|
Incorporated by reference to the Companys Quarterly Report on Form 10-Q for
the quarter ended November 1, 2003
|
|
*(17)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended January 31, 2004.
|
|
*(18)
|
|
Incorporated by reference to the Companys Current Report on Form 8-K, dated
April 20, 2004.
|
|
*(19)
|
|
Incorporated by reference to the Companys Current Report on Form 8-K, dated
May 14, 2004.
|
|
*(20)
|
|
Incorporated by reference to the Companys Current Report on Form 8-K, dated
April 7, 2005.
|
|
*(21)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended January 29, 2005.
|
|
*(22)
|
|
Incorporated by reference to the Companys Current Report on Form 8-K, dated
April 6, 2006.
|
|
*(23)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended January 28, 2006.
|
|
*(24)
|
|
Incorporated by reference to the Companys Quarterly Report on Form 10-Q for
the quarter ended April 29, 2006.
|
|
*(25)
|
|
Incorporated by reference to the Companys Current Report on Form 8-K, dated
May 4, 2006.
|
|
*(26)
|
|
Incorporated by reference to Amendment No. 1 to the Companys Quarterly
Report on Form 10-Q for the quarter ended July 29, 2006.
|
|
*(27)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended February 3, 2007.
|
|
*(28)
|
|
Incorporated by reference to the Companys Current Report on Form 8-K, dated
September 6, 2007.
|
|
*(29)
|
|
Incorporated by reference to the Companys Current Report on Form 8-K, dated
September 20, 2007.
|
|
*(30)
|
|
Filed herewith.
|
|
|
|
Exhibit represents a management contract or compensatory plan or arrangement.
|
38
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Jos. A. Bank Clothiers, Inc:
Hampstead, Maryland
We have audited the accompanying consolidated balance sheets of Jos. A. Bank Clothiers, Inc.
and subsidiaries (the Company) as of February 2, 2008 and February 3, 2007 and the related
consolidated statements of income, stockholders equity, and cash flows for the year ended February
2, 2008 (fiscal year 2007), for the year ended February 3, 2007 (fiscal year 2006), and for the
year ended January 28, 2006 (fiscal year 2005). These financial statements are the responsibility
of the Companys management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such fiscal year 2007, fiscal year 2006, and fiscal year 2005 consolidated
financial statements present fairly, in all material respects, the financial position of Jos. A.
Bank Clothiers, Inc. and subsidiaries as of February 2, 2008, and February 3, 2007, and the results
of their operations and their cash flows for each of the three fiscal years in the period ended
February 2, 2008, in conformity with accounting principles generally accepted in the United States
of America.
We have also audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the Companys internal control over financial reporting as of
February 2, 2008, based on the criteria established in
Internal ControlIntegrated Framework
issued
by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated April 10, 2008 expressed an unqualified opinion on the Companys internal control over financial
reporting.
DELOITTE & TOUCHE LLP
Baltimore, Maryland
April 10, 2008
F-1
JOS. A. BANK CLOTHIERS, INC.
CONSOLIDATED BALANCE SHEETS
AS OF FEBRUARY 3, 2007 AND FEBRUARY 2, 2008
(In Thousands, Except Share Information)
|
|
|
|
|
|
|
|
|
|
|
February 3, 2007
|
|
|
February 2, 2008
|
|
ASSETS
|
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
43,080
|
|
|
$
|
82,082
|
|
Accounts receivable, net
|
|
|
5,193
|
|
|
|
5,855
|
|
Inventories, net
|
|
|
183,471
|
|
|
|
206,825
|
|
Prepaid expenses and other current assets
|
|
|
18,560
|
|
|
|
18,593
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
250,304
|
|
|
|
313,355
|
|
NONCURRENT ASSETS:
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
117,553
|
|
|
|
126,235
|
|
Other noncurrent assets
|
|
|
535
|
|
|
|
508
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
368,392
|
|
|
$
|
440,098
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
41,683
|
|
|
$
|
47,383
|
|
Accrued expenses
|
|
|
63,606
|
|
|
|
72,150
|
|
Deferred tax liability
|
|
|
8,453
|
|
|
|
6,688
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
113,742
|
|
|
|
126,221
|
|
NONCURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
412
|
|
|
|
|
|
Noncurrent lease obligations
|
|
|
42,053
|
|
|
|
50,185
|
|
Noncurrent deferred tax liability
|
|
|
2,595
|
|
|
|
1,210
|
|
Other noncurrent liabilities
|
|
|
1,356
|
|
|
|
1,317
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
160,158
|
|
|
|
178,933
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
STOCKHOLDERS EQUITY:
|
|
|
|
|
|
|
|
|
Preferred stock, $1.00 par, 500,000
shares authorized, none issued or
outstanding
|
|
|
|
|
|
|
|
|
Common stock, $.01 par, 45,000,000 shares
authorized, 18,039,826 issued and
outstanding at February 3, 2007 and
18,179,371 issued and outstanding at
February 2, 2008
|
|
|
180
|
|
|
|
181
|
|
Additional paid-in capital
|
|
|
78,101
|
|
|
|
80,791
|
|
Retained earnings
|
|
|
130,092
|
|
|
|
180,260
|
|
Accumulated other comprehensive losses
|
|
|
(139
|
)
|
|
|
(67
|
)
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
208,234
|
|
|
|
261,165
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity
|
|
$
|
368,392
|
|
|
$
|
440,098
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-2
JOS. A. BANK CLOTHIERS, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED JANUARY 28, 2006, FEBRUARY 3, 2007 AND FEBRUARY 2, 2008
(In Thousands, Except Per Share Information)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
NET SALES
|
|
$
|
464,633
|
|
|
$
|
546,385
|
|
|
$
|
604,010
|
|
Cost of goods sold
|
|
|
177,006
|
|
|
|
207,947
|
|
|
|
225,364
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
|
287,627
|
|
|
|
338,438
|
|
|
|
378,646
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
179,902
|
|
|
|
212,890
|
|
|
|
242,655
|
|
General and administrative
|
|
|
45,930
|
|
|
|
52,453
|
|
|
|
53,240
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
225,832
|
|
|
|
265,343
|
|
|
|
295,895
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME
|
|
|
61,795
|
|
|
|
73,095
|
|
|
|
82,751
|
|
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
136
|
|
|
|
461
|
|
|
|
1,937
|
|
Interest expense
|
|
|
(1,930
|
)
|
|
|
(1,399
|
)
|
|
|
(355
|
)
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense)
|
|
|
(1,794
|
)
|
|
|
(938
|
)
|
|
|
1,582
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
60,001
|
|
|
|
72,157
|
|
|
|
84,333
|
|
Provision for income taxes
|
|
|
24,751
|
|
|
|
28,935
|
|
|
|
34,165
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
$
|
35,250
|
|
|
$
|
43,222
|
|
|
$
|
50,168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.07
|
|
|
$
|
2.40
|
|
|
$
|
2.77
|
|
Diluted
|
|
$
|
1.95
|
|
|
$
|
2.36
|
|
|
$
|
2.72
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
17,021
|
|
|
|
17,981
|
|
|
|
18,128
|
|
Diluted
|
|
|
18,031
|
|
|
|
18,342
|
|
|
|
18,420
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-3
JOS. A. BANK CLOTHIERS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
FOR THE YEARS ENDED JANUARY 28, 2006, FEBRUARY 3, 2007 AND FEBRUARY 2, 2008
(In Thousands, Except Share Information)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
|
other
|
|
|
Total
|
|
|
|
Shares of
|
|
|
Common
|
|
|
paid-in
|
|
|
Retained
|
|
|
Treasury
|
|
|
comprehensive
|
|
|
stockholders
|
|
|
|
common stock
|
|
|
stock
|
|
|
capital
|
|
|
earnings
|
|
|
stock
|
|
|
losses
|
|
|
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, JANUARY 29, 2005
|
|
|
16,825,370
|
|
|
$
|
124
|
|
|
$
|
67,594
|
|
|
$
|
51,664
|
|
|
$
|
(5,058
|
)
|
|
$
|
|
|
|
$
|
114,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,250
|
|
|
|
|
|
|
|
|
|
|
|
35,250
|
|
Retirement of treasury stock, at cost
|
|
|
|
|
|
|
|
|
|
|
(5,058
|
)
|
|
|
|
|
|
|
5,058
|
|
|
|
|
|
|
|
|
|
Issuance of common stock pursuant to
Incentive Option Plan
|
|
|
460,156
|
|
|
|
5
|
|
|
|
1,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,601
|
|
Income tax benefit from exercise of
non-qualified stock options
|
|
|
|
|
|
|
|
|
|
|
2,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,694
|
|
Stock dividend fractional share repurchase
|
|
|
(1,722
|
)
|
|
|
|
|
|
|
(69
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(69
|
)
|
Stock dividend transfer of par value
|
|
|
|
|
|
|
44
|
|
|
|
|
|
|
|
(44
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, JANUARY 28, 2006
|
|
|
17,283,804
|
|
|
|
173
|
|
|
|
66,757
|
|
|
|
86,870
|
|
|
|
|
|
|
|
|
|
|
|
153,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,222
|
|
|
|
|
|
|
|
|
|
|
|
43,222
|
|
Adjustment to minimum pension liability,
net of tax effect of $4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,228
|
|
Adjustment to initially apply FAS No.
