United States Securities and Exchange Commission
Washington, DC 20549
FORM 10-Q
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þ
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Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the quarterly period ended August 1, 2009.
or
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o
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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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
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36-3189198
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer
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Identification
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Number)
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500 Hanover Pike, Hampstead, MD
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21074-2095
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(Address of Principal Executive Offices)
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(Zip Code)
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410-239-2700
(Registrants telephone number including area code)
None
(Former name or former address, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes
þ
No
o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files).
Yes
o
No
o
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 the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange
Act)(check one):
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Large accelerated filer
o
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Accelerated filer
þ
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Non-accelerated filer
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(Do not check if smaller reporting company)
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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
o
No
þ
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date:
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Class
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Outstanding as of August 26, 2009
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Common Stock, $.01 par value
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18,290,977
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JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
Index
2
PART I. FINANCIAL INFORMATION
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Item 1.
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Unaudited Condensed Consolidated Financial Statements
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JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(In thousands except per share data)
(Unaudited)
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Three Months Ended
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Six Months Ended
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August 2, 2008
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August 1, 2009
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August 2, 2008
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August 1, 2009
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Net sales
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$
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152,734
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$
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167,735
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$
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298,138
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$
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329,660
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Cost of goods sold
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57,496
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64,558
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111,920
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128,029
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Gross profit
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95,238
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103,177
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186,218
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201,631
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Operating expenses:
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Sales and marketing, including occupancy costs
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66,629
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67,684
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127,564
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132,629
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General and administrative
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13,831
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14,811
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27,038
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29,471
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Total operating expenses
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80,460
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82,495
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154,602
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162,100
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Operating income
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14,778
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20,682
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31,616
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39,531
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Other income (expense):
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Interest income
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321
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92
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624
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161
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Interest expense
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(92
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(110
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(186
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(208
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Total other income (expense)
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229
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(18
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438
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(47
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Income before provision for income taxes
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15,007
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20,664
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32,054
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39,484
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Provision for income taxes
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6,138
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8,152
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13,354
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15,517
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Net income
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$
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8,869
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$
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12,512
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$
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18,700
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$
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23,967
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Per share information:
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Earnings per share:
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Basic
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$
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0.49
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$
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0.68
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$
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1.03
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$
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1.31
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Diluted
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$
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0.48
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$
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0.68
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$
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1.02
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$
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1.29
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Weighted average shares outstanding:
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Basic
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18,184
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18,291
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18,184
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18,291
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Diluted
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18,427
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18,520
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18,420
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18,512
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See accompanying notes.
3
JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In Thousands)
(Unaudited)
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January 31, 2009
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August 1, 2009
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ASSETS
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CURRENT ASSETS:
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Cash and cash equivalents
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$
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122,875
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$
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60,964
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Short-term investments
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64,879
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Accounts receivable, net
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7,404
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7,020
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Inventories:
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Finished goods
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199,886
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212,357
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Raw materials
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9,356
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13,689
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Total inventories
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209,242
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226,046
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Prepaid expenses and other current assets
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17,776
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14,486
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Total current assets
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357,297
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373,395
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NONCURRENT ASSETS:
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Property, plant and equipment, net
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133,588
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128,646
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Other noncurrent assets
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481
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448
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Total assets
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$
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491,366
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$
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502,489
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LIABILITIES AND STOCKHOLDERS EQUITY
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CURRENT LIABILITIES:
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Accounts payable
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$
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29,774
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$
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34,291
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Accrued expenses
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74,792
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58,082
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Deferred tax liability current
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6,604
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6,752
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Total current liabilities
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111,170
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99,125
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NONCURRENT LIABILITIES:
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Deferred rent
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54,743
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53,647
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Deferred tax liability noncurrent
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2,605
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2,682
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Other noncurrent liabilities
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1,035
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1,255
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Total liabilities
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169,553
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156,709
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COMMITMENTS AND CONTINGENCIES
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STOCKHOLDERS EQUITY:
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Common stock
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182
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182
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Additional paid-in capital
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82,951
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82,951
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Retained earnings
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238,668
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262,635
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Accumulated other comprehensive income
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12
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12
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Total stockholders equity
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321,813
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345,780
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Total liabilities and
stockholders equity
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$
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491,366
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$
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502,489
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See accompanying notes.
4
JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
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Six Months Ended
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August 2, 2008
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August 1, 2009
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Cash flows from operating activities:
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Net income
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$
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18,700
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$
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23,967
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Adjustments to reconcile net income to net cash provided by
operating activities:
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Depreciation and amortization
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10,049
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10,896
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Loss on disposals of property, plant and equipment
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201
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66
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Increase in deferred taxes
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282
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225
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Net increase in operating working capital and other components
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(28,940
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(24,773
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Net cash provided by operating activities
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292
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10,381
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Cash flows from investing activities:
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Capital expenditures
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(18,136
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(7,413
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Proceeds from disposal of fixed assets
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Purchases of short-term investments
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(64,879
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Net cash used in investing activities
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(18,136
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(72,292
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Cash flows from financing activities:
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Net proceeds from exercise of stock options
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119
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Net cash provided by financing activities
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119
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Net decrease in cash and cash equivalents
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(17,725
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(61,911
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Cash and cash equivalents beginning of period
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82,082
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122,875
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Cash and cash equivalents end of period
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$
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64,357
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$
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60,964
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See accompanying notes.
5
JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Amounts in Thousands Except Per Share Amounts and the Number of Stores, or as Otherwise Noted)
Jos. A. Bank Clothiers, Inc. (the Company) is a nationwide retailer of classic mens
apparel through conventional retail stores and catalog and Internet direct marketing. The
condensed consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in
consolidation.
The results of operations for the interim periods shown in this report are not
necessarily indicative of results to be expected for the fiscal year. In the opinion of
management, the information contained herein reflects all adjustments necessary to make the
results of operations for the interim periods a fair statement of the operating results for
these periods. These adjustments are of a normal recurring nature.
The Company operates on a 52-53 week fiscal year ending on the Saturday closest to
January 31. The following fiscal years ended or will end on the dates indicated and will be
referred to herein by their fiscal year designations:
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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 year 2009
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January 30, 2010
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Fiscal year 2010
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January 29, 2011
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Each fiscal year noted above consisted of 52 weeks except fiscal year 2006, which
consisted of 53 weeks.
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared
in accordance with generally accepted accounting principles in the United States of America
(GAAP) for interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X and therefore do not include all of the information and footnotes
required by GAAP for comparable annual financial statements. Certain notes and other
information have been condensed or omitted from the interim financial statements presented in
this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in
conjunction with the Companys Annual Report on Form 10-K for fiscal year 2008.
