Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 28, 2017 | Nov. 25, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | Tailored Brands Inc | |
Entity Central Index Key | 884,217 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 28, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-03 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 49,243,027 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 | Oct. 29, 2016 |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 126,244 | $ 70,889 | $ 34,948 |
Accounts receivable, net | 81,193 | 65,714 | 71,898 |
Inventories | 973,001 | 955,512 | 1,047,915 |
Other current assets | 53,566 | 73,602 | 60,190 |
Total current assets | 1,234,004 | 1,165,717 | 1,214,951 |
PROPERTY AND EQUIPMENT, net | 454,921 | 484,165 | 501,391 |
RENTAL PRODUCT, net | 125,320 | 152,610 | 160,101 |
GOODWILL | 119,125 | 117,026 | 116,026 |
INTANGIBLE ASSETS, net | 169,072 | 171,659 | 172,337 |
OTHER ASSETS | 8,859 | 6,695 | 10,323 |
TOTAL ASSETS | 2,111,301 | 2,097,872 | 2,175,129 |
CURRENT LIABILITIES: | |||
Accounts payable | 186,862 | 177,380 | 200,199 |
Accrued expenses and other current liabilities | 281,533 | 267,899 | 280,658 |
Income taxes payable | 21,224 | 1,262 | 917 |
Current portion of long-term debt | 8,750 | 13,379 | 7,000 |
Total current liabilities | 498,369 | 459,920 | 488,774 |
LONG-TERM DEBT, net | 1,467,735 | 1,582,150 | 1,588,873 |
DEFERRED TAXES, net AND OTHER LIABILITIES | 160,197 | 163,420 | 175,179 |
Total liabilities | 2,126,301 | 2,205,490 | 2,252,826 |
COMMITMENTS AND CONTINGENCIES | |||
SHAREHOLDERS' DEFICIT: | |||
Preferred stock | |||
Common stock | 492 | 487 | 487 |
Capital in excess of par | 485,299 | 470,801 | 466,817 |
Accumulated deficit | (469,463) | (538,823) | (499,663) |
Accumulated other comprehensive loss | (31,328) | (40,083) | (45,338) |
Total shareholders' deficit | (15,000) | (107,618) | (77,697) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 2,111,301 | $ 2,097,872 | $ 2,175,129 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Net sales: | ||||
Total net sales | $ 810,818 | $ 846,934 | $ 2,444,482 | $ 2,585,440 |
Cost of sales: | ||||
Total cost of sales | 452,061 | 469,728 | 1,356,589 | 1,446,089 |
Gross margin: | ||||
Total gross margin | 358,757 | 377,206 | 1,087,893 | 1,139,351 |
Advertising expense | 38,664 | 45,656 | 120,804 | 138,547 |
Selling, general and administrative expenses | 243,466 | 270,494 | 750,995 | 849,122 |
Operating (loss) income | 76,627 | 61,056 | 216,094 | 151,682 |
Interest income | 159 | 52 | 324 | 102 |
Interest expense | (24,412) | (25,476) | (75,200) | (77,853) |
Gain on extinguishment of debt, net | 2,539 | 1,808 | 6,535 | 1,737 |
Earnings (loss) before income taxes | 54,913 | 37,440 | 147,753 | 75,668 |
Provision (benefit) for income taxes | 18,021 | 9,007 | 50,551 | 20,623 |
Net earnings (loss) | $ 36,892 | $ 28,433 | $ 97,202 | $ 55,045 |
Net earnings per common share allocated to common shareholders: | ||||
Basic (in dollars per share) | $ 0.75 | $ 0.58 | $ 1.98 | $ 1.13 |
Diluted (in dollars per share) | $ 0.75 | $ 0.58 | $ 1.97 | $ 1.13 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 49,206 | 48,655 | 49,040 | 48,570 |
Diluted (in shares) | 49,430 | 48,812 | 49,251 | 48,691 |
Cash dividends declared per common share (in dollars per share) | $ 0.18 | $ 0.18 | $ 0.54 | $ 0.54 |
Retail Segment | ||||
Net sales: | ||||
Retail clothing product | $ 575,203 | $ 575,046 | $ 1,753,782 | $ 1,806,660 |
Rental services | 126,410 | 138,724 | 373,208 | 403,564 |
Alteration and other services | 45,909 | 49,919 | 138,835 | 149,888 |
Total net sales | 747,522 | 763,689 | 2,265,825 | 2,360,112 |
Cost of sales: | ||||
Retail clothing product | 247,293 | 247,978 | 748,802 | 796,215 |
Rental services | 20,455 | 22,958 | 60,580 | 65,943 |
Alteration and other services | 34,138 | 33,526 | 103,686 | 104,085 |
Occupancy costs | 103,579 | 108,923 | 311,994 | 327,673 |
Total cost of sales | 405,465 | 413,385 | 1,225,062 | 1,293,916 |
Gross margin: | ||||
Retail clothing product | 327,910 | 327,068 | 1,004,980 | 1,010,445 |
Rental services | 105,955 | 115,766 | 312,628 | 337,621 |
Alteration and other services | 11,771 | 16,393 | 35,149 | 45,803 |
Occupancy costs | (103,579) | (108,923) | (311,994) | (327,673) |
Total gross margin | 342,057 | 350,304 | 1,040,763 | 1,066,196 |
Corporate Apparel Segment | ||||
Net sales: | ||||
Total net sales | 63,296 | 83,245 | 178,657 | 225,328 |
Cost of sales: | ||||
Total cost of sales | 46,596 | 56,343 | 131,527 | 152,173 |
Gross margin: | ||||
Total gross margin | $ 16,700 | $ 26,902 | $ 47,130 | $ 73,155 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | ||||
Net earnings | $ 36,892 | $ 28,433 | $ 97,202 | $ 55,045 |
Currency translation adjustments | (5,257) | (15,075) | 10,857 | (18,246) |
Unrealized gain (loss) on cash flow hedges, net of tax | 2,110 | 948 | (2,102) | 1,394 |
Comprehensive income | $ 33,745 | $ 14,306 | $ 105,957 | $ 38,193 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 28, 2017 | Oct. 29, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net earnings | $ 97,202 | $ 55,045 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 78,929 | 87,838 |
Rental product amortization | 32,779 | 35,982 |
Gain on extinguishment of debt, net | (6,535) | (1,737) |
Amortization of deferred financing costs and discount on long-term debt | 5,391 | 5,650 |
Loss on disposition of assets | 1,407 | 616 |
Asset impairment charges | 2,867 | 4,293 |
Share-based compensation | 14,850 | 13,958 |
Deferred tax benefit | (243) | (13,233) |
Deferred rent expense and other | 422 | (1,281) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (13,192) | (13,273) |
Inventories | (13,569) | (32,833) |
Rental product | (6,554) | (37,817) |
Other assets | 16,632 | 84,844 |
Accounts payable, accrued expenses and other current liabilities | 24,394 | (4,314) |
Income taxes payable | 19,870 | (2,065) |
Other liabilities | (2,112) | (4,789) |
Net cash provided by operating activities | 252,538 | 176,884 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (55,956) | (80,550) |
Acquisition of business, net of cash | (457) | |
Proceeds from sales of property and equipment | 2,157 | 605 |
Net cash used in investing activities | (54,256) | (79,945) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on term loan | (9,879) | (40,701) |
Proceeds from asset-based revolving credit facility | 235,900 | 520,550 |
Payments on asset-based revolving credit facility | (235,900) | (520,550) |
Repurchase and retirement of senior notes | (106,731) | (21,924) |
Deferred financing costs | (2,464) | |
Cash dividends paid | (26,895) | (26,438) |
Proceeds from issuance of common stock | 1,334 | 1,451 |
Tax payments related to vested deferred stock units | (1,682) | (1,258) |
Net cash used in financing activities | (146,317) | (88,870) |
Effect of exchange rate changes | 3,390 | (3,101) |
INCREASE IN CASH AND CASH EQUIVALENTS | 55,355 | 4,968 |
Balance at beginning of period | 70,889 | 29,980 |
Balance at end of period | $ 126,244 | $ 34,948 |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Oct. 28, 2017 | |
Significant Accounting Policies | |
Significant Accounting Policies | 1. Significant Accounting Policies Basis of Presentation — The condensed consolidated financial statements herein include the accounts of Tailored Brands, Inc. and its subsidiaries (the "Company") and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). As applicable under such regulations, certain information and footnote disclosures have been condensed or omitted. We believe the presentation and disclosures herein are adequate to make the information not misleading, and the condensed consolidated financial statements reflect all elimination entries and normal recurring adjustments which are necessary for a fair presentation of the financial position, results of operations and cash flows at the dates and for the periods presented. Certain prior period amounts have been reclassified to conform to the current period presentation. Our business results historically have fluctuated throughout the year and, as a result, the operating results of the interim periods presented are not necessarily indicative of the results that may be achieved for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended January 28, 2017. Unless the context otherwise requires, "Company", "we", "us" and "our" refer to Tailored Brands, Inc. and its subsidiaries. The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual amounts could differ from those estimates. Recent Accounting Pronouncements — We have considered all new accounting pronouncements and have concluded there are no new pronouncements that may have a material impact on our financial position, results of operations, or cash flows, based on current information, except for those listed below. In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases. ASU 2016-02 increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between previous U.S. GAAP and ASU 2016-02 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. ASU 2016-02 is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of ASU 2016-02 is permitted. The guidance is required to be adopted using the modified retrospective approach. We are currently evaluating the impact ASU 2016-02 will have on our financial position, results of operations and cash flows but expect that it will result in a significant increase in our long-term assets and liabilities given we have a considerable number of operating leases. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. In August 2015, the FASB issued ASU No. 2015-14 which deferred the effective date of ASU 2014-09 by one year. As a result of this deferral, ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted for annual reporting periods beginning after December 15, 2016. The guidance allows for either a full retrospective or a modified retrospective transition method. Based on our preliminary assessment, we determined that the adoption of ASU 2014-09 will impact the timing of revenue recognition related to our customer loyalty program and gift cards. Upon adoption, for our customer loyalty program, we will no longer use the incremental cost method approach, rather we will use a deferred revenue model. For income from breakage of gift cards, which is currently recognized as a reduction of selling, general and administrative expenses ("SG&A") when the redemption of the gift card is remote, the new guidance requires classification within net sales with breakage recognized proportionately over the expected redemption period. Additionally, under the new guidance, we expect to recognize allowances for estimated sales returns on a gross basis rather than net basis on the condensed consolidated balance sheets. We are in the process of finalizing and quantifying the effects of the areas described above including additional disclosure requirements. We will adopt ASU 2014-09 on February 4, 2018, under the modified retrospective approach, which will result in a cumulative adjustment to retained earnings. |
Termination of Tuxedo Rental Li
Termination of Tuxedo Rental License Agreement with Macy's | 9 Months Ended |
Oct. 28, 2017 | |
Termination of Tuxedo Rental License Agreement with Macy's [Abstract] | |
Termination of Tuxedo Rental License Agreement with Macy's | 2. Termination of Tuxedo Rental License Agreement with Macy's During the first quarter of fiscal 2017, we reached an agreement with Macy's to wind down operations under the tuxedo rental license agreement established between Macy's and The Men's Wearhouse, Inc. ("The Men's Wearhouse") in 2015. The winding down of our tuxedo shops within Macy's is complete and all tuxedo shops within Macy's closed in the second quarter of 2017. As a result of the agreement, during the first quarter of fiscal 2017, we incurred $17.2 million of termination-related costs, of which $14.6 million were cash charges. These costs included $12.3 million related to contract termination, $1.4 million of rental product write-offs, $1.2 million of asset impairment charges and $2.3 million of other costs, all of which relate to our retail segment. Of the $17.2 million in termination-related costs, $15.8 million is recorded in SG&A and $1.4 million is included in cost of sales in the condensed consolidated statement of earnings. At October 28, 2017, $0.4 million of such costs are included in accrued expenses and other current liabilities in the condensed consolidated balance sheet. |
Restructuring and Other Charges
Restructuring and Other Charges | 9 Months Ended |
Oct. 28, 2017 | |
Restructuring and Other Charges | |
Restructuring and Other Charges | 3. Restructuring and Other Charges During the fourth quarter of fiscal 2015, we began implementing initiatives intended to reduce costs and improve operating performance. These initiatives included a store rationalization program as well as a profit improvement program to drive operating efficiencies and improve our expense structure. These programs were substantially completed in fiscal 2016 and resulted in the closure of 75 Jos. A. Bank full line stores, the closure of 56 factory and outlet stores at Jos. A. Bank and Men's Wearhouse and the closure of 102 Men's Wearhouse and Tux stores. No charges were incurred under these initiatives for the three and nine months ended October 28, 2017. A summary of the charges incurred in the three and nine months ended October 29, 2016 incurred under these initiatives since inception is presented in the table below (amounts in thousands): For the Three Months Ended For the Nine Months Ended October 29, 2016 October 29, 2016 Lease termination costs $ 8,667 $ 37,004 Store asset impairment charges and accelerated depreciation, net of deferred rent (844) 2,330 Consulting costs 1,806 13,583 Severance and employee-related costs 481 4,643 Other costs 839 1,565 Total pre-tax restructuring and other charges (1) $ 10,949 $ 59,125 (1) Consists of $12.4 million in SG&A offset by a $1.5 million reduction in cost of sales for the three months ended October 29, 2016. Of the total amount recorded for the three months ended October 29, 2016, $9.1 million relates to our retail segment and $1.8 million relates to shared services. Consists of $61.8 million included in SG&A offset by a $2.7 million reduction in cost of sales for the nine months ended October 29, 2016. Of the total amount recorded for the nine months ended October 29, 2016, $42.7 million relates to our retail segment and $16.4 million relates to shared services. The following table is a rollforward of amounts included in accrued expenses and other current liabilities in the condensed consolidated balance sheet related to the pre-tax restructuring and other charges (amounts in thousands): Severance and Lease Employee- Termination Consulting Other Related Costs Costs Costs Costs Total Beginning Balance, January 28, 2017 $ 986 $ 4,834 $ 60 $ 25 $ 5,905 Charges, excluding non-cash items — — — — — Payments (504) (4,377) (60) (25) (4,966) Ending Balance, October 28, 2017 $ 482 $ 457 $ — $ — $ 939 In addition to the restructuring costs described above, for the three months ended October 29, 2016, we incurred integration and other costs related to Jos. A. Bank totaling $1.4 million, of which $0.9 million are included in SG&A and $0.5 million are included in cost of sales in the condensed consolidated statement of earnings. For the nine months ended October 29, 2016, we incurred integration and other costs related to Jos. A. Bank totaling $7.1 million, of which $5.5 million are included in SG&A and $1.6 million are included in cost of sales in the condensed consolidated statement of earnings. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Oct. 28, 2017 | |
Earnings Per Share | |
Earnings Per Share | 4. Earnings Per Share Basic earnings per common share allocated to common shareholders is computed by dividing net earnings by the weighted-average common shares outstanding during the period. Diluted earnings per common share reflect the more dilutive earnings per common share amount calculated using the treasury stock method or the two-class method. For the three and nine months ended October 28, 2017, the treasury stock method is used to calculate diluted earnings per common share while the two-class method was used for the three and nine months ended October 29, 2016. Basic and diluted earnings per common share allocated to common shareholders are computed using the actual net earnings allocated to common shareholders and the actual weighted-average common shares outstanding rather than the rounded numbers presented within our condensed consolidated statement of earnings and the accompanying notes. As a result, it may not be possible to recalculate earnings per common share allocated to common shareholders in our condensed consolidated statement of earnings and the accompanying notes. The following table sets forth the computation of basic and diluted earnings per common share allocated to common shareholders (in thousands, except per share amounts): For the Three Months Ended For the Nine Months Ended October 28, October 29, October 28, October 29, 2017 2016 2017 2016 Numerator Net earnings $ 36,892 $ 28,433 $ 97,202 $ 55,045 Net earnings allocated to participating securities (restricted stock and deferred stock units) — (33) — (65) Net earnings allocated to common shareholders $ 36,892 $ 28,400 $ 97,202 $ 54,980 Denominator Basic weighted-average common shares outstanding 49,206 48,655 49,040 48,570 Dilutive effect of share-based awards 224 157 211 121 Diluted weighted-average common shares outstanding 49,430 48,812 49,251 48,691 Net earnings per common share allocated to common shareholders: Basic $ 0.75 $ 0.58 $ 1.98 $ 1.13 Diluted $ 0.75 $ 0.58 $ 1.97 $ 1.13 For the three and nine months ended October 28, 2017, 2.2 million and 2.1 million anti-dilutive shares of common stock were excluded from the calculation of diluted earnings per common share, respectively. For the three and nine months ended October 29, 2016, 1.9 million and 1.7 million anti-dilutive shares of common stock were excluded from the calculation of diluted earnings per common share, respectively. |