158, net of tax benefit of $95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(145
|
)
|
|
|
(145
|
)
|
Issuance of common stock pursuant to
Incentive Option Plan
|
|
|
756,022
|
|
|
|
7
|
|
|
|
7,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,404
|
|
Income tax benefit from exercise of
non-qualified stock options
|
|
|
|
|
|
|
|
|
|
|
3,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, FEBRUARY 3, 2007
|
|
|
18,039,826
|
|
|
|
180
|
|
|
|
78,101
|
|
|
|
130,092
|
|
|
|
|
|
|
|
(139
|
)
|
|
|
208,234
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,168
|
|
|
|
|
|
|
|
|
|
|
|
50,168
|
|
Adjustment to minimum pension liability,
net of tax effect of $47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72
|
|
|
|
72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,240
|
|
Issuance of common stock pursuant to
Incentive Option Plan
|
|
|
139,545
|
|
|
|
1
|
|
|
|
1,868
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,869
|
|
Income tax benefit from exercise of
non-qualified stock options
|
|
|
|
|
|
|
|
|
|
|
822
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
822
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, FEBRUARY 2, 2008
|
|
|
18,179,371
|
|
|
$
|
181
|
|
|
$
|
80,791
|
|
|
$
|
180,260
|
|
|
$
|
|
|
|
$
|
(67
|
)
|
|
$
|
261,165
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-4
JOS. A. BANK CLOTHIERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JANUARY 28, 2006, FEBRUARY 3, 2007 AND FEBRUARY 2, 2008
(In Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
35,250
|
|
|
$
|
43,222
|
|
|
$
|
50,168
|
|
Adjustments to reconcile net income to net cash provided
by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) deferred taxes
|
|
|
12,791
|
|
|
|
(2,603
|
)
|
|
|
(3,150
|
)
|
Depreciation and amortization
|
|
|
13,020
|
|
|
|
15,809
|
|
|
|
18,477
|
|
Loss on disposition of assets
|
|
|
31
|
|
|
|
34
|
|
|
|
281
|
|
Income tax benefit from exercise of non-qualified stock options
|
|
|
2,694
|
|
|
|
|
|
|
|
|
|
Asset impairment charges
|
|
|
|
|
|
|
|
|
|
|
833
|
|
Non-cash recognition of state grant
|
|
|
|
|
|
|
|
|
|
|
(485
|
)
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in accounts receivable
|
|
|
(1,657
|
)
|
|
|
1,262
|
|
|
|
(662
|
)
|
Increase in inventories
|
|
|
(48,949
|
)
|
|
|
(6,829
|
)
|
|
|
(23,354
|
)
|
Increase in prepaid expenses and other assets
|
|
|
(960
|
)
|
|
|
(5,708
|
)
|
|
|
(10
|
)
|
Decrease in non-current assets
|
|
|
942
|
|
|
|
31
|
|
|
|
27
|
|
Increase (decrease) in accounts payable
|
|
|
2,545
|
|
|
|
(995
|
)
|
|
|
5,700
|
|
Increase in accrued expenses
|
|
|
15,503
|
|
|
|
10,490
|
|
|
|
7,602
|
|
Increase in noncurrent lease obligations
|
|
|
4,689
|
|
|
|
7,046
|
|
|
|
8,132
|
|
Increase (decrease) in other noncurrent liabilities
|
|
|
1,127
|
|
|
|
(848
|
)
|
|
|
153
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
37,026
|
|
|
|
60,911
|
|
|
|
63,712
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS USED FOR INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments for capital expenditures
|
|
|
(31,577
|
)
|
|
|
(31,141
|
)
|
|
|
(27,696
|
)
|
Proceeds from disposal of assets
|
|
|
|
|
|
|
|
|
|
|
295
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used for investing activities
|
|
|
(31,577
|
)
|
|
|
(31,141
|
)
|
|
|
(27,401
|
)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings under revolving loan agreement
|
|
|
106,185
|
|
|
|
90,135
|
|
|
|
|
|
Repayment of borrowings under revolving loan agreement
|
|
|
(106,185
|
)
|
|
|
(90,135
|
)
|
|
|
|
|
Proceeds from long-term debt
|
|
|
|
|
|
|
400
|
|
|
|
|
|
Repayment of other long-term debt
|
|
|
(1,062
|
)
|
|
|
(5,785
|
)
|
|
|
|
|
Income tax benefit from exercise of non-qualified
stock options
|
|
|
|
|
|
|
3,947
|
|
|
|
822
|
|
Proceeds from issuance of common stock, net of
fractional share repurchase
|
|
|
1,532
|
|
|
|
7,404
|
|
|
|
1,869
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
470
|
|
|
|
5,966
|
|
|
|
2,691
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
|
5,919
|
|
|
|
35,736
|
|
|
|
39,002
|
|
CASH AND CASH EQUIVALENTS, beginning of year
|
|
|
1,425
|
|
|
|
7,344
|
|
|
|
43,080
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, end of year
|
|
$
|
7,344
|
|
|
$
|
43,080
|
|
|
$
|
82,082
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-5
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Description of Business
Jos. A. Bank Clothiers, Inc. is a nationwide retailer of classic mens
clothing through conventional retail stores, catalog and Internet direct marketing and franchisees.
Principles of Consolidation
The consolidated financial statements include the accounts of Jos.
A. Bank Clothiers, Inc. and its wholly-owned subsidiaries (collectively referred to as the
Company). All significant intercompany balances and transactions have been eliminated in
consolidation.
Reclassifications
Certain amounts for fiscal years 2005 and 2006 have been reclassified to
conform to the presentation in fiscal year 2007. The Company reclassified store opening costs,
which were reported on a separate line in fiscal years 2005 and 2006, to sales and marketing
expense in the accompanying Consolidated Statements of Income. Also, interest income is reported
separately from interest expense in the accompanying Consolidated Statements of Income.
Additionally, certain deferred tax line items have been reclassified within the accompanying Income
Taxes Note (Note 7).
Common Stock Dividend
On December 14, 2005, the Companys Board of Directors declared a 25%
common stock dividend payable on February 15, 2006 to stockholders of record as of January 27,
2006. In conjunction with the distribution of the stock dividend, the Company retired all of its
previously held shares of treasury stock. Unless otherwise indicated, all historical weighted
average share and per share amounts and all references to the number of common shares elsewhere in
the consolidated financial statements, and notes thereto, have been restated to reflect the stock
dividend.
Fiscal Year
The Company maintains its accounts on a fifty-two/fifty-three week fiscal year
ending on the Saturday closest to January 31. The fiscal years ended January 28, 2006 (fiscal year
2005) and February 2, 2008 (fiscal year 2007) each contained fifty-two weeks, while the fiscal year
ended February 3, 2007 (fiscal year 2006) contained fifty-three weeks.
Seasonality
The Companys net sales, net income and inventory levels fluctuate on a seasonal
basis and therefore the results for one quarter are not necessarily indicative of the results that
may be achieved for a full fiscal year. The increased traffic during the holiday season and the
Companys increased marketing efforts during this peak selling time have resulted in profits
generated during the fourth quarter becoming a larger portion of annual profits. Seasonality is
also impacted by growth as more new stores are opened in the second half of the year. During the
fourth quarters of fiscal years 2005, 2006 and 2007, the Company generated approximately 53%, 58%
and 53%, respectively, of its annual net income.
Use of Estimates
The preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Estimates have been prepared
on the basis of the most current and best information. However, actual results could and probably
will differ from those estimates. Significant estimates in these financial statements include net
realizable value of inventory, estimates of future cash flows associated with asset impairments and
useful lives for depreciation and amortization.
Cash and Cash Equivalents
Cash and cash equivalents totaled $43.1 million and $82.1 million
at fiscal year-end 2006 and fiscal year-end 2007, respectively, and include overnight investments
and other short-term investments with maturities of 90 days or less at the date of acquisition. At
fiscal year-end 2007, $79.6 million of the cash and cash equivalents was invested in U.S. Treasury
Bills and $2.5 million was invested in cash bank accounts.
F-6
Supplemental Cash Flow Information
Interest and income taxes paid were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
Interest paid
|
|
$
|
1,809
|
|
|
$
|
1,422
|
|
|
$
|
318
|
|
Income taxes paid
|
|
$
|
6,828
|
|
|
$
|
25,318
|
|
|
$
|
35,581
|
|
Inventories
The Company records inventory at the lower of cost or market (LCM). Cost is
determined using the first-in, first-out method. The Company capitalizes into inventory certain
warehousing and freight delivery costs associated with shipping its merchandise to the point of
sale. The Company periodically reviews quantities of inventories on hand and compares these amounts
to the expected sales of each product. The Company records a charge to cost of goods sold for the
amount required to reduce the carrying value of inventory to net realizable value.
Franchise Fees
The Company has 12 stores operated by franchisees, representing approximately
3% of the Companys store base. Monthly franchise fees are recognized when earned under the
franchise agreements. The fees are based on a percentage of sales
generated by the franchise stores and on a mark-up on inventory sold to the franchisees from the Company and such fees are included in
net sales in the Consolidated Statements of Income. Initial franchise fees are fully earned upon
execution of the franchise agreements and there are no further obligations on the part of the
Company in order to earn the initial franchise fee.
The Company does not have any controlling interest in any of its franchisees through voting
rights or any other means and, in accordance with Financial Accounting Standards Board
Interpretation No. 46R, Consolidation of Variable Interest Entities, does not consolidate these
entities. The Company sells inventory to its franchise stores at prices above cost and the
franchise stores have the right to return some or all of their inventory to the Company.
Gift Cards and Certificates
The Company sells gift cards to individuals and companies. The
Companys apparel incentive gift certificates are used by various companies as a reward for
achievement for their employees. The Company also redeems proprietary gift cards and gift
certificates marketed by major premium/incentive companies. The Company records a liability when a
gift card/certificate is purchased. As the gift card/certificate is redeemed, the Company reduces
the liability and records revenue.
Vendor Rebates
The Company receives credits from vendors in connection with inventory
purchases. The credits are separately negotiated with each vendor. Substantially all of these
credits are earned in one of two ways: a) as a fixed percentage of purchases when an invoice is
paid or b) as an agreed-upon amount in the month a new store is opened. There are no contingent
minimum purchase amounts, milestones or other contingencies that are required to be met to earn the
credits. The credits described in a) above are recorded as a reduction to inventories in the
Consolidated Balance Sheet as the inventories are purchased and the credits described in b) above
are recorded as a reduction to inventories as new stores are opened. In both cases, the credits are
recognized as reductions to cost of goods sold as the product is sold.
Landlord Contributions
Landlord contributions are accounted for as an increase to current and
noncurrent lease obligations and as an increase to prepaid and other current assets when the lease
is signed. When collected, the Company records cash and reduces the prepaid and other current
assets account. The landlord contributions are presented in the Consolidated Statements of Cash
Flows as an operating activity. The noncurrent lease obligations are amortized over the life of the
lease in a manner that is consistent with the Companys 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. The amortization of noncurrent lease
obligations recognized in the Consolidated Statements of Income were $3.7 million, $4.9 million and
$6.1 million in fiscal years 2005, 2006 and 2007, respectively.
Catalog
Costs related to mail order catalogs, including design, printing and distribution,
are included in prepaid expenses and other current assets consistent with Statement of Position No.
93 7, Reporting on Advertising Costs. These costs are amortized as sales and marketing expense
based on actual revenue for the period as compared to aggregate projected revenue over the benefit
period in which customers are expected to order from a particular catalog, which is typically four
months. The benefit period is based on historical ordering patterns. At each of fiscal year-end
2006 and fiscal year-end 2007, the amount included in prepaid expenses and other current assets
related to catalog costs was $1.7 million.
F-7
Marketing Expenses
Marketing expenses consist of advertising, display, list rental and
Internet costs. Marketing costs are recognized as expenses the first time the marketing takes
place. Marketing expense, excluding catalog costs, was approximately $31.1 million, $32.9 million
and $38.8 million in fiscal years 2005, 2006 and 2007, respectively. These amounts exclude catalog
production costs of approximately $6.6 million, $6.2 million and $6.0 million for fiscal years
2005, 2006 and 2007, respectively. Marketing and catalog costs are included in Sales and
marketing in the accompanying Consolidated Statements of Income.