2.
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SIGNIFICANT ACCOUNTING POLICIES
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Cash and Cash Equivalents
Cash and cash equivalents include bank deposit
accounts, money market accounts and other highly liquid investments with original maturities
of 90 days or less. At August 1, 2009, substantially all of the cash and cash equivalents
were invested in U.S. Treasury bills with original maturities ranging from 7 to 90 days and
overnight federally-sponsored agency notes. These investments are classified as
held-to-maturity and due to the short-term maturities of the instruments, their market values
approximate their carrying values.
Short-term Investments
Short-term investments consist of investments in
securities with original maturities of more than 90 days but less than one year. At August 1,
2009, short-term investments consisted solely of U.S. Treasury bills with original maturities
ranging from six to nine months. These investments are classified as held-to-maturity and
their market values approximate their carrying values.
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.
6
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 the purchase price
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 Sheets 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 products are sold.
Landlord Contributions
Landlord contributions are initially accounted for as an
increase to deferred rent and as an increase to prepaid expenses and other current assets when
the related store is opened. When collected, the Company records cash and reduces the prepaid
expenses and other current assets account. The collection of landlord contributions is
presented in the Condensed Consolidated Statements of Cash Flows as an operating activity. The
deferred rent is amortized over the lease term in a manner that is consistent with 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.
Recently Issued Accounting Standards
In September 2006, the Financial
Accounting Standard 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 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 was effective for the
Company beginning in fiscal year 2008, except as it related to nonfinancial assets and
liabilities, for which the statement became effective beginning in fiscal year 2009. This
statement has not had a material impact on the Companys consolidated financial statements.
In October 2008, the FASB issued Staff Position 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active (FSP 157-3), which clarifies
the application of SFAS 157 and provides an example of determining fair value when the market
for a financial asset is not active. FSP 157-3 was effective for the Company upon issuance
and has not had a material impact on the Companys consolidated financial statements.
In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments
and Hedging Activities, an amendment of SFAS No. 133, (SFAS 161). SFAS 161 is intended to
improve financial standards for derivative instruments and hedging activities by requiring
enhanced disclosures to enable investors to better understand their effects on an entitys
financial position, financial performance and cash flows. Entities are required to provide
enhanced disclosures about: how and why an entity uses derivative instruments; how derivative
instruments and related hedged items are accounted for under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, and its related interpretations; and how
derivative instruments and related hedged items affect an entitys financial position,
financial performance and cash flows. SFAS 161 was effective for the Company beginning in
fiscal year 2009 and has not had an impact on the Companys consolidated financial statements.
7
3.
|
|
SUPPLEMENTAL CASH FLOW DISCLOSURE
|
The net changes in operating working capital and other components consist of the
following:
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
August 2, 2008
|
|
|
August 1, 2009
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in accounts receivable
|
|
$
|
(2,971
|
)
|
|
$
|
384
|
|
Increase in inventories
|
|
|
(12,712
|
)
|
|
|
(16,804
|
)
|
(Increase) decrease in prepaids and other assets
|
|
|
(772
|
)
|
|
|
3,323
|
|
Increase (decrease) in accounts payable
|
|
|
(616
|
)
|
|
|
4,517
|
|
Decrease in accrued expenses
|
|
|
(14,954
|
)
|
|
|
(15,317
|
)
|
Increase (decrease) in deferred rent and other noncurrent
liabilities
|
|
|
3,085
|
|
|
|
(876
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in operating working capital and other components
|
|
$
|
(28,940
|
)
|
|
$
|
(24,773
|
)
|
|
|
|
|
|
|
|
Interest and income taxes paid were as follows:
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
August 2, 2008
|
|
|
August 1, 2009
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
132
|
|
|
$
|
155
|
|
Income taxes paid
|
|
$
|
28,818
|
|
|
$
|
25,946
|
|
Basic earnings per share is calculated by dividing net income by the weighted average
number of common shares outstanding for the period. Diluted earnings per share is calculated
by dividing net income by the diluted weighted average common shares, which reflects the
potential dilution of stock options. The weighted average shares used to calculate basic and
diluted earnings per share are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
August 2, 2008
|
|
|
August 1, 2009
|
|
|
August 2, 2008
|
|
|
August 1, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding for basic EPS
|
|
|
18,184
|
|
|
|
18,291
|
|
|
|
18,184
|
|
|
|
18,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilutive effect of common stock
equivalents
|
|
|
243
|
|
|
|
229
|
|
|
|
236
|
|
|
|
221
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding for diluted
EPS
|
|
|
18,427
|
|
|
|
18,520
|
|
|
|
18,420
|
|
|
|
18,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company uses the treasury stock method for calculating the dilutive effect of
stock options. There were 12,500 options that were anti-dilutive for the six months ended
August 2, 2008, which were excluded from the calculation of diluted shares. For the quarter
and six months ended August 1, 2009 and the quarter ended August 2, 2008, there were no
anti-dilutive options.
8
Income taxes are accounted for under the asset and liability method in accordance with
SFAS No. 109, Accounting for Income Taxes, (SFAS 109). 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.
The Company accounts for uncertainties in income taxes pursuant to Financial
Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (FIN 48), which
clarifies the accounting for uncertainty in income taxes recognized in the financial
statements under SFAS 109. The Company recognizes tax liabilities for uncertain income tax
positions (unrecognized tax benefits) pursuant to FIN 48 where an evaluation has indicated
that it is more likely than not that the tax positions will not be sustained on an audit. The
Company estimates the unrecognized tax benefits as the largest amount that is more than 50%
likely to be realized upon ultimate settlement. The Company reevaluates these uncertain tax
positions on a quarterly basis or when new information becomes available to management. The
reevaluations are based on many factors, including but not limited to, changes in facts or
circumstances, changes in tax law, successfully settled issues under audit, expirations due to
statutes of limitations, and new federal or state audit activity. The Company also recognizes
accrued interest and penalties related to these unrecognized tax benefits which are included
in the provision for income taxes in the Consolidated Statement of Income.
The effective income tax rate for the first six months of fiscal year 2009 was 39.3% as
compared with 41.7% in the first six months of fiscal year 2008. The effective rate was
higher in the first six months of fiscal year 2008 primarily due to limitations in the
deductibility of certain employee compensation under Internal Revenue Code (IRC) Section
162(m). Those limitations are not expected to apply to fiscal year 2009 as the Company
believes it has taken the necessary actions to achieve deductibility for substantially all
employee compensation for the fiscal year. The effective rate for the first six months of
fiscal year 2008 was also negatively impacted by an increase in the liability for penalties
and interest related to unrecognized tax benefits of $0.3 million.
