Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Nov. 02, 2019 | Nov. 29, 2019 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Nov. 2, 2019 | |
Entity File Number | 1-16097 | |
Entity Registrant Name | TAILORED BRANDS, INC. | |
Entity Incorporation, State or Country Code | TX | |
Entity Tax Identification Number | 47-4908760 | |
Entity Address, Address Line One | 6380 Rogerdale Road | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77072-1624 | |
City Area Code | 281 | |
Local Phone Number | 776-7000 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | TLRD | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 48,422,534 | |
Current Fiscal Year End Date | --02-01 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000884217 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Nov. 02, 2019 | Feb. 02, 2019 | Nov. 03, 2018 |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 21,193 | $ 32,671 | $ 56,293 |
Accounts receivable, net | 42,056 | 34,686 | 34,637 |
Inventories | 778,342 | 724,086 | 772,206 |
Other current assets | 60,778 | 66,823 | 66,063 |
Current assets - discontinued operations | 171,376 | 165,358 | |
Total current assets | 902,369 | 1,029,642 | 1,094,557 |
PROPERTY AND EQUIPMENT, net | 405,000 | 424,316 | 416,061 |
OPERATING LEASE RIGHT-OF-USE ASSETS | 908,505 | ||
RENTAL PRODUCT, net | 92,785 | 99,770 | 102,540 |
GOODWILL | 79,392 | 79,491 | 79,475 |
INTANGIBLE ASSETS, net | 146,890 | 153,711 | 154,144 |
OTHER ASSETS | 5,450 | 8,489 | 17,232 |
NON-CURRENT ASSETS - DISCONTINUED OPERATIONS | 25,071 | 25,531 | |
TOTAL ASSETS | 2,540,391 | 1,820,490 | 1,889,540 |
CURRENT LIABILITIES: | |||
Accounts payable | 210,165 | 204,775 | 218,114 |
Accrued expenses and other current liabilities | 250,706 | 268,698 | 290,422 |
Current portion of operating lease liabilities | 184,422 | ||
Income taxes payable | 9,928 | 13,478 | 12,360 |
Current portion of long-term debt | 9,000 | 11,619 | 9,000 |
Current liabilities - discontinued operations | 40,025 | 33,661 | |
Total current liabilities | 664,221 | 538,595 | 563,557 |
LONG-TERM DEBT, net | 1,111,732 | 1,153,242 | 1,167,906 |
OPERATING LEASE LIABILITIES | 754,956 | ||
DEFERRED TAXES, net AND OTHER LIABILITIES | 73,968 | 119,545 | 144,138 |
NON-CURRENT LIABILITIES - DISCONTINUED OPERATIONS | 5,477 | 4,452 | |
Total liabilities | 2,604,877 | 1,816,859 | 1,880,053 |
COMMITMENTS AND CONTINGENCIES | |||
SHAREHOLDERS' (DEFICIT) EQUITY: | |||
Preferred stock | |||
Common stock | 507 | 501 | 501 |
Capital in excess of par | 513,106 | 505,157 | 501,835 |
Accumulated deficit | (534,979) | (468,048) | (464,993) |
Accumulated other comprehensive loss | (33,120) | (33,979) | (27,856) |
Treasury stock, at cost | (10,000) | ||
Shareholders' (deficit) equity | (64,486) | 3,631 | 9,487 |
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY | $ 2,540,391 | $ 1,820,490 | $ 1,889,540 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | |
Net sales: | ||||
Total net sales | $ 729,481 | $ 751,741 | $ 2,190,288 | $ 2,274,498 |
Cost of sales: | ||||
Total cost of sales | 421,453 | 406,247 | 1,258,510 | 1,247,168 |
Gross margin: | ||||
Total gross margin | 308,028 | 345,494 | 931,778 | 1,027,330 |
Advertising expense | 34,031 | 37,116 | 111,527 | 116,241 |
Selling, general and administrative expenses | 228,453 | 233,100 | 687,414 | 698,833 |
Operating income | 45,544 | 75,278 | 132,837 | 212,256 |
Interest income | 147 | 207 | 400 | 414 |
Interest expense | (17,572) | (18,757) | (54,493) | (61,602) |
Loss on extinguishment of debt, net | (77) | (9,420) | (77) | (30,253) |
Earnings before income taxes | 28,042 | 47,308 | 78,667 | 120,815 |
Provision for income taxes | 254 | 12,521 | 14,743 | 26,018 |
Net earnings from continuing operations | 27,788 | 34,787 | 63,924 | 94,797 |
Loss from discontinued operations, net of tax | (117,378) | (20,912) | (112,106) | (17,775) |
Net (loss) earnings | $ (89,590) | $ 13,875 | $ (48,182) | $ 77,022 |
Net earnings from continuing operations per common share: | ||||
Basic (in dollars per share) | $ 0.56 | $ 0.70 | $ 1.27 | $ 1.90 |
Diluted (in dollars per share) | 0.56 | 0.69 | 1.27 | 1.87 |
Net loss from discontinued operations per common share: | ||||
Basic (in dollars per share) | (2.36) | (0.42) | (2.23) | (0.36) |
Diluted (in dollars per share) | (2.35) | (0.41) | (2.23) | (0.35) |
Net (loss) earnings per common share: | ||||
Basic (in dollars per share) | (1.80) | 0.28 | (0.96) | 1.55 |
Diluted (in dollars per share) | $ (1.80) | $ 0.27 | $ (0.96) | $ 1.52 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 49,803 | 50,000 | 50,210 | 49,766 |
Diluted (in shares) | 49,905 | 50,722 | 50,372 | 50,764 |
Retail clothing product | Retail Segment | ||||
Net sales: | ||||
Total net sales | $ 573,854 | $ 588,447 | $ 1,749,533 | $ 1,807,879 |
Cost of sales: | ||||
Total cost of sales | 266,481 | 254,385 | 794,970 | 790,565 |
Gross margin: | ||||
Total gross margin | 307,373 | 334,062 | 954,563 | 1,017,314 |
Rental services | Retail Segment | ||||
Net sales: | ||||
Total net sales | 120,021 | 124,697 | 334,090 | 350,019 |
Cost of sales: | ||||
Total cost of sales | 16,041 | 17,319 | 48,831 | 51,342 |
Gross margin: | ||||
Total gross margin | 103,980 | 107,378 | 285,259 | 298,677 |
Total alteration and other services | Retail Segment | ||||
Net sales: | ||||
Total net sales | 35,606 | 38,597 | 106,665 | 116,600 |
Cost of sales: | ||||
Total cost of sales | 33,151 | 33,022 | 100,612 | 100,949 |
Gross margin: | ||||
Total gross margin | 2,455 | 5,575 | 6,053 | 15,651 |
Occupancy costs | Retail Segment | ||||
Cost of sales: | ||||
Total cost of sales | 105,780 | 101,521 | 314,097 | 304,312 |
Gross margin: | ||||
Total gross margin | $ (105,780) | $ (101,521) | $ (314,097) | $ (304,312) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | ||||
Net (loss) earnings | $ (89,590) | $ 13,875 | $ (48,182) | $ 77,022 |
Currency translation adjustments | 3,223 | (4,056) | (5,691) | (26,023) |
Unrealized (loss) gain on cash flow hedges, net of tax | (2,656) | 4,980 | (20,335) | 8,949 |
Release of cumulative foreign currency translation adjustment to loss from discontinued operations | 26,885 | 26,885 | ||
Comprehensive (loss) income | $ (62,138) | $ 14,799 | $ (47,323) | $ 59,948 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Stock | Capital in Excess of Par | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock, at Cost | Total |
Balance at the beginning of the year at Feb. 03, 2018 | $ 492 | $ 491,648 | $ (479,166) | $ (10,782) | $ 2,192 | |
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) earnings | 13,909 | 13,909 | ||||
Other comprehensive (loss) income | (11,343) | (11,343) | ||||
Cash dividends - $0.18 per share | (9,360) | (9,360) | ||||
Share-based compensation | 4,581 | 4,581 | ||||
Common stock issued - 306,505 and 155,210 and 116,839 shares for quarters ending May 4, 2019, Aug 3, 2019 and Nov 2, 2019 respectively and 445,932 and 178,647 and 183,431 shares for quarters ending May 5, 2018, Aug 4, 2018 and Nov 3, 2018 respectively | 4 | 3,645 | 3,649 | |||
Tax payments related to vested deferred stock units | (5,025) | (5,025) | ||||
Balance at the end of the year at May. 05, 2018 | 496 | 494,849 | (510,441) | (22,125) | (37,221) | |
Balance at the beginning of the year at Feb. 03, 2018 | 492 | 491,648 | (479,166) | (10,782) | 2,192 | |
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) earnings | 77,022 | |||||
Balance at the end of the year at Nov. 03, 2018 | 501 | 501,835 | (464,993) | (27,856) | 9,487 | |
Increase (Decrease) in Shareholders' Equity | ||||||
Cumulative adjustment | Cumulative adjustment upon ASC 606 adoption | (35,824) | (35,824) | ||||
Balance at the beginning of the year at May. 05, 2018 | 496 | 494,849 | (510,441) | (22,125) | (37,221) | |
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) earnings | 49,238 | 49,238 | ||||
Other comprehensive (loss) income | (6,655) | (6,655) | ||||
Cash dividends - $0.18 per share | (9,174) | (9,174) | ||||
Share-based compensation | 4,835 | 4,835 | ||||
Common stock issued - 306,505 and 155,210 and 116,839 shares for quarters ending May 4, 2019, Aug 3, 2019 and Nov 2, 2019 respectively and 445,932 and 178,647 and 183,431 shares for quarters ending May 5, 2018, Aug 4, 2018 and Nov 3, 2018 respectively | 2 | 462 | 464 | |||
Tax payments related to vested deferred stock units | (1,476) | (1,476) | ||||
Balance at the end of the year at Aug. 04, 2018 | 498 | 498,670 | (470,377) | (28,780) | 11 | |
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) earnings | 13,875 | 13,875 | ||||
Other comprehensive (loss) income | 924 | 924 | ||||
Cash dividends - $0.18 per share | (8,491) | (8,491) | ||||
Share-based compensation | 2,140 | 2,140 | ||||
Common stock issued - 306,505 and 155,210 and 116,839 shares for quarters ending May 4, 2019, Aug 3, 2019 and Nov 2, 2019 respectively and 445,932 and 178,647 and 183,431 shares for quarters ending May 5, 2018, Aug 4, 2018 and Nov 3, 2018 respectively | 3 | 2,034 | 2,037 | |||
Tax payments related to vested deferred stock units | (1,009) | (1,009) | ||||
Balance at the end of the year at Nov. 03, 2018 | 501 | 501,835 | (464,993) | (27,856) | 9,487 | |
Balance at the beginning of the year at Feb. 02, 2019 | 501 | 505,157 | (468,048) | (33,979) | 3,631 | |
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) earnings | 7,142 | 7,142 | ||||
Other comprehensive (loss) income | (7,199) | (7,199) | ||||
Cash dividends - $0.18 per share | (9,103) | (9,103) | ||||
Share-based compensation | 2,398 | 2,398 | ||||
Common stock issued - 306,505 and 155,210 and 116,839 shares for quarters ending May 4, 2019, Aug 3, 2019 and Nov 2, 2019 respectively and 445,932 and 178,647 and 183,431 shares for quarters ending May 5, 2018, Aug 4, 2018 and Nov 3, 2018 respectively | 3 | 424 | 427 | |||
Tax payments related to vested deferred stock units | (940) | (940) | ||||
Balance at the end of the year at May. 04, 2019 | 504 | 507,039 | (470,411) | (41,178) | (4,046) | |
Balance at the beginning of the year at Feb. 02, 2019 | 501 | 505,157 | (468,048) | (33,979) | 3,631 | |
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) earnings | (48,182) | |||||
Release of cumulative foreign currency translation adjustment to loss from discontinued operations | 26,885 | 26,885 | ||||
Balance at the end of the year at Nov. 02, 2019 | 507 | 513,106 | (534,979) | (33,120) | $ (10,000) | (64,486) |
Increase (Decrease) in Shareholders' Equity | ||||||
Cumulative adjustment | Cumulative adjustment upon ASC 842 adoption (see Note 12) | (402) | (402) | ||||
Balance at the beginning of the year at May. 04, 2019 | 504 | 507,039 | (470,411) | (41,178) | (4,046) | |
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) earnings | 34,266 | 34,266 | ||||
Other comprehensive (loss) income | (19,394) | (19,394) | ||||
Cash dividends - $0.18 per share | (9,247) | (9,247) | ||||
Share-based compensation | 2,644 | 2,644 | ||||
Common stock issued - 306,505 and 155,210 and 116,839 shares for quarters ending May 4, 2019, Aug 3, 2019 and Nov 2, 2019 respectively and 445,932 and 178,647 and 183,431 shares for quarters ending May 5, 2018, Aug 4, 2018 and Nov 3, 2018 respectively | 2 | 450 | 452 | |||
Tax payments related to vested deferred stock units | (112) | (112) | ||||
Balance at the end of the year at Aug. 03, 2019 | 506 | 510,021 | (445,392) | (60,572) | 4,563 | |
Increase (Decrease) in Shareholders' Equity | ||||||
Net (loss) earnings | (89,590) | (89,590) | ||||
Other comprehensive (loss) income | 567 | 567 | ||||
True-up to cash dividends | 3 | 3 | ||||
Release of cumulative foreign currency translation adjustment to loss from discontinued operations | 26,885 | 26,885 | ||||
Share-based compensation | 2,811 | 2,811 | ||||
Common stock issued - 306,505 and 155,210 and 116,839 shares for quarters ending May 4, 2019, Aug 3, 2019 and Nov 2, 2019 respectively and 445,932 and 178,647 and 183,431 shares for quarters ending May 5, 2018, Aug 4, 2018 and Nov 3, 2018 respectively | 1 | 340 | 341 | |||
Tax payments related to vested deferred stock units | (66) | (66) | ||||
Treasury stock reissued - 2,336,852 and shares for 2019 respectively | (10,000) | (10,000) | ||||
Balance at the end of the year at Nov. 02, 2019 | $ 507 | $ 513,106 | $ (534,979) | $ (33,120) | $ (10,000) | $ (64,486) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) (Parenthetical) - $ / shares | 3 Months Ended | |||||
Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Nov. 03, 2018 | Aug. 04, 2018 | May 05, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) | ||||||
Cash dividends declared per common share (in dollars per share) | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | |
Common stock issued (in shares) | 116,839 | 155,210 | 306,505 | 183,431 | 178,647 | 445,932 |
Treasury stock reissued (in shares) | 2,336,852 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Nov. 02, 2019 | Nov. 03, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net (loss) earnings | $ (48,182,000) | $ 77,022,000 |
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 79,394,000 | 78,088,000 |
Non-cash lease expense | 147,602,000 | |
Rental product amortization | 29,739,000 | 30,720,000 |
Goodwill impairment charge | 23,991,000 | |
Loss on extinguishment of debt, net | 77,000 | 30,253,000 |
Amortization of deferred financing costs and discount on long-term debt | 1,431,000 | 2,936,000 |
Loss on divestiture of business | 82,808,000 | 3,766,000 |
Loss on release of cumulative foreign currency translation adjustment | 26,885,000 | |
Loss on disposition of assets | 1,942,000 | 4,833,000 |
Asset impairment charges | 1,185,000 | 504,000 |
Share-based compensation | 7,853,000 | 11,555,000 |
Deferred tax benefit | (1,540,000) | (2,956,000) |
Other | 67,000 | 395,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,078,000 | (5,661,000) |
Inventories | (55,116,000) | (49,739,000) |
Rental product | (25,798,000) | (14,665,000) |
Other assets | (16,804,000) | 10,560,000 |
Accounts payable, accrued expenses and other current liabilities | (13,076,000) | 70,924,000 |
Income taxes payable | (5,239,000) | 10,313,000 |
Other liabilities | (148,744,000) | (5,022,000) |
Net cash provided by operating activities | 65,562,000 | 277,817,000 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (63,408,000) | (46,927,000) |
Proceeds from divestiture of business, net | 45,034,000 | 17,755,000 |
Net cash used in investing activities | (18,374,000) | (29,172,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on original term loan | (993,420,000) | |
Proceeds from new term loan | 895,500,000 | |
Payments on new term loan | (9,370,000) | (6,750,000) |
Proceeds from asset-based revolving credit facility | 1,065,000,000 | 465,500,000 |
Payments on asset-based revolving credit facility | (1,046,000,000) | (407,000,000) |
Repurchase and retirement of senior notes | (54,425,000) | (199,365,000) |
Deferred financing costs | (6,713,000) | |
Cash dividends paid | (27,938,000) | (27,833,000) |
Proceeds from issuance of common stock | 1,220,000 | 6,149,000 |
Tax payments related to vested deferred stock units | (1,118,000) | (7,510,000) |
Repurchases of common stock | (10,000,000) | |
Net cash used in financing activities | (82,631,000) | (281,442,000) |
Effect of exchange rate changes | 1,205,000 | (2,385,000) |
DECREASE IN CASH AND CASH EQUIVALENTS | (34,238,000) | (35,182,000) |
Balance at beginning of period | 55,431,000 | 103,607,000 |
Balance at end of period | $ 21,193,000 | $ 68,425,000 |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Nov. 02, 2019 | |
Significant Accounting Policies | |
Significant Accounting Policies | 1. Significant Accounting Policies Basis of 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 February 2, 2019. 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.”) requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual amounts could differ from those estimates. As discussed in Note 2, during the third quarter of 2019, we completed the sale of our corporate apparel business. Amounts presented on the condensed consolidated balance sheet and condensed consolidated statements of (loss) earnings for all prior periods related to the corporate apparel business have been reclassified as discontinued operations. Unless noted otherwise, discussion in these notes to the condensed consolidated financial statements pertain to our continuing operations. In addition, as a result of this change in our organizational structure, we reassessed our segment reporting presentation. We determined that the results from our four merchandising brands: Men’s Wearhouse/Men’s Wearhouse and Tux, Jos. A. Bank, K&G and Moores Clothing for Men (“Moores”) represent separate operating segments that should continue to be aggregated into a reportable segment and, as a result, we have only one reportable segment. Please see Note 6 for revenue information by brand and by major source. Recent Accounting Pronouncements Not Yet Adopted In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-15, Intangibles-Goodwill and Other-Internal Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Nov. 02, 2019 | |
Discontinued Operations | |
Discontinued Operations | 2. Discontinued Operations On August 15, 2019, our Board of Directors approved and on August 16, 2019, we completed the sale of MWUK Limited, our UK corporate apparel operations conducted under the Dimensions, Alexandra, and Yaffy brand names to Project Dart Bidco Limited, pursuant to a Share Purchase Agreement entered into on August 16, 2019. In addition, we also completed the sale of Twin Hill Acquisition Company, Inc. (“Twin Hill”), our U.S. corporate apparel operation, to TH Holdco Inc., pursuant to a Stock Purchase Agreement entered into on August 16, 2019. The aggregate consideration for all of the outstanding equity of MWUK Limited and Twin Hill (collectively, the “corporate apparel business”) was approximately $62 million, subject to certain working capital adjustments. After consideration of working capital adjustments and other related items, we received $49.3 million in cash during the third quarter of 2019 and approximately $6.0 million will be received in the first quarter of fiscal 2020. Prior to its sale, the corporate apparel business was its own reportable segment. We determined that the sale of the corporate apparel business represents a strategic shift that will have a major effect on our results of operations and, as a result, have reported the disposal as discontinued operations. We have presented the results of the corporate apparel business including the loss on the sale of the corporate apparel business within loss from discontinued operations, net in the condensed consolidated statement of (loss) earnings for all periods presented. Certain costs previously allocated to the corporate apparel business for segment reporting purposes do not qualify for classification within discontinued operations and have been reallocated to continuing operations. In addition, the goodwill impairment charge of $24.0 million recorded during the third quarter of 2018 and related to the corporate apparel business has been reclassified to discontinued operations. Also, U.S. GAAP requires cumulative foreign currency translation adjustment balances to be released into earnings once the sale or liquidation of the net assets of a foreign entity occurs. As we have sold the operating entities associated with the corporate apparel business during the third quarter of 2019, we determined the cumulative foreign currency translation adjustment balance totaling $26.9 million should be released to earnings and classified within loss from discontinued operations. The related assets and liabilities of the corporate apparel business are presented as current and non-current assets and liabilities of discontinued operations in the condensed consolidated balance sheets as of November 3, 2018 and February 2, 2019. The following table provides details of the carrying amounts of major classes of assets and liabilities related to discontinued operations as of November 3, 2018 and February 2, 2019 (in thousands): November 3, February 2, 2018 2019 ASSETS Cash and cash equivalents $ 12,132 $ 22,760 Accounts receivable, net 46,059 38,387 Inventories 102,797 106,340 Other current assets 4,370 3,889 Total current assets 165,358 171,376 Property and equipment, net 14,817 14,856 Other assets 10,714 10,215 Total assets $ 190,889 $ 196,447 LIABILITIES Accounts payable $ 17,844 $ 24,204 Accrued expenses and other current liabilities 15,817 15,821 Total current liabilities 33,661 40,025 Other liabilities 4,452 5,477 Total liabilities $ 38,113 $ 45,502 The following table provides details of the amounts reflected in loss from discontinued operations, net of tax in the condensed consolidated statements of (loss) earnings for the three and nine months ended November 2, 2019 and November 3, 2018 (in thousands): For the Three Months Ended For the Nine Months Ended November 2, 2019 November 3, 2018 November 2, 2019 November 3, 2018 Net sales $ 7,376 $ 61,006 $ 117,444 $ 179,643 Cost of sales 5,507 43,765 85,042 130,112 Selling, general and administrative expenses 2,200 13,427 30,049 41,812 Goodwill impairment charge — 23,991 — 23,991 Loss on sale of corporate apparel business 83,723 — 82,808 — Loss on release of cumulative foreign currency translation adjustment 26,885 — 26,885 — Loss from discontinued operations before taxes (110,939) (20,177) (107,340) (16,272) Income tax expense 6,439 735 4,766 1,503 Loss from discontinued operations, net of tax $ (117,378) $ (20,912) $ (112,106) $ (17,775) The cash flows related to discontinued operations have not been segregated, and are included in the condensed consolidated statement of cash flows. The following table provides selected information on cash flows related to discontinued operations for the nine months ended November 2, 2019 and November 3, 2018 (in thousands): For the Nine Months Ended November 2, 2019 November 3, 2018 Depreciation and amortization $ 3,102 $ 4,382 Capital expenditures 2,677 3,198 Significant non-cash operating and investing items: Goodwill impairment charge — 23,991 Loss on divestiture of business 82,808 — Loss on release of cumulative foreign currency translation adjustment 26,885 — Receivable related to sale of corporate apparel business $ 6,048 $ — |
Divestiture of MW Cleaners
Divestiture of MW Cleaners | 9 Months Ended |
Nov. 02, 2019 | |
Divestiture of MW Cleaners | |
Divestiture of MW Cleaners | 3. Divestiture of MW Cleaners On February 28, 2018, we entered into a definitive agreement to divest our MW Cleaners business for approximately $18.0 million, subject to certain adjustments, and the transaction closed on March 3, 2018. During the first nine months of 2018, we received cash proceeds of $17.8 million and recorded a loss on the divestiture totaling $3.8 million, which is included within selling, general and administrative expenses (“SG&A”) in the condensed consolidated statement of (loss) earnings. We determined that the sale of the MW Cleaners business did not represent a strategic shift and will not have a major effect on our consolidated results of operations, financial position or cash flows. Accordingly, we have not presented the sale as a discontinued operation in the condensed consolidated financial statements. |
(Loss) Earnings Per Share
(Loss) Earnings Per Share | 9 Months Ended |
Nov. 02, 2019 | |
(Loss) Earnings Per Share | |