Contingent Rental Expense
The Company has certain store leases that determine all or a portion
of their rent based on annual aggregate sales from the respective stores. The Company recognizes
contingent rental expense prior to achievement of the specified
target that triggers the contingent rental provided that achievement of that target is
probable. The amount is recorded on a straight-line basis throughout the year.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. The Company
depreciates and amortizes property, plant and equipment on a straight-line basis over the following
estimated useful lives:
|
|
|
Asset Class
|
|
Estimated Useful Lives
|
Buildings and improvements
|
|
25 years
|
Equipment
|
|
3-10 years
|
Furniture and fixtures
|
|
10 years
|
Leasehold improvements
|
|
Generally 10 years
|
The Company amortizes leasehold improvements over the shorter of the lease term or the useful
life of the improvements. Depreciation and amortization expense of property, plant, and equipment
for fiscal years 2005, 2006 and 2007 was approximately $13.0 million, $15.8 million and $18.5
million, respectively. Maintenance and repairs that do not extend the lives of the assets are
expensed as incurred.
Other Noncurrent Assets
Other noncurrent assets includes deferred financing costs and
deposits. Deferred financing costs are amortized as additional interest expense over the remaining
term of the debt agreements using the effective interest method. Amortization expense for fiscal
years 2005, 2006 and 2007 was $74, $93 and $50, respectively, and included $30 write-off of
financing costs in fiscal year 2006 due to the voluntary prepayment of long-term debt.
Long-Lived Assets
Long-lived assets, such as property, plant, and equipment, subject to
depreciation and amortization, are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability
of assets to be held and used is measured by a comparison of the carrying amount of an asset to
estimated undiscounted future cash flows expected to be generated by the asset. If the carrying
amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in
the amount by which the carrying amount of the asset exceeds the fair value of the asset. During
fiscal year 2007, the Company recognized an impairment charge of $0.8 million relating to several
stores within its Stores segment which was included in Sales and marketing in the accompanying
Consolidated Statements of Income.
Fair Value of Financial Instruments
For cash and cash equivalents, accounts receivable and
accounts payable, the carrying amount is a reasonable estimate of fair value. For long-term debt,
rates available for debt with similar terms and remaining maturities are used to estimate the fair
value of existing debt. At fiscal year-end 2006, the fair value of the Companys debt approximated
the carrying value. The Company had no debt at fiscal year-end 2007.
Net Sales
In the Companys Stores segment, net sales are recognized at the point-of-sale. In
the Companys Direct Marketing segment, sales are recognized when products are shipped to the
customer. The Company provides for sales returns based on estimated returns in future periods. The
sales return reserves were approximately $0.5 million for each
of fiscal years 2005 and 2006 and $0.6
million for fiscal year 2007, and were included in Accrued expenses in the accompanying
Consolidated Balance Sheets.
Classification of Expenses
Cost of goods sold includes cost of merchandise, cost of tailoring
and freight from vendors to the distribution center and from the distribution center to the stores.
Merchandise management, distribution, warehousing and corporate overhead costs are included in
general and administrative expenses. Store and Direct Marketing operating costs and Company
advertising and marketing expenses are included in sales and marketing expenses.
Lease Accounting
Rent expense on leases, including the amortization of landlord
contributions, is recorded on a straight-line basis over a consistent lease period (generally, the
initial non-cancelable lease term plus renewal option periods provided for in the lease that can be
reasonably assured) and the excess of expense over cash amounts paid are included in noncurrent
lease obligations in the accompanying Consolidated Balance Sheets. The term of the lease begins on
the date the Company has the right to control the use of the leased property, generally
approximately six to nine weeks prior to opening the store.
F-8
Store Opening Costs
Costs incurred in connection with initial promotion and other start-up
costs, such as travel for recruitment, training and setup of new store openings, are expensed as
incurred.
Income Taxes
Income taxes are accounted for under the asset and liability method. 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.
Earnings Per Share (EPS)
Basic net income per share is calculated by dividing net income by
the weighted average number of common shares outstanding for the year. Diluted net income per share
is calculated by dividing net income by the diluted weighted average common shares, which reflect
the potential dilution as a result of the exercise of stock options. The weighted average shares
used to calculate basic and diluted earnings per share are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
Weighted average shares outstanding for basic EPS
|
|
|
17,021
|
|
|
|
17,981
|
|
|
|
18,128
|
|
Dilutive effect of stock options
|
|
|
1,010
|
|
|
|
361
|
|
|
|
292
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding for diluted EPS
|
|
|
18,031
|
|
|
|
18,342
|
|
|
|
18,420
|
|
|
|
|
|
|
|
|
|
|
|
The Company uses the treasury method for calculating the dilutive effect of stock options. The
effects on weighted average shares outstanding of options to purchase common stock of the Company
were included in the computation of diluted net income per share in all years presented. For the
years ended January 28, 2006, February 3, 2007 and February 2, 2008, there were no stock options
that were antidilutive.
Authorized Common Shares
At the 2006 annual meeting of shareholders held on June 23, 2006, the
shareholders voted to approve an amendment to the Companys restated certificate of incorporation
to increase the number of authorized shares of common stock of the Company from 20 million shares
to 45 million shares.
Incentive Plans
Incentive plans provide discretionary cash incentive compensation to certain
employees based upon, among other things, the attainment of certain annual earnings and performance
goals. At each interim quarter-end, the Company estimates the probability that such goals will be
attained based on results-to-date and the likelihood of discretionary payments and records
incentive compensation accordingly. Any incentive compensation which is likely to be paid for the
year is expensed based on the proportion of the earnings-to-date to projected annual earnings.
Healthcare Costs
The Company is self-insured for healthcare claims for eligible participating
employees subject to certain deductibles and limitations per incident. The insurance accrual
represents an estimate for claims incurred but not reported. In estimating this accrual, we
consider historical claims experience and the timing of the submission of expected claims. We
believe our estimates of this liability are reasonable based upon our methodology; however, changes
in health care costs, accident frequency and severity and other factors could materially affect the
estimate for these liabilities.
Recently Issued Accounting Standards
In September 2006, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value
Measurements. (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring
fair value under generally accepted accounting principles, and expands disclosures about fair value
measurements. SFAS No. 157 does not require any new fair value measurements, but provides guidance
on how to measure fair value by providing a fair value hierarchy used to classify the source of the
information. This statement is effective for fiscal year 2008, except as it relates to nonfinancial
assets and liabilities, for which the statement is effective for fiscal year 2009. The Company is
evaluating the impact, if any, of this statement on its consolidated financial statements.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets
and Financial Liabilities including an amendment of FASB Statement No. 115, (SFAS 159). SFAS
159 permits entities to choose to measure many financial instruments and certain other assets and
liabilities at fair value on an instrument-by-instrument basis (the fair value option). SFAS 159
becomes effective for fiscal year 2008. The Company is evaluating the impact, if any, of this
statement on its consolidated financial statements.
F-9
In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141(R),
Business Combinations (SFAS 141(R)). SFAS 141(R) replaces SFAS 141, Business Combinations,
but retains the requirement that the purchase method of accounting for acquisitions be used for all
business combinations. SFAS No. 141(R) amends the principles and requirements for how an acquirer
recognizes and measures in its financial statements the identifiable assets acquired, the
liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS
141(R) also requires expanded disclosures in addition to that previously required by SFAS 141. SFAS
141(R) will be effective for all business combinations with an acquisition date on or after
February 1, 2009, the start of our fiscal year 2009, and early adoption is not permitted. The
Company is currently evaluating the impact SFAS No. 141(R) will have on the Companys consolidated
financial statements.
In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160,
Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB No. 51 (SFAS
160). SFAS 160 requires that noncontrolling (or minority) interests in subsidiaries be reported in
the equity section of the companys balance sheet, rather than in the balance sheet between
liabilities and equity. SFAS 160 also changes the manner in which the net income of the subsidiary
is reported and disclosed in the controlling companys income statement and establishes guidelines
for accounting for changes in ownership percentages and for deconsolidation. SFAS 160 will be
effective beginning February 1, 2009. The Company is currently assessing the impact, if any, of
this statement on its consolidated financial statements.
2. INVENTORIES:
Inventories as of February 3, 2007 and February 2, 2008, consist of the following:
|
|
|
|
|
|
|
|
|
|
|
February 3, 2007
|
|
|
February 2, 2008
|
|
Finished goods
|
|
$
|
175,690
|
|
|
$
|
196,547
|
|
Raw materials
|
|
|
7,781
|
|
|
|
10,278
|
|
|
|
|
|
|
|
|
Total inventories, net
|
|
$
|
183,471
|
|
|
$
|
206,825
|
|
|
|
|
|
|
|
|
3. PREPAID EXPENSES AND OTHER CURRENT ASSETS:
Prepaid expenses and other current assets as of February 3, 2007 and February 2, 2008, consist
of the following:
|
|
|
|
|
|
|
|
|
|
|
February 3, 2007
|
|
|
February 2, 2008
|
|
Landlord contributions receivable
|
|
$
|
7,691
|
|
|
$
|
7,153
|
|
Prepaid rents
|
|
|
3,293
|
|
|
|
3,898
|
|
Prepaid expenses and other current assets
|
|
|
7,576
|
|
|
|
7,542
|
|
|
|
|
|
|
|
|
Total prepaid expenses and other current assets, net
|
|
$
|
18,560
|
|
|
$
|
18,593
|
|
|
|
|
|
|
|
|
F-10
4. PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment as of February 3, 2007 and February 2, 2008, consists of the
following:
|
|
|
|
|
|
|
|
|
|
|
February 3, 2007
|
|
|
February 2, 2008
|
|
Land
|
|
$
|
349
|
|
|
$
|
349
|
|
Buildings and improvements
|
|
|
12,062
|
|
|
|
11,957
|
|
Leasehold improvements
|
|
|
97,511
|
|
|
|
110,321
|
|
Furniture and fixtures
|
|
|
58,043
|
|
|
|
66,733
|
|
Equipment and other
|
|
|
35,079
|
|
|
|
37,201
|
|
|
|
|
|
|
|
|
|
|
|
203,044
|
|
|
|
226,561
|
|
Less: accumulated depreciation and amortization
|
|
|
(85,491
|
)
|
|
|
(100,326
|
)
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
$
|
117,553
|
|
|
$
|
126,235
|
|
|
|
|
|
|
|
|
As of February 3, 2007 and February 2, 2008, included in the amounts shown above are $6.8
million and $7.7 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 year-ends. These amounts are excluded from payments for capital expenditures and
changes in accrued expenses in the accompanying Consolidated Statements of Cash Flows.
5. ACCRUED EXPENSES:
Accrued expenses as of February 3, 2007 and February 2, 2008, consist of the following:
|
|
|
|
|
|
|
|
|
|
|
February 3, 2007
|
|
|
February 2, 2008
|
|
Accrued compensation and benefits
|
|
$
|
14,947
|
|
|
$
|
16,701
|
|
Gift cards and certificates payable
|
|
|
9,327
|
|
|
|
11,516
|
|
Accrued property, plant and equipment
|
|
|
6,822
|
|
|
|
7,717
|
|
Accrued federal and state income tax
|
|
|
12,267
|
|
|
|
14,118
|
|
Current portion of lease obligations
|
|
|
6,238
|
|
|
|
7,344
|
|
Other accrued expenses
|
|
|
14,005
|
|
|
|
14,754
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
63,606
|
|
|
$
|
72,150
|
|
|
|
|
|
|
|
|
Other accrued expenses consist primarily of liabilities related to: accrued advertising;
franchise, sales and property taxes; customer deposits and other accrued costs.