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 2005, including its examination of the tax return for fiscal year 2005 in the
third quarter of fiscal year 2008. No significant adjustments were required to the fiscal
year 2005 tax return as a result of the examination by the IRS. The Company was notified by
the IRS in August 2009 that it will be performing an examination of the Companys tax returns
for fiscal years 2007 and 2008 (when filed). For the years before fiscal year 2004, the
majority of the Companys state and local tax returns are no longer subject to examinations by
taxing authorities.
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 call center 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. This basis excludes any allocation of management company costs, consisting
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, a typical
customer travels to the store and purchases mens clothing and/or alterations and take their
purchases with them. In the Direct Marketing segment, a typical customer receives a catalog in
his or her home and/or office and/or visits our Internet web site and places an order by
phone, mail, fax or online. The merchandise is then shipped to the customer.
9
Segment data is presented in the following tables:
Three months ended August 1, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stores
|
|
|
Direct Marketing
|
|
|
Other
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
(a)
|
|
$
|
151,040
|
|
|
$
|
13,917
|
|
|
$
|
2,778
|
|
|
$
|
167,735
|
|
Depreciation and amortization
|
|
|
4,824
|
|
|
|
9
|
|
|
|
630
|
|
|
|
5,463
|
|
Operating income (loss)
(b)
|
|
|
30,860
|
|
|
|
5,570
|
|
|
|
(15,748
|
)
|
|
|
20,682
|
|
Capital expenditures
(c)
|
|
|
1,922
|
|
|
|
182
|
|
|
|
367
|
|
|
|
2,471
|
|
Three months ended August 2, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stores
|
|
|
Direct Marketing
|
|
|
Other
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
(a)
|
|
$
|
135,162
|
|
|
$
|
14,909
|
|
|
$
|
2,663
|
|
|
$
|
152,734
|
|
Depreciation and amortization
|
|
|
4,512
|
|
|
|
20
|
|
|
|
607
|
|
|
|
5,139
|
|
Operating income (loss)
(b)
|
|
|
22,870
|
|
|
|
5,779
|
|
|
|
(13,871
|
)
|
|
|
14,778
|
|
Capital expenditures
(c)
|
|
|
9,949
|
|
|
|
2
|
|
|
|
236
|
|
|
|
10,187
|
|
Six months ended August 1, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stores
|
|
|
Direct Marketing
|
|
|
Other
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
(a)
|
|
$
|
294,811
|
|
|
$
|
29,343
|
|
|
$
|
5,506
|
|
|
$
|
329,660
|
|
Depreciation and amortization
|
|
|
9,604
|
|
|
|
20
|
|
|
|
1,272
|
|
|
|
10,896
|
|
Operating income (loss)
(b)
|
|
|
58,356
|
|
|
|
12,022
|
|
|
|
(30,847
|
)
|
|
|
39,531
|
|
Capital expenditures
(c)
|
|
|
5,900
|
|
|
|
846
|
|
|
|
667
|
|
|
|
7,413
|
|
Six months ended August 2, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stores
|
|
|
Direct Marketing
|
|
|
Other
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
(a)
|
|
$
|
264,204
|
|
|
$
|
28,676
|
|
|
$
|
5,258
|
|
|
$
|
298,138
|
|
Depreciation and amortization
|
|
|
8,794
|
|
|
|
40
|
|
|
|
1,215
|
|
|
|
10,049
|
|
Operating income (loss)
(b)
|
|
|
47,814
|
|
|
|
11,651
|
|
|
|
(27,849
|
)
|
|
|
31,616
|
|
Capital expenditures
(c)
|
|
|
17,656
|
|
|
|
5
|
|
|
|
475
|
|
|
|
18,136
|
|
|
|
|
(a)
|
|
Direct Marketing net sales represent catalog call center and Internet sales. Net sales
from segments below the GAAP 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 (loss) for the Stores and Direct Marketing segments represents profit
before allocations of overhead from the corporate office and the distribution centers,
interest and income taxes. Total Company shipping costs to customers of approximately $2.0
million and $2.5 million for the second quarter of fiscal years 2008 and 2009, respectively,
and approximately $3.7 million and $4.1 million for the first six months of fiscal years
2008 and 2009, respectively, which primarily related to the Direct Marketing segment, were
recorded to Sales and marketing, including occupancy costs in the Condensed Consolidated
Statements of Income. Operating income (loss) for Other consists primarily of costs
included in general and administrative costs. Total operating income represents profit
before interest and income taxes.
|
|
(c)
|
|
Capital expenditures include purchases of property, plant and equipment made for the
reportable segment.
|
10
On July 24, 2006, a lawsuit was filed against the Company and Robert N. Wildrick (then
the Companys Chief Executive Officer and now its Chairman of the Board) 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 Laborers Annuity Fund has been appointed the lead plaintiff in the Class
Action and has filed a Consolidated Class Action Complaint. R. Neal Black (then the Companys
President and now its President and Chief Executive Officer) 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.
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.
11
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. On February
12, 2009, the Court granted the Companys Motion for Summary Judgment and dismissed the
Verified Complaint. NCRS appealed. By order dated July 30, 2009, the Supreme Court of the
State of Delaware (No. 118, 2009) affirmed the judgment of the Court of Chancery dismissing
the Verified Complaint. The case is now closed.
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.
Management evaluated all activity of the Company through September 2, 2009, the issue
date of the Companys condensed consolidated financial statements (up to the time of filing), and
concluded that no subsequent events have occurred that would require recognition in the
condensed consolidated financial statements.
12
|
|
|
Item 2.
|
|
Managements Discussion and Analysis of Financial Condition and Results of
Operations
|
The following discussion should be read in conjunction with the unaudited condensed
consolidated financial statements and notes thereto included in this Quarterly Report on Form
10-Q and with the Companys audited financial statements and notes thereto included in its
Annual Report on Form 10-K for fiscal year 2008.
Overview
For the
second quarter of fiscal year 2009, the Companys net income
was $12.5 million, an increase of 41% as compared with the second quarter of
fiscal year 2008. The Company earned $0.68 per diluted share in the second quarter of fiscal
year 2009, as compared with $0.48 per diluted share in the second quarter of fiscal year 2008.
As such, diluted earnings per share increased 41.7% as compared with the prior year period.
