Exhibit 99.1
For Information Contact:
Company Contact:
Jeff Unger, Investor Relations
(561) 514-0115
Andrew Bard, Weber Shandwick Worldwide
(212) 445-8368
Casual Male Retail Group, Inc. Reports Third Quarter Fiscal 2006
Breakeven Earnings, Excluding a Special Charge Loss
CANTON, MA, November 16, 2006 — Casual Male Retail Group, Inc. (NASDAQ/GM: “CMRG“), retail brand operator of Casual Male XL and Rochester Big & Tall, today reported its operating results for the third quarter and first nine months of fiscal 2006.
For the 13 week period ended October 28, 2006, the Company reported a net loss of $0.8 million, or $0.02 per diluted share, compared to a net loss of $2.8 million, or $0.08 per diluted share for the corresponding 13 week period ended October 29, 2005. The net loss for the third quarter of fiscal 2006 includes a charge of $1.2 million or $0.02 per diluted share from the early termination of employment contracts in the Rochester division. The net loss for the third quarter of fiscal 2005 would have been $0.05 per diluted share after adjusting for income taxes at a normalized tax rate.
For the nine months ended October 28, 2006, net income was $3.9 million, or $0.11 per diluted share, compared to a net loss of $2.7 million, or $0.08 per diluted share, for the nine months ended October 29, 2005. The net loss for the first nine months of fiscal 2005 would have been $0.05 per diluted share after adjusting for income taxes at a normalized tax rate.
During the fourth quarter of fiscal 2006, the Company plans to consolidate its Rochester Clothing division by closing its San Francisco offices and moving those operations to Casual Male’s corporate offices in Canton. In connection with those plans, during the third quarter of fiscal 2006, the Company terminated certain of its employment agreements and, accordingly, as disclosed above, incurred a charge of $1.2 million, or $0.02 diluted share. The prior year’s third quarter results included a benefit of $0.7 million, or $0.02 per diluted share, related to a class action settlement with Visa/MasterCard.
Previously, the Company reported that comparable store sales for the third quarter of 2006 increased by 13.0% when compared to the third quarter of fiscal 2005 and comparable store sales for the nine months ended October 28, 2006 increased by 9.7% when compared to the nine months of the prior year.
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), our above discussion refers to a normalized tax rate, which is a non-GAAP measure. The above discussion for the third quarter and nine months ended October 29, 2005 includes net loss per diluted share of $0.05 for both periods, assuming a normalized tax basis which reflects a 37.5% effective tax rate on pre-tax income(loss). The Company believes that the inclusion of this non-GAAP measure helps investors to gain a better understanding of the Company’s performance, especially when comparing fiscal 2006 results to fiscal 2005. However, this non-GAAP financial measure included in this press release is not meant to be considered superior to or as a substitute for results of operations prepared in accordance with GAAP. The following table shows the reconciliation of the net loss of $0.05 per diluted share for both the third quarter and nine months ended October 29, 2005, effected for the adjustment for normalized taxes:
| For the three months ended October 29, 2005 | For the nine months ended October 29, 2005 | |||||||||||||||
| (in millions, except for per share amounts) | Net Loss | Per Share | Net Loss | Per Share | ||||||||||||
Net loss, as reported | $ | (2.8 | ) | $ | (0.08 | ) | $ | (2.7 | ) | $ | (0.08 | ) | ||||
Income tax benefit, assuming normalized tax rate of 37.5% | $ | 1.1 | $ | 0.03 | 1.0 | 0.03 | ||||||||||
Adjusted net loss, after normalized tax benefit | $ | (1.7 | ) | $ | (0.05 | ) | $ | (1.7 | ) | $ | (0.05 | ) | ||||
Weighted average shares outstanding - diluted | 34.3 | 34.3 | ||||||||||||||
CMRG will host a conference call with security analysts beginning at 11:00 a.m. ET today, Thursday, November 16, 2006, to review the operating results for the third quarter ended October 28, 2006. The call is being web cast by CCBN and can be accessed atwww.casualmale.com/investor. During the conference call the Company may discuss and answer questions concerning business and financial developments and trends. The Company’s responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously.
