Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 29, 2017 | May 27, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | Tailored Brands Inc | |
Entity Central Index Key | 884,217 | |
Document Type | 10-Q | |
Document Period End Date | Apr. 29, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-03 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 49,048,248 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Apr. 29, 2017 | Jan. 28, 2017 | Apr. 30, 2016 |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 66,580 | $ 70,889 | $ 36,429 |
Accounts receivable, net | 84,016 | 65,714 | 83,333 |
Inventories | 984,221 | 955,512 | 1,076,733 |
Other current assets | 69,288 | 73,602 | 77,903 |
Total current assets | 1,204,105 | 1,165,717 | 1,274,398 |
PROPERTY AND EQUIPMENT, net | 467,661 | 484,165 | 521,144 |
RENTAL PRODUCT, net | 147,495 | 152,610 | 174,240 |
GOODWILL | 117,585 | 117,026 | 121,498 |
INTANGIBLE ASSETS, net | 170,966 | 171,659 | 177,826 |
OTHER ASSETS | 6,423 | 6,695 | 7,715 |
TOTAL ASSETS | 2,114,235 | 2,097,872 | 2,276,821 |
CURRENT LIABILITIES: | |||
Accounts payable | 171,886 | 177,380 | 203,248 |
Accrued expenses and other current liabilities | 303,602 | 267,899 | 311,044 |
Income taxes payable | 2,861 | 1,262 | |
Current portion of long-term debt | 13,379 | 13,379 | 42,451 |
Total current liabilities | 491,728 | 459,920 | 556,743 |
LONG-TERM DEBT, net | 1,574,486 | 1,582,150 | 1,613,192 |
DEFERRED TAXES, net AND OTHER LIABILITIES | 161,600 | 163,420 | 197,116 |
Total liabilities | 2,227,814 | 2,205,490 | 2,367,051 |
COMMITMENTS AND CONTINGENCIES | |||
SHAREHOLDERS' DEFICIT: | |||
Preferred stock | |||
Common stock | 490 | 487 | 486 |
Capital in excess of par | 474,369 | 470,801 | 456,107 |
Accumulated deficit | (546,230) | (538,823) | (535,006) |
Accumulated other comprehensive loss | (42,208) | (40,083) | (11,817) |
Total shareholders' deficit | (113,579) | (107,618) | (90,230) |
TOTAL LIABILITIES AND SHAREHOLDERS? DEFICIT | $ 2,114,235 | $ 2,097,872 | $ 2,276,821 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Net sales: | ||
Total net sales | $ 782,906 | $ 828,822 |
Cost of sales: | ||
Total cost of sales | 450,466 | 476,981 |
Gross margin: | ||
Total gross margin | 332,440 | 351,841 |
Advertising expense | 42,252 | 47,928 |
Selling, general and administrative expenses | 259,186 | 272,918 |
Operating income | 31,002 | 30,995 |
Interest income | 67 | 13 |
Interest expense | (25,621) | (26,502) |
Gain on extinguishment of debt, net | 715 | |
Earnings (loss) before income taxes | 6,163 | 4,506 |
Provision (benefit) for income taxes | 4,324 | 2,869 |
Net earnings | $ 1,839 | $ 1,637 |
Net earnings (loss) per common share allocated to common shareholders: | ||
Basic (in dollars per share) | $ 0.04 | $ 0.03 |
Diluted (in dollars per share) | $ 0.04 | $ 0.03 |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 48,808 | 48,446 |
Diluted (in shares) | 49,151 | 48,621 |
Cash dividends declared per common share (in dollars per share) | $ 0.18 | $ 0.18 |
Retail Segment | ||
Net sales: | ||
Retail clothing product | $ 583,585 | $ 615,668 |
Rental services | 94,820 | 99,831 |
Alteration and other services | 46,900 | 50,743 |
Total net sales | 725,305 | 766,242 |
Cost of sales: | ||
Retail clothing product | 252,879 | 270,355 |
Rental services | 16,168 | 15,884 |
Alteration and other services | 34,472 | 36,150 |
Occupancy costs | 105,089 | 110,135 |
Total cost of sales | 408,608 | 432,524 |
Gross margin: | ||
Retail clothing product | 330,706 | 345,313 |
Rental services | 78,652 | 83,947 |
Alteration and other services | 12,428 | 14,593 |
Occupancy costs | (105,089) | (110,135) |
Total gross margin | 316,697 | 333,718 |
Corporate Apparel Segment | ||
Net sales: | ||
Total net sales | 57,601 | 62,580 |
Cost of sales: | ||
Total cost of sales | 41,858 | 44,457 |
Gross margin: | ||
Total gross margin | $ 15,743 | $ 18,123 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | ||
Net earnings | $ 1,839 | $ 1,637 |
Currency translation adjustments | 1,341 | 16,429 |
Unrealized (loss) gain on cash flow hedges, net of tax | (3,466) | 240 |
Comprehensive (loss) income | $ (286) | $ 18,306 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net earnings | $ 1,839 | $ 1,637 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 26,426 | 30,306 |
Rental product amortization | 7,878 | 8,304 |
Gain on extinguishment of debt, net | (715) | |
Amortization of deferred financing costs and discount on long-term debt | 1,849 | 1,916 |
Loss on disposition of assets | 1,437 | 9 |
Asset impairment charges | 2,867 | 1,162 |
Share-based compensation | 4,735 | 4,118 |
Deferred tax (benefit) expense | (269) | 3,539 |
Deferred rent expense and other | 210 | 296 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (17,432) | (18,955) |
Inventories | (27,831) | (44,916) |
Rental product | (4,833) | (23,129) |
Other assets | 3,888 | 65,973 |
Accounts payable, accrued expenses and other current liabilities | 32,943 | 17,246 |
Income taxes payable | 1,529 | |
Other liabilities | (1,170) | (1,071) |
Net cash provided by operating activities | 33,351 | 46,435 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (17,786) | (30,325) |
Acquisition of business, net of cash | (457) | |
Proceeds from sales of property and equipment | 12 | 501 |
Net cash used in investing activities | (18,231) | (29,824) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on term loan | (1,750) | (1,750) |
Proceeds from asset-based revolving credit facility | 137,650 | 204,014 |
Payments on asset-based revolving credit facility | (137,650) | (204,014) |
Repurchase and retirement of senior notes | (6,601) | |
Cash dividends paid | (9,131) | (8,921) |
Proceeds from issuance of common stock | 467 | 434 |
Tax payments related to vested deferred stock units | (1,632) | (1,247) |
Net cash used in financing activities | (18,647) | (11,484) |
Effect of exchange rate changes | (782) | 1,322 |
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (4,309) | 6,449 |
Balance at beginning of period | 70,889 | 29,980 |
Balance at end of period | $ 66,580 | $ 36,429 |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Apr. 29, 2017 | |
Significant Accounting Policies | |
Significant Accounting Policies | 1. Significant Accounting Policies Basis of Presentation — The condensed consolidated financial statements herein include the accounts of Tailored Brands, Inc. and its subsidiaries (the “Company”) and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). As applicable under such regulations, certain information and footnote disclosures have been condensed or omitted. We believe the presentation and disclosures herein are adequate to make the information not misleading, and the condensed consolidated financial statements reflect all elimination entries and normal recurring adjustments which are necessary for a fair presentation of the financial position, results of operations and cash flows at the dates and for the periods presented. Certain prior period amounts have been reclassified to conform to the current period presentation. Our business results historically have fluctuated throughout the year and, as a result, the operating results of the interim periods presented are not necessarily indicative of the results that may be achieved for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended January 28, 2017. Unless the context otherwise requires, “Company”, “we”, “us” and “our” refer to Tailored Brands, Inc. and its subsidiaries. The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual amounts could differ from those estimates. Recent Accounting Pronouncements — We have considered all new accounting pronouncements and have concluded there are no new pronouncements that may have a material impact on our financial position, results of operations, or cash flows, based on current information, except for those listed below. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases. ASU 2016-02 increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between previous U.S. GAAP and ASU 2016-02 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. ASU 2016-02 is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of ASU 2016-02 is permitted. The guidance is required to be adopted using the modified retrospective approach. We are currently evaluating the impact ASU 2016-02 will have on our financial position, results of operations and cash flows but expect that it will result in a significant increase in our long-term assets and liabilities given we have a significant number of leases. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. In August 2015, the FASB issued ASU No. 2015-14 which deferred the effective date of ASU 2014-09 by one year. As a result of this deferral, ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted for annual reporting periods beginning after December 15, 2016. The guidance allows for either a full retrospective or a modified retrospective transition method. We are continuing to evaluate our method of adoption and the impact this guidance, including recent amendments, interpretations and additional disclosure requirements, may have on our financial position, results of operations and cash flows. |
Termination of Tuxedo Rental Li
Termination of Tuxedo Rental License Agreement with Macy?s | 3 Months Ended |
Apr. 29, 2017 | |
Termination Of Rental License Agreement [Abstract] | |
Termination of Tuxedo Rental License Agreement with Macy?s | 2. Termination of Tuxedo Rental License Agreement with Macy’s During the first quarter of fiscal 2017, we reached an agreement with Macy’s to wind down operations under the tuxedo rental license agreement established between Macy’s and The Men’s Wearhouse, Inc. (“The Men’s Wearhouse”) in 2015. The winding down of our tuxedo shops within Macy’s has begun and we expect all tuxedo shops within Macy’s to close by the end of the second quarter of 2017. As a result of the agreement, we incurred $17.2 million of termination-related costs, of which $14.6 million are cash charges. These costs include $12.3 million related to contract termination, $1.4 million of rental product write-offs, $1.2 million of asset impairment charges and $2.3 million of other costs, all of which relate to our retail segment. Of the $17.2 million in termination-related costs, $15.8 million is recorded in selling, general and administrative (“SG&A”) expenses and $1.4 million is included in cost of sales in the condensed consolidated statement of earnings. At April 29, 2017, $2.3 million of such costs are included in accrued expenses and other current liabilities in the condensed consolidated balance sheet. |
Restructuring and Other Charges
Restructuring and Other Charges | 3 Months Ended |
Apr. 29, 2017 | |
Restructuring and Other Charges | |
Restructuring and Other Charges | 3. Restructuring and Other Charges During the fourth quarter of fiscal 2015, we began implementing initiatives intended to reduce costs and improve operating performance. These initiatives included a store rationalization program as well as a profit improvement program to drive operating efficiencies and improve our expense structure. These programs were substantially completed in fiscal 2016 and resulted in the closure of 75 Jos. A. Bank full line stores, the closure of 56 factory and outlet stores at Jos. A. Bank and Men’s Wearhouse and the closure of 102 Men’s Wearhouse and Tux stores. No charges were incurred under these initiatives in the first quarter of fiscal 2017. A summary of the charges incurred in the first quarter of fiscal 2016 is presented in the table below (amounts in thousands): For the Three Months Ended April 30, 2016 Consulting costs $ 4,952 Severance and employee-related costs 3,756 Store asset impairment charges and accelerated depreciation, net of deferred rent 2,010 Lease termination costs 1,891 Other costs 552 Total pre-tax restructuring and other charges (1) $ 13,161 (1) Consists of $13.0 million in SG&A and $0.2 million included in cost of sales in the condensed consolidated statement of earnings. Of the total amount recorded in the table above, $5.7 million relates to our retail segment and $7.5 million relates to shared services. The following table is a rollforward of amounts included in accrued expenses and other current liabilities in the condensed consolidated balance sheet related to the pre-tax restructuring and other charges (amounts in thousands): Severance and Lease Employee- Termination Consulting Other Related Costs Costs Costs Costs Total Beginning Balance, January 28, 2017 $ 986 $ 4,834 $ 60 $ 25 $ 5,905 Charges, excluding non-cash items — — — — — Payments (171) (2,728) (60) — (2,959) Ending Balance, April 29, 2017 $ 815 $ 2,106 $ — $ 25 $ 2,946 In addition to the restructuring costs described above, we incurred integration and other costs related to Jos. A. Bank totaling $3.6 million for the three months ended April 30, 2016 of which $3.1 million are included in SG&A and $0.5 million are included in cost of sales in the condensed consolidated statement of earnings. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Apr. 29, 2017 | |
Earnings Per Share | |
Earnings Per Share | 4. Earnings Per Share Basic earnings per common share allocated to common shareholders is computed by dividing net earnings by the weighted-average common shares outstanding during the period. Diluted earnings per common share reflect the more dilutive earnings per common share amount calculated using the treasury stock method or the two-class method. In the first quarter of 2017, the treasury stock method is used to calculate diluted earnings per common share while the two-class method was used in the first quarter of 2016. Basic and diluted earnings per common share allocated to common shareholders are computed using the actual net earnings allocated to common shareholders and the actual weighted-average common shares outstanding rather than the rounded numbers presented within our condensed consolidated statement of earnings and the accompanying notes. As a result, it may not be possible to recalculate earnings per common share allocated to common shareholders in our condensed consolidated statement of earnings and the accompanying notes. The following table sets forth the computation of basic and diluted earnings per common share allocated to common shareholders (in thousands, except per share amounts): For the Three Months Ended April 29, April 30, 2017 2016 Numerator Net earnings $ 1,839 $ 1,637 Net earnings allocated to participating securities (restricted stock and deferred stock units) — (2) Net earnings allocated to common shareholders $ 1,839 $ 1,635 Denominator Basic weighted-average common shares outstanding 48,808 48,446 Dilutive effect of share-based awards 343 175 Diluted weighted-average common shares outstanding 49,151 48,621 Net earnings per common share allocated to common shareholders: Basic $ 0.04 $ 0.03 Diluted $ 0.04 $ 0.03 For the three months ended April 29, 2017 and April 30, 2016, 1.6 million and 1.2 million anti-dilutive shares of common stock were excluded from the calculation of diluted earnings per common share, respectively. |
Debt
Debt | 3 Months Ended |
Apr. 29, 2017 | |
Debt | |