(Loss) Earnings Per Share | 4. (Loss) Earnings Per Share Basic (loss) earnings per common share is computed by dividing net (loss) earnings by the weighted-average common shares outstanding during the period. Diluted (loss) earnings per common share is calculated using the treasury stock method. Basic and diluted (loss) earnings per common share are computed using the actual net (loss) earnings and the actual weighted-average common shares outstanding rather than the rounded numbers presented within our condensed consolidated statement of (loss) earnings and the accompanying notes. As a result, it may not be possible to recalculate (loss) earnings per common share in our condensed consolidated statement of (loss) earnings and the accompanying notes. The following table sets forth the computation of basic and diluted (loss) earnings per common share (in thousands, except per share amounts): For the Three Months Ended For the Nine Months Ended November 2, November 3, November 2, November 3, 2019 2018 2019 2018 Numerator Net earnings from continuing operations $ 27,788 $ 34,787 $ 63,924 $ 94,797 Loss from discontinued operations, net of tax (117,378) (20,912) (112,106) (17,775) Net (loss) earnings $ (89,590) $ 13,875 $ (48,182) $ 77,022 Denominator Basic weighted-average common shares outstanding 49,803 50,000 50,210 49,766 Dilutive effect of share-based awards 102 722 162 998 Diluted weighted-average common shares outstanding 49,905 50,722 50,372 50,764 Net earnings from continuing operations per common share: Basic $ 0.56 $ 0.70 $ 1.27 $ 1.90 Diluted $ 0.56 $ 0.69 $ 1.27 $ 1.87 Net loss from discontinued operations per common share: Basic $ (2.36) $ (0.42) $ (2.23) $ (0.36) Diluted $ (2.35) $ (0.41) $ (2.23) $ (0.35) Net (loss) earnings per common share: Basic $ (1.80) $ 0.28 $ (0.96) $ 1.55 Diluted $ (1.80) $ 0.27 $ (0.96) $ 1.52 For the three and nine months ended November 2, 2019, 4.5 million and 3.7 million anti-dilutive shares of common stock were excluded from the calculation of diluted (loss) earnings per common share, respectively. For the three and nine months ended November 3, 2018, 0.8 million and 0.6 million anti-dilutive shares of common stock were excluded from the calculation of diluted (loss) earnings per common share, respectively. |
Debt
Debt | 9 Months Ended |
Nov. 02, 2019 | |
Debt | |
Debt | 5. Debt In 2014, The Men's Wearhouse entered into a term loan credit agreement that provided for a senior secured term loan in the aggregate principal amount of $1.1 billion (the "Original Term Loan") and a $500.0 million asset-based revolving credit agreement (the "ABL Facility", and together with the Original Term Loan, the "Credit Facilities") with certain of our U.S. subsidiaries and Moores the Suit People, one of our Canadian subsidiaries, as co-borrowers. Proceeds from the Original Term Loan were reduced by an $11.0 million original issue discount ("OID"), which was presented as a reduction of the outstanding balance on the Original Term Loan on the balance sheet and was to be amortized to interest expense over the contractual life of the Original 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"). In October 2017, The Men’s Wearhouse amended the ABL Facility in part to increase the principal amount available to $550.0 million and extend the maturity date to October 2022. In April 2018, The Men’s Wearhouse refinanced its Original Term Loan, and in October 2018, amended its term loan to reduce the interest rate margin. See Credit Facilities section below for additional information. 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. Should our total leverage ratio and secured leverage ratio exceed certain thresholds specified in the agreements, we would be subject to certain additional restrictions, including limitations on our ability to make significant acquisitions and incur additional indebtedness. As of November 2, 2019, our total leverage ratio is below the maximum specified in the agreements, however, our secured leverage ratio is above the maximum level. As a result, we are now subject to additional restrictions, primarily related to the size of any incremental term loan facilities being limited to a maximum of $250.0 million. In addition, as a result of the refinancing of our Original Term Loan and amending of our ABL Facility, our ability to pay dividends on our common stock has increased from a maximum of $10.0 million per quarter to a maximum of $15.0 million per quarter. Credit Facilities In April 2018, we refinanced our Original Term Loan. Immediately prior to the refinancing, the Original Term Loan consisted of $593.4 million in aggregate principal amount with an interest rate of LIBOR plus 3.50% (with a floor of 1.0%) and $400.0 million in aggregate principal amount with a fixed rate of 5.0% per annum. Upon entering into the refinancing, we made a prepayment of $93.4 million on the Original Term Loan using cash on hand. As a result, we refinanced $900.0 million in aggregate principal amount of term loans then outstanding with a new Term Loan totaling $900.0 million (the “New Term Loan”). Additionally, we may continue to request additional term loans or incremental equivalent debt borrowings, all of which are uncommitted, in an aggregate amount up to the greater of (1) $250.0 million and (2) an aggregate principal amount such that, on a pro forma basis (giving effect to such borrowings), our senior secured leverage ratio will not exceed 2.5 to 1.0. As noted above, we are currently limited to a maximum of $250.0 million for such incremental borrowings. The New Term Loan will amortize in an annual amount equal to 1.0% of the principal amount of the New Term Loan, payable quarterly commencing on May 1, 2018. Proceeds from the New Term Loan were reduced by a $4.5 million OID, which was presented as a reduction of the outstanding balance on the New Term Loan on the balance sheet and was to be amortized to interest expense over the contractual life of the New Term Loan. The New Term Loan extends the maturity date of the Original Term Loan from June 18, 2021 until April 9, 2025, subject to a maturity provision that would accelerate the maturity of the New Term Loan to April 1, 2022 if any of the Company’s obligations under its Senior Notes remain outstanding on April 1, 2022. The New Term Loan bears interest at a rate per annum equal to an applicable margin plus, at the Company’s option, either LIBOR (with a floor of 1.0%) or the base rate (with a floor of 2.0%). In October 2018, we amended the New Term Loan resulting in a reduction in the interest rate margin of 25 basis points. As a result of the amendment, the margins for borrowings under the New Term Loan are 3.25% for LIBOR and 2.25% for the base rate and the OID was eliminated. In connection with the October 2018 amendment of the New Term Loan, we incurred deferred financing costs of $1.1 million, which will be amortized over the life of the New Term Loan using the interest method. The maturity date for the New Term Loan remains April 9, 2025, and all other material provisions of the New Term Loan remain unchanged. For the three and nine months ended November 3, 2018, we recorded a loss on extinguishment of debt totaling $9.4 million and $21.3 million, respectively, consisting of the elimination of unamortized deferred financing costs and OID related to the Original Term Loan and refinancing of the New Term Loan. The interest rate on the New Term Loan is based on 1-month LIBOR, which was 1.77% at November 2, 2019, plus the applicable margin of 3.25%, resulting in a total interest rate of 5.02%. We have two interest rate swap agreements where the variable rates due under the New Term Loan have been exchanged for a fixed rate. At November 2, 2019, the total notional amount under these interest rate swaps is $705.0 million. Please see Note 17 for additional information on our interest rate swaps. As a result of our interest rate swaps, 80% of the variable interest rate under the New Term Loan has been converted to a fixed rate and, as of November 2, 2019, the New Term Loan had a weighted average interest rate of 5.63%. In October 2017, we amended our ABL Facility, which now provides for a senior secured revolving credit facility of $550.0 million, with possible future increases to $650.0 million under an expansion feature, that matures in October 2022, 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 New York Federal Reserve Bank (“NYFRB”) rate plus 0.5% or adjusted LIBOR for a one-month interest 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 1.75%. The ABL Facility also provides for fees applicable to amounts available to be drawn under outstanding letters of credit which range from 1.25% to 1.75%, and a fee on unused commitments of 0.25%. As of November 2, 2019, $67.5 million in borrowings were outstanding under the ABL Facility at a weighted average interest rate of approximately 3.5%. During the nine months ended November 2, 2019, the maximum borrowing outstanding under the ABL Facility was $100.0 million. We utilize letters of credit primarily as collateral for workers compensation claims. At November 2, 2019, letters of credit totaling approximately $26.7 million were issued and outstanding. Borrowings available under the ABL Facility as of November 2, 2019 were $455.8 million. The obligations under the Credit Facilities are secured on a senior basis by a first priority lien on substantially all of the assets of the Company, The Men’s Wearhouse and its U.S. subsidiaries and, in the case of the ABL Facility, Moores The Suit People. The Credit Facilities and the related guarantees and security interests granted thereunder are senior secured obligations of, and will rank equally with all present and future senior indebtedness of the Company, the co-borrowers and the respective guarantors. 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 on January 1 and July 1 of each year. We may redeem some or all of the Senior Notes at any time on or after July 1, 2017 at the redemption prices set forth in the indenture governing the Senior Notes. Upon the occurrence of certain specific changes of control, we may be required to offer to purchase the Senior Notes at 101% of their aggregate principal amount plus accrued and unpaid interest thereon to the date of purchase. During the third quarter of 2019, we repurchased and retired $54.8 million in face value of Senior Notes through open market repurchases. As a result, we recorded a net loss on extinguishment totaling $0.1 million, consisting of the elimination of unamortized deferred financing costs totaling $0.5 million partially offset by a $0.4 million gain upon repurchase, which is included as a separate line in the condensed consolidated statement of (loss) earnings. For the nine months ended November 3, 2018, as a result of the partial redemption of $175.0 million in face value of our Senior Notes in the second quarter of 2018 as well as the repurchase and retirement of $17.6 million in face value of Senior Notes through open market transactions in the first quarter of 2018, we recorded a net loss on extinguishment totaling $8.9 million, which is included as a separate line in the condensed consolidated statement of (loss) earnings. The net loss on extinguishment reflects a $6.7 million loss upon repurchase and the elimination of unamortized deferred financing costs totaling $2.2 million related to the Senior Notes. Long-Term Debt The following table provides details on our long-term debt as of November 2, 2019, November 3, 2018 and February 2, 2019 (in thousands): November 2, November 3, February 2, 2019 2018 2019 Term Loan $ 881,630 $ 893,250 $ 891,000 Senior Notes 173,816 228,607 228,607 ABL Facility 67,500 58,500 48,500 Less: Deferred financing costs related to the Term Loan and Senior Notes (2,214) (3,451) (3,246) Total long-term debt, net 1,120,732 1,176,906 1,164,861 Current portion of long-term debt (9,000) (9,000) (11,619) Total long-term debt, net of current portion $ 1,111,732 $ 1,167,906 $ 1,153,242 |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Nov. 02, 2019 | |
Revenue Recognition | |
Revenue Recognition | 6. Revenue Recognition Adoption of ASC 606 Effective February 4, 2018, we adopted ASC 606, Revenue from Contracts with Customers The following table depicts the cumulative effect of the changes made to our February 3, 2018 balance sheet for the adoption of ASC 606 (in thousands): Reported Adjusted Balance at Impact of Balance at February 3, Adoption of February 3, 2018 ASC 606 2018 Assets: Accounts receivable, net $ 36,288 $ (303) $ 35,985 Other current assets 77,228 2,753 79,981 Current assets - discontinued operations 182,862 (17,837) 165,025 Liabilities: Accrued expenses and other current liabilities 246,946 52,673 299,619 Current liabilities - discontinued operations 62,188 (20,295) 41,893 Deferred taxes, net and other liabilities 160,163 (12,555) 147,608 Non-current liabilities - discontinued operations 4,028 614 4,642 Equity: Accumulated deficit $ (479,166) $ (35,824) $ (514,990) The adoption of ASC 606 primarily impacted the timing of revenue recognition related to our customer loyalty program, gift cards and e-commerce sales, as discussed in more detail below. In addition, for our corporate apparel business which has been reclassified to discontinued operations, certain deferred revenue balances along with related inventory amounts were eliminated as part of the cumulative adjustment to opening retained earnings. Also, for estimated sales returns, we recognize allowances for estimated sales returns on a gross basis rather than a net basis on the condensed consolidated balance sheets. Revenues The following table depicts the disaggregation of revenue by major source (in thousands): For the Three Months Ended For the Nine Months Ended November 2, 2019 November 3, 2018 November 2, 2019 November 3, 2018 Net sales: Men's tailored clothing product $ 326,036 $ 342,972 $ 1,001,467 $ 1,055,213 Men's non-tailored clothing product 229,514 227,069 687,257 691,780 Women's clothing product 15,029 15,109 51,207 52,138 Other (1) 3,275 3,297 9,602 8,748 Total retail clothing product 573,854 588,447 1,749,533 1,807,879 Rental services 120,021 124,697 334,090 350,019 Alteration services 35,606 38,597 106,665 114,049 Retail dry cleaning services (2) — — — 2,551 Total alteration and other services 35,606 38,597 106,665 116,600 Total net sales $ 729,481 $ 751,741 $ 2,190,288 $ 2,274,498 (1) Other consists of franchise and licensing revenues and gift card breakage. Franchise revenues are generally recognized at a point in time while licensing revenues consist primarily of minimum guaranteed royalty amounts recognized over an elapsed time period. (2) On March 3, 2018, we completed the divestiture of our MW Cleaners business. Please see Note 3 for additional information. Additional net sales information is as follows (in thousands): For the Three Months Ended For the Nine Months Ended November 2, 2019 November 3, 2018 November 2, 2019 November 3, 2018 Net sales: Men's Wearhouse (1) $ 438,088 $ 454,927 $ 1,289,364 $ 1,347,933 Jos. A. Bank 168,432 169,318 501,383 510,821 K&G 71,859 72,610 242,245 245,535 Moores 51,102 54,886 157,296 167,658 MW Cleaners (2) — — — 2,551 Total net sales $ 729,481 $ 751,741 $ 2,190,288 $ 2,274,498 (1) Consists of Men's Wearhouse, Men's Wearhouse and Tux and Joseph Abboud. (2) On March 3, 2018, we completed the divestiture of our MW Cleaners business. Please see Note 3 for additional information. For retail clothing product revenue, we transfer control and recognize revenue at a point in time, upon sale or shipment of the merchandise, net of actual sales returns and an accrual for estimated sales returns. For rental and alteration services, we transfer control and recognize revenue at a point in time, upon receipt by the customer. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Sales, use and value added taxes we collect from our customers and are remitted to governmental agencies are excluded from revenue. Loyalty Program We maintain a customer loyalty program for our Men’s Wearhouse, Men’s Wearhouse and Tux, Jos. A. Bank and Moores brands in which customers receive points for purchases. Points are generally equivalent to dollars spent on a one-to-one basis, excluding any sales tax dollars, and, historically, did not expire. During the fourth quarter of 2018, we finalized our decision to implement an expiration policy for loyalty program points beginning in the second quarter of fiscal 2019, which was completed. Upon reaching 500 points, customers are issued a $50 rewards certificate which they may redeem for purchases at our stores or online. Generally, reward certificates earned must be redeemed no later than six months from the date of issuance. We believe our loyalty programs represents a customer option that is a material right and, accordingly, is a performance obligation in the contract with our customer. Therefore, we record our obligation for future point redemptions using a deferred revenue model. When loyalty program members earn points, we recognize a portion of the transaction as revenue for merchandise product sales or services and defer a portion of the transaction representing the value of the related points. The value of the points is recorded in deferred revenue on our condensed consolidated balance sheet and recognized into revenue when the points are converted into a rewards certificate and the certificate is used. We account for points earned and certificates issued that will not be redeemed by loyalty members, which we refer to as breakage. We review our breakage estimates at least annually based upon the latest available information regarding redemption and expiration patterns. Our estimate of the expected usage of points and certificates requires significant management judgment. Current and future changes to our assumptions or to loyalty program rules may result in material changes to the deferred revenue balance as well as recognized revenues from the loyalty programs. Gift Card Breakage Proceeds from the sale of gift cards are recorded as a liability and are recognized as net sales from products and services when the cards are redeemed. Our gift cards do not have expiration dates. In addition, we recognize revenue for gift cards for which the likelihood of redemption is deemed to be remote and for which there is no legal obligation to remit the value of such unredeemed gift cards to any relevant jurisdictions (commonly referred to as gift card breakage) under the redemption recognition method. This method records gift card breakage as revenue on a proportional basis over the redemption period based on our historical gift card breakage rate. We review our gift card breakage estimate based on our historical redemption patterns. Sales Returns Revenue from merchandise product sales is reported net of sales returns, which includes an estimate of future returns based on historical return rates, with a corresponding reduction to cost of sales. Our refund liability for sales returns was $5.8 million at November 2, 2019, which is included in accrued and other current liabilities and represents the expected value of the refund that will be due to our customers. We also have a corresponding asset included in other current assets that represents the right to recover products from customers associated with sales returns of $2.8 million at November 2, 2019. Contract Liabilities The following table summarizes the opening and closing balances of our contract liabilities (in thousands): Balance at Increase Balance at February 2, 2019 (Decrease) November 2, 2019 Contract liabilities $ 121,796 $ (3,058) $ 118,738 Balance at Increase Balance at February 3, 2018 (Decrease) November 3, 2018 As Adjusted Contract liabilities $ 139,809 $ 1,139 $ 140,948 Contract liabilities include cash payments received from customers in advance of our performance, including amounts which are refundable. These liabilities primarily consist of customer deposits related to rental product or custom clothing transactions since we typically receive payment from our customers prior to our performance and deferred revenue related to our loyalty programs and unredeemed gift cards. These amounts are primarily included as “Customer deposits, prepayments and refunds payable,” “Loyalty program liabilities” and “Unredeemed gift cards,” respectively, within the accrued expenses and other current liabilities line item on our condensed consolidated balance sheet. Please see Note 10 for additional information on our accrued expenses and other current liabilities. The amount of revenue recognized for the three months and nine months ended November 2, 2019 that was included in the respective opening contract liability balance was $8.2 million and $75.6 million, respectively. The amount of revenue recognized for the three and nine months ended November 3, 2018 that was included in the opening contract liability balance was $10.1 million and $75.0 million, respectively. This revenue primarily consists of recognition of deposits for completed transactions as well as redeemed certificates related to our loyalty program and gift card redemptions. |
Supplemental Cash Flows
Supplemental Cash Flows | 9 Months Ended |
Nov. 02, 2019 | |
Supplemental Cash Flows | |
Supplemental Cash Flows | 7. Supplemental Cash Flows Supplemental disclosure of cash flow information is as follows (in thousands): For the Nine Months Ended November 2, November 3, 2019 2018 Cash paid for interest $ 50,332 $ 55,856 Cash paid for income taxes, net $ 26,811 $ 3,331 Schedule of noncash investing and financing activities: Receivable related to sale of corporate apparel business $ 6,048 $ — We had unpaid capital expenditure purchases included in accounts payable and accrued expenses and other current liabilities of approximately $8.3 million and $12.8 million at November 2, 2019 and November 3, 2018, 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. Please see Note 14 for other cash flow disclosures related to leases. |
Inventories
Inventories | 9 Months Ended |
Nov. 02, 2019 | |
Inventories | |
Inventories | 8. Inventories The following table provides details on our inventories as of November 2, 2019, November 3, 2018 and February 2, 2019 (in thousands): November 2, November 3, February 2, 2019 2018 2019 Finished goods $ 647,715 $ 666,087 $ 581,953 Raw materials and merchandise components 130,627 106,119 142,133 Total inventories $ 778,342 $ 772,206 $ 724,086 |
Income Taxes
Income Taxes | 9 Months Ended |
Nov. 02, 2019 | |
Income Taxes | |
Income Taxes | 9. Income Taxes Our effective income tax rate from continuing operations for the third quarter of 2019 was 0.9% compared to 26.5% for the third quarter of 2018. The decrease in the effective income tax rate from continuing operations is primarily due to the net release of $5.9 million of valuation allowances in the third quarter of 2019. Our effective income tax rate from continuing operations for the first nine months of 2019 was 18.7% compared to 21.5% for the first nine months of 2018. The decrease in the effective income tax rate from continuing operations is primarily due to the net release of $5.4 million of valuation allowances in the first nine months of 2019. Additionally, we are currently undergoing several tax 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 | 9 Months Ended |
Nov. 02, 2019 | |