Debt
Debt | 9 Months Ended |
Oct. 28, 2017 | |
Debt | |
Debt | 5. Debt In 2014, The Men's Wearhouse entered into a term loan credit agreement that provides for a senior secured term loan in the aggregate principal amount of $1.1 billion (the "Term Loan") and a $500.0 million asset-based revolving credit agreement (the "ABL Facility", and together with the Term Loan, the "Credit Facilities") with certain of our U.S. subsidiaries and Moores the Suit People Inc., one of our Canadian subsidiaries, as co-borrowers. Proceeds from the Term Loan were reduced by an $11.0 million original issue discount ("OID"), which is presented as a reduction of the outstanding balance on the Term Loan on the balance sheet and will be amortized to interest expense over the contractual life of the Term Loan. In addition, in 2014, The Men's Wearhouse issued $600.0 million in aggregate principal amount of 7.00% Senior Notes due 2022 (the "Senior Notes"). 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. 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. In addition, we are currently restricted on our ability to pay dividends on our common stock in excess of $10.0 million per quarter. Since entering into these financing arrangements, our total leverage ratio and secured leverage ratio have been above the maximums specified in the agreements, which was anticipated when we entered into these arrangements. As a result, we were subject to certain additional restrictions, including limitations on our ability to make significant acquisitions and incur additional indebtedness. As of October 28, 2017, our total leverage ratio and secured leverage ratio were below the maximums specified in the agreements and we believe these ratios will remain below the maximums specified in the agreements during the remainder of fiscal 2017 and beyond, which will result in the elimination of these additional restrictions. In addition, in accordance with the terms of the Credit Facilities, we made a mandatory excess cash flow prepayment offer of $4.6 million to the Term Loan lenders prior to April 28, 2017. On May 2, 2017, the entire $4.6 million prepayment was made together with normal principal and interest payments on the Term Loan. Credit Facilities The Term Loan is guaranteed, jointly and severally, by Tailored Brands, Inc. and certain of our U.S. subsidiaries and will mature in June 2021. The interest rate on the Term Loan is based on 1-month LIBOR, which was 1.24% at October 28, 2017, plus the applicable margin which is currently 3.50%, resulting in a total interest rate of 4.74%. In January 2015, we entered into an interest rate swap agreement, in which the variable rate payments due under a portion of the Term Loan were exchanged for a fixed rate. In April 2017, we entered into an additional interest rate swap agreement to exchange variable rate payments under a portion of the Term Loan for a fixed rate. At October 28, 2017, the total notional amount under our interest rate swaps is $490.0 million. See Note 14 for additional information on our interest rate swaps. In 2015, The Men's Wearhouse entered into Incremental Facility Agreement No. 1 (the "Incremental Agreement") resulting in a refinancing of $400.0 million aggregate principal amount of the Term Loan from a variable rate to a fixed rate of 5.0% per annum. The Incremental Agreement did not impact the total amount borrowed under the Term Loan, the maturity date of the Term Loan, or collateral and guarantees under the Term Loan. As a result of our interest rate swaps and the Incremental Agreement, we have converted a significant portion of the variable interest rate under the Term Loan to a fixed rate and, as of October 28, 2017, the Term Loan had a weighted average interest rate of 5.13%. 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 October 28, 2017, there were no borrowings outstanding under the ABL Facility. During the nine months ended October 28, 2017, the maximum borrowing outstanding under the ABL Facility was $34.7 million. We utilize letters of credit primarily as collateral for workers compensation claims and to secure inventory purchases. At October 28, 2017, letters of credit totaling approximately $38.7 million were issued and outstanding. Borrowings available under the ABL Facility as of October 28, 2017 were $511.3 million. Senior Notes The Senior Notes are guaranteed, jointly and severally, on an unsecured basis by Tailored Brands, Inc. and certain of our U.S. subsidiaries. The Senior Notes and the related guarantees are senior unsecured obligations of the Company and the guarantors, respectively, and will rank equally with all of the Company's and each guarantor's present and future senior indebtedness. The Senior Notes will mature in July 2022. Interest on the Senior Notes is payable in January and July of each year. Long-Term Debt During the third quarter of 2017, we repurchased and retired $65.0 million in face value of Senior Notes through open market transactions, which were consummated via borrowings on our ABL Facility. As a result, we recorded a net gain on extinguishment totaling $2.5 million, which is included as a separate line in the condensed consolidated statement of earnings. The net gain on extinguishment reflects a $3.4 million gain upon repurchase partially offset by the elimination of unamortized deferred financing costs totaling $0.9 million related to the Senior Notes. For the nine months ended October 28, 2017, as a result of the repurchase and retirement of a total of $115.0 million in face value of Senior Notes and our excess cash flow prepayment, we recorded a net gain on extinguishment totaling $6.5 million, which reflects a $8.2 million gain upon repurchase partially offset by the elimination of unamortized deferred financing costs of $1.7 million, which is included as a separate line in the condensed consolidated statement of earnings. The following table provides details on our long-term debt as of October 28, 2017, October 29, 2016 and January 28, 2017 (in thousands): October 28, October 29, January 28, 2017 2016 2017 Term Loan (net of unamortized OID of $3.4 million at October 28, 2017, $4.4 million at October 29, 2016, and $4.1 million at January 28, 2017) $ 1,033,514 $ 1,044,173 $ 1,042,660 Senior Notes 460,000 575,000 575,000 Less: Deferred financing costs related to the Term Loan and Senior Notes (17,029) (23,300) (22,131) Total long-term debt, net 1,476,485 1,595,873 1,595,529 Current portion of long-term debt (8,750) (7,000) (13,379) Total long-term debt, net of current portion $ 1,467,735 $ 1,588,873 $ 1,582,150 |
Supplemental Cash Flows
Supplemental Cash Flows | 9 Months Ended |
Oct. 28, 2017 | |
Supplemental Cash Flows | |
Supplemental Cash Flows | 6. Supplemental Cash Flows Supplemental disclosure of cash flow information is as follows (in thousands): For the Nine Months Ended October 28, October 29, 2017 2016 Cash paid for interest $ 66,628 $ 62,450 Cash paid (refunded) for income taxes, net $ 17,798 $ (44,961) We had unpaid capital expenditure purchases included in accounts payable and accrued expenses and other current liabilities of approximately $7.1 million and $7.8 million at October 28, 2017 and October 29, 2016, respectively. Capital expenditure purchases are recorded as cash outflows from investing activities in the condensed consolidated statement of cash flows in the period they are paid. Cash dividends declared of $9.2 million and $9.0 million at October 28, 2017 and October 29, 2016, respectively, are included in accrued expenses and other current liabilities. |
Inventories
Inventories | 9 Months Ended |
Oct. 28, 2017 | |
Inventories | |
Inventories | 7. Inventories The following table provides details on our inventories as of October 28, 2017, October 29, 2016 and January 28, 2017 (in thousands): October 28, October 29, January 28, 2017 2016 2017 Finished goods $ 873,030 $ 963,036 $ 846,585 Raw materials and merchandise components 99,971 84,879 108,927 Total inventories $ 973,001 $ 1,047,915 $ 955,512 |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 28, 2017 | |
Income Taxes | |
Income Taxes | 8. Income Taxes Our effective income tax rate increased to 32.8% for the third quarter of 2017 from 24.1% for the third quarter of 2016 primarily due to higher U.S. income as compared to income earned in foreign jurisdictions this year compared to last year. Our effective income tax rate increased to 34.2% for the first nine months of 2017 from 27.3% for the first nine months of 2016 primarily due to higher U.S. income as compared to income earned in foreign jurisdictions this year compared to last year. In addition, the effective income tax rate for the first nine months of 2017 was impacted by $2.2 million of tax deficiencies related to the vesting of stock-based awards resulting from the adoption of new accounting guidance related to stock-based compensation. See Note 11 for additional information. Additionally, we are currently undergoing several federal, foreign and state audits; however, we currently do not believe these audits will result in any material charge to tax expense in the future. |
Other Current Assets, Accrued E
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities | 9 Months Ended |
Oct. 28, 2017 | |
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities | |
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities | 9. Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities Other current assets consist of the following (in thousands): October 28, October 29, January 28, 2017 2016 2017 Prepaid expenses $ 44,473 $ 43,778 $ 47,057 Tax receivable 506 4,697 15,794 Other 8,587 11,715 10,751 Total other current assets $ 53,566 $ 60,190 $ 73,602 Accrued expenses and other current liabilities consist of the following (in thousands): October 28, October 29, January 28, 2017 2016 2017 Accrued salary, bonus, sabbatical, vacation and other benefits $ 79,753 $ 70,631 $ 72,589 Customer deposits, prepayments and refunds payable 37,822 29,371 28,384 Unredeemed gift cards 34,552 34,693 40,865 Sales, value added, payroll, property and other taxes payable 30,220 36,021 31,188 Accrued workers compensation and medical costs 27,860 30,818 31,609 Accrued interest 19,550 25,884 15,457 Loyalty program reward certificates 11,199 10,704 9,840 Accrued dividends 10,789 9,572 9,842 Accrued royalties 6,020 7,977 3,720 Lease termination and other store closure costs 1,027 6,442 4,834 Other 22,741 18,545 19,571 Total accrued expenses and other current liabilities $ 281,533 $ 280,658 $ 267,899 Deferred taxes, net and other liabilities consist of the following (in thousands): October 28, October 29, January 28, 2017 2016 2017 Deferred and other income tax liabilities, net $ 91,760 $ 102,243 $ 92,079 Deferred rent and landlord incentives 60,040 61,641 61,215 Unfavorable lease liabilities 3,279 5,394 4,693 Other 5,118 5,901 5,433 Total deferred taxes, net and other liabilities $ 160,197 $ 175,179 $ 163,420 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 9 Months Ended |
Oct. 28, 2017 | |
Accumulated Other Comprehensive (Loss) Income. | |
Accumulated Other Comprehensive (Loss) Income | 10. Accumulated Other Comprehensive (Loss) Income The following table summarizes the components of accumulated other comprehensive (loss) income for the nine months ended October 28, 2017 (in thousands and net of tax): Foreign Currency Cash Flow Pension Translation Hedges Plan Total BALANCE— January 28, 2017 $ (40,205) $ (82) $ 204 $ (40,083) Other comprehensive income (loss) before reclassifications 10,857 (4,240) — 6,617 Amounts reclassified from accumulated other comprehensive loss — 2,138 — 2,138 Net current-period other comprehensive income (loss) 10,857 (2,102) — 8,755 BALANCE— October 28, 2017 $ (29,348) $ (2,184) $ 204 $ (31,328) The following table summarizes the components of accumulated other comprehensive (loss) income for the nine months ended October 29, 2016 (in thousands and net of tax): Foreign Currency Cash Flow Pension Translation Hedges Plan Total BALANCE— January 30, 2016 $ (26,659) $ (2,007) $ 180 $ (28,486) Other comprehensive (loss) income before reclassifications (18,246) 354 — (17,892) Amounts reclassified from accumulated other comprehensive loss — 1,040 — 1,040 Net current-period other comprehensive (loss) income (18,246) 1,394 — (16,852) BALANCE— October 29, 2016 $ (44,905) $ (613) $ 180 $ (45,338) Amounts reclassified from other comprehensive (loss) income for the nine months ended October 28, 2017 relate to changes in the fair value of our interest rate swaps which is recorded within interest expense in the condensed consolidated statement of earnings and changes in the fair value of cash flow hedges related to inventory purchases, which is recorded within cost of sales in the condensed consolidated statement of earnings. Amounts reclassified from other comprehensive (loss) income for the nine months ended October 29, 2016 relate to changes in the fair value of our interest rate swap, which is recorded within interest expense in the condensed consolidated statement of earnings. |
Share-Based Compensation Plans
Share-Based Compensation Plans | 9 Months Ended |
Oct. 28, 2017 | |
Share-Based Compensation Plans | |
Share-Based Compensation Plans | 11. Share-Based Compensation Plans For a discussion of our share-based compensation plans, refer to Note 13 in our Annual Report on Form 10-K for the fiscal year ended January 28, 2017. During the first quarter of fiscal 2017, we adopted ASU No. 2016-09, Compensation-Stock Compensation . ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The recognition of excess tax benefits and deficiencies related to the vesting of stock-based awards in the statement of earnings and presentation of excess tax benefits on the statement of cash flows were adopted prospectively, with no adjustments made to prior periods. See Note 8 for additional information. In addition, upon adoption, we did not change our policy on accounting for forfeitures, which is to estimate the number of awards expected to be forfeited and adjusting the estimate as needed. Overall, the adoption of ASU 2016-09 did not have a material impact on our financial statements. Non-Vested Deferred Stock Units, Performance Units and Restricted Stock The following table summarizes the activity of time-based and performance-based awards (collectively, "DSUs") for the nine months ended October 28, 2017: Weighted-Average Units Grant-Date Fair Value Time- Performance- Time- Performance- Based Based Based Based Non-Vested at January 28, 2017 1,061,965 523,948 $ 24.31 $ 28.28 Granted 472,708 542,528 Vested (1) (455,925) — — Forfeited (51,271) (41,942) Non-Vested at October 28, 2017 1,027,477 1,024,534 $ $ (1) Includes 125, 806 shares relinquished for tax payments related to vested DSUs for the nine months ended October 28, 2017. The following table summarizes the activity of restricted stock for the nine months ended October 28, 2017: Weighted- Shares Grant-Date Non-Vested at January 28, 2017 36,878 $ 15.56 Granted — — Vested (36,878) Forfeited — — Non-Vested at October 28, 2017 — $ — Restricted stock awards receive non-forfeitable dividends, if any, when and if paid to shareholders of record at the payment date. As of October 28, 2017, we have unrecognized compensation expense related to non-vested DSUs of approximately $22.0 million, which is expected to be recognized over a weighted-average period of 1.6 years. Stock Options The following table summarizes the activity of stock options for the nine months ended October 28, 2017: Weighted- Number of Average Shares Exercise Price Outstanding at January 28, 2017 1,194,690 $ 29.70 Granted 630,083 11.54 Exercised — — Forfeited (50,856) 16.25 Expired (40,243) Outstanding at October 28, 2017 1,733,674 $ 23.23 Exercisable at October 28, 2017 736,137 $ 33.33 The weighted-average grant date fair value of the 630,083 stock options granted during the nine months ended October 28, 2017 was $3.86 per share. The following table summarizes the weighted-average assumptions used to fair value the stock options at the date of grant using the Black-Scholes option model for the nine months ended October 28, 2017: For the Nine Months Ended October 28, 2017 Risk-free interest rates Expected lives 5.0 years Dividend yield Expected volatility As of October 28, 2017, we have unrecognized compensation expense related to non-vested stock options of approximately $3.7 million, which is expected to be recognized over a weighted-average period of 1.4 years. Cash Settled Awards During 2017, we 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 and includes a market condition. 