For Information, Contact:
Company Contact:
Jeff Unger, Investor Relations
(561) 514-0115
Andrew Bard, Weber Shandwick
(212) 445-8368
CASUAL MALE RETAIL GROUP INC. ANNOUNCES SECOND QUARTER
FISCAL 2004 RESULTS
CANTON, Mass., August 19, 2004 -- Casual Male Retail Group, Inc.
(NASDAQ/NMS: "CMRG" -), retail brand operator of Casual Male Big & Tall,
the exclusive retailer of George Foreman's clothing collection, and,
subject to the consummation of an asset purchase agreement, Rochester Big
and Tall, today announced its operating results for the second quarter and
six months ended July 31, 2004. For the second quarter of fiscal 2004,
the Company reported income from continuing operations of $0.7 million, or
$0.02 per share, compared to $0.6 million, or $0.02 per share for the
second quarter of fiscal 2003, after assuming a normalized tax rate of
37%.
For the second quarter of fiscal 2004, the Company reported net income of
$99,000, or $0.00 per share, compared to a net income of $658,000, or
$0.02 per share, for the second quarter of fiscal 2003. For the six
months ended July 31, 2004, the Company reported a net loss of $5.0
million, or $(0.14) per share, as compared to a net loss of $2.1 million,
or $(0.06) per share for the six months of the prior year. During the
second quarter of 2004 and for the six months ended July 31, 2004, the
Company recorded a loss from discontinued operations of approximately $1.0
million, or $(0.03) per share and $2.1 million, or $(0.06) per share,
related to the continued closure of the Levis(r)/Dockers(r) outlet stores.
As previously reported, comparable store sales for Casual Male Big & Tall
business increased 4.8% for the second quarter of fiscal 2004 and
increased 6.9% for the six months ended July 31, 2004.
During the second quarter of fiscal 2004, the Company completed the sale
of its 50.5% joint venture interest in the Ecko Unltd.(r) outlet and full
price retail stores to its joint venture partner Ecko.Complex, LLC. In
connection with the sale, the Company received a partial cash payment of
10% at closing and will receive the balance of the proceeds in monthly
installments over the next twelve months at an 8% interest rate. Included
in operating results for the second quarter of fiscal 2004 is a gain of
$3.1 million related to the sale. Offsetting the one time gain were
expenses of $1.9 million associated with the early retirement of long-term
debt, and a write-off of $1.0 million for previously incurred costs for an
intended spin-off of the Company's subsidiary LP Innovations, Inc., which
has been postponed.
"Casual Male's sales during the first half of the year benefited greatly
from the new merchandising strategies, which featured the George Foreman
Comfort Zone and Signature Collection apparel lines. However, a
significant marketing investment of approximately $4.5 million was made in
connection with the launch of the George Foreman line which boosted the
Company's SG&A costs," stated Dennis R. Hernreich, Executive Vice
President and COO/CFO of CMRG. "We expect that the gross margin
improvement made in the second quarter will continue into the second half
of the year. Moreover, the significant marketing investment concluded in
the first half of the year and accordingly, SG&A expense levels are
expected to moderate during the balance of the year."
Operating Results by Business Segment
The following table reflects operating results by segment for the
Company's second quarter and six months of fiscal 2004 and for the
corresponding periods of the prior year. These segment results have been
prepared on a basis consistent with the presentation in the Company's
recent Form 10-K and Form 10-Q filings.
For the three months
ended: July 31, 2004 August 2, 2003
(in millions) Other Other
Casual Branded Casual Branded
Male Apparel Combined Male Apparel Combined
business business Company business business Company
----------------------------------------------------------
Sales $ 81.5 $ 25.1 $ 106.6 $ 78.9 $ 21.6 $ 100.5
Gross margin,
net of
occupancy costs 34.2 6.0 40.2 32.2 5.2 37.4
Gross margin rate 42.0% 23.9% 37.7% 40.8% 24.1% 37.2%
Selling, general
and administrative 28.8 6.2 35.0 26.3 5.1 31.4
Depreciation and
Amortization 2.2 0.6 2.8 1.5 0.6 2.1
----------------------------------------------------------
Operating income
(loss) $ 3.2 $ (0.8) $ 2.4 $ 4.4 $(0.5) $ 3.9
==========================================================
For the six months
ended: July 31, 2004 August 2, 2003
(in millions) Other Other
Casual Branded Casual Branded
Male Apparel Combined Male Apparel Combined
business business Company business business Company
----------------------------------------------------------
Sales $ 159.6 $ 48.0 $ 207.6 $ 151.7 $ 39.0 $ 190.7
Gross margin, net
of occupancy costs 66.0 11.1 77.1 62.4 8.6 71.0
Gross margin rate 41.4% 23.1% 37.1% 41.1% 22.1% 37.2%
Selling, general and
Administrative 59.6 11.9 71.5 52.6 10.5 63.1
Depreciation and
Amortization 4.1 1.2 5.3 3.1 0.8 3.9
---------------------------------------------------------
Operating income
(loss) $ 2.3 $ (2.0) $ 0.3 $ 6.7 $ (2.7) $ 4.0
=========================================================
In addition to the financial measures prepared in accordance with
generally accepted accounting principles (GAAP), our above discussion
refers to a normalized tax rate, which is a non-GAAP measure. Normalized
tax basis reflects a 37% effective tax rate on pre-tax income. The Company
believes that the inclusion of such non-GAAP measure helps investors to
gain a better understanding of the Company's performance, especially when
comparing such results to previous periods or forecasts. However, the non-
GAAP financial measures included in this press release are not meant to be
considered superior to or as a substitute for results of operations
prepared in accordance with GAAP. The following table shows the
reconciliation of the income from continuing operations for the second
quarter of fiscal 2004 and fiscal 2003 on a GAAP basis effected for the
adjustment for normalized taxes:
For the three months ended: July 31 ,2004 August 2, 2003
(in thousands, except per
share data) Per share Per share
basic and basic and
diluted diluted
----------------------- ---------------------
Income from
continuing operations $1,123 $0.03 $ 993 $0.03
Income Tax provision,
assuming normalized
tax rate of 37% (415) (0.01) (367) (0.01)
-----------------------------------------------
Adjusted income from
continuing operations, after
normalized tax rate $708 $0.02 $ 626 $0.02
===============================================
Weighted average number of
common shares outstanding:
basic 34,485 35,839
diluted 36,099 36,891
CMRG will conduct a conference call to discuss its second quarter earnings
results today at 11:00 a.m. Eastern Time at www.casualmale.com/investor.