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 | 10. Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities The following table provides details on our other current assets as of November 2, 2019, November 3, 2018 and February 2, 2019 (in thousands): November 2, November 3, February 2, 2019 2018 2019 Prepaid expenses $ 42,175 $ 53,176 $ 53,455 Tax receivable 5,111 457 — Assets held for sale 4,949 — — Other 8,543 12,430 13,368 Total other current assets $ 60,778 $ 66,063 $ 66,823 The decrease in prepaid expenses as of November 2, 2019, is primarily due to the impact on prepaid rent resulting from the adoption of Accounting Standards Codification 842, Leases During the third quarter of 2019, we reclassified property and equipment, primarily related to recently closed distribution centers, as assets held for sale. Assets held for sale are measured at the lower of their carrying amount or fair value less costs to sell. As we believe the fair value less costs to sell of these assets exceeds their carrying amount, no adjustment to their carrying value was recorded in the third quarter of 2019. The following table provides details on our accrued expenses and other current liabilities as of November 2, 2019, November 3, 2018 and February 2, 2019 (in thousands): November 2, November 3, February 2, 2019 2018 2019 Accrued salary, bonus, sabbatical, vacation and other benefits $ 52,247 $ 67,360 $ 78,297 Loyalty program liabilities 46,781 64,944 44,434 Customer deposits, prepayments and refunds payable 38,248 42,520 38,436 Sales, value added, payroll, property and other taxes payable 30,000 27,094 20,930 Unredeemed gift cards 24,389 26,279 32,178 Accrued workers compensation and medical costs 22,442 25,601 23,893 Unrealized loss on interest rate swaps 6,998 797 1,625 Accrued interest 4,557 6,055 1,828 Accrued royalties 3,651 3,287 1,286 Accrued dividends 889 10,320 10,480 Other 20,504 16,165 15,311 Total accrued expenses and other current liabilities $ 250,706 $ 290,422 $ 268,698 The following table provides details on our deferred taxes, net and other liabilities as of November 2, 2019, November 3, 2018 and February 2, 2019 (in thousands): November 2, November 3, February 2, 2019 2018 2019 Deferred and other income tax liabilities, net $ 45,223 $ 78,930 $ 48,199 Unrealized loss on interest rate swaps 25,245 — 7,605 Deferred rent and landlord incentives — 58,297 57,351 Unfavorable lease liabilities — 2,085 1,797 Other 3,500 4,826 4,593 Total deferred taxes, net and other liabilities $ 73,968 $ 144,138 $ 119,545 The elimination of deferred rent and landlord incentives and unfavorable lease liabilities is due to the adoption of ASC 842, effective February 3, 2019. Please see Note 14 for additional information. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 9 Months Ended |
Nov. 02, 2019 | |
Accumulated Other Comprehensive (Loss) Income | |
Accumulated Other Comprehensive (Loss) Income | 11. Accumulated Other Comprehensive (Loss) Income The following table summarizes the components of accumulated other comprehensive (loss) income for the nine months ended November 2, 2019 (in thousands): Foreign Currency Cash Flow Pension Translation Hedges Plan Total BALANCE— February 2, 2019 $ (29,820) $ (4,314) $ 155 $ (33,979) Other comprehensive loss before reclassifications (5,691) (26,871) — (32,562) Amounts reclassified from accumulated other comprehensive loss — (114) — (114) Release of cumulative foreign currency translation adjustment to loss from discontinued operations (see Note 2) 26,885 — — 26,885 Tax Effect — 6,650 — 6,650 Net current-period other comprehensive loss 21,194 (20,335) — 859 BALANCE— November 2, 2019 $ (8,626) $ (24,649) $ 155 $ (33,120) The following table summarizes the components of accumulated other comprehensive (loss) income for the nine months ended November 3, 2018 (in thousands): Foreign Currency Cash Flow Pension Translation Hedges Plan Total BALANCE— February 3, 2018 $ (11,116) $ 145 $ 189 $ (10,782) Other comprehensive (loss) income before reclassifications (26,023) 9,151 — (16,872) Amounts reclassified from accumulated other comprehensive income — 2,487 — 2,487 Tax Effect — (2,689) — (2,689) Net current-period other comprehensive (loss) income (26,023) 8,949 — (17,074) BALANCE— November 3, 2018 $ (37,139) $ 9,094 $ 189 $ (27,856) Amounts reclassified from other comprehensive (loss) income for the nine months ended November 2, 2019 relate to changes in the fair value of our interest rate swaps which is recorded within interest expense in the condensed consolidated statement of (loss) earnings and the impact of the cancellation of cash flow hedges related to inventory purchases for our recently sold corporate apparel business, which is recorded within loss on discontinued operations. Amounts reclassified from other comprehensive (loss) income for the nine months ended November 3, 2018 relate to changes in the fair value of our interest rate swaps 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 (loss) earnings. |
Share Repurchases
Share Repurchases | 9 Months Ended |
Nov. 02, 2019 | |
Share Repurchases | |
Share Repurchases | 12. Share Repurchases In March 2013, our Board of Directors (the “Board”) approved a share repurchase program for our common stock. During the third quarter of 2019, we repurchased 2,336,852 shares through open market repurchases at a cost of $10.0 million for an average price of $4.28 per share. At November 2, 2019, the remaining balance available under the Board’s authorization was $38.0 million. No shares were repurchased during 2018. Share repurchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. |
Share-Based Compensation Plans
Share-Based Compensation Plans | 9 Months Ended |
Nov. 02, 2019 | |
Share-Based Compensation Plans | |
Share-Based Compensation Plans | 13. Share-Based Compensation Plans For a discussion of our share-based compensation plans, please see Note 14 in our Annual Report on Form 10-K for the fiscal year ended February 2, 2019. Non-Vested Deferred Stock Units and Performance Units The following table summarizes the activity of time-based and performance-based awards (collectively, "DSUs") for the nine months ended November 2, 2019: Weighted-Average Units Grant-Date Fair Value Time- Performance- Time- Performance- Based Based Based Based Non-Vested at February 2, 2019 939,086 336,906 $ 22.60 $ 18.59 Granted 162,162 — 5.55 — Vested (1) (455,288) (28,686) 21.88 17.43 Forfeited (113,937) (44,459) 22.78 18.44 Non-Vested at November 2, 2019 532,023 263,761 $ 17.97 $ 18.74 (1) Includes 150,785 shares relinquished for tax payments related to vested DSUs for the nine months ended November 2, 2019. As of November 2, 2019, we have unrecognized compensation expense related to non-vested DSUs of $7.6 million, which is expected to be recognized over a weighted-average period of 1.1 years. Stock Options and Stock Appreciation Rights (“SARs”) The following table summarizes the activity of stock options for the nine months ended November 2, 2019: Weighted- Number of Average Shares Exercise Price Outstanding at February 2, 2019 1,252,072 $ 23.64 Granted 3,188,732 7.49 Exercised — — Forfeited (209,921) 10.52 Expired (56,584) 25.72 Outstanding at November 2, 2019 4,174,299 $ 11.94 Exercisable at November 2, 2019 916,464 $ 24.89 During the first quarter of 2019, we granted SARs, which vest ratably over a period of three years, and will be settled in stock. Each vested SAR entitles the holder to the right of the difference between the value of our common stock on the date of exercise and the common stock price on the date of grant. We use the Black-Scholes option pricing model to estimate the fair value of SARs on the date of grant. The following table summarizes the activity of SARs for the nine months ended November 2, 2019: Weighted- Number of Average Shares Exercise Price Outstanding at February 2, 2019 — $ — Granted 414,476 7.62 Exercised — — Forfeited — — Expired — — Outstanding at November 2, 2019 414,476 $ 7.62 Exercisable at November 2, 2019 — $ — The weighted-average grant date fair value of the 3,188,732 stock options and 414,476 SARs granted during the nine months ended November 2, 2019 was $2.99 and $3.01 per share, respectively. The following table summarizes the weighted-average assumptions used to fair value the stock options and SARs at the date of grant using the Black-Scholes option model for the nine months ended November 2, 2019: For the Nine Months Ended November 2, 2019 Risk-free interest rate 2.36% Expected lives 5.0 years Dividend yield (1) 4.17% Expected volatility 62.53% (1) Awards granted after announcement of the suspension of our dividend assume a dividend yield of 0%. As November 2, 2019, we have unrecognized compensation expense related to non-vested stock options and SARs of $9.8 million, which is expected to be recognized over a weighted-average period of 1.6 years. Cash Settled Awards We have granted stock-based awards to certain employees, which vest over a period of three years, and will be settled in cash ("cash settled awards"). The fair value of the cash settled awards at each reporting period is based on the price of our common stock. The fair value of the cash settled awards will be remeasured at each reporting period until the awards are settled. Cash settled awards are classified as liabilities in the condensed consolidated balance sheets. At November 2, 2019, the liability associated with the cash settled awards was $1.6 million and was recorded in accrued expenses and other current liabilities in the condensed consolidated balance sheets. The following table summarizes the activity of cash settled awards, based on their initial grant date values, for the nine months ended November 2, 2019 (in thousands): Cash Settled Awards Non-Vested at February 2, 2019 $ 5,072 Granted 4,382 Vested (2,401) Forfeited (683) Non-Vested at November 2, 2019 $ 6,370 As of November 2, 2019, we have unrecognized compensation expense related to non-vested cash settled awards of $2.8 million, which is expected to be recognized over a weighted-average period of 1.6 years. Share-Based Compensation Expense Share-based compensation expense, including cash settled awards, recognized for the three and nine months ended November 2, 2019 was $3.2 million and $7.5 million, respectively. Share-based compensation expense, including cash settled awards, recognized for the three and nine months ended November 3, 2018 was $2.9 million and $14.6 million, respectively, of which $0.7 million, net of the impact of forfeited awards, was related to the retirement of our former Chief Executive Officer. |
Leases
Leases | 9 Months Ended |
Nov. 02, 2019 | |
Leases | |
Leases | 14. Leases Adoption of ASC 842 Effective February 3, 2019, we adopted ASU No. 2016-02, Leases (Topic 842) ● We elected the package of practical expedients under which we did not reassess our prior conclusions about lease identification, lease classification and initial direct costs. ● We elected to not separate lease and non-lease components for all leases. ● We elected to exempt leases with an initial term of twelve months or less from balance sheet recognition. ● We elected the land easement practical expedient under which we did not reassess whether existing land easements not accounted for as leases under previous guidance are or contain leases under ASC 842. ● We did not elect the hindsight practical expedient for all leases. In addition, in July 2018, the FASB approved an optional transition method that removed the requirement to restate prior period financial statements upon adoption of the standard with a cumulative-effect adjustment to retained earnings in the period of adoption and we elected to apply this transition method. As a result, the comparative period information has not been restated and continues to be reported under the accounting standards in effect for the period presented. The adoption of ASC 842 had no impact to our previously reported results of operations or cash flows. The following table depicts the cumulative effect of the changes made to our February 2, 2019 balance sheet for the adoption of ASC 842 effective on February 3, 2019 (in thousands): Reported Adjusted Balance at Impact of Balance at February 2, Adoption of February 3, 2019 ASC 842 2019 Assets: Other current assets $ 66,823 $ (20,604) $ 46,219 Current assets - discontinued operations 171,376 (150) 171,226 Operating lease right-of-use assets — 887,064 887,064 Intangible assets, net 153,711 (6,682) 147,029 Non-current assets - discontinued operations 25,071 9,206 34,277 Current Liabilities: Accrued expenses and other current liabilities 268,698 (151) 268,547 Current portion of operating lease liabilities — 181,931 181,931 Current liabilities - discontinued operations 40,025 1,795 41,820 Noncurrent Liabilities: Operating lease liabilities — 737,750 737,750 Deferred taxes, net and other liabilities 119,545 (59,349) 60,196 Noncurrent liabilities - discontinued operations 5,477 7,260 12,737 Equity: Accumulated deficit $ (468,048) $ (402) $ (468,450) The adoption of ASC 842 primarily resulted in the recognition of operating lease liabilities totaling $928.8 million, based upon the present value of the remaining minimum rental payments using discount rates as of the adoption date, with $183.7 million within current liabilities and $745.1 million in noncurrent liabilities. In addition, we recorded corresponding right-of-use assets totaling $896.3 million based upon the operating lease liabilities adjusted for favorable lease intangible assets, previously included within intangible assets, net and deferred rent and unfavorable lease liabilities, previously included within deferred taxes, net and other liabilities. In addition, we recorded a $0.4 million cumulative effect of initially applying ASC 842 as an adjustment to the opening balance of accumulated deficit. Lease Information We lease store locations, office and warehouse facilities, vehicles and equipment under various non-cancelable operating leases expiring in various years through 2032. Substantially all of our stores are leased, generally for five to ten year initial terms. Certain store leases include one or more options to renew, with renewal terms that range from one to ten years. Management uses its judgment to determine if a renewal option is reasonably certain of being exercised including consideration of the significant investment related to the identification, opening and operation of these store locations. In addition, under our real estate leases, we pay costs such as real estate taxes and common area maintenance and certain of our lease agreements include rental payments based on a percentage of retail sales over contractual levels. These costs are generally considered variable lease payments, and are recognized when deemed probable of payment. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. In addition, we sublease certain real estate to third parties. Amounts related to subleases were immaterial to the condensed consolidated financial statements. Operating lease right-of-use assets and operating lease liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments. Operating lease right-of-use assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, lease incentives and impairment of operating lease right-of-use assets. To determine the present value of the lease payments, we estimated our incremental borrowing rate based on our current credit rating as well as comparisons to comparable borrowing rates of similarly-rated companies. The components of lease cost are as follows (in thousands): For the Three Months Ended For the Nine Months Ended November 2, 2019 November 2, 2019 Operating lease cost $ 62,098 $ 186,778 Variable lease cost 18,228 55,680 Total lease cost $ 80,326 $ 242,458 Operating lease expense is recognized on a straight-line basis over the lease term. Total lease costs for stores and our distribution network are included in cost of sales while other total lease costs are included in SG&A expenses. Supplemental balance sheet information related to operating leases consists of the following (in thousands): November 2, 2019 Operating lease right-of-use assets $ 908,505 Current portion of operating lease liabilities $ 184,422 Noncurrent portion operating lease liabilities 754,956 Total operating lease liabilities $ 939,378 Lease term and discount rate for operating leases were as follows: November 2, 2019 Weighted average remaining lease term 4.7 years Weighted average discount rate 5.24% Supplemental disclosures of cash flow information consists of the following (in thousands): For the Nine Months Ended November 2, 2019 Cash paid for operating leases $ 191,309 Operating lease assets obtained in exchange for operating lease liabilities $ 1,054,182 At November 2, 2019, we have approximately $939.4 million of non-cancelable operating lease commitments and no finance leases. The following table summarizes the undiscounted annual future minimum lease payments, as of November 2, 2019, for each of the next five years and in the aggregate (in thousands): Operating Leases Year 1 $ 229,077 Year 2 239,009 Year 3 201,540 Year 4 155,022 Year 5 111,953 Thereafter 152,806 Total lease payments $ 1,089,407 Less: Interest (150,029) Present value of lease liabilities $ 939,378 Disclosures Related to Periods Prior to Adoption of ASC 842 As previously disclosed in our 2018 Annual Report on Form 10-K and under the accounting standards then in effect, minimum future rental payments under non-cancelable leases as of February 2, 2019 for each of the next five years and in the aggregate are as follows (in thousands): Fiscal Year Operating Leases 2019 $ 236,539 2020 206,652 2021 173,294 2022 131,800 2023 86,127 Thereafter 140,256 Total lease payments $ 974,668 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Nov. 02, 2019 | |
GOODWILL AND INTANGIBLE ASSETS | |
Goodwill and Other Intangible Assets | 15. Goodwill and Other Intangible Assets Goodwill Changes in the net carrying amount of goodwill for the nine months ended November 2, 2019 are as follows (in thousands): Total Balance at February 2, 2019 $ 79,491 Translation adjustment (99) Balance at November 2, 2019 $ 79,392 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. During the third quarter of 2019, we determined that a triggering event occurred as a result of the sustained decline in the market price of our stock and performed an interim goodwill impairment test, which indicated no goodwill impairment at this time. We estimated the fair values of each of our reporting units using a combined income and market comparable approach. Our income approach uses projected future cash flows that are discounted using a weighted-average cost of capital analysis that reflects current market conditions. The market comparable approach primarily considers earnings multiples of comparable companies and applies those multiples to certain key drivers of the reporting unit. We believe these two approaches are appropriate valuation techniques and we weighted the two approaches equally as an estimate of reporting unit fair value for the purposes of our impairment testing. In addition, we compared the total fair values of our reporting units to our market capitalization and noted that the implied control premium was within what we consider to be a reasonable range. If the current market price of our stock further decreases, or if other events or circumstances change that would more likely than not reduce the fair value of our reporting units below their respective carrying values, all or a portion of our goodwill may be impaired in future periods and such an impairment charge could have a material effect on our results of operations and financial condition. Intangible Assets The gross carrying amount and accumulated amortization of our identifiable intangible assets are as follows (in thousands): November 2, November 3, February 2, 2019 2018 2019 Amortizable intangible assets: Carrying amount: Trademarks, tradenames and franchise agreements $ 13,506 $ 13,506 $ 13,506 Favorable leases — 12,695 11,844 Total carrying amount 13,506 26,201 25,350 Accumulated amortization: Trademarks, tradenames and franchise agreements (9,816) (9,628) (9,677) Favorable leases — (5,629) (5,162) Total accumulated amortization (9,816) (15,257) (14,839) Total amortizable intangible assets, net 3,690 10,944 10,511 Indefinite-lived intangible assets: Trademarks and tradename 143,200 143,200 143,200 Total intangible assets, net $ 146,890 $ 154,144 $ 153,711 The elimination of favorable leases is due to the adoption of ASC 842, effective February 3, 2019. Please see Note 14 for additional information. In addition, the decrease in trademarks, tradenames and franchise agreements and the elimination of customer relationships is due to the sale of our corporate apparel business. Please see Note 2 for additional information. During the third quarter of 2019, based on the recent performance of the Jos. A. Bank brand, we determined that a triggering event occurred related to our Jos. A. Bank tradename, an indefinite-lived intangible asset. As a result, we completed an interim impairment test, which indicated no impairment at this time. We estimated the fair value of the Jos. A. Bank tradename based on an income approach using the relief-from-royalty method. This approach is dependent upon a number of factors, including estimates of future growth and trends, royalty rates, discount rates and other variables. If events or circumstances change that would more likely than not reduce the fair value of our indefinite-lived intangible assets below their respective carrying values, we may be required to record an impairment charge, which could have a material effect on our results of operations and financial condition. Amortization expense associated with intangible assets subject to amortization totaled less than $0.1 million and $0.1 million for the three and nine months ended November 2, 2019, respectively. Amortization expense associated with intangible assets subject to amortization totaled $0.4 million and $1.1 million for the three and nine months ended November 3, 2018, respectively. Amortization expense associated with intangible assets subject to amortization at November 2, 2019 is estimated to be less than $0.1 million for the remainder of fiscal 2019 and $0.2 million each year for fiscal years 2020-2024. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Nov. 02, 2019 | |
Fair Value Measurements | |