The results of the second quarter of fiscal year 2009, as compared to the second quarter of
fiscal year 2008, were primarily driven by:
|
|
|
9.8% increase in net sales, driven by an 11.7% increase in the Stores segment,
partially offset by a 6.7% decrease in the Direct Marketing segment, with gross profit
margins decreasing by 90 basis points;
|
|
|
|
6.2% increase in comparable store sales;
|
|
|
|
a 320 basis point decrease in sales and marketing costs as a percentage of
sales driven primarily by the leveraging of store payroll costs, occupancy costs and
advertising and marketing costs; and
|
|
|
|
a 30 basis point decrease in general and administrative costs as a percentage
of sales as the Company was able to better leverage its costs during the quarter.
|
As of the end of the second quarter of fiscal year 2009, the Company had 467 stores,
consisting of 448 Company-owned full-line stores, seven Company-owned outlet stores and 12
stores operated by franchisees. The Company opened seven stores in the first six months of
fiscal year 2009. In the past five years, the Company has opened over 250 stores.
Specifically, there were 60 new stores opened in fiscal year 2004, 56 new stores opened in
fiscal year 2005, 52 new stores opened in fiscal year 2006, 48 new stores opened in fiscal
year 2007 and 40 new stores opened in fiscal year 2008.
The Company expects to open approximately 10 to 15 stores in fiscal year 2009, including
the seven stores opened in the first six months of fiscal year 2009. The lower number of store
openings in the first six months of fiscal year 2009 has been due primarily to the impact of
the national economic crisis, including but not limited to a resulting lack of quality real
estate opportunities. The Company expects to open approximately 30 to 40 stores in fiscal year
2010 as quality real estate opportunities are beginning to open in the marketplace and the
Company wants to expand its store base at a more rapid pace. The Company previously believed
that it could grow the chain to 600 stores by the end of Fiscal Year 2012. However, primarily
as a result of the slowdown in store openings in fiscal year 2009, the Company may reach the
600 store level subsequent to 2012.
Capital expenditures in fiscal year 2009 are expected to be approximately $18 to $20
million, primarily to fund the opening of approximately 10 to 15 new stores, the renovation
and/or relocation of several stores and the implementation of various systems projects,
including the replacement of the Companys existing Internet infrastructure. The capital
expenditures include the cost of the construction of leasehold improvements for new stores and
the renovation or relocation of several stores, of which approximately $2 to $3 million is
expected to be reimbursed through landlord contributions.
The Company also expects inventories to increase in fiscal year 2009 to support new store
openings and to replenish certain core items that had higher than expected sales volumes in
fiscal year 2008.
Critical Accounting Policies and Estimates
In preparing the condensed
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 to the Consolidated Financial Statements in the Companys Annual Report
on Form 10-K for fiscal year 2008.
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.
13
Managements sales assumptions regarding sales below cost 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 2008) are
of classic traditional products that are part of on-going programs and that bear low risk of
declines in value below cost. These products include items such as navy and gray suits, navy
blazers, white and blue dress shirts, etc. All product categories 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 web site
or on clearance at the retail stores, typically within 24 months of the Companys purchase.
The Companys costs in excess of selling price for units sold below cost totaled $1.9 million
and $1.4 million in fiscal year 2007 and fiscal year 2008, respectively. The Company reduces
the carrying amount of its current inventory value for product in its inventory that may be
sold below its cost. 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 estimated fair value of the asset, which is based on the discounted cash flows.
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. While the Company performs
a quarterly review of its long-lived assets to determine if an impairment exists, the fourth
quarter is typically the most significant quarter to make such a determination since it
provides the best indication of performance trends in the individual stores. There were no
asset valuation charges in either the first six months of fiscal year 2009 or the first six
months of fiscal year 2008.
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 commence on the date when the
Company takes possession and has the right to control the 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 making its best estimates and judgments,
actual results could differ from these estimates. These estimates, among other things, were
discussed by management with the Companys Audit Committee.
14
Recently Issued Accounting Standards
In September 2006, the Financial Accounting
Standard 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 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 was effective for the
Company beginning in fiscal year 2008, except as it related to nonfinancial assets and
liabilities, for which the statement became effective beginning in fiscal year 2009. This
statement has not had a material impact on the Companys consolidated financial statements.
In October 2008, the FASB issued Staff Position 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active (FSP 157-3), which clarifies
the application of SFAS 157 and provides an example of determining fair value when the market
for a financial asset is not active. FSP 157-3 was effective for the Company upon issuance
and has not had a material impact on the Companys consolidated financial statements.
In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments
and Hedging Activities, an amendment of SFAS No. 133, (SFAS 161). SFAS 161 is intended to
improve financial standards for derivative instruments and hedging activities by requiring
enhanced disclosures to enable investors to better understand their effects on an entitys
financial position, financial performance and cash flows. Entities are required to provide
enhanced disclosures about: how and why an entity uses derivative instruments; how derivative
instruments and related hedged items are accounted for under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, and its related interpretations; and how
derivative instruments and related hedged items affect an entitys financial position,
financial performance and cash flows. SFAS 161 was effective for the Company beginning in
fiscal year 2009 and has not had an impact on the Companys consolidated financial statements.