Debt | 5. Debt In 2014, The Men's Wearhouse entered into a term loan credit agreement that provides for a senior secured term loan in the aggregate principal amount of $1.1 billion (the “Term Loan”) and a $500.0 million asset-based revolving credit agreement (the “ABL Facility”, and together with the Term Loan, the “Credit Facilities”) with certain of our U.S. subsidiaries and Moores the Suit People Inc., one of our Canadian subsidiaries, as co-borrowers. Proceeds from the Term Loan were reduced by an $11.0 million original issue discount (“OID”), which is presented as a reduction of the outstanding balance on the Term Loan on the balance sheet and will be amortized to interest expense over the contractual life of the Term Loan. In addition, in 2014, The Men’s Wearhouse issued $600.0 million in aggregate principal amount of 7.00% Senior Notes due 2022 (the “Senior Notes”). The Credit Facilities and the Senior Notes contain customary non-financial and financial covenants, including fixed charge coverage ratios, total leverage ratios and secured leverage ratios, as well as a restriction on our ability to pay dividends on our common stock in excess of $10.0 million per quarter. Since entering into these financing arrangements and as of April 29, 2017, our total leverage ratio and secured leverage ratio were above the maximums specified in the agreements, which was anticipated when we entered into these arrangements. As a result, we are currently subject to certain additional restrictions, including limitations on our ability to make significant acquisitions and incur additional indebtedness. Currently, we believe our total leverage ratio and secured leverage ratio will move below the maximums specified in the agreements during fiscal 2018, which will result in the elimination of these additional restrictions. In addition, in accordance with the terms of the Credit Facilities, we made a mandatory excess cash flow prepayment offer of $4.6 million to the Term Loan lenders prior to April 28, 2017. On May 2, 2017, the entire $4.6 million prepayment was made together with normal principal and interest payments on the Term Loan. Credit Facilities The Term Loan is guaranteed, jointly and severally, by Tailored Brands, Inc. and certain of our U.S. subsidiaries and will mature in June 2021. The interest rate on the Term Loan is based on 1-month LIBOR, which was approximately 1.00% at April 29, 2017. The Term Loan interest rate is subject to a LIBOR floor of 1% per annum, plus the applicable margin which is currently 3.50%, resulting in a total interest rate of 4.50%. In January 2015, we entered into an interest rate swap agreement, in which the variable rate payments due under a portion of the Term Loan were exchanged for a fixed rate. In April 2017, we entered into an additional interest rate swap agreement to exchange variable rate payments under a portion of the Term Loan for a fixed rate. At April 29, 2017, the total notional amount under our interest rate swaps is $550.0 million. See Note 14 for additional information on our interest rate swaps. In 2015, The Men's Wearhouse entered into Incremental Facility Agreement No. 1 (the “Incremental Agreement”) resulting in a refinancing of $400.0 million aggregate principal amount of the Term Loan from a variable rate to a fixed rate of 5.0% per annum. The Incremental Agreement did not impact the total amount borrowed under the Term Loan, the maturity date of the Term Loan, or collateral and guarantees under the Term Loan. As a result of our interest rate swaps and the Incremental Agreement, we have converted a significant portion of the variable interest rate under the Term Loan to a fixed rate and, as of April 29, 2017, the Term Loan had a weighted average interest rate of 5.10%. The ABL Facility provides for a senior secured revolving credit facility of $500.0 million, with possible future increases to $650.0 million under an expansion feature that matures in June 2019, and is guaranteed, jointly and severally, by Tailored Brands, Inc. and certain of our U.S. subsidiaries. The ABL Facility has several borrowing and interest rate options including the following indices: (i) adjusted LIBOR, (ii) Canadian Dollar Offered Rate (“CDOR”) rate, (iii) Canadian prime rate or (iv) an alternate base rate (equal to the greater of the prime rate, the federal funds effective rate plus 0.5% or adjusted LIBOR for a one-month period plus 1.0%). Advances under the ABL Facility bear interest at a rate per annum using the applicable indices plus a varying interest rate margin of up to 2.00%. The ABL Facility also provides for fees applicable to amounts available to be drawn under outstanding letters of credit which range from 1.50% to 2.00%, and a fee on unused commitments which ranges from 0.25% to 0.375%. As of April 29, 2017, there were no borrowings outstanding under the ABL Facility. During the three months ended April 29, 2017, the maximum borrowing outstanding under the ABL Facility was $34.7 million. We utilize letters of credit primarily as collateral for workers compensation claims and to secure inventory purchases. At April 29, 2017, letters of credit totaling approximately $31.9 million were issued and outstanding. Borrowings available under the ABL Facility as of April 29, 2017 were $468.1 million. Senior Notes The Senior Notes are guaranteed, jointly and severally, on an unsecured basis by Tailored Brands, Inc. and certain of our U.S. subsidiaries. The Senior Notes and the related guarantees are senior unsecured obligations of the Company and the guarantors, respectively, and will rank equally with all of the Company's and each guarantor's present and future senior indebtedness. The Senior Notes will mature in July 2022. Interest on the Senior Notes is payable in January and July of each year. Long-Term Debt During the first quarter of 2017, we repurchased and retired $7.4 million in face value of Senior Notes through open market transactions, which were consummated via borrowings on our ABL Facility. As a result, we recorded a net gain on extinguishment totaling $0.7 million, which is included as a separate line in the condensed consolidated statement of earnings. The net gain on extinguishment reflects a $0.8 million gain upon repurchase partially offset by the elimination of unamortized deferred financing costs totaling $0.1 million related to the Senior Notes. Subsequent to the end of the first quarter of 2017, we repurchased and retired an additional $17.5 million in face value of Senior Notes through open market transactions, which were consummated via borrowings on our ABL Facility and subsequently repaid. The following table provides details on our long-term debt as of April 29, 2017, April 30, 2016 and January 28, 2017 (in thousands): April 29, April 30, January 28, 2017 2016 2017 Term Loan (net of unamortized OID of $3.9 million at April 29, 2017, $5.1 million at April 30, 2016, and $4.1 million at January 28, 2017 $ 1,041,147 $ 1,082,392 $ 1,042,660 Senior Notes 567,570 600,000 575,000 Less: Deferred financing costs related to the Term Loan and Senior Notes (20,852) (26,749) (22,131) Total long-term debt, net 1,587,865 1,655,643 1,595,529 Current portion of long-term debt (13,379) (42,451) (13,379) Total long-term debt, net of current portion $ 1,574,486 $ 1,613,192 $ 1,582,150 |
Supplemental Cash Flows
Supplemental Cash Flows | 3 Months Ended |
Apr. 29, 2017 | |
Supplemental Cash Flows | |
Supplemental Cash Flows | 6. Supplemental Cash Flows Supplemental disclosure of cash flow information is as follows (in thousands): For the Three Months Ended April 29, April 30, 2017 2016 Cash paid for interest $ 16,389 $ 13,676 Cash paid (refunded) for income taxes, net $ 1,483 $ (60,204) Schedule of noncash investing and financing activities: Cash dividends declared $ 9,246 $ 8,796 We had unpaid capital expenditure purchases included in accounts payable and accrued expenses and other current liabilities of approximately $7.1 million and $9.9 million at April 29, 2017 and April 30, 2016, respectively. Capital expenditure purchases are recorded as cash outflows from investing activities in the condensed consolidated statement of cash flows in the period they are paid. |
Inventories
Inventories | 3 Months Ended |
Apr. 29, 2017 | |
Inventories | |
Inventories | 7. Inventories The following table provides details on our inventories as of April 29, 2017, April 30, 2016 and January 28, 2017 (in thousands): April 29, April 30, January 28, 2017 2016 2017 Finished goods $ 915,065 $ 1,018,401 $ 846,585 Raw materials and merchandise components 69,156 58,332 108,927 Total inventories $ 984,221 $ 1,076,733 $ 955,512 |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 29, 2017 | |
Income Taxes | |
Income Taxes | 8. Income Taxes Our effective income tax rate increased to 70.2% for the first quarter of 2017 from 63.7% for the first quarter of 2016. Our effective income tax rate for the first quarter of 2017 is higher than the United States (“U.S”) statutory rate as well as the effective income tax rate for the first quarter of 2016 primarily as a result of $2.2 million of tax deficiencies related to the vesting of stock-based awards recorded in the first quarter of 2017 resulting from the adoption of new accounting guidance related to stock-based compensation. See Note 11 for additional information. Additionally, we are currently undergoing several federal, foreign and state audits, however, we currently do not believe these audits will result in any material charge to tax expense in the future. |
Other Current Assets, Accrued E
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities | 3 Months Ended |
Apr. 29, 2017 | |
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities | |
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities | 9. Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities Other current assets consist of the following (in thousands): April 29, April 30, January 28, 2017 2016 2017 Prepaid expenses $ 44,584 $ 46,245 $ 47,057 Tax receivable 14,055 22,561 15,794 Other 10,649 9,097 10,751 Total other current assets $ 69,288 $ 77,903 $ 73,602 Accrued expenses and other current liabilities consist of the following (in thousands): April 29, April 30, January 28, 2017 2016 2017 Customer deposits, prepayments and refunds payable $ 72,411 $ 67,497 $ 28,384 Accrued salary, bonus, sabbatical, vacation and other benefits 58,373 63,774 72,589 Unredeemed gift cards 37,434 37,712 40,865 Sales, value added, payroll, property and other taxes payable 36,878 40,917 31,188 Accrued workers compensation and medical costs 27,194 29,145 31,609 Accrued interest 22,871 27,134 15,457 Accrued dividends 9,957 9,025 9,842 Loyalty program reward certificates 8,720 10,076 9,840 Lease termination and other store closure costs 4,106 1,732 4,834 Accrued royalties 1,806 2,167 3,720 Other 23,852 21,865 19,571 Total accrued expenses and other current liabilities $ 303,602 $ 311,044 $ 267,899 Deferred taxes, net and other liabilities consist of the following (in thousands): April 29, April 30, January 28, 2017 2016 2017 Deferred and other income tax liabilities, net $ 90,772 $ 116,115 $ 92,079 Deferred rent and landlord incentives 60,542 66,192 61,215 Unfavorable lease liabilities 4,224 7,465 4,693 Other 6,062 7,344 5,433 Total deferred taxes, net and other liabilities $ 161,600 $ 197,116 $ 163,420 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 3 Months Ended |
Apr. 29, 2017 | |
Accumulated Other Comprehensive (Loss) Income. | |
Accumulated Other Comprehensive (Loss) Income | 10. Accumulated Other Comprehensive (Loss) Income The following table summarizes the components of accumulated other comprehensive (loss) income for the three months ended April 29, 2017 (in thousands and net of tax): Foreign Currency Cash Flow Pension Translation Hedges Plan Total BALANCE— January 28, 2017 (40,205) (82) 204 (40,083) Other comprehensive income (loss) before reclassifications 1,341 (3,926) — (2,585) Amounts reclassified from accumulated other comprehensive loss — 460 — 460 Net current-period other comprehensive income (loss) 1,341 (3,466) — (2,125) BALANCE— April 29, 2017 $ (38,864) $ (3,548) $ 204 $ (42,208) The following table summarizes the components of accumulated other comprehensive (loss) income for the three months ended April 30, 2016 (in thousands and net of tax): Foreign Currency Cash Flow Pension Translation Hedges Plan Total BALANCE— January 30, 2016 $ (26,659) $ (2,007) $ 180 $ (28,486) Other comprehensive income (loss) before reclassifications 16,429 (125) — 16,304 Amounts reclassified from accumulated other comprehensive loss — 365 — 365 Net current-period other comprehensive income 16,429 240 — 16,669 BALANCE— April 30, 2016 $ (10,230) $ (1,767) $ 180 $ (11,817) Amounts reclassified from other comprehensive (loss) income for the three months ended April 29, 2017 relate to changes in the fair value of our interest rate swaps which is recorded within interest expense in the condensed consolidated statement of earnings and changes in the fair value of cash flow hedges related to inventory purchases, which is recorded within cost of sales in the condensed consolidated statement of earnings. Amounts reclassified from other comprehensive (loss) income for the three months ended April 30, 2016 relate to changes in the fair value of our interest rate swap, which is recorded within interest expense in the condensed consolidated statement of earnings. |
Share-Based Compensation Plans
Share-Based Compensation Plans | 3 Months Ended |
Apr. 29, 2017 | |
Share-Based Compensation Plans | |