Casual Male Retail Group, Inc., the largest retailer of big and tall men’s apparel with retail operations throughout the United States, Canada and London, England, operates 484 Casual Male XL stores, the Casual Male e-commerce site, Casual Male catalog business, 12 Casual Male at Sears-Canada stores, 25 Rochester Big & Tall stores and a direct-to-consumer business. The Company is headquartered in Canton, Massachusetts, and its common stock is listed on the NASDAQ Global Market under the symbol “CMRG.”
The discussion of forward-looking information requires management of the Company to make certain estimates and assumptions regarding the Company’s strategic direction and the effect of such plans on the
Company’s financial results. The Company’s actual results and the implementation of its plans and operations may differ materially from forward-looking statements made by the Company. The Company encourages readers of forward-looking information concerning the Company to refer to its prior filings with the Securities and Exchange Commission that set forth certain risks and uncertainties that may have an impact on future results and direction of the Company.
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CASUAL MALE RETAIL GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| For the three months ended | For the nine months ended | |||||||||||||||
| October 28, 2006 | October 29, 2005 | October 28, 2006 | October 29, 2005 | |||||||||||||
Sales | $ | 106,851 | $ | 93,770 | $ | 321,517 | $ | 291,688 | ||||||||
Cost of goods sold including occupancy | 59,790 | 55,185 | 178,829 | 169,191 | ||||||||||||
Gross profit | 47,061 | 38,585 | 142,688 | 122,497 | ||||||||||||
Expenses: | ||||||||||||||||
Selling, general and administrative | 42,082 | 36,175 | 121,675 | 109,942 | ||||||||||||
Provision for employment contract termination | 1,200 | — | 1,200 | — | ||||||||||||
Depreciation and amortization | 3,624 | 3,131 | 10,314 | 9,106 | ||||||||||||
Total expenses | 46,906 | 39,306 | 133,189 | 119,048 | ||||||||||||
Operating income (loss) | 155 | (721 | ) | 9,499 | 3,449 | |||||||||||
Other income (expense), net | — | — | 1,112 | — | ||||||||||||
Interest expense, net | (1,522 | ) | (2,114 | ) | (4,092 | ) | (6,145 | ) | ||||||||
Income (loss) before income taxes | (1,367 | ) | (2,835 | ) | 6,519 | (2,696 | ) | |||||||||
Provision (benefit) for income taxes | (523 | ) | — | 2,575 | — | |||||||||||
Net income (loss) | $ | (844 | ) | $ | (2,835 | ) | $ | 3,944 | $ | (2,696 | ) | |||||
Net income (loss) per share - basic | $ | (0.02 | ) | $ | (0.08 | ) | $ | 0.11 | $ | (0.08 | ) | |||||
Net income (loss) per share - diluted | $ | (0.02 | ) | $ | (0.08 | ) | $ | 0.11 | $ | (0.08 | ) | |||||
Weighted-average number of common shares outstanding: | ||||||||||||||||
Basic | 34,393 | 34,345 | 34,665 | 34,288 | ||||||||||||
Diluted | 34,393 | 34,345 | 37,217 | 34,288 | ||||||||||||
CASUAL MALE RETAIL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
October 28, 2006 and January 28, 2006
(In thousands)
| October 28, 2006 | January 28, 2006 | |||||
ASSETS | ||||||
Cash and investments | $ | 7,185 | $ | 5,568 | ||
Assets held for sale (land and building) | — | 26,629 | ||||
Inventories | 124,176 | 91,546 | ||||
Other current assets | 9,374 | 8,216 | ||||
Property and equipment, net | 56,976 | 51,273 | ||||
Goodwill and other intangibles | 93,142 | 89,618 | ||||
Other assets | 9,089 | 10,981 | ||||
Total assets | $ | 299,942 | $ | 283,831 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Accounts payable, accrued expenses and other liabilities | $ | 69,059 | $ | 61,850 | ||
Notes payable | 21,298 | 37,387 | ||||
Long-term debt, net of current portion | 94,749 | 95,437 | ||||
Deferred gain | 26,744 | — | ||||
Stockholders’ equity | 88,092 | 89,157 | ||||
Total liabilities and stockholders’ equity | $ | 299,942 | $ | 283,831 | ||
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