Results of Operations
The following table is derived from the Companys Condensed Consolidated Statements of
Income and sets forth, for the periods indicated, the items included in the Condensed
Consolidated Statements of Income expressed as a percentage of net sales.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Net Sales
|
|
|
Percentage of Net Sales
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
August 2,
|
|
|
August 1,
|
|
|
August 2,
|
|
|
August 1,
|
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
Cost of goods sold
|
|
|
37.6
|
|
|
|
38.5
|
|
|
|
37.5
|
|
|
|
38.8
|
|
Gross profit
|
|
|
62.4
|
|
|
|
61.5
|
|
|
|
62.5
|
|
|
|
61.2
|
|
Sales and marketing expenses
|
|
|
43.6
|
|
|
|
40.4
|
|
|
|
42.8
|
|
|
|
40.2
|
|
General and administrative expenses
|
|
|
9.1
|
|
|
|
8.8
|
|
|
|
9.1
|
|
|
|
8.9
|
|
Total operating expenses
|
|
|
52.7
|
|
|
|
49.2
|
|
|
|
51.9
|
|
|
|
49.2
|
|
Operating income
|
|
|
9.7
|
|
|
|
12.3
|
|
|
|
10.6
|
|
|
|
12.0
|
|
Total other income
|
|
|
0.1
|
|
|
|
|
|
|
|
0.1
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
9.8
|
|
|
|
12.3
|
|
|
|
10.8
|
|
|
|
12.0
|
|
Provision for income taxes
|
|
|
4.0
|
|
|
|
4.9
|
|
|
|
4.5
|
|
|
|
4.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
5.8
|
%
|
|
|
7.5
|
%
|
|
|
6.3
|
%
|
|
|
7.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
Net Sales
Net sales increased 9.8% to $167.7 million in the second quarter
of fiscal year 2009, as compared with $152.7 million in the second quarter of fiscal year
2008. Net sales for the first six months of fiscal year 2009 increased 10.6% to $329.7
million, as compared with $298.1 million in the first six months of fiscal year 2008. The
sales increases were primarily related to increases in Stores sales of 11.7% and 11.6% for the
second quarter and first six months of fiscal year 2009, respectively, including comparable
store sales increases of 6.2% and 5.2% for the second quarter and first six months of fiscal
year 2009, respectively. Comparable store sales include merchandise sales generated in all
stores that have been open for at least thirteen full months. The increase in comparable store
sales for the quarter and the first six months of fiscal year 2009 were primarily driven by
increases in average dollars per transaction, in items per transaction and in traffic (as
measured by number of transactions). Direct Marketing sales decreased 6.7% for the second
quarter of fiscal year 2009, driven by a decrease in sales in the Internet channel, which
represents the major portion of this reportable segment, in addition to the continued decline
of sales through the catalog call center. Sales from the Internet channel during the quarter
were negatively impacted by a more challenging retail environment and did not benefit from
promotional activity which was more directed to the Stores segment. For the first six months
of fiscal year 2009, Direct Marketing sales increased 2.3% driven by an increase in sales in
the Internet channel, partially offset by a decline in the catalog call center sales. Of the
major product categories, suits generated strong unit sales growth during the second quarter
and first six months of fiscal year 2009 while other tailored clothing and dress shirts grew
modestly and sportswear was essentially flat.
The following table summarizes store opening and closing activity during the respective
periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
August 2, 2008
|
|
|
August 1, 2009
|
|
|
August 2, 2008
|
|
|
August 1, 2009
|
|
|
|
|
|
|
|
Square
|
|
|
|
|
|
|
Square
|
|
|
|
|
|
|
Square
|
|
|
|
|
|
|
Square
|
|
|
|
Stores
|
|
|
Feet*
|
|
|
Stores
|
|
|
Feet*
|
|
|
Stores
|
|
|
Feet*
|
|
|
Stores
|
|
|
Feet*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stores open at the
beginning of the
period
|
|
|
428
|
|
|
|
1,961
|
|
|
|
463
|
|
|
|
2,104
|
|
|
|
422
|
|
|
|
1,935
|
|
|
|
460
|
|
|
|
2,091
|
|
Stores opened
|
|
|
16
|
|
|
|
63
|
|
|
|
4
|
|
|
|
17
|
|
|
|
22
|
|
|
|
89
|
|
|
|
7
|
|
|
|
30
|
|
Stores closed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stores open at the
end of the period
|
|
|
444
|
|
|
|
2,024
|
|
|
|
467
|
|
|
|
2,121
|
|
|
|
444
|
|
|
|
2,024
|
|
|
|
467
|
|
|
|
2,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Square feet is presented in thousands and excludes the square footage of the Companys
franchise stores.
|
Gross profit
Gross profit (net sales less cost of goods sold) totaled $103.2
million or 61.5% of net sales in the second quarter of fiscal year 2009, as compared with
$95.2 million or 62.4% of net sales in the second quarter of fiscal year 2008. Gross profit
totaled $201.6 million or 61.2% of net sales for the first six months of fiscal year 2009, as
compared with $186.2 million or 62.5% of net sales for the first six months of fiscal year
2008. As stated in the Companys Annual Report on Form 10-K for fiscal year 2008, the Company
is subject to certain risks that may affect its gross profit, including risks of doing
business on an international basis, increased costs of raw materials and other resources and
changes in economic conditions. The Company experienced certain of these risks during the
second quarter and the first six months of fiscal year 2009, particularly a weaker economic
environment, which resulted in lower merchandise gross margins due primarily to increased
promotional activity, partially offset by higher initial mark-ups. The lower merchandise gross
margins were partially offset by lower freight costs in the second quarter and first six
months of fiscal year 2009 compared to the same periods in fiscal year 2008. The Company
expects to continue to be subject to gross profit risks in the future.
The Companys gross profit represents net sales less cost of goods sold which primarily
includes the cost of merchandise, the cost of tailoring and freight from vendors to the
distribution center and from the distribution center to the stores. This 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.
16
Sales and Marketing Expenses
Sales and marketing expenses increased to $67.7
million or 40.4% of sales in the second quarter of fiscal year 2009 from $66.6 million or
43.6% of sales in the second quarter of fiscal year 2008. Sales and marketing expenses
increased to $132.6 million or 40.2% of sales in the first six months of fiscal year 2009 from
$127.6 million or 42.8% of sales in the first six months of fiscal year 2008. Sales and
marketing expenses consist primarily of a) full-line store, outlet store and Direct Marketing
occupancy, payroll, selling and other variable costs (which include such costs as shipping
costs to customers and credit card processing fees) and b) total Company advertising and
marketing expenses.
The increase in sales and marketing expenses relates primarily to the opening of 23 new
stores, net of 2 stores closed, since the end of the second quarter of fiscal year 2008. For
the second quarter of fiscal year 2009, the increase consists of a) $0.9 million related to
additional occupancy costs, b) $0.6 million related to additional store employee compensation
costs, and c) $0.1 million related to additional advertising and marketing expenses, partially
offset by lower other variable selling costs of $0.5 million. For the first six months of
fiscal year 2009 the increase consists of a) $2.6 million related to additional occupancy
costs, b) $2.3 million related to additional store employee compensation costs, and c) $0.1
million related to additional other variable selling costs. The Company expects sales and
marketing expenses to increase for the remainder of fiscal year 2009 as compared to fiscal
year 2008, although possibly by a lower amount than recent years, primarily as a result of
opening new stores (10 to 15 stores) in fiscal year 2009, the full year operation of the 40
stores that were opened during fiscal year 2008, 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, were $14.8
million and $13.8 million for the second quarter of fiscal year 2009 and the second quarter of
fiscal year 2008, respectively. G&A expenses were $29.5 million for the first six months of
fiscal year 2009 compared to $27.0 million for the first six months of fiscal year 2008. As a
percent of net sales, G&A expenses were 8.8% and 9.1% for the second quarters of fiscal years
2009 and 2008, respectively, and 8.9% and 9.1% for the first six months of fiscal years 2009
and 2008, respectively. The increased dollar amount of expenses for the second quarter of
fiscal year 2009 was due primarily to a) $1.0 million of higher corporate compensation costs
(which includes all company incentive compensation) and group medical costs and b) $0.3
million of higher distribution center costs, partially offset by lower other corporate costs
of $0.3 million. For the first six months of the fiscal year 2009, the increased dollar
amount of expenses was due to a) $1.7 million of higher corporate compensation costs and group
medical costs, b) $0.2 million of higher other corporate costs, and c) $0.6 million of higher
distribution center costs. Continued growth in the Stores and Direct Marketing segments may
result in increases in G&A expenses in the future.