Share-Based Compensation Plans | 11. Share-Based Compensation Plans For a discussion of our share-based compensation plans, refer to Note 13 in our Annual Report on Form 10-K for the fiscal year ended January 28, 2017. During the first quarter of fiscal 2017, we adopted ASU No. 2016-09, Compensation-Stock Compensation . ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The recognition of excess tax benefits and deficiencies related to the vesting of stock-based awards in the statement of earnings and presentation of excess tax benefits on the statement of cash flows were adopted prospectively, with no adjustments made to prior periods. See Note 8 for additional information. In addition, upon adoption, we did not change our policy on accounting for forfeitures, which is to estimate the number of awards expected to be forfeited and adjusting the estimate as needed. Overall, the adoption of ASU 2016-09 did not have a material impact on our financial statements. The amount of share-based compensation cost is measured based on the grant-date fair value of the instrument issued and is recognized over the vesting period. Share-based compensation expense recognized for the three months ended April 29, 2017 and April 30, 2016 was $4.7 million and $4.1 million, respectively. Non-Vested Deferred Stock Units, Performance Units and Restricted Stock The following table summarizes the activity of time-based and performance-based (collectively, “DSUs”) awards for the three months ended April 29, 2017: Weighted-Average Units Grant-Date Fair Value Time- Performance- Time- Performance- Based Based Based Based Non-Vested at January 28, 2017 1,061,965 523,948 $ 24.31 $ 28.28 Granted — — — — Vested (1) (350,291) — — Forfeited (11,596) (737) Non-Vested at April 29, 2017 700,078 523,211 $ $ (1) Includes 121,993 shares relinquished for tax payments related to vested DSUs for the three months ended April 29, 2017. The following table summarizes the activity of restricted stock for the three months ended April 29, 2017: Weighted- Shares Grant-Date Non-Vested at January 28, 2017 36,878 $ 15.56 Granted — — Vested (36,878) Forfeited — — Non-Vested at April 29, 2017 — $ — Restricted stock awards receive non-forfeitable dividends, if any, when and if paid to shareholders of record at the payment date. As of April 29, 2017, we have unrecognized compensation expense related to non-vested DSUs of approximately $18.5 million, which is expected to be recognized over a weighted-average period of 1.5 years. Stock Options The following table summarizes the activity of stock options for the three months ended April 29, 2017: Weighted- Number of Average Shares Exercise Price Outstanding at January 28, 2017 1,194,690 $ 29.70 Granted — — Exercised — — Forfeited (1,553) Expired (40,243) Outstanding at April 29, 2017 1,152,894 $ Exercisable at April 29, 2017 716,137 $ As of April 29, 2017, we have unrecognized compensation expense related to non-vested stock options of approximately $2.7 million, which is expected to be recognized over a weighted-average period of 1.3 years. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Apr. 29, 2017 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 12. Goodwill and Other Intangible Assets Goodwill Goodwill allocated to our reportable segments and changes in the net carrying amount of goodwill for the three months ended April 29, 2017 are as follows (in thousands): Corporate Retail Apparel Total Balance at January 28, 2017 $ 94,511 $ 22,515 $ 117,026 Goodwill of acquired business — 695 695 Translation adjustment (811) 675 (136) Balance at April 29, 2017 $ 93,700 $ 23,885 $ 117,585 The goodwill of acquired business resulted from an immaterial acquisition by our United Kingdom (“UK”) based operations. Goodwill is evaluated for impairment at least annually. A more frequent evaluation is performed if events or circumstances indicate that impairment could have occurred. Such events or circumstances could include, but are not limited to, new significant negative industry or economic trends, unanticipated changes in the competitive environment, decisions to significantly modify or dispose of operations and a significant sustained decline in the market price of our stock. No impairment evaluation was considered necessary during the first three months ended April 29, 2017. Intangible Assets The gross carrying amount and accumulated amortization of our identifiable intangible assets are as follows (in thousands): April 29, April 30, January 28, 2017 2016 2017 Amortizable intangible assets: Carrying amount: Trademarks, tradenames and franchise agreements $ 16,040 $ 16,361 $ 15,966 Favorable leases 13,679 14,562 13,826 Customer relationships 26,268 29,661 25,483 Total carrying amount 55,987 60,584 55,275 Accumulated amortization: Trademarks, tradenames and franchise agreements (10,183) (9,857) (10,055) Favorable leases (4,297) (3,057) (3,961) Customer relationships (14,776) (14,213) (13,804) Total accumulated amortization (29,256) (27,127) (27,820) Total amortizable intangible assets, net 26,731 33,457 27,455 Indefinite-lived intangible assets: Trademarks and tradename 144,235 144,369 144,204 Total intangible assets, net $ 170,966 $ 177,826 $ 171,659 Pre-tax amortization expense associated with intangible assets subject to amortization totaled $1.0 million and $1.3 million for the three months ended April 29, 2017 and April 30, 2016, respectively. Pre-tax amortization associated with intangible assets subject to amortization at April 29, 2017 is estimated to be $3.0 million for the remainder of fiscal 2017, $3.7 million for fiscal 2018, $3.5 million for fiscal 2019, $3.4 million for fiscal 2020 and $3.3 million for fiscal 2021. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Apr. 29, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | 13. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a three-tier fair value hierarchy, categorizing the inputs used to measure fair value. The hierarchy can be described as follows: Level 1- observable inputs such as quoted prices in active markets; Level 2- inputs other than the quoted prices in active markets that are observable either directly or indirectly; and Level 3- unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and Liabilities that are Measured at Fair Value on a Recurring Basis Fair Value Measurements at Reporting Date Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Instruments Inputs Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total April 29, 2017— Assets: Derivative financial instruments $ — $ $ — $ Liabilities: Derivative financial instruments $ — $ $ — $ January 28, 2017— Assets: Derivative financial instruments $ — $ $ — $ Liabilities: Derivative financial instruments $ — $ $ — $ April 30, 2016— Assets: Derivative financial instruments $ — $ $ — $ Liabilities: Derivative financial instruments $ — $ $ — $ Derivative financial instruments are comprised of (1) foreign currency forward exchange contracts primarily entered into to minimize our foreign currency exposure related to forecasted purchases of certain inventories denominated in a currency different from the operating entity’s functional currency, (2) foreign currency forward exchange contracts primarily entered into to minimize our foreign currency exposure related to forecasted revenues from our UK operations denominated in a currency different from the UK’s functional currency and (3) interest rate swap agreements to minimize our exposure to interest rate changes on our outstanding indebtedness. These derivative financial instruments are recorded in the condensed consolidated balance sheets at fair value based upon observable market inputs. Derivative financial instruments in an asset position are included within other current assets in the condensed consolidated balance sheets. Derivative financial instruments in a liability position are included within accrued expenses and other current liabilities or noncurrent liabilities in the condensed consolidated balance sheets. See Note 14 for further information regarding our derivative instruments. Assets and Liabilities that are Measured at Fair Value on a Non-Recurring Basis Long-lived assets, such as property and equipment, goodwill and identifiable intangibles, are periodically evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the asset carrying amount exceeds its fair value, an impairment charge is recognized in the amount by which the carrying amount exceeds the fair value of the asset. During the three months ended April 29, 2017, we incurred $2.9 million of asset impairment charges, which is included within SG&A expenses in our condensed consolidated statement of earnings, primarily related to underperforming stores as well as long-lived assets related to our tuxedo rental license agreement with Macy’s. We estimated the fair value of the long-lived assets based on an income approach using projected future cash flows discounted using a weighted-average cost of capital analysis that reflects current market conditions, which we classify as Level 3 within the fair value hierarchy. Fair Value of Financial Instruments Our financial instruments consist of cash, accounts receivable, accounts payable, accrued expenses and other current liabilities and long-term debt. Management estimates that, as of April 29, 2017, April 30, 2016, and January 28, 2017, the carrying value of our financial instruments other than long-term debt approximated their fair value due to the highly liquid or short-term nature of these instruments. The fair values of our Term Loan were valued based upon observable market data provided by a third party for similar types of debt, which we classify as a Level 2 input within the fair value hierarchy. The fair value of our Senior Notes is based on quoted prices in active markets, which we classify as a Level 1 input within the fair value hierarchy. The table below shows the fair value and carrying value of our long-term debt, including current portion (in thousands): April 29, 2017 April 30, 2016 January 28, 2017 Carrying Estimated Carrying Estimated Carrying Estimated Amount (1) Fair Value Amount (1) Fair Value Amount (1) Fair Value Long-term debt, including current portion $ 1,587,865 $ 1,482,750 $ 1,655,643 $ 1,583,132 $ 1,595,529 $ 1,556,200 (1) The carrying value of the long-term debt, including current portion is net of deferred financing costs of $20.9 million, $26.7 million and $22.1 million as of April 29, 2017, April 30, 2016 and January 28, 2017, respectively. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Apr. 29, 2017 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 14. Derivative Financial Instruments As discussed in Note 5, in January 2015, we entered into an interest rate swap agreement on an initial notional amount of $520.0 million that matures in August 2018 with periodic interest settlements. At April 29, 2017, the notional amount totaled $290.0 million. Under this interest rate swap agreement, we receive a floating rate based on 3-month LIBOR and pay a fixed rate of 5.03% (including the applicable margin of 3.50%) on the outstanding notional amount. We have designated the interest rate swap as a cash flow hedge of the variability of interest payments under the Term Loan due to changes in the LIBOR benchmark interest rate. In addition, in April 2017, we entered into an interest rate swap agreement on an initial notional amount of $260.0 million that matures in June 2021 with periodic interest settlements. Under this interest rate swap agreement, we receive a floating rate based on 1-month LIBOR and pay a fixed rate of 5.56% (including the applicable margin of 3.50%) on the outstanding notional amount. We have designated the interest rate swap as a cash flow hedge of the variability of interest payments under the Term Loan due to changes in the LIBOR benchmark interest rate. At April 29, 2017, the fair value of the interest rate swaps was a liability of $3.8 million with $3.1 million recorded in accrued expenses and other current liabilities and $0.7 million in other liabilities in our condensed consolidated balance sheet. The effective portion of the swaps is reported as a component of accumulated other comprehensive (loss) income. There was no hedge ineffectiveness at April 29, 2017. Changes in fair value are reclassified from accumulated other comprehensive (loss) income into earnings in the same period that the hedged item affects earnings. Over the next 12 months, $3.1 million of the effective portion of the interest rate swaps is expected to be reclassified from accumulated other comprehensive (loss) income into earnings within interest expense. If, at any time, either interest rate swap is determined to be ineffective, in whole or in part, due to changes in the interest rate swap or underlying debt agreements, the fair value of the portion of the interest rate swap determined to be ineffective will be recognized as a gain or loss in the statement of earnings for the applicable period . Also, we have entered into derivative instruments to hedge our foreign exchange risk, specifically related to the British pound and Euro. We have designated these instruments as cash flow hedges of the variability in exchange rates for those foreign currencies. At April 29, 2017, the fair value of these cash flow hedges was a net liability of $0.7 million with $1.5 million recorded in accrued expenses and other current liabilities and $0.8 million recorded in other current assets in our condensed consolidated balance sheet. The effective portion of the hedges is reported as a component of accumulated other comprehensive (loss) income. Hedge ineffectiveness at April 29, 2017 was immaterial. Changes in fair value are reclassified from accumulated other comprehensive (loss) income into earnings in the same period that the hedged item affects earnings. Over the next 12 months, $1.8 million of the effective portion of the cash flow hedges is expected to be reclassified from accumulated other comprehensive (loss) income into earnings within cost of sales. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Apr. 29, 2017 | |
Segment Reporting | |
Segment Reporting | 15. Segment Reporting Our operations are conducted in two reportable segments, retail and corporate apparel, based on the way we manage, evaluate and internally report our business activities. The retail segment includes the results from our four retail merchandising brands: Men’s Wearhouse/Men’s Wearhouse and Tux, Jos. A. Bank, Moores Clothing for Men (“Moores”) and K&G. These four brands are operating segments that have been aggregated into the retail reportable segment. MW Cleaners is also aggregated in the retail segment as these operations have not had a significant effect on our revenues or expenses. Specialty apparel merchandise offered by our four retail merchandising concepts include suits, suit separates, sport coats, slacks, business casual, denim, sportswear, outerwear, dress shirts, shoes and accessories for men. Women’s career and casual apparel, sportswear and accessories, including shoes, and children’s apparel is offered at most of our K&G stores. Rental product is offered at our Men’s Wearhouse/Men’s Wearhouse and Tux, Jos. A. Bank and Moores retail stores. The corporate apparel segment includes the results from our corporate apparel and uniform operations conducted by Dimensions, Alexandra, and Yaffy in the UK and Twin Hill in the U.S., which provide corporate apparel uniforms and workwear to workforces. We measure segment profitability based on operating income, defined as income before interest expense, interest income, gain on extinguishment of debt, net and income taxes, before shared service expenses. Shared service expenses include costs incurred and directed primarily by our corporate offices that are not allocated to segments. Additional net sales information is as follows (in thousands): For the Three Months Ended April 29, 2017 April 30, 2016 Net sales: MW (1) $ 420,067 $ 441,646 Jos. A. Bank 167,228 178,450 K&G 88,683 94,759 Moores 40,813 43,229 MW Cleaners 8,514 8,158 Total retail segment 725,305 766,242 Total corporate apparel segment 57,601 62,580 Total net sales $ 782,906 $ (1) MW includes Men’s Wearhouse, Men’s Wearhouse and Tux, tuxedo shops within Macy’s and Joseph Abboud. The following table sets forth supplemental products and services sales information for the Company (in thousands): For the Three Months Ended April 29, 2017 April 30, 2016 Net sales: Men's tailored clothing product $ 332,630 $ 349,528 Men's non-tailored clothing product 228,699 241,933 Women's clothing product 19,827 21,846 Other 2,429 2,361 Total retail clothing product 583,585 615,668 Rental services 94,820 99,831 Alteration services 38,386 42,585 Retail dry cleaning services 8,514 8,158 Total alteration and other services 46,900 50,743 Corporate apparel clothing product 57,601 62,580 Total net sales $ 782,906 $ Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes is as follows (in thousands): For the Three Months Ended April 29, 2017 April 30, 2016 Operating income: Retail $ 73,425 $ 79,877 Corporate apparel 1,975 2,054 Shared service expense (44,398) (50,936) Operating income 31,002 30,995 Interest income 67 13 Interest expense (25,621) (26,502) Gain on extinguishment of debt, net 715 — Earnings before income taxes $ $ |
Legal Matters
Legal Matters | 3 Months Ended |
Apr. 29, 2017 | |
Legal Matters | |