Fair Value Measurements | 16. 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 November 2, 2019— Assets: Derivative financial instruments $ — $ — $ — $ — Liabilities: Derivative financial instruments $ — $ 32,287 $ — $ 32,287 November 3, 2018— Assets: Derivative financial instruments $ — $ 11,881 $ — $ 11,881 Liabilities: Derivative financial instruments $ — $ 797 $ — $ 797 February 2, 2019— Assets: Derivative financial instruments $ — $ 2,965 $ — $ 2,965 Liabilities: Derivative financial instruments $ — $ 9,307 $ — $ 9,307 At November 2, 2019, derivative financial instruments are comprised of interest rate swap agreements to minimize our exposure to interest rate changes on our outstanding indebtedness and foreign currency forward exchange contracts primarily entered into related to our direct sourcing programs, specifically related to the Canadian dollar. These derivative financial instruments are recorded in the condensed consolidated balance sheets at fair value based upon observable market inputs, primarily pricing models based on current market rates. Derivative financial instruments in an asset position are included within other current assets or other 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. Please see Note 17 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, operating lease right-of-use assets 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 and nine months ended November 2, 2019, we incurred $0.9 million and $1.2 million, respectively, of asset impairment charges, which is included within SG&A expenses in our condensed consolidated statement of (loss) earnings, related to underperforming stores. In addition, during the nine months ended November 2, 2019, we recognized a write-off of $2.9 million of rental product related to the closure of a Canadian distribution center, which is included within cost of sales in our condensed consolidated statement of (loss) earnings. During the three and nine months ended November 3, 2018, we incurred $0.2 million and $0.5 million, respectively, of asset impairment charges, which is included within SG&A expenses in our condensed consolidated statement of (loss) earnings, related to underperforming stores. In addition, during the nine months ended November 3, 2018, we recognized a write-off of $4.0 million of rental product related to the closure of a rental product distribution center, which is included within cost of sales in our condensed consolidated statement of (loss) earnings. 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 our Term Loan and Senior Notes. Management estimates that, as of November 2, 2019, November 3, 2018, and February 2, 2019, the carrying value of our financial instruments, other than our Term Loan and Senior Notes, approximated their fair value due to the highly liquid or short-term nature of these instruments. We believe that the borrowings under our ABL Facility approximate their fair value because interest rates are adjusted on a short-term basis. 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): November 2, 2019 November 3, 2018 February 2, 2019 Carrying Estimated Carrying Estimated Carrying Estimated Amount (1) Fair Value Amount (1) Fair Value Amount (1) Fair Value Term Loan and Senior Notes, including current portion $ 1,053,232 $ 809,934 $ 1,118,406 $ 1,130,202 $ 1,116,361 $ 1,120,296 (1) million as of November 2, 2019, November 3, 2018 and February 2, 2019, respectively. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Nov. 02, 2019 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 17. Derivative Financial Instruments Effective February 3, 2019, we adopted ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities In April 2017, we entered into an interest rate swap contract on an initial notional amount of $260.0 million that matures in June 2021 with periodic interest settlements. At November 2, 2019, the notional amount totaled $320.0 million. Under this interest rate swap contract, we receive a floating rate based on 1-month LIBOR and pay a fixed rate of 5.31% (including the applicable margin of 3.25%) on the outstanding notional amount. In June 2018, we entered into an interest rate swap contract on an initial notional amount of $320.0 million that matures in April 2025 with periodic interest settlements. At November 2, 2019, the notional amount totaled $385.0 million. Under this interest rate swap contract, we receive a floating rate based on 1-month LIBOR and pay a fixed rate of 6.18% (including the applicable margin of 3.25%) on the outstanding notional amount. We have designated each 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 rate and the fair value of the swaps is reported as a component of accumulated other comprehensive (loss) income. For both swaps, 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, $7.0 million of the amounts related to the interest rate swaps is expected to be reclassified from accumulated other comprehensive (loss) income into earnings within interest expense. Historically, we also utilized derivative instruments to hedge our foreign exchange risk, specifically related to the British pound and Euro. As a result of the sale of our corporate apparel business, these instruments were cancelled during the third quarter of 2019 and any amounts included in accumulated other comprehensive (loss) income were reclassified to expense and included within loss from discontinued operations. In addition, we are exposed to market risk associated with foreign currency exchange rate fluctuations as a result of our direct sourcing programs, specifically related to the Canadian dollar. As a result, from time to time, we may enter into derivative instruments to hedge this foreign exchange risk. We have not elected to apply hedge accounting to these derivative instruments. At November 2, 2019, the notional amount of these instruments totaled $6.1 million. Amounts related to these transactions were immaterial to our condensed consolidated financial statements. The following table provides details on our derivative instruments recorded in the condensed consolidated balance sheets as of November 2, 2019, November 3, 2018 and February 2, 2019 (in thousands): November 2, 2019 November 3, 2018 February 2, 2019 Balance Estimated Balance Estimated Balance Estimated Sheet Location Fair Value Sheet Location Fair Value Sheet Location Fair Value Interest rate contracts Other current assets $ — Other current assets $ 2,316 Other current assets $ 1,610 Interest rate contracts Other assets — Other assets 9,559 Other assets 1,355 Foreign exchange contracts Other current assets — Other current assets 6 Other current assets — Total assets $ — $ 11,881 $ 2,965 Interest rate contracts Accrued expenses and other current liabilities $ 6,998 Accrued expenses and other current liabilities $ 797 Accrued expenses and other current liabilities $ 1,625 Interest rate contracts Deferred taxes, net and other liabilities 25,245 Deferred taxes, net and other liabilities — Deferred taxes, net and other liabilities 7,605 Foreign exchange contracts Accrued expenses and other current liabilities 44 Accrued expenses and other current liabilities — Accrued expenses and other current liabilities 77 Total liabilities $ 32,287 $ 797 $ 9,307 The following table provides details on our derivative instruments recorded in the condensed consolidated statements of (loss) earnings and comprehensive (loss) income for the three and nine months ended in November 2, 2019 and November 3, 2018 (in thousands): Amount of Gain/(Loss) Recognized in Other Comprehensive Loss, net of tax Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings For the Three Months Ended For the Three Months Ended November 2, 2019 November 3, 2018 November 2, 2019 November 3, 2018 Derivatives in Cash Flow Hedging Relationships: Interest rate contracts $ (2,051) $ 4,012 Interest expense $ 556 $ 413 Amount of Gain/(Loss) Recognized in Other Comprehensive Loss, net of tax Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings For the Nine Months Ended For the Nine Months Ended November 2, 2019 November 3, 2018 November 2, 2019 November 3, 2018 Derivatives in Cash Flow Hedging Relationships: Interest rate contracts $ (20,189) $ 4,797 Interest expense $ 669 $ 720 |
Legal Matters
Legal Matters | 9 Months Ended |
Nov. 02, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
Legal Matters | 18. Legal Matters On August 2, 2017, two American Airlines employees, Thor Zurbriggen and Dena Catan, filed a putative class action lawsuit against our Twin Hill subsidiary in the United States District Court for the Northern District of Illinois (Case No. 1:17-cv-05648). The complaint alleged claims for strict liability, negligence, and medical monitoring based on allegedly defective uniforms Twin Hill supplied to American Airlines for its employees. On September 28, 2017, the plaintiffs filed an amended complaint adding nine additional named plaintiffs, adding American Airlines, Inc. as a defendant, and adding claims for civil battery and intentional infliction of emotional distress. Plaintiffs filed a Seconded Amended Complaint on October 4, 2018 on behalf of 39 named plaintiffs, adding PSA Airlines, Inc. and Envoy Air Inc. as defendants, adding new factual allegations and adding a new claim of fraud against American. The Second Amended Complaint included plaintiffs from the Onody Joy Onody Joy On September 27, 2017, Heather Poole and numerous other American Airlines employees filed a lawsuit against our Twin Hill subsidiary in the Superior Court for the State of California for the County of Alameda (Case No. RG17876798). The complaint attempts to allege claims for strict liability and negligence based on allegedly defective uniforms Twin Hill supplied to American Airlines for its employees. On December 11, 2017, the Company filed a demurrer to Plaintiff’s complaint. On February 20, 2018, the Court granted our demurrer and dismissed the plaintiffs’ Complaint. Plaintiffs filed an amended complaint on April 10, 2018 and again on April 27, 2018, which added allegations regarding Plaintiffs’ alleged injuries and named Tailored Brands as a defendant. This case was consolidated for pretrial purposes only with other complaints containing identical allegations, including the Agnello, Hughes, Mackonochie Wagoner 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 | 9 Months Ended |
Nov. 02, 2019 | |
CONDENSED CONSOLIDATING FINANCIAL INFORMATION | |
Condensed Consolidating Information | 19. Condensed Consolidating Information As discussed in Note 5, The Men's Wearhouse (the "Issuer") issued $600.0 million in aggregate principal amount of 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 foreign 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. As discussed in Note 2, on August 16, 2019, we completed the sale of our corporate apparel business. Given the immateriality of the domestic portion of the corporate apparel business, we have elected not to restate the condensed consolidating financial information to reflect the change in guarantor status of the domestic portion of the corporate apparel business and instead will maintain the operational history of the guarantors. As such, the financial information for the domestic portion of the corporate apparel business is reflected within the guarantor balances for the periods indicated, while the international portion is reflected within the non-guarantor balances for the periods indicated. However, the condensed consolidating financial information has been recast to reflect the impact of discontinued operations for all periods presented. Tailored Brands, Inc. Condensed Consolidating Balance Sheet November 2, 2019 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 1,073 $ 1,760 $ 18,360 $ — $ 21,193 Accounts receivable, net — 30,148 178,025 48,848 (214,965) 42,056 Inventories — 136,033 503,709 138,600 — 778,342 Other current assets 9,287 4,545 37,680 9,266 — 60,778 Total current assets 9,287 171,799 721,174 215,074 (214,965) 902,369 Property and equipment, net — 180,273 203,570 21,157 — 405,000 Operating lease right-of-use assets — 474,788 381,008 52,709 — 908,505 Rental product, net — 76,463 6,836 9,486 — 92,785 Goodwill — 6,160 52,129 21,103 — 79,392 Intangible assets, net — — 146,890 — — 146,890 Investments in subsidiaries 115,082 1,100,045 — — (1,215,127) — Other assets — 4,958 438 3,954 (3,900) 5,450 Total assets $ 124,369 $ 2,014,486 $ 1,512,045 $ 323,483 $ (1,433,992) $ 2,540,391 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 182,242 $ 81,886 $ 92,053 $ 68,949 $ (214,965) $ 210,165 Accrued expenses and other current liabilities 2,671 168,824 63,589 25,550 — 260,634 Current portion of operating lease liabilities — 97,917 74,751 11,754 — 184,422 Current portion of long-term debt — 9,000 — — — 9,000 Total current liabilities 184,913 357,627 230,393 106,253 (214,965) 664,221 Long-term debt, net — 1,111,732 — — — 1,111,732 Operating lease liabilities — 400,518 312,774 41,664 — 754,956 Deferred taxes, net and other liabilities 3,942 29,527 28,063 16,336 (3,900) 73,968 Shareholders' (deficit) equity (64,486) 115,082 940,815 159,230 (1,215,127) (64,486) Total liabilities and shareholders' equity $ 124,369 $ 2,014,486 $ 1,512,045 $ 323,483 $ (1,433,992) $ 2,540,391 Tailored Brands, Inc. Condensed Consolidating Balance Sheet November 3, 2018 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 981 $ 2,133 $ 53,179 $ — $ 56,293 Accounts receivable, net — 25,010 223,001 55,299 (268,673) 34,637 Inventories — 149,157 500,579 122,470 — 772,206 Other current assets 220 26,657 34,718 4,468 — 66,063 Current assets - discontinued operations — — 46,470 118,888 — 165,358 Total current assets 220 201,805 806,901 354,304 (268,673) 1,094,557 Property and equipment, net — 190,905 204,147 21,009 — 416,061 Rental product, net — 83,554 4,367 14,619 — 102,540 Goodwill — 6,160 52,128 21,187 — 79,475 Intangible assets, net — — 154,144 — — 154,144 Investments in subsidiaries 157,114 1,344,748 — — (1,501,862) — Other assets — 16,046 635 80,786 (80,235) 17,232 Non-current assets - discontinued operations — — 2,045 23,486 — 25,531 Total assets $ 157,334 $ 1,843,218 $ 1,224,367 $ 515,391 $ (1,850,770) $ 1,889,540 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 134,700 $ 188,583 $ 88,627 $ 74,877 $ (268,673) $ 218,114 Accrued expenses and other current liabilities 7,952 170,406 100,839 23,585 — 302,782 Current portion of long-term debt — 9,000 — — — 9,000 Current liabilities - discontinued operations — — 6,635 27,026 — 33,661 Total current liabilities 142,652 367,989 196,101 125,488 (268,673) 563,557 Long-term debt, net — 1,167,906 — — — 1,167,906 Deferred taxes, net and other liabilities 5,195 150,209 46,186 22,783 (80,235) 144,138 Non-current liabilities - discontinued operations — — 1,451 3,001 — 4,452 Shareholders' equity 9,487 157,114 980,629 364,119 (1,501,862) 9,487 Total liabilities and shareholders' equity $ 157,334 $ 1,843,218 $ 1,224,367 $ 515,391 $ (1,850,770) $ 1,889,540 Tailored Brands, Inc. Condensed Consolidating Balance Sheet February 2, 2019 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 970 $ 1,434 $ 30,267 $ — $ 32,671 Accounts receivable, net — 23,954 255,091 53,610 (297,969) 34,686 Inventories — 149,923 429,952 144,211 — 724,086 Other current assets — 30,699 37,621 3,773 (5,270) 66,823 Current assets - discontinued operations — — 41,404 129,972 — 171,376 Total current assets — 205,546 765,502 361,833 (303,239) 1,029,642 Property and equipment, net — 194,290 207,934 22,092 — 424,316 Rental product, net — 81,809 3,426 14,535 — 99,770 Goodwill — 6,160 52,128 21,203 — 79,491 Intangible assets, net — — 153,711 — — 153,711 Investments in subsidiaries 160,057 1,234,005 — — (1,394,062) — Other assets — 7,590 640 5,059 (4,800) 8,489 Non-current assets - discontinued operations — — 1,906 23,165 — 25,071 Total assets $ 160,057 $ 1,729,400 $ 1,185,247 $ 447,887 $ (1,702,101) $ 1,820,490 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 142,701 $ 201,799 $ 67,044 $ 91,200 $ (297,969) $ 204,775 Accrued expenses and other current liabilities 6,697 146,683 105,022 29,044 (5,270) 282,176 Current portion of long-term debt — 11,619 — — — 11,619 Current liabilities - discontinued operations — — 7,073 32,952 — 40,025 Total current liabilities 149,398 360,101 179,139 153,196 (303,239) 538,595 Long-term debt, net — 1,153,242 — — — 1,153,242 Deferred taxes, net and other liabilities 7,028 56,000 43,495 17,822 (4,800) 119,545 Non-current liabilities - discontinued operations — — 1,574 3,903 — 5,477 Shareholders' equity 3,631 160,057 961,039 272,966 (1,394,062) 3,631 Total liabilities and shareholders' equity $ 160,057 $ 1,729,400 $ 1,185,247 $ 447,887 $ (1,702,101) $ 1,820,490 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 November 2, 2019 Net sales $ — $ 436,671 $ 386,754 $ 69,270 $ (163,214) $ 729,481 Cost of sales — 227,407 309,577 47,683 (163,214) 421,453 Gross margin — 209,264 77,177 21,587 — 308,028 Operating expenses 991 131,183 129,975 14,693 (14,358) 262,484 Operating (loss) income (991) 78,081 (52,798) 6,894 14,358 45,544 Other income and expenses, net — — 14,984 (626) (14,358) — Interest (expense) income, net (939) (17,380) 1,036 (142) — (17,425) Loss on extinguishment of debt, net — (77) — — — (77) (Loss) earnings before income taxes (1,930) 60,624 (36,778) 6,126 — 28,042 (Benefit) provision for income taxes (45) 548 (289) 40 — 254 (Loss) earnings before equity in net income of subsidiaries (1,885) 60,076 (36,489) 6,086 — 27,788 Equity in (loss) earnings of subsidiaries (87,705) (121,473) — — 209,178 — Net (loss) earnings from continuing operations (89,590) (61,397) (36,489) 6,086 209,178 27,788 Net loss from discontinued operations, net of tax — (26,308) (6,166) (84,904) — (117,378) Net (loss) earnings $ (89,590) $ (87,705) $ (42,655) $ (78,818) $ 209,178 $ (89,590) Comprehensive (loss) income $ (62,138) $ (64,403) $ (31,136) $ (79,788) $ 175,327 $ (62,138) Three Months Ended November 3, 2018 Net sales $ — $ 453,316 $ 355,710 $ 102,896 $ (160,181) $ 751,741 Cost of sales — 219,036 273,793 73,599 (160,181) 406,247 Gross margin — 234,280 81,917 29,297 — 345,494 Operating expenses 1,443 135,498 131,431 16,786 (14,942) 270,216 Operating (loss) income (1,443) 98,782 (49,514) 12,511 14,942 75,278 Other income and expenses, net — — 14,942 — (14,942) — Interest (expense) income, net (1,062) (20,017) 1,970 559 — (18,550) Loss on extinguishment of debt, net — (9,420) — — — (9,420) (Loss) earnings before income taxes (2,505) 69,345 (32,602) 13,070 — 47,308 (Benefit) provision for income taxes (505) 17,304 (6,848) 2,570 — 12,521 (Loss) earnings before equity in net income of subsidiaries (2,000) 52,041 (25,754) 10,500 — 34,787 Equity in earnings (loss) of subsidiaries 15,875 (36,166) — — 20,291 — Net earnings (loss) from continuing operations 13,875 15,875 (25,754) 10,500 20,291 34,787 Net gain (loss) from discontinued operations, net of tax — — 176 (21,088) — (20,912) Net earnings (loss) $ 13,875 $ 15,875 $ (25,578) $ (10,588) $ 20,291 $ 13,875 Comprehensive income (loss) $ 14,799 $ 20,300 $ (25,578) $ (14,089) $ 19,367 $ 14,799 Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Nine Months Ended November 2, 2019 Net sales $ — $ 1,285,018 $ 1,147,368 $ 433,343 $ (675,441) $ 2,190,288 Cost of sales — 675,840 908,308 349,803 (675,441) 1,258,510 Gross margin — 609,178 239,060 83,540 — 931,778 Operating expenses 2,487 401,100 390,436 62,458 (57,540) 798,941 Operating (loss) income (2,487) 208,078 (151,376) 21,082 57,540 132,837 Other income and expenses, net — — 57,019 521 (57,540) — Interest (expense) income, net (3,178) (53,956) 3,611 (570) — (54,093) Loss on extinguishment of debt, net — (77) — — — (77) (Loss) earnings before income taxes (5,665) 154,045 (90,746) 21,033 — 78,667 (Benefit) provision for income taxes (2,919) 30,428 (14,997) 2,231 — 14,743 (Loss) earnings before equity in net income of subsidiaries (2,746) 123,617 (75,749) 18,802 — 63,924 Equity in (loss) earnings of subsidiaries (45,436) (143,482) — — 188,918 — Net (loss) earnings from continuing operations (48,182) (19,865) (75,749) 18,802 188,918 63,924 Net (loss) gain from discontinued operations, net of tax — (25,571) 2,013 (88,548) — (112,106) Net (loss) earnings $ (48,182) $ (45,436) $ (73,736) $ (69,746) $ 188,918 $ (48,182) Comprehensive (loss) income $ (47,323) $ (38,071) $ (73,736) $ (76,252) $ 188,059 $ (47,323) Nine Months Ended November 3, 2018 Net sales $ — $ 1,343,248 $ 1,095,988 $ 303,913 $ (468,651) $ 2,274,498 Cost of sales — 664,219 834,458 217,142 (468,651) 1,247,168 Gross margin — 679,029 261,530 86,771 — 1,027,330 Operating expenses 3,408 405,344 397,110 51,305 (42,093) 815,074 Operating (loss) income (3,408) 273,685 (135,580) 35,466 42,093 212,256 Other income and expenses, net — — 42,093 — (42,093) — Interest (expense) income, net (2,749) (66,141) 6,115 1,587 — (61,188) Loss on extinguishment of debt, net — (30,253) — — — (30,253) (Loss) earnings before income taxes (6,157) 177,291 (87,372) 37,053 — 120,815 (Benefit) provision for income taxes (1,624) 37,882 (17,075) 6,835 — 26,018 (Loss) earnings before equity in net income of subsidiaries (4,533) 139,409 (70,297) 30,218 — 94,797 Equity in earnings (loss) of subsidiaries 81,555 (57,854) — — (23,701) — Net earnings (loss) from continuing operations 77,022 81,555 (70,297) 30,218 (23,701) 94,797 Net gain (loss) from discontinued operations, net of tax — — 4,247 (22,022) — (17,775) Net earnings (loss) $ 77,022 $ 81,555 $ (66,050) $ 8,196 $ (23,701) $ 77,022 Comprehensive income (loss) $ 59,948 $ 87,072 $ (66,050) $ (14,395) $ (6,627) $ 59,948 Tailored Brands, Inc. Condensed Consolidating Statement of Cash Flows For the Nine Months Ended November 2, 2019 (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 $ 37,836 $ 329,070 $ 34,951 $ (284,857) $ (51,438) $ 65,562 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures — (21,879) (34,687) (6,842) — (63,408) Proceeds from divestiture of business, net — — — 45,034 — 45,034 Intercompany activities — (238,423) — (30,953) 269,376 — Net cash (used in) provided by investing activities — (260,302) (34,687) 7,239 269,376 (18,374) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on new term loan — (9,370) — — — (9,370) Proceeds from asset-based revolving credit facility — 1,065,000 — — — 1,065,000 Payments on asset-based revolving credit facility — (1,046,000) — — — (1,046,000) Repurchase and retirement of senior notes — (54,425) — — — (54,425) Intercompany activities — (23,870) — 241,808 (217,938) — Cash dividends paid (27,938) — — — — (27,938) Proceeds from issuance of common stock 1,220 — — — — 1,220 Tax payments related to vested deferred stock units (1,118) — — — — (1,118) Repurchases of common stock (10,000) — — — — (10,000) Net cash (used in) provided by financing activities (37,836) (68,665) — 241,808 (217,938) (82,631) Effect of exchange rate changes — — — 1,205 — 1,205 Increase (decrease) in cash and cash equivalents — 103 264 (34,605) — (34,238) Cash and cash equivalents at beginning of period — 970 1,496 52,965 — 55,431 Cash and cash equivalents at end of period $ — $ 1,073 $ 1,760 $ 18,360 $ — $ 21,193 Tailored Brands, Inc. Condensed Consolidating Statement of Cash Flows For the Nine Months Ended November 3, 2018 (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 $ 29,194 $ 470,656 $ 11,157 $ (205,357) $ (27,833) $ 277,817 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures — (12,962) (28,853) (5,112) — (46,927) Proceeds from divestiture of business — — 17,755 — — 17,755 Intercompany activities — (228,450) — — 228,450 — Net cash (used in) provided by investing activities — (241,412) (11,098) (5,112) 228,450 (29,172) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on original term loan — (993,420) — — — (993,420) Proceeds from new term loan — 895,500 — — — 895,500 Payments on new term loan — (6,750) — — — (6,750) Proceeds from asset-based revolving credit facility — 465,500 — — — 465,500 Payments on asset-based revolving credit facility — (407,000) — — — (407,000) Repurchase and retirement of senior notes — (199,365) — — — (199,365) Deferred financing costs — (6,713) — — — (6,713) Intercompany activities — (27,833) — 228,450 (200,617) — Cash dividends paid (27,833) — — — — (27,833) Proceeds from issuance of common stock 6,149 — — — — 6,149 Tax payments related to vested deferred stock units (7,510) — — — — (7,510) Net cash (used in) provided by financing activities (29,194) (280,081) — 228,450 (200,617) (281,442) Effect of exchange rate changes — — — (2,385) — (2,385) (Decrease) increase in cash and cash equivalents — (50,837) 59 15,596 — (35,182) Cash and cash equivalents at beginning of period — 51,818 2,180 49,609 — 103,607 Cash and cash equivalents at end of period $ — $ 981 $ 2,239 $ 65,205 $ — $ 68,425 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Nov. 02, 2019 | |
Significant Accounting Policies | |