F-11
6. LONG-TERM DEBT:
Long-term debt as of February 3, 2007 and February 2, 2008, consists of the following:
|
|
|
|
|
|
|
|
|
|
|
February 3, 2007
|
|
|
February 2, 2008
|
|
Bank Credit Agreement
|
|
|
|
|
|
|
|
|
Borrowings under revolving loan agreement
|
|
$
|
|
|
|
$
|
|
|
Other notes payable
|
|
|
412
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
$
|
412
|
|
|
$
|
|
|
|
|
|
|
|
|
|
Pursuant to the Credit Agreement, the Company has a credit facility with a maturity date of
April 30, 2010. The current maximum revolving amount under the Credit Agreement is $100 million.
Subject to certain limitations, the Company has the option to increase the maximum revolving amount
to $125 million, if requested by April 30, 2008, if needed and if supported by its borrowing base
formula under the Credit Agreement. Borrowings are limited by a formula which considers inventories
and accounts receivable. Interest rates under the Credit Agreement vary with the prime rate or
LIBOR and may include a spread over or under the applicable rate. The spreads, if any, are based
upon the Companys excess availability from time to time. The average interest rate, excluding
unused line fees, was 6.8% for fiscal year 2006 and there were no borrowings outstanding in fiscal
year 2007. Aggregate borrowings are secured by substantially all assets of the Company with the
exception of its distribution center and certain equipment.
Under the provisions of the Credit Agreement, the Company must comply with certain covenants
if the Excess Availability is less than $7.5 million. The covenants include a minimum earnings
before interest, taxes, depreciation and amortization (EBITDA), limitations on capital
expenditures and additional indebtedness, and restrictions on cash dividend payments. At each of
fiscal year-end 2006 and fiscal year-end 2007, under the Credit Agreement, there were no revolving
borrowings outstanding, there was one standby letter of credit issued in the amount of $0.4 million
(to secure the payment of rent at one leased location) and the Excess Availability was $99.6
million. As of fiscal year-end 2006, the Company had $0.4 million of term debt. As of fiscal
year-end 2007, the Company had no term debt.
The average daily outstanding revolving balance under the Credit Agreement was approximately
$7.2 million for fiscal year 2006, while there was no debt outstanding under the line during fiscal
year 2007.
F-12
7. INCOME TAXES:
The provision for income taxes consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
Federal:
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
$
|
10,192
|
|
|
$
|
26,074
|
|
|
$
|
31,038
|
|
Deferred
|
|
|
10,491
|
|
|
|
(2,214
|
)
|
|
|
(2,427
|
)
|
State:
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
1,768
|
|
|
|
5,372
|
|
|
|
6,002
|
|
Deferred
|
|
|
2,300
|
|
|
|
(297
|
)
|
|
|
(448
|
)
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
$
|
24,751
|
|
|
$
|
28,935
|
|
|
$
|
34,165
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income tax is reconciled to the amount computed by applying the statutory
Federal income tax rate of 35% for fiscal years 2005, 2006 and 2007 to income before provision for
income taxes as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
Computed federal tax provision at statutory rates
|
|
$
|
21,000
|
|
|
$
|
25,255
|
|
|
$
|
29,517
|
|
State income taxes, net of federal income tax effect
|
|
|
2,653
|
|
|
|
3,298
|
|
|
|
3,610
|
|
Non-deductible compensation
|
|
|
907
|
|
|
|
957
|
|
|
|
1,016
|
|
Change in tax reserves
|
|
|
101
|
|
|
|
(681
|
)
|
|
|
(108
|
)
|
Other, net
|
|
|
90
|
|
|
|
106
|
|
|
|
130
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
$
|
24,751
|
|
|
$
|
28,935
|
|
|
$
|
34,165
|
|
|
|
|
|
|
|
|
|
|
|
The tax effects of temporary differences that give rise to significant positions of deferred
tax assets and deferred tax liabilities as of February 3, 2007 and February 2, 2008 are as follows:
|
|
|
|
|
|
|
|
|
|
|
February 3, 2007
|
|
|
February 2, 2008
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
Current accrued liabilities and other
|
|
$
|
2,913
|
|
|
$
|
3,421
|
|
Noncurrent lease obligations
|
|
|
19,161
|
|
|
|
22,710
|
|
Noncurrent accrued liabilities and other
|
|
|
92
|
|
|
|
377
|
|
|
|
|
|
|
|
|
|
|
|
22,166
|
|
|
|
26,508
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
|
|
Current inventories
|
|
|
(10,080
|
)
|
|
|
(8,790
|
)
|
Current prepaid expenses and other current assets
|
|
|
(1,286
|
)
|
|
|
(1,319
|
)
|
Noncurrent property, plant and equipment
|
|
|
(21,848
|
)
|
|
|
(24,297
|
)
|
|
|
|
|
|
|
|
|
|
|
(33,214
|
)
|
|
|
(34,406
|
)
|
|
|
|
|
|
|
|
Net deferred tax liability
|
|
$
|
(11,048
|
)
|
|
$
|
(7,898
|
)
|
|
|
|
|
|
|
|
F-13
Effective February 4, 2007, the Company adopted the provisions of FASB Interpretation No. 48,
Accounting for Uncertainty in Income Taxes (FIN 48). FIN 48 is an interpretation of SFAS
Statement No. 109, Accounting for Income Taxes, that prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement of a tax position
taken or expected to be taken in a tax return. In addition, FIN 48 requires expanded disclosure
with respect to the uncertainty in income taxes.
Also effective February 4, 2007, the Company adopted FASB Staff Position (FSP) No. FIN 48-1,
Definition of Settlement in FASB Interpretation No. 48, (FSP FIN 48-1), which was issued on May
2, 2007. FSP FIN 48-1 amends FIN 48 to provide guidance on how an entity should determine whether
a tax position is effectively settled for the purpose of recognizing previously unrecognized tax
benefits. The term effectively settled replaces the term ultimately settled when used to
describe recognition, and the terms settlement or settled replace the terms ultimate
settlement or ultimately settled when used to describe measurement of a tax position under FIN
48. FSP FIN 48-1 clarifies that a tax position can be effectively settled upon the completion of an
examination by a taxing authority without being legally extinguished. For tax positions considered
effectively settled, an entity would recognize the full amount of tax benefit, even if the tax
position is not considered more likely than not to be sustained based solely on the basis of its
technical merits and the statute of limitations remains open.
As a result of the evaluation and implementation of FIN No. 48 and FSP FIN 48-1, the Company
concluded no adjustment in the consolidated financial statements was necessary. At the date of
adoption, the total unrecognized tax benefits were approximately $0.3 million. If resolved in the
Companys favor, approximately $0.3 million (after considering the impact of income taxes) would
favorably affect the Companys effective tax rate. The Company does not expect that the total
amount of unrecognized tax benefits will significantly change in the next twelve months.
The following table summarizes the activity related to our unrecognized tax benefits for
fiscal year 2007:
|
|
|
|
|
Balance February 3, 2007
|
|
$
|
310
|
|
Increases related to prior year tax positions
|
|
|
115
|
|
Expiration of the statue of limitations for the assessment of taxes
|
|
|
(116
|
)
|
|
|
|
|
Balance at February 2, 2008
|
|
$
|
309
|
|
|
|
|
|
The Company recognizes accrued interest and penalties related to unrecognized tax benefits in
the provision for income taxes in the Consolidated Statement of Income. During fiscal year 2007,
the Company reduced its accrued penalties and interest related to its unrecognized tax benefits by
$0.1 million. As of fiscal year-end 2007, the Companys liability for penalties and interest was
$0.4 million.
In assessing the realizability of deferred tax assets, management considered whether it was
more likely than not that some portion or all of the deferred tax assets will be realized. The
ultimate realization of the deferred tax assets is dependent upon existence of taxable income in
carryback periods and the generation of future taxable income during periods in which temporary
differences become deductible. Management considered income taxes paid during the previous two
years and projected future taxable income in making this assessment. Based upon the level of
historical taxable income and projections for future taxable income over the periods in which the
temporary differences are deductible, management has determined that no valuation allowance was
required at February 3, 2007 and February 2, 2008.
The Company files 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 2004 and is in the process of examining the tax return for fiscal year 2005. The fiscal year
2004 tax return examination resulted in a $0.7 million reduction in fiscal year 2006 of previously
recorded income tax liabilities that were settled upon completion of the audit in that period. The
majority of the Companys state and local returns are no longer subject to examinations by taxing
authorities for the years before fiscal year 2002.
F-14
8. BENEFIT PLANS
Defined Benefit Pension & Post-Retirement Plans
The Company maintains a noncontributory
defined benefit pension plan and a post-retirement benefit plan which cover certain union
employees. The annual contributions are not less than the minimum funding standards set forth in
the Employee Retirement Income Security Act of 1974, as amended. The plans provide for eligible
employees to receive benefits based principally on years of service with the Company. The Company
does not pre-fund the benefits from the post-retirement benefit plan. The Company records the
expected cost of these benefits as expense during the years that employees render service.
As of February 3, 2007, the Company adopted SFAS No. 158. The statement, which is an amendment
to SFAS No. 87, SFAS No. 88, SFAS No. 106, and SFAS No. 132(R), requires an employer to recognize
the funded status of any defined benefit pension and/or other postretirement benefit plans as an
asset or liability in its balance sheet. Funded status is the difference between the projected
benefit obligation and the market value of plan assets for defined benefit pension plans, and is
the difference between the accumulated benefit obligation and the market value of plan assets (if
any) for other post retirement benefit plans. SFAS No. 158 also requires an employer to recognize
changes in that funded status related to unrecognized prior service costs, transition obligations
or actuarial gains/losses in the year in which the changes occur through other comprehensive income
and losses in the stockholders equity section of its balance sheet. As a result of the adoption of
SFAS No. 158, prepaid pension costs related to our defined benefit pension plan decreased by $0.2
million and our accumulated other comprehensive losses, net of related deferred income taxes,
increased by approximately $0.1 million as of February 3, 2007.
In addition, this statement requires companies to measure plan assets and obligations at the
date of the Companys year-end, regardless of the plans year-end date, with limited exceptions.
Previously, the Companys measurement date of plan assets and obligations was December 31, which
was consistent with the plans year-end. Effective for the year-ended February 2, 2008, the Company
adopted this required provision and changed its measurement date to its fiscal year-end date.
