Tailored Brands, Inc. Reports Fiscal 2016 First Quarter Results
- First quarter 2016 GAAP diluted EPS of $0.03; Adjusted diluted EPS(1) of $0.29
- Company reaffirms full-year guidance
- Conference call scheduled for Thursday, June 9th at 9:00 a.m. Eastern time
FREMONT, Calif., June 8, 2016 /PRNewswire/ -- Tailored Brands, Inc. (NYSE: TLRD) today announced consolidated financial results for the fiscal first quarter ended April 30, 2016.
First quarter 2016 GAAP diluted earnings per share ("EPS") were $0.03 and adjusted diluted EPS(1) was $0.29 excluding certain items(1).
Doug Ewert, Tailored Brands president and chief executive officer stated, "Our first quarter results were mixed as we navigated the difficult consumer and retail environment and cycled a strong performance in last year's first quarter. While our net sales decline of 6.4% was slightly below our expectation, our focus on lowering operating expenses brought operating income and earnings per share in-line with our plan for the quarter. Men's Wearhouse reported a modestly below-plan comparable sales decline of 3.5% while our Jos. A. Bank comparable sales decline of 16% was better than our expectation, despite anniversarying significant Buy-One-Get-Three Free events in the same period last year. On a GAAP basis, retail operating income decreased $15.4 million. On an adjusted basis, retail operating income decreased $18.2 million driven by an $18.1 million reduction at Jos. A. Bank. The decline in Jos. A. Bank results was slightly better than the expectations we previously outlined for 2016.
"Importantly, we are making progress on our transition plan for Tailored Brands. We are executing on our profit improvement program, organizational realignment, store base rationalization, and cost reductions. We remain committed to stabilizing, resizing, and rebuilding the foundation of the Jos. A. Bank business to a base from which we can profitably grow on a go-forward basis.
"Lastly, I am pleased that business seems to be improving in the second quarter, as evidenced by our May comps. In May, Men's Wearhouse posted a comparable sales increase in the mid-single-digit range and Jos. A. Bank and Moores also saw improving trends. Accordingly, we continue to expect our 2016 annual adjusted EPS to be in the range of $1.55 to $1.85," stated Ewert.
SALES REVIEW
The table that follows is a summary of total net sales for the first quarter ended April 30, 2016. The dollars shown are U.S. dollars in millions and, due to rounded numbers, may not sum. Comparable sales exclude the net sales of a store for any month of one period if the store was not owned or open throughout the same month of the prior period and include e-commerce net sales. The Moores comparable sales change is based on the Canadian dollar. In addition, Jos. A. Bank comparable sales exclude sales from factory stores. Fiscal 2015 comparable sales shown below for Jos. A. Bank are based on a comparison to Jos. A. Bank's fiscal 2014 sales, a portion of which was prior to the acquisition on June 18, 2014.
First Quarter Net Sales Summary – Fiscal 2016 |
||||||
Net Sales |
Comparable Sales Change |
|||||
Net Sales Change |
Current Quarter |
% of Total Sales |
Current Quarter |
Prior Year Quarter |
||
Retail Segment |
(7.0%) |
($58.0) |
$766.2 |
92% |
||
Men's Wearhouse |
(3.2%) |
($14.7) |
$441.6 |
53% |
(3.5%) |
6.8% |
Jos. A. Bank |
(17.4%) |
($37.6) |
$178.5 |
22% |
(16.0%) |
(1.1%) |
K&G |
(1.3%) |
($1.2) |
$94.8 |
11% |
0.2% |
7.3% |
Moores |
(9.0%) |
($4.3) |
$43.2 |
5% |
(3.9%) |
0.8% |
MW Cleaners |
(1.9%) |
($0.2) |
$8.2 |
1% |
||
Corporate Apparel Segment |
2.9% |
$1.8 |
$62.6 |
8% |
||
Total Company |
(6.4%) |
($56.3) |
$828.8 |
Net sales for the first quarter at our largest brand, Men's Wearhouse, were down 3.2% and comparable sales decreased 3.5% from last year's first quarter. Comparable sales decreased 3.5% primarily due to a decrease in average transactions per store and units per transaction partially offset by an increase in average unit retails (net selling prices). Comparable rental revenue decreased 4.8% in the first quarter of 2016 due to a decrease in unit rentals partially offset by an increase in rental rates.