Basis of Presentation | Basis of 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 February 2, 2019. 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.”) requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual amounts could differ from those estimates. As discussed in Note 2, during the third quarter of 2019, we completed the sale of our corporate apparel business. Amounts presented on the condensed consolidated balance sheet and condensed consolidated statements of (loss) earnings for all prior periods related to the corporate apparel business have been reclassified as discontinued operations. Unless noted otherwise, discussion in these notes to the condensed consolidated financial statements pertain to our continuing operations. In addition, as a result of this change in our organizational structure, we reassessed our segment reporting presentation. We determined that the results from our four merchandising brands: Men’s Wearhouse/Men’s Wearhouse and Tux, Jos. A. Bank, K&G and Moores Clothing for Men (“Moores”) represent separate operating segments that should continue to be aggregated into a reportable segment and, as a result, we have only one reportable segment. Please see Note 6 for revenue information by brand and by major source. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-15, Intangibles-Goodwill and Other-Internal Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Nov. 02, 2019 | |
Discontinued Operations | |
Summary of information attributable to discontinued operations | November 3, February 2, 2018 2019 ASSETS Cash and cash equivalents $ 12,132 $ 22,760 Accounts receivable, net 46,059 38,387 Inventories 102,797 106,340 Other current assets 4,370 3,889 Total current assets 165,358 171,376 Property and equipment, net 14,817 14,856 Other assets 10,714 10,215 Total assets $ 190,889 $ 196,447 LIABILITIES Accounts payable $ 17,844 $ 24,204 Accrued expenses and other current liabilities 15,817 15,821 Total current liabilities 33,661 40,025 Other liabilities 4,452 5,477 Total liabilities $ 38,113 $ 45,502 The following table provides details of the amounts reflected in loss from discontinued operations, net of tax in the condensed consolidated statements of (loss) earnings for the three and nine months ended November 2, 2019 and November 3, 2018 (in thousands): For the Three Months Ended For the Nine Months Ended November 2, 2019 November 3, 2018 November 2, 2019 November 3, 2018 Net sales $ 7,376 $ 61,006 $ 117,444 $ 179,643 Cost of sales 5,507 43,765 85,042 130,112 Selling, general and administrative expenses 2,200 13,427 30,049 41,812 Goodwill impairment charge — 23,991 — 23,991 Loss on sale of corporate apparel business 83,723 — 82,808 — Loss on release of cumulative foreign currency translation adjustment 26,885 — 26,885 — Loss from discontinued operations before taxes (110,939) (20,177) (107,340) (16,272) Income tax expense 6,439 735 4,766 1,503 Loss from discontinued operations, net of tax $ (117,378) $ (20,912) $ (112,106) $ (17,775) The cash flows related to discontinued operations have not been segregated, and are included in the condensed consolidated statement of cash flows. The following table provides selected information on cash flows related to discontinued operations for the nine months ended November 2, 2019 and November 3, 2018 (in thousands): For the Nine Months Ended November 2, 2019 November 3, 2018 Depreciation and amortization $ 3,102 $ 4,382 Capital expenditures 2,677 3,198 Significant non-cash operating and investing items: Goodwill impairment charge — 23,991 Loss on divestiture of business 82,808 — Loss on release of cumulative foreign currency translation adjustment 26,885 — Receivable related to sale of corporate apparel business $ 6,048 $ — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Nov. 02, 2019 | |
(Loss) Earnings Per Share | |
Computation of basic and diluted earnings per common share | The following table sets forth the computation of basic and diluted (loss) earnings per common share (in thousands, except per share amounts): For the Three Months Ended For the Nine Months Ended November 2, November 3, November 2, November 3, 2019 2018 2019 2018 Numerator Net earnings from continuing operations $ 27,788 $ 34,787 $ 63,924 $ 94,797 Loss from discontinued operations, net of tax (117,378) (20,912) (112,106) (17,775) Net (loss) earnings $ (89,590) $ 13,875 $ (48,182) $ 77,022 Denominator Basic weighted-average common shares outstanding 49,803 50,000 50,210 49,766 Dilutive effect of share-based awards 102 722 162 998 Diluted weighted-average common shares outstanding 49,905 50,722 50,372 50,764 Net earnings from continuing operations per common share: Basic $ 0.56 $ 0.70 $ 1.27 $ 1.90 Diluted $ 0.56 $ 0.69 $ 1.27 $ 1.87 Net loss from discontinued operations per common share: Basic $ (2.36) $ (0.42) $ (2.23) $ (0.36) Diluted $ (2.35) $ (0.41) $ (2.23) $ (0.35) Net (loss) earnings per common share: Basic $ (1.80) $ 0.28 $ (0.96) $ 1.55 Diluted $ (1.80) $ 0.27 $ (0.96) $ 1.52 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Nov. 02, 2019 | |
Debt | |
Schedule of long-term debt | The following table provides details on our long-term debt as of November 2, 2019, November 3, 2018 and February 2, 2019 (in thousands): November 2, November 3, February 2, 2019 2018 2019 Term Loan $ 881,630 $ 893,250 $ 891,000 Senior Notes 173,816 228,607 228,607 ABL Facility 67,500 58,500 48,500 Less: Deferred financing costs related to the Term Loan and Senior Notes (2,214) (3,451) (3,246) Total long-term debt, net 1,120,732 1,176,906 1,164,861 Current portion of long-term debt (9,000) (9,000) (11,619) Total long-term debt, net of current portion $ 1,111,732 $ 1,167,906 $ 1,153,242 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Nov. 02, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Schedule of disaggregation of revenue | The following table depicts the disaggregation of revenue by major source (in thousands): Additional net sales information is as follows (in thousands): For the Three Months Ended For the Nine Months Ended November 2, 2019 November 3, 2018 November 2, 2019 November 3, 2018 Net sales: Men's Wearhouse (1) $ 438,088 $ 454,927 $ 1,289,364 $ 1,347,933 Jos. A. Bank 168,432 169,318 501,383 510,821 K&G 71,859 72,610 242,245 245,535 Moores 51,102 54,886 157,296 167,658 MW Cleaners (2) — — — 2,551 Total net sales $ 729,481 $ 751,741 $ 2,190,288 $ 2,274,498 (1) Consists of Men's Wearhouse, Men's Wearhouse and Tux and Joseph Abboud. (2) On March 3, 2018, we completed the divestiture of our MW Cleaners business. Please see Note 3 for additional information. |
Schedule of opening and closing balance of contract liabilities | The following table summarizes the opening and closing balances of our contract liabilities (in thousands): Balance at Increase Balance at February 2, 2019 (Decrease) November 2, 2019 Contract liabilities $ 121,796 $ (3,058) $ 118,738 Balance at Increase Balance at February 3, 2018 (Decrease) November 3, 2018 As Adjusted Contract liabilities $ 139,809 $ 1,139 $ 140,948 |
Cumulative adjustment upon ASC 606 adoption | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Schedule of cumulative effect of changes in adoption of ASU 606 | The following table depicts the cumulative effect of the changes made to our February 3, 2018 balance sheet for the adoption of ASC 606 (in thousands): Reported Adjusted Balance at Impact of Balance at February 3, Adoption of February 3, 2018 ASC 606 2018 Assets: Accounts receivable, net $ 36,288 $ (303) $ 35,985 Other current assets 77,228 2,753 79,981 Current assets - discontinued operations 182,862 (17,837) 165,025 Liabilities: Accrued expenses and other current liabilities 246,946 52,673 299,619 Current liabilities - discontinued operations 62,188 (20,295) 41,893 Deferred taxes, net and other liabilities 160,163 (12,555) 147,608 Non-current liabilities - discontinued operations 4,028 614 4,642 Equity: Accumulated deficit $ (479,166) $ (35,824) $ (514,990) |
Supplemental Cash Flows (Tables
Supplemental Cash Flows (Tables) | 9 Months Ended |
Nov. 02, 2019 | |
Supplemental Cash Flows | |
Schedule of supplemental disclosure of cash flow information | Supplemental disclosure of cash flow information is as follows (in thousands): For the Nine Months Ended November 2, November 3, 2019 2018 Cash paid for interest $ 50,332 $ 55,856 Cash paid for income taxes, net $ 26,811 $ 3,331 Schedule of noncash investing and financing activities: Receivable related to sale of corporate apparel business $ 6,048 $ — |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Nov. 02, 2019 | |
Inventories | |
Schedule of inventories | The following table provides details on our inventories as of November 2, 2019, November 3, 2018 and February 2, 2019 (in thousands): November 2, November 3, February 2, 2019 2018 2019 Finished goods $ 647,715 $ 666,087 $ 581,953 Raw materials and merchandise components 130,627 106,119 142,133 Total inventories $ 778,342 $ 772,206 $ 724,086 |
Other Current Assets, Accrued_2
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities (Tables) | 9 Months Ended |
Nov. 02, 2019 | |
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities | |
Other current assets | The following table provides details on our other current assets as of November 2, 2019, November 3, 2018 and February 2, 2019 (in thousands): November 2, November 3, February 2, 2019 2018 2019 Prepaid expenses $ 42,175 $ 53,176 $ 53,455 Tax receivable 5,111 457 — Assets held for sale 4,949 — — Other 8,543 12,430 13,368 Total other current assets $ 60,778 $ 66,063 $ 66,823 |
Accrued expenses and other current liabilities | The following table provides details on our accrued expenses and other current liabilities as of November 2, 2019, November 3, 2018 and February 2, 2019 (in thousands): November 2, November 3, February 2, 2019 2018 2019 Accrued salary, bonus, sabbatical, vacation and other benefits $ 52,247 $ 67,360 $ 78,297 Loyalty program liabilities 46,781 64,944 44,434 Customer deposits, prepayments and refunds payable 38,248 42,520 38,436 Sales, value added, payroll, property and other taxes payable 30,000 27,094 20,930 Unredeemed gift cards 24,389 26,279 32,178 Accrued workers compensation and medical costs 22,442 25,601 23,893 Unrealized loss on interest rate swaps 6,998 797 1,625 Accrued interest 4,557 6,055 1,828 Accrued royalties 3,651 3,287 1,286 Accrued dividends 889 10,320 10,480 Other 20,504 16,165 15,311 Total accrued expenses and other current liabilities $ 250,706 $ 290,422 $ 268,698 |
Deferred taxes, net and other liabilities | The following table provides details on our deferred taxes, net and other liabilities as of November 2, 2019, November 3, 2018 and February 2, 2019 (in thousands): November 2, November 3, February 2, 2019 2018 2019 Deferred and other income tax liabilities, net $ 45,223 $ 78,930 $ 48,199 Unrealized loss on interest rate swaps 25,245 — 7,605 Deferred rent and landlord incentives — 58,297 57,351 Unfavorable lease liabilities — 2,085 1,797 Other 3,500 4,826 4,593 Total deferred taxes, net and other liabilities $ 73,968 $ 144,138 $ 119,545 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive (Loss) Income (Tables) | 9 Months Ended |
Nov. 02, 2019 | |
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 nine months ended November 2, 2019 (in thousands): Foreign Currency Cash Flow Pension Translation Hedges Plan Total BALANCE— February 2, 2019 $ (29,820) $ (4,314) $ 155 $ (33,979) Other comprehensive loss before reclassifications (5,691) (26,871) — (32,562) Amounts reclassified from accumulated other comprehensive loss — (114) — (114) Release of cumulative foreign currency translation adjustment to loss from discontinued operations (see Note 2) 26,885 — — 26,885 Tax Effect — 6,650 — 6,650 Net current-period other comprehensive loss 21,194 (20,335) — 859 BALANCE— November 2, 2019 $ (8,626) $ (24,649) $ 155 $ (33,120) The following table summarizes the components of accumulated other comprehensive (loss) income for the nine months ended November 3, 2018 (in thousands): Foreign Currency Cash Flow Pension Translation Hedges Plan Total BALANCE— February 3, 2018 $ (11,116) $ 145 $ 189 $ (10,782) Other comprehensive (loss) income before reclassifications (26,023) 9,151 — (16,872) Amounts reclassified from accumulated other comprehensive income — 2,487 — 2,487 Tax Effect — (2,689) — (2,689) Net current-period other comprehensive (loss) income (26,023) 8,949 — (17,074) BALANCE— November 3, 2018 $ (37,139) $ 9,094 $ 189 $ (27,856) |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 9 Months Ended |
Nov. 02, 2019 | |
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 February 2, 2019 939,086 336,906 $ 22.60 $ 18.59 Granted 162,162 — 5.55 — Vested (1) (455,288) (28,686) 21.88 17.43 Forfeited (113,937) (44,459) 22.78 18.44 Non-Vested at November 2, 2019 532,023 263,761 $ 17.97 $ 18.74 (1) Includes 150,785 shares relinquished for tax payments related to vested DSUs for the nine months ended November 2, 2019. |
Stock Options | |
Summary of activity | Weighted- Number of Average Shares Exercise Price Outstanding at February 2, 2019 1,252,072 $ 23.64 Granted 3,188,732 7.49 Exercised — — Forfeited (209,921) 10.52 Expired (56,584) 25.72 Outstanding at November 2, 2019 4,174,299 $ 11.94 Exercisable at November 2, 2019 916,464 $ 24.89 |
Stock Appreciation Rights ("SARs") | |
Summary of activity | Weighted- Number of Average Shares Exercise Price Outstanding at February 2, 2019 — $ — Granted 414,476 7.62 Exercised — — Forfeited — — Expired — — Outstanding at November 2, 2019 414,476 $ 7.62 Exercisable at November 2, 2019 — $ — |
Weighted-average assumptions used to calculate fair value of stock options | For the Nine Months Ended November 2, 2019 Risk-free interest rate 2.36% Expected lives 5.0 years Dividend yield (1) 4.17% Expected volatility 62.53% (1) Awards granted after announcement of the suspension of our dividend assume a dividend yield of 0%. |
Cash Settled Awards | |
Summary of share-based compensation of cash settled awards | The following table summarizes the activity of cash settled awards, based on their initial grant date values, for the nine months ended November 2, 2019 (in thousands): Cash Settled Awards Non-Vested at February 2, 2019 $ 5,072 Granted 4,382 Vested (2,401) Forfeited (683) Non-Vested at November 2, 2019 $ 6,370 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Nov. 02, 2019 | |
Leases | |
Summary of components of lease cost | The components of lease cost are as follows (in thousands): For the Three Months Ended For the Nine Months Ended November 2, 2019 November 2, 2019 Operating lease cost $ 62,098 $ 186,778 Variable lease cost 18,228 55,680 Total lease cost $ 80,326 $ 242,458 |
Summary of supplemental balance sheet information related to leases | Supplemental balance sheet information related to operating leases consists of the following (in thousands): November 2, 2019 Operating lease right-of-use assets $ 908,505 Current portion of operating lease liabilities $ 184,422 Noncurrent portion operating lease liabilities 754,956 Total operating lease liabilities $ 939,378 |
Summary of lease term and discount rate | Lease term and discount rate for operating leases were as follows: November 2, 2019 Weighted average remaining lease term 4.7 years Weighted average discount rate 5.24% |
Summary of supplemental disclosures of cash flow information | Supplemental disclosures of cash flow information consists of the following (in thousands): For the Nine Months Ended November 2, 2019 Cash paid for operating leases $ 191,309 Operating lease assets obtained in exchange for operating lease liabilities $ 1,054,182 |
Summary of the undiscounted annual future minimum lease payments | The following table summarizes the undiscounted annual future minimum lease payments, as of November 2, 2019, for each of the next five years and in the aggregate (in thousands): Operating Leases Year 1 $ 229,077 Year 2 239,009 Year 3 201,540 Year 4 155,022 Year 5 111,953 Thereafter 152,806 Total lease payments $ 1,089,407 Less: Interest (150,029) Present value of lease liabilities $ 939,378 |
Minimum future rental payments under non-cancelable operating leases | As previously disclosed in our 2018 Annual Report on Form 10-K and under the accounting standards then in effect, minimum future rental payments under non-cancelable leases as of February 2, 2019 for each of the next five years and in the aggregate are as follows (in thousands): Fiscal Year Operating Leases 2019 $ 236,539 2020 206,652 2021 173,294 2022 131,800 2023 86,127 Thereafter 140,256 Total lease payments $ 974,668 |
Cumulative adjustment upon ASC 842 adoption (see Note 12) | |
Leases | |
Summary of cumulative effect of the changes made to our February 2, 2019 balance sheet | The following table depicts the cumulative effect of the changes made to our February 2, 2019 balance sheet for the adoption of ASC 842 effective on February 3, 2019 (in thousands): Reported Adjusted Balance at Impact of Balance at February 2, Adoption of February 3, 2019 ASC 842 2019 Assets: Other current assets $ 66,823 $ (20,604) $ 46,219 Current assets - discontinued operations 171,376 (150) 171,226 Operating lease right-of-use assets — 887,064 887,064 Intangible assets, net 153,711 (6,682) 147,029 Non-current assets - discontinued operations 25,071 9,206 34,277 Current Liabilities: Accrued expenses and other current liabilities 268,698 (151) 268,547 Current portion of operating lease liabilities — 181,931 181,931 Current liabilities - discontinued operations 40,025 1,795 41,820 Noncurrent Liabilities: Operating lease liabilities — 737,750 737,750 Deferred taxes, net and other liabilities 119,545 (59,349) 60,196 Noncurrent liabilities - discontinued operations 5,477 7,260 12,737 Equity: Accumulated deficit $ (468,048) $ (402) $ (468,450) |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Nov. 02, 2019 | |
GOODWILL AND INTANGIBLE ASSETS | |
Changes in the net carrying amount of goodwill | Changes in the net carrying amount of goodwill for the nine months ended November 2, 2019 are as follows (in thousands): Total Balance at February 2, 2019 $ 79,491 Translation adjustment (99) Balance at November 2, 2019 $ 79,392 |
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): November 2, November 3, February 2, 2019 2018 2019 Amortizable intangible assets: Carrying amount: Trademarks, tradenames and franchise agreements $ 13,506 $ 13,506 $ 13,506 Favorable leases — 12,695 11,844 Total carrying amount 13,506 26,201 25,350 Accumulated amortization: Trademarks, tradenames and franchise agreements (9,816) (9,628) (9,677) Favorable leases — (5,629) (5,162) Total accumulated amortization (9,816) (15,257) (14,839) Total amortizable intangible assets, net 3,690 10,944 10,511 Indefinite-lived intangible assets: Trademarks and tradename 143,200 143,200 143,200 Total intangible assets, net $ 146,890 $ 154,144 $ 153,711 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Nov. 02, 2019 | |
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 November 2, 2019— Assets: Derivative financial instruments $ — $ — $ — $ — Liabilities: Derivative financial instruments $ — $ 32,287 $ — $ 32,287 November 3, 2018— Assets: Derivative financial instruments $ — $ 11,881 $ — $ 11,881 Liabilities: Derivative financial instruments $ — $ 797 $ — $ 797 February 2, 2019— Assets: Derivative financial instruments $ — $ 2,965 $ — $ 2,965 Liabilities: Derivative financial instruments $ — $ 9,307 $ — $ 9,307 |
Schedule of fair value and carrying value of long-term debt, including current portion | The table below shows the fair value and carrying value of our long-term debt, including current portion (in thousands): November 2, 2019 November 3, 2018 February 2, 2019 Carrying Estimated Carrying Estimated Carrying Estimated Amount (1) Fair Value Amount (1) Fair Value Amount (1) Fair Value Term Loan and Senior Notes, including current portion $ 1,053,232 $ 809,934 $ 1,118,406 $ 1,130,202 $ 1,116,361 $ 1,120,296 (1) million as of November 2, 2019, November 3, 2018 and February 2, 2019, respectively. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Nov. 02, 2019 | |
Derivative Financial Instruments | |
Schedule of derivative instruments recorded in the condensed consolidated balance sheets | The following table provides details on our derivative instruments recorded in the condensed consolidated balance sheets as of November 2, 2019, November 3, 2018 and February 2, 2019 (in thousands): November 2, 2019 November 3, 2018 February 2, 2019 Balance Estimated Balance Estimated Balance Estimated Sheet Location Fair Value Sheet Location Fair Value Sheet Location Fair Value Interest rate contracts Other current assets $ — Other current assets $ 2,316 Other current assets $ 1,610 Interest rate contracts Other assets — Other assets 9,559 Other assets 1,355 Foreign exchange contracts Other current assets — Other current assets 6 Other current assets — Total assets $ — $ 11,881 $ 2,965 Interest rate contracts Accrued expenses and other current liabilities $ 6,998 Accrued expenses and other current liabilities $ 797 Accrued expenses and other current liabilities $ 1,625 Interest rate contracts Deferred taxes, net and other liabilities 25,245 Deferred taxes, net and other liabilities — Deferred taxes, net and other liabilities 7,605 Foreign exchange contracts Accrued expenses and other current liabilities 44 Accrued expenses and other current liabilities — Accrued expenses and other current liabilities 77 Total liabilities $ 32,287 $ 797 $ 9,307 |
Schedule of derivative instruments recorded in the condensed consolidated statements of earnings and comprehensive income (loss) | Amount of Gain/(Loss) Recognized in Other Comprehensive Loss, net of tax Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings For the Three Months Ended For the Three Months Ended November 2, 2019 November 3, 2018 November 2, 2019 November 3, 2018 Derivatives in Cash Flow Hedging Relationships: Interest rate contracts $ (2,051) $ 4,012 Interest expense $ 556 $ 413 Amount of Gain/(Loss) Recognized in Other Comprehensive Loss, net of tax Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings For the Nine Months Ended For the Nine Months Ended November 2, 2019 November 3, 2018 November 2, 2019 November 3, 2018 Derivatives in Cash Flow Hedging Relationships: Interest rate contracts $ (20,189) $ 4,797 Interest expense $ 669 $ 720 |
Condensed Consolidating Infor_2
Condensed Consolidating Information (Tables) | 9 Months Ended |
Nov. 02, 2019 | |
CONDENSED CONSOLIDATING FINANCIAL INFORMATION | |