The impact of adopting SFAS No. 158 resulted in adjustments to the beginning balances for
fiscal year 2006 of pension-related balances as displayed in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before
|
|
|
|
|
|
|
After
|
|
|
|
Application
|
|
|
|
|
|
|
Application
|
|
|
|
of SFAS 158
|
|
|
Adjustments
|
|
|
of SFAS 158
|
|
|
|
(In thousands)
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets
|
|
$
|
275
|
|
|
$
|
(240
|
)
|
|
$
|
35
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined benefit pension plans
|
|
|
|
|
|
|
|
|
|
|
|
|
Postretirement benefit plans
|
|
|
547
|
|
|
|
|
|
|
|
547
|
|
|
|
|
|
|
|
|
|
|
|
Other noncurrent liabilities
|
|
$
|
547
|
|
|
$
|
|
|
|
$
|
547
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive income and
(losses), net of tax
|
|
$
|
|
|
|
$
|
(145
|
)
|
|
$
|
(145
|
)
|
|
|
|
|
|
|
|
|
|
|
F-15
The following table sets forth the plans benefit obligations, fair value of plan assets, and
funded status at December 31, 2006 and February 2, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
|
Postretirement Benefits
|
|
|
|
Fiscal Year
|
|
|
Fiscal Year
|
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
Accumulated benefit obligation
|
|
$
|
575
|
|
|
$
|
667
|
|
|
$
|
407
|
|
|
$
|
492
|
|
Fair value of plan assets
|
|
|
560
|
|
|
|
670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funded status
|
|
|
(15
|
)
|
|
|
3
|
|
|
|
(407
|
)
|
|
|
(492
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued (prepaid) benefit
cost recognized in
the balance sheets
|
|
$
|
15
|
|
|
$
|
(3
|
)
|
|
$
|
584
|
|
|
$
|
492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average discount rate assumption used to determine benefit obligations as of December
31, 2006 and February 2, 2008 (the dates of the latest actuarial calculations) was 6.0% and 5.75%,
respectively. Weighted-average assumptions used to determine net cost for fiscal years 2006 and
2007 included discount rate of 6.0% and return on plan assets assumption of 8.0% for both years.
The Companys overall expected long-term rate of return on assets is 8.0%. Plan assets of the
Companys pension benefits as of December 31, 2006 and February 2, 2008 consisted primarily of
balanced mutual funds and short-term investment funds.
Pension expense recognized in the Companys statements of income for fiscal years 2005, 2006
and 2007 was $55, $79 and $79, respectively. The Company contributed $0 and $105 in fiscal year
2006 and fiscal year 2007, respectively, to the pension plan. The Company does not expect to be
required to contribute significant amounts of cash in fiscal year 2008 to the pension plan.
Profit Sharing Plan
The Company maintains a defined contribution 401(k) profit sharing plan
for its employees. All non-union and certain union employees are eligible to participate at the
beginning of the month after 90 days of service. Employee contributions to the plan are limited
based on applicable sections of the Internal Revenue Code. The Companys contribution to the 401(k)
plan is discretionary. Amounts expensed by the Company related to the plan were approximately $0.6
million for each of fiscal years 2005, 2006 and 2007.
Deferred Compensation Plan
The Company also maintains a non-qualified deferred compensation
plan for certain highly compensated employees. All assets of the plan are fully subject to the
Companys creditors. There were no matching contributions by the Company in any of fiscal years
2005, 2006 or 2007, although contributions were made by certain employees. Included in the
Companys Consolidated Balance Sheets are separate amounts of an equal asset and liability of $1.2
million at fiscal year-end 2006 and $1.3 million at fiscal year-end 2007.
9. COMMITMENTS AND CONTINGENCIES:
On July 24, 2006, a lawsuit was filed against the Company and Robert N. Wildrick, the
Companys Chief Executive Officer, in the United States District Court for the District of Maryland
by Roy T. Lefkoe, Civil Action Number 1:06-cv-01892-WMN (the Class Action). On August 3, 2006, a
lawsuit substantially similar to the Class Action was filed in the United States District Court for
the District of Maryland by Tewas Trust UAD 9/23/86, Civil Action Number 1:06-cv-02011-WMN (the
Tewas Trust Action). The Tewas Trust Action was filed against the same defendants as those in the
Class Action and purported to assert the same claims and seek the same relief. On November 20,
2006, the Class Action and the Tewas Trust Action were consolidated under the Class Action case
number (1:06-cv-01892-WMN) and the Tewas Trust Action was administratively closed.
Massachusetts Labor Annuity Fund has been appointed the lead plaintiff in the Class Action and
has filed a Consolidated Class Action Complaint. R. Neal Black, the Companys President, and David
E. Ullman, the Companys Executive Vice President and Chief Financial Officer, have been added as
defendants. On behalf of purchasers of the Companys stock between December 5, 2005 and June 7,
2006 (the Class Period), the Class Action purports to make claims under Sections 10(b) and 20(a)
and Rule 10b-5 of the Securities Exchange Act of 1934, based on the Companys disclosures during
the Class Period. The Class Action seeks unspecified damages, costs, and attorneys fees. The
Companys Motion to Dismiss the Class Action was not granted. The Company intends to defend
vigorously the Class Action.
F-16
On August 11, 2006, a lawsuit was filed against the Companys directors and, as nominal
defendant, the Company in the United States District Court for the District of Maryland by Glenn
Hutton (Hutton), Civil Action Number 1:06-cv-02095-BEL (the Hutton Action). The lawsuit
purported to be a shareholder derivative action. The lawsuit purported to make claims for various
violations of
state law that allegedly occurred from January 5, 2006 through August 11, 2006 (the Relevant
Period). It sought on behalf of the Company against the directors unspecified damages, equitable
relief, costs and attorneys fees.
On August 28, 2006, a lawsuit substantially similar to the Hutton Action was filed in the
United States District Court for the District of Maryland by Robert Kemp, Civil Action Number
1:06-cv-02232-BEL (the Kemp Action). The Kemp Action was filed against the same defendants as
those in the Hutton Action and purported to assert substantially the same claims and sought
substantially the same relief.
On October 17, 2006, the Hutton Action and the Kemp Action were consolidated under the Hutton
Action case number (1:06-cv-02095-BEL) and are now known as In re Jos. A. Bank Clothiers, Inc.
Derivative Litigation (the Derivative Action). The Amended Shareholder Derivative Complaint in
the Derivative Action was filed against the same defendants as those in the Hutton Action,
extended the Relevant Period to October 20, 2006 and purported to assert substantially the
same claims and seek substantially the same relief.
The Companys Motion to Dismiss the Derivative Action was granted on September 13, 2007. Among
the reasons for dismissal was the failure of the plaintiff to demand that the Board of Directors
pursue on behalf of the Company the claims alleged in the Derivative Action. By letter dated
September 17, 2007 (the Demand Letter), Hutton, by and through his attorneys, made such demand.
The Board appointed a Special Litigation Committee (the SLC) to investigate, and determine the
position of the Company with respect to, all matters relating to the Demand Letter. The SLC, with
the assistance of independent counsel, conducted an investigation into the claims presented in the
Demand Letter. The SLC issued its findings in a Report of the Special Litigation Committee of Jos.
A. Bank Clothiers, Inc., dated February 7, 2008 (the Report). In the Report, the SLC concludes
that, for a variety of reasons, the institution of a lawsuit [as proposed in the Demand Letter] is
neither appropriate nor in the best interest of the Company.... First, and most important [among
those reasons, the SLC found that] the proposed lawsuit is entirely without merit. The Report has
been delivered to Huttons attorneys.
By letter dated November 27, 2007, the Company received from the Norfolk County Retirement
System (NCRS) a demand pursuant to Section 220 of the Delaware General Corporation Law for
inspection of certain of the Companys books and records for the purpose of investigating, among
other matters, claims that appear substantially similar to those raised in the Derivative Action.
The Company asked that the demand be withdrawn or held in abeyance until the SLC reported on its
investigation. On January 3, 2008, NCRS filed in the Court of Chancery of the State of Delaware
(Case Number 3443-VCP) a Verified Complaint against the Company seeking to compel an inspection of
the Companys books and records. The Company has answered the Complaint and intends to defend
vigorously the action.
The resolution of the foregoing matters cannot be accurately predicted and there is no
estimate of costs or potential losses, if any. Accordingly, the Company cannot determine whether
its insurance coverage would be sufficient to cover such costs or potential losses, if any, and has
not recorded any provision for cost or loss associated with these actions. It is possible that the
Companys consolidated financial statements could be materially impacted in a particular fiscal
quarter or year by an unfavorable outcome or settlement of these actions.
From time to time, other legal matters in which the Company may be named as a defendant arise
in the normal course of the Companys business activities. The resolution of these legal matters
against the Company cannot be accurately predicted. The Company does not anticipate that the
outcome of such matters will have a material adverse effect on the business, net assets or
financial position of the Company.
Employment Agreements and Incentive Compensation
The Company has employment agreements with
certain of its executives expiring at various points through January 2010, aggregating base
compensation of $5.1 million (not including annual adjustments) over the terms. Depending on the
circumstances of termination, the Company has severance obligations to these and certain other
executives aggregating up to approximately $4.7 million, not including annual adjustments. These
executives are also eligible for additional incentive payments subject to performance standards.
In addition, other employees are eligible for incentive payments based on performance, including
store managers and regional sales directors, although these payments are not based on employment
agreements. The Company expensed approximately $6.5 million for incentive compensation for all
eligible employees in each of fiscal years 2005 and 2006 and $6.3 million in fiscal year 2007.
F-17
Lease Obligations
The Company has numerous noncancelable operating leases for retail stores,
distribution center, office and tailoring space and equipment. Certain facility leases provide for
annual base minimum rentals plus contingent rentals based on sales. Renewal options are available
under the majority of the leases. The Company has buy-out opportunities with respect to certain
leased transportation equipment. If exercised, the purchase price is expected to be approximately
$20 to $21 million.
Future minimum lease payments, including rent escalations, under noncancelable operating
leases for stores and other leased facilities opened and equipment placed in service as of fiscal
year-end 2007, were as follows:
|
|
|
|
|
Fiscal Year
|
|
Amount
|
|
2008
|
|
$
|
49,673
|
|
2009
|
|
|
47,919
|
|
2010
|
|
|
45,791
|
|
2011
|
|
|
43,822
|
|
2012
|
|
|
40,919
|
|
Thereafter
|
|
|
112,480
|
|
|
|
|
|
Total
|
|
$
|
340,604
|
|
|
|
|
|
The minimum rentals above do not include additional payments for percentage rent, insurance,
property taxes and maintenance costs that may be due as provided for in the leases.
Total rental expense for operating leases, excluding contingent rentals, was approximately
$33.2 million, $40.1 million and $44.1 million for fiscal years 2005, 2006 and 2007, respectively.
Contingent rent expense in fiscal years 2005, 2006 and 2007, which was based on a percentage of net
sales at the applicable properties, was approximately $1.9 million, $1.7 million and $2.1 million,
respectively.
As of fiscal year-end 2007, the Company has also entered into various lease agreements for
stores to be opened and equipment placed in service subsequent to year end. The future minimum
lease payments under these agreements were $1.3 million in fiscal year 2008, $2.3 million in fiscal
year 2009, $2.3 million in fiscal year 2010, $2.3 million in fiscal year 2011, $2.4 million in
fiscal year 2012 and $14.7 million thereafter. In addition, the Company has entered into an
agreement to purchase a retail location for approximately $2.1 million. Closing under the agreement
is expected to occur in fiscal year 2008.