Other Income (Expense)
Other income (expense) for the second quarter and first
six months of fiscal year 2009 was less than $0.1 million of expense for both periods, as
compared to $0.2 million and $0.4 million of income for the second quarter and first six
months of fiscal year 2008, respectively. The decreases were due primarily to lower interest
income which resulted from lower average market interest rates as compared to fiscal year
2008, partially offset by higher average cash and cash equivalents and short-term investment
balances during the fiscal year 2009 periods.
Income Taxes
The effective income tax rate for the first six months of fiscal
year 2009 was 39.3% as compared with 41.7% in the first six months of fiscal year 2008. The
effective rate was higher in the first six months of fiscal year 2008 primarily due to
limitations in the deductibility of certain employee compensation under Internal Revenue Code
(IRC) Section 162(m). Those limitations are not expected to apply to fiscal year 2009 as the
Company believes it has taken the necessary actions to achieve deductibility for substantially
all employee compensation for the fiscal year. The effective rate for the first six months of
fiscal year 2008 was also negatively impacted by an increase in the liability for penalties
and interest related to unrecognized tax benefits of $0.3 million.
17
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 customer traffic
during the holiday season and the Companys increased marketing efforts during this peak
selling time have resulted in sales and profits generated during the fourth quarter becoming a
larger portion of annual sales and profits as compared to the other three quarters.
Seasonality is also impacted by growth as more new stores have historically been opened in the
second half of the year. During the fourth quarters of fiscal years 2006, 2007 and 2008, the
Company generated approximately 36%, 35% and 36%, respectively, of its annual net sales and
approximately 58%, 53% and 52%, respectively, of its annual net income.
Liquidity and Capital Resources
Pursuant to an Amended and Restated Credit
Agreement (the Credit Agreement), the Company maintains a credit facility with a maturity
date of April 30, 2010. The current maximum revolving amount available under the Credit
Agreement is $100 million. 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 amount which the Company is entitled to borrow, from time to time, under the
Credit Agreement, after giving effect to all then outstanding obligations and other
limitations (Excess Availability). Aggregate borrowings are secured by substantially all
assets of the Company with the exception of the Company-owned real estate located in
Hampstead, Maryland.
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, limitations on capital
expenditures and additional indebtedness, and restrictions on cash dividend payments. At
August 1, 2009, January 31, 2009 and August 2, 2008, 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. Additionally, the Company had no term debt at August 1, 2009,
January 31, 2009 and August 2, 2008. The Company expects to negotiate an amendment to the
Credit Agreement or a new credit agreement prior to the expiration of the existing facility.
The Company may choose to reduce the maximum borrowing amount of this facility based on its
current and projected cash needs and market conditions. However, the Company can make no
assurance that a facility will be in place beyond April 30, 2010.
The following table summarizes the Companys sources and uses of funds as reflected in
the Condensed Consolidated Statements of Cash Flows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
August 2, 2008
|
|
|
August 1, 2009
|
|
|
|
|
|
|
|
|
|
|
Cash provided by (used in):
|
|
|
|
|
|
|
|
|
Operating activities
|
|
$
|
292
|
|
|
$
|
10,381
|
|
Investing activities
|
|
|
(18,136
|
)
|
|
|
(72,292
|
)
|
Financing activities
|
|
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
$
|
(17,725
|
)
|
|
$
|
(61,911
|
)
|
|
|
|
|
|
|
|
The Companys cash and cash equivalents consist primarily of U.S. Treasury bills with
original maturities of 90 days or less and overnight federally-sponsored agency notes and the
Companys short-term investments consist of U.S. Treasury bills with original maturities of
more than 90 days but less than one year. At August 1, 2009, the Companys cash balance was
$61.0 million and the Companys short-term investments were $64.9 million, for a total of
$125.9 million, compared to a cash balance of $64.4 million at August 2, 2008. The Company had
no short-term investments at August 2, 2008. Cash was $122.9 million at the beginning of
fiscal year 2009. The significant changes in sources and uses of funds through August 1, 2009
are discussed below.
18
Cash provided by the Companys operating activities of $10.4 million in the first six
months of fiscal year 2009 was primarily impacted by net income of $24.0 million and
depreciation and amortization of $10.9 million, partially offset by an increase in operating
working capital and other operating items of $24.8 million. The increase in operating working
capital and other operating items included an increase in inventory of $16.8 million primarily
related to new stores opened and the replenishment of certain core items that had higher than
expected sales volumes in fiscal year 2008. In addition, the increase in operating working
capital and other operating items included a reduction in accrued expenses and accounts
payable totaling $10.8 million (excluding accrued property, plant and equipment) related
primarily to the payment of income taxes and incentive compensation that had been accrued at
the end of fiscal year 2008, in addition to the timing of payments to vendors. Accounts
payable represent all short-term liabilities for which the Company has received a vendor
invoice prior to the end of the reporting period. Accrued expenses represent all other
short-term liabilities related to, among other things, vendors from whom invoices have not
been received, employee compensation, federal and state income taxes and unearned gift cards
and gift certificates. Partially offsetting these increases in operating working capital and
other operating items was a decrease in prepaid and other assets of $3.3 million due primarily
to a lower level of landlord contributions related to fewer new store openings for the first
six months of fiscal year 2009 compared with the prior year.
Cash used in investing activities in the first six months of fiscal year 2009 relates to
$7.4 million of payments for capital expenditures, as described below, and $64.9 million of
purchases of short-term investments.
For fiscal year 2009, the Company expects to spend approximately $18 to $20 million on
capital expenditures, primarily to fund the opening of approximately 10 to 15 new stores, the
renovation and/or relocation of several stores and the implementation of various systems
projects, including the replacement of its existing Internet infrastructure. The capital
expenditures for fiscal year 2009 are planned to be lower than prior years due primarily to
the reduced number of new stores planned. The capital expenditures include the cost of the
construction of leasehold improvements for new stores and the renovation or relocation of
several stores, of which approximately $2 to $3 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. The Company spent $7.4 million on capital expenditures in the first six months
of fiscal year 2009 largely related to partial payments for the seven stores opened during the
first six months of the fiscal year in addition to expenditures related to the replacement of
its existing Internet infrastructure and payments for various system initiatives. In addition,
capital expenditures for the period include payments of property, plant and equipment
additions accrued at year-end fiscal year 2008 related to stores opened in fiscal year 2008.