Legal Matters | 16. Legal Matters On March 29, 2016, Peter Makhlouf filed a putative class action lawsuit against the Company and its Chief Executive Officer ("CEO"), Douglas S. Ewert, in the United States District Court for the Southern District of Texas (Case No. 4:16-cv-00838). The complaint attempts to allege claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of a putative class of persons who purchased or otherwise acquired the Company's securities between June 18, 2014 and December 9, 2015. In particular, the complaint alleges that the Company and its CEO made certain statements about the Company's acquisition and subsequent integration of Jos. A. Bank that were false and misleading and omitted material facts. On March 23, 2017, the Court appointed Strathclyde Pension Fund lead plaintiff in this matter and the parties subsequently agreed on a case schedule through the motion to dismiss phase of this matter. We believe that the claims are without merit and are defending the lawsuit vigorously. The range of loss, if any, is not reasonably estimable at this time. We do not currently believe, however, that it will have a material adverse effect on our financial position, results of operations or cash flows. On February 17, 2016, Anthony Oliver filed a putative class action lawsuit against the Company in the United States District Court for the Central District of California (Case No. 2:16-cv-01100-TJH-AS). The complaint attempts to allege claims under the Telephone Consumer Protection Act. In particular the complaint alleges that the Company sent unsolicited text messages to cellular telephones beginning October 1, 2013 to the present day. After we demonstrated that the Company had the plaintiff’s permission to send him texts, the plaintiff filed an amended complaint alleging the Company sent text messages exceeding the number plaintiff had agreed to receive each week. The Company filed a motion to dismiss on June 10, 2016. The court denied the motion to dismiss on February 13, 2017. We believe that the claims are without merit and intend to defend the lawsuit vigorously. The range of loss, if any, is not reasonably estimable at this time. We do not currently believe, however, that it will have a material adverse effect on our financial position, results of operations or cash flows. In addition, we are involved in various routine legal proceedings, including ongoing litigation, incidental to the conduct of our business. Management does not believe that any of these matters will have a material adverse effect on our financial position, results of operations or cash flows. |
Condensed Consolidating Informa
Condensed Consolidating Information | 3 Months Ended |
Apr. 29, 2017 | |
Condensed Consolidating Information | |
Condensed Consolidating Information | 17. Condensed Consolidating Information As discussed in Note 5, The Men’s Wearhouse (the “Issuer”) issued $600.0 million in aggregate principal amount of 7.00% Senior Notes. The Senior Notes are guaranteed jointly and severally, on an unsecured basis by Tailored Brands, Inc. (the "Parent") and certain of our U.S. subsidiaries (the “Guarantors”). Our Canadian and U.K. subsidiaries (collectively, the “Non-Guarantors”) are not guarantors of the Senior Notes. Each of the Guarantors is 100% owned and all guarantees are joint and several. In addition, the guarantees are full and unconditional except for certain automatic release provisions related to the Guarantors. These automatic release provisions are considered customary and include the sale or other disposition of all or substantially all of the assets or all of the capital stock of any subsidiary guarantor, the release or discharge of a guarantor’s guarantee of the obligations under the Term Loan other than a release or discharge through payment thereon, the designation in accordance with the Indenture of a guarantor as an unrestricted subsidiary or the satisfaction of the requirements for defeasance or discharge of the Senior Notes as provided for in the Indenture. The tables in the following pages present the condensed consolidating financial information for the Parent, the Issuer, the Guarantors and the Non-Guarantors, together with eliminations, as of and for the periods indicated. The consolidating financial information may not necessarily be indicative of the financial positions, results of operations or cash flows had the Issuer, Guarantors and Non-Guarantors operated as independent entities. Tailored Brands, Inc. Condensed Consolidating Balance Sheet April 29, 2017 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 2,162 $ 2,335 $ 62,083 $ — $ 66,580 Accounts receivable, net 7,358 28,480 437,481 149,697 (539,000) 84,016 Inventories — 212,146 438,670 333,405 — 984,221 Other current assets 136 229,333 33,392 10,933 (204,506) 69,288 Total current assets 7,494 472,121 911,878 556,118 (743,506) 1,204,105 Property and equipment, net — 224,274 208,719 34,668 — 467,661 Rental product, net — 127,188 3,087 17,220 — 147,495 Goodwill — 6,160 68,510 42,915 — 117,585 Intangible assets, net — 52 156,741 14,173 — 170,966 Investments in subsidiaries (89,379) 1,444,485 — — (1,355,106) — Other assets — 5,200 949 7,174 (6,900) 6,423 Total assets $ (81,885) $ 2,279,480 $ 1,349,884 $ 672,268 $ (2,105,512) $ 2,114,235 LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY CURRENT LIABILITIES: Accounts payable $ 21,606 $ 553,773 $ 82,517 $ 52,990 $ (539,000) $ 171,886 Accrued expenses and other current liabilities 10,088 146,168 120,022 227,415 (197,230) 306,463 Current portion of long-term debt — 13,379 — — — 13,379 Total current liabilities 31,694 713,320 202,539 280,405 (736,230) 491,728 Long-term debt, net — 1,574,486 — — — 1,574,486 Deferred taxes and other liabilities — 81,053 84,719 10,004 (14,176) 161,600 Shareholders' (deficit) equity (113,579) (89,379) 1,062,626 381,859 (1,355,106) (113,579) Total liabilities and shareholders' (deficit) equity $ (81,885) $ 2,279,480 $ 1,349,884 $ 672,268 $ (2,105,512) $ 2,114,235 Tailored Brands, Inc. Condensed Consolidating Balance Sheet April 30, 2016 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 7,950 $ 3,231 $ 25,248 $ — $ 36,429 Accounts receivable, net — 17,235 293,596 35,703 (263,201) 83,333 Inventories — 211,358 714,712 150,663 — 1,076,733 Other current assets 9,769 41,038 18,629 8,467 — 77,903 Total current assets 9,769 277,581 1,030,168 220,081 (263,201) 1,274,398 Property and equipment, net — 252,683 228,714 39,747 — 521,144 Rental product, net — 141,427 13,990 18,823 — 174,240 Goodwill — 6,160 68,510 46,828 — 121,498 Intangible assets, net — 159 159,051 18,616 — 177,826 Investments in subsidiaries (88,520) 1,447,307 — — (1,358,787) — Other assets — 6,637 952 8,226 (8,100) 7,715 Total assets $ $ $ $ $ $ LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY CURRENT LIABILITIES: Accounts payable $ — $ 310,830 $ 113,982 $ 41,637 $ (263,201) $ 203,248 Accrued expenses and other current liabilities 9,129 184,955 90,879 26,081 — 311,044 Current portion of long-term debt — 42,451 — — — 42,451 Total current liabilities 9,129 538,236 204,861 67,718 (263,201) 556,743 Long-term debt, net — 1,613,192 — — — 1,613,192 Deferred taxes and other liabilities 2,350 69,046 122,428 11,392 (8,100) 197,116 Shareholders' (deficit) equity (90,230) (88,520) 1,174,096 273,211 (1,358,787) (90,230) Total liabilities and shareholders' (deficit) equity $ $ $ $ $ $ 2,276,821 Tailored Brands, Inc. Condensed Consolidating Balance Sheet January 28, 2017 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 1,002 $ 1,881 $ 68,006 $ — $ 70,889 Accounts receivable, net 7,376 15,499 476,742 56,777 (490,680) 65,714 Inventories — 230,264 438,167 287,081 — 955,512 Other current assets 12,773 134,225 28,436 8,448 (110,280) 73,602 Total current assets 20,149 380,990 945,226 420,312 (600,960) 1,165,717 Property and equipment, net — 232,090 216,248 35,827 — 484,165 Rental product, net — 131,287 3,369 17,954 — 152,610 Goodwill — 6,160 68,510 42,356 — 117,026 Intangible assets, net — 78 157,270 14,311 — 171,659 Investments in subsidiaries (109,788) 1,425,622 — — (1,315,834) — Other assets — 5,615 959 7,321 (7,200) 6,695 Total assets $ (89,639) $ $ $ $ $ LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY CURRENT LIABILITIES: Accounts payable $ 15,352 $ 509,572 $ 82,337 $ 60,799 $ (490,680) $ 177,380 Accrued expenses and other current liabilities 2,627 111,617 129,420 135,777 (110,280) 269,161 Current portion of long-term debt — 13,379 — — — 13,379 Total current liabilities 17,979 634,568 211,757 196,576 (600,960) 459,920 Long-term debt, net — 1,582,150 — — — 1,582,150 Deferred taxes and other liabilities — 74,912 85,477 10,231 (7,200) 163,420 Shareholders' (deficit) equity (107,618) (109,788) 1,094,348 331,274 (1,315,834) (107,618) Total liabilities and shareholders' (deficit) equity $ (89,639) $ $ $ $ $ Tailored Brands, Inc. Condensed Consolidating Statement of Earnings (Loss) (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Three Months Ended April 29, 2017 Net sales $ — $ 418,925 $ 372,264 $ 135,258 $ (143,541) $ 782,906 Cost of sales — 212,499 278,631 102,877 (143,541) 450,466 Gross margin — 206,426 93,633 32,381 — 332,440 Operating expenses 903 155,783 133,532 25,952 (14,732) 301,438 Operating (loss) income (903) 50,643 (39,899) 6,429 14,732 31,002 Other income and expenses, net — — 14,732 — (14,732) — Interest income 110 1,302 1,672 62 (3,079) 67 Interest expense — (27,194) (114) (1,392) 3,079 (25,621) Gain on extinguishment of debt, net — 715 — — — 715 (Loss) earnings before income taxes (793) 25,466 (23,609) 5,099 — 6,163 Provision (benefit) for income taxes 1,945 8,469 (7,752) 1,662 — 4,324 (Loss) earnings before equity in net income of subsidiaries (2,738) 16,997 (15,857) 3,437 — 1,839 Equity in earnings of subsidiaries 4,577 (12,420) — — 7,843 — Net earnings (loss) $ 1,839 $ 4,577 $ (15,857) $ 3,437 $ 7,843 $ 1,839 Comprehensive (loss) income $ (286) $ 2,920 $ (15,857) $ 2,969 $ 9,968 $ (286) Three Months Ended April 30, 2016 Net sales $ — $ 440,498 $ 403,227 $ 96,770 $ (111,673) $ 828,822 Cost of sales — 220,547 305,394 62,713 (111,673) 476,981 Gross margin — 219,951 97,833 34,057 — 351,841 Operating expenses 717 148,487 156,913 28,415 (13,686) 320,846 Operating (loss) income (717) 71,464 (59,080) 5,642 13,686 30,995 Other income and expenses, net — — 13,686 — (13,686) — Interest income 2 5 307 8 (309) 13 Interest expense — (26,688) (11) (112) 309 (26,502) (Loss) earnings before income taxes (715) 44,781 (45,098) 5,538 — 4,506 (Benefit) provision for income taxes (203) 14,544 (13,045) 1,573 — 2,869 (Loss) earnings before equity in net income of subsidiaries (512) 30,237 (32,053) 3,965 — 1,637 Equity in earnings (loss) of subsidiaries 2,149 (28,088) — — 25,939 — Net earnings (loss) 1,637 2,149 (32,053) 3,965 25,939 1,637 Comprehensive income (loss) $ 18,306 $ 2,389 $ (32,053) $ 20,394 $ 9,270 $ 18,306 Tailored Brands, Inc. Condensed Consolidating Statement of Cash Flows For the Three Months Ended April 29, 2017 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ 10,296 $ 174,399 $ 10,424 $ (152,637) $ (9,131) $ 33,351 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures — (6,333) (9,982) (1,471) — (17,786) Acquisition of business, net of cash — — — (457) — (457) Intercompany activities — (149,424) — — 149,424 — Proceeds from sale of property and equipment — — 12 — — 12 Net cash used in investing activities — (155,757) (9,970) (1,928) 149,424 (18,231) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on term loan — (1,750) — — — (1,750) Proceeds from asset-based revolving credit facility — 137,650 — — — 137,650 Payments on asset-based revolving credit facility — (137,650) — — — (137,650) Repurchase and retirement of senior notes — (6,601) — — — (6,601) Intercompany activities — (9,131) — 149,424 (140,293) — Cash dividends paid (9,131) — — — — (9,131) Proceeds from issuance of common stock 467 — — — — 467 Tax payments related to vested deferred stock units (1,632) — — — — (1,632) Net cash (used in) provided by financing activities (10,296) (17,482) — 149,424 (140,293) (18,647) Effect of exchange rate changes — — — (782) — (782) Increase (decrease) in cash and cash equivalents — 1,160 454 (5,923) — (4,309) Cash and cash equivalents at beginning of period — 1,002 1,881 68,006 — 70,889 Cash and cash equivalents at end of period $ — $ 2,162 $ 2,335 $ 62,083 $ — $ 66,580 Tailored Brands, Inc. Condensed Consolidating Statement of Cash Flows For the Three Months Ended April 30, 2016 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ 9,734 $ 34,076 $ 13,365 $ (1,819) $ (8,921) $ 46,435 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures — (16,179) (12,878) (1,268) — (30,325) Proceeds from sale of property and equipment — — 501 — — 501 Net cash used in investing activities — (16,179) (12,377) (1,268) — (29,824) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on term loan — (1,750) — — — (1,750) Proceeds from asset-based revolving credit facility — 201,000 — 3,014 — 204,014 Payments on asset-based revolving credit facility — (201,000) — (3,014) — (204,014) Intercompany activities — (8,921) — — 8,921 — Cash dividends paid (8,921) — — — — (8,921) Proceeds from issuance of common stock 434 — — — — 434 Tax payments related to vested deferred stock units (1,247) — — — — (1,247) Net cash used in financing activities (9,734) (10,671) — — 8,921 (11,484) Effect of exchange rate changes — — — 1,322 — 1,322 Increase (decrease) in cash and cash equivalents — 7,226 988 (1,765) — 6,449 Cash and cash equivalents at beginning of period — 724 2,243 27,013 — 29,980 Cash and cash equivalents at end of period $ — $ 7,950 $ 3,231 $ 25,248 $ — $ 36,429 |
Significant Accounting Polici23
Significant Accounting Policies (Policies) | 3 Months Ended |
Apr. 29, 2017 | |
Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation — The condensed consolidated financial statements herein include the accounts of Tailored Brands, Inc. and its subsidiaries (the “Company”) and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). As applicable under such regulations, certain information and footnote disclosures have been condensed or omitted. We believe the presentation and disclosures herein are adequate to make the information not misleading, and the condensed consolidated financial statements reflect all elimination entries and normal recurring adjustments which are necessary for a fair presentation of the financial position, results of operations and cash flows at the dates and for the periods presented. Certain prior period amounts have been reclassified to conform to the current period presentation. Our business results historically have fluctuated throughout the year and, as a result, the operating results of the interim periods presented are not necessarily indicative of the results that may be achieved for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended January 28, 2017. Unless the context otherwise requires, “Company”, “we”, “us” and “our” refer to Tailored Brands, Inc. and its subsidiaries. The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual amounts could differ from those estimates. |
Restructuring and Other Charg24
Restructuring and Other Charges (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
Restructuring and Other Charges | |
Summary of charges incurred | No charges were incurred under these initiatives in the first quarter of fiscal 2017. A summary of the charges incurred in the first quarter of fiscal 2016 is presented in the table below (amounts in thousands): For the Three Months Ended April 30, 2016 Consulting costs $ 4,952 Severance and employee-related costs 3,756 Store asset impairment charges and accelerated depreciation, net of deferred rent 2,010 Lease termination costs 1,891 Other costs 552 Total pre-tax restructuring and other charges (1) $ 13,161 (1) Consists of $13.0 million in SG&A and $0.2 million included in cost of sales in the condensed consolidated statement of earnings. Of the total amount recorded in the table above, $5.7 million relates to our retail segment and $7.5 million relates to shared services. |