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 October 28, 2017, the liability associated with the cash settled awards was $2.3 million with $1.4 million recorded in accrued expenses and other current liabilities and $0.9 million recorded in other liabilities in the condensed consolidated balance sheets. The following table summarizes the activity of cash settled awards for the nine months ended October 28, 2017 (in thousands): Cash Settled Awards Non-Vested at January 28, 2017 $ — Granted 8,377 Vested — Forfeited (149) Non-Vested at October 28, 2017 $ 8,228 Share-Based Compensation Expense Share-based compensation expense, including cash settled awards, recognized for the three and nine months ended October 28, 2017 was $8.2 million and $17.2 million, respectively. Share-based compensation expense recognized for the three and nine months ended October 29, 2016 was $5.2 million and $14.0 million, respectively. There were no cash settled awards granted during 2016. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Oct. 28, 2017 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 12. Goodwill and Other Intangible Assets Goodwill Goodwill allocated to our reportable segments and changes in the net carrying amount of goodwill for the nine months ended October 28, 2017 are as follows (in thousands): Corporate Retail Apparel Total Balance at January 28, 2017 $ 94,511 $ 22,515 $ 117,026 Goodwill of acquired business — 695 695 Translation adjustment 433 971 1,404 Balance at October 28, 2017 $ 94,944 $ 24,181 $ 119,125 The goodwill of acquired business resulted from an immaterial acquisition by our United Kingdom ("UK") based operations. Goodwill is evaluated for impairment at least annually. A more frequent evaluation is performed if events or circumstances indicate that impairment could have occurred. Such events or circumstances could include, but are not limited to, new significant negative industry or economic trends, unanticipated changes in the competitive environment, decisions to significantly modify or dispose of operations and a significant sustained decline in the market price of our stock. No impairment evaluation was considered necessary during the first nine months ended October 28, 2017. Intangible Assets The gross carrying amount and accumulated amortization of our identifiable intangible assets are as follows (in thousands): October 28, October 29, January 28, 2017 2016 2017 Amortizable intangible assets: Carrying amount: Trademarks, tradenames and franchise agreements $ 16,074 $ 15,897 $ 15,966 Favorable leases 13,475 14,381 13,826 Customer relationships 26,612 24,750 25,483 Total carrying amount 56,161 55,028 55,275 Accumulated amortization: Trademarks, tradenames and franchise agreements (10,404) (9,930) (10,055) Favorable leases (4,856) (4,045) (3,961) Customer relationships (16,078) (12,891) (13,804) Total accumulated amortization (31,338) (26,866) (27,820) Total amortizable intangible assets, net 24,823 28,162 27,455 Indefinite-lived intangible assets: Trademarks and tradename 144,249 144,175 144,204 Total intangible assets, net $ 169,072 $ 172,337 $ 171,659 Pre-tax amortization expense associated with intangible assets subject to amortization totaled $1.0 million and $3.1 million for the three and nine months ended October 28, 2017. Pre-tax amortization expense associated with intangible assets subject to amortization totaled $1.2 million and $3.7 million for the three and nine months ended and October 29, 2016. Pre-tax amortization associated with intangible assets subject to amortization at October 28, 2017 is estimated to be $1.1 million for the remainder of fiscal 2017, $3.8 million for fiscal 2018, $3.6 million for fiscal 2019, $3.5 million for fiscal 2020 and $3.4 million for fiscal 2021. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Oct. 28, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | 13. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a three-tier fair value hierarchy, categorizing the inputs used to measure fair value. The hierarchy can be described as follows: Level 1- observable inputs such as quoted prices in active markets; Level 2- inputs other than the quoted prices in active markets that are observable either directly or indirectly; and Level 3- unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and Liabilities that are Measured at Fair Value on a Recurring Basis Fair Value Measurements at Reporting Date Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Instruments Inputs Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total October 28, 2017— Assets: Derivative financial instruments $ — $ $ — $ Liabilities: Derivative financial instruments $ — $ $ — $ January 28, 2017— Assets: Derivative financial instruments $ — $ $ — $ Liabilities: Derivative financial instruments $ — $ $ — $ October 29, 2016— Assets: Derivative financial instruments $ — $ $ — $ Liabilities: Derivative financial instruments $ — $ $ — $ Derivative financial instruments are comprised of (1) foreign currency forward exchange contracts primarily entered into to minimize our foreign currency exposure related to forecasted purchases of certain inventories denominated in a currency different from the operating entity's functional currency, (2) foreign currency forward exchange contracts primarily entered into to minimize our foreign currency exposure related to forecasted revenues from our UK operations denominated in a currency different from the UK's functional currency and (3) interest rate swap agreements to minimize our exposure to interest rate changes on our outstanding indebtedness. These derivative financial instruments are recorded in the condensed consolidated balance sheets at fair value based upon observable market inputs. Derivative financial instruments in an asset position are included within other current assets in the condensed consolidated balance sheets. Derivative financial instruments in a liability position are included within accrued expenses and other current liabilities or noncurrent liabilities in the condensed consolidated balance sheets. See Note 14 for further information regarding our derivative instruments. Assets and Liabilities that are Measured at Fair Value on a Non-Recurring Basis Long-lived assets, such as property and equipment, goodwill and identifiable intangibles, are periodically evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the asset carrying amount exceeds its fair value, an impairment charge is recognized in the amount by which the carrying amount exceeds the fair value of the asset. During the nine months ended October 28, 2017, we incurred $2.9 million of asset impairment charges, which is included within SG&A expenses in our condensed consolidated statement of earnings, primarily related to underperforming stores as well as long-lived assets related to our now-terminated tuxedo rental license agreement with Macy's. We estimated the fair value of the long-lived assets based on an income approach using projected future cash flows discounted using a weighted-average cost of capital analysis that reflects current market conditions, which we classify as Level 3 within the fair value hierarchy. Fair Value of Financial Instruments Our financial instruments consist of cash, accounts receivable, accounts payable, accrued expenses and other current liabilities and long-term debt. Management estimates that, as of October 28, 2017, October 29, 2016, and January 28, 2017, the carrying value of our financial instruments, other than long-term debt, approximated their fair value due to the highly liquid or short-term nature of these instruments. The fair values of our Term Loan were valued based upon observable market data provided by a third party for similar types of debt, which we classify as a Level 2 input within the fair value hierarchy. The fair value of our Senior Notes is based on quoted prices in active markets, which we classify as a Level 1 input within the fair value hierarchy. The table below shows the fair value and carrying value of our long-term debt, including current portion (in thousands): October 28, 2017 October 29, 2016 January 28, 2017 Carrying Estimated Carrying Estimated Carrying Estimated Amount (1) Fair Value Amount (1) Fair Value Amount (1) Fair Value Long-term debt, including current portion $ 1,476,485 $ 1,461,283 $ 1,595,873 $ 1,556,661 $ 1,595,529 $ 1,556,200 (1) The carrying value of the long-term debt, including current portion is net of deferred financing costs of $17.0 million, $23.3 million and $22.1 million as of October 28, 2017, October 29, 2016 and January 28, 2017, respectively. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Oct. 28, 2017 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 14. Derivative Financial Instruments As discussed in Note 5, in January 2015, we entered into an interest rate swap agreement on an initial notional amount of $520.0 million that matures in August 2018 with periodic interest settlements. At October 28, 2017, the notional amount totaled $200.0 million. Under this interest rate swap agreement, we receive a floating rate based on 3-month LIBOR and pay a fixed rate of 5.03% (including the applicable margin of 3.50%) on the outstanding notional amount. We have designated the interest rate swap as a cash flow hedge of the variability of interest payments under the Term Loan due to changes in the LIBOR benchmark interest rate. In addition, in April 2017, we entered into an interest rate swap agreement on an initial notional amount of $260.0 million that matures in June 2021 with periodic interest settlements. At October 28, 2017, the notional amount totaled $290.0 million. Under this interest rate swap agreement, we receive a floating rate based on 1-month LIBOR and pay a fixed rate of 5.56% (including the applicable margin of 3.50%) on the outstanding notional amount. We have designated the interest rate swap as a cash flow hedge of the variability of interest payments under the Term Loan due to changes in the LIBOR benchmark interest rate. At October 28, 2017, the fair value of the interest rate swaps was a net liability of $1.8 million with $1.9 million recorded in accrued expenses and other current liabilities offset by $0.1 million recorded in other assets in our condensed consolidated balance sheet. The effective portion of the swaps is reported as a component of accumulated other comprehensive (loss) income. There was no hedge ineffectiveness at October 28, 2017. Changes in fair value are reclassified from accumulated other comprehensive (loss) income into earnings in the same period that the hedged item affects earnings. Over the next 12 months, $1. 8 million of the effective portion of the interest rate swaps is expected to be reclassified from accumulated other comprehensive (loss) income into earnings within interest expense. If, at any time, either interest rate swap is determined to be ineffective, in whole or in part, due to changes in the interest rate swap or underlying debt agreements, the fair value of the portion of the interest rate swap determined to be ineffective will be recognized as a gain or loss in the statement of earnings for the applicable period . Also, we have entered into derivative instruments to hedge our foreign exchange risk, specifically related to the British pound and Euro. We have designated these instruments as cash flow hedges of the variability in exchange rates for those foreign currencies. At October 28, 2017, the fair value of these cash flow hedges was a liability of $0.2 million recorded in accrued expenses and other current liabilities in our condensed consolidated balance sheet. The effective portion of the hedges is reported as a component of accumulated other comprehensive (loss) income. Hedge ineffectiveness at October 28, 2017 was immaterial. Changes in fair value are reclassified from accumulated other comprehensive (loss) income into earnings in the same period that the hedged item affects earnings. Over the next 12 months, $1.5 million of the effective portion of the cash flow hedges is expected to be reclassified as expense into cost of sales from accumulated other comprehensive (loss) income. 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 October 28, 2017, the fair value of our derivative instruments was an asset of $0.1 million included in other assets in our condensed consolidated balance sheet. For the three and nine months ended October 28, 2017, we recognized net pre-tax gains of $0.7 million and $0.2 million, respectively, in cost of sales in the condensed consolidated statement of earnings for our derivative financial instruments not designated as cash flow hedges. For the three and nine months ended October 29, 2016, we recognized net pre-tax gains of $0.4 million and $2.3 million, respectively, in cost of sales in the condensed consolidated statement of earnings for our derivative financial instruments not designated as cash flow hedges. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Oct. 28, 2017 | |
Segment Reporting | |
Segment Reporting | 15. Segment Reporting Our operations are conducted in two reportable segments, retail and corporate apparel, based on the way we manage, evaluate and internally report our business activities. The retail segment includes the results from our four retail merchandising brands: Men's Wearhouse/Men's Wearhouse and Tux, Jos. A. Bank, Moores Clothing for Men ("Moores") and K&G. These four brands are operating segments that have been aggregated into the retail reportable segment. MW Cleaners is also aggregated in the retail segment as these operations have not had a significant effect on our revenues or expenses. Specialty apparel merchandise offered by our four retail merchandising concepts include suits, suit separates, sport coats, slacks, business casual, denim, sportswear, outerwear, dress shirts, shoes and accessories for men. Women's career and casual apparel, sportswear and accessories, including shoes, and children's apparel is offered at most of our K&G stores. Rental product is offered at our Men's Wearhouse/Men's Wearhouse and Tux, Jos. A. Bank and Moores retail stores. The corporate apparel segment includes the results from our corporate apparel and uniform operations conducted by Dimensions, Alexandra, and Yaffy in the UK and Twin Hill in the U.S., which provide corporate apparel uniforms and workwear to workforces. We measure segment profitability based on operating income, defined as income before interest expense, interest income, gain on extinguishment of debt, net and income taxes, before shared service expenses. Shared service expenses include costs incurred and directed primarily by our corporate offices that are not allocated to segments. Additional net sales information is as follows (in thousands): For the Three Months Ended For the Nine Months Ended October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016 Net sales: MW (1) $ 448,955 $ 461,806 $ 1,327,773 $ 1,386,347 Jos. A. Bank 162,685 165,992 504,238 530,482 K&G 69,604 70,874 244,098 252,007 Moores 57,607 56,520 163,732 166,203 MW Cleaners 8,671 8,497 25,984 25,073 Total retail segment 747,522 763,689 2,265,825 2,360,112 Total corporate apparel segment 63,296 83,245 178,657 225,328 Total net sales $ 810,818 $ $ $ (1) MW includes Men's Wearhouse, Men's Wearhouse and Tux, tuxedo shops within Macy's and Joseph Abboud. The following table sets forth supplemental products and services sales information for the Company (in thousands): For the Three Months Ended For the Nine Months Ended October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016 Net sales: Men's tailored clothing product $ 330,618 $ 326,741 $ 1,004,430 $ 1,025,495 Men's non-tailored clothing product 227,520 230,146 690,312 718,233 Women's clothing product 14,795 15,626 52,722 55,940 Other 2,270 2,533 6,318 6,992 Total retail clothing product 575,203 575,046 1,753,782 1,806,660 Rental services 126,410 138,724 373,208 403,564 Alteration services 37,238 41,422 112,851 124,815 Retail dry cleaning services 8,671 8,497 25,984 25,073 Total alteration and other services 45,909 49,919 138,835 149,888 Corporate apparel clothing product 63,296 83,245 178,657 225,328 Total net sales $ 810,818 $ $ $ Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes is as follows (in thousands): For the Three Months Ended For the Nine Months Ended October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016 Operating income: Retail $ 123,628 $ 97,629 $ 352,273 $ 278,732 Corporate apparel 3,072 10,314 7,150 24,288 Shared service expense (50,073) (46,887) (143,329) (151,338) Operating income 76,627 61,056 216,094 151,682 Interest income 159 52 324 102 Interest expense (24,412) (25,476) (75,200) (77,853) Gain on extinguishment of debt, net 2,539 1,808 6,535 1,737 Earnings before income taxes $ 54,913 $ 37,440 $ 147,753 $ 75,668 |
Legal Matters
Legal Matters | 9 Months Ended |
Oct. 28, 2017 | |
Legal Matters | |