For the stores opened and renovated in the first six months of fiscal year 2009, the Company
negotiated approximately $2.2 million of landlord contributions. The table below summarizes
the landlord contributions that were negotiated and collected related to the stores opened in
fiscal years 2009 and 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts
|
|
|
|
|
|
|
|
|
|
|
Amounts
|
|
|
Collected
|
|
|
Amounts
|
|
|
|
|
|
|
|
Collected in
|
|
|
YTD in
|
|
|
Outstanding
|
|
|
|
Negotiated
|
|
|
Fiscal Year
|
|
|
Fiscal Year
|
|
|
August 1,
|
|
|
|
Amounts
|
|
|
2008
|
|
|
2009
|
|
|
2009
|
|
|
|
(in thousands )
|
|
Full Fiscal Year 2008 Store
Openings (40 Stores)
|
|
$
|
10,513
|
|
|
$
|
(6,373
|
)
|
|
$
|
(4,030
|
)
|
|
$
|
110
|
|
First Six Months of Fiscal
Year 2009 Store Openings (7 Stores)
|
|
|
2,190
|
|
|
|
|
|
|
|
(926
|
)
|
|
|
1,264
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
12,703
|
|
|
$
|
(6,373
|
)
|
|
$
|
(4,956
|
)
|
|
$
|
1,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The outstanding amounts of the landlord contributions for the stores opened and
renovated in fiscal years 2008 and 2009 are primarily expected to be received by the end of
the second quarter of fiscal year 2010.
The Company expects inventories to increase in fiscal year 2009 to support new store
openings and to replenish certain core items that had higher than expected sales volumes in
fiscal year 2008.
19
Management believes that the Companys cash from operations, existing cash and cash
equivalents, short-term investments and availability under its Credit Agreement will be
sufficient to fund its planned capital expenditures and operating expenses through at least
the next 12 months.
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 facilities 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 (contingent rent). In addition, many of these leases
include scheduled rent increases. Base annual rent and scheduled rent increases are included
in the contractual obligations table below for operating leases, as these are the only
rent-related commitments that are determinable at this time.
The following table reflects a summary of the Companys contractual cash obligations and
other commercial commitments for the periods indicated, including amounts paid in the first
half of fiscal year 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due by Fiscal Year
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beyond
|
|
|
|
|
|
|
2009
|
|
|
2010-2012
|
|
|
2013-2014
|
|
|
2014
|
|
|
Total
(e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating leases
(a) (b)
|
|
$
|
53,813
|
|
|
$
|
158,372
|
|
|
$
|
81,899
|
|
|
$
|
67,308
|
|
|
$
|
361,392
|
|
Standby letter of credit
(c)
|
|
|
400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
400
|
|
Related Party Agreement
(d)
|
|
|
825
|
|
|
|
1,650
|
|
|
|
|
|
|
|
|
|
|
|
2,475
|
|
License agreement
|
|
|
165
|
|
|
|
495
|
|
|
|
330
|
|
|
|
330
|
|
|
|
1,320
|
|
|
|
|
(a)
|
|
Includes various lease agreements for stores to be opened and equipment placed in
service subsequent to
August 1, 2009.
|
|
(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.
|
|
(d)
|
|
Relates to consulting agreement with the Companys current Chairman of the Board to
consult on matters of strategic planning and initiatives.
|
|
(e)
|
|
Obligations related to unrecognized tax benefits and related penalties and interest
of $0.8 million have been excluded from the above table as the amount to be settled in
cash and the specific payment dates are not known.
|
Cautionary Statement
This Quarterly Report on Form 10-Q 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 Quarterly Report on Form 10-Q, 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.
20
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, including negative changes to consumer
confidence and other recessionary pressures, 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 suitable lease sites for new stores, doing
business on an international basis, the ability to source product from its global supplier
base, legal matters and other competitive factors. The identified risk factors and 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, but not limited to, those described under Risk Factors in
the Companys Annual Report on Form 10-K for fiscal year 2008 and Managements Discussion and
Analysis of Financial Condition and Results of Operations in this Quarterly Report on Form
10-Q. 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.
|
|
|
Item 3.
|
|
Quantitative and Qualitative Disclosures About Market Risk
|
At August 1, 2009, the Company was not a party to any derivative financial instruments.
The Company does business with all of its product vendors in U.S. currency. As a result, the
Company may be affected by the value of the U.S. dollar against the currencies of its
suppliers countries. A devaluation of the U.S. dollar against these foreign currencies could
have a material adverse effect on our product costs and resulting gross profit. The Companys
interest on borrowings under its Credit Agreement is at a variable rate based on the prime
rate or LIBOR, and may include a spread over or under the applicable rate. Further, the
Company currently invests substantially all of its excess cash in short-term investments,
primarily in U.S. Treasury bills with original maturities of less than one year and overnight
federally-sponsored agency notes, 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 $0.7 million in fiscal year 2008.
|
|
|
Item 4.
|
|
Controls and Procedures
|
Limitations on Control Systems.
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. 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 August 1, 2009, 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
August 1, 2009.
21
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 Rule 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.
PART II. OTHER INFORMATION
|
|
|
Item 1.
|
|
Legal Proceedings
|
On July 24, 2006, a lawsuit was filed against the Company and Robert N. Wildrick (then
the Companys Chief Executive Officer and now its Chairman of the Board) 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 Laborers Annuity Fund has been appointed the lead plaintiff in the Class
Action and has filed a Consolidated Class Action Complaint. R. Neal Black (then the Companys
President and now its President and Chief Executive Officer) 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.
22
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.
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. On February
12, 2009, the Court granted the Companys Motion for Summary Judgment and dismissed the
Verified Complaint. NCRS appealed. By order dated July 30, 2009, the Supreme Court of the
State of Delaware (No. 118, 2009) affirmed the judgment of the Court of Chancery dismissing
the Verified Complaint. The case is now closed.
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.