Rollforward of amounts related to pre-tax restructuring and other charges | The following table is a rollforward of amounts included in accrued expenses and other current liabilities in the condensed consolidated balance sheet related to the pre-tax restructuring and other charges (amounts in thousands): Severance and Lease Employee- Termination Consulting Other Related Costs Costs Costs Costs Total Beginning Balance, January 28, 2017 $ 986 $ 4,834 $ 60 $ 25 $ 5,905 Charges, excluding non-cash items — — — — — Payments (171) (2,728) (60) — (2,959) Ending Balance, April 29, 2017 $ 815 $ 2,106 $ — $ 25 $ 2,946 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
Earnings Per Share | |
Computation of basic and diluted earnings (loss) per common share allocated to common shareholders | The following table sets forth the computation of basic and diluted earnings per common share allocated to common shareholders (in thousands, except per share amounts): For the Three Months Ended April 29, April 30, 2017 2016 Numerator Net earnings $ 1,839 $ 1,637 Net earnings allocated to participating securities (restricted stock and deferred stock units) — (2) Net earnings allocated to common shareholders $ 1,839 $ 1,635 Denominator Basic weighted-average common shares outstanding 48,808 48,446 Dilutive effect of share-based awards 343 175 Diluted weighted-average common shares outstanding 49,151 48,621 Net earnings per common share allocated to common shareholders: Basic $ 0.04 $ 0.03 Diluted $ 0.04 $ 0.03 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
Debt | |
Schedule of long-term debt | The following table provides details on our long-term debt as of April 29, 2017, April 30, 2016 and January 28, 2017 (in thousands): April 29, April 30, January 28, 2017 2016 2017 Term Loan (net of unamortized OID of $3.9 million at April 29, 2017, $5.1 million at April 30, 2016, and $4.1 million at January 28, 2017 $ 1,041,147 $ 1,082,392 $ 1,042,660 Senior Notes 567,570 600,000 575,000 Less: Deferred financing costs related to the Term Loan and Senior Notes (20,852) (26,749) (22,131) Total long-term debt, net 1,587,865 1,655,643 1,595,529 Current portion of long-term debt (13,379) (42,451) (13,379) Total long-term debt, net of current portion $ 1,574,486 $ 1,613,192 $ 1,582,150 |
Supplemental Cash Flows (Tables
Supplemental Cash Flows (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
Supplemental Cash Flows | |
Schedule of supplemental disclosure of cash flow information | Supplemental disclosure of cash flow information is as follows (in thousands): For the Three Months Ended April 29, April 30, 2017 2016 Cash paid for interest $ 16,389 $ 13,676 Cash paid (refunded) for income taxes, net $ 1,483 $ (60,204) Schedule of noncash investing and financing activities: Cash dividends declared $ 9,246 $ 8,796 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
Inventories | |
Schedule of inventories | The following table provides details on our inventories as of April 29, 2017, April 30, 2016 and January 28, 2017 (in thousands): April 29, April 30, January 28, 2017 2016 2017 Finished goods $ 915,065 $ 1,018,401 $ 846,585 Raw materials and merchandise components 69,156 58,332 108,927 Total inventories $ 984,221 $ 1,076,733 $ 955,512 |
Other Current Assets, Accrued29
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities | |
Other current assets | Other current assets consist of the following (in thousands): April 29, April 30, January 28, 2017 2016 2017 Prepaid expenses $ 44,584 $ 46,245 $ 47,057 Tax receivable 14,055 22,561 15,794 Other 10,649 9,097 10,751 Total other current assets $ 69,288 $ 77,903 $ 73,602 |
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities consist of the following (in thousands): April 29, April 30, January 28, 2017 2016 2017 Customer deposits, prepayments and refunds payable $ 72,411 $ 67,497 $ 28,384 Accrued salary, bonus, sabbatical, vacation and other benefits 58,373 63,774 72,589 Unredeemed gift cards 37,434 37,712 40,865 Sales, value added, payroll, property and other taxes payable 36,878 40,917 31,188 Accrued workers compensation and medical costs 27,194 29,145 31,609 Accrued interest 22,871 27,134 15,457 Accrued dividends 9,957 9,025 9,842 Loyalty program reward certificates 8,720 10,076 9,840 Lease termination and other store closure costs 4,106 1,732 4,834 Accrued royalties 1,806 2,167 3,720 Other 23,852 21,865 19,571 Total accrued expenses and other current liabilities $ 303,602 $ 311,044 $ 267,899 |
Deferred taxes and other liabilities | Deferred taxes, net and other liabilities consist of the following (in thousands): April 29, April 30, January 28, 2017 2016 2017 Deferred and other income tax liabilities, net $ 90,772 $ 116,115 $ 92,079 Deferred rent and landlord incentives 60,542 66,192 61,215 Unfavorable lease liabilities 4,224 7,465 4,693 Other 6,062 7,344 5,433 Total deferred taxes, net and other liabilities $ 161,600 $ 197,116 $ 163,420 |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive (Loss) Income (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
Accumulated Other Comprehensive (Loss) Income. | |
Summary of components of accumulated other comprehensive (loss) income | The following table summarizes the components of accumulated other comprehensive (loss) income for the three months ended April 29, 2017 (in thousands and net of tax): Foreign Currency Cash Flow Pension Translation Hedges Plan Total BALANCE— January 28, 2017 (40,205) (82) 204 (40,083) Other comprehensive income (loss) before reclassifications 1,341 (3,926) — (2,585) Amounts reclassified from accumulated other comprehensive loss — 460 — 460 Net current-period other comprehensive income (loss) 1,341 (3,466) — (2,125) BALANCE— April 29, 2017 $ (38,864) $ (3,548) $ 204 $ (42,208) The following table summarizes the components of accumulated other comprehensive (loss) income for the three months ended April 30, 2016 (in thousands and net of tax): Foreign Currency Cash Flow Pension Translation Hedges Plan Total BALANCE— January 30, 2016 $ (26,659) $ (2,007) $ 180 $ (28,486) Other comprehensive income (loss) before reclassifications 16,429 (125) — 16,304 Amounts reclassified from accumulated other comprehensive loss — 365 — 365 Net current-period other comprehensive income 16,429 240 — 16,669 BALANCE— April 30, 2016 $ (10,230) $ (1,767) $ 180 $ (11,817) |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
Share-Based Compensation Plans | |
Summary of time-based and performance-based awards activity | Weighted-Average Units Grant-Date Fair Value Time- Performance- Time- Performance- Based Based Based Based Non-Vested at January 28, 2017 1,061,965 523,948 $ 24.31 $ 28.28 Granted — — — — Vested (1) (350,291) — — Forfeited (11,596) (737) Non-Vested at April 29, 2017 700,078 523,211 $ $ (1) Includes 121,993 shares relinquished for tax payments related to vested DSUs for the three months ended April 29, 2017. |
Summary of restricted stock activity | Weighted- Shares Grant-Date Non-Vested at January 28, 2017 36,878 $ 15.56 Granted — — Vested (36,878) Forfeited — — Non-Vested at April 29, 2017 — $ — |
Summary of stock option activity | Weighted- Number of Average Shares Exercise Price Outstanding at January 28, 2017 1,194,690 $ 29.70 Granted — — Exercised — — Forfeited (1,553) Expired (40,243) Outstanding at April 29, 2017 1,152,894 $ Exercisable at April 29, 2017 716,137 $ |
Goodwill and Other Intangible32
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
Goodwill and Other Intangible Assets | |
Changes in the net carrying amount of goodwill | Goodwill allocated to our reportable segments and changes in the net carrying amount of goodwill for the three months ended April 29, 2017 are as follows (in thousands): Corporate Retail Apparel Total Balance at January 28, 2017 $ 94,511 $ 22,515 $ 117,026 Goodwill of acquired business — 695 695 Translation adjustment (811) 675 (136) Balance at April 29, 2017 $ 93,700 $ 23,885 $ 117,585 |
Gross carrying amount and accumulated amortization of identifiable intangible assets | The gross carrying amount and accumulated amortization of our identifiable intangible assets are as follows (in thousands): April 29, April 30, January 28, 2017 2016 2017 Amortizable intangible assets: Carrying amount: Trademarks, tradenames and franchise agreements $ 16,040 $ 16,361 $ 15,966 Favorable leases 13,679 14,562 13,826 Customer relationships 26,268 29,661 25,483 Total carrying amount 55,987 60,584 55,275 Accumulated amortization: Trademarks, tradenames and franchise agreements (10,183) (9,857) (10,055) Favorable leases (4,297) (3,057) (3,961) Customer relationships (14,776) (14,213) (13,804) Total accumulated amortization (29,256) (27,127) (27,820) Total amortizable intangible assets, net 26,731 33,457 27,455 Indefinite-lived intangible assets: Trademarks and tradename 144,235 144,369 144,204 Total intangible assets, net $ 170,966 $ 177,826 $ 171,659 Pre-tax amortization expense associated with intangible assets subject to amortization totaled $1.0 million and $1.3 million for the three months ended April 29, 2017 and April 30, 2016, respectively. Pre-tax amortization associated with intangible assets subject to amortization at April 29, 2017 is estimated to be $3.0 million for the remainder of fiscal 2017, $3.7 million for fiscal 2018, $3.5 million for fiscal 2019, $3.4 million for fiscal 2020 and $3.3 million for fiscal 2021. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
Fair Value Measurements | |
Assets and Liabilities that are Measured at Fair Value on a Recurring Basis | Fair Value Measurements at Reporting Date Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Instruments Inputs Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total April 29, 2017— Assets: Derivative financial instruments $ — $ $ — $ Liabilities: Derivative financial instruments $ — $ $ — $ January 28, 2017— Assets: Derivative financial instruments $ — $ $ — $ Liabilities: Derivative financial instruments $ — $ $ — $ April 30, 2016— Assets: Derivative financial instruments $ — $ $ — $ Liabilities: Derivative financial instruments $ — $ $ — $ |
Schedule of fair value and carrying value of long-term debt | The table below shows the fair value and carrying value of our long-term debt, including current portion (in thousands): April 29, 2017 April 30, 2016 January 28, 2017 Carrying Estimated Carrying Estimated Carrying Estimated Amount (1) Fair Value Amount (1) Fair Value Amount (1) Fair Value Long-term debt, including current portion $ 1,587,865 $ 1,482,750 $ 1,655,643 $ 1,583,132 $ 1,595,529 $ 1,556,200 (1) The carrying value of the long-term debt, including current portion is net of deferred financing costs of $20.9 million, $26.7 million and $22.1 million as of April 29, 2017, April 30, 2016 and January 28, 2017, respectively. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
Segment Reporting | |
Net sales by brand and reportable segment | Additional net sales information is as follows (in thousands): For the Three Months Ended April 29, 2017 April 30, 2016 Net sales: MW (1) $ 420,067 $ 441,646 Jos. A. Bank 167,228 178,450 K&G 88,683 94,759 Moores 40,813 43,229 MW Cleaners 8,514 8,158 Total retail segment 725,305 766,242 Total corporate apparel segment 57,601 62,580 Total net sales $ 782,906 $ (1) MW includes Men’s Wearhouse, Men’s Wearhouse and Tux, tuxedo shops within Macy’s and Joseph Abboud. |
Supplemental products and services sales information | The following table sets forth supplemental products and services sales information for the Company (in thousands): For the Three Months Ended April 29, 2017 April 30, 2016 Net sales: Men's tailored clothing product $ 332,630 $ 349,528 Men's non-tailored clothing product 228,699 241,933 Women's clothing product 19,827 21,846 Other 2,429 2,361 Total retail clothing product 583,585 615,668 Rental services 94,820 99,831 Alteration services 38,386 42,585 Retail dry cleaning services 8,514 8,158 Total alteration and other services 46,900 50,743 Corporate apparel clothing product 57,601 62,580 Total net sales $ 782,906 $ Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes is as follows (in thousands): For the Three Months Ended April 29, 2017 April 30, 2016 Operating income: Retail $ 73,425 $ 79,877 Corporate apparel 1,975 2,054 Shared service expense (44,398) (50,936) Operating income 31,002 30,995 Interest income 67 13 Interest expense (25,621) (26,502) Gain on extinguishment of debt, net 715 — Earnings before income taxes $ $ |
Operating income by reportable segment, shared service expense, and the reconciliation to earnings (loss) before income taxes | Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes is as follows (in thousands): For the Three Months Ended April 29, 2017 April 30, 2016 Operating income: Retail $ 73,425 $ 79,877 Corporate apparel 1,975 2,054 Shared service expense (44,398) (50,936) Operating income 31,002 30,995 Interest income 67 13 Interest expense (25,621) (26,502) Gain on extinguishment of debt, net 715 — Earnings before income taxes $ $ |
Condensed Consolidating Infor35
Condensed Consolidating Information (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
Condensed Consolidating Information | |