Inventories
The Company ordinarily places orders for the purchases of inventory at least one
to two seasons in advance. Approximately 12% of the total product purchases (including piece goods)
in fiscal year 2007 were sourced from United States suppliers, and approximately 88% were sourced
from suppliers in other countries. In fiscal year 2007, approximately 43% of the total product
purchases were manufactured in China (including 21% from Hong Kong) and 20% in Mexico. In fiscal
year 2007, the Company purchased approximately 39% of its finished product through an agent who
sources the products from various vendors, including those described above. No other country
represented more than 8% of total product purchases in fiscal year 2007. The Company purchases the
raw materials for approximately 11% of its finished products, of which five vendors accounted for
over 79% of the raw materials purchased directly by the Company in fiscal year 2007. The remainder
of its finished products are purchased as finished units, with the vendor responsible for the
acquisition of the raw materials based on the Companys specifications.
Other
The Company has an agreement with David Leadbetter, a golf professional, which allows
the Company to produce golf and other apparel under Leadbetters name. The agreement expires in
January 2011. The minimum royalty under this agreement was $0.2 million in each of fiscal years
2005 through 2007 and is expected to be $0.2 million for each of fiscal years 2008 through 2010.
F-18
10. INCENTIVE STOCK OPTION PLAN:
Effective January 28, 1994, the Company adopted an Incentive Plan (the 1994 Plan). The 1994
Plan generally provides for the granting of stock, stock options, stock appreciation rights,
restricted shares or any combination of the foregoing to the eligible participants, as defined, for
issuance of up to 2,238 shares of common stock in the aggregate, of which options to purchase all
of such shares had been granted as of January 29, 2005 (fiscal year 2004). On September 14, 1999,
the Company adopted an Incentive Plan (the 1999 Plan) which provides for the issuance of up to
1,406 shares of common stock in the aggregate, of which all had been granted as of the end of
fiscal year 2004. In March 2002, the Company adopted an Incentive Plan (the 2002 Plan and
together with the 1994 Plan and the 1999 Plan, the Plans) which provides for issuance of up to
937 shares of common stock in the aggregate, of which options to purchase all of such shares had
been granted as of the end of fiscal year 2005. The exercise price of an option granted under both
the 1994 Plan and the 2002 Plan may not be less than the fair market value of the underlying shares
of Common Stock on the date of grant, and employee options generally expire at the earlier of
termination of employment or ten years from the date of grant. All options covered under the 1994
Plan, 1999 Plan and the 2002 Plan were fully vested as of the end of fiscal year 2005.
The aggregate number of shares of Common Stock as to which awards may be granted under any of
the Plans, the number of shares of Common Stock covered by each outstanding award under the Plans
and the exercise price per share of Common Stock in each outstanding award, are to be
proportionately adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a subdivision or consolidation of shares or other capital adjustment, or the
payment of a stock dividend or other increase or decrease in such shares, effected without receipt
of consideration by the Company, or other change in corporate or capital structure; provided,
however, that any fractional shares resulting from any such adjustment are to be eliminated.
Changes in options outstanding were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2005
|
|
|
Fiscal Year 2006
|
|
|
Fiscal Year 2007
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
|
Exercise
|
|
|
|
|
|
|
Exercise
|
|
|
|
|
|
|
Exercise
|
|
|
|
Shares
|
|
|
Price
|
|
|
Shares
|
|
|
Price
|
|
|
Shares
|
|
|
Price
|
|
Outstanding
at beginning of year
|
|
|
1,758
|
|
|
$
|
8.22
|
|
|
|
1,334
|
|
|
$
|
10.34
|
|
|
|
578
|
|
|
$
|
11.06
|
|
Granted
|
|
|
36
|
|
|
$
|
24.39
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
Exercised
|
|
|
(460
|
)
|
|
$
|
3.48
|
|
|
|
(756
|
)
|
|
$
|
9.79
|
|
|
|
(139
|
)
|
|
$
|
13.39
|
|
Canceled
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at end of year
|
|
|
1,334
|
|
|
$
|
10.34
|
|
|
|
578
|
|
|
$
|
11.06
|
|
|
|
439
|
|
|
$
|
10.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The fair value of each stock option granted is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted average assumption used for grants
in 2005:
|
|
|
|
|
|
|
Fiscal
|
|
|
|
Year 2005
|
|
Risk free interest rate
|
|
|
3.88
|
%
|
Expected volatility
|
|
|
0.34
|
|
Expected life
|
|
3 years
|
|
Contractual life
|
|
|
1 to 10 years
|
|
Expected dividend yield
|
|
|
0
|
%
|
Fair value of options granted
|
|
|
$7.24
|
|
Options granted
|
|
|
36
|
|
Weighted average exercise price
|
|
|
$26.29
|
|
F-19
In December 2004, the FASB issued SFAS No. 123(R),
Share-Based Payment
(SFAS 123R), which
revises SFAS No. 123,
Accounting for Stock-Based Compensation
(SFAS 123), as amended by SFAS No.
148,
Accounting for Stock Based Compensation-Transition and Disclosure
(SFAS 148). SFAS 123R
supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees
(APB 25) and requires all
stock-based compensation to be recognized as an expense in the financial statements and that such
costs be measured according to the fair value of the award. SFAS 123R became effective for the
Company at the beginning of fiscal year 2006, and the Company accounts for the effects of SFAS 123R
under the modified prospective application. All stock options were fully vested prior to fiscal
year 2006. Therefore, adoption of the provisions of SFAS 123R did not have an impact on the
Companys accompanying Consolidated Balance Sheets and Statements of Income, at and for fiscal
years ended February 3, 2007 and February 2, 2008. While there are currently no unvested options,
the Company will continue to use the Black-Scholes option valuation model for future stock options
granted, if any.
SFAS 123R changes the presentation of realized excess tax benefits associated with the
exercise of stock options in the statements of cash flows. Excess tax benefits are realized tax
benefits from tax deductions for the exercise of stock options in excess of the deferred tax asset
attributable to stock compensation expense for such options. Prior to the adoption of SFAS 123R,
such realized tax benefits were required to be presented as operating cash flows. SFAS 123R
requires such realized tax benefits to be presented as part of cash flows from financing
activities. For fiscal years 2005, 2006 and 2007, tax benefits realized from stock option exercises
totaled $2,694, $3,947 and $822, respectively.
Prior to fiscal year 2006, the Company accounted for grants of stock rights in accordance with
APB 25 and provided pro forma effects of SFAS 123 in accordance with SFAS 148. To account for its
fixed-plan stock options, the Company applied the intrinsic-value-based method of accounting
prescribed by APB 25, and related interpretations including Financial Accounting Standards Board
Interpretation No. 44,
Accounting for Certain Transactions Involving Stock Compensation
, issued in
March 2000. Under this method, compensation expense was recorded on the measurement date only if
the then-current market price of the underlying stock exceeds the exercise price. Historically, the
Company issued substantially all options at or above the market price on the measurement date.
There was no stock-based compensation expense recognized in the Condensed Consolidated Statements
of Income for fiscal years 2005, 2006 and 2007. SFAS 123, as amended by SFAS 148, established
accounting and disclosure requirements using a fair-value-based method of accounting for
stock-based employee compensation plans. As allowed by SFAS 123 prior to adoption of SFAS 123R,
the Company elected to apply the intrinsic-value-based method of accounting described above, and
adopted only the disclosure requirements of SFAS 123 as amended by SFAS 148. The following table
illustrates the effect on net income if the fair-value-based method had been applied to all
outstanding and unvested awards in fiscal year 2005 and compensation expense had been recorded:
|
|
|
|
|
|
|
Fiscal
|
|
|
|
Year 2005
|
|
Net income, as reported
|
|
$
|
35,250
|
|
|
|
|
|
|
Deduct total stock-based employee compensation expense determined
under fair-value-based method for all awards, net of tax
|
|
|
180
|
|
|
|
|
|
Pro forma net income
|
|
$
|
35,070
|
|
|
|
|
|
Basic net income per common share, as reported
|
|
$
|
2.07
|
|
|
|
|
|
Pro forma basic net income per common share
|
|
$
|
2.06
|
|
|
|
|
|
Diluted net income per common share, as reported
|
|
$
|
1.95
|
|
|
|
|
|
Pro forma diluted net income per common share
|
|
$
|
1.94
|
|
|
|
|
|
F-20
The following table summarizes information about stock options outstanding and exercisable as
of February 2, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Outstanding
|
|
|
Options Exercisable
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
Weighted
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
Remaining
|
|
|
Average
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
|
Contractual
|
|
|
Exercise
|
|
|
|
|
|
|
Exercise
|
|
|
|
Number
|
|
|
Life
|
|
|
Price
|
|
|
Number
|
|
|
Price
|
|
Range of Exercise Prices
|
|
Outstanding
|
|
|
per Share
|
|
|
per Share
|
|
|
Exercisable
|
|
|
per Share
|
|
$0 - $5.00
|
|
|
114
|
|
|
|
3.27
|
|
|
$
|
3.37
|
|
|
|
114
|
|
|
$
|
3.37
|
|
$5.01 - $10.00
|
|
|
212
|
|
|
|
5.10
|
|
|
$
|
9.82
|
|
|
|
212
|
|
|
$
|
9.82
|
|
$15.01 - $20.00
|
|
|
80
|
|
|
|
5.83
|
|
|
$
|
16.55
|
|
|
|
80
|
|
|
$
|
16.55
|
|
$20.01 - $25.00
|
|
|
33
|
|
|
|
6.82
|
|
|
$
|
22.48
|
|
|
|
33
|
|
|
$
|
22.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
439
|
|
|
|
4.89
|
|
|
$
|
10.32
|
|
|
|
439
|
|
|
$
|
10.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11. RIGHTS AGREEMENT:
The Company maintains a Rights Agreement in which preferred stock purchase rights (Rights)
were distributed as a dividend at the rate of one Right for each share of the Companys outstanding
Common Stock held as of the close of business on September 20, 2007. This Rights Agreement replaced
a similar agreement which expired on September 19, 2007. The number of Rights associated with each
share of the Companys Common Stock will be proportionally adjusted in connection with any stock
split or stock dividends issued by the Company in accordance with the Rights Agreement. In
addition, the Rights Agreement provides that at the time Rights certificates evidencing the Rights
are to be issued, the Company will not be required to issue Rights certificates that evidence
fractional Rights. In lieu of such fractional Rights, the Company will pay to the persons to which
fractional Rights would otherwise be issuable, an amount in cash equal to the fraction of the
market value of a whole Right.
Each Right will entitle stockholders to buy one 1/100
th
of a share of Series A
Junior Participating Preferred Stock of Jos. A. Bank at an exercise price of $200. The Rights will
be exercisable only if a person or group acquires beneficial ownership of 20 percent or more of the
Companys outstanding Common Stock (without the approval of the board of directors) or commences a
tender or exchange offer upon consummation of which a person or group would beneficially own 20
percent or more of the Companys outstanding Common Stock.