Condensed Consolidating Balance Sheet | Tailored Brands, Inc. Condensed Consolidating Balance Sheet November 2, 2019 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 1,073 $ 1,760 $ 18,360 $ — $ 21,193 Accounts receivable, net — 30,148 178,025 48,848 (214,965) 42,056 Inventories — 136,033 503,709 138,600 — 778,342 Other current assets 9,287 4,545 37,680 9,266 — 60,778 Total current assets 9,287 171,799 721,174 215,074 (214,965) 902,369 Property and equipment, net — 180,273 203,570 21,157 — 405,000 Operating lease right-of-use assets — 474,788 381,008 52,709 — 908,505 Rental product, net — 76,463 6,836 9,486 — 92,785 Goodwill — 6,160 52,129 21,103 — 79,392 Intangible assets, net — — 146,890 — — 146,890 Investments in subsidiaries 115,082 1,100,045 — — (1,215,127) — Other assets — 4,958 438 3,954 (3,900) 5,450 Total assets $ 124,369 $ 2,014,486 $ 1,512,045 $ 323,483 $ (1,433,992) $ 2,540,391 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 182,242 $ 81,886 $ 92,053 $ 68,949 $ (214,965) $ 210,165 Accrued expenses and other current liabilities 2,671 168,824 63,589 25,550 — 260,634 Current portion of operating lease liabilities — 97,917 74,751 11,754 — 184,422 Current portion of long-term debt — 9,000 — — — 9,000 Total current liabilities 184,913 357,627 230,393 106,253 (214,965) 664,221 Long-term debt, net — 1,111,732 — — — 1,111,732 Operating lease liabilities — 400,518 312,774 41,664 — 754,956 Deferred taxes, net and other liabilities 3,942 29,527 28,063 16,336 (3,900) 73,968 Shareholders' (deficit) equity (64,486) 115,082 940,815 159,230 (1,215,127) (64,486) Total liabilities and shareholders' equity $ 124,369 $ 2,014,486 $ 1,512,045 $ 323,483 $ (1,433,992) $ 2,540,391 Tailored Brands, Inc. Condensed Consolidating Balance Sheet November 3, 2018 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 981 $ 2,133 $ 53,179 $ — $ 56,293 Accounts receivable, net — 25,010 223,001 55,299 (268,673) 34,637 Inventories — 149,157 500,579 122,470 — 772,206 Other current assets 220 26,657 34,718 4,468 — 66,063 Current assets - discontinued operations — — 46,470 118,888 — 165,358 Total current assets 220 201,805 806,901 354,304 (268,673) 1,094,557 Property and equipment, net — 190,905 204,147 21,009 — 416,061 Rental product, net — 83,554 4,367 14,619 — 102,540 Goodwill — 6,160 52,128 21,187 — 79,475 Intangible assets, net — — 154,144 — — 154,144 Investments in subsidiaries 157,114 1,344,748 — — (1,501,862) — Other assets — 16,046 635 80,786 (80,235) 17,232 Non-current assets - discontinued operations — — 2,045 23,486 — 25,531 Total assets $ 157,334 $ 1,843,218 $ 1,224,367 $ 515,391 $ (1,850,770) $ 1,889,540 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 134,700 $ 188,583 $ 88,627 $ 74,877 $ (268,673) $ 218,114 Accrued expenses and other current liabilities 7,952 170,406 100,839 23,585 — 302,782 Current portion of long-term debt — 9,000 — — — 9,000 Current liabilities - discontinued operations — — 6,635 27,026 — 33,661 Total current liabilities 142,652 367,989 196,101 125,488 (268,673) 563,557 Long-term debt, net — 1,167,906 — — — 1,167,906 Deferred taxes, net and other liabilities 5,195 150,209 46,186 22,783 (80,235) 144,138 Non-current liabilities - discontinued operations — — 1,451 3,001 — 4,452 Shareholders' equity 9,487 157,114 980,629 364,119 (1,501,862) 9,487 Total liabilities and shareholders' equity $ 157,334 $ 1,843,218 $ 1,224,367 $ 515,391 $ (1,850,770) $ 1,889,540 Tailored Brands, Inc. Condensed Consolidating Balance Sheet February 2, 2019 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 970 $ 1,434 $ 30,267 $ — $ 32,671 Accounts receivable, net — 23,954 255,091 53,610 (297,969) 34,686 Inventories — 149,923 429,952 144,211 — 724,086 Other current assets — 30,699 37,621 3,773 (5,270) 66,823 Current assets - discontinued operations — — 41,404 129,972 — 171,376 Total current assets — 205,546 765,502 361,833 (303,239) 1,029,642 Property and equipment, net — 194,290 207,934 22,092 — 424,316 Rental product, net — 81,809 3,426 14,535 — 99,770 Goodwill — 6,160 52,128 21,203 — 79,491 Intangible assets, net — — 153,711 — — 153,711 Investments in subsidiaries 160,057 1,234,005 — — (1,394,062) — Other assets — 7,590 640 5,059 (4,800) 8,489 Non-current assets - discontinued operations — — 1,906 23,165 — 25,071 Total assets $ 160,057 $ 1,729,400 $ 1,185,247 $ 447,887 $ (1,702,101) $ 1,820,490 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 142,701 $ 201,799 $ 67,044 $ 91,200 $ (297,969) $ 204,775 Accrued expenses and other current liabilities 6,697 146,683 105,022 29,044 (5,270) 282,176 Current portion of long-term debt — 11,619 — — — 11,619 Current liabilities - discontinued operations — — 7,073 32,952 — 40,025 Total current liabilities 149,398 360,101 179,139 153,196 (303,239) 538,595 Long-term debt, net — 1,153,242 — — — 1,153,242 Deferred taxes, net and other liabilities 7,028 56,000 43,495 17,822 (4,800) 119,545 Non-current liabilities - discontinued operations — — 1,574 3,903 — 5,477 Shareholders' equity 3,631 160,057 961,039 272,966 (1,394,062) 3,631 Total liabilities and shareholders' equity $ 160,057 $ 1,729,400 $ 1,185,247 $ 447,887 $ (1,702,101) $ 1,820,490 |
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 November 2, 2019 Net sales $ — $ 436,671 $ 386,754 $ 69,270 $ (163,214) $ 729,481 Cost of sales — 227,407 309,577 47,683 (163,214) 421,453 Gross margin — 209,264 77,177 21,587 — 308,028 Operating expenses 991 131,183 129,975 14,693 (14,358) 262,484 Operating (loss) income (991) 78,081 (52,798) 6,894 14,358 45,544 Other income and expenses, net — — 14,984 (626) (14,358) — Interest (expense) income, net (939) (17,380) 1,036 (142) — (17,425) Loss on extinguishment of debt, net — (77) — — — (77) (Loss) earnings before income taxes (1,930) 60,624 (36,778) 6,126 — 28,042 (Benefit) provision for income taxes (45) 548 (289) 40 — 254 (Loss) earnings before equity in net income of subsidiaries (1,885) 60,076 (36,489) 6,086 — 27,788 Equity in (loss) earnings of subsidiaries (87,705) (121,473) — — 209,178 — Net (loss) earnings from continuing operations (89,590) (61,397) (36,489) 6,086 209,178 27,788 Net loss from discontinued operations, net of tax — (26,308) (6,166) (84,904) — (117,378) Net (loss) earnings $ (89,590) $ (87,705) $ (42,655) $ (78,818) $ 209,178 $ (89,590) Comprehensive (loss) income $ (62,138) $ (64,403) $ (31,136) $ (79,788) $ 175,327 $ (62,138) Three Months Ended November 3, 2018 Net sales $ — $ 453,316 $ 355,710 $ 102,896 $ (160,181) $ 751,741 Cost of sales — 219,036 273,793 73,599 (160,181) 406,247 Gross margin — 234,280 81,917 29,297 — 345,494 Operating expenses 1,443 135,498 131,431 16,786 (14,942) 270,216 Operating (loss) income (1,443) 98,782 (49,514) 12,511 14,942 75,278 Other income and expenses, net — — 14,942 — (14,942) — Interest (expense) income, net (1,062) (20,017) 1,970 559 — (18,550) Loss on extinguishment of debt, net — (9,420) — — — (9,420) (Loss) earnings before income taxes (2,505) 69,345 (32,602) 13,070 — 47,308 (Benefit) provision for income taxes (505) 17,304 (6,848) 2,570 — 12,521 (Loss) earnings before equity in net income of subsidiaries (2,000) 52,041 (25,754) 10,500 — 34,787 Equity in earnings (loss) of subsidiaries 15,875 (36,166) — — 20,291 — Net earnings (loss) from continuing operations 13,875 15,875 (25,754) 10,500 20,291 34,787 Net gain (loss) from discontinued operations, net of tax — — 176 (21,088) — (20,912) Net earnings (loss) $ 13,875 $ 15,875 $ (25,578) $ (10,588) $ 20,291 $ 13,875 Comprehensive income (loss) $ 14,799 $ 20,300 $ (25,578) $ (14,089) $ 19,367 $ 14,799 Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Nine Months Ended November 2, 2019 Net sales $ — $ 1,285,018 $ 1,147,368 $ 433,343 $ (675,441) $ 2,190,288 Cost of sales — 675,840 908,308 349,803 (675,441) 1,258,510 Gross margin — 609,178 239,060 83,540 — 931,778 Operating expenses 2,487 401,100 390,436 62,458 (57,540) 798,941 Operating (loss) income (2,487) 208,078 (151,376) 21,082 57,540 132,837 Other income and expenses, net — — 57,019 521 (57,540) — Interest (expense) income, net (3,178) (53,956) 3,611 (570) — (54,093) Loss on extinguishment of debt, net — (77) — — — (77) (Loss) earnings before income taxes (5,665) 154,045 (90,746) 21,033 — 78,667 (Benefit) provision for income taxes (2,919) 30,428 (14,997) 2,231 — 14,743 (Loss) earnings before equity in net income of subsidiaries (2,746) 123,617 (75,749) 18,802 — 63,924 Equity in (loss) earnings of subsidiaries (45,436) (143,482) — — 188,918 — Net (loss) earnings from continuing operations (48,182) (19,865) (75,749) 18,802 188,918 63,924 Net (loss) gain from discontinued operations, net of tax — (25,571) 2,013 (88,548) — (112,106) Net (loss) earnings $ (48,182) $ (45,436) $ (73,736) $ (69,746) $ 188,918 $ (48,182) Comprehensive (loss) income $ (47,323) $ (38,071) $ (73,736) $ (76,252) $ 188,059 $ (47,323) Nine Months Ended November 3, 2018 Net sales $ — $ 1,343,248 $ 1,095,988 $ 303,913 $ (468,651) $ 2,274,498 Cost of sales — 664,219 834,458 217,142 (468,651) 1,247,168 Gross margin — 679,029 261,530 86,771 — 1,027,330 Operating expenses 3,408 405,344 397,110 51,305 (42,093) 815,074 Operating (loss) income (3,408) 273,685 (135,580) 35,466 42,093 212,256 Other income and expenses, net — — 42,093 — (42,093) — Interest (expense) income, net (2,749) (66,141) 6,115 1,587 — (61,188) Loss on extinguishment of debt, net — (30,253) — — — (30,253) (Loss) earnings before income taxes (6,157) 177,291 (87,372) 37,053 — 120,815 (Benefit) provision for income taxes (1,624) 37,882 (17,075) 6,835 — 26,018 (Loss) earnings before equity in net income of subsidiaries (4,533) 139,409 (70,297) 30,218 — 94,797 Equity in earnings (loss) of subsidiaries 81,555 (57,854) — — (23,701) — Net earnings (loss) from continuing operations 77,022 81,555 (70,297) 30,218 (23,701) 94,797 Net gain (loss) from discontinued operations, net of tax — — 4,247 (22,022) — (17,775) Net earnings (loss) $ 77,022 $ 81,555 $ (66,050) $ 8,196 $ (23,701) $ 77,022 Comprehensive income (loss) $ 59,948 $ 87,072 $ (66,050) $ (14,395) $ (6,627) $ 59,948 |
Condensed Consolidating Statement of Cash Flows | Tailored Brands, Inc. Condensed Consolidating Statement of Cash Flows For the Nine Months Ended November 2, 2019 (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 $ 37,836 $ 329,070 $ 34,951 $ (284,857) $ (51,438) $ 65,562 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures — (21,879) (34,687) (6,842) — (63,408) Proceeds from divestiture of business, net — — — 45,034 — 45,034 Intercompany activities — (238,423) — (30,953) 269,376 — Net cash (used in) provided by investing activities — (260,302) (34,687) 7,239 269,376 (18,374) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on new term loan — (9,370) — — — (9,370) Proceeds from asset-based revolving credit facility — 1,065,000 — — — 1,065,000 Payments on asset-based revolving credit facility — (1,046,000) — — — (1,046,000) Repurchase and retirement of senior notes — (54,425) — — — (54,425) Intercompany activities — (23,870) — 241,808 (217,938) — Cash dividends paid (27,938) — — — — (27,938) Proceeds from issuance of common stock 1,220 — — — — 1,220 Tax payments related to vested deferred stock units (1,118) — — — — (1,118) Repurchases of common stock (10,000) — — — — (10,000) Net cash (used in) provided by financing activities (37,836) (68,665) — 241,808 (217,938) (82,631) Effect of exchange rate changes — — — 1,205 — 1,205 Increase (decrease) in cash and cash equivalents — 103 264 (34,605) — (34,238) Cash and cash equivalents at beginning of period — 970 1,496 52,965 — 55,431 Cash and cash equivalents at end of period $ — $ 1,073 $ 1,760 $ 18,360 $ — $ 21,193 Tailored Brands, Inc. Condensed Consolidating Statement of Cash Flows For the Nine Months Ended November 3, 2018 (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 $ 29,194 $ 470,656 $ 11,157 $ (205,357) $ (27,833) $ 277,817 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures — (12,962) (28,853) (5,112) — (46,927) Proceeds from divestiture of business — — 17,755 — — 17,755 Intercompany activities — (228,450) — — 228,450 — Net cash (used in) provided by investing activities — (241,412) (11,098) (5,112) 228,450 (29,172) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on original term loan — (993,420) — — — (993,420) Proceeds from new term loan — 895,500 — — — 895,500 Payments on new term loan — (6,750) — — — (6,750) Proceeds from asset-based revolving credit facility — 465,500 — — — 465,500 Payments on asset-based revolving credit facility — (407,000) — — — (407,000) Repurchase and retirement of senior notes — (199,365) — — — (199,365) Deferred financing costs — (6,713) — — — (6,713) Intercompany activities — (27,833) — 228,450 (200,617) — Cash dividends paid (27,833) — — — — (27,833) Proceeds from issuance of common stock 6,149 — — — — 6,149 Tax payments related to vested deferred stock units (7,510) — — — — (7,510) Net cash (used in) provided by financing activities (29,194) (280,081) — 228,450 (200,617) (281,442) Effect of exchange rate changes — — — (2,385) — (2,385) (Decrease) increase in cash and cash equivalents — (50,837) 59 15,596 — (35,182) Cash and cash equivalents at beginning of period — 51,818 2,180 49,609 — 103,607 Cash and cash equivalents at end of period $ — $ 981 $ 2,239 $ 65,205 $ — $ 68,425 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | 9 Months Ended |
Nov. 02, 2019segment | |
Segment Reporting Information [Line Items] | |
Number of Reportable Segments | 1 |
Retail Segment | |
Segment Reporting Information [Line Items] | |
Number Of Merchandising Brands | 4 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
May 02, 2020 | Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | Aug. 16, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Consideration received | $ 45,034,000 | $ 17,755,000 | ||||
Release of cumulative foreign currency translation adjustment to loss from discontinued operations | $ 26,885,000 | $ 26,885,000 | ||||
Goodwill impairment charge | 0 | $ 23,991,000 | $ 23,991,000 | |||
Disposed of by sale | Corporate apparel business | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Consideration | $ 62,000,000 | |||||
Consideration received | $ 49,300,000 | |||||
Consideration to be received | $ 6,000,000 | |||||
Goodwill impairment charge | $ 24,000,000 |
Discontinued Operations - Conde
Discontinued Operations - Condensed Consolidated Statements Of Balance Sheet (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Feb. 02, 2019 | Nov. 03, 2018 |
ASSETS | |||
Cash and cash equivalents | $ 22,760 | $ 12,132 | |
Receivable related to sale of corporate apparel business | $ 6,048 | 38,387 | 46,059 |
Inventories | 106,340 | 102,797 | |
Other current assets | 3,889 | 4,370 | |
Total current assets | 171,376 | 165,358 | |
Property and equipment, net | 14,856 | 14,817 | |
Other assets | 10,215 | 10,714 | |
Total assets | 196,447 | 190,889 | |
LIABILITIES | |||
Accounts payable | 24,204 | 17,844 | |
Accrued expenses and other current liabilities | 15,821 | 15,817 | |
Total current liabilities | 40,025 | 33,661 | |
Other liabilities | 5,477 | 4,452 | |
Total liabilities | $ 45,502 | $ 38,113 |
Discontinued Operations - Con_2
Discontinued Operations - Condensed Consolidated Statements Of Earnings (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Net sales | $ 7,376,000 | $ 61,006,000 | $ 117,444,000 | $ 179,643,000 |
Cost of sales | 5,507,000 | 43,765,000 | 85,042,000 | 130,112,000 |
Selling, general and administrative expenses | 2,200,000 | 13,427,000 | 30,049,000 | 41,812,000 |
Goodwill impairment charge | 0 | 23,991,000 | 23,991,000 | |
Loss on sale of corporate apparel business | 83,723,000 | 82,808,000 | ||
Loss on release of cumulative foreign currency translation adjustment before tax | 26,885,000 | 26,885,000 | ||
Loss from discontinued operations before taxes | (110,939,000) | (20,177,000) | (107,340,000) | (16,272,000) |
Income tax expense | 6,439,000 | 735,000 | 4,766,000 | 1,503,000 |
Loss from discontinued operations, net of tax | $ (117,378,000) | $ (20,912,000) | $ (112,106,000) | $ (17,775,000) |
Discontinued Operations - Con_3
Discontinued Operations - Condensed Consolidated Statements Of Cash flows (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | Feb. 02, 2019 | |
Discontinued Operation, Alternative Cash Flow Information [Abstract] | |||||
Depreciation and amortization | $ 3,102,000 | $ 4,382,000 | |||
Capital expenditures | 2,677,000 | 3,198,000 | |||
Significant non-cash operating and investing items: | |||||
Goodwill impairment charge | $ 0 | $ 23,991,000 | 23,991,000 | ||
Loss on divestiture of business | 82,808,000 | 3,766,000 | |||
Loss on release of cumulative foreign currency translation adjustment | 26,885,000 | ||||
Receivable related to sale of corporate apparel business | $ 6,048,000 | $ 46,059,000 | $ 6,048,000 | $ 46,059,000 | $ 38,387,000 |
Divestiture of MW Cleaners (Det
Divestiture of MW Cleaners (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Feb. 28, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Proceeds from divestiture of business, net | $ 45,034 | $ 17,755 | |
Loss on divestiture | $ (82,808) | (3,766) | |
Disposed of by sale | MW Cleaners business | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Consideration | $ 18,000 | ||
Proceeds from divestiture of business, net | 17,800 | ||
Retail Segment | Disposed of by sale | MW Cleaners business | Selling, general and administrative expenses | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Loss on divestiture | $ (3,800) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | |
Numerator | ||||
Net earnings from continuing operations | $ 27,788 | $ 34,787 | $ 63,924 | $ 94,797 |
Loss from discontinued operations, net of tax | (117,378) | (20,912) | (112,106) | (17,775) |
Net (loss) earnings | $ (89,590) | $ 13,875 | $ (48,182) | $ 77,022 |
Denominator | ||||
Basic weighted-average common shares outstanding (in shares) | 49,803 | 50,000 | 50,210 | 49,766 |
Dilutive effect of share-based awards (in shares) | 102 | 722 | 162 | 998 |
Diluted weighted-average common shares outstanding (in shares) | 49,905 | 50,722 | 50,372 | 50,764 |
Net earnings from continuing operations per common share: | ||||
Basic (in dollars per share) | $ 0.56 | $ 0.70 | $ 1.27 | $ 1.90 |
Diluted (in dollars per share) | 0.56 | 0.69 | 1.27 | 1.87 |
Net loss from discontinued operations per common share: | ||||
Basic (in dollars per share) | (2.36) | (0.42) | (2.23) | (0.36) |
Diluted (in dollars per share) | (2.35) | (0.41) | (2.23) | (0.35) |
Net (loss) earnings per common share: | ||||
Basic (in dollars per share) | (1.80) | 0.28 | (0.96) | 1.55 |
Diluted (in dollars per share) | $ (1.80) | $ 0.27 | $ (0.96) | $ 1.52 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | |
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) | 4.5 | 0.8 | 3.7 | 0.6 |
Debt - Summary, Narrative (Deta
Debt - Summary, Narrative (Details) - USD ($) $ in Millions | Feb. 03, 2018 | Nov. 02, 2019 | Apr. 30, 2018 | Oct. 28, 2017 | Jan. 31, 2015 |
Debt | |||||
Maximum quarterly dividends on common stock per debt covenants | $ 10 | $ 15 | |||
Senior Notes | |||||
Debt | |||||
Aggregate principal amount of debt issued | $ 600 | ||||
Interest rate (as a percent) | 7.00% | ||||
Incremental Term Loan Facilities | |||||
Debt | |||||
Credit facility | $ 250 | ||||
2014 Credit Facilities | Original Term Loan | |||||
Debt | |||||
Aggregate principal amount of debt issued | $ 900 | $ 1,100 | |||
Unamortized OID | 11 | ||||
2014 Credit Facilities | ABL Facility | |||||
Debt | |||||
Credit facility | $ 550 | $ 500 |
Debt - Credit Facilities, Narra
Debt - Credit Facilities, Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Oct. 31, 2018USD ($) | Apr. 30, 2018USD ($) | Oct. 28, 2017USD ($) | Nov. 02, 2019USD ($) | Nov. 03, 2018USD ($) | Nov. 02, 2019USD ($)agreement | Nov. 03, 2018USD ($) | Jan. 31, 2015USD ($) | |
Debt | ||||||||
(Loss) gain on extinguishment of debt | $ (77) | $ (9,420) | $ (77) | $ (30,253) | ||||
Amended New Term Loan | ||||||||
Debt | ||||||||
Number of interest rate swap agreements | agreement | 2 | |||||||
Senior Notes | ||||||||
Debt | ||||||||
Aggregate principal amount of debt issued | $ 600,000 | |||||||
(Loss) gain on extinguishment of debt | (100) | (8,900) | ||||||
Senior Notes | Upon the occurrence of certain specific changes of control | ||||||||
Debt | ||||||||
Redemption price as a percentage of the principal amount of debt | 101.00% | |||||||
Incremental Term Loan Facilities | ||||||||
Debt | ||||||||
Credit facility | $ 250,000 | $ 250,000 | ||||||
2014 Credit Facilities | Original Term Loan | ||||||||
Debt | ||||||||
Aggregate principal amount of debt issued | $ 900,000 | 1,100,000 | ||||||
Fixed rate on refinanced amount (as a percent) | 5.00% | |||||||
Prepayment | $ 93,400 | |||||||
Unamortized OID | 11,000 | |||||||
2014 Credit Facilities | Original Term Loan | LIBOR | ||||||||
Debt | ||||||||
Margin added to Base rate (as a percent) | 3.50% | |||||||
Floor rate (as a percent) | 1.00% | |||||||
2014 Credit Facilities | Amended New Term Loan | London Interbank Offered Rate One Month Libor [Member] | ||||||||
Debt | ||||||||
Debt Instrument, Description of Variable Rate Basis | 1-month LIBOR | |||||||
Variable interest rate basis | 1-month LIBOR | |||||||
2014 Credit Facilities | Amended ABL Facility | LIBOR | ||||||||
Debt | ||||||||
Margin added to Base rate (as a percent) | 1.00% | |||||||
2014 Credit Facilities | ABL Facility | ||||||||
Debt | ||||||||
Credit facility | $ 550,000 | $ 500,000 | ||||||
Variable Rate Interest Rate | Original Term Loan | ||||||||
Debt | ||||||||
Aggregate principal amount of debt issued | $ 593,400 | |||||||
Fixed Rate Interest Rate | Original Term Loan | ||||||||
Debt | ||||||||
Aggregate principal amount of debt issued | $ 400,000 | |||||||
Fixed rate on refinanced amount (as a percent) | 5.00% | |||||||
2018 Credit Facilities | Amended New Term Loan | ||||||||
Debt | ||||||||
Reduction in the interest rate margin | 0.25% | |||||||
Total variable interest rate (as a percent) | 5.02% | 5.02% | ||||||
Deferred financing costs | $ 1,100 | |||||||
Weighted average interest rate (as a percent) | 5.63% | 5.63% | ||||||
2018 Credit Facilities | Amended New Term Loan | LIBOR | ||||||||
Debt | ||||||||
Margin added to Base rate (as a percent) | 3.25% | 3.25% | ||||||
Actual LIBOR rate (as a percent) | 1.77% | 1.77% | ||||||
2018 Credit Facilities | Amended New Term Loan | Base Rate | ||||||||
Debt | ||||||||
Margin added to Base rate (as a percent) | 2.25% | |||||||
2018 Credit Facilities | Amended New Term Loan | Interest rate swap | ||||||||
Debt | ||||||||
Notional amount of interest rate swaps | $ 705,000 | $ 705,000 | ||||||
Percentage of variable interest rate converted to a fixed rate | 80.00% | |||||||
2018 Credit Facilities | New Term Loan | ||||||||
Debt | ||||||||
Aggregate principal amount of debt issued | $ 900,000 | |||||||
Secured leverage ratio | 2.5 | 2.5 | ||||||
Credit facility | $ 250,000 | $ 250,000 | ||||||
Amortized percentage | 1.00% | 1.00% | ||||||
(Loss) gain on extinguishment of debt | $ 9,400 | $ 21,300 | ||||||
Unamortized OID | $ 4,500 | |||||||
2018 Credit Facilities | New Term Loan | LIBOR | ||||||||
Debt | ||||||||
Floor rate (as a percent) | 1.00% | 1.00% | ||||||
2018 Credit Facilities | New Term Loan | Base Rate | ||||||||
Debt | ||||||||
Floor rate (as a percent) | 2.00% | 2.00% | ||||||
Amended ABL Facility [Member] | Amended ABL Facility | ||||||||
Debt | ||||||||
Credit facility | 550,000 | |||||||
Weighted average interest rate (as a percent) | 3.50% | 3.50% | ||||||
Total credit facility with expansion feature | $ 650,000 | |||||||
Fees on unused commitments (as a percent) | 0.25% | |||||||
Letters of credit issued and outstanding | $ 67,500 | $ 67,500 | ||||||
Amended ABL Facility [Member] | Amended ABL Facility | Line of Credit | ||||||||
Debt | ||||||||
Letters of credit issued and outstanding | 26,700 | 26,700 | ||||||
Amended ABL Facility [Member] | Amended ABL Facility | LIBOR | ||||||||
Debt | ||||||||
Period for variable rate basis | 1 month | |||||||
Amended ABL Facility [Member] | Amended ABL Facility | Federal funds rate | ||||||||
Debt | ||||||||
Margin added to Base rate (as a percent) | 0.50% | |||||||
Amended ABL Facility [Member] | Amended ABL Facility | Minimum | ||||||||
Debt | ||||||||
Fees on amounts available to be drawn (as a percent) | 1.25% | |||||||
Amended ABL Facility [Member] | Amended ABL Facility | Maximum | ||||||||
Debt | ||||||||
Varying interest rate margin (as a percent) | 1.75% | |||||||
Fees on amounts available to be drawn (as a percent) | 1.75% | |||||||
Maximum borrowing outstanding under the ABL Facility during the period | 100,000 | |||||||
Amended ABL Facility [Member] | ABL Facility | ||||||||
Debt | ||||||||
Borrowings available under credit facility | $ 455,800 | $ 455,800 |
Debt - Senior Notes, Narrative
Debt - Senior Notes, Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | |
Debt | ||||
(Loss) gain on extinguishment of debt | $ (77) | $ (9,420) | $ (77) | $ (30,253) |