Jos. A. Bank comparable sales for the first quarter decreased 16.0% primarily due to a decrease in average transactions per store partially offset by higher units per transaction and higher rental revenue. K&G comparable sales increased 0.2% primarily due to an increase in units sold per transaction offset by lower average transactions per store. Net sales for Moores, our Canadian retail brand, decreased 9.0% primarily due to unfavorable currency fluctuations. Moores had a comparable sales decrease of 3.9% due to decreases in both average transactions per store and units sold per transaction driven by weakening macro-economic conditions in Canada, partially offset by an increase in average unit retails. The Corporate Apparel segment had a sales increase of 2.9% primarily driven by higher sales from existing customers.
FIRST QUARTER GAAP RESULTS
Below is a comparison table and discussion of the condensed consolidated first quarter FY 2016 to first quarter FY 2015 operating results.
Condensed Consolidated First Quarter FY 2016 Comparison to First Quarter FY 2015 Operating Results |
|||||||
Q1 FY16 |
Q1 FY16 |
Q1 FY15 |
Q1 FY15 |
Variance |
|||
$ |
% of Sales |
$ |
% of Sales |
Dollar |
% |
Basis Points |
|
Net sales: |
|||||||
Retail clothing product |
$ 615,668 |
74.28% |
$666,862 |
75.34% |
($51,194) |
-7.68% |
(1.06) |
Rental services |
99,831 |
12.04% |
103,129 |
11.65% |
(3,298) |
-3.20% |
0.39 |
Alteration and other services |
50,743 |
6.12% |
54,280 |
6.13% |
(3,537) |
-6.52% |
(0.01) |
Total retail sales |
766,242 |
92.45% |
824,271 |
93.13% |
(58,029) |
-7.04% |
(0.68) |
Corporate apparel clothing product |
62,580 |
7.55% |
60,818 |
6.87% |
1,762 |
2.90% |
0.68 |
Total net sales |
828,822 |
100.00% |
885,089 |
100.00% |
(56,267) |
-6.36% |
- |
Gross margin(1): |
|||||||
Retail clothing product |
345,313 |
56.09% |
372,478 |
55.86% |
(27,165) |
-7.29% |
0.23 |
Rental services |
83,947 |
84.09% |
87,045 |
84.40% |
(3,098) |
-3.56% |
(0.31) |
Alteration and other services |
14,593 |
28.76% |
18,130 |
33.40% |
(3,537) |
-19.51% |
(4.64) |
Occupancy costs |
(110,135) |
-14.37% |
(113,096) |
-13.72% |
2,961 |
2.62% |
(0.65) |
Total retail gross margin |
333,718 |
43.55% |
364,557 |
44.23% |
(30,839) |
-8.46% |
(0.68) |
Corporate apparel clothing product |
18,123 |
28.96% |
16,995 |
27.94% |
1,128 |
6.64% |
1.02 |
Total gross margin |
351,841 |
42.45% |
381,552 |
43.11% |
(29,711) |
-7.79% |
(0.66) |
Advertising expense |
47,928 |
5.78% |
50,656 |
5.72% |
(2,728) |
-5.39% |
0.06 |
Selling, general and administrative expenses |
272,918 |
32.93% |
275,607 |
31.14% |
(2,689) |
-0.98% |
1.79 |
Operating income |
30,995 |
3.74% |
55,289 |
6.25% |
($24,294) |
-43.94% |
(2.51) |
Operating income by segment(1): |
|||||||
Retail |
$ 79,877 |
10.42% |
$ 95,306 |
11.56% |
($15,429) |
-16.19% |
(1.14) |
Corporate apparel |
2,054 |
3.28% |
1,312 |
2.16% |
742 |
56.55% |
1.12 |
Shared services |
(50,936) |
-6.15% |
(41,329) |
-4.67% |
(9,607) |
23.25% |
(1.48) |
Total operating income |
$ 30,995 |
3.74% |
$ 55,289 |
6.25% |
($24,294) |
-43.94% |
(2.51) |
(1) As a percent of related sales. |
Total net sales decreased 6.4%, or $56.3 million, to $828.8 million. Retail segment net sales decreased by 7.0%, or $58.0 million. Corporate apparel sales increased by 2.9% or $1.8 million.