Legal Matters | 16. Legal Matters On March 29, 2016, a putative class action lawsuit was filed against the Company and its Chief Executive Officer, Douglas S. Ewert, in the United States District Court for the Southern District of Texas (Case No. 4:16-cv-00838). The complaint attempts to allege claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of a putative class of persons who purchased or otherwise acquired the Company's securities between June 18, 2014 and December 9, 2015 (the "Class Period"). On May 26, 2017, Lead Plaintiff Strathclyde Pension Fund filed an Amended Complaint alleging that during the Class Period Defendants omitted facts about the Company's Jos. A. Bank's business, financial status, and operations, the omission of which rendered Defendants' statements about the Jos. A. Bank business false or misleading. The amended complaint also named Jon W. Kimmins, the Company's former Chief Financial Officer, and Mary Beth Blake, the Company's current Brand President, Jos. A. Bank, as additional named defendants. We believe that the claims are without merit and are defending the lawsuit vigorously. The range of loss, if any, is not reasonably estimable at this time. We do not currently believe, however, that it will have a material adverse effect on our financial position, results of operations or cash flows. On February 17, 2016, Anthony Oliver filed a putative class action lawsuit against our Men's Wearhouse subsidiary in the United States District Court for the Central District of California (Case No. 2:16-cv-01100). The complaint attempts to allege claims under the Telephone Consumer Protection Act. In particular the complaint alleges that the Company sent unsolicited text messages to cellular telephones beginning October 1, 2013 to the present day. After we demonstrated that the Company had the plaintiff's permission to send him texts, the plaintiff filed an amended complaint alleging the Company sent text messages exceeding the number plaintiff had agreed to receive each week. The parties filed cross-motions for summary judgment and the case is stayed pending the Court's decision on those motions. We believe that the claims are without merit and intend to defend the lawsuit vigorously. The range of loss, if any, is not reasonably estimable at this time. We do not currently believe, however, that it will have a material adverse effect on our financial position, results of operations or cash flows. On August 2, 2017, two American Airlines employees 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 attempts to allege claims for strict liability and negligence 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 and adding claims for civil battery and intentional infliction of emotional distress. We believe that any lawsuit filed on the basis of the safety of the Twin Hill uniforms supplied to American Airlines is without merit, and we intend to contest this action vigorously. Twin Hill has substantial and convincing evidence of the uniforms' safety and fitness for their intended purpose and we believe that there is no evidence linking any of the plaintiffs' alleged injuries to our uniforms. The range of loss, if any, is not reasonably estimable at this time. We do not currently believe, however, that it will have a material adverse effect on our financial position, results of operations or cash flows. On 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. We believe that any lawsuit filed on the basis of the safety of the Twin Hill uniforms supplied to American Airlines is without merit, and we intend to contest this action vigorously. Twin Hill has substantial and convincing evidence of the uniforms' safety and fitness for their intended purpose and we believe that there is no evidence linking any of the plaintiffs' alleged injuries to our uniforms. The range of loss, if any, is not reasonably estimable at this time. We do not currently believe, however, that it will have a material adverse effect on our financial position, results of operations or cash flows. On October 30, 2017, Denise Mumma 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. RG17880635). 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. We believe that any lawsuit filed on the basis of the safety of the Twin Hill uniforms supplied to American Airlines is without merit, and we intend to contest this action vigorously. Twin Hill has substantial and convincing evidence of the uniforms' safety and fitness for their intended purpose and we believe that there is no evidence linking any of the plaintiffs' alleged injuries to our uniforms. The range of loss, if any, is not reasonably estimable at this time. We do not currently believe, however, that it will have a material adverse effect on our financial position, results of operations or cash flows. In addition, we are involved in various routine legal proceedings, including ongoing litigation, incidental to the conduct of our business. Management does not believe that any of these matters will have a material adverse effect on our financial position, results of operations or cash flows. |
Condensed Consolidating Informa
Condensed Consolidating Information | 9 Months Ended |
Oct. 28, 2017 | |
Condensed Consolidating Information | |
Condensed Consolidating Information | 17. Condensed Consolidating Information As discussed in Note 5, The Men's Wearhouse (the "Issuer") issued $600.0 million in aggregate principal amount of 7.00% Senior Notes. The Senior Notes are guaranteed jointly and severally, on an unsecured basis by Tailored Brands, Inc. (the "Parent") and certain of our U.S. subsidiaries (the "Guarantors"). Our 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. Tailored Brands, Inc. Condensed Consolidating Balance Sheet October 28, 2017 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 20,224 $ 1,941 $ 104,079 $ — $ 126,244 Accounts receivable, net 7,414 19,518 287,688 35,137 (268,564) 81,193 Inventories — 198,429 458,603 315,969 — 973,001 Other current assets 7,275 87,450 26,185 7,889 (75,233) 53,566 Total current assets 14,689 325,621 774,417 463,074 (343,797) 1,234,004 Property and equipment, net — 207,432 212,213 35,276 — 454,921 Rental product, net — 107,222 2,327 15,771 — 125,320 Goodwill — 6,160 68,510 44,455 — 119,125 Intangible assets, net — — 155,884 13,188 — 169,072 Investments in subsidiaries 77,901 1,308,676 — — (1,386,577) — Other assets — 7,780 821 6,558 (6,300) 8,859 Total assets $ 92,590 $ 1,962,891 $ 1,214,172 $ 578,322 $ (1,736,674) $ 2,111,301 LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY CURRENT LIABILITIES: Accounts payable $ 87,758 $ 189,756 $ 81,409 $ 96,503 $ (268,564) $ 186,862 Accrued expenses and other current liabilities 18,911 139,577 109,718 102,508 (67,957) 302,757 Current portion of long-term debt — 8,750 — — — 8,750 Total current liabilities 106,669 338,083 191,127 199,011 (336,521) 498,369 Long-term debt, net — 1,467,735 — — — 1,467,735 Deferred taxes, net and other liabilities 921 79,172 83,342 10,338 (13,576) 160,197 Shareholders' (deficit) equity (15,000) 77,901 939,703 368,973 (1,386,577) (15,000) Total liabilities and shareholders' (deficit) equity $ 92,590 $ 1,962,891 $ 1,214,172 $ 578,322 $ (1,736,674) $ 2,111,301 Tailored Brands, Inc. Condensed Consolidating Balance Sheet October 29, 2016 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 5,435 $ 1,984 $ 27,529 $ — $ 34,948 Accounts receivable, net 7,373 17,112 455,368 31,140 (439,095) 71,898 Inventories — 253,482 459,159 335,274 — 1,047,915 Other current assets 7,102 22,155 42,995 6,963 (19,025) 60,190 Total current assets 14,475 298,184 959,506 400,906 (458,120) 1,214,951 Property and equipment, net — 249,797 217,156 34,438 — 501,391 Rental product, net — 139,386 3,677 17,038 — 160,101 Goodwill — 6,160 68,510 41,356 — 116,026 Intangible assets, net — 105 157,788 14,444 — 172,337 Investments in subsidiaries (67,257) 1,375,395 — — (1,308,138) — Other assets 3,257 6,004 939 7,623 (7,500) 10,323 Total assets $ $ 2,075,031 $ 1,407,576 $ 515,805 $ $ 2,175,129 LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY CURRENT LIABILITIES: Accounts payable $ 16,216 $ 337,499 $ 99,597 $ 185,982 $ (439,095) $ 200,199 Accrued expenses and other current liabilities 9,617 143,023 105,446 42,514 (19,025) 281,575 Current portion of long-term debt — 7,000 — — — 7,000 Total current liabilities 25,833 487,522 205,043 228,496 (458,120) 488,774 Long-term debt, net — 1,588,873 — — — 1,588,873 Deferred taxes, net and other liabilities 2,339 65,893 104,512 9,935 (7,500) 175,179 Shareholders' (deficit) equity (77,697) (67,257) 1,098,021 277,374 (1,308,138) (77,697) Total liabilities and shareholders' (deficit) equity $ $ 2,075,031 $ 1,407,576 $ 515,805 $ $ 2,175,129 Tailored Brands, Inc. Condensed Consolidating Balance Sheet January 28, 2017 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 1,002 $ 1,881 $ 68,006 $ — $ 70,889 Accounts receivable, net 7,376 15,499 476,742 56,777 (490,680) 65,714 Inventories — 230,264 438,167 287,081 — 955,512 Other current assets 12,773 134,225 28,436 8,448 (110,280) 73,602 Total current assets 20,149 380,990 945,226 420,312 (600,960) 1,165,717 Property and equipment, net — 232,090 216,248 35,827 — 484,165 Rental product, net — 131,287 3,369 17,954 — 152,610 Goodwill — 6,160 68,510 42,356 — 117,026 Intangible assets, net — 78 157,270 14,311 — 171,659 Investments in subsidiaries (109,788) 1,425,622 — — (1,315,834) — Other assets — 5,615 959 7,321 (7,200) 6,695 Total assets $ (89,639) $ $ $ $ $ LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY CURRENT LIABILITIES: Accounts payable $ 15,352 $ 509,572 $ 82,337 $ 60,799 $ (490,680) $ 177,380 Accrued expenses and other current liabilities 2,627 111,617 129,420 135,777 (110,280) 269,161 Current portion of long-term debt — 13,379 — — — 13,379 Total current liabilities 17,979 634,568 211,757 196,576 (600,960) 459,920 Long-term debt, net — 1,582,150 — — — 1,582,150 Deferred taxes, net and other liabilities — 74,912 85,477 10,231 (7,200) 163,420 Shareholders' (deficit) equity (107,618) (109,788) 1,094,348 331,274 (1,315,834) (107,618) Total liabilities and shareholders' (deficit) equity $ (89,639) $ $ $ $ $ Tailored Brands, Inc. Condensed Consolidating Statement of Earnings (Loss) (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Three Months Ended October 28, 2017 Net sales $ — $ 447,936 $ 404,531 $ 242,893 $ (284,542) $ 810,818 Cost of sales — 227,612 317,262 191,729 (284,542) 452,061 Gross margin — 220,324 87,269 51,164 — 358,757 Operating expenses 917 135,740 134,433 27,465 (16,425) 282,130 Operating (loss) income (917) 84,584 (47,164) 23,699 16,425 76,627 Other income and expenses, net — — 16,425 — (16,425) — Interest expense, net (129) (27,789) 1,543 2,122 — (24,253) Gain on extinguishment of debt, net — 2,539 — — — 2,539 (Loss) earnings before income taxes (1,046) 59,334 (29,196) 25,821 — 54,913 (Benefit) provision for income taxes (337) 19,267 (9,441) 8,532 — 18,021 (Loss) earnings before equity in net income of subsidiaries (709) 40,067 (19,755) 17,289 — 36,892 Equity in earnings (loss) of subsidiaries 37,601 (2,466) — — (35,135) — Net earnings (loss) $ 36,892 $ 37,601 $ (19,755) $ 17,289 $ (35,135) $ 36,892 Comprehensive income (loss) $ 33,745 $ 39,114 $ (19,755) $ 12,629 $ (31,988) $ 33,745 Three Months Ended October 29, 2016 Net sales $ — $ 460,432 $ 466,476 $ 105,474 $ (185,448) $ 846,934 Cost of sales — 230,110 361,117 63,949 (185,448) 469,728 Gross margin — 230,322 105,359 41,525 — 377,206 Operating expenses 974 146,398 153,439 29,662 (14,323) 316,150 Operating (loss) income (974) 83,924 (48,080) 11,863 14,323 61,056 Other income and expenses, net — — 14,323 — (14,323) — Interest expense, net (8) (25,830) 517 (103) — (25,424) Gain on extinguishment of debt, net — 1,808 — — — 1,808 (Loss) earnings before income taxes (982) 59,902 (33,240) 11,760 — 37,440 (Benefit) provision for income taxes (247) 14,763 (8,119) 2,610 — 9,007 (Loss) earnings before equity in net income of subsidiaries (735) 45,139 (25,121) 9,150 — 28,433 Equity in earnings (loss) of subsidiaries 29,168 (15,971) — — (13,197) — Net earnings (loss) $ 28,433 $ 29,168 $ (25,121) $ 9,150 $ (13,197) $ 28,433 Comprehensive income (loss) $ 14,306 $ 30,116 $ (25,121) $ (5,925) $ 930 $ 14,306 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 Nine Months Ended October 28, 2017 Net sales $ — $ 1,324,731 $ 1,146,271 $ 513,276 $ (539,796) $ 2,444,482 Cost of sales — 648,900 860,944 386,541 (539,796) 1,356,589 Gross margin — 675,831 285,327 126,735 — 1,087,893 Operating expenses 2,599 425,912 405,988 82,321 (45,021) 871,799 Operating (loss) income (2,599) 249,919 (120,661) 44,414 45,021 216,094 Other income and expenses, net — — 45,295 (274) (45,021) — Interest expense, net 223 (79,010) 4,804 (893) — (74,876) Gain on extinguishment of debt, net — 6,535 — — — 6,535 (Loss) earnings before income taxes (2,376) 177,444 (70,562) 43,247 — 147,753 Provision (benefit) for income taxes 1,441 57,951 (23,398) 14,557 — 50,551 (Loss) earnings before equity in net income of subsidiaries (3,817) 119,493 (47,164) 28,690 — 97,202 Equity in earnings (loss) of subsidiaries 101,019 (18,474) — — (82,545) — Net earnings (loss) $ 97,202 $ 101,019 $ (47,164) $ 28,690 $ (82,545) $ 97,202 Comprehensive (loss) income $ 105,957 $ 100,578 $ (47,164) $ 37,886 $ (91,300) $ 105,957 Nine Months Ended October 29, 2016 Net sales $ — $ 1,382,515 $ 1,300,852 $ 315,060 $ (412,987) $ 2,585,440 Cost of sales — 676,761 992,265 190,050 (412,987) 1,446,089 Gross margin — 705,754 308,587 125,010 — 1,139,351 Operating expenses 2,554 452,661 486,419 88,958 (42,923) 987,669 Operating (loss) income (2,554) 253,093 (177,832) 36,052 42,923 151,682 Other income and expenses, net — — 42,923 — (42,923) — Interest expense, net (11) (78,862) 1,393 (271) — (77,751) Gain on extinguishment of debt, net — 1,737 — — — 1,737 (Loss) earnings before income taxes (2,565) 175,968 (133,516) 35,781 — 75,668 (Benefit) provision for income taxes (671) 46,915 (34,900) 9,279 — 20,623 (Loss) earnings before equity in net income of subsidiaries (1,894) 129,053 (98,616) 26,502 — 55,045 Equity in earnings (loss) of subsidiaries 56,939 (72,114) — — 15,175 — Net earnings (loss) 55,045 56,939 (98,616) 26,502 15,175 55,045 Comprehensive income (loss) $ 38,193 $ 58,333 $ (98,616) $ 8,256 $ 32,027 $ 38,193 Tailored Brands, Inc. Condensed Consolidating Statement of Cash Flows For the Nine Months Ended October 28, 2017 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ 27,243 $ 404,404 $ 34,049 $ (186,263) $ (26,895) $ 252,538 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures — (15,413) (36,146) (4,397) — (55,956) Acquisition of business, net of cash — — — (457) — (457) Intercompany activities — (223,800) — — 223,800 — Proceeds from sale of property and equipment — — 2,157 — — 2,157 Net cash used in investing activities — (239,213) (33,989) (4,854) 223,800 (54,256) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on term loan — (9,879) — — — (9,879) Proceeds from asset-based revolving credit facility — 235,900 — — — 235,900 Payments on asset-based revolving credit facility — (235,900) — — — (235,900) Repurchase and retirement of senior notes — (106,731) — — — (106,731) Deferred financing costs — (2,464) — — — (2,464) Intercompany activities — (26,895) — 223,800 (196,905) — Cash dividends paid (26,895) — — — — (26,895) Proceeds from issuance of common stock 1,334 — — — — 1,334 Tax payments related to vested deferred stock units (1,682) — — — — (1,682) Net cash (used in) provided by financing activities (27,243) (145,969) — 223,800 (196,905) (146,317) Effect of exchange rate changes — — — 3,390 — 3,390 Increase in cash and cash equivalents — 19,222 60 36,073 — 55,355 Cash and cash equivalents at beginning of period — 1,002 1,881 68,006 — 70,889 Cash and cash equivalents at end of period $ — $ 20,224 $ 1,941 $ 104,079 $ — $ 126,244 Tailored Brands, Inc. Condensed Consolidating Statement of Cash Flows For the Nine Months Ended October 29, 2016 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ 26,245 $ 153,072 $ 36,198 $ (12,193) $ (26,438) $ 176,884 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures — (40,273) (37,055) (3,222) — (80,550) Intercompany activities — (19,025) — — 19,025 — Proceeds from sale of property and equipment — — 598 7 — 605 Net cash used in investing activities — (59,298) (36,457) (3,215) 19,025 (79,945) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on term loan — (40,701) — — — (40,701) Proceeds from asset-based revolving credit facility — 517,500 — 3,050 — 520,550 Payments on asset-based revolving credit facility — (517,500) — (3,050) — (520,550) Repurchase and retirement of senior notes — (21,924) — — — (21,924) Intercompany activities — (26,438) — 19,025 7,413 — Cash dividends paid (26,438) — — — — (26,438) Proceeds from issuance of common stock 1,451 — — — — 1,451 Tax payments related to vested deferred stock units (1,258) — — — — (1,258) Net cash (used in) provided by financing activities (26,245) (89,063) — 19,025 7,413 (88,870) Effect of exchange rate changes — — — (3,101) — (3,101) Increase (decrease) in cash and cash equivalents — 4,711 (259) 516 — 4,968 Cash and cash equivalents at beginning of period — 724 2,243 27,013 — 29,980 Cash and cash equivalents at end of period $ — $ 5,435 $ 1,984 $ 27,529 $ — $ 34,948 |
Significant Accounting Polici23
Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 28, 2017 | |
Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation — The condensed consolidated financial statements herein include the accounts of Tailored Brands, Inc. and its subsidiaries (the "Company") and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). As applicable under such regulations, certain information and footnote disclosures have been condensed or omitted. We believe the presentation and disclosures herein are adequate to make the information not misleading, and the condensed consolidated financial statements reflect all elimination entries and normal recurring adjustments which are necessary for a fair presentation of the financial position, results of operations and cash flows at the dates and for the periods presented. Certain prior period amounts have been reclassified to conform to the current period presentation. Our business results historically have fluctuated throughout the year and, as a result, the operating results of the interim periods presented are not necessarily indicative of the results that may be achieved for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended January 28, 2017. Unless the context otherwise requires, "Company", "we", "us" and "our" refer to Tailored Brands, Inc. and its subsidiaries. The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual amounts could differ from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements — We have considered all new accounting pronouncements and have concluded there are no new pronouncements that may have a material impact on our financial position, results of operations, or cash flows, based on current information, except for those listed below. In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases. ASU 2016-02 increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between previous U.S. GAAP and ASU 2016-02 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. ASU 2016-02 is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of ASU 2016-02 is permitted. The guidance is required to be adopted using the modified retrospective approach. We are currently evaluating the impact ASU 2016-02 will have on our financial position, results of operations and cash flows but expect that it will result in a significant increase in our long-term assets and liabilities given we have a considerable number of operating leases. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. In August 2015, the FASB issued ASU No. 2015-14 which deferred the effective date of ASU 2014-09 by one year. As a result of this deferral, ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted for annual reporting periods beginning after December 15, 2016. The guidance allows for either a full retrospective or a modified retrospective transition method. Based on our preliminary assessment, we determined that the adoption of ASU 2014-09 will impact the timing of revenue recognition related to our customer loyalty program and gift cards. Upon adoption, for our customer loyalty program, we will no longer use the incremental cost method approach, rather we will use a deferred revenue model. For income from breakage of gift cards, which is currently recognized as a reduction of selling, general and administrative expenses ("SG&A") when the redemption of the gift card is remote, the new guidance requires classification within net sales with breakage recognized proportionately over the expected redemption period. Additionally, under the new guidance, we expect to recognize allowances for estimated sales returns on a gross basis rather than net basis on the condensed consolidated balance sheets. We are in the process of finalizing and quantifying the effects of the areas described above including additional disclosure requirements. We will adopt ASU 2014-09 on February 4, 2018, under the modified retrospective approach, which will result in a cumulative adjustment to retained earnings. |
Restructuring and Other Charg24
Restructuring and Other Charges (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Restructuring and Other Charges | |
Summary of charges incurred | A summary of the charges incurred in the three and nine months ended October 29, 2016 incurred under these initiatives since inception is presented in the table below (amounts in thousands): For the Three Months Ended For the Nine Months Ended October 29, 2016 October 29, 2016 Lease termination costs $ 8,667 $ 37,004 Store asset impairment charges and accelerated depreciation, net of deferred rent (844) 2,330 Consulting costs 1,806 13,583 Severance and employee-related costs 481 4,643 Other costs 839 1,565 Total pre-tax restructuring and other charges (1) $ 10,949 $ 59,125 (1) Consists of $12.4 million in SG&A offset by a $1.5 million reduction in cost of sales for the three months ended October 29, 2016. Of the total amount recorded for the three months ended October 29, 2016, $9.1 million relates to our retail segment and $1.8 million relates to shared services. Consists of $61.8 million included in SG&A offset by a $2.7 million reduction in cost of sales for the nine months ended October 29, 2016. Of the total amount recorded for the nine months ended October 29, 2016, $42.7 million relates to our retail segment and $16.4 million relates to shared services. |
Rollforward of amounts related to pre-tax restructuring and other charges | The following table is a rollforward of amounts included in accrued expenses and other current liabilities in the condensed consolidated balance sheet related to the pre-tax restructuring and other charges (amounts in thousands): Severance and Lease Employee- Termination Consulting Other Related Costs Costs Costs Costs Total Beginning Balance, January 28, 2017 $ 986 $ 4,834 $ 60 $ 25 $ 5,905 Charges, excluding non-cash items — — — — — Payments (504) (4,377) (60) (25) (4,966) Ending Balance, October 28, 2017 $ 482 $ 457 $ — $ — $ 939 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Earnings Per Share | |
Computation of basic and diluted earnings (loss) per common share allocated to common shareholders | The following table sets forth the computation of basic and diluted earnings per common share allocated to common shareholders (in thousands, except per share amounts): For the Three Months Ended For the Nine Months Ended October 28, October 29, October 28, October 29, 2017 2016 2017 2016 Numerator Net earnings $ 36,892 $ 28,433 $ 97,202 $ 55,045 Net earnings allocated to participating securities (restricted stock and deferred stock units) — (33) — (65) Net earnings allocated to common shareholders $ 36,892 $ 28,400 $ 97,202 $ 54,980 Denominator Basic weighted-average common shares outstanding 49,206 48,655 49,040 48,570 Dilutive effect of share-based awards 224 157 211 121 Diluted weighted-average common shares outstanding 49,430 48,812 49,251 48,691 Net earnings per common share allocated to common shareholders: Basic $ 0.75 $ 0.58 $ 1.98 $ 1.13 Diluted $ 0.75 $ 0.58 $ 1.97 $ 1.13 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Debt | |
Schedule of long-term debt | The following table provides details on our long-term debt as of October 28, 2017, October 29, 2016 and January 28, 2017 (in thousands): October 28, October 29, January 28, 2017 2016 2017 Term Loan (net of unamortized OID of $3.4 million at October 28, 2017, $4.4 million at October 29, 2016, and $4.1 million at January 28, 2017) $ 1,033,514 $ 1,044,173 $ 1,042,660 Senior Notes 460,000 575,000 575,000 Less: Deferred financing costs related to the Term Loan and Senior Notes (17,029) (23,300) (22,131) Total long-term debt, net 1,476,485 1,595,873 1,595,529 Current portion of long-term debt (8,750) (7,000) (13,379) Total long-term debt, net of current portion $ 1,467,735 $ 1,588,873 $ 1,582,150 |
Supplemental Cash Flows (Tables
Supplemental Cash Flows (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Supplemental Cash Flows | |
Schedule of supplemental disclosure of cash flow information | Supplemental disclosure of cash flow information is as follows (in thousands): For the Nine Months Ended October 28, October 29, 2017 2016 Cash paid for interest $ 66,628 $ 62,450 Cash paid (refunded) for income taxes, net $ 17,798 $ (44,961) |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Inventories | |
Schedule of inventories | The following table provides details on our inventories as of October 28, 2017, October 29, 2016 and January 28, 2017 (in thousands): October 28, October 29, January 28, 2017 2016 2017 Finished goods $ 873,030 $ 963,036 $ 846,585 Raw materials and merchandise components 99,971 84,879 108,927 Total inventories $ 973,001 $ 1,047,915 $ 955,512 |
Other Current Assets, Accrued29
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities | |
Other current assets | Other current assets consist of the following (in thousands): October 28, October 29, January 28, 2017 2016 2017 Prepaid expenses $ 44,473 $ 43,778 $ 47,057 Tax receivable 506 4,697 15,794 Other 8,587 11,715 10,751 Total other current assets $ 53,566 $ 60,190 $ 73,602 |
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities consist of the following (in thousands): October 28, October 29, January 28, 2017 2016 2017 Accrued salary, bonus, sabbatical, vacation and other benefits $ 79,753 $ 70,631 $ 72,589 Customer deposits, prepayments and refunds payable 37,822 29,371 28,384 Unredeemed gift cards 34,552 34,693 40,865 Sales, value added, payroll, property and other taxes payable 30,220 36,021 31,188 Accrued workers compensation and medical costs 27,860 30,818 31,609 Accrued interest 19,550 25,884 15,457 Loyalty program reward certificates 11,199 10,704 9,840 Accrued dividends 10,789 9,572 9,842 Accrued royalties 6,020 7,977 3,720 Lease termination and other store closure costs 1,027 6,442 4,834 Other 22,741 18,545 19,571 Total accrued expenses and other current liabilities $ 281,533 $ 280,658 $ 267,899 |
Deferred taxes, net and other liabilities | Deferred taxes, net and other liabilities consist of the following (in thousands): October 28, October 29, January 28, 2017 2016 2017 Deferred and other income tax liabilities, net $ 91,760 $ 102,243 $ 92,079 Deferred rent and landlord incentives 60,040 61,641 61,215 Unfavorable lease liabilities 3,279 5,394 4,693 Other 5,118 5,901 5,433 Total deferred taxes, net and other liabilities $ 160,197 $ 175,179 $ 163,420 |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive (Loss) Income (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Accumulated Other Comprehensive (Loss) Income. | |
Summary of components of accumulated other comprehensive (loss) income | The following table summarizes the components of accumulated other comprehensive (loss) income for the nine months ended October 28, 2017 (in thousands and net of tax): Foreign Currency Cash Flow Pension Translation Hedges Plan Total BALANCE— January 28, 2017 $ (40,205) $ (82) $ 204 $ (40,083) Other comprehensive income (loss) before reclassifications 10,857 (4,240) — 6,617 Amounts reclassified from accumulated other comprehensive loss — 2,138 — 2,138 Net current-period other comprehensive income (loss) 10,857 (2,102) — 8,755 BALANCE— October 28, 2017 $ (29,348) $ (2,184) $ 204 $ (31,328) The following table summarizes the components of accumulated other comprehensive (loss) income for the nine months ended October 29, 2016 (in thousands and net of tax): Foreign Currency Cash Flow Pension Translation Hedges Plan Total BALANCE— January 30, 2016 $ (26,659) $ (2,007) $ 180 $ (28,486) Other comprehensive (loss) income before reclassifications (18,246) 354 — (17,892) Amounts reclassified from accumulated other comprehensive loss — 1,040 — 1,040 Net current-period other comprehensive (loss) income (18,246) 1,394 — (16,852) BALANCE— October 29, 2016 $ (44,905) $ (613) $ 180 $ (45,338) |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Summary of time-based and performance-based awards activity | Weighted-Average Units Grant-Date Fair Value Time- Performance- Time- Performance- Based Based Based Based Non-Vested at January 28, 2017 1,061,965 523,948 $ 24.31 $ 28.28 Granted 472,708 542,528 Vested (1) (455,925) — — Forfeited (51,271) (41,942) Non-Vested at October 28, 2017 1,027,477 1,024,534 $ $ (1) Includes 125, 806 shares relinquished for tax payments related to vested DSUs for the nine months ended October 28, 2017. |
Summary of restricted stock activity | Weighted- Shares Grant-Date Non-Vested at January 28, 2017 36,878 $ 15.56 Granted — — Vested (36,878) Forfeited — — Non-Vested at October 28, 2017 — $ — |
Summary of stock option activity | Weighted- Number of Average Shares Exercise Price Outstanding at January 28, 2017 1,194,690 $ 29.70 Granted 630,083 11.54 Exercised — — Forfeited (50,856) 16.25 Expired (40,243) Outstanding at October 28, 2017 1,733,674 $ 23.23 Exercisable at October 28, 2017 736,137 $ 33.33 |
Weighted-average assumptions used to calculate fair value of stock options | For the Nine Months Ended October 28, 2017 Risk-free interest rates Expected lives 5.0 years Dividend yield Expected volatility |
Cash Settled Awards | |
Summary of share-based compensation of cash settled awards | The following table summarizes the activity of cash settled awards for the nine months ended October 28, 2017 (in thousands): Cash Settled Awards Non-Vested at January 28, 2017 $ — Granted 8,377 Vested — Forfeited (149) Non-Vested at October 28, 2017 $ 8,228 |
Goodwill and Other Intangible32
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Goodwill and Other Intangible Assets | |
Changes in the net carrying amount of goodwill | Goodwill allocated to our reportable segments and changes in the net carrying amount of goodwill for the nine months ended October 28, 2017 are as follows (in thousands): Corporate Retail Apparel Total Balance at January 28, 2017 $ 94,511 $ 22,515 $ 117,026 Goodwill of acquired business — 695 695 Translation adjustment 433 971 1,404 Balance at October 28, 2017 $ 94,944 $ 24,181 $ 119,125 |
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): October 28, October 29, January 28, 2017 2016 2017 Amortizable intangible assets: Carrying amount: Trademarks, tradenames and franchise agreements $ 16,074 $ 15,897 $ 15,966 Favorable leases 13,475 14,381 13,826 Customer relationships 26,612 24,750 25,483 Total carrying amount 56,161 55,028 55,275 Accumulated amortization: Trademarks, tradenames and franchise agreements (10,404) (9,930) (10,055) Favorable leases (4,856) (4,045) (3,961) Customer relationships (16,078) (12,891) (13,804) Total accumulated amortization (31,338) (26,866) (27,820) Total amortizable intangible assets, net 24,823 28,162 27,455 Indefinite-lived intangible assets: Trademarks and tradename 144,249 144,175 144,204 Total intangible assets, net $ 169,072 $ 172,337 $ 171,659 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Fair Value Measurements | |
Assets and Liabilities that are Measured at Fair Value on a Recurring Basis | Fair Value Measurements at Reporting Date Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Instruments Inputs Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total October 28, 2017— Assets: Derivative financial instruments $ — $ $ — $ Liabilities: Derivative financial instruments $ — $ $ — $ January 28, 2017— Assets: Derivative financial instruments $ — $ $ — $ Liabilities: Derivative financial instruments $ — $ $ — $ October 29, 2016— Assets: Derivative financial instruments $ — $ $ — $ Liabilities: Derivative financial instruments $ — $ $ — $ |
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): October 28, 2017 October 29, 2016 January 28, 2017 Carrying Estimated Carrying Estimated Carrying Estimated Amount (1) Fair Value Amount (1) Fair Value Amount (1) Fair Value Long-term debt, including current portion $ 1,476,485 $ 1,461,283 $ 1,595,873 $ 1,556,661 $ 1,595,529 $ 1,556,200 (1) The carrying value of the long-term debt, including current portion is net of deferred financing costs of $17.0 million, $23.3 million and $22.1 million as of October 28, 2017, October 29, 2016 and January 28, 2017, respectively. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Segment Reporting | |
Net sales by brand and reportable segment | Additional net sales information is as follows (in thousands): For the Three Months Ended For the Nine Months Ended October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016 Net sales: MW (1) $ 448,955 $ 461,806 $ 1,327,773 $ 1,386,347 Jos. A. Bank 162,685 165,992 504,238 530,482 K&G 69,604 70,874 244,098 252,007 Moores 57,607 56,520 163,732 166,203 MW Cleaners 8,671 8,497 25,984 25,073 Total retail segment 747,522 763,689 2,265,825 2,360,112 Total corporate apparel segment 63,296 83,245 178,657 225,328 Total net sales $ 810,818 $ $ $ (1) MW includes Men's Wearhouse, Men's Wearhouse and Tux, tuxedo shops within Macy's and Joseph Abboud. |
Supplemental products and services sales information | The following table sets forth supplemental products and services sales information for the Company (in thousands): For the Three Months Ended For the Nine Months Ended October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016 Net sales: Men's tailored clothing product $ 330,618 $ 326,741 $ 1,004,430 $ 1,025,495 Men's non-tailored clothing product 227,520 230,146 690,312 718,233 Women's clothing product 14,795 15,626 52,722 55,940 Other 2,270 2,533 6,318 6,992 Total retail clothing product 575,203 575,046 1,753,782 1,806,660 Rental services 126,410 138,724 373,208 403,564 Alteration services 37,238 41,422 112,851 124,815 Retail dry cleaning services 8,671 8,497 25,984 25,073 Total alteration and other services 45,909 49,919 138,835 149,888 Corporate apparel clothing product 63,296 83,245 178,657 225,328 Total net sales $ 810,818 $ $ $ |
Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes | Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes is as follows (in thousands): For the Three Months Ended For the Nine Months Ended October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016 Operating income: Retail $ 123,628 $ 97,629 $ 352,273 $ 278,732 Corporate apparel 3,072 10,314 7,150 24,288 Shared service expense (50,073) (46,887) (143,329) (151,338) Operating income 76,627 61,056 216,094 151,682 Interest income 159 52 324 102 Interest expense (24,412) (25,476) (75,200) (77,853) Gain on extinguishment of debt, net 2,539 1,808 6,535 1,737 Earnings before income taxes $ 54,913 $ 37,440 $ 147,753 $ 75,668 |
Condensed Consolidating Infor35
Condensed Consolidating Information (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Condensed Consolidating Information | |