If any person becomes the beneficial owner of 20 percent or more of the Companys outstanding
common stock (without the approval of the board of directors), or if a holder of 20 percent or more
of the Companys Common Stock engaged in certain self-dealing transactions or a merger transaction
in which the Company is the surviving corporation and its Common Stock remains outstanding, then
each Right not owned by such person or certain related parties will entitle its holder to purchase,
at the Rights then-current exercise price, units of the Companys Series A Junior Participating
Preferred Stock (or, in certain circumstances, Common Stock, cash, property or other securities of
the Company) having a market value equal to twice the then-current exercise price of the Rights. In
addition, if the Company is involved in a merger or other business combination transaction with
another person after which its Common Stock does not remain outstanding, or sells 50 percent or
more of its assets or earning power to another person, each Right will entitle its holder to
purchase, at the Rights then-current exercise price, shares of common stock of such other person
having a market value equal to twice the then-current exercise price of the Rights. The Company
will generally be entitled to redeem the Rights at $0.01 per Right at any time prior to the earlier
of (i) such time that a person has become an Acquiring Person or (ii) the Final Expiration Date
F-21
12. SEGMENT REPORTING:
The Company has two reportable segments: Stores and Direct Marketing. The Stores segment
includes all Company-owned stores excluding outlet 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. The Company evaluates performance of the segments based on four wall
contribution, which excludes any allocation of management company costs, which consists primarily
of general and administration costs (except order fulfillment costs which are allocated to Direct
Marketing), interest and income taxes.
The Companys segments are strategic business units that offer similar products to the retail
customer by two distinctively different methods. In the Stores segment, the typical customer
travels to the store and purchases mens clothing 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 web page via the Internet and either calls, mails, faxes or places an online order. The
merchandise is then shipped to the customer.
Segment data is presented in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
|
|
|
|
|
|
|
|
Fiscal Year 2005
|
|
Stores
|
|
|
Marketing
|
|
|
Other
|
|
|
Total
|
|
Net sales(a)
|
|
$
|
408,452
|
|
|
$
|
44,453
|
|
|
$
|
11,728
|
|
|
$
|
464,633
|
|
Depreciation and amortization
|
|
|
10,777
|
|
|
|
70
|
|
|
|
2,173
|
|
|
|
13,020
|
|
Operating income(b)
|
|
|
94,694
|
|
|
|
15,815
|
|
|
|
(48,714
|
)
|
|
|
61,795
|
|
Interest income (expense), net
|
|
|
|
|
|
|
|
|
|
|
(1,794
|
)
|
|
|
(1,794
|
)
|
Total assets(c)
|
|
|
257,499
|
|
|
|
30,982
|
|
|
|
16,351
|
|
|
|
304,832
|
|
Capital expenditures(d)
|
|
|
29,238
|
|
|
|
44
|
|
|
|
2,295
|
|
|
|
31,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
|
|
|
|
|
|
|
|
Fiscal Year 2006
|
|
Stores
|
|
|
Marketing
|
|
|
Other
|
|
|
Total
|
|
Net sales(a)
|
|
$
|
478,234
|
|
|
$
|
56,244
|
|
|
$
|
11,907
|
|
|
$
|
546,385
|
|
Depreciation and amortization
|
|
|
13,363
|
|
|
|
77
|
|
|
|
2,369
|
|
|
|
15,809
|
|
Operating income(b)
|
|
|
105,151
|
|
|
|
21,835
|
|
|
|
(53,891
|
)
|
|
|
73,095
|
|
Interest income (expense), net
|
|
|
|
|
|
|
|
|
|
|
(938
|
)
|
|
|
(938
|
)
|
Total assets(c)
|
|
|
323,679
|
|
|
|
28,500
|
|
|
|
16,213
|
|
|
|
368,392
|
|
Capital expenditures(d)
|
|
|
29,021
|
|
|
|
41
|
|
|
|
2,079
|
|
|
|
31,141
|
|
F-22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
|
|
|
|
|
|
|
|
Fiscal Year 2007
|
|
Stores
|
|
|
Marketing
|
|
|
Other
|
|
|
Total
|
|
Net sales(a)
|
|
$
|
528,330
|
|
|
$
|
63,611
|
|
|
$
|
12,069
|
|
|
$
|
604,010
|
|
Depreciation and amortization
|
|
|
15,941
|
|
|
|
80
|
|
|
|
2,456
|
|
|
|
18,477
|
|
Operating income(b)
|
|
|
112,680
|
|
|
|
24,767
|
|
|
|
(54,696
|
)
|
|
|
82,751
|
|
Interest income (expense), net
|
|
|
|
|
|
|
|
|
|
|
1,582
|
|
|
|
1,582
|
|
Total assets(c)
|
|
|
392,302
|
|
|
|
33,136
|
|
|
|
14,660
|
|
|
|
440,098
|
|
Capital expenditures(d)
|
|
|
26,243
|
|
|
|
31
|
|
|
|
1,422
|
|
|
|
27,696
|
|
|
|
|
(a)
|
|
Direct Marketing net sales represent catalog and Internet sales. Net sales from segments
below the quantitative thresholds are attributable primarily to three operating segments of
the Company. Those segments are outlet stores, franchise stores and regional tailor shops.
None of these segments have ever met any of the quantitative thresholds for determining
reportable segments and are included in Other.
|
|
(b)
|
|
Operating income 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. Operating income for Other consists primarily of costs included in general
and administrative costs. Total operating income represents profit before interest and income
taxes.
|
|
(c)
|
|
Identifiable assets include cash and cash equivalents, accounts receivable, inventories,
prepaid expenses and other current assets and property, plant and equipment residing in or
related to the reportable segment. Assets included in Other are primarily cash and cash
equivalents, property, plant and equipment associated with the corporate office and
distribution centers, deferred tax assets, other noncurrent assets, and inventories, which
have not been assigned to one of the reportable segments.
|
|
(d)
|
|
Capital expenditures include purchases of property, plant and equipment made for the
reportable segment.
|
13. QUARTERLY FINANCIAL INFORMATION (Unaudited):
Summarized quarterly financial information in fiscal years 2006 and 2007 as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
|
|
|
Second
|
|
|
Third
|
|
|
Fourth
|
|
|
|
|
|
|
Quarter
|
|
|
Quarter
|
|
|
Quarter
|
|
|
Quarter
|
|
|
Total
|
|
|
|
(In thousands, except per share amounts)
|
|
Fiscal
Year 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
113,665
|
|
|
$
|
119,098
|
|
|
$
|
119,511
|
|
|
$
|
194,111
|
|
|
$
|
546,385
|
|
Gross profit
|
|
|
69,751
|
|
|
|
74,299
|
|
|
|
72,454
|
|
|
|
121,934
|
|
|
|
338,438
|
|
Operating income
|
|
|
10,435
|
|
|
|
12,299
|
|
|
|
9,059
|
|
|
|
41,302
|
|
|
|
73,095
|
|
Net income
|
|
|
5,861
|
|
|
|
6,973
|
|
|
|
5,508
|
|
|
|
24,880
|
|
|
|
43,222
|
|
Diluted income per common share
|
|
$
|
0.32
|
|
|
$
|
0.38
|
|
|
$
|
0.30
|
|
|
$
|
1.36
|
|
|
$
|
2.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal
Year 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
129,533
|
|
|
$
|
134,278
|
|
|
$
|
131,304
|
|
|
$
|
208,895
|
|
|
$
|
604,010
|
|
Gross profit
|
|
|
81,080
|
|
|
|
83,747
|
|
|
|
83,625
|
|
|
|
130,194
|
|
|
|
378,646
|
|
Operating income
|
|
|
13,802
|
|
|
|
13,516
|
|
|
|
11,497
|
|
|
|
43,936
|
|
|
|
82,751
|
|
Net income
|
|
|
8,358
|
|
|
|
8,206
|
|
|
|
7,096
|
|
|
|
26,508
|
|
|
|
50,168
|
|
Diluted income per common share
|
|
$
|
0.45
|
|
|
$
|
0.44
|
|
|
$
|
0.38
|
|
|
$
|
1.45
|
|
|
$
|
2.72
|
|
F-23
SIGNATURES
Pursuant to the requirements of Section 13 or l5(d) 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.
Date:
April 10, 2008
|
|
|
|
|
|
JOS. A. BANK CLOTHIERS, INC.
(registrant)
|
|
|
By:
|
/s/ ROBERT N. WILDRICK
|
|
|
|
ROBERT N. WILDRICK
|
|
|
|
EXECUTIVE CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
|
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been
signed below by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ ROBERT N. WILDRICK
|
|
Director, Executive Chairman and
Chief Executive Officer
|
|
April 10, 2008
|
|
|
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ DAVID E. ULLMAN
|
|
Executive Vice President, Chief Financial Officer
|
|
April 10, 2008
|
|
|
|
|
|
|
|
(Principal Financial Officer
and Principal Accounting
Officer)
|
|
|
|
|
|
|
|
/s/ ANDREW A. GIORDANO
|
|
Director, Chairman of the Board
|
|
April 10, 2008
|
|
|
|
|
|
|
|
|
|
|
/s/ GARY S. GLADSTEIN
|
|
Director
|
|
April 10, 2008
|
|
|
|
|
|
|
|
|
|
|
/s/ WILLIAM E. HERRON
|
|
Director
|
|
April 10, 2008
|
|
|
|
|
|
|
|
|
|
|
/s/ DAVID A. PREISER
|
|
Director
|
|
April 10, 2008
|
|
|
|
|
|
|
|
|
|
|
/s/ SIDNEY H. RITMAN
|
|
Director
|
|
April 10, 2008
|
|
|
|
|
|
Exhibits Index
|
|
|
|
|
3.1
|
|
|
|
Certificate of Amendment of the Restated Certificate of Incorporation of the
Company and the Restated Certificate of Incorporation of the Company.*(26)
|
|
|
|
|
|
3.2
|
|
|
|
Amended and Restated By-Laws of the Company as of April 15, 2003.*(15)
|
|
|
|
|
|
4.1
|
|
|
|
Form of Common Stock certificate.*(1)
|
|
|
|
|
|
4.2
|
|
|
|
Rights Agreement, dated as of September 6, 2007, including Exhibit B thereto
(the form of Right
Certificate).*(28)
|
|
|
|
|
|
4.3
|
|
|
|
Certificate Eliminating Reference to Series A Preferred Stock from Restated
Certificate of Incorporation of Company.*(29)
|
|
|
|
|
|
4.4
|
|
|
|
Certificate of Designation of Series A Junior Participating Preferred Stock.*(29)
|
|
|
|
|
|
10.1
|
|
|
|
1994 Incentive Plan.*(1)
|
|
|
|
|
|
10.1(a)
|
|
|
|
Amendments, dated as of October 6, 1997, to Incentive Plan.*(5)
|
|
|
|
|
|
10.2
|
|
|
|
Amended and Restated Credit Agreement, dated as of January 6, 2004, by and among
the Company, certain Lenders which are signatories thereto and Wells Fargo
Retail Finance II, LLC, as agent for such Lenders.*(17)
|
|
|
|
|
|
10.2(a)
|
|
|
|
Second Amendment to Amended and Restated Credit Agreement, dated as of January
6, 2004, by and among the Company, certain Lenders which are signatories thereto
and Wells Fargo Retail Finance II, LLC, as agent for such Lenders.*(24)
|
|
|
|
|
|
10.3
|
|
|
|
Amended and Restated Employment Agreement, dated as of May 15, 2002, between
David E. Ullman and Jos. A. Bank Clothiers, Inc.*(12)
|
|
|
|
|
|
10.3(a)
|
|
|
|
First Amendment, dated April 30, 2003, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between David E. Ullman and Jos. A.