Total gross margin was $351.8 million, a decrease of $29.7 million, or 7.8% due primarily to the decrease in retail segment net sales. As a percent of sales, total gross margin decreased 66 basis points to 42.5% of net sales primarily due to deleveraging of occupancy costs. Excluding Jos. A. Bank, total gross margin decreased by 15 basis points and retail gross margin decreased 17 basis points.
Advertising expense decreased $2.7 million to $47.9 million but increased slightly by 6 basis points as a percent of sales.
Selling, general and administrative expenses ("SG&A") decreased $2.7 million to $272.9 million. As a percent of sales, SG&A increased 179 basis points primarily due to deleveraging from lower sales.
Operating income for the quarter was $31.0 million compared to operating income of $55.3 million last year.
Net interest expense for the first quarter was $26.5 million for both 2016 and 2015.
The effective tax rate for the first quarter was 63.7% for 2016 and 35.8% for 2015.
Net earnings for the quarter were $1.6 million compared to net earnings of $10.4 million last year. Diluted EPS was $0.03 compared to diluted EPS of $0.21 in the prior year quarter.
FIRST QUARTER ADJUSTED RESULTS(1)
Below is a comparison table and discussion of adjusted operating metrics for first quarter FY 2016 and FY 2015.
Summary of Adjusted First Quarter FY 2016 Metrics Compared to Adjusted First Quarter FY 2015(1) |
|||||||
Q1 FY16 |
Q1 FY16 |
Q1 FY15 |
Q1 FY15 |
Variance |
|||
$ |
% of Sales |
$ |
% of Sales |
Dollar |
% |
Basis Points |
|
Gross margin(2): |
|||||||
Retail clothing product |
$ 345,290 |
56.08% |
$ 373,218 |
55.97% |
($27,928) |
-7.48% |
0.12 |
Alteration and other services |
14,744 |
29.06% |
18,130 |
33.40% |
(3,386) |
-18.68% |
(4.34) |
Occupancy costs |
(110,158) |
-14.38% |
(112,810) |
-13.69% |
2,652 |
2.35% |
(0.69) |
Total retail gross margin |
333,823 |
43.57% |
365,583 |
44.35% |
(31,760) |
-8.69% |
(0.79) |
Total gross margin |
351,946 |
42.46% |
382,578 |
43.22% |
(30,632) |
-8.01% |
(0.76) |
Selling, general and administrative expenses |
256,521 |
30.95% |
263,985 |
29.83% |
(7,464) |
-2.83% |
1.12 |
Operating income |
$ 47,497 |
5.73% |
$ 67,937 |
7.68% |
($20,440) |
-30.09% |
(1.95) |
Operating income by segment(2): |
|||||||
Retail |
$ 88,058 |
11.49% |
$ 106,227 |
12.89% |
($18,169) |
-17.10% |
(1.40) |
Corporate apparel |
2,054 |
3.28% |
1,312 |
2.16% |
742 |
56.55% |
1.12 |
Shared services |
(42,615) |
-5.14% |
( 39,602) |
-4.47% |
(3,013) |
7.61% |
(0.67) |
Total operating income |
$ 47,497 |
5.73% |
$ 67,937 |
7.68% |
($20,440) |
-30.09% |
(1.95) |
(1) See Use of Non-GAAP Financial Measures for reconciliation to GAAP. |
|||||||||
(2) As a percent of related sales. |
Total gross margin decreased $30.6 million and decreased 76 basis points. Retail gross margin decreased $31.8 million primarily due to lower sales and decreased 79 basis points primarily due to occupancy deleverage. Excluding Jos. A. Bank, total gross margin decreased by 12 basis points and retail gross margin decreased 14 basis points.