Senior Notes | ||||
Debt | ||||
Partial redemption | $ 175,000 | 175,000 | ||
Repurchase and retired amount | 54,800 | 17,600 | ||
(Loss) gain on extinguishment of debt | (100) | (8,900) | ||
Unamortized Debt Issuance Expense | 500 | $ 500 | ||
Loss upon repurchase | (6,700) | |||
Unamortized deferred financing costs | $ 2,200 | |||
Gains (Losses) On Repurchase Of Debt Instrument | $ 400 |
Debt - Components (Details)
Debt - Components (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Feb. 02, 2019 | Nov. 03, 2018 | Oct. 31, 2018 |
Debt | ||||
Total long-term debt, net | $ 1,120,732 | $ 1,164,861 | $ 1,176,906 | |
Current portion of long-term debt | (9,000) | (11,619) | (9,000) | |
Total long-term debt, net of current portion | 1,111,732 | 1,153,242 | 1,167,906 | |
Senior Notes | ||||
Debt | ||||
Long-term debt | 173,816 | 228,607 | 228,607 | |
Amended ABL Facility | ||||
Debt | ||||
Long-term debt | 67,500 | 48,500 | 58,500 | |
Term Loan and Senior Notes | ||||
Debt | ||||
Less: Deferred financing costs | (2,214) | (3,246) | (3,451) | |
2018 Credit Facilities | Amended New Term Loan | ||||
Debt | ||||
Long-term debt | $ 881,630 | $ 891,000 | $ 893,250 | |
Less: Deferred financing costs | $ (1,100) |
Revenue Recognition - Adoption
Revenue Recognition - Adoption of ASC 606 (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Feb. 02, 2019 | Nov. 03, 2018 | Feb. 03, 2018 |
Assets | ||||
Accounts receivable, net | $ 42,056 | $ 34,686 | $ 34,637 | |
Other current assets | 60,778 | 66,823 | 66,063 | |
Current assets - discontinued operations | 171,376 | 165,358 | ||
Liabilities | ||||
Accrued expenses and other current liabilities | 250,706 | 268,698 | 290,422 | |
Current liabilities - discontinued operations | 40,025 | 33,661 | ||
Deferred taxes, net and other liabilities | 73,968 | 119,545 | 144,138 | |
Non-current liabilities - discontinued operations | 5,477 | 4,452 | ||
Equity: | ||||
Accumulated deficit | $ (534,979) | $ (468,048) | $ (464,993) | |
Cumulative adjustment upon ASC 606 adoption | ||||
Assets | ||||
Accounts receivable, net | $ 35,985 | |||
Other current assets | 79,981 | |||
Current assets - discontinued operations | 165,025 | |||
Liabilities | ||||
Accrued expenses and other current liabilities | 299,619 | |||
Current liabilities - discontinued operations | 41,893 | |||
Deferred taxes, net and other liabilities | 147,608 | |||
Non-current liabilities - discontinued operations | 4,642 | |||
Equity: | ||||
Accumulated deficit | (514,990) | |||
Impact of Adoption of ASU 606 | Cumulative adjustment upon ASC 606 adoption | ||||
Assets | ||||
Accounts receivable, net | (303) | |||
Other current assets | 2,753 | |||
Current assets - discontinued operations | (17,837) | |||
Liabilities | ||||
Accrued expenses and other current liabilities | 52,673 | |||
Current liabilities - discontinued operations | (20,295) | |||
Deferred taxes, net and other liabilities | (12,555) | |||
Non-current liabilities - discontinued operations | 614 | |||
Equity: | ||||
Accumulated deficit | (35,824) | |||
Reported Balance | Cumulative adjustment upon ASC 606 adoption | ||||
Assets | ||||
Accounts receivable, net | 36,288 | |||
Other current assets | 77,228 | |||
Current assets - discontinued operations | 182,862 | |||
Liabilities | ||||
Accrued expenses and other current liabilities | 246,946 | |||
Current liabilities - discontinued operations | 62,188 | |||
Deferred taxes, net and other liabilities | 160,163 | |||
Non-current liabilities - discontinued operations | 4,028 | |||
Equity: | ||||
Accumulated deficit | $ (479,166) |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total net sales | $ 729,481 | $ 751,741 | $ 2,190,288 | $ 2,274,498 |
Rental services | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 120,021 | 124,697 | 334,090 | 350,019 |
Retail clothing product | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 573,854 | 588,447 | 1,749,533 | 1,807,879 |
Men's tailored clothing product | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 326,036 | 342,972 | 1,001,467 | 1,055,213 |
Men's non-tailored clothing product | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 229,514 | 227,069 | 687,257 | 691,780 |
Women's clothing product | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 15,029 | 15,109 | 51,207 | 52,138 |
Other | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 3,275 | 3,297 | 9,602 | 8,748 |
Total alteration and other services | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 35,606 | 38,597 | 106,665 | 116,600 |
Alteration services | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | $ 35,606 | $ 38,597 | $ 106,665 | 114,049 |
Retail dry cleaning services | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | $ 2,551 |
Revenue Recognition - Other Var
Revenue Recognition - Other Various Policies (Details) | 9 Months Ended |
Nov. 02, 2019USD ($)item | |
Loyalty Program | |
Points equivalency to dollars spent ratio | 1 |
Loyalty point threshold | item | 500 |
Amount of rewards certificates | $ 50 |
Period after which reward certificates earned must be redeemed | 6 months |
Sales Returns And Allowances For Goods [Abstract] | |
Refund liability current | $ 5,800,000 |
Right to recover | $ 2,800,000 |
Revenue Recognition - Sales by
Revenue Recognition - Sales by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | |
Net sales: | ||||
Total net sales | $ 729,481 | $ 751,741 | $ 2,190,288 | $ 2,274,498 |
Retail Segment | Men's Wearhouse | ||||
Net sales: | ||||
Total net sales | 438,088 | 454,927 | 1,289,364 | 1,347,933 |
Retail Segment | Jos. A. Bank | ||||
Net sales: | ||||
Total net sales | 168,432 | 169,318 | 501,383 | 510,821 |
Retail Segment | K&G | ||||
Net sales: | ||||
Total net sales | 71,859 | 72,610 | 242,245 | 245,535 |
Retail Segment | Moores | ||||
Net sales: | ||||
Total net sales | $ 51,102 | $ 54,886 | $ 157,296 | 167,658 |
Retail Segment | MW Cleaners | ||||
Net sales: | ||||
Total net sales | $ 2,551 |
Revenue Recognition - Contract
Revenue Recognition - Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | |
Revenue Recognition | ||||
Beginning Balance | $ 121,796 | $ 139,809 | ||
Increase (Decrease) | (3,058) | 1,139 | ||
Ending Balance | $ 118,738 | $ 140,948 | 118,738 | 140,948 |
Revenue recognized included in contract liability balance | $ 8,200 | $ 10,100 | $ 75,600 | $ 75,000 |
Supplemental Cash Flows (Detail
Supplemental Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Feb. 02, 2019 | |
Supplemental Cash Flows | |||
Cash paid for interest | $ 50,332 | $ 55,856 | |
Cash paid for income taxes, net | 26,811 | 3,331 | |
Schedule of noncash investing and financing activities: | |||
Receivable related to sale of corporate apparel business | 6,048 | 46,059 | $ 38,387 |
Unpaid capital expenditure purchases | |||
Unpaid capital expenditure purchases | $ 8,300 | $ 12,800 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Feb. 02, 2019 | Nov. 03, 2018 |
Inventories | |||
Finished goods | $ 647,715 | $ 581,953 | $ 666,087 |
Raw materials and merchandise components | 130,627 | 142,133 | 106,119 |
Total inventories | $ 778,342 | $ 724,086 | $ 772,206 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | |
Income Taxes | ||||
Effective income tax rate (as a percent) | 0.90% | 26.50% | 18.70% | 21.50% |
Release of state valuation allowances | $ (5.9) | $ (5.4) |
Other Current Assets, Accrued_3
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Feb. 02, 2019 | Nov. 03, 2018 |
Other current assets | |||
Prepaid expenses | $ 42,175 | $ 53,455 | $ 53,176 |
Tax receivable | 5,111 | 457 | |
Assets held for sale | 4,949 | ||
Other | 8,543 | 13,368 | 12,430 |
Total other current assets | 60,778 | 66,823 | 66,063 |
Accrued expenses and other current liabilities | |||
Accrued salary, bonus, sabbatical, vacation and other benefits | 52,247 | 78,297 | 67,360 |
Loyalty program liabilities | 46,781 | 44,434 | 64,944 |
Customer deposits, prepayments and refunds payable | 38,248 | 38,436 | 42,520 |
Sales, value added, payroll, property and other taxes payable | 30,000 | 20,930 | 27,094 |
Unredeemed gift cards | 24,389 | 32,178 | 26,279 |
Accrued workers compensation and medical costs | 22,442 | 23,893 | 25,601 |
Unrealized loss on interest rate swaps | 6,998 | 1,625 | 797 |
Accrued interest | 4,557 | 1,828 | 6,055 |
Accrued royalties | 3,651 | 1,286 | 3,287 |
Accrued dividends | 889 | 10,480 | 10,320 |
Other | 20,504 | 15,311 | 16,165 |
Total accrued expenses and other current liabilities | 250,706 | 268,698 | 290,422 |
Deferred taxes and other liabilities | |||
Deferred and other income tax liabilities, net | 45,223 | 48,199 | 78,930 |
Unrealized loss on interest rate swaps | 25,245 | 7,605 | |
Deferred rent and landlord incentives | 57,351 | 58,297 | |
Unfavorable lease liabilities | 1,797 | 2,085 | |
Other | 3,500 | 4,593 | 4,826 |
Total deferred taxes, net and other liabilities | $ 73,968 | $ 119,545 | $ 144,138 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Nov. 02, 2019 | Nov. 02, 2019 | Nov. 03, 2018 | |
Change in accumulated other comprehensive (loss) income components | |||
Balance at the beginning of the period | $ 3,631 | ||
Release of cumulative foreign currency translation adjustment to loss from discontinued operations | $ 26,885 | 26,885 | |
Balance at the end of the period | (64,486) | (64,486) | $ 9,487 |
Accumulated Other Comprehensive Loss | |||
Change in accumulated other comprehensive (loss) income components | |||
Balance at the beginning of the period | (33,979) | (10,782) | |
Other comprehensive (loss) income before reclassifications | (32,562) | (16,872) | |
Amounts reclassified from accumulated other comprehensive (loss) income | (114) | 2,487 | |
Release of cumulative foreign currency translation adjustment to loss from discontinued operations | 26,885 | 26,885 | |
Tax Effect | 6,650 | (2,689) | |
Net current-period other comprehensive (loss) income | 859 | (17,074) | |
Balance at the end of the period | (33,120) | (33,120) | (27,856) |
Foreign Currency Translation | |||
Change in accumulated other comprehensive (loss) income components | |||
Balance at the beginning of the period | (29,820) | (11,116) | |
Other comprehensive (loss) income before reclassifications | (5,691) | (26,023) | |
Release of cumulative foreign currency translation adjustment to loss from discontinued operations | 26,885 | ||
Net current-period other comprehensive (loss) income | 21,194 | (26,023) | |
Balance at the end of the period | (8,626) | (8,626) | (37,139) |
Cash Flow Hedges | |||
Change in accumulated other comprehensive (loss) income components | |||
Balance at the beginning of the period | (4,314) | 145 | |
Other comprehensive (loss) income before reclassifications | (26,871) | 9,151 | |
Amounts reclassified from accumulated other comprehensive (loss) income | (114) | 2,487 | |
Tax Effect | 6,650 | (2,689) | |
Net current-period other comprehensive (loss) income | (20,335) | 8,949 | |
Balance at the end of the period | (24,649) | (24,649) | 9,094 |
Pension Plan | |||
Change in accumulated other comprehensive (loss) income components | |||
Balance at the beginning of the period | 155 | 189 | |
Balance at the end of the period | $ 155 | $ 155 | $ 189 |
Share Repurchases (Details)
Share Repurchases (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended |
Nov. 02, 2019 | Feb. 02, 2019 | |
Share Repurchases | ||
Shares repurchased | $ 10 | |
Shares repurchased and held in treasury | 2,336,852 | 0 |
Remaining balance available | $ 38 | |
Average price per share of common stock repurchased (in dollars per share) | $ 4.28 |
Share-Based Compensation Plan_2
Share-Based Compensation Plans - Deferred Stock Units, Performance Units and Restricted Stock (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Nov. 02, 2019USD ($)$ / sharesshares | |
Deferred stock units | |
Additional information | |
Shares relinquished for tax withholding | 150,785 |
Unrecognized compensation cost | |
Unrecognized compensation cost, non-vested awards | $ | $ 7.6 |
Compensation recognition period, non-vested awards | 1 year 1 month 6 days |
Time-Based DSUs | |
Awards | |
Non-Vested at the beginning of the period (in shares) | 939,086 |
Granted (in shares) | 162,162 |
Vested (in shares) | (455,288) |
Forfeited (in shares) | (113,937) |
Non-Vested at the end of the period (in shares) | 532,023 |
Weighted-Average Grant-Date Fair Value | |
Non-Vested at the beginning of the period (in dollars per share) | $ / shares | $ 22.60 |
Granted (in dollars per share) | $ / shares | 5.55 |
Vested (in dollars per share) | $ / shares | 21.88 |
Forfeited (in dollars per share) | $ / shares | 22.78 |
Non-Vested at the end of the period (in dollars per share) | $ / shares | $ 17.97 |
Performance-Based DSUs | |
Awards | |
Non-Vested at the beginning of the period (in shares) | 336,906 |
Vested (in shares) | (28,686) |
Forfeited (in shares) | (44,459) |
Non-Vested at the end of the period (in shares) | 263,761 |
Weighted-Average Grant-Date Fair Value | |
Non-Vested at the beginning of the period (in dollars per share) | $ / shares | $ 18.59 |
Vested (in dollars per share) | $ / shares | 17.43 |
Forfeited (in dollars per share) | $ / shares | 18.44 |
Non-Vested at the end of the period (in dollars per share) | $ / shares | $ 18.74 |
Share-Based Compensation Plan_3
Share-Based Compensation Plans - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | |
Share-based compensation | ||||
Share-based compensation expense | $ 3.2 | $ 2.9 | $ 7.5 | $ 14.6 |
Stock Options | ||||
Number of Shares | ||||
Outstanding at the beginning of the period (in shares) | 1,252,072 | |||
Granted (in shares) | 3,188,732 | |||
Forfeited (in shares) | (209,921) | |||
Expired (in shares) | (56,584) | |||
Outstanding at the end of the period (in shares) | 4,174,299 | 4,174,299 | ||
Exercisable at the end of the period (in shares) | 916,464 | 916,464 | ||
Weighted-Average Exercise Price | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 23.64 | |||
Granted (in dollars per share) | 7.49 | |||
Forfeited (in dollars per share) | 10.52 | |||
Expired (in dollars per share) | 25.72 | |||
Outstanding at the end of the period (in dollars per share) | $ 11.94 | 11.94 | ||
Exercisable at the end of the period (in dollars per share) | $ 24.89 | 24.89 | ||
Additional disclosures | ||||
Weighted-average grant date fair value of stock options granted (in dollars per share) | $ 2.99 | |||
Stock Appreciation Rights ("SARs") | ||||
Number of Shares | ||||
Granted (in shares) | 414,476 | |||
Outstanding at the end of the period (in shares) | 414,476 | 414,476 | ||
Weighted-Average Exercise Price | ||||
Granted (in dollars per share) | $ 7.62 | |||
Outstanding at the end of the period (in dollars per share) | $ 7.62 | 7.62 | ||
Additional disclosures | ||||
Weighted-average grant date fair value of stock options granted (in dollars per share) | $ 3.01 | |||
Assumptions used to value stock options | ||||
Risk-free interest rate (as a percent) | 2.36% | |||
Expected lives (in years) | 5 years | |||
Dividend yield (as a percent) | 4.17% | |||
Expected volatility (as a percent) | 62.53% | |||
Stock Options And Stock Appreciation Rights ("SARs") | ||||
Assumptions used to value stock options | ||||
Dividend yield (as a percent) | 0.00% | |||
Unrecognized compensation cost | ||||
Unrecognized compensation cost, non-vested awards | $ 9.8 | $ 9.8 | ||
Compensation recognition period, non-vested awards | 1 year 7 months 6 days | |||
Chief Executive Officer | ||||
Share-based compensation | ||||
Share-based compensation expense | $ 0.7 | $ 0.7 |
Share-Based Compensation Plan_4
Share-Based Compensation Plans - Cash Settled Awards (Details) shares in Thousands, $ in Millions | 9 Months Ended |
Nov. 02, 2019USD ($)shares | |
Stock Appreciation Rights ("SARs") | |
Share-based compensation | |
Vesting period (in years) | 3 years |
Cash Settled Awards | |
Share-based compensation | |
Vesting period (in years) | 3 years |
Liability associated with the cash settled awards | $ | $ 1.6 |
Awards | |
Non-Vested at the beginning of the period (in shares) | 5,072 |
Granted (in shares) | 4,382 |
Vested (in shares) | (2,401) |
Forfeited (in shares) | (683) |
Non-Vested at the end of the period (in shares) | 6,370 |
Unrecognized compensation cost | |
Unrecognized compensation cost, non-vested awards | $ | $ 2.8 |
Compensation recognition period, non-vested awards | 1 year 7 months 6 days |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | Feb. 03, 2019 | Nov. 02, 2019 | May 04, 2019 | Feb. 02, 2019 | Nov. 03, 2018 |
Practical Expedients [Abstract] | |||||
Practical expedients package | true | ||||
Practical expedients hindsight | false | ||||
Land easement practical expedient | true | ||||
Single lease components | true | ||||
Assets | |||||
Other current assets | $ 60,778 | $ 66,823 | $ 66,063 | ||
Current assets - discontinued operations | 171,376 | 165,358 | |||
Intangible assets, net | 146,890 | 153,711 | 154,144 | ||
Non-current assets - discontinued operations | 25,071 | 25,531 | |||
Current Liabilities: | |||||
Accrued expenses and other current liabilities | 250,706 | 268,698 | 290,422 | ||
Current liabilities - discontinued operations | 40,025 | 33,661 | |||
Noncurrent Liabilities: | |||||
Deferred taxes, net and other liabilities | 73,968 | 119,545 | 144,138 | ||
Non-current liabilities - discontinued operations | 5,477 | 4,452 | |||
Equity: | |||||
Accumulated deficit | (534,979) | (468,048) | $ (464,993) | ||
Adoption Of ASC 842: | |||||
Current portion of operating lease liabilities | 184,422 | ||||
Noncurrent portion operating lease liabilities | 754,956 | ||||
Operating lease liabilities | 939,378 | ||||
Operating lease right-of-use assets | $ 908,505 | ||||
Cumulative adjustment upon ASC 842 adoption (see Note 12) | |||||
Assets | |||||
Other current assets | $ 46,219 | ||||
Current assets - discontinued operations | 171,226 | ||||
Operating lease right-of-use assets | 887,064 | ||||
Intangible assets, net | 147,029 | ||||
Non-current assets - discontinued operations | 34,277 | ||||
Current Liabilities: | |||||
Accrued expenses and other current liabilities | 268,547 | ||||
Current portion of operating lease liabilities | 181,931 | ||||
Current liabilities - discontinued operations | 41,820 | ||||
Noncurrent Liabilities: | |||||
Operating lease liabilities excluding discontinued operations | 737,750 | ||||
Deferred taxes, net and other liabilities | 60,196 | ||||
Non-current liabilities - discontinued operations | 12,737 | ||||
Equity: | |||||
Accumulated deficit | (468,450) | ||||
Adoption Of ASC 842: | |||||
Cumulative effect of initially applying ASC 842 | $ (402) | ||||
Previously Reported Balance | Cumulative adjustment upon ASC 842 adoption (see Note 12) | |||||
Assets | |||||
Other current assets | 66,823 | ||||
Current assets - discontinued operations | 171,376 | ||||
Intangible assets, net | 153,711 | ||||
Non-current assets - discontinued operations | 25,071 | ||||
Current Liabilities: | |||||
Accrued expenses and other current liabilities | 268,698 | ||||
Current liabilities - discontinued operations | 40,025 | ||||
Noncurrent Liabilities: | |||||
Deferred taxes, net and other liabilities | 119,545 | ||||
Non-current liabilities - discontinued operations | 5,477 | ||||
Equity: | |||||
Accumulated deficit | $ (468,048) | ||||
Impact of Adoption | Cumulative adjustment upon ASC 842 adoption (see Note 12) | |||||
Assets | |||||
Other current assets | (20,604) | ||||
Current assets - discontinued operations | (150) | ||||
Operating lease right-of-use assets | 887,064 | ||||
Intangible assets, net | (6,682) | ||||
Non-current assets - discontinued operations | 9,206 | ||||
Current Liabilities: | |||||
Accrued expenses and other current liabilities | (151) | ||||
Current portion of operating lease liabilities | 181,931 | ||||
Current liabilities - discontinued operations | 1,795 | ||||
Noncurrent Liabilities: | |||||
Operating lease liabilities excluding discontinued operations | 737,750 | ||||
Deferred taxes, net and other liabilities | (59,349) | ||||
Non-current liabilities - discontinued operations | 7,260 | ||||
Equity: | |||||
Accumulated deficit | (402) | ||||
Adoption Of ASC 842: | |||||
Current portion of operating lease liabilities | 183,700 | ||||
Noncurrent portion operating lease liabilities | 745,100 | ||||
Operating lease liabilities | 928,800 | ||||
Operating lease right-of-use assets | $ 896,300 |
Leases - Lease Information (Det
Leases - Lease Information (Details) | 9 Months Ended |
Nov. 02, 2019 | |
Lessee, Lease, Description [Line Items] | |
Renewal options | true |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Initial term | 5 years |
Renewal term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Initial term | 10 years |
Renewal term | 10 years |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Nov. 02, 2019 | Nov. 02, 2019 | |
Components of lease cost | ||
Operating lease cost | $ 62,098 | $ 186,778 |
Variable lease cost | 18,228 | 55,680 |
Total lease cost | $ 80,326 | $ 242,458 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate and Supplemental Disclosures of Cash Flow Information (Details) $ in Thousands | 9 Months Ended |
Nov. 02, 2019USD ($) | |
Leases | |
Weighted average remaining lease term | 4 years 8 months 12 days |
Weighted average discount rate | 5.24% |
Cash paid for operating leases | $ 191,309 |
Operating lease assets obtained in exchange for operating lease liabilities | 1,054,182 |
Operating lease liabilities | 939,378 |
Finance lease | $ 0 |
Leases - Undiscounted Annual Fu
Leases - Undiscounted Annual Future Minimum Lease Payments and Minimum Future Rental Payments (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Feb. 02, 2019 |
Leases | ||
Year 1 | $ 229,077 | |
Year 2 | 239,009 | |
Year 3 | 201,540 | |
Year 4 | 155,022 | |
Year 5 | 111,953 | |
Thereafter | 152,806 | |
Total lease payments | 1,089,407 | |
Less: Interest | (150,029) | |
Present value of lease liabilities | $ 939,378 | |
2019 | $ 236,539 | |
2020 | 206,652 | |
2021 | 173,294 | |
2022 | 131,800 | |
2023 | 86,127 | |
Thereafter | 140,256 | |
Total lease payments | $ 974,668 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | |
Changes in the net carrying amount of goodwill | ||||
Balance at the beginning of the period | $ 79,491,000 | |||
Goodwill impairment charge | $ 0 | $ 23,991,000 | $ 23,991,000 | |
Translation adjustment | (99,000) | |||
Balance at the end of the period | $ 79,392,000 | $ 79,475,000 | $ 79,392,000 | $ 79,475,000 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Feb. 02, 2019 | Nov. 03, 2018 |
Amortizable intangible assets: | |||
Carrying amount | $ 13,506 | $ 25,350 | $ 26,201 |
Accumulated amortization | (9,816) | (14,839) | (15,257) |
Total amortizable intangible assets, net | 3,690 | 10,511 | 10,944 |
Indefinite-lived intangible assets: | |||
Trademarks and tradename | 143,200 | 143,200 | 143,200 |
Total intangible assets, net | 146,890 | 153,711 | 154,144 |
Trademarks, tradenames and franchise agreements | |||
Amortizable intangible assets: | |||
Carrying amount | 13,506 | 13,506 | 13,506 |
Accumulated amortization | $ (9,816) | (9,677) | (9,628) |
Favorable leases | |||
Amortizable intangible assets: | |||
Carrying amount | 11,844 | 12,695 | |
Accumulated amortization | $ (5,162) | $ (5,629) |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | |
Intangible asset amortization expense | ||||
Pre-tax amortization expense associated with intangible assets | $ 400 | $ 100 | $ 1,100 | |
Pre-tax amortization expense estimated for fiscal year 2020 | $ 200 | 200 | ||
Pre-tax amortization expense estimated for fiscal year 2021 | 200 | 200 | ||