Bank Clothiers, Inc.*(15)
|
|
|
|
|
|
10.3(b)
|
|
|
|
Second Amendment, dated as of April 4, 2005, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between David E. Ullman and Jos. A.
Bank Clothiers, Inc.*(20)
|
|
|
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10.3(c)
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Third Amendment, dated as of April 5, 2006, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between David E. Ullman and Jos. A.
Bank Clothiers, Inc.*(22)
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10.3(d)
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Fourth Amendment, dated as of April 13, 2007, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between David E. Ullman and Jos. A.
Bank Clothiers, Inc.*(27)
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10.3(e)
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Fifth Amendment, dated as of April 9, 2008, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between David E. Ullman and Jos. A.
Bank Clothiers, Inc.*(30)
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10.4
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Jos. A. Bank Clothiers, Inc. Nonqualified Deferred Compensation Trust Agreement,
dated
January 20, 2004.*(21)
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10.5
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Employment offer letter, dated March 14, 2008, from Jos. A. Bank Clothiers, Inc.
to Eric Singleton.*(30)
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10.6
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Amended and Restated Employment Agreement, dated May 15, 2002, by and between
Charles D. Frazer and Jos. A. Bank Clothiers, Inc.*(12)
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10.6(a)
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First Amendment, dated as of April 30, 2003, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between Charles D. Frazer and Jos.
A. Bank Clothiers, Inc.*(15)
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10.6(b)
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Second Amendment, dated as of April 4, 2005, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between Charles D. Frazer and Jos.
A. Bank Clothiers, Inc.*(21)
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10.6(c)
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Third Amendment, dated as of April 5, 2006, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between Charles D. Frazer and Jos.
A. Bank Clothiers, Inc.*(22)
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10.6(d)
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Fourth Amendment, dated as of April 13, 2007, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between Charles D. Frazer and Jos.
A. Bank Clothiers, Inc.*(27)
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10.6(e)
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Fifth Amendment, dated as of April 9, 2008, to Amended and Restated Employment
Agreement, dated as of May 15, 2002, by and between Charles D. Frazer and Jos.
A. Bank Clothiers, Inc.*(30)
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10.7
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Employment Agreement, dated as of November 1, 1999, between Robert N. Wildrick
and Jos. A. Bank Clothiers, Inc.*(7)
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10.7(a)
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First Amendment, dated as of March 6, 2000, to Employment Agreement, dated as of
November 1, 1999, by and between Robert N. Wildrick and Jos. A. Bank Clothiers,
Inc.*(8)
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10.7(b)
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Second Amendment, dated as of May 25, 2001, to Employment Agreement, dated as of
November 1, 1999, by and between Robert N. Wildrick and Jos. A. Bank Clothiers,
Inc.*(10)
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10.7(c)
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Third Amendment, dated as of October 2, 2003, to Employment Agreement, dated as
of November 1, 1999, by and between Robert N. Wildrick and Jos. A. Bank
Clothiers, Inc.*(16)
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10.8
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Employment Agreement, dated as of November 30, 1999, by and between Robert
Hensley and Jos. A. Bank Clothiers, Inc.*(7)
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10.8(a)
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First Amendment, dated as of January 1, 2000, to Employment Agreement, dated as
of November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(9)
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10.8(b)
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Second Amendment, dated as of March 16, 2001, to Employment Agreement, dated as
of November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(9)
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10.8(c)
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Third Amendment, dated as of April 15, 2002, to Employment Agreement, dated as
of November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(11)
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10.8(d)
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Fourth Amendment, dated as of May 28, 2002, to Employment Agreement, dated as of
November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(12)
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10.8(e)
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Fifth Amendment, dated as of April 30, 2003, to Employment Agreement, dated as
of November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(15)
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10.8(f)
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Sixth Amendment, dated as of April 4, 2005, to Employment Agreement, dated as of
November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(20)
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10.8(g)
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Seventh Amendment, dated as of April 5, 2006, to Employment Agreement, dated as
of November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(22)
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10.8(h)
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Eighth Amendment, dated as of April 13, 2007, to Employment Agreement, dated as
of November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(27)
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10.8(i)
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Ninth Amendment, dated as of April 9, 2008, to Employment Agreement, dated as of
November 30, 1999, by and between Robert Hensley and Jos. A. Bank Clothiers,
Inc.*(30)
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10.9
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Employment Agreement, dated as of December 21, 1999, by and between R. Neal
Black and Jos. A. Bank Clothiers, Inc.*(8)
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10.9(a)
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First Amendment, dated as of March 16, 2001, to Employment Agreement, dated as
of December 21, 1999, by and between R. Neal Black and Jos. A. Bank Clothiers,
Inc.*(9)
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10.9(b)
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Second Amendment, dated as of April 15, 2002, to Employment Agreement, dated as
of December 21, 1999, by and between Neal Black and Jos. A. Bank Clothiers,
Inc.*(11)
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10.9(c)
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Third Amendment, dated as of May 29, 2002, to Employment Agreement, dated as of
December 21, 1999, by and between R. Neal Black and Jos. A. Bank Clothiers,
Inc.*(12)
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10.9(d)
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Fourth Amendment, dated as of April 30, 2003, to Employment Agreement, dated as
of December 21, 1999, by and between R. Neal Black and Jos. A. Bank Clothiers,
Inc.*(15)
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10.9(e)
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Fifth Amendment, dated as of April 4, 2005 to Employment Agreement, dated as of
December 21, 1999, by and between R. Neal Black and Jos. A. Bank Clothiers,
Inc.*(20)
|
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10.9(f)
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Sixth Amendment, dated as of April 5, 2006 to Employment Agreement, dated as of
December 21, 1999, by and between R. Neal Black and Jos. A. Bank Clothiers,
Inc.*(22)
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10.9(g)
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Seventh Amendment, dated as of April 13, 2007 to Employment Agreement, dated as
of December 21, 1999, by and between R. Neal Black and Jos. A. Bank Clothiers,
Inc.*(27)
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10.9(h)
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Eighth Amendment, dated as of April 9, 2008 to Employment Agreement, dated as of
December 21, 1999, by and between R. Neal Black and Jos. A. Bank Clothiers,
Inc.*(30)
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10.10
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|
Employment offer letter, dated November 20, 2000, from Jos. A. Bank Clothiers,
Inc. to Jerry DeBoer.*(9)
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10.10(a)
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Written description of 2008 base salary for Jerry DeBoer.*(30)
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10.11
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Employment offer letter, dated September 18, 2000, from Jos. A. Bank Clothiers,
Inc. to Gary Merry.*(12)
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10.11(a)
|
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|
Written description of 2008 base salary for Gary Merry.*(30)
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10.12
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2002 Long-Term Incentive Plan.*(14)
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10.13
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Form of stock option agreement under the 2002 Long-Term Incentive Plan.*(20)
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10.14
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Collective Bargaining Agreement, dated March 1, 2006, by and between Joseph A.
Bank Mfg. Co., Inc. and UNITE HERE MID-ATLANTIC REGIONAL JOINT BOARD.*(25)
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10.15
|
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Description of management bonus plans.*(30)
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21.1
|
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Company subsidiaries.*(21)
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23.1
|
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Consent of Deloitte & Touche LLP.*(30)
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31.1
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Certification of Principal Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*(30)
|
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31.2
|
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Certification of Principal Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*(30)
|
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32.1
|
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Certification of Principal Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*(30)
|
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32.2
|
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|
|
Certification of Principal Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*(30)
|
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*(1)
|
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Incorporated by reference to the Companys Registration Statement on Form
S-1 filed May 3, 1994.
|
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*(2)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended February 3, 1996.
|
|
*(3)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended February 1, 1997.
|
|
*(4)
|
|
Incorporated by reference to the Companys Form 8-K dated September 22, 1997.
|
|
*(5)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended January 31, 1998.
|
|
*(6)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended January 30, 1999.
|
|
*(7)
|
|
Incorporated by reference to the Companys Quarterly Report on Form 10-Q for
the quarter ended October 30, 1999.
|
|
|
|
*(8)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended January 29, 2000.
|
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*(9)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended February 3, 2001.
|
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*(10)
|
|
Incorporated by reference to the Companys Quarterly Report on Form 10-Q for
the quarter ended May 5, 2001.
|
|
*(11)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended February 2, 2002.
|
|
*(12)
|
|
Incorporated by reference to the Companys Quarterly Report on Form 10-Q for
the quarter ended May 4, 2002.
|
|
*(13)
|
|
Incorporated by reference to the Companys Current Report on Form 8-K, dated
May 8, 2002.
|
|
*(14)
|
|
Incorporated by reference to the Companys Definitive Proxy Statement on
Schedule 14(A) filed May 20, 2002.
|
|
*(15)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended February 1, 2003.
|
|
*(16)
|
|
Incorporated by reference to the Companys Quarterly Report on Form 10-Q for
the quarter ended November 1, 2003
|
|
*(17)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended January 31, 2004.
|
|
*(18)
|
|
Incorporated by reference to the Companys Current Report on Form 8-K, dated
April 20, 2004.
|
|
*(19)
|
|
Incorporated by reference to the Companys Current Report on Form 8-K, dated
May 14, 2004.
|
|
*(20)
|
|
Incorporated by reference to the Companys Current Report on Form 8-K, dated
April 7, 2005.
|
|
*(21)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended January 29, 2005.
|
|
*(22)
|
|
Incorporated by reference to the Companys Current Report on Form 8-K, dated
April 6, 2006.
|
|
*(23)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended January 28, 2006.
|
|
*(24)
|
|
Incorporated by reference to the Companys Quarterly Report on Form 10-Q for
the quarter ended April 29, 2006.
|
|
*(25)
|
|
Incorporated by reference to the Companys Current Report on Form 8-K, dated
May 4, 2006.
|
|
*(26)
|
|
Incorporated by reference to Amendment No. 1 to the Companys Quarterly
Report on Form 10-Q for the quarter ended July 29, 2006.
|
|
*(27)
|
|
Incorporated by reference to the Companys Annual Report on Form 10-K for
the year ended February 3, 2007.
|
|
*(28)
|
|
Incorporated by reference to the Companys Current Report on Form 8-K, dated
September 6, 2007.
|
|
*(29)
|
|
Incorporated by reference to the Companys Current Report on Form 8-K, dated
September 20, 2007.
|
|
*(30)
|
|
Filed herewith.
|
|
|
|
Exhibit represents a management contract or compensatory plan or arrangement.
|
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