On a stand-alone basis, Jos. A. Bank retail clothing product selling margin at full-line stores increased over 400 basis points due to lower product costs and an increase in the average unit retail.
Primarily due to the Company's cost reduction efforts, SG&A expenses decreased $7.5 million yet deleveraged 112 basis points.
Operating income decreased $20.4 million or 30.1%.
The effective tax rate was 33.7%.
Adjusted net earnings were $13.9 million, or $0.29 adjusted diluted earnings per share.
BALANCE SHEET
Total debt at the end of the first quarter 2016 was approximately $1.66 billion. The Company made its scheduled $1.8 million payment on its term loan during the quarter. Subsequent to the end of the quarter, the Company made an additional payment of $35.5 million on its Term Loan. There were no borrowings outstanding on our revolving credit facility at the end of the first quarter of 2016.
Inventories increased $90.3 million to $1,076.7 million at the end of the first quarter 2016 from $986.5 million at the end of the prior year first quarter, primarily due to higher Jos. A. Bank inventory reflecting lower sales and increased corporate apparel inventory as a result of the American Airlines rollout occurring later in fiscal 2016.
Capital expenditures for the 2016 first quarter were $30.3 million.
CALL AND WEBCAST INFORMATION
At 9:00 a.m. Eastern time on Thursday, June 9, 2016, management will host a conference call and real time webcast to discuss fiscal 2016 first quarter results.
To access the conference call, dial 412-902-0030. To access the live webcast presentation, visit the Investor Relations section of the Company's website at http://ir.tailoredbrands.com. A telephonic replay will be available through June 16, 2016 by calling 201-612-7415 and entering the access code of 13635589#, or a webcast archive will be available free on the website for approximately 90 days.
STORE INFORMATION |
||||||
April 30, 2016 |
May 2, 2015 |
January 30, 2016 |
||||
Number of Stores |
Sq. Ft. (000's) |
Number of Stores |
Sq. Ft. (000's) |
Number of Stores |
Sq. Ft. (000's) |
|
Men's Wearhouse(a) |
716 |
4,031.0 |
702 |
3,963.4 |
714 |
4,025.7 |
Jos. A. Bank(b) |
615 |
2,841.2 |
636 |
2,923.2 |
625 |
2,880.7 |
Men's Wearhouse and Tux |
153 |
214.5 |
207 |
287.9 |
160 |
223.5 |
The Tuxedo Shop @ Macy's |
148 |
73.4 |
– |
– |
12 |
6.5 |
Moores, Clothing for Men |
125 |
785.1 |
124 |
783.1 |
124 |
779.8 |
K&G(c) |
89 |
2,091.1 |
89 |
2,109.0 |
89 |
2,102.1 |
Total |
1,846 |
10,036.3 |
1,758 |
10,066.6 |
1,724 |
10,018.3 |
(a) Includes one Joseph Abboud store. |
(b) Excludes 14, 15 and 14 franchise stores, respectively. |
(c) 82, 81 and 82 stores, respectively, offering women's apparel. |
Tailored Brands, Inc. is the largest specialty retailer of men's suits and the largest provider of rental product in the U.S. and Canada with over 1,800 stores including tuxedo shops within Macy's. The Company's brands include Men's Wearhouse, Jos. A. Bank, Joseph Abboud, Moores Clothing for Men and K&G Fashion Superstores. Tailored Brands also operates a global corporate apparel and workwear group consisting of Twin Hill in the United States and Dimensions, Alexandra and Yaffy in the United Kingdom.