The call will be archived online within one hour after its completion.
Participating in the call will be David Levin, President and Chief
Executive Officer and Dennis Hernreich, Executive Vice President, Chief
Operating Officer and Chief Financial Officer.
CMRG, the largest retailer of big and tall men's apparel, operates 489
Casual Male Big & Tall stores, the Casual Male e-commerce site, Casual
Male catalog business, and 48 Levi's(r) Outlet by Designs and Dockers(r)
Outlet by Designs stores, throughout the United States and Puerto Rico.
The Company is headquartered in Canton, Massachusetts and its common stock
is listed on the Nasdaq National Market under the symbol "CMRG."
This press release contains forward-looking statements within the meaning
of the federal securities laws, including statements about gross margin
improvement and SG&A expense levels. The discussion of forward-looking
information requires management of the Company to make certain estimates
and assumptions regarding the Company's strategic direction and the effect
of such plans on the Company's financial results. The Company's actual
results and the implementation of its plans and operations may differ
materially from forward-looking statements made by the Company in this
press release and elsewhere as a result of numerous risks and
uncertainties. The Company encourages readers to refer to its prior
filings with the Securities and Exchange Commission, including, without
limitation, its Current Report on Form 8-K filed on April 14, 2004, that
set forth certain risks and uncertainties that may have an impact on
future results and direction of the Company.
# # #
CASUAL MALE RETAIL GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
For the three months ended For the six months ended
7/31/2004 8/2/2003 7/31/2004 8/2/2003
------------------------- -----------------------
Sales $ 106,569 $ 100,530 $ 207,576 $ 190,651
Cost of goods sold
including occupancy 66,362 63,146 130,514 19,603
--------- --------- ---------- --------
Gross profit 40,207 37,384 77,062 71,048
Expenses:
Selling, general and
administrative 34,962 31,392 71,516 63,055
Depreciation and amortization 2,807 2,043 5,294 3,943
-------- --------- --------- ---------
Total expenses 37,769 33,435 76,810 66,998
Operating income 2,438 3,949 252 4,050
Other income, net 308 - 308 -
Interest expense, net (1,977) (2,976) (4,157) (5,861)
-------- --------- --------- ---------
Income (loss) from continuing
operations before minority
interest and income taxes 769 973 (3,597) (1,811)
Minority interest (354) (20) (701) (92)
Income taxes - - - -
--------- --------- -------- -------
Income (loss) from
continuing operations 1,123 993 (2,896) (1,719)
Loss from discontinued operations (1,024) (335) (2,099) (378)
---------- --------- --------- --------
Net income (loss) $ 99 $ 658 $ (4,995) $ (2,097)
========= ========= ========= =========
Net income (loss) per share
- - basic and diluted
Income (loss) from
continuing operations $ 0.03 $ 0.03 $ (0.08) $ (0.05)
Loss from discontinued
operations ($0.03) ($0.01) ($0.06) ($0.01)
---------- --------- --------- ---------
Net income (loss) $ 0.00 $ 0.02 $ (0.14) $ (0.06)
Weighted-average number
of common shares
outstanding:
Basic 34,485 35,839 34,805 35,796
Diluted 36,099 36,891 34,805 35,796
CASUAL MALE RETAIL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
July 31, 2004 and January 31, 2004
(In thousands)
July 31, January 31,
2004 2004
----------- -----------
ASSETS (unaudited)
Cash and investments $ 5,832 $ 4,179
Inventories 87,452 98,673
Other current assets 17,407 10,831
Property and equipment, net 66,713 68,345
Goodwill and other intangibles 81,256 81,306
Other assets 8,664 9,408
--------- ---------
Total assets $ 267,324 $ 272,742
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses
and other liabilities $ 46,426 $ 59,155
Notes payable 33,878 3,623
Restructuring reserves 2,645 2,945
Long-term debt, net of current
Portion 114,071 122,374
Minority interest - 3,804
Stockholders' equity 70,304 80,841
---------- ---------
Total liabilities and
stockholders' equity $ 267,324 $ 272,742
========== =========