Condensed Consolidating Balance Sheet | Tailored Brands, Inc. Condensed Consolidating Balance Sheet October 28, 2017 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 20,224 $ 1,941 $ 104,079 $ — $ 126,244 Accounts receivable, net 7,414 19,518 287,688 35,137 (268,564) 81,193 Inventories — 198,429 458,603 315,969 — 973,001 Other current assets 7,275 87,450 26,185 7,889 (75,233) 53,566 Total current assets 14,689 325,621 774,417 463,074 (343,797) 1,234,004 Property and equipment, net — 207,432 212,213 35,276 — 454,921 Rental product, net — 107,222 2,327 15,771 — 125,320 Goodwill — 6,160 68,510 44,455 — 119,125 Intangible assets, net — — 155,884 13,188 — 169,072 Investments in subsidiaries 77,901 1,308,676 — — (1,386,577) — Other assets — 7,780 821 6,558 (6,300) 8,859 Total assets $ 92,590 $ 1,962,891 $ 1,214,172 $ 578,322 $ (1,736,674) $ 2,111,301 LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY CURRENT LIABILITIES: Accounts payable $ 87,758 $ 189,756 $ 81,409 $ 96,503 $ (268,564) $ 186,862 Accrued expenses and other current liabilities 18,911 139,577 109,718 102,508 (67,957) 302,757 Current portion of long-term debt — 8,750 — — — 8,750 Total current liabilities 106,669 338,083 191,127 199,011 (336,521) 498,369 Long-term debt, net — 1,467,735 — — — 1,467,735 Deferred taxes, net and other liabilities 921 79,172 83,342 10,338 (13,576) 160,197 Shareholders' (deficit) equity (15,000) 77,901 939,703 368,973 (1,386,577) (15,000) Total liabilities and shareholders' (deficit) equity $ 92,590 $ 1,962,891 $ 1,214,172 $ 578,322 $ (1,736,674) $ 2,111,301 Tailored Brands, Inc. Condensed Consolidating Balance Sheet October 29, 2016 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 5,435 $ 1,984 $ 27,529 $ — $ 34,948 Accounts receivable, net 7,373 17,112 455,368 31,140 (439,095) 71,898 Inventories — 253,482 459,159 335,274 — 1,047,915 Other current assets 7,102 22,155 42,995 6,963 (19,025) 60,190 Total current assets 14,475 298,184 959,506 400,906 (458,120) 1,214,951 Property and equipment, net — 249,797 217,156 34,438 — 501,391 Rental product, net — 139,386 3,677 17,038 — 160,101 Goodwill — 6,160 68,510 41,356 — 116,026 Intangible assets, net — 105 157,788 14,444 — 172,337 Investments in subsidiaries (67,257) 1,375,395 — — (1,308,138) — Other assets 3,257 6,004 939 7,623 (7,500) 10,323 Total assets $ $ 2,075,031 $ 1,407,576 $ 515,805 $ $ 2,175,129 LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY CURRENT LIABILITIES: Accounts payable $ 16,216 $ 337,499 $ 99,597 $ 185,982 $ (439,095) $ 200,199 Accrued expenses and other current liabilities 9,617 143,023 105,446 42,514 (19,025) 281,575 Current portion of long-term debt — 7,000 — — — 7,000 Total current liabilities 25,833 487,522 205,043 228,496 (458,120) 488,774 Long-term debt, net — 1,588,873 — — — 1,588,873 Deferred taxes, net and other liabilities 2,339 65,893 104,512 9,935 (7,500) 175,179 Shareholders' (deficit) equity (77,697) (67,257) 1,098,021 277,374 (1,308,138) (77,697) Total liabilities and shareholders' (deficit) equity $ $ 2,075,031 $ 1,407,576 $ 515,805 $ $ 2,175,129 Tailored Brands, Inc. Condensed Consolidating Balance Sheet January 28, 2017 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 1,002 $ 1,881 $ 68,006 $ — $ 70,889 Accounts receivable, net 7,376 15,499 476,742 56,777 (490,680) 65,714 Inventories — 230,264 438,167 287,081 — 955,512 Other current assets 12,773 134,225 28,436 8,448 (110,280) 73,602 Total current assets 20,149 380,990 945,226 420,312 (600,960) 1,165,717 Property and equipment, net — 232,090 216,248 35,827 — 484,165 Rental product, net — 131,287 3,369 17,954 — 152,610 Goodwill — 6,160 68,510 42,356 — 117,026 Intangible assets, net — 78 157,270 14,311 — 171,659 Investments in subsidiaries (109,788) 1,425,622 — — (1,315,834) — Other assets — 5,615 959 7,321 (7,200) 6,695 Total assets $ (89,639) $ $ $ $ $ LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY CURRENT LIABILITIES: Accounts payable $ 15,352 $ 509,572 $ 82,337 $ 60,799 $ (490,680) $ 177,380 Accrued expenses and other current liabilities 2,627 111,617 129,420 135,777 (110,280) 269,161 Current portion of long-term debt — 13,379 — — — 13,379 Total current liabilities 17,979 634,568 211,757 196,576 (600,960) 459,920 Long-term debt, net — 1,582,150 — — — 1,582,150 Deferred taxes, net and other liabilities — 74,912 85,477 10,231 (7,200) 163,420 Shareholders' (deficit) equity (107,618) (109,788) 1,094,348 331,274 (1,315,834) (107,618) Total liabilities and shareholders' (deficit) equity $ (89,639) $ $ $ $ $ |
Condensed Consolidating Statement of Earnings (Loss) | Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Three Months Ended October 28, 2017 Net sales $ — $ 447,936 $ 404,531 $ 242,893 $ (284,542) $ 810,818 Cost of sales — 227,612 317,262 191,729 (284,542) 452,061 Gross margin — 220,324 87,269 51,164 — 358,757 Operating expenses 917 135,740 134,433 27,465 (16,425) 282,130 Operating (loss) income (917) 84,584 (47,164) 23,699 16,425 76,627 Other income and expenses, net — — 16,425 — (16,425) — Interest expense, net (129) (27,789) 1,543 2,122 — (24,253) Gain on extinguishment of debt, net — 2,539 — — — 2,539 (Loss) earnings before income taxes (1,046) 59,334 (29,196) 25,821 — 54,913 (Benefit) provision for income taxes (337) 19,267 (9,441) 8,532 — 18,021 (Loss) earnings before equity in net income of subsidiaries (709) 40,067 (19,755) 17,289 — 36,892 Equity in earnings (loss) of subsidiaries 37,601 (2,466) — — (35,135) — Net earnings (loss) $ 36,892 $ 37,601 $ (19,755) $ 17,289 $ (35,135) $ 36,892 Comprehensive income (loss) $ 33,745 $ 39,114 $ (19,755) $ 12,629 $ (31,988) $ 33,745 Three Months Ended October 29, 2016 Net sales $ — $ 460,432 $ 466,476 $ 105,474 $ (185,448) $ 846,934 Cost of sales — 230,110 361,117 63,949 (185,448) 469,728 Gross margin — 230,322 105,359 41,525 — 377,206 Operating expenses 974 146,398 153,439 29,662 (14,323) 316,150 Operating (loss) income (974) 83,924 (48,080) 11,863 14,323 61,056 Other income and expenses, net — — 14,323 — (14,323) — Interest expense, net (8) (25,830) 517 (103) — (25,424) Gain on extinguishment of debt, net — 1,808 — — — 1,808 (Loss) earnings before income taxes (982) 59,902 (33,240) 11,760 — 37,440 (Benefit) provision for income taxes (247) 14,763 (8,119) 2,610 — 9,007 (Loss) earnings before equity in net income of subsidiaries (735) 45,139 (25,121) 9,150 — 28,433 Equity in earnings (loss) of subsidiaries 29,168 (15,971) — — (13,197) — Net earnings (loss) $ 28,433 $ 29,168 $ (25,121) $ 9,150 $ (13,197) $ 28,433 Comprehensive income (loss) $ 14,306 $ 30,116 $ (25,121) $ (5,925) $ 930 $ 14,306 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 Nine Months Ended October 28, 2017 Net sales $ — $ 1,324,731 $ 1,146,271 $ 513,276 $ (539,796) $ 2,444,482 Cost of sales — 648,900 860,944 386,541 (539,796) 1,356,589 Gross margin — 675,831 285,327 126,735 — 1,087,893 Operating expenses 2,599 425,912 405,988 82,321 (45,021) 871,799 Operating (loss) income (2,599) 249,919 (120,661) 44,414 45,021 216,094 Other income and expenses, net — — 45,295 (274) (45,021) — Interest expense, net 223 (79,010) 4,804 (893) — (74,876) Gain on extinguishment of debt, net — 6,535 — — — 6,535 (Loss) earnings before income taxes (2,376) 177,444 (70,562) 43,247 — 147,753 Provision (benefit) for income taxes 1,441 57,951 (23,398) 14,557 — 50,551 (Loss) earnings before equity in net income of subsidiaries (3,817) 119,493 (47,164) 28,690 — 97,202 Equity in earnings (loss) of subsidiaries 101,019 (18,474) — — (82,545) — Net earnings (loss) $ 97,202 $ 101,019 $ (47,164) $ 28,690 $ (82,545) $ 97,202 Comprehensive (loss) income $ 105,957 $ 100,578 $ (47,164) $ 37,886 $ (91,300) $ 105,957 Nine Months Ended October 29, 2016 Net sales $ — $ 1,382,515 $ 1,300,852 $ 315,060 $ (412,987) $ 2,585,440 Cost of sales — 676,761 992,265 190,050 (412,987) 1,446,089 Gross margin — 705,754 308,587 125,010 — 1,139,351 Operating expenses 2,554 452,661 486,419 88,958 (42,923) 987,669 Operating (loss) income (2,554) 253,093 (177,832) 36,052 42,923 151,682 Other income and expenses, net — — 42,923 — (42,923) — Interest expense, net (11) (78,862) 1,393 (271) — (77,751) Gain on extinguishment of debt, net — 1,737 — — — 1,737 (Loss) earnings before income taxes (2,565) 175,968 (133,516) 35,781 — 75,668 (Benefit) provision for income taxes (671) 46,915 (34,900) 9,279 — 20,623 (Loss) earnings before equity in net income of subsidiaries (1,894) 129,053 (98,616) 26,502 — 55,045 Equity in earnings (loss) of subsidiaries 56,939 (72,114) — — 15,175 — Net earnings (loss) 55,045 56,939 (98,616) 26,502 15,175 55,045 Comprehensive income (loss) $ 38,193 $ 58,333 $ (98,616) $ 8,256 $ 32,027 $ 38,193 |
Condensed Consolidating Statement of Cash Flows | Tailored Brands, Inc. Condensed Consolidating Statement of Cash Flows For the Nine Months Ended October 28, 2017 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ 27,243 $ 404,404 $ 34,049 $ (186,263) $ (26,895) $ 252,538 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures — (15,413) (36,146) (4,397) — (55,956) Acquisition of business, net of cash — — — (457) — (457) Intercompany activities — (223,800) — — 223,800 — Proceeds from sale of property and equipment — — 2,157 — — 2,157 Net cash used in investing activities — (239,213) (33,989) (4,854) 223,800 (54,256) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on term loan — (9,879) — — — (9,879) Proceeds from asset-based revolving credit facility — 235,900 — — — 235,900 Payments on asset-based revolving credit facility — (235,900) — — — (235,900) Repurchase and retirement of senior notes — (106,731) — — — (106,731) Deferred financing costs — (2,464) — — — (2,464) Intercompany activities — (26,895) — 223,800 (196,905) — Cash dividends paid (26,895) — — — — (26,895) Proceeds from issuance of common stock 1,334 — — — — 1,334 Tax payments related to vested deferred stock units (1,682) — — — — (1,682) Net cash (used in) provided by financing activities (27,243) (145,969) — 223,800 (196,905) (146,317) Effect of exchange rate changes — — — 3,390 — 3,390 Increase in cash and cash equivalents — 19,222 60 36,073 — 55,355 Cash and cash equivalents at beginning of period — 1,002 1,881 68,006 — 70,889 Cash and cash equivalents at end of period $ — $ 20,224 $ 1,941 $ 104,079 $ — $ 126,244 Tailored Brands, Inc. Condensed Consolidating Statement of Cash Flows For the Nine Months Ended October 29, 2016 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ 26,245 $ 153,072 $ 36,198 $ (12,193) $ (26,438) $ 176,884 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures — (40,273) (37,055) (3,222) — (80,550) Intercompany activities — (19,025) — — 19,025 — Proceeds from sale of property and equipment — — 598 7 — 605 Net cash used in investing activities — (59,298) (36,457) (3,215) 19,025 (79,945) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on term loan — (40,701) — — — (40,701) Proceeds from asset-based revolving credit facility — 517,500 — 3,050 — 520,550 Payments on asset-based revolving credit facility — (517,500) — (3,050) — (520,550) Repurchase and retirement of senior notes — (21,924) — — — (21,924) Intercompany activities — (26,438) — 19,025 7,413 — Cash dividends paid (26,438) — — — — (26,438) Proceeds from issuance of common stock 1,451 — — — — 1,451 Tax payments related to vested deferred stock units (1,258) — — — — (1,258) Net cash (used in) provided by financing activities (26,245) (89,063) — 19,025 7,413 (88,870) Effect of exchange rate changes — — — (3,101) — (3,101) Increase (decrease) in cash and cash equivalents — 4,711 (259) 516 — 4,968 Cash and cash equivalents at beginning of period — 724 2,243 27,013 — 29,980 Cash and cash equivalents at end of period $ — $ 5,435 $ 1,984 $ 27,529 $ — $ 34,948 |
Termination of Tuxedo Rental 36
Termination of Tuxedo Rental License Agreement with Macy's (Details) $ in Millions | 9 Months Ended |
Oct. 28, 2017USD ($) | |
Accrued expenses and other current liabilities | |
Accrued termination related costs | $ 0.4 |
Retail Segment | |
Termination-related costs | 17.2 |
Termination Related Costs, Cash Charges | 14.6 |
Contract termination | 12.3 |
Rental product write-offs | 1.4 |
Asset impairment charges | 1.2 |
Other costs | 2.3 |
Selling, general and administrative expenses | |
Termination-related costs | 15.8 |
Cost of sales | |
Termination-related costs | $ 1.4 |
Restructuring and Other Charg37
Restructuring and Other Charges - Store Closures and Charges Incurred (Details) | 9 Months Ended |
Oct. 28, 2017store | |
Men's Wearhouse and Tux | |
Restructuring and Other Charges | |
Number of stores closed in fiscal 2016 | 102 |
Closure of underperforming stores | Jos. A. Bank | |
Restructuring and Other Charges | |
Number of stores closed in fiscal 2016 | 75 |
Exiting of the outlet/factory business | MW and Jos. A. Bank | |
Restructuring and Other Charges | |
Number of stores closed in fiscal 2016 | 56 |
Restructuring and Other Charg38
Restructuring and Other Charges - Charges Incurred (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Restructuring and Other Charges | ||||
Pre-tax restructuring and other charges | $ 0 | $ 10,949 | $ 0 | $ 59,125 |
Shared services | ||||
Restructuring and Other Charges | ||||
Pre-tax restructuring and other charges | 1,800 | 16,400 | ||
Consulting costs | ||||
Restructuring and Other Charges | ||||
Pre-tax restructuring and other charges | 1,806 | 13,583 | ||
Severance and employee-related costs | ||||
Restructuring and Other Charges | ||||
Pre-tax restructuring and other charges | 481 | 4,643 | ||
Store asset impairment charges and accelerated depreciation, net of deferred rent | ||||
Restructuring and Other Charges | ||||
Pre-tax restructuring and other charges | (844) | 2,330 | ||
Lease termination costs | ||||
Restructuring and Other Charges | ||||
Pre-tax restructuring and other charges | 8,667 | 37,004 | ||
Other costs | ||||
Restructuring and Other Charges | ||||
Pre-tax restructuring and other charges | 839 | 1,565 | ||
Selling, general and administrative expenses | ||||
Restructuring and Other Charges | ||||
Pre-tax restructuring and other charges | 12,400 | 61,800 | ||
Cost of sales | ||||
Restructuring and Other Charges | ||||
Pre-tax restructuring and other charges | (1,500) | (2,700) | ||
Retail Segment | ||||
Restructuring and Other Charges | ||||
Pre-tax restructuring and other charges | $ 9,100 | $ 42,700 |
Restructuring and Other Charg39
Restructuring and Other Charges - Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Summary of pre-tax and other charges | |||
Beginning Balance | $ 5,905 | ||
Payments | (4,966) | ||
Ending Balance | 939 | ||
Jos. A. Bank | |||
Additional costs | |||
Integration costs | $ 1,400 | $ 7,100 | |
Severance and employee-related costs | |||
Summary of pre-tax and other charges | |||
Beginning Balance | 986 | ||
Payments | (504) | ||
Ending Balance | 482 | ||
Lease termination costs | |||
Summary of pre-tax and other charges | |||
Beginning Balance | 4,834 | ||
Payments | (4,377) | ||
Ending Balance | 457 | ||
Consulting costs | |||
Summary of pre-tax and other charges | |||
Beginning Balance | 60 | ||
Payments | (60) | ||
Other costs | |||
Summary of pre-tax and other charges | |||
Beginning Balance | 25 | ||
Payments | $ (25) | ||
Selling, general and administrative expenses | Jos. A. Bank | |||
Additional costs | |||
Integration costs | 900 | 5,500 | |
Cost of sales | Jos. A. Bank | |||
Additional costs | |||
Integration costs | $ 500 | $ 1,600 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Numerator | ||||
Net earnings | $ 36,892 | $ 28,433 | $ 97,202 | $ 55,045 |
Net earnings allocated to participating securities (restricted stock and deferred stock units) - basic | (33) | (65) | ||
Net earnings allocated to participating securities (restricted stock and deferred stock units) - diluted | (33) | (65) | ||
Net earnings (loss) allocated to common shareholders - basic | 36,892 | 28,400 | 97,202 | 54,980 |
Net earnings (loss) allocated to common shareholders - diluted | $ 36,892 | $ 28,400 | $ 97,202 | $ 54,980 |
Denominator | ||||
Basic weighted-average common shares outstanding (in shares) | 49,206 | 48,655 | 49,040 | 48,570 |
Dilutive effect of share-based awards (in shares) | 224 | 157 | 211 | 121 |
Diluted weighted-average common shares outstanding (in shares) | 49,430 | 48,812 | 49,251 | 48,691 |
Net earnings (loss) per common share allocated to common shareholders: | ||||
Basic (in dollars per share) | $ 0.75 | $ 0.58 | $ 1.98 | $ 1.13 |
Diluted (in dollars per share) | $ 0.75 | $ 0.58 | $ 1.97 | $ 1.13 |
Earnings Per Share - Anti-dilut
Earnings Per Share - Anti-dilutive Shares (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Share-based awards | ||||
Antidilutive Securities Excluded from Computation of (Loss) Earnings Per Share | ||||
Anti-dilutive shares of common stock excluded from the calculation of diluted earnings (loss) per common share (in shares) | 2.2 | 1.9 | 2.1 | 1.7 |
Debt - Summary, Narrative (Deta
Debt - Summary, Narrative (Details) - USD ($) $ in Millions | May 02, 2017 | Jan. 28, 2017 | Oct. 28, 2017 | Oct. 29, 2016 | Jun. 18, 2014 |
Debt | |||||
Maximum quarterly dividends on common stock per debt covenants | $ 10 | ||||
Senior Notes | |||||
Debt | |||||
Aggregate principal amount of debt issued | $ 600 | $ 600 | |||
Interest rate (as a percent) | 7.00% | 7.00% | |||
2014 Credit Facilities | Term Loan | |||||
Debt | |||||
Aggregate principal amount of debt issued | $ 1,100 | ||||
Unamortized OID | $ 4.1 | $ 3.4 | $ 4.4 | 11 | |
Mandatory excess cash flow prepayment offer | $ 4.6 | ||||
Repayment of obligations | $ 4.6 | ||||
2014 Credit Facilities | ABL Facility | |||||
Debt | |||||
Credit facility | $ 550 | $ 500 |
Debt - Credit Facilities, Narra
Debt - Credit Facilities, Narrative(Details) - 2014 Credit Facilities - USD ($) $ in Millions | 9 Months Ended | ||
Oct. 28, 2017 | Apr. 30, 2015 | Jun. 18, 2014 | |
Term Loan | |||
Debt | |||
Total variable interest rate (as a percent) | 4.74% | ||
Portion of term loan refinanced at a fixed rate | $ 400 | ||
Fixed rate on refinanced amount (as a percent) | 5.00% | ||