For additional information on Tailored Brands, please visit the Company's websites at www.tailoredbrands.com, www.menswearhouse.com, www.josbank.com, www.josephabboud.com, www.mooresclothing.com, www.kgstores.com, www.twinhill.com, www.dimensions.co.uk and www.alexandra.co.uk.
This press release contains forward-looking information. The forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance and a variety of factors could cause actual results to differ materially from the anticipated or expected results expressed in or suggested by these forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to: actions by governmental entities, domestic and international macro-economic conditions, inflation or deflation, success, or lack thereof, in executing our internal strategies and operating plans including new store and new market expansion plans and cost reduction initiatives, store rationalization plans, profit improvement plans, revenue enhancement strategies, the impact of opening tuxedo shops within Macy's stores, changes in demand for clothing, market trends in the retail business, customer confidence and spending patterns, changes in traffic trends in our stores, customer acceptance of our merchandise strategies, performance issues with key suppliers, disruptions in our supply chain, severe weather, foreign currency fluctuations, government export and import policies, advertising or marketing activities of competitors, and legal proceedings.
The forward-looking statements in this press release speak only as of the date hereof. Except for the ongoing obligations of Tailored Brands to disclose material information under the federal securities laws, Tailored Brands undertakes no obligation to revise or update publicly any forward-looking statement, except as required by law. Other factors that may impact the forward-looking statements are described in our latest annual report on Form 10-K and our filings on Form 10-Q.
Contact:
Investor Relations
(281) 776-7575
[email protected]
Jon Kimmins, EVP, CFO and Treasurer
Tailored Brands, Inc.
Ken Dennard
Dennard • Lascar Associates
(1) |
See Use of Non-GAAP Financial Measures for additional information. Non-GAAP adjusted EPS is referred to as "adjusted EPS" for simplicity. |
TAILORED BRANDS, INC. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS |
||||||||
(Unaudited) |
||||||||
For the Three Months Ended April 30, 2016 and May 2, 2015 |
||||||||
(In thousands, except per share data) |
||||||||
Three Months Ended |
Variance |
|||||||
% of |
% of |
Basis |
||||||
2016 |
Sales |
2015 |
Sales |
Dollar |
% |
Points |
||
Net sales: |
||||||||
Retail clothing product |
$ 615,668 |
74.28% |
$ 666,862 |
75.34% |
$ (51,194) |
(7.68%) |
(1.06) |
|
Rental services |
99,831 |
12.04% |
103,129 |
11.65% |
(3,298) |
(3.20%) |
0.39 |
|
Alteration and other services |
50,743 |
6.12% |
54,280 |
6.13% |
(3,537) |
(6.52%) |
(0.01) |
|
Total retail sales |
766,242 |
92.45% |
824,271 |
93.13% |
(58,029) |
(7.04%) |
(0.68) |
|
Corporate apparel clothing product |
62,580 |
7.55% |
60,818 |
6.87% |
1,762 |
2.90% |
0.68 |
|
Total net sales |
828,822 |
100.00% |
885,089 |
100.00% |
(56,267) |
(6.36%) |
0.00 |
|
Total cost of sales |
476,981 |
57.55% |
503,537 |
56.89% |
(26,556) |
(5.27%) |
0.66 |
|
Gross margin(a): |
||||||||
Retail clothing product |
345,313 |
56.09% |
372,478 |
55.86% |