Pre-tax amortization expense estimated for fiscal year 2022 | 200 | 200 | ||
Pre-tax amortization expense estimated for fiscal year 2023 | 200 | 200 | ||
Pre-tax amortization expense estimated for fiscal year 2024 | 200 | 200 | ||
Intangible impairment charge | 0 | |||
Maximum | ||||
Intangible asset amortization expense | ||||
Pre-tax amortization expense associated with intangible assets | 100 | |||
Pre-tax amortization expense estimated for the remainder of fiscal year 2019 | $ 100 | $ 100 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring and Non-Recurring (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | Feb. 02, 2019 | |
Liabilities: | |||||
Asset impairment charges | $ 1,185 | $ 504 | |||
Recurring | |||||
Assets: | |||||
Derivative financial instruments | $ 11,881 | 11,881 | $ 2,965 | ||
Liabilities: | |||||
Derivative financial instruments | $ 32,287 | 797 | 32,287 | 797 | 9,307 |
Recurring | Level 2 | |||||
Assets: | |||||
Derivative financial instruments | 11,881 | 11,881 | 2,965 | ||
Liabilities: | |||||
Derivative financial instruments | 32,287 | 797 | 32,287 | 797 | $ 9,307 |
Selling, general and administrative expenses | |||||
Liabilities: | |||||
Asset impairment charges | $ 900 | $ 200 | 1,200 | 500 | |
Cost of sales | |||||
Liabilities: | |||||
Asset impairment charges | $ 2,900 | $ 4,000 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Feb. 02, 2019 | Nov. 03, 2018 |
Fair Value of Financial Instruments | |||
Carrying Amount | $ 1,120,732 | $ 1,164,861 | $ 1,176,906 |
Deferred financing costs | 2,200 | 3,200 | 3,500 |
Reported Value Measurement [Member] | Term Loan and Senior Notes | Level 1 and Level 2 | |||
Fair Value of Financial Instruments | |||
Carrying Amount | 1,053,232 | 1,116,361 | 1,118,406 |
Estimate of Fair Value Measurement [Member] | Term Loan and Senior Notes | Level 1 and Level 2 | |||
Fair Value of Financial Instruments | |||
Estimated Fair Value | $ 809,934 | $ 1,120,296 | $ 1,130,202 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Nov. 02, 2019 | Jun. 30, 2018 | Apr. 30, 2017 | |
Interest rate swap | Designated as hedging instruments | |||
Derivative Financial Instruments | |||
Effective portion of the loss expected to be reclassified from accumulated other comprehensive (loss) income into earnings over the next 12 months | $ (7) | ||
Interest rate swap matures in June 2021 | |||
Derivative Financial Instruments | |||
Notional amount | $ 320 | $ 260 | |
Fixed rate payable (as a percent) | 5.31% | ||
Applicable margin included in fixed rate (as a percent) | 3.25% | ||
Interest rate swap matures in June 2021 | London Interbank Offered Rate One Month Libor [Member] | |||
Derivative Financial Instruments | |||
Debt Instrument, Description of Variable Rate Basis | 1 | ||
Interest rate swap matures in April 2025 | |||
Derivative Financial Instruments | |||
Notional amount | $ 385 | $ 320 | |
Fixed rate payable (as a percent) | 6.18% | ||
Applicable margin included in fixed rate (as a percent) | 3.25% | ||
Interest rate swap matures in April 2025 | London Interbank Offered Rate One Month Libor [Member] | |||
Derivative Financial Instruments | |||
Debt Instrument, Description of Variable Rate Basis | 1 | ||
Foreign exchange forward | Not designated as hedging instrument | Canada, Dollars | |||
Derivative Financial Instruments | |||
Notional amount | $ 6.1 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Estimated fair value (Details) - Designated as hedging instruments - USD ($) $ in Thousands | Nov. 02, 2019 | Feb. 02, 2019 | Nov. 03, 2018 |
Derivative Financial Instruments | |||
Derivative asset | $ 2,965 | $ 11,881 | |
Derivative liability | $ 32,287 | 9,307 | 797 |
Other current assets | Interest rate contracts | |||
Derivative Financial Instruments | |||
Interest Rate Cash Flow Hedge Asset at Fair Value | 1,610 | 2,316 | |
Other current assets | Foreign exchange contract | |||
Derivative Financial Instruments | |||
Foreign Currency Fair Value Hedge Asset at Fair Value | 6 | ||
Other noncurrent assets | Interest rate contracts | |||
Derivative Financial Instruments | |||
Interest Rate Cash Flow Hedge Asset at Fair Value | 1,355 | 9,559 | |
Accrued expenses and other current liabilities | Interest rate contracts | |||
Derivative Financial Instruments | |||
Interest Rate Cash Flow Hedge Liability at Fair Value | 6,998 | 1,625 | $ 797 |
Accrued expenses and other current liabilities | Foreign exchange contract | |||
Derivative Financial Instruments | |||
Foreign Currency Fair Value Hedge Liability at Fair Value | 44 | 77 | |
Deferred taxes, net and other liabilities | Interest rate contracts | |||
Derivative Financial Instruments | |||
Interest Rate Cash Flow Hedge Liability at Fair Value | $ 25,245 | $ 7,605 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Gain loss on derivatives (Details) - Interest rate contracts - Interest Expense. - Cash flow hedges. - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | |
Derivative Financial Instruments | ||||
Other comprehensive (loss) income before reclassifications | $ (2,051) | $ 4,012 | $ (20,189) | $ 4,797 |
Amounts reclassified from accumulated other comprehensive (loss) income | $ 556 | $ 413 | $ 669 | $ 720 |
Legal Matters (Details)
Legal Matters (Details) - plaintiff | Oct. 04, 2018 | Sep. 28, 2017 | Aug. 02, 2017 |
COMMITMENTS AND CONTINGENCIES | |||
Number of plaintiffs | 2 | ||
Additional number of plaintiffs | 39 | 9 |
CONDENSED CONSOLIDATING INFOR_3
CONDENSED CONSOLIDATING INFORMATION - Balance Sheet (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Nov. 02, 2019 | Feb. 02, 2019 | Nov. 03, 2018 | Jan. 31, 2015 | |
CURRENT ASSETS: | ||||
Cash and cash equivalents | $ 21,193 | $ 32,671 | $ 56,293 | |
Accounts receivable, net | 42,056 | 34,686 | 34,637 | |
Inventories | 778,342 | 724,086 | 772,206 | |
Other current assets | 60,778 | 66,823 | 66,063 | |
Current assets - discontinued operations | 171,376 | 165,358 | ||
Total current assets | 902,369 | 1,029,642 | 1,094,557 | |
Property and equipment, net | 405,000 | 424,316 | 416,061 | |
Operating lease right-of-use assets | 908,505 | |||
Rental product, net | 92,785 | 99,770 | 102,540 | |
Goodwill | 79,392 | 79,491 | 79,475 | |
Intangible assets, net | 146,890 | 153,711 | 154,144 | |
Other assets | 5,450 | 8,489 | 17,232 | |
NON-CURRENT ASSETS - DISCONTINUED OPERATIONS | 25,071 | 25,531 | ||
Total assets | 2,540,391 | 1,820,490 | 1,889,540 | |
CURRENT LIABILITIES: | ||||
Accounts payable | 210,165 | 204,775 | 218,114 | |
Accrued expenses and other current liabilities | 260,634 | 282,176 | 302,782 | |
Current portion of operating lease liabilities | 184,422 | |||
Current liabilities - discontinued operations | 40,025 | 33,661 | ||
Current portion of long-term debt | 9,000 | 11,619 | 9,000 | |
Total current liabilities | 664,221 | 538,595 | 563,557 | |
Long-term debt, net | 1,111,732 | 1,153,242 | 1,167,906 | |
Operating lease liabilities | 754,956 | |||
Deferred taxes, net and other liabilities | 73,968 | 119,545 | 144,138 | |
Non-current liabilities - discontinued operations | 5,477 | 4,452 | ||
Shareholders' (deficit) equity | (64,486) | 3,631 | 9,487 | |
Total liabilities and shareholders' (deficit) equity | 2,540,391 | 1,820,490 | 1,889,540 | |
Eliminations | ||||
CURRENT ASSETS: | ||||
Accounts receivable, net | (214,965) | (297,969) | (268,673) | |
Other current assets | (5,270) | |||
Total current assets | (214,965) | (303,239) | (268,673) | |
Investments in subsidiaries | (1,215,127) | (1,394,062) | (1,501,862) | |
Other assets | (3,900) | (4,800) | (80,235) | |
Total assets | (1,433,992) | (1,702,101) | (1,850,770) | |
CURRENT LIABILITIES: | ||||
Accounts payable | (214,965) | (297,969) | (268,673) | |
Accrued expenses and other current liabilities | (5,270) | |||
Total current liabilities | (214,965) | (303,239) | (268,673) | |
Deferred taxes, net and other liabilities | (3,900) | (4,800) | (80,235) | |
Shareholders' (deficit) equity | (1,215,127) | (1,394,062) | (1,501,862) | |
Total liabilities and shareholders' (deficit) equity | (1,433,992) | (1,702,101) | (1,850,770) | |
Senior Notes | ||||
Condensed Consolidating Balance Sheet | ||||
Aggregate principal amount of debt issued | $ 600,000 | |||
Tailored Brands, Inc. | Reportable Legal Entities | ||||
CURRENT ASSETS: | ||||
Other current assets | 9,287 | 220 | ||
Total current assets | 9,287 | 220 | ||
Investments in subsidiaries | 115,082 | 160,057 | 157,114 | |
Total assets | 124,369 | 160,057 | 157,334 | |
CURRENT LIABILITIES: | ||||
Accounts payable | 182,242 | 142,701 | 134,700 | |
Accrued expenses and other current liabilities | 2,671 | 6,697 | 7,952 | |
Total current liabilities | 184,913 | 149,398 | 142,652 | |
Deferred taxes, net and other liabilities | 3,942 | 7,028 | 5,195 | |
Shareholders' (deficit) equity | (64,486) | 3,631 | 9,487 | |
Total liabilities and shareholders' (deficit) equity | 124,369 | 160,057 | 157,334 | |
The Men's Wearhouse, Inc. | Reportable Legal Entities | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | 1,073 | 970 | 981 | |
Accounts receivable, net | 30,148 | 23,954 | 25,010 | |
Inventories | 136,033 | 149,923 | 149,157 | |
Other current assets | 4,545 | 30,699 | 26,657 | |
Total current assets | 171,799 | 205,546 | 201,805 | |
Property and equipment, net | 180,273 | 194,290 | 190,905 | |
Operating lease right-of-use assets | 474,788 | |||
Rental product, net | 76,463 | 81,809 | 83,554 | |
Goodwill | 6,160 | 6,160 | 6,160 | |
Investments in subsidiaries | 1,100,045 | 1,234,005 | 1,344,748 | |
Other assets | 4,958 | 7,590 | 16,046 | |
Total assets | 2,014,486 | 1,729,400 | 1,843,218 | |
CURRENT LIABILITIES: | ||||
Accounts payable | 81,886 | 201,799 | 188,583 | |
Accrued expenses and other current liabilities | 168,824 | 146,683 | 170,406 | |
Current portion of operating lease liabilities | 97,917 | |||
Current portion of long-term debt | 9,000 | 11,619 | 9,000 | |
Total current liabilities | 357,627 | 360,101 | 367,989 | |
Long-term debt, net | 1,111,732 | 1,153,242 | 1,167,906 | |
Operating lease liabilities | 400,518 | |||
Deferred taxes, net and other liabilities | 29,527 | 56,000 | 150,209 | |
Shareholders' (deficit) equity | 115,082 | 160,057 | 157,114 | |
Total liabilities and shareholders' (deficit) equity | $ 2,014,486 | 1,729,400 | 1,843,218 | |
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 | $ 1,760 | 1,434 | 2,133 | |
Accounts receivable, net | 178,025 | 255,091 | 223,001 | |
Inventories | 503,709 | 429,952 | 500,579 | |
Other current assets | 37,680 | 37,621 | 34,718 | |
Current assets - discontinued operations | 41,404 | 46,470 | ||
Total current assets | 721,174 | 765,502 | 806,901 | |
Property and equipment, net | 203,570 | 207,934 | 204,147 | |
Operating lease right-of-use assets | 381,008 | |||
Rental product, net | 6,836 | 3,426 | 4,367 | |
Goodwill | 52,129 | 52,128 | 52,128 | |
Intangible assets, net | 146,890 | 153,711 | 154,144 | |
Other assets | 438 | 640 | 635 | |
NON-CURRENT ASSETS - DISCONTINUED OPERATIONS | 1,906 | 2,045 | ||
Total assets | 1,512,045 | 1,185,247 | 1,224,367 | |
CURRENT LIABILITIES: | ||||
Accounts payable | 92,053 | 67,044 | 88,627 | |
Accrued expenses and other current liabilities | 63,589 | 105,022 | 100,839 | |
Current portion of operating lease liabilities | 74,751 | |||
Current liabilities - discontinued operations | 7,073 | 6,635 | ||
Total current liabilities | 230,393 | 179,139 | 196,101 | |
Operating lease liabilities | 312,774 | |||
Deferred taxes, net and other liabilities | 28,063 | 43,495 | 46,186 | |
Non-current liabilities - discontinued operations | 1,574 | 1,451 | ||
Shareholders' (deficit) equity | 940,815 | 961,039 | 980,629 | |
Total liabilities and shareholders' (deficit) equity | 1,512,045 | 1,185,247 | 1,224,367 | |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | 18,360 | 30,267 | 53,179 | |
Accounts receivable, net | 48,848 | 53,610 | 55,299 | |
Inventories | 138,600 | 144,211 | 122,470 | |
Other current assets | 9,266 | 3,773 | 4,468 | |
Current assets - discontinued operations | 129,972 | 118,888 | ||
Total current assets | 215,074 | 361,833 | 354,304 | |
Property and equipment, net | 21,157 | 22,092 | 21,009 | |
Operating lease right-of-use assets | 52,709 | |||
Rental product, net | 9,486 | 14,535 | 14,619 | |
Goodwill | 21,103 | 21,203 | 21,187 | |
Other assets | 3,954 | 5,059 | 80,786 | |
NON-CURRENT ASSETS - DISCONTINUED OPERATIONS | 23,165 | 23,486 | ||
Total assets | 323,483 | 447,887 | 515,391 | |
CURRENT LIABILITIES: | ||||
Accounts payable | 68,949 | 91,200 | 74,877 | |
Accrued expenses and other current liabilities | 25,550 | 29,044 | 23,585 | |
Current portion of operating lease liabilities | 11,754 | |||
Current liabilities - discontinued operations | 32,952 | 27,026 | ||
Total current liabilities | 106,253 | 153,196 | 125,488 | |
Operating lease liabilities | 41,664 | |||
Deferred taxes, net and other liabilities | 16,336 | 17,822 | 22,783 | |
Non-current liabilities - discontinued operations | 3,903 | 3,001 | ||
Shareholders' (deficit) equity | 159,230 | 272,966 | 364,119 | |
Total liabilities and shareholders' (deficit) equity | $ 323,483 | $ 447,887 | $ 515,391 |
CONDENSED CONSOLIDATING INFOR_4
CONDENSED CONSOLIDATING INFORMATION - Earnings (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2019 | Nov. 03, 2018 | Nov. 02, 2019 | Nov. 03, 2018 | |
Condensed Consolidating Statement of Earnings (Loss) | ||||
Total net sales | $ 729,481 | $ 751,741 | $ 2,190,288 | $ 2,274,498 |
Total cost of sales | 421,453 | 406,247 | 1,258,510 | 1,247,168 |
Total gross margin | 308,028 | 345,494 | 931,778 | 1,027,330 |
Operating expenses | 262,484 | 270,216 | 798,941 | 815,074 |
Operating income | 45,544 | 75,278 | 132,837 | 212,256 |
Interest (expense) income, net | (17,425) | (18,550) | (54,093) | (61,188) |
Loss on extinguishment of debt, net | (77) | (9,420) | (77) | (30,253) |
Earnings before income taxes | 28,042 | 47,308 | 78,667 | 120,815 |
(Benefit) provision for income taxes | 254 | 12,521 | 14,743 | 26,018 |
(Loss) earnings before equity in net income of subsidiaries | 27,788 | 34,787 | 63,924 | 94,797 |
Net earnings from continuing operations | 27,788 | 34,787 | 63,924 | 94,797 |
Loss from discontinued operations, net of tax | (117,378) | (20,912) | (112,106) | (17,775) |
Net (loss) earnings | (89,590) | 13,875 | (48,182) | 77,022 |
Comprehensive income (loss) | (62,138) | 14,799 | (47,323) | 59,948 |
Eliminations | ||||
Condensed Consolidating Statement of Earnings (Loss) | ||||
Total net sales | (163,214) | (160,181) | (675,441) | (468,651) |
Total cost of sales | (163,214) | (160,181) | (675,441) | (468,651) |
Operating expenses | (14,358) | (14,942) | (57,540) | (42,093) |
Operating income | 14,358 | 14,942 | 57,540 | 42,093 |
Other income and expenses, net | (14,358) | (14,942) | (57,540) | (42,093) |
Equity in earnings (loss) of subsidiaries | 209,178 | 20,291 | 188,918 | (23,701) |
Net earnings from continuing operations | 209,178 | 20,291 | 188,918 | (23,701) |
Net (loss) earnings | 209,178 | 20,291 | 188,918 | (23,701) |
Comprehensive income (loss) | 175,327 | 19,367 | 188,059 | (6,627) |
Tailored Brands, Inc. | Reportable Legal Entities | ||||
Condensed Consolidating Statement of Earnings (Loss) | ||||
Operating expenses | 991 | 1,443 | 2,487 | 3,408 |
Operating income | (991) | (1,443) | (2,487) | (3,408) |
Interest (expense) income, net | (939) | (1,062) | (3,178) | (2,749) |
Earnings before income taxes | (1,930) | (2,505) | (5,665) | (6,157) |
(Benefit) provision for income taxes | (45) | (505) | (2,919) | (1,624) |
(Loss) earnings before equity in net income of subsidiaries | (1,885) | (2,000) | (2,746) | (4,533) |
Equity in earnings (loss) of subsidiaries | (87,705) | 15,875 | (45,436) | 81,555 |
Net earnings from continuing operations | (89,590) | 13,875 | (48,182) | 77,022 |
Net (loss) earnings | (89,590) | 13,875 | (48,182) | 77,022 |
Comprehensive income (loss) | (62,138) | 14,799 | (47,323) | 59,948 |
The Men's Wearhouse, Inc. | Reportable Legal Entities | ||||
Condensed Consolidating Statement of Earnings (Loss) | ||||
Total net sales | 436,671 | 453,316 | 1,285,018 | 1,343,248 |
Total cost of sales | 227,407 | 219,036 | 675,840 | 664,219 |
Total gross margin | 209,264 | 234,280 | 609,178 | 679,029 |
Operating expenses | 131,183 | 135,498 | 401,100 | 405,344 |
Operating income | 78,081 | 98,782 | 208,078 | 273,685 |
Interest (expense) income, net | (17,380) | (20,017) | (53,956) | (66,141) |
Loss on extinguishment of debt, net | (77) | (9,420) | (77) | (30,253) |
Earnings before income taxes | 60,624 | 69,345 | 154,045 | 177,291 |
(Benefit) provision for income taxes | 548 | 17,304 | 30,428 | 37,882 |
(Loss) earnings before equity in net income of subsidiaries | 60,076 | 52,041 | 123,617 | 139,409 |
Equity in earnings (loss) of subsidiaries | (121,473) | (36,166) | (143,482) | (57,854) |
Net earnings from continuing operations | (61,397) | 15,875 | (19,865) | 81,555 |
Loss from discontinued operations, net of tax | (26,308) | (25,571) | ||
Net (loss) earnings | (87,705) | 15,875 | (45,436) | 81,555 |
Comprehensive income (loss) | (64,403) | 20,300 | (38,071) | 87,072 |
Guarantor Subsidiaries | Reportable Legal Entities | ||||
Condensed Consolidating Statement of Earnings (Loss) | ||||
Total net sales | 386,754 | 355,710 | 1,147,368 | 1,095,988 |
Total cost of sales | 309,577 | 273,793 | 908,308 | 834,458 |
Total gross margin | 77,177 | 81,917 | 239,060 | 261,530 |
Operating expenses | 129,975 | 131,431 | 390,436 | 397,110 |
Operating income | (52,798) | (49,514) | (151,376) | (135,580) |
Other income and expenses, net | 14,984 | 14,942 | 57,019 | 42,093 |
Interest (expense) income, net | 1,036 | 1,970 | 3,611 | 6,115 |
Earnings before income taxes | (36,778) | (32,602) | (90,746) | (87,372) |
(Benefit) provision for income taxes | (289) | (6,848) | (14,997) | (17,075) |
(Loss) earnings before equity in net income of subsidiaries | (36,489) | (25,754) | (75,749) | (70,297) |
Net earnings from continuing operations | (36,489) | (25,754) | (75,749) | (70,297) |
Loss from discontinued operations, net of tax | (6,166) | 176 | 2,013 | 4,247 |
Net (loss) earnings | (42,655) | (25,578) | (73,736) | (66,050) |
Comprehensive income (loss) | (31,136) | (25,578) | (73,736) | (66,050) |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Condensed Consolidating Statement of Earnings (Loss) | ||||
Total net sales | 69,270 | 102,896 | 433,343 | 303,913 |
Total cost of sales | 47,683 | 73,599 | 349,803 | 217,142 |
Total gross margin | 21,587 | 29,297 | 83,540 | 86,771 |
Operating expenses | 14,693 | 16,786 | 62,458 | 51,305 |
Operating income | 6,894 | 12,511 | 21,082 | 35,466 |
Other income and expenses, net | (626) | 521 | ||
Interest (expense) income, net | (142) | 559 | (570) | 1,587 |
Earnings before income taxes | 6,126 | 13,070 | 21,033 | 37,053 |
(Benefit) provision for income taxes | 40 | 2,570 | 2,231 | 6,835 |
(Loss) earnings before equity in net income of subsidiaries | 6,086 | 10,500 | 18,802 | 30,218 |
Net earnings from continuing operations | 6,086 | 10,500 | 18,802 | 30,218 |
Loss from discontinued operations, net of tax | (84,904) | (21,088) | (88,548) | (22,022) |
Net (loss) earnings | (78,818) | (10,588) | (69,746) | 8,196 |
Comprehensive income (loss) | $ (79,788) | $ (14,089) | $ (76,252) | $ (14,395) |
CONDENSED CONSOLIDATING INFOR_5
CONDENSED CONSOLIDATING INFORMATION - Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 02, 2019 | Nov. 03, 2018 | |
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | $ 65,562 | $ 277,817 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (63,408) | (46,927) |
Proceeds from divestiture of business, net | 45,034 | 17,755 |
Net cash used in investing activities | (18,374) | (29,172) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on original term loan | (993,420) | |
Proceeds from new term loan | 895,500 | |
Payments on new term loan | (9,370) | (6,750) |
Proceeds from asset-based revolving credit facility | 1,065,000 | 465,500 |
Payments on asset-based revolving credit facility | (1,046,000) | (407,000) |
Repurchase and retirement of senior notes | (54,425) | (199,365) |
Deferred financing costs | (6,713) | |
Cash dividends paid | (27,938) | (27,833) |
Proceeds from issuance of common stock | 1,220 | 6,149 |
Tax payments related to vested deferred stock units | (1,118) | (7,510) |
Repurchases of common stock | (10,000) | |
Net cash used in financing activities | (82,631) | (281,442) |
Effect of exchange rate changes | 1,205 | (2,385) |
Increase (decrease) in cash and cash equivalent | (34,238) | (35,182) |
Balance at beginning of period | 55,431 | 103,607 |
Balance at end of period | 21,193 | 68,425 |
Eliminations | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | (51,438) | (27,833) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Intercompany activities | 269,376 | 228,450 |
Net cash used in investing activities | 269,376 | 228,450 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Intercompany activities | (217,938) | (200,617) |
Net cash used in financing activities | (217,938) | (200,617) |
Tailored Brands, Inc. | Reportable Legal Entities | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | 37,836 | 29,194 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Cash dividends paid | (27,938) | (27,833) |
Proceeds from issuance of common stock | 1,220 | 6,149 |
Tax payments related to vested deferred stock units | (1,118) | (7,510) |
Repurchases of common stock | (10,000) | |
Net cash used in financing activities | (37,836) | (29,194) |
The Men's Wearhouse, Inc. | Reportable Legal Entities | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | 329,070 | 470,656 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (21,879) | (12,962) |
Intercompany activities | (238,423) | (228,450) |
Net cash used in investing activities | (260,302) | (241,412) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on original term loan | (993,420) | |
Proceeds from new term loan | 895,500 | |
Payments on new term loan | (9,370) | (6,750) |
Proceeds from asset-based revolving credit facility | 1,065,000 | 465,500 |
Payments on asset-based revolving credit facility | (1,046,000) | (407,000) |
Repurchase and retirement of senior notes | (54,425) | (199,365) |
Deferred financing costs | (6,713) | |
Intercompany activities | (23,870) | (27,833) |
Net cash used in financing activities | (68,665) | (280,081) |
Increase (decrease) in cash and cash equivalent | 103 | (50,837) |
Balance at beginning of period | 970 | 51,818 |
Balance at end of period | 1,073 | 981 |
Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | 34,951 | 11,157 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (34,687) | (28,853) |
Proceeds from divestiture of business, net | 17,755 | |
Net cash used in investing activities | (34,687) | (11,098) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Increase (decrease) in cash and cash equivalent | 264 | 59 |
Balance at beginning of period | 1,496 | 2,180 |
Balance at end of period | 1,760 | 2,239 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | (284,857) | (205,357) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (6,842) | (5,112) |
Proceeds from divestiture of business, net | 45,034 | |
Intercompany activities | (30,953) | |
Net cash used in investing activities | 7,239 | (5,112) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Intercompany activities | 241,808 | 228,450 |
Net cash used in financing activities | 241,808 | 228,450 |
Effect of exchange rate changes | 1,205 | (2,385) |
Increase (decrease) in cash and cash equivalent | (34,605) | 15,596 |
Balance at beginning of period | 52,965 | 49,609 |
Balance at end of period | $ 18,360 | $ 65,205 |