In addition to the other information set forth in this report, you should carefully
consider the factors discussed under the caption Item 1A. Risk Factors in the Companys
Annual Report on Form 10-K for fiscal year 2008, which could materially affect the Companys
business, financial condition or future results. The risks described in the Companys Annual
Report on Form 10-K are not the only risks facing the Company. Additional risks and
uncertainties, including those not currently known to the Company or that the Company
currently deems to be immaterial also could materially adversely affect the Companys
business, financial condition and/or operating results. There have been no material changes in
our risk factors from those disclosed in our Annual Report on Form 10-K for fiscal year 2008.
|
|
|
Item 4.
|
|
Submission of Matters to a Vote of Security Holders
|
The following information is furnished with respect to matters submitted to a vote of security
holders during the period covered by this report:
|
a)
|
|
The 2009 annual meeting of shareholders of the Company was held on June 18,
2009.
|
|
b)
|
|
Andrew A. Giordano, William E. Herron and Henry Homes, III were elected
directors at the meeting. Gary S. Gladstein, Sidney H. Ritman, R. Neal Black, James H.
Ferstl and Robert N. Wildrick continued in their respective terms of office as
directors.
|
|
c)
|
|
The matters voted upon at the meeting and the votes were as follows:
|
|
1.
|
|
Election of Directors
(a):
|
|
|
|
|
|
|
|
|
|
Name of Nominee
|
|
For
|
|
|
Withheld
|
|
Andrew A. Giordano
|
|
|
13,492,714
|
|
|
|
3,615,147
|
|
William E. Herron
|
|
|
13,607,722
|
|
|
|
3,500,139
|
|
Henry Homes, III
|
|
|
16,862,415
|
|
|
|
245,446
|
|
|
2.
|
|
Ratification of the selection of Deloitte and Touche LLP as the
Companys registered public accounting firm for the fiscal year ending January
30, 2010
(b)
:
|
|
|
|
|
|
For
|
|
Against
|
|
Abstaining
|
16,653,496
|
|
330,976
|
|
123,389
|
23
|
3.
|
|
Approval of the JoS. A. Bank Clothiers, Inc. Executive Management
Incentive Plan
(c)
:
|
|
|
|
|
|
For
|
|
Against
|
|
Abstaining
|
14,079,589
|
|
614,078
|
|
2,080,662
|
|
|
|
(a)
|
|
There were no abstentions or broker non-votes with respect to the election of
the directors.
|
|
(b)
|
|
There were no broker non-votes with respect to the ratification of selection of
Deloitte and Touche LLP as the Companys registered public accounting firm for the fiscal
year ending January 30, 2010.
|
|
(c)
|
|
There were 0.3 million broker non-votes with respect to the approval of the
JoS. A. Bank Clothiers, Inc. Executive Management Incentive Plan.
|
Each of these matters carried. In accordance with the Companys bylaws, each of the director
nominees received the affirmative vote of a plurality of the votes present in person or
represented by proxy and entitled to vote in the election of directors and the proposals for
the ratification of the registered public accounting firm and the Executive Management
Incentive Plan both received a majority of the votes cast in favor of approval.
|
|
|
Item 5.
|
|
Other Information
|
On September 1, 2009, the Companys Board of Directors approved a form of indemnification
agreement (the Indemnification Agreement), and authorized the Company to enter into
Indemnification Agreements with the Companys directors and certain designated officers and
senior employees (each party to such agreement, an Indemnitee). On the same day, pursuant
to such authorization, the Company entered into Indemnification Agreements with each of the
Companys directors and David E. Ullman, the Companys Chief Financial Officer. Each of the
Indemnification Agreements will provide the Indemnitee with a contractual right to
indemnification, and to the advancement of expenses, if, by reason of his status as a present
or former director, officer, employee or agent of the Company or as a director, trustee,
officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign
or domestic corporation, partnership, limited liability company, joint venture, trust,
employee benefit plan or other enterprise that such person is or was serving in such capacity
at the request of the Company, such Indemnitee is, or is threatened to be, made a party to or
a witness in any threatened, pending or completed Proceeding (as defined in the
Indemnification Agreement), subject to the terms, limitations and conditions set forth in such
Indemnification Agreement. The rights under the Indemnification Agreements are in addition to
any rights such parties may have under law, the Companys certificate of incorporation and the
Companys bylaws.
The form of Indemnification Agreement and the Indemnification Agreements for each of the
directors and Mr. Ullman are filed as Exhibits 10.1 through 10.10 to this Quarterly Report on
Form 10-Q. The foregoing summary description is qualified in its entirety by reference to the
full text of the Indemnification Agreements incorporated by reference herein.
|
|
|
|
|
Exhibits
|
|
|
|
10.1
|
|
|
Form of Indemnification Agreement.
|
|
10.2
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and Robert N.
Wildrick.
|
|
10.3
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and Andrew A.
Giordano.
|
|
10.4
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and R. Neal
Black.
|
|
10.5
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and James H.
Ferstl.
|
|
10.6
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and Gary S.
Gladstein.
|
|
10.7
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and William E.
Herron.
|
24
|
|
|
|
|
Exhibits
|
|
|
|
10.8
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and Henry
Homes, III.
|
|
10.9
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and Sidney H.
Ritman.
|
|
10.10
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and David E.
Ullman.
|
|
10.11
|
|
|
Jos. A. Bank Clothiers, Inc. Executive Management Incentive Plan.*(1)
|
|
31.1
|
|
|
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
|
|
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
|
|
Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
|
|
Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*(1)
|
|
Incorporated by reference to the Companys Current Report on Form 8 K, dated June 18, 2009.
|
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
Dated: September 2, 2009
|
|
Jos. A. Bank Clothiers, Inc.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
/s/ D
avid
E. U
llman
David E. Ullman
|
|
|
|
|
Executive Vice President,
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial and Accounting Officer
|
|
|
|
|
and Duly Authorized Officer)
|
|
|
25
Exhibit Index
|
|
|
|
|
Exhibits
|
|
|
|
|
|
|
10.1
|
|
|
Form of Indemnification Agreement.
|
|
10.2
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and Robert N.
Wildrick.
|
|
10.3
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and Andrew A.
Giordano.
|
|
10.4
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and R. Neal
Black.
|
|
10.5
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and James H.
Ferstl.
|
|
10.6
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and Gary S.
Gladstein.
|
|
10.7
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and William E.
Herron.
|
|
10.8
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and Henry
Homes, III.
|
|
10.9
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and Sidney H.
Ritman.
|
|
10.10
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS. A. Bank Clothiers, Inc. and David E.
Ullman.
|
|
10.11
|
|
|
Jos. A. Bank Clothiers, Inc. Executive Management Incentive Plan.*(1)
|
|
31.1
|
|
|
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
|
|
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
|
|
Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
|
|
Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*(1)
|
|
Incorporated by reference to the Companys Current Report on Form 8 K, dated June 18, 2009.
|
26
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