(27,165) |
(7.29%) |
0.23 |
|
Rental services |
83,947 |
84.09% |
87,045 |
84.40% |
(3,098) |
(3.56%) |
(0.31) |
|
Alteration and other services |
14,593 |
28.76% |
18,130 |
33.40% |
(3,537) |
(19.51%) |
(4.64) |
|
Occupancy costs |
(110,135) |
(14.37%) |
(113,096) |
(13.72%) |
2,961 |
2.62% |
(0.65) |
|
Total retail gross margin |
333,718 |
43.55% |
364,557 |
44.23% |
(30,839) |
(8.46%) |
(0.68) |
|
Corporate apparel clothing product |
18,123 |
28.96% |
16,995 |
27.94% |
1,128 |
6.64% |
1.02 |
|
Total gross margin |
351,841 |
42.45% |
381,552 |
43.11% |
(29,711) |
(7.79%) |
(0.66) |
|
Advertising expense |
47,928 |
5.78% |
50,656 |
5.72% |
(2,728) |
(5.39%) |
0.06 |
|
Selling, general and administrative expenses |
272,918 |
32.93% |
275,607 |
31.14% |
(2,689) |
(0.98%) |
1.79 |
|
Operating income |
30,995 |
3.74% |
55,289 |
6.25% |
(24,294) |
(43.94%) |
(2.51) |
|
Net interest |
(26,489) |
(3.20%) |
(26,455) |
(2.99%) |
(34) |
0.13% |
(0.21) |
|
Loss on extinguishment of debt |
- |
0.00% |
(12,675) |
(1.43%) |
12,675 |
(100.00%) |
1.43 |
|
Earnings before income taxes |
4,506 |
0.54% |
16,159 |
1.83% |
(11,653) |
(72.11%) |
(1.28) |
|
Provision for income taxes |
2,869 |
0.35% |
5,790 |
0.65% |
(2,921) |
(50.45%) |
(0.31) |
|
Net earnings |
$ 1,637 |
0.20% |
$ 10,369 |
1.17% |
$ (8,732) |
(84.21%) |
(0.97) |
|
Net earnings per diluted common share allocated to common shareholders |
$ 0.03 |
$ 0.21 |
||||||
Weighted-average diluted common shares outstanding: |
48,621 |
48,429 |
||||||
(a) Gross margin percent of sales is calculated as a percentage of related sales. |
TAILORED BRANDS, INC. |
||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||
(In thousands) |
||||
(Unaudited) |
||||
April 30, |
May 2, |
|||
2016 |
2015 |
|||
ASSETS |
||||
Current assets: |
||||
Cash and cash equivalents |
$ 36,429 |
$ 61,802 |
||
Accounts receivable, net |
83,333 |
83,169 |
||
Inventories |
1,076,733 |
986,457 |
||
Other current assets |
77,903 |
165,698 |
||
Total current assets |
1,274,398 |
1,297,126 |
||
Property and equipment, net |
521,144 |
560,141 |
||
Rental product, net |
174,240 |
146,050 |
||
Goodwill |
121,498 |
893,435 |
||
Intangible assets, net |
177,826 |
664,935 |
||
Other assets |
7,715 |
9,764 |
||
Total assets |
$ 2,276,821 |
$ 3,571,451 |
||
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY |
||||
Current liabilities: |
||||
Accounts payable |
$ 203,248 |
$ 233,066 |
||
Accrued expenses and other current liabilities |
311,044 |
291,284 |
||
Current portion of long-term debt |
42,451 |
7,000 |
||
Total current liabilities |
556,743 |
531,350 |
||
Long-term debt, net |
1,613,192 |
1,647,986 |
||
Deferred taxes and other liabilities |
197,116 |
412,575 |
||
Total liabilities |
2,367,051 |
2,591,911 |
||
Shareholders' (deficit) equity: |
||||
Preferred stock |
- |
- |
||
Common stock |
486 |
485 |
||
Capital in excess of par |
456,107 |
442,743 |
||
(Accumulated deficit) retained earnings |
(535,006) |
538,716 |
||
Accumulated other comprehensive (loss) income |
(11,817) |
789 |
||
Treasury stock, at cost |
- |
(3,193) |
||
Total shareholders' (deficit) equity |
(90,230) |
979,540 |
||
Total liabilities and shareholders' (deficit) equity |
$ 2,276,821 |
$ 3,571,451 |
TAILORED BRANDS, INC. |
||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||
(Unaudited) |
||||