Condensed Consolidating Balance Sheet | Tailored Brands, Inc. Condensed Consolidating Balance Sheet April 29, 2017 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 2,162 $ 2,335 $ 62,083 $ — $ 66,580 Accounts receivable, net 7,358 28,480 437,481 149,697 (539,000) 84,016 Inventories — 212,146 438,670 333,405 — 984,221 Other current assets 136 229,333 33,392 10,933 (204,506) 69,288 Total current assets 7,494 472,121 911,878 556,118 (743,506) 1,204,105 Property and equipment, net — 224,274 208,719 34,668 — 467,661 Rental product, net — 127,188 3,087 17,220 — 147,495 Goodwill — 6,160 68,510 42,915 — 117,585 Intangible assets, net — 52 156,741 14,173 — 170,966 Investments in subsidiaries (89,379) 1,444,485 — — (1,355,106) — Other assets — 5,200 949 7,174 (6,900) 6,423 Total assets $ (81,885) $ 2,279,480 $ 1,349,884 $ 672,268 $ (2,105,512) $ 2,114,235 LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY CURRENT LIABILITIES: Accounts payable $ 21,606 $ 553,773 $ 82,517 $ 52,990 $ (539,000) $ 171,886 Accrued expenses and other current liabilities 10,088 146,168 120,022 227,415 (197,230) 306,463 Current portion of long-term debt — 13,379 — — — 13,379 Total current liabilities 31,694 713,320 202,539 280,405 (736,230) 491,728 Long-term debt, net — 1,574,486 — — — 1,574,486 Deferred taxes and other liabilities — 81,053 84,719 10,004 (14,176) 161,600 Shareholders' (deficit) equity (113,579) (89,379) 1,062,626 381,859 (1,355,106) (113,579) Total liabilities and shareholders' (deficit) equity $ (81,885) $ 2,279,480 $ 1,349,884 $ 672,268 $ (2,105,512) $ 2,114,235 Tailored Brands, Inc. Condensed Consolidating Balance Sheet April 30, 2016 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 7,950 $ 3,231 $ 25,248 $ — $ 36,429 Accounts receivable, net — 17,235 293,596 35,703 (263,201) 83,333 Inventories — 211,358 714,712 150,663 — 1,076,733 Other current assets 9,769 41,038 18,629 8,467 — 77,903 Total current assets 9,769 277,581 1,030,168 220,081 (263,201) 1,274,398 Property and equipment, net — 252,683 228,714 39,747 — 521,144 Rental product, net — 141,427 13,990 18,823 — 174,240 Goodwill — 6,160 68,510 46,828 — 121,498 Intangible assets, net — 159 159,051 18,616 — 177,826 Investments in subsidiaries (88,520) 1,447,307 — — (1,358,787) — Other assets — 6,637 952 8,226 (8,100) 7,715 Total assets $ $ $ $ $ $ LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY CURRENT LIABILITIES: Accounts payable $ — $ 310,830 $ 113,982 $ 41,637 $ (263,201) $ 203,248 Accrued expenses and other current liabilities 9,129 184,955 90,879 26,081 — 311,044 Current portion of long-term debt — 42,451 — — — 42,451 Total current liabilities 9,129 538,236 204,861 67,718 (263,201) 556,743 Long-term debt, net — 1,613,192 — — — 1,613,192 Deferred taxes and other liabilities 2,350 69,046 122,428 11,392 (8,100) 197,116 Shareholders' (deficit) equity (90,230) (88,520) 1,174,096 273,211 (1,358,787) (90,230) Total liabilities and shareholders' (deficit) equity $ $ $ $ $ $ 2,276,821 Tailored Brands, Inc. Condensed Consolidating Balance Sheet January 28, 2017 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 1,002 $ 1,881 $ 68,006 $ — $ 70,889 Accounts receivable, net 7,376 15,499 476,742 56,777 (490,680) 65,714 Inventories — 230,264 438,167 287,081 — 955,512 Other current assets 12,773 134,225 28,436 8,448 (110,280) 73,602 Total current assets 20,149 380,990 945,226 420,312 (600,960) 1,165,717 Property and equipment, net — 232,090 216,248 35,827 — 484,165 Rental product, net — 131,287 3,369 17,954 — 152,610 Goodwill — 6,160 68,510 42,356 — 117,026 Intangible assets, net — 78 157,270 14,311 — 171,659 Investments in subsidiaries (109,788) 1,425,622 — — (1,315,834) — Other assets — 5,615 959 7,321 (7,200) 6,695 Total assets $ (89,639) $ $ $ $ $ LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY CURRENT LIABILITIES: Accounts payable $ 15,352 $ 509,572 $ 82,337 $ 60,799 $ (490,680) $ 177,380 Accrued expenses and other current liabilities 2,627 111,617 129,420 135,777 (110,280) 269,161 Current portion of long-term debt — 13,379 — — — 13,379 Total current liabilities 17,979 634,568 211,757 196,576 (600,960) 459,920 Long-term debt, net — 1,582,150 — — — 1,582,150 Deferred taxes and other liabilities — 74,912 85,477 10,231 (7,200) 163,420 Shareholders' (deficit) equity (107,618) (109,788) 1,094,348 331,274 (1,315,834) (107,618) Total liabilities and shareholders' (deficit) equity $ (89,639) $ $ $ $ $ |
Condensed Consolidating Statement of Earnings (Loss) | Tailored Brands, Inc. Condensed Consolidating Statement of Earnings (Loss) (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Three Months Ended April 29, 2017 Net sales $ — $ 418,925 $ 372,264 $ 135,258 $ (143,541) $ 782,906 Cost of sales — 212,499 278,631 102,877 (143,541) 450,466 Gross margin — 206,426 93,633 32,381 — 332,440 Operating expenses 903 155,783 133,532 25,952 (14,732) 301,438 Operating (loss) income (903) 50,643 (39,899) 6,429 14,732 31,002 Other income and expenses, net — — 14,732 — (14,732) — Interest income 110 1,302 1,672 62 (3,079) 67 Interest expense — (27,194) (114) (1,392) 3,079 (25,621) Gain on extinguishment of debt, net — 715 — — — 715 (Loss) earnings before income taxes (793) 25,466 (23,609) 5,099 — 6,163 Provision (benefit) for income taxes 1,945 8,469 (7,752) 1,662 — 4,324 (Loss) earnings before equity in net income of subsidiaries (2,738) 16,997 (15,857) 3,437 — 1,839 Equity in earnings of subsidiaries 4,577 (12,420) — — 7,843 — Net earnings (loss) $ 1,839 $ 4,577 $ (15,857) $ 3,437 $ 7,843 $ 1,839 Comprehensive (loss) income $ (286) $ 2,920 $ (15,857) $ 2,969 $ 9,968 $ (286) Three Months Ended April 30, 2016 Net sales $ — $ 440,498 $ 403,227 $ 96,770 $ (111,673) $ 828,822 Cost of sales — 220,547 305,394 62,713 (111,673) 476,981 Gross margin — 219,951 97,833 34,057 — 351,841 Operating expenses 717 148,487 156,913 28,415 (13,686) 320,846 Operating (loss) income (717) 71,464 (59,080) 5,642 13,686 30,995 Other income and expenses, net — — 13,686 — (13,686) — Interest income 2 5 307 8 (309) 13 Interest expense — (26,688) (11) (112) 309 (26,502) (Loss) earnings before income taxes (715) 44,781 (45,098) 5,538 — 4,506 (Benefit) provision for income taxes (203) 14,544 (13,045) 1,573 — 2,869 (Loss) earnings before equity in net income of subsidiaries (512) 30,237 (32,053) 3,965 — 1,637 Equity in earnings (loss) of subsidiaries 2,149 (28,088) — — 25,939 — Net earnings (loss) 1,637 2,149 (32,053) 3,965 25,939 1,637 Comprehensive income (loss) $ 18,306 $ 2,389 $ (32,053) $ 20,394 $ 9,270 $ 18,306 |
Condensed Consolidating Statement of Cash Flows | Tailored Brands, Inc. Condensed Consolidating Statement of Cash Flows For the Three Months Ended April 29, 2017 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ 10,296 $ 174,399 $ 10,424 $ (152,637) $ (9,131) $ 33,351 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures — (6,333) (9,982) (1,471) — (17,786) Acquisition of business, net of cash — — — (457) — (457) Intercompany activities — (149,424) — — 149,424 — Proceeds from sale of property and equipment — — 12 — — 12 Net cash used in investing activities — (155,757) (9,970) (1,928) 149,424 (18,231) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on term loan — (1,750) — — — (1,750) Proceeds from asset-based revolving credit facility — 137,650 — — — 137,650 Payments on asset-based revolving credit facility — (137,650) — — — (137,650) Repurchase and retirement of senior notes — (6,601) — — — (6,601) Intercompany activities — (9,131) — 149,424 (140,293) — Cash dividends paid (9,131) — — — — (9,131) Proceeds from issuance of common stock 467 — — — — 467 Tax payments related to vested deferred stock units (1,632) — — — — (1,632) Net cash (used in) provided by financing activities (10,296) (17,482) — 149,424 (140,293) (18,647) Effect of exchange rate changes — — — (782) — (782) Increase (decrease) in cash and cash equivalents — 1,160 454 (5,923) — (4,309) Cash and cash equivalents at beginning of period — 1,002 1,881 68,006 — 70,889 Cash and cash equivalents at end of period $ — $ 2,162 $ 2,335 $ 62,083 $ — $ 66,580 Tailored Brands, Inc. Condensed Consolidating Statement of Cash Flows For the Three Months Ended April 30, 2016 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ 9,734 $ 34,076 $ 13,365 $ (1,819) $ (8,921) $ 46,435 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures — (16,179) (12,878) (1,268) — (30,325) Proceeds from sale of property and equipment — — 501 — — 501 Net cash used in investing activities — (16,179) (12,377) (1,268) — (29,824) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on term loan — (1,750) — — — (1,750) Proceeds from asset-based revolving credit facility — 201,000 — 3,014 — 204,014 Payments on asset-based revolving credit facility — (201,000) — (3,014) — (204,014) Intercompany activities — (8,921) — — 8,921 — Cash dividends paid (8,921) — — — — (8,921) Proceeds from issuance of common stock 434 — — — — 434 Tax payments related to vested deferred stock units (1,247) — — — — (1,247) Net cash used in financing activities (9,734) (10,671) — — 8,921 (11,484) Effect of exchange rate changes — — — 1,322 — 1,322 Increase (decrease) in cash and cash equivalents — 7,226 988 (1,765) — 6,449 Cash and cash equivalents at beginning of period — 724 2,243 27,013 — 29,980 Cash and cash equivalents at end of period $ — $ 7,950 $ 3,231 $ 25,248 $ — $ 36,429 |
Termination of Tuxedo Rental 36
Termination of Tuxedo Rental License Agreement with Macy?s (Details) $ in Millions | 3 Months Ended |
Apr. 29, 2017USD ($) | |
Accrued expenses and other current liabilities | |
Accrued termination related costs | $ 2.3 |
Retail Segment | |
Termination-related costs | 17.2 |
Termination Related Costs, Cash Charges | 14.6 |
Contract termination | 12.3 |
Rental product write-offs | 1.4 |
Asset impairment charges | 1.2 |
Other costs | 2.3 |
Selling, general and administrative expenses | |
Termination-related costs | 15.8 |
Cost of sales | |
Termination-related costs | $ 1.4 |
Restructuring and Other Charg37
Restructuring and Other Charges - Store Closures and Charges Incurred (Details) | 3 Months Ended |
Apr. 29, 2017store | |
Men's Wearhouse and Tux | |
Restructuring and Other Charges | |
Number of stores closed in fiscal 2016 | 102 |
Closure of underperforming stores | Jos. A. Bank | |
Restructuring and Other Charges | |
Number of stores closed in fiscal 2016 | 75 |
Exiting of the outlet/factory business | MW and Jos. A. Bank | |
Restructuring and Other Charges | |
Number of stores closed in fiscal 2016 | 56 |
Restructuring and Other Charg38
Restructuring and Other Charges - Charges Incurred (Details) $ in Thousands | 3 Months Ended |
Apr. 30, 2016USD ($) | |
Restructuring and Other Charges | |
Pre-tax restructuring and other charges | $ 13,161 |
Shared services | |
Restructuring and Other Charges | |
Pre-tax restructuring and other charges | 7,500 |
Consulting costs | |
Restructuring and Other Charges | |
Pre-tax restructuring and other charges | 4,952 |
Severance and employee-related costs | |
Restructuring and Other Charges | |
Pre-tax restructuring and other charges | 3,756 |
Store asset impairment charges and accelerated depreciation | |
Restructuring and Other Charges | |
Pre-tax restructuring and other charges | 2,010 |
Lease termination costs | |
Restructuring and Other Charges | |
Pre-tax restructuring and other charges | 1,891 |
Other costs | |
Restructuring and Other Charges | |
Pre-tax restructuring and other charges | 552 |
Selling, general and administrative expenses | |
Restructuring and Other Charges | |
Pre-tax restructuring and other charges | 13,000 |
Cost of sales | |
Restructuring and Other Charges | |
Pre-tax restructuring and other charges | 200 |
Retail Segment | |
Restructuring and Other Charges | |
Pre-tax restructuring and other charges | $ 5,700 |
Restructuring and Other Charg39
Restructuring and Other Charges - Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Summary of pre-tax and other charges | ||
Beginning Balance | $ 5,905 | |
Payments | (2,959) | |
Ending Balance | 2,946 | |
Jos. A. Bank | ||
Additional costs | ||
Integration costs | 3,600 | |
Severance and employee-related costs | ||
Summary of pre-tax and other charges | ||
Beginning Balance | 986 | |
Payments | (171) | |
Ending Balance | 815 | |
Lease termination costs | ||
Summary of pre-tax and other charges | ||
Beginning Balance | 4,834 | |
Payments | (2,728) | |
Ending Balance | 2,106 | |
Consulting costs | ||
Summary of pre-tax and other charges | ||
Beginning Balance | 60 | |
Payments | (60) | |
Other costs | ||
Summary of pre-tax and other charges | ||
Beginning Balance | 25 | |
Ending Balance | $ 25 | |
Selling, general and administrative expenses | Jos. A. Bank | ||
Additional costs | ||
Integration costs | $ 3,100 | |
Cost of sales | Jos. A. Bank | ||
Additional costs | ||
Integration costs | $ 500 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Numerator | ||
Net earnings | $ 1,839 | $ 1,637 |
Net earnings allocated to participating securities (restricted stock and deferred stock units) - basic | (2) | |
Net earnings allocated to participating securities (restricted stock and deferred stock units) - diluted | (2) | |
Net earnings (loss) allocated to common shareholders - basic | 1,839 | 1,635 |
Net earnings (loss) allocated to common shareholders - diluted | $ 1,839 | $ 1,635 |
Denominator | ||
Basic weighted-average common shares outstanding (in shares) | 48,808 | 48,446 |
Dilutive effect of share-based awards (in shares) | 343 | 175 |
Diluted weighted-average common shares outstanding (in shares) | 49,151 | 48,621 |
Net earnings (loss) per common share allocated to common shareholders: | ||
Basic (in dollars per share) | $ 0.04 | $ 0.03 |
Diluted (in dollars per share) | $ 0.04 | $ 0.03 |
Earnings Per Share - Anti-dilut
Earnings Per Share - Anti-dilutive Shares (Details) - shares shares in Millions | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Share-based awards | ||
Antidilutive Securities Excluded from Computation of (Loss) Earnings Per Share | ||
Anti-dilutive shares of common stock excluded from the calculation of diluted earnings (loss) per common share (in shares) | 1.6 | 1.2 |
Debt - Summary, Narrative (Deta
Debt - Summary, Narrative (Details) - USD ($) $ in Millions | May 02, 2017 | Jan. 28, 2017 | Apr. 29, 2017 | Apr. 30, 2016 | Jun. 18, 2014 |
Debt | |||||
Maximum quarterly dividends on common stock per debt covenants | $ 10 | ||||
Senior Notes | |||||
Debt | |||||
Aggregate principal amount of debt issued | $ 600 | $ 600 | |||
Interest rate (as a percent) | 7.00% | 7.00% | |||
2014 Credit Facilities | Term Loan | |||||
Debt | |||||
Aggregate principal amount of debt issued | $ 1,100 | ||||
Unamortized OID | $ 4.1 | $ 3.9 | $ 5.1 | 11 | |
Mandatory excess cash flow prepayment offer | $ 4.6 | ||||
Repayment of obligations | $ 4.6 | ||||
2014 Credit Facilities | ABL Facility | |||||
Debt | |||||
Credit facility | $ 500 | $ 500 |
Debt - Credit Facilities, Narra
Debt - Credit Facilities, Narrative(Details) - 2014 Credit Facilities - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 29, 2017 | Apr. 30, 2015 | Jun. 18, 2014 | |
Term Loan | |||
Debt | |||
Total variable interest rate (as a percent) | 4.50% | ||
Portion of term loan refinanced at a fixed rate | $ 400 | ||
Fixed rate on refinanced amount (as a percent) | 5.00% | ||
Weighted average interest rate (as a percent) | 5.10% | ||
Term Loan | LIBOR | |||
Debt | |||
Period for variable rate basis | 1 month | ||
Actual LIBOR rate (as a percent) | 1.00% | ||
LIBOR floor rate (as a percent) | 1.00% | ||
Margin added to Base rate (as a percent) | 3.50% | ||
Term Loan | Interest rate swap | |||
Debt | |||
Notional amount of interest rate swap | $ 550 | ||
ABL Facility | |||
Debt | |||
Credit facility | 500 | $ 500 | |
Total credit facility with expansion feature | 650 | ||
Amount drawn | 0 | ||
Letters of credit issued and outstanding | 31.9 | ||
Borrowings available under credit facility | $ 468.1 | ||
ABL Facility | LIBOR | |||
Debt | |||
Period for variable rate basis | 1 month | ||
Margin added to Base rate (as a percent) | 1.00% | ||
ABL Facility | Federal funds rate | |||
Debt | |||
Margin added to Base rate (as a percent) | 0.50% | ||
ABL Facility | Minimum | |||
Debt | |||
Fees on amounts available to be drawn (as a percent) | 1.50% | ||
Fees on unused commitments (as a percent) | 0.25% | ||
ABL Facility | Maximum | |||
Debt | |||
Varying interest rate margin (as a percent) | 2.00% | ||
Fees on amounts available to be drawn (as a percent) | 2.00% | ||
Fees on unused commitments (as a percent) | 0.375% | ||
Maximum borrowing outstanding under the ABL Facility during the period | $ 34.7 |
Debt - Long Term Debt, Narrativ
Debt - Long Term Debt, Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 29, 2017 | Apr. 29, 2017 | |
Debt | ||
Gain on extinguishment of debt, net | $ 715 | |
Senior Notes | ||
Debt | ||
Repurchased and retired | $ 17,500 | 7,400 |
Gain on extinguishment of debt, net | 700 | |
Gain upon repurchase | 800 | |
Unamortized deferred financing costs | $ 100 |
Debt - Components (Details)
Debt - Components (Details) - USD ($) $ in Thousands | Apr. 29, 2017 | Jan. 28, 2017 | Apr. 30, 2016 | Jun. 18, 2014 |
Debt | ||||
Total long-term debt, net | $ 1,587,865 | $ 1,595,529 | $ 1,655,643 | |
Current portion of long-term debt | (13,379) | (13,379) | (42,451) | |
Total long-term debt, net of current portion | 1,574,486 | 1,582,150 | 1,613,192 | |
Senior Notes | ||||
Debt | ||||
Long-term debt | 567,570 | 575,000 | 600,000 | |
Term Loan and Senior Notes | ||||
Debt | ||||
Less: Deferred financing costs related to the Term Loan and Senior Notes | (20,852) | (22,131) | (26,749) | |
2014 Credit Facilities | Term Loan | ||||