Weighted average interest rate (as a percent) | 5.13% | ||
Term Loan | LIBOR | |||
Debt | |||
Period for variable rate basis | 1 month | ||
Actual LIBOR rate (as a percent) | 1.24% | ||
Margin added to Base rate (as a percent) | 3.50% | ||
Term Loan | Interest rate swap | |||
Debt | |||
Notional amount of interest rate swap | $ 490 | ||
ABL Facility | |||
Debt | |||
Credit facility | 550 | $ 500 | |
Total credit facility with expansion feature | $ 650 | ||
Fees on unused commitments (as a percent) | 0.25% | ||
Amount drawn | $ 0 | ||
Letters of credit issued and outstanding | 38.7 | ||
Borrowings available under credit facility | $ 511.3 | ||
ABL Facility | LIBOR | |||
Debt | |||
Period for variable rate basis | 1 month | ||
Margin added to Base rate (as a percent) | 1.00% | ||
ABL Facility | Federal funds rate | |||
Debt | |||
Margin added to Base rate (as a percent) | 0.50% | ||
ABL Facility | Minimum | |||
Debt | |||
Fees on amounts available to be drawn (as a percent) | 1.25% | ||
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 | $ 34.7 |
Debt - Long Term Debt, Narrativ
Debt - Long Term Debt, Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Debt | ||||
Gain on extinguishment of debt, net | $ 2,539 | $ 1,808 | $ 6,535 | $ 1,737 |
Senior Notes | ||||
Debt | ||||
Repurchased and retired | 65,000 | 115,000 | ||
Gain on extinguishment of debt, net | 2,500 | 6,500 | ||
Gain upon repurchase | 3,400 | 8,200 | ||
Unamortized deferred financing costs | $ 900 | $ 1,700 |
Debt - Components (Details)
Debt - Components (Details) - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 | Oct. 29, 2016 | Jun. 18, 2014 |
Debt | ||||
Total long-term debt, net | $ 1,476,485 | $ 1,595,529 | $ 1,595,873 | |
Current portion of long-term debt | (8,750) | (13,379) | (7,000) | |
Total long-term debt, net of current portion | 1,467,735 | 1,582,150 | 1,588,873 | |
Senior Notes | ||||
Debt | ||||
Long-term debt | 460,000 | 575,000 | 575,000 | |
Term Loan and Senior Notes | ||||
Debt | ||||
Less: Deferred financing costs related to the Term Loan and Senior Notes | (17,029) | (22,131) | (23,300) | |
2014 Credit Facilities | Term Loan | ||||
Debt | ||||
Unamortized OID | 3,400 | 4,100 | 4,400 | $ 11,000 |
Long-term debt | $ 1,033,514 | $ 1,042,660 | $ 1,044,173 |
Supplemental Cash Flows (Detail
Supplemental Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 28, 2017 | Oct. 29, 2016 | |
Supplemental Cash Flows | ||
Cash paid for interest | $ 66,628 | $ 62,450 |
Cash paid (refunded) for income taxes, net | 17,798 | (44,961) |
Schedule of noncash investing and financing activities: | ||
Cash dividends declared | 9,200 | 9,000 |
Unpaid capital expenditure purchases | ||
Unpaid capital expenditure purchases | $ 7,100 | $ 7,800 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 | Oct. 29, 2016 |
Inventories | |||
Finished goods | $ 873,030 | $ 846,585 | $ 963,036 |
Raw materials and merchandise components | 99,971 | 108,927 | 84,879 |
Total inventories | $ 973,001 | $ 955,512 | $ 1,047,915 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Income Taxes | ||||
Effective income tax rate (as a percent) | 32.80% | 24.10% | 34.20% | 27.30% |
Accounting Standards Update 2016-09 [Member] | Measurement period adjustments | ||||
Income Taxes | ||||
Tax deficiencies related vesting of stock-based awards | $ 2.2 |
Other Current Assets, Accrued49
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities (Details) - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 | Oct. 29, 2016 |
Other current assets | |||
Prepaid expenses | $ 44,473 | $ 47,057 | $ 43,778 |
Tax receivable | 506 | 15,794 | 4,697 |
Other | 8,587 | 10,751 | 11,715 |
Total other current assets | 53,566 | 73,602 | 60,190 |
Accrued expenses and other current liabilities | |||
Accrued salary, bonus, sabbatical, vacation and other benefits | 79,753 | 72,589 | 70,631 |
Customer deposits, prepayments and refunds payable | 37,822 | 28,384 | 29,371 |
Unredeemed gift cards | 34,552 | 40,865 | 34,693 |
Sales, value added, payroll, property and other taxes payable | 30,220 | 31,188 | 36,021 |
Accrued workers compensation and medical costs | 27,860 | 31,609 | 30,818 |
Accrued interest | 19,550 | 15,457 | 25,884 |
Loyalty program reward certificates | 11,199 | 9,840 | 10,704 |
Accrued dividends | 10,789 | 9,842 | 9,572 |
Accrued royalties | 6,020 | 3,720 | 7,977 |
Lease termination and other store closure costs | 1,027 | 4,834 | 6,442 |
Other | 22,741 | 19,571 | 18,545 |
Total accrued expenses and other current liabilities | 281,533 | 267,899 | 280,658 |
Deferred taxes, net and other liabilities | |||
Deferred and other income tax liabilities, net | 91,760 | 92,079 | 102,243 |
Deferred rent and landlord incentives | 60,040 | 61,215 | 61,641 |
Unfavorable lease liabilities | 3,279 | 4,693 | 5,394 |
Other | 5,118 | 5,433 | 5,901 |
Total deferred taxes, net and other liabilities | $ 160,197 | $ 163,420 | $ 175,179 |
Accumulated Other Comprehensi50
Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 28, 2017 | Oct. 29, 2016 | |
Change in accumulated other comprehensive (loss) income components | ||
Balance at the beginning of the period | $ (107,618) | |
Balance at the end of the period | (15,000) | $ (77,697) |
Accumulated Other Comprehensive (Loss) Income | ||
Change in accumulated other comprehensive (loss) income components | ||
Balance at the beginning of the period | (40,083) | (28,486) |
Other comprehensive income (loss) before reclassifications | 6,617 | (17,892) |
Amounts reclassified from accumulated other comprehensive loss | 2,138 | 1,040 |
Net current-period other comprehensive income (loss) | 8,755 | (16,852) |
Balance at the end of the period | (31,328) | (45,338) |
Foreign Currency Translation | ||
Change in accumulated other comprehensive (loss) income components | ||
Balance at the beginning of the period | (40,205) | (26,659) |
Other comprehensive income (loss) before reclassifications | 10,857 | (18,246) |
Net current-period other comprehensive income (loss) | 10,857 | (18,246) |
Balance at the end of the period | (29,348) | (44,905) |
Cash Flow Hedge | ||
Change in accumulated other comprehensive (loss) income components | ||
Balance at the beginning of the period | (82) | (2,007) |
Other comprehensive income (loss) before reclassifications | (4,240) | 354 |
Amounts reclassified from accumulated other comprehensive loss | 2,138 | 1,040 |
Net current-period other comprehensive income (loss) | (2,102) | 1,394 |
Balance at the end of the period | (2,184) | (613) |
Pension Plan | ||
Change in accumulated other comprehensive (loss) income components | ||
Balance at the beginning of the period | 204 | 180 |
Balance at the end of the period | $ 204 | $ 180 |
Share-Based Compensation Plan51
Share-Based Compensation Plans - Deferred Stock Units, Performance Units and Restricted Stock (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Oct. 28, 2017USD ($)$ / sharesshares | |
Deferred stock units | |
Additional information | |
Shares relinquished for tax withholding | 125,806 |
Unrecognized compensation cost | |
Unrecognized compensation cost, non-vested awards | $ | $ 22 |
Compensation recognition period, non-vested awards | 1 year 7 months 6 days |
Time-Based DSUs | |
Cash Settled Awards | |
Non-Vested at the beginning of the period (in shares) | 1,061,965 |
Granted (in shares) | 472,708 |
Vested (in shares) | (455,925) |
Forfeited (in shares) | (51,271) |
Non-Vested at the end of the period (in shares) | 1,027,477 |
Weighted-Average Grant-Date Fair Value | |
Non-Vested at the beginning of the period (in dollars per share) | $ / shares | $ 24.31 |
Granted (in dollars per share) | $ / shares | 11.48 |
Vested (in dollars per share) | $ / shares | 25.38 |
Forfeited (in dollars per share) | $ / shares | 20.78 |
Non-Vested at the end of the period (in dollars per share) | $ / shares | $ 18.10 |
Performance-Based DSUs | |
Cash Settled Awards | |
Non-Vested at the beginning of the period (in shares) | 523,948 |
Granted (in shares) | 542,528 |
Forfeited (in shares) | (41,942) |
Non-Vested at the end of the period (in shares) | 1,024,534 |
Weighted-Average Grant-Date Fair Value | |
Non-Vested at the beginning of the period (in dollars per share) | $ / shares | $ 28.28 |
Granted (in dollars per share) | $ / shares | 11.45 |
Forfeited (in dollars per share) | $ / shares | 22.26 |
Non-Vested at the end of the period (in dollars per share) | $ / shares | $ 19.61 |
Restricted Stock | |
Cash Settled Awards | |
Non-Vested at the beginning of the period (in shares) | 36,878 |
Vested (in shares) | (36,878) |
Non-Vested at the end of the period (in shares) | |
Weighted-Average Grant-Date Fair Value | |
Non-Vested at the beginning of the period (in dollars per share) | $ / shares | $ 15.56 |
Vested (in dollars per share) | $ / shares | $ 15.56 |
Non-Vested at the end of the period (in dollars per share) | $ / shares |
Share-Based Compensation Plan52
Share-Based Compensation Plans - Stock Options (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Oct. 28, 2017USD ($)$ / sharesshares | |
Additional disclosures | |
Weighted-average grant date fair value of stock options granted (in dollars per share) | $ 3.86 |
Stock Options | |
Number of Shares | |
Outstanding at the beginning of the period (in shares) | shares | 1,194,690 |
Granted (in shares) | shares | 630,083 |
Forfeited (in shares) | shares | (50,856) |
Expired (in shares) | shares | (40,243) |
Outstanding at the end of the period (in shares) | shares | 1,733,674 |
Exercisable at the end of the period (in shares) | shares | 736,137 |
Weighted-Average Exercise Price | |
Outstanding at the beginning of the period (in dollars per share) | $ 29.70 |
Granted (in dollars per share) | 11.54 |
Forfeited (in dollars per share) | 16.25 |
Expired (in dollars per share) | 41.23 |
Outstanding at the end of the period (in dollars per share) | 23.23 |
Exercisable at the end of the period (in dollars per share) | $ 33.33 |
Unrecognized compensation cost | |
Unrecognized compensation cost, non-vested awards | $ | $ 3.7 |
Compensation recognition period, non-vested awards | 1 year 4 months 24 days |
Assumptions used to value stock options | |
Risk-free interest rate (as a percent) | 1.75% |
Expected lives | 5 years |
Dividend yield (as a percent) | 4.69% |
Expected volatility (as a percent) | 55.12% |
Share-Based Compensation Plan53
Share-Based Compensation Plans - Cash Settled Awards (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | Jan. 28, 2017 | |
Share-based compensation | |||||
Share-based compensation expense | $ 8.2 | $ 5.2 | $ 17.2 | $ 14 | |
Cash Settled Awards | |||||
Share-based compensation | |||||
Vesting period | 3 years | ||||
Liability associated with the cash settled awards | $ 2.3 | $ 2.3 | |||
Cash Settled Awards | |||||
Granted (in shares) | 8,377 | 0 | |||
Forfeited (in shares) | (149) | ||||
Non-Vested at the end of the period (in shares) | 8,228 | 8,228 | |||
Cash Settled Awards | Accrued expenses and other current liabilities | |||||
Share-based compensation | |||||
Liability associated with the cash settled awards | $ 1.4 | $ 1.4 | |||
Cash Settled Awards | Other Liabilities | |||||
Share-based compensation | |||||
Liability associated with the cash settled awards | $ 0.9 | $ 0.9 |
Goodwill and Other Intangible54
Goodwill and Other Intangible Assets - Goodwill (Details) $ in Thousands | 9 Months Ended |
Oct. 28, 2017USD ($) | |
Changes in the net carrying amount of goodwill | |
Balance at the beginning of the period | $ 117,026 |
Goodwill of acquired business | 695 |
Translation adjustment | 1,404 |
Balance at the end of the period | 119,125 |
Retail Segment | |
Changes in the net carrying amount of goodwill | |
Balance at the beginning of the period | 94,511 |
Translation adjustment | 433 |
Balance at the end of the period | 94,944 |
Corporate Apparel Segment | |
Changes in the net carrying amount of goodwill | |
Balance at the beginning of the period | 22,515 |
Goodwill of acquired business | 695 |
Translation adjustment | 971 |
Balance at the end of the period | $ 24,181 |
Goodwill and Other Intangible55
Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 | Oct. 29, 2016 |
Amortizable intangible assets: | |||
Carrying amount | $ 56,161 | $ 55,275 | $ 55,028 |
Accumulated amortization | (31,338) | (27,820) | (26,866) |
Total amortizable intangible assets, net | 24,823 | 27,455 | 28,162 |
Indefinite-lived intangible assets: | |||
Trademarks and tradename | 144,249 | 144,204 | 144,175 |
Total intangible assets, net | 169,072 | 171,659 | 172,337 |
Trademarks, tradenames and franchise agreements | |||
Amortizable intangible assets: | |||
Carrying amount | 16,074 | 15,966 | 15,897 |
Accumulated amortization | (10,404) | (10,055) | (9,930) |
Favorable leases | |||
Amortizable intangible assets: | |||
Carrying amount | 13,475 | 13,826 | 14,381 |
Accumulated amortization | (4,856) | (3,961) | (4,045) |
Customer relationships | |||
Amortizable intangible assets: | |||
Carrying amount | 26,612 | 25,483 | 24,750 |
Accumulated amortization | $ (16,078) | $ (13,804) | $ (12,891) |
Goodwill and Other Intangible56
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Intangible asset amortization expense | ||||
Pre-tax amortization expense associated with intangible assets | $ 1 | $ 1.2 | $ 3.1 | $ 3.7 |
Pre-tax amortization expense estimated for the remainder of fiscal year 2017 | 1.1 | 1.1 | ||
Pre-tax amortization expense estimated for fiscal year 2018 | 3.8 | 3.8 | ||
Pre-tax amortization expense estimated for fiscal year 2019 | 3.6 | 3.6 | ||
Pre-tax amortization expense estimated for fiscal year 2020 | 3.5 | 3.5 | ||
Pre-tax amortization expense estimated for fiscal year 2021 | $ 3.4 | $ 3.4 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring and Non-Recurring (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Jan. 28, 2017 | |
Fair value measurements | |||
Asset impairment charges | $ 2,867 | $ 4,293 | |
Selling, general and administrative expenses | |||
Fair value measurements | |||
Asset impairment charges | 2,900 | ||
Recurring | |||
Assets: | |||
Derivative asset | 235 | 753 | $ 460 |
Liabilities: | |||
Derivative liability | 2,198 | 2,520 | 2,413 |
Recurring | Level 2 | |||
Assets: | |||
Derivative asset | 235 | 753 | 460 |
Liabilities: | |||
Derivative liability | $ 2,198 | $ 2,520 | $ 2,413 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 | Oct. 29, 2016 |
Fair Value of Financial Instruments | |||
Carrying Amount of Long-term debt, including current portion | $ 1,476,485 | $ 1,595,529 | $ 1,595,873 |
Deferred financing costs | 17,000 | 22,100 | 23,300 |
Level 1 and Level 2 | |||
Fair Value of Financial Instruments | |||
Long-term debt, Estimated Fair Value | $ 1,461,283 | $ 1,556,200 | $ 1,556,661 |
Derivative Financial Instrume59
Derivative Financial Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | Apr. 29, 2017 | Jan. 31, 2015 | |
Derivative Financial Instruments | ||||||
Pre-tax (losses) gains associated with foreign exchange forward contracts | $ 0.7 | $ 0.4 | $ 0.2 | $ 2.3 | ||
Other assets | ||||||
Derivative Financial Instruments | ||||||
Derivative asset | 0.1 | 0.1 | ||||
Interest rate swap | Designated as hedging instruments | ||||||
Derivative Financial Instruments | ||||||
Fair value of the interest rate swaps | 1.8 | 1.8 | ||||
Hedge ineffectiveness | 0 | |||||
Effective portion of the loss expected to be reclassified from accumulated other comprehensive (loss) income into earnings over the next 12 months | 1.8 | |||||
Interest rate swap | Designated as hedging instruments | Accrued expenses and other current liabilities | ||||||
Derivative Financial Instruments | ||||||
Derivative liability | 1.9 | 1.9 | ||||
Interest rate swap | Designated as hedging instruments | Other assets | ||||||
Derivative Financial Instruments | ||||||
Derivative asset | 0.1 | 0.1 | ||||
Interest rate swap matures in August 2018 | Designated as hedging instruments | ||||||
Derivative Financial Instruments | ||||||
Notional amount | $ 200 | $ 200 | $ 520 | |||
Fixed rate payable (as a percent) | 5.03% | 5.03% | ||||
Applicable margin included in fixed rate (as a percent) | 3.50% | |||||
Interest rate swap matures in August 2018 | Designated as hedging instruments | LIBOR | ||||||
Derivative Financial Instruments | ||||||
Period for interest rate basis for variable rate receivable | 3 months | |||||
Interest rate swap matures in June 2021 | Designated as hedging instruments | ||||||
Derivative Financial Instruments | ||||||
Notional amount | $ 290 | $ 290 | $ 260 | |||
Fixed rate payable (as a percent) | 5.56% | 5.56% | ||||
Applicable margin included in fixed rate (as a percent) | 3.50% | |||||
Interest rate swap matures in June 2021 | Designated as hedging instruments | LIBOR | ||||||
Derivative Financial Instruments | ||||||
Period for interest rate basis for variable rate receivable | 1 month | |||||
Foreign exchange forward | 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 | $ 1.5 | |||||
Foreign exchange forward | Designated as hedging instruments | Accrued expenses and other current liabilities | ||||||
Derivative Financial Instruments | ||||||
Derivative liability | $ 0.2 | $ 0.2 |
Segment Reporting - Number of S
Segment Reporting - Number of Segments (Details) | 9 Months Ended |
Oct. 28, 2017segment | |
Segment reporting | |
Number of reportable segments | 2 |
Retail Segment | |
Segment reporting | |
Number of operating segments | 4 |
Segment Reporting - Sales by Se
Segment Reporting - Sales by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Net sales: | ||||
Total net sales | $ 810,818 | $ 846,934 | $ 2,444,482 | $ 2,585,440 |
Retail Segment | ||||
Net sales: | ||||
Total net sales | 747,522 | 763,689 | 2,265,825 | 2,360,112 |
Retail Segment | MW | ||||
Net sales: | ||||
Total net sales | 448,955 | 461,806 | 1,327,773 | 1,386,347 |
Retail Segment | Jos. A. Bank | ||||
Net sales: | ||||
Total net sales | 162,685 | 165,992 | 504,238 | 530,482 |
Retail Segment | K&G | ||||
Net sales: | ||||
Total net sales | 69,604 | 70,874 | 244,098 | 252,007 |
Retail Segment | Moores | ||||
Net sales: | ||||
Total net sales | 57,607 | 56,520 | 163,732 | 166,203 |
Retail Segment | MW Cleaners | ||||
Net sales: | ||||
Total net sales | 8,671 | 8,497 | 25,984 | 25,073 |
Corporate Apparel Segment | ||||
Net sales: | ||||
Total net sales | $ 63,296 | $ 83,245 | $ 178,657 | $ 225,328 |
Segment Reporting - Sales by Pr
Segment Reporting - Sales by Product or Service (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Supplemental products and services sales information | ||||
Total net sales | $ 810,818 | $ 846,934 | $ 2,444,482 | $ 2,585,440 |
Retail Segment | ||||
Supplemental products and services sales information | ||||
Total retail clothing product | 575,203 | 575,046 | 1,753,782 | 1,806,660 |
Rental services | 126,410 | 138,724 | 373,208 | 403,564 |
Total alteration and other services | 45,909 | 49,919 | 138,835 | 149,888 |
Total net sales | 747,522 | 763,689 | 2,265,825 | 2,360,112 |
Retail Segment | Men's tailored clothing product | ||||
Supplemental products and services sales information | ||||
Total retail clothing product | 330,618 | 326,741 | 1,004,430 | 1,025,495 |
Retail Segment | Men's non-tailored clothing product | ||||
Supplemental products and services sales information | ||||
Total retail clothing product | 227,520 | 230,146 | 690,312 | 718,233 |
Retail Segment | Women's clothing product | ||||
Supplemental products and services sales information | ||||
Total retail clothing product | 14,795 | 15,626 | 52,722 | 55,940 |
Retail Segment | Other | ||||
Supplemental products and services sales information | ||||
Total retail clothing product | 2,270 | 2,533 | 6,318 | 6,992 |
Retail Segment | Alteration services | ||||
Supplemental products and services sales information | ||||
Total alteration and other services | 37,238 | 41,422 | 112,851 | 124,815 |
Retail Segment | Retail dry cleaning services | ||||
Supplemental products and services sales information | ||||
Total alteration and other services | 8,671 | 8,497 | 25,984 | 25,073 |
Corporate Apparel Segment | ||||
Supplemental products and services sales information | ||||
Total net sales | $ 63,296 | $ 83,245 | $ 178,657 | $ 225,328 |
Segment Reporting - Operating I
Segment Reporting - Operating Income Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes | ||||
Operating income | $ 76,627 | $ 61,056 | $ 216,094 | $ 151,682 |
Interest income | 159 | 52 | 324 | 102 |
Interest expense | (24,412) | (25,476) | (75,200) | (77,853) |
Gain on extinguishment of debt, net | 2,539 | 1,808 | 6,535 | 1,737 |
Earnings (loss) before income taxes | 54,913 | 37,440 | 147,753 | 75,668 |
Shared services | ||||
Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes | ||||
Operating income | (50,073) | (46,887) | (143,329) | (151,338) |
Retail Segment | Reportable segments | ||||
Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes | ||||
Operating income | 123,628 | 97,629 | 352,273 | 278,732 |
Corporate Apparel Segment | Reportable segments | ||||
Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes | ||||
Operating income | $ 3,072 | $ 10,314 | $ 7,150 | $ 24,288 |
Condensed Consolidating Infor64
Condensed Consolidating Information - Balance Sheet (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Oct. 28, 2017 | Jan. 28, 2017 | Oct. 29, 2016 | Jan. 30, 2016 | Jun. 18, 2014 | |
CURRENT ASSETS: | |||||
Cash and cash equivalents | $ 126,244 | $ 70,889 | $ 34,948 | $ 29,980 | |
Accounts receivable, net | 81,193 | 65,714 | 71,898 | ||
Inventories | 973,001 | 955,512 | 1,047,915 | ||
Other current assets | 53,566 | 73,602 | 60,190 | ||
Total current assets | 1,234,004 | 1,165,717 | 1,214,951 | ||
Property and equipment, net | 454,921 | 484,165 | 501,391 | ||
Rental product, net | 125,320 | 152,610 | 160,101 | ||
Goodwill | 119,125 | 117,026 | 116,026 | ||
Intangible assets, net | 169,072 | 171,659 | 172,337 | ||
Other assets | 8,859 | 6,695 | 10,323 | ||
Total assets | 2,111,301 | 2,097,872 | 2,175,129 | ||
CURRENT LIABILITIES: | |||||
Accounts payable | 186,862 | 177,380 | 200,199 | ||
Accrued expenses and other current liabilities | 302,757 | 269,161 | 281,575 | ||
Current portion of long-term debt | 8,750 | 13,379 | 7,000 | ||
Total current liabilities | 498,369 | 459,920 | 488,774 | ||
Long-term debt, net | 1,467,735 | 1,582,150 | 1,588,873 | ||
Deferred taxes, net and other liabilities | 160,197 | 163,420 | 175,179 | ||
Shareholders' (deficit) equity | (15,000) | (107,618) | (77,697) | ||
Total liabilities and shareholders' (deficit) equity | 2,111,301 | 2,097,872 | 2,175,129 | ||
Eliminations | |||||
CURRENT ASSETS: | |||||
Accounts receivable, net | (268,564) | (490,680) | (439,095) | ||
Other current assets | (75,233) | (110,280) | (19,025) | ||
Total current assets | (343,797) | (600,960) | (458,120) | ||
Investments in subsidiaries | (1,386,577) | (1,315,834) | (1,308,138) | ||
Other assets | (6,300) | (7,200) | (7,500) | ||
Total assets | (1,736,674) | (1,923,994) | (1,773,758) | ||
CURRENT LIABILITIES: | |||||
Accounts payable | (268,564) | (490,680) | (439,095) | ||
Accrued expenses and other current liabilities | (67,957) | (110,280) | (19,025) | ||
Total current liabilities | (336,521) | (600,960) | (458,120) | ||
Deferred taxes, net and other liabilities | (13,576) | (7,200) | (7,500) | ||
Shareholders' (deficit) equity | (1,386,577) | (1,315,834) | (1,308,138) | ||
Total liabilities and shareholders' (deficit) equity | (1,736,674) | (1,923,994) | (1,773,758) | ||
Tailored Brands, Inc. | Reportable Legal Entities | |||||
CURRENT ASSETS: | |||||
Accounts receivable, net | 7,414 | 7,376 | 7,373 | ||
Other current assets | 7,275 | 12,773 | 7,102 | ||
Total current assets | 14,689 | 20,149 | 14,475 | ||
Investments in subsidiaries | 77,901 | (109,788) | (67,257) | ||
Other assets | 3,257 | ||||
Total assets | 92,590 | (89,639) | (49,525) | ||
CURRENT LIABILITIES: | |||||
Accounts payable | 87,758 | 15,352 | 16,216 | ||
Accrued expenses and other current liabilities | 18,911 | 2,627 | 9,617 | ||
Total current liabilities | 106,669 | 17,979 | 25,833 | ||
Deferred taxes, net and other liabilities | 921 | 2,339 | |||
Shareholders' (deficit) equity | (15,000) | (107,618) | (77,697) | ||
Total liabilities and shareholders' (deficit) equity | 92,590 | (89,639) | (49,525) | ||
The Men's Wearhouse, Inc. | Reportable Legal Entities | |||||
CURRENT ASSETS: | |||||
Cash and cash equivalents | 20,224 | 1,002 | 5,435 | 724 | |
Accounts receivable, net | 19,518 | 15,499 | 17,112 | ||
Inventories | 198,429 | 230,264 | 253,482 | ||
Other current assets | 87,450 | 134,225 | 22,155 | ||
Total current assets | 325,621 | 380,990 | 298,184 | ||
Property and equipment, net | 207,432 | 232,090 | 249,797 | ||
Rental product, net | 107,222 | 131,287 | 139,386 | ||
Goodwill | 6,160 | 6,160 | 6,160 | ||
Intangible assets, net | 78 | 105 | |||
Investments in subsidiaries | 1,308,676 | 1,425,622 | 1,375,395 | ||
Other assets | 7,780 | 5,615 | 6,004 | ||
Total assets | 1,962,891 | 2,181,842 | 2,075,031 | ||
CURRENT LIABILITIES: | |||||
Accounts payable | 189,756 | 509,572 | 337,499 | ||
Accrued expenses and other current liabilities | 139,577 | 111,617 | 143,023 | ||
Current portion of long-term debt | 8,750 | 13,379 | 7,000 | ||
Total current liabilities | 338,083 | 634,568 | 487,522 | ||
Long-term debt, net | 1,467,735 | 1,582,150 | 1,588,873 | ||
Deferred taxes, net and other liabilities | 79,172 | 74,912 | 65,893 | ||
Shareholders' (deficit) equity | 77,901 | (109,788) | (67,257) | ||
Total liabilities and shareholders' (deficit) equity | $ 1,962,891 | 2,181,842 | 2,075,031 | ||
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 | $ 1,941 | 1,881 | 1,984 | 2,243 | |
Accounts receivable, net | 287,688 | 476,742 | 455,368 | ||
Inventories | 458,603 | 438,167 | 459,159 | ||
Other current assets | 26,185 | 28,436 | 42,995 | ||
Total current assets | 774,417 | 945,226 | 959,506 | ||
Property and equipment, net | 212,213 | 216,248 | 217,156 | ||
Rental product, net | 2,327 | 3,369 | 3,677 | ||
Goodwill | 68,510 | 68,510 | 68,510 | ||
Intangible assets, net | 155,884 | 157,270 | 157,788 | ||
Other assets | 821 | 959 | 939 | ||
Total assets | 1,214,172 | 1,391,582 | 1,407,576 | ||
CURRENT LIABILITIES: | |||||
Accounts payable | 81,409 | 82,337 | 99,597 | ||
Accrued expenses and other current liabilities | 109,718 | 129,420 | 105,446 | ||
Total current liabilities | 191,127 | 211,757 | 205,043 | ||
Deferred taxes, net and other liabilities | 83,342 | 85,477 | 104,512 | ||
Shareholders' (deficit) equity | 939,703 | 1,094,348 | 1,098,021 | ||
Total liabilities and shareholders' (deficit) equity | 1,214,172 | 1,391,582 | 1,407,576 | ||
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||||
CURRENT ASSETS: | |||||
Cash and cash equivalents | 104,079 | 68,006 | 27,529 | $ 27,013 | |
Accounts receivable, net | 35,137 | 56,777 | 31,140 | ||
Inventories | 315,969 | 287,081 | 335,274 | ||
Other current assets | 7,889 | 8,448 | 6,963 | ||
Total current assets | 463,074 | 420,312 | 400,906 | ||
Property and equipment, net | 35,276 | 35,827 | 34,438 | ||
Rental product, net | 15,771 | 17,954 | 17,038 | ||
Goodwill | 44,455 | 42,356 | 41,356 | ||
Intangible assets, net | 13,188 | 14,311 | 14,444 | ||
Other assets | 6,558 | 7,321 | 7,623 | ||
Total assets | 578,322 | 538,081 | 515,805 | ||
CURRENT LIABILITIES: | |||||
Accounts payable | 96,503 | 60,799 | 185,982 | ||
Accrued expenses and other current liabilities | 102,508 | 135,777 | 42,514 | ||
Total current liabilities | 199,011 | 196,576 | 228,496 | ||
Deferred taxes, net and other liabilities | 10,338 | 10,231 | 9,935 | ||
Shareholders' (deficit) equity | 368,973 | 331,274 | 277,374 | ||
Total liabilities and shareholders' (deficit) equity | 578,322 | $ 538,081 | $ 515,805 | ||
Senior Notes | |||||
Condensed Consolidating Balance Sheet | |||||
Aggregate principal amount of debt issued | $ 600,000 | $ 600,000 | |||
Interest rate (as a percent) | 7.00% | 7.00% |
Condensed Consolidating Infor65
Condensed Consolidating Information - Earnings (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Condensed Consolidating Statement of Earnings (Loss) | ||||
Net sales | $ 810,818 | $ 846,934 | $ 2,444,482 | $ 2,585,440 |
Cost of sales | 452,061 | 469,728 | 1,356,589 | 1,446,089 |
Total gross margin | 358,757 | 377,206 | 1,087,893 | 1,139,351 |
Operating expenses | 282,130 | 316,150 | 871,799 | 987,669 |
Operating (loss) income | 76,627 | 61,056 | 216,094 | 151,682 |
Interest expense, net | (24,253) | (25,424) | (74,876) | (77,751) |
Gain on extinguishment of debt, net | 2,539 | 1,808 | 6,535 | 1,737 |
Earnings (loss) before income taxes | 54,913 | 37,440 | 147,753 | 75,668 |
(Benefit) provision for income taxes | 18,021 | 9,007 | 50,551 | 20,623 |
(Loss) earnings before equity in net income of subsidiaries | 36,892 | 28,433 | 97,202 | 55,045 |
Net earnings (loss) | 36,892 | 28,433 | 97,202 | 55,045 |
Comprehensive income (loss) | 33,745 | 14,306 | 105,957 | 38,193 |
Eliminations | ||||
Condensed Consolidating Statement of Earnings (Loss) | ||||
Net sales | (284,542) | (185,448) | (539,796) | (412,987) |
Cost of sales | (284,542) | (185,448) | (539,796) | (412,987) |
Operating expenses | (16,425) | (14,323) | (45,021) | (42,923) |
Operating (loss) income | 16,425 | 14,323 | 45,021 | 42,923 |
Other income and expenses, net | (16,425) | (14,323) | (45,021) | (42,923) |
Equity in earnings of subsidiaries | (35,135) | (13,197) | (82,545) | 15,175 |
Net earnings (loss) | (35,135) | (13,197) | (82,545) | 15,175 |
Comprehensive income (loss) | (31,988) | 930 | (91,300) | 32,027 |
Tailored Brands, Inc. | Reportable Legal Entities | ||||
Condensed Consolidating Statement of Earnings (Loss) | ||||
Operating expenses | 917 | 974 | 2,599 | 2,554 |
Operating (loss) income | (917) | (974) | (2,599) | (2,554) |
Interest expense, net | (129) | (8) | 223 | (11) |
Earnings (loss) before income taxes | (1,046) | (982) | (2,376) | (2,565) |
(Benefit) provision for income taxes | (337) | (247) | 1,441 | (671) |
(Loss) earnings before equity in net income of subsidiaries | (709) | (735) | (3,817) | (1,894) |
Equity in earnings of subsidiaries | 37,601 | 29,168 | 101,019 | 56,939 |
Net earnings (loss) | 36,892 | 28,433 | 97,202 | 55,045 |
Comprehensive income (loss) | 33,745 | 14,306 | 105,957 | 38,193 |
The Men's Wearhouse, Inc. | Reportable Legal Entities | ||||
Condensed Consolidating Statement of Earnings (Loss) | ||||
Net sales | 447,936 | 460,432 | 1,324,731 | 1,382,515 |
Cost of sales | 227,612 | 230,110 | 648,900 | 676,761 |
Total gross margin | 220,324 | 230,322 | 675,831 | 705,754 |
Operating expenses | 135,740 | 146,398 | 425,912 | 452,661 |
Operating (loss) income | 84,584 | 83,924 | 249,919 | 253,093 |
Interest expense, net | (27,789) | (25,830) | (79,010) | (78,862) |
Gain on extinguishment of debt, net | 2,539 | 1,808 | 6,535 | 1,737 |
Earnings (loss) before income taxes | 59,334 | 59,902 | 177,444 | 175,968 |
(Benefit) provision for income taxes | 19,267 | 14,763 | 57,951 | 46,915 |
(Loss) earnings before equity in net income of subsidiaries | 40,067 | 45,139 | 119,493 | 129,053 |
Equity in earnings of subsidiaries | (2,466) | (15,971) | (18,474) | (72,114) |
Net earnings (loss) | 37,601 | 29,168 | 101,019 | 56,939 |
Comprehensive income (loss) | 39,114 | 30,116 | 100,578 | 58,333 |
Guarantor Subsidiaries | Reportable Legal Entities | ||||
Condensed Consolidating Statement of Earnings (Loss) | ||||
Net sales | 404,531 | 466,476 | 1,146,271 | 1,300,852 |
Cost of sales | 317,262 | 361,117 | 860,944 | 992,265 |
Total gross margin | 87,269 | 105,359 | 285,327 | 308,587 |
Operating expenses | 134,433 | 153,439 | 405,988 | 486,419 |
Operating (loss) income | (47,164) | (48,080) | (120,661) | (177,832) |
Other income and expenses, net | 16,425 | 14,323 | 45,295 | 42,923 |
Interest expense, net | 1,543 | 517 | 4,804 | 1,393 |
Earnings (loss) before income taxes | (29,196) | (33,240) | (70,562) | (133,516) |
(Benefit) provision for income taxes | (9,441) | (8,119) | (23,398) | (34,900) |
(Loss) earnings before equity in net income of subsidiaries | (19,755) | (25,121) | (47,164) | (98,616) |
Net earnings (loss) | (19,755) | (25,121) | (47,164) | (98,616) |
Comprehensive income (loss) | (19,755) | (25,121) | (47,164) | (98,616) |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Condensed Consolidating Statement of Earnings (Loss) | ||||
Net sales | 242,893 | 105,474 | 513,276 | 315,060 |
Cost of sales | 191,729 | 63,949 | 386,541 | 190,050 |
Total gross margin | 51,164 | 41,525 | 126,735 | 125,010 |
Operating expenses | 27,465 | 29,662 | 82,321 | 88,958 |
Operating (loss) income | 23,699 | 11,863 | 44,414 | 36,052 |
Other income and expenses, net | (274) | |||
Interest expense, net | 2,122 | (103) | (893) | (271) |
Earnings (loss) before income taxes | 25,821 | 11,760 | 43,247 | 35,781 |
(Benefit) provision for income taxes | 8,532 | 2,610 | 14,557 | 9,279 |
(Loss) earnings before equity in net income of subsidiaries | 17,289 | 9,150 | 28,690 | 26,502 |
Net earnings (loss) | 17,289 | 9,150 | 28,690 | 26,502 |
Comprehensive income (loss) | $ 12,629 | $ (5,925) | $ 37,886 | $ 8,256 |
Condensed Consolidating Infor66
Condensed Consolidating Information - Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 28, 2017 | Oct. 29, 2016 | |
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | $ 252,538 | $ 176,884 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (55,956) | (80,550) |
Acquisition of business, net of cash | (457) | |
Proceeds from sale of property and equipment | 2,157 | 605 |
Net cash used in investing activities | (54,256) | (79,945) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on term loan | (9,879) | (40,701) |
Proceeds from asset-based revolving credit facility | 235,900 | 520,550 |
Payments on asset-based revolving credit facility | (235,900) | (520,550) |
Repurchase and retirement of senior notes | (106,731) | (21,924) |
Deferred financing costs | (2,464) | |
Cash dividends paid | (26,895) | (26,438) |
Proceeds from issuance of common stock | 1,334 | 1,451 |
Tax payments related to vested deferred stock units | (1,682) | (1,258) |
Net cash (used in) provided by financing activities | (146,317) | (88,870) |
Effect of exchange rate changes | 3,390 | (3,101) |
Increase (decrease) in cash and cash equivalents | 55,355 | 4,968 |
Balance at beginning of period | 70,889 | 29,980 |
Balance at end of period | 126,244 | 34,948 |
Eliminations | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | (26,895) | (26,438) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Intercompany activities | 223,800 | 19,025 |
Net cash used in investing activities | 223,800 | 19,025 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Intercompany activities | (196,905) | 7,413 |
Net cash (used in) provided by financing activities | (196,905) | 7,413 |
Tailored Brands, Inc. | Reportable Legal Entities | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | 27,243 | 26,245 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Cash dividends paid | (26,895) | (26,438) |
Proceeds from issuance of common stock | 1,334 | 1,451 |
Tax payments related to vested deferred stock units | (1,682) | (1,258) |
Net cash (used in) provided by financing activities | (27,243) | (26,245) |
The Men's Wearhouse, Inc. | Reportable Legal Entities