For the Three Months Ended April 30, 2016 and May 2, 2015 |
||||
(In thousands) |
||||
Three Months Ended |
||||
2016 |
2015 |
|||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||
Net earnings |
$ 1,637 |
$ 10,369 |
||
Non-cash adjustments to net earnings: |
||||
Depreciation and amortization |
30,306 |
31,906 |
||
Rental product amortization |
8,304 |
7,604 |
||
Asset impairment charges |
1,162 |
- |
||
Loss on extinguishment of debt |
- |
12,675 |
||
Amortization of deferred financing costs |
1,666 |
1,796 |
||
Amortization of discount on long-term debt |
250 |
340 |
||
Loss on disposition of assets |
9 |
424 |
||
Other |
7,953 |
12,480 |
||
Changes in operating assets and liabilities |
(4,852) |
(28,609) |
||
Net cash provided by operating activities |
46,435 |
48,985 |
||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||
Capital expenditures |
(30,325) |
(30,384) |
||
Proceeds from sales of property and equipment |
501 |
- |
||
Net cash used in investing activities |
(29,824) |
(30,384) |
||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||
Payments on term loan |
(1,750) |
(4,500) |
||
Proceeds from asset-based revolving credit facility |
204,014 |
3,000 |
||
Payments on asset-based revolving credit facility |
(204,014) |
(3,000) |
||
Deferred financing costs |
- |
(3,566) |
||
Cash dividends paid |
(8,921) |
(8,863) |
||
Proceeds from issuance of common stock |
434 |
908 |
||
Tax payments related to vested deferred stock units |
(1,247) |
(4,506) |
||
Excess tax benefits from share-based plans |
- |
981 |
||
Repurchases of common stock |
- |
(277) |
||
Net cash used in financing activities |
(11,484) |
(19,823) |
||
Effect of exchange rate changes |
1,322 |
763 |
||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
6,449 |
(459) |
||
Balance at beginning of period |
29,980 |
62,261 |
||
Balance at end of period |
$ 36,429 |
$ 61,802 |
TAILORED BRANDS, INC.
UNAUDITED NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
Use of Non-GAAP Financial Measures
In addition to providing financial results in accordance with GAAP, we have provided adjusted information for fiscal first quarter 2016 and 2015. This non-GAAP financial information is provided to enhance the user's overall understanding of the Company's financial performance by removing the impacts of large, unusual or unique transactions that we believe are not indicative of our core operating results, primarily costs related to our store rationalization and profit improvement programs as well as certain items related to the acquisition and integration of Jos. A. Bank. Management uses these adjusted results to assess the Company's performance, to make decisions about how to allocate resources and to develop expectations for future operating performance. In addition, adjusted EPS is used as a performance measure in the Company's executive compensation program to determine the number of performance units that are ultimately earned.
The non-GAAP financial information should be considered in addition to, not as a substitute for or as being superior to, financial information prepared in accordance with GAAP. Management strongly encourages investors and shareholders to review the Company's financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.
A reconciliation of this non-GAAP information to our actual results follows and may not sum due to rounded numbers.
GAAP to Non-GAAP Adjusted Statements of Earnings Information |
||||||
GAAP to Non-GAAP Adjusted - Three Months Ended April 30, 2016 |
||||||
Consolidated Results |
GAAP Results |
Jos. A. Bank Integration(1) |
Profit Improvement(2) |
Other |
Total Adjustments |
Non-GAAP Adjusted Results |
Retail clothing product gross margin |
$ 345,313 |
$ - |
$ - |
$ (23) |
$ (23) |
$ 345,290 |
Alteration and other services gross margin |
14,593 |
- |
151 |
- |
151 |
14,744 |
Occupancy costs |
(110,135) |
541 |
- |
(564) |
(23) |
(110,158) |
Total gross margin |
351,841 |
541 |
151 |
(587) |
105 |
351,946 |
Selling, general and administrative expenses |
272,918 |
(3,082) |
(13,010) |
(305) |
(16,397) |
256,521 |
Operating income(3) |
30,995 |
3,623 |
13,161 |
(282) |
16,502 |
47,497 |
Provision for income taxes(4) |
2,869 |
4,209 |
7,078 |
|||
Net earnings |
1,637 |
12,293 |
13,930 |
|||
Net earnings per diluted common share allocated to common shareholders |
$ 0.03 |
$ 0.26 |
$ 0.29 |
(1) Primarily consisting of severance costs and accelerated depreciation. |
||||||
(2) Consists of $5.0 million of consulting costs, $3.8 million of severance costs, store closure costs, $2.0 million of store impairment charges and accelerated depreciation, $1.9 million of lease termination costs and $0.5 million of other costs. |
||||||
(3) Of the $16.5 million in total adjustments to operating income, $8.2 million relates to the retail segment and $8.3 million relates to shared services. |
||||||
(4) The tax effect of the excluded items is computed as the difference between tax expense on a GAAP basis and tax expense on an adjusted non-GAAP basis. |
GAAP to Non-GAAP Adjusted - Three Months Ended May 2, 2015 |
|||||||
Consolidated Results |
GAAP Results |
Acquisition & Integration(1) |
Purchase Acctg. Allocation(2) |
Other(3) |
Total Adjustments |
Non-GAAP Adjusted Results |
|
Retail clothing product gross margin |
$ 372,478 |
$ - |
$ 740 |
$ - |
$ 740 |
$ 373,218 |
|
Occupancy costs |
(113,096) |
- |
286 |
- |
286 |
(112,810) |
|
Total gross margin |
381,552 |
- |
1,026 |
- |
1,026 |
382,578 |
|
Selling, general and administrative expenses |
275,607 |
(5,949) |
(2,069) |
(3,604) |
(11,622) |
263,985 |
|
Operating income(4) |
55,289 |
5,949 |
3,095 |
3,604 |
12,648 |
67,937 |
|
Loss on extinguishment of debt |
(12,675) |
12,675 |
- |
- |
12,675 |
- |
|
Provision for income taxes(5) |
5,790 |
9,683 |
15,473 |
||||
Net earnings |
10,369 |
15,640 |
26,009 |
||||
Net earnings per diluted common share allocated to common shareholders |
$ 0.21 |
$0.33 |
$ 0.54 |
(1) Acquisition & integration primarily relates to Jos. A. Bank. |
|||||||
(2) Consists of depreciation and amortization adjustments resulting from the recognition of intangible assets and step up in fair value for PP&E for Jos. A. Bank. |
|||||||
(3) Primarily consists of $3.7 million of separation costs with a former executive. |
|||||||
(4) Of the $12.6 million in total adjustments to operating income, $10.9 million relates to the retail segment and $1.7 million relates to shared services. |
|||||||
(5) The tax effect of the excluded items is computed as the difference between tax expense on a GAAP basis and tax expense on an adjusted non-GAAP basis. |
GAAP to Non-GAAP Adjusted - Three Months Ended April 30, 2016 |
||||
Jos. A. Bank Brand |
GAAP Results |
Total Adjustments |
Non-GAAP Adjusted Results |
|
Gross margin before occupancy |
$ 98,882 |
$ (23) |
$ 98,859 |
|
Occupancy costs |
(36,402) |
(52) |
(36,454) |
|
Selling, general and administrative expenses |
69,295 |
(4,849) |
64,446 |
|
Operating income |
(6,815) |
(4,774) |
(2,041) |
GAAP to Non-GAAP Adjusted - Three Months Ended May 2, 2015 |
||||
Jos. A. Bank Brand |
GAAP Results |
Total Adjustments |
Non-GAAP Adjusted Results |
|
Gross margin before occupancy |
$ 121,191 |
$ 740 |
$ 121,931 |
|
Occupancy costs |
(38,321) |
286 |
(38,035) |
|
Selling, general and administrative expenses |
72,624 |
(4,740) |
67,884 |
|
Operating income |
10,246 |
(5,766) |
16,012 |
SOURCE Tailored Brands, Inc.
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