Debt | ||||
Unamortized OID | 3,900 | 4,100 | 5,100 | $ 11,000 |
Long-term debt | $ 1,041,147 | $ 1,042,660 | $ 1,082,392 |
Supplemental Cash Flows (Detail
Supplemental Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Supplemental Cash Flows | ||
Cash paid for interest | $ 16,389 | $ 13,676 |
Cash paid (refunded) for income taxes, net | 1,483 | (60,204) |
Schedule of noncash investing and financing activities: | ||
Cash dividends declared | 9,246 | 8,796 |
Unpaid capital expenditure purchases | ||
Unpaid capital expenditure purchases | $ 7,100 | $ 9,900 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Apr. 29, 2017 | Jan. 28, 2017 | Apr. 30, 2016 |
Inventories | |||
Finished goods | $ 915,065 | $ 846,585 | $ 1,018,401 |
Raw materials and merchandise components | 69,156 | 108,927 | 58,332 |
Total inventories | $ 984,221 | $ 955,512 | $ 1,076,733 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Income Taxes | ||
Effective income tax rate (as a percent) | 70.20% | 63.70% |
Accounting Standards Update 2016-09 [Member] | Measurement period adjustments | ||
Income Taxes | ||
Tax deficiencies related vesting of stock-based awards | $ 2.2 |
Other Current Assets, Accrued49
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities (Details) - USD ($) $ in Thousands | Apr. 29, 2017 | Jan. 28, 2017 | Apr. 30, 2016 |
Other current assets | |||
Prepaid expenses | $ 44,584 | $ 47,057 | $ 46,245 |
Tax receivable | 14,055 | 15,794 | 22,561 |
Other | 10,649 | 10,751 | 9,097 |
Total other current assets | 69,288 | 73,602 | 77,903 |
Accrued expenses and other current liabilities | |||
Customer deposits, prepayments and refunds payable | 72,411 | 28,384 | 67,497 |
Accrued salary, bonus, sabbatical, vacation and other benefits | 58,373 | 72,589 | 63,774 |
Unredeemed gift certificates | 37,434 | 40,865 | 37,712 |
Sales, value added, payroll, property and other taxes payable | 36,878 | 31,188 | 40,917 |
Accrued workers compensation and medical costs | 27,194 | 31,609 | 29,145 |
Accrued interest | 22,871 | 15,457 | 27,134 |
Accrued dividends | 9,957 | 9,842 | 9,025 |
Loyalty program reward certificates | 8,720 | 9,840 | 10,076 |
Lease termination and other store closure costs | 4,106 | 4,834 | 1,732 |
Accrued royalties | 1,806 | 3,720 | 2,167 |
Other | 23,852 | 19,571 | 21,865 |
Total accrued expenses and other current liabilities | 303,602 | 267,899 | 311,044 |
Deferred taxes and other liabilities | |||
Deferred and other income tax liabilities, net | 90,772 | 92,079 | 116,115 |
Deferred rent and landlord incentives | 60,542 | 61,215 | 66,192 |
Unfavorable lease liabilities | 4,224 | 4,693 | 7,465 |
Other | 6,062 | 5,433 | 7,344 |
Total deferred taxes and other liabilities | $ 161,600 | $ 163,420 | $ 197,116 |
Accumulated Other Comprehensi50
Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Change in accumulated other comprehensive (loss) income components | ||
Balance at the beginning of the period | $ (107,618) | |
Balance at the end of the period | (113,579) | $ (90,230) |
Accumulated Other Comprehensive (Loss) Income | ||
Change in accumulated other comprehensive (loss) income components | ||
Balance at the beginning of the period | (40,083) | (28,486) |
Other comprehensive (loss) income before reclassifications | (2,585) | 16,304 |
Amounts reclassified from accumulated other comprehensive (loss) income | 460 | 365 |
Net current-period other comprehensive income (loss) | (2,125) | 16,669 |
Balance at the end of the period | (42,208) | (11,817) |
Foreign Currency Translation | ||
Change in accumulated other comprehensive (loss) income components | ||
Balance at the beginning of the period | (40,205) | (26,659) |
Other comprehensive (loss) income before reclassifications | 1,341 | 16,429 |
Net current-period other comprehensive income (loss) | 1,341 | 16,429 |
Balance at the end of the period | (38,864) | (10,230) |
Cash Flow Hedge | ||
Change in accumulated other comprehensive (loss) income components | ||
Balance at the beginning of the period | (82) | (2,007) |
Other comprehensive (loss) income before reclassifications | (3,926) | (125) |
Amounts reclassified from accumulated other comprehensive (loss) income | 460 | 365 |
Net current-period other comprehensive income (loss) | (3,466) | 240 |
Balance at the end of the period | (3,548) | (1,767) |
Pension Plan | ||
Change in accumulated other comprehensive (loss) income components | ||
Balance at the beginning of the period | 204 | 180 |
Balance at the end of the period | $ 204 | $ 180 |
Share-Based Compensation Plan51
Share-Based Compensation Plans - Deferred Stock Units, Performance Units and Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Share-based compensation | ||
Share-based compensation expense | $ 4.7 | $ 4.1 |
Deferred stock units | ||
Additional information | ||
Shares relinquished for tax withholding | 121,993 | |
Unrecognized compensation cost | ||
Unrecognized compensation cost, non-vested awards | $ 18.5 | |
Compensation recognition period, non-vested awards | 1 year 6 months | |
Time-Based DSUs | ||
Shares | ||
Non-Vested at the beginning of the period (in shares) | 1,061,965 | |
Vested (in shares) | (350,291) | |
Forfeited (in shares) | (11,596) | |
Non-Vested at the end of the period (in shares) | 700,078 | |
Weighted-Average Grant-Date Fair Value | ||
Non-Vested at the beginning of the period (in dollars per share) | $ 24.31 | |
Vested (in dollars per share) | 29.40 | |
Forfeited (in dollars per share) | 23.76 | |
Non-Vested at the end of the period (in dollars per share) | $ 21.77 | |
Performance-Based DSUs | ||
Shares | ||
Non-Vested at the beginning of the period (in shares) | 523,948 | |
Forfeited (in shares) | (737) | |
Non-Vested at the end of the period (in shares) | 523,211 | |
Weighted-Average Grant-Date Fair Value | ||
Non-Vested at the beginning of the period (in dollars per share) | $ 28.28 | |
Forfeited (in dollars per share) | 54.26 | |
Non-Vested at the end of the period (in dollars per share) | $ 28.24 | |
Restricted Stock | ||
Shares | ||
Non-Vested at the beginning of the period (in shares) | 36,878 | |
Vested (in shares) | (36,878) | |
Weighted-Average Grant-Date Fair Value | ||
Non-Vested at the beginning of the period (in dollars per share) | $ 15.56 | |
Vested (in dollars per share) | $ 15.56 |
Share-Based Compensation Plan52
Share-Based Compensation Plans - Stock Options (Details) - Stock Options $ / shares in Units, $ in Millions | 3 Months Ended |
Apr. 29, 2017USD ($)$ / sharesshares | |
Number of Shares | |
Outstanding at the beginning of the period (in shares) | shares | 1,194,690 |
Forfeited (in shares) | shares | (1,553) |
Expired (in shares) | shares | (40,243) |
Outstanding at the end of the period (in shares) | shares | 1,152,894 |
Exercisable at the end of the period (in shares) | shares | 716,137 |
Weighted-Average Exercise Price | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 29.70 |
Forfeited (in dollars per share) | $ / shares | 52.27 |
Expired (in dollars per share) | $ / shares | 41.23 |
Outstanding at the end of the period (in dollars per share) | $ / shares | 29.27 |
Exercisable at the end of the period (in dollars per share) | $ / shares | $ 33.34 |
Unrecognized compensation cost | |
Unrecognized compensation cost, non-vested awards | $ | $ 2.7 |
Compensation recognition period, non-vested awards | 1 year 3 months 18 days |
Goodwill and Other Intangible53
Goodwill and Other Intangible Assets - Goodwill (Details) $ in Thousands | 3 Months Ended |
Apr. 29, 2017USD ($) | |
Changes in the net carrying amount of goodwill | |
Balance at the beginning of the period | $ 117,026 |
Goodwill of acquired business | 695 |
Translation adjustment | (136) |
Balance at the end of the period | 117,585 |
Retail Segment | |
Changes in the net carrying amount of goodwill | |
Balance at the beginning of the period | 94,511 |
Translation adjustment | (811) |
Balance at the end of the period | 93,700 |
Corporate Apparel Segment | |
Changes in the net carrying amount of goodwill | |
Balance at the beginning of the period | 22,515 |
Goodwill of acquired business | 695 |
Translation adjustment | 675 |
Balance at the end of the period | $ 23,885 |
Goodwill and Other Intangible54
Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | Apr. 29, 2017 | Jan. 28, 2017 | Apr. 30, 2016 |
Amortizable intangible assets: | |||
Carrying amount | $ 55,987 | $ 55,275 | $ 60,584 |
Accumulated amortization | (29,256) | (27,820) | (27,127) |
Total amortizable intangible assets, net | 26,731 | 27,455 | 33,457 |
Indefinite-lived intangible assets: | |||
Trademarks and tradename | 144,235 | 144,204 | 144,369 |
Total intangible assets, net | 170,966 | 171,659 | 177,826 |
Favorable leases | |||
Amortizable intangible assets: | |||
Carrying amount | 13,679 | 13,826 | 14,562 |
Accumulated amortization | (4,297) | (3,961) | (3,057) |
Customer relationships | |||
Amortizable intangible assets: | |||
Carrying amount | 26,268 | 25,483 | 29,661 |
Accumulated amortization | (14,776) | (13,804) | (14,213) |
Trademarks and tradenames | |||
Amortizable intangible assets: | |||
Carrying amount | 16,040 | 15,966 | 16,361 |
Accumulated amortization | $ (10,183) | $ (10,055) | $ (9,857) |
Goodwill and Other Intangible55
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Intangible asset amortization expense | ||
Pre-tax amortization expense associated with intangible assets | $ 1 | $ 1.3 |
Pre-tax amortization expense estimated for the remainder of fiscal year 2017 | 3 | |
Pre-tax amortization expense estimated for fiscal year 2018 | 3.7 | |
Pre-tax amortization expense estimated for fiscal year 2019 | 3.5 | |
Pre-tax amortization expense estimated for fiscal year 2020 | 3.4 | |
Pre-tax amortization expense estimated for fiscal year 2021 | $ 3.3 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring and Non-Recurring (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 29, 2017 | Apr. 30, 2016 | Jan. 28, 2017 | |
Fair value measurements | |||
Asset impairment charges | $ 2,867 | $ 1,162 | |
Selling, general and administrative expenses | |||
Fair value measurements | |||
Asset impairment charges | 2,900 | ||
Recurring | |||
Assets: | |||
Derivative asset | 937 | 9 | $ 460 |
Liabilities: | |||
Derivative liability | 5,293 | 3,295 | 2,413 |
Recurring | Level 2 | |||
Assets: | |||
Derivative asset | 937 | 9 | 460 |
Liabilities: | |||
Derivative liability | $ 5,293 | $ 3,295 | $ 2,413 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Thousands | Apr. 29, 2017 | Jan. 28, 2017 | Apr. 30, 2016 |
Fair Value of Financial Instruments | |||
Long-term debt, Carrying Amount | $ 1,587,865 | $ 1,595,529 | $ 1,655,643 |
Level 1 and Level 2 | |||
Fair Value of Financial Instruments | |||
Long-term debt, Estimated Fair Value | $ 1,482,750 | $ 1,556,200 | $ 1,583,132 |
Derivative Financial Instrume58
Derivative Financial Instruments (Details) - Designated as hedging instruments - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Apr. 29, 2017 | Apr. 29, 2017 | Jan. 31, 2015 | |
Interest rate swap | |||
Derivative Financial Instruments | |||
Fair value of the interest rate swap | $ 3.8 | $ 3.8 | |
Hedge ineffectiveness | 0 | ||
Effective portion of the loss expected to be reclassified from accumulated other comprehensive (loss) income into earnings over the next 12 months | 3.1 | ||
Interest rate swap | Accrued expenses and other current liabilities | |||
Derivative Financial Instruments | |||
Derivative liability | 3.1 | 3.1 | |
Interest rate swap | Other liabilities | |||
Derivative Financial Instruments | |||
Derivative liability | 0.7 | 0.7 | |
Interest rate swap matures in August 2018 | |||
Derivative Financial Instruments | |||
Notional amount | $ 290 | $ 290 | $ 520 |
Fixed rate payable (as a percent) | 5.03% | 5.03% | |
Applicable margin included in fixed rate (as a percent) | 3.50% | ||
Interest rate swap matures in August 2018 | LIBOR | |||
Derivative Financial Instruments | |||
Period for interest rate basis for variable rate receivable | 3 months | ||
Interest rate swap matures in June 2021 | |||
Derivative Financial Instruments | |||
Notional amount | $ 260 | $ 260 | |
Fixed rate payable (as a percent) | 5.56% | 5.56% | |
Applicable margin included in fixed rate (as a percent) | 3.50% | ||
Interest rate swap matures in June 2021 | LIBOR | |||
Derivative Financial Instruments | |||
Period for interest rate basis for variable rate receivable | 1 month | ||
Foreign exchange forward | |||
Derivative Financial Instruments | |||
Net derivative liability | $ 0.7 | $ 0.7 | |
Effective portion of the loss expected to be reclassified from accumulated other comprehensive (loss) income into earnings over the next 12 months | 1.8 | ||
Foreign exchange forward | Other current assets | |||
Derivative Financial Instruments | |||
Derivative asset | 0.8 | 0.8 | |
Foreign exchange forward | Accrued expenses and other current liabilities | |||
Derivative Financial Instruments | |||
Derivative liability | $ 1.5 | $ 1.5 |
Segment Reporting - Number of S
Segment Reporting - Number of Segments (Details) | 3 Months Ended |
Apr. 29, 2017segment | |
Segment reporting | |
Number of reportable segments | 2 |
Retail Segment | |
Segment reporting | |
Number of operating segments | 4 |
Segment Reporting - Sales by Se
Segment Reporting - Sales by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Net sales: | ||
Total net sales | $ 782,906 | $ 828,822 |
Retail Segment | ||
Net sales: | ||
Total net sales | 725,305 | 766,242 |
Retail Segment | MW | ||
Net sales: | ||
Total net sales | 420,067 | 441,646 |
Retail Segment | Jos. A. Bank | ||
Net sales: | ||
Total net sales | 167,228 | 178,450 |
Retail Segment | K&G | ||
Net sales: | ||
Total net sales | 88,683 | 94,759 |
Retail Segment | Moores | ||
Net sales: | ||
Total net sales | 40,813 | 43,229 |
Retail Segment | MW Cleaners | ||
Net sales: | ||
Total net sales | 8,514 | 8,158 |
Corporate Apparel Segment | ||
Net sales: | ||
Total net sales | $ 57,601 | $ 62,580 |
Segment Reporting - Sales by Pr
Segment Reporting - Sales by Product or Service (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Supplemental products and services sales information | ||
Total net sales | $ 782,906 | $ 828,822 |
Retail Segment | ||
Supplemental products and services sales information | ||
Total retail clothing product | 583,585 | 615,668 |
Rental services | 94,820 | 99,831 |
Total alteration and other services | 46,900 | 50,743 |
Total net sales | 725,305 | 766,242 |
Retail Segment | Men's tailored clothing product | ||
Supplemental products and services sales information | ||
Total retail clothing product | 332,630 | 349,528 |
Retail Segment | Men's non-tailored clothing product | ||
Supplemental products and services sales information | ||
Total retail clothing product | 228,699 | 241,933 |
Retail Segment | Women's clothing product | ||
Supplemental products and services sales information | ||
Total retail clothing product | 19,827 | 21,846 |
Retail Segment | Other | ||
Supplemental products and services sales information | ||
Total retail clothing product | 2,429 | 2,361 |
Retail Segment | Alteration services | ||
Supplemental products and services sales information | ||
Total alteration and other services | 38,386 | 42,585 |
Retail Segment | Retail dry cleaning services | ||
Supplemental products and services sales information | ||
Total alteration and other services | 8,514 | 8,158 |
Corporate Apparel Segment | ||
Supplemental products and services sales information | ||
Total net sales | $ 57,601 | $ 62,580 |
Segment Reporting - Operating I
Segment Reporting - Operating Income Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Operating income by reportable segment and the reconciliation to earnings before income taxes | ||
Operating income | $ 31,002 | $ 30,995 |
Interest income | 67 | 13 |
Interest expense | (25,621) | (26,502) |
Gain on extinguishment of debt, net | 715 | |
Earnings (loss) before income taxes | 6,163 | 4,506 |
Shared services | ||
Operating income by reportable segment and the reconciliation to earnings before income taxes | ||
Operating income | (44,398) | (50,936) |
Retail Segment | Reportable segments | ||
Operating income by reportable segment and the reconciliation to earnings before income taxes | ||
Operating income | 73,425 | 79,877 |
Corporate Apparel Segment | Reportable segments | ||
Operating income by reportable segment and the reconciliation to earnings before income taxes | ||
Operating income | $ 1,975 | $ 2,054 |
Condensed Consolidating Infor63
Condensed Consolidating Information - Balance Sheet (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Apr. 29, 2017 | Jan. 28, 2017 | Apr. 30, 2016 | Jan. 30, 2016 | Jun. 18, 2014 | |
CURRENT ASSETS: | |||||
Cash and cash equivalents | $ 66,580 | $ 70,889 | $ 36,429 | $ 29,980 | |
Accounts receivable, net | 84,016 | 65,714 | 83,333 | ||
Inventories | 984,221 | 955,512 | 1,076,733 | ||
Other current assets | 69,288 | 73,602 | 77,903 | ||
Total current assets | 1,204,105 | 1,165,717 | 1,274,398 | ||
Property and equipment, net | 467,661 | 484,165 | 521,144 | ||
Rental product, net | 147,495 | 152,610 | 174,240 | ||
Goodwill | 117,585 | 117,026 | 121,498 | ||
Intangible assets, net | 170,966 | 171,659 | 177,826 | ||
Other assets | 6,423 | 6,695 | 7,715 | ||
TOTAL ASSETS | 2,114,235 | 2,097,872 | 2,276,821 | ||
CURRENT LIABILITIES: | |||||
Accounts payable | 171,886 | 177,380 | 203,248 | ||
Accrued expenses and other current liabilities | 306,463 | 269,161 | 311,044 | ||
Current portion of long-term debt | 13,379 | 13,379 | 42,451 | ||
Total current liabilities | 491,728 | 459,920 | 556,743 | ||
Long-term debt, net | 1,574,486 | 1,582,150 | 1,613,192 | ||
Deferred taxes and other liabilities | 161,600 | 163,420 | 197,116 | ||
Shareholders' (deficit) equity | (113,579) | (107,618) | (90,230) | ||
TOTAL LIABILITIES AND SHAREHOLDERS? DEFICIT | 2,114,235 | 2,097,872 | 2,276,821 | ||
Eliminations | |||||
CURRENT ASSETS: | |||||
Accounts receivable, net | (539,000) | (490,680) | (263,201) | ||
Other current assets | (204,506) | (110,280) | |||
Total current assets | (743,506) | (600,960) | (263,201) | ||
Investments in subsidiaries | (1,355,106) | (1,315,834) | (1,358,787) | ||
Other assets | (6,900) | (7,200) | (8,100) | ||
TOTAL ASSETS | (2,105,512) | (1,923,994) | (1,630,088) | ||
CURRENT LIABILITIES: | |||||
Accounts payable | (539,000) | (490,680) | (263,201) | ||
Accrued expenses and other current liabilities | (197,230) | (110,280) | |||
Total current liabilities | (736,230) | (600,960) | (263,201) | ||
Deferred taxes and other liabilities | (14,176) | (7,200) | (8,100) | ||
Shareholders' (deficit) equity | (1,355,106) | (1,315,834) | (1,358,787) | ||
TOTAL LIABILITIES AND SHAREHOLDERS? DEFICIT | (2,105,512) | (1,923,994) | (1,630,088) | ||
Tailored Brands, Inc. | Reportable Legal Entities | |||||
CURRENT ASSETS: | |||||
Accounts receivable, net | 7,358 | 7,376 | |||
Other current assets | 136 | 12,773 | 9,769 | ||
Total current assets | 7,494 | 20,149 | 9,769 | ||
Investments in subsidiaries | (89,379) | (109,788) | (88,520) | ||
TOTAL ASSETS | (81,885) | (89,639) | (78,751) | ||
CURRENT LIABILITIES: | |||||
Accounts payable | 21,606 | 15,352 | |||
Accrued expenses and other current liabilities | 10,088 | 2,627 | 9,129 | ||
Total current liabilities | 31,694 | 17,979 | 9,129 | ||
Deferred taxes and other liabilities | 2,350 | ||||
Shareholders' (deficit) equity | (113,579) | (107,618) | (90,230) | ||
TOTAL LIABILITIES AND SHAREHOLDERS? DEFICIT | (81,885) | (89,639) | (78,751) | ||
The Men's Wearhouse, Inc. | Reportable Legal Entities | |||||
CURRENT ASSETS: | |||||
Cash and cash equivalents | 2,162 | 1,002 | 7,950 | 724 | |
Accounts receivable, net | 28,480 | 15,499 | 17,235 | ||
Inventories | 212,146 | 230,264 | 211,358 | ||
Other current assets | 229,333 | 134,225 | 41,038 | ||
Total current assets | 472,121 | 380,990 | 277,581 | ||
Property and equipment, net | 224,274 | 232,090 | 252,683 | ||
Rental product, net | 127,188 | 131,287 | 141,427 | ||
Goodwill | 6,160 | 6,160 | 6,160 | ||
Intangible assets, net | 52 | 78 | 159 | ||
Investments in subsidiaries | 1,444,485 | 1,425,622 | 1,447,307 | ||
Other assets | 5,200 | 5,615 | 6,637 | ||
TOTAL ASSETS | 2,279,480 | 2,181,842 | 2,131,954 | ||
CURRENT LIABILITIES: | |||||
Accounts payable | 553,773 | 509,572 | 310,830 | ||
Accrued expenses and other current liabilities | 146,168 | 111,617 | 184,955 | ||
Current portion of long-term debt | 13,379 | 13,379 | 42,451 | ||
Total current liabilities | 713,320 | 634,568 | 538,236 | ||
Long-term debt, net | 1,574,486 | 1,582,150 | 1,613,192 | ||
Deferred taxes and other liabilities | 81,053 | 74,912 | 69,046 | ||
Shareholders' (deficit) equity | (89,379) | (109,788) | (88,520) | ||
TOTAL LIABILITIES AND SHAREHOLDERS? DEFICIT | $ 2,279,480 | 2,181,842 | 2,131,954 | ||
Guarantor Subsidiaries | |||||
Condensed Consolidating Balance Sheet | |||||
Ownership of Guarantor subsidiaries (as a percent) | 100.00% | ||||
Guarantor Subsidiaries | Reportable Legal Entities | |||||
CURRENT ASSETS: | |||||
Cash and cash equivalents | $ 2,335 | 1,881 | 3,231 | 2,243 | |
Accounts receivable, net | 437,481 | 476,742 | 293,596 | ||
Inventories | 438,670 | 438,167 | 714,712 | ||
Other current assets | 33,392 | 28,436 | 18,629 | ||
Total current assets | 911,878 | 945,226 | 1,030,168 | ||
Property and equipment, net | 208,719 | 216,248 | 228,714 | ||
Rental product, net | 3,087 | 3,369 | 13,990 | ||
Goodwill | 68,510 | 68,510 | 68,510 | ||
Intangible assets, net | 156,741 | 157,270 | 159,051 | ||
Other assets | 949 | 959 | 952 | ||
TOTAL ASSETS | 1,349,884 | 1,391,582 | 1,501,385 | ||
CURRENT LIABILITIES: | |||||
Accounts payable | 82,517 | 82,337 | 113,982 | ||
Accrued expenses and other current liabilities | 120,022 | 129,420 | 90,879 | ||
Total current liabilities | 202,539 | 211,757 | 204,861 | ||
Deferred taxes and other liabilities | 84,719 | 85,477 | 122,428 | ||
Shareholders' (deficit) equity | 1,062,626 | 1,094,348 | 1,174,096 | ||
TOTAL LIABILITIES AND SHAREHOLDERS? DEFICIT | 1,349,884 | 1,391,582 | 1,501,385 | ||
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||||
CURRENT ASSETS: | |||||
Cash and cash equivalents | 62,083 | 68,006 | 25,248 | $ 27,013 | |
Accounts receivable, net | 149,697 | 56,777 | 35,703 | ||
Inventories | 333,405 | 287,081 | 150,663 | ||
Other current assets | 10,933 | 8,448 | 8,467 | ||
Total current assets | 556,118 | 420,312 | 220,081 | ||
Property and equipment, net | 34,668 | 35,827 | 39,747 | ||
Rental product, net | 17,220 | 17,954 | 18,823 | ||
Goodwill | 42,915 | 42,356 | 46,828 | ||
Intangible assets, net | 14,173 | 14,311 | 18,616 | ||
Other assets | 7,174 | 7,321 | 8,226 | ||
TOTAL ASSETS | 672,268 | 538,081 | 352,321 | ||
CURRENT LIABILITIES: | |||||
Accounts payable | 52,990 | 60,799 | 41,637 | ||
Accrued expenses and other current liabilities | 227,415 | 135,777 | 26,081 | ||
Total current liabilities | 280,405 | 196,576 | 67,718 | ||
Deferred taxes and other liabilities | 10,004 | 10,231 | 11,392 | ||
Shareholders' (deficit) equity | 381,859 | 331,274 | 273,211 | ||
TOTAL LIABILITIES AND SHAREHOLDERS? DEFICIT | 672,268 | $ 538,081 | $ 352,321 | ||
Senior Notes | |||||
Condensed Consolidating Balance Sheet | |||||
Aggregate principal amount of debt issued | $ 600,000 | $ 600,000 | |||
Interest rate (as a percent) | 7.00% | 7.00% |
Condensed Consolidating Infor64
Condensed Consolidating Information - Earnings (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Condensed Consolidating Statement of Earnings (Loss) | ||
Net sales | $ 782,906 | $ 828,822 |
Cost of sales | 450,466 | 476,981 |
Total gross margin | 332,440 | 351,841 |
Operating expenses | 301,438 | 320,846 |
Operating income | 31,002 | 30,995 |
Interest income | 67 | 13 |
Interest expense | (25,621) | (26,502) |
Gain on extinguishment of debt, net | 715 | |
Earnings (loss) before income taxes | 6,163 | 4,506 |
(Benefit) provision for income taxes | 4,324 | 2,869 |
(Loss) earnings before equity in net income of subsidiaries | 1,839 | 1,637 |
Net earnings | 1,839 | 1,637 |
Comprehensive income (loss) | (286) | 18,306 |
Eliminations | ||
Condensed Consolidating Statement of Earnings (Loss) | ||
Net sales | (143,541) | (111,673) |
Cost of sales | (143,541) | (111,673) |
Operating expenses | (14,732) | (13,686) |
Operating income | 14,732 | 13,686 |
Other income and expenses, net | (14,732) | (13,686) |
Interest income | (3,079) | (309) |
Interest expense | 3,079 | 309 |
Equity in earnings of subsidiaries | 7,843 | 25,939 |
Net earnings | 7,843 | 25,939 |
Comprehensive income (loss) | 9,968 | 9,270 |
Tailored Brands, Inc. | Reportable Legal Entities | ||
Condensed Consolidating Statement of Earnings (Loss) | ||
Operating expenses | 903 | 717 |
Operating income | (903) | (717) |
Interest income | 110 | 2 |
Earnings (loss) before income taxes | (793) | (715) |
(Benefit) provision for income taxes | 1,945 | (203) |
(Loss) earnings before equity in net income of subsidiaries | (2,738) | (512) |
Equity in earnings of subsidiaries | 4,577 | 2,149 |
Net earnings | 1,839 | 1,637 |
Comprehensive income (loss) | (286) | 18,306 |
The Men's Wearhouse, Inc. | Reportable Legal Entities | ||
Condensed Consolidating Statement of Earnings (Loss) | ||
Net sales | 418,925 | 440,498 |
Cost of sales | 212,499 | 220,547 |
Total gross margin | 206,426 | 219,951 |
Operating expenses | 155,783 | 148,487 |
Operating income | 50,643 | 71,464 |
Interest income | 1,302 | 5 |
Interest expense | (27,194) | (26,688) |
Gain on extinguishment of debt, net | 715 | |
Earnings (loss) before income taxes | 25,466 | 44,781 |
(Benefit) provision for income taxes | 8,469 | 14,544 |
(Loss) earnings before equity in net income of subsidiaries | 16,997 | 30,237 |
Equity in earnings of subsidiaries | (12,420) | (28,088) |
Net earnings | 4,577 | 2,149 |
Comprehensive income (loss) | 2,920 | 2,389 |
Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Consolidating Statement of Earnings (Loss) | ||
Net sales | 372,264 | 403,227 |
Cost of sales | 278,631 | 305,394 |
Total gross margin | 93,633 | 97,833 |
Operating expenses | 133,532 | 156,913 |
Operating income | (39,899) | (59,080) |
Other income and expenses, net | 14,732 | 13,686 |
Interest income | 1,672 | 307 |
Interest expense | (114) | (11) |
Earnings (loss) before income taxes | (23,609) | (45,098) |
(Benefit) provision for income taxes | (7,752) | (13,045) |
(Loss) earnings before equity in net income of subsidiaries | (15,857) | (32,053) |
Net earnings | (15,857) | (32,053) |
Comprehensive income (loss) | (15,857) | (32,053) |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Consolidating Statement of Earnings (Loss) | ||
Net sales | 135,258 | 96,770 |
Cost of sales | 102,877 | 62,713 |
Total gross margin | 32,381 | 34,057 |
Operating expenses | 25,952 | 28,415 |
Operating income | 6,429 | 5,642 |
Interest income | 62 | 8 |
Interest expense | (1,392) | (112) |
Earnings (loss) before income taxes | 5,099 | 5,538 |
(Benefit) provision for income taxes | 1,662 | 1,573 |
(Loss) earnings before equity in net income of subsidiaries | 3,437 | 3,965 |
Net earnings | 3,437 | 3,965 |
Comprehensive income (loss) | $ 2,969 | $ 20,394 |
Condensed Consolidating Infor65
Condensed Consolidating Information - Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | $ 33,351 | $ 46,435 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (17,786) | (30,325) |
Acquisition of business, net of cash | (457) | |
Proceeds from sale of property and equipment | 12 | 501 |
Net cash used in investing activities | (18,231) | (29,824) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on term loan | (1,750) | (1,750) |
Proceeds from asset-based revolving credit facility | 137,650 | 204,014 |
Payments on asset-based revolving credit facility | (137,650) | (204,014) |
Repurchase and retirement of senior notes | (6,601) | |
Cash dividends paid | (9,131) | (8,921) |
Proceeds from issuance of common stock | 467 | 434 |
Tax payments related to vested deferred stock units | (1,632) | (1,247) |
Net cash used in financing activities | (18,647) | (11,484) |
Effect of exchange rate changes | (782) | 1,322 |
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (4,309) | 6,449 |
Balance at beginning of period | 70,889 | 29,980 |
Balance at end of period | 66,580 | 36,429 |
Eliminations | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | (9,131) | (8,921) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Intercompany activities | 149,424 | |
Net cash used in investing activities | 149,424 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Intercompany activities | (140,293) | 8,921 |
Net cash used in financing activities | (140,293) | 8,921 |
Tailored Brands, Inc. | Reportable Legal Entities | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | 10,296 | 9,734 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Cash dividends paid | (9,131) | (8,921) |
Proceeds from issuance of common stock | 467 | 434 |
Tax payments related to vested deferred stock units | (1,632) | (1,247) |
Net cash used in financing activities | (10,296) | (9,734) |
The Men's Wearhouse, Inc. | Reportable Legal Entities | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | 174,399 | 34,076 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (6,333) | (16,179) |
Intercompany activities | (149,424) | |
Net cash used in investing activities | (155,757) | (16,179) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on term loan | (1,750) | (1,750) |
Proceeds from asset-based revolving credit facility | 137,650 | 201,000 |
Payments on asset-based revolving credit facility | (137,650) | (201,000) |
Repurchase and retirement of senior notes | (6,601) | |
Intercompany activities | (9,131) | (8,921) |
Net cash used in financing activities | (17,482) | (10,671) |
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | 1,160 | 7,226 |
Balance at beginning of period | 1,002 | 724 |
Balance at end of period | 2,162 | 7,950 |
Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | 10,424 | 13,365 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (9,982) | (12,878) |
Proceeds from sale of property and equipment | 12 | 501 |
Net cash used in investing activities | (9,970) | (12,377) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | 454 | 988 |
Balance at beginning of period | 1,881 | 2,243 |
Balance at end of period | 2,335 | 3,231 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | (152,637) | (1,819) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (1,471) | (1,268) |
Acquisition of business, net of cash | (457) | |
Net cash used in investing activities | (1,928) | (1,268) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from asset-based revolving credit facility | 3,014 | |
Payments on asset-based revolving credit facility | (3,014) | |
Intercompany activities | 149,424 | |
Net cash used in financing activities | 149,424 | |
Effect of exchange rate changes | (782) | 1,322 |
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (5,923) | (1,765) |
Balance at beginning of period | 68,006 | 27,013 |
Balance at end of period | $ 62,083 | $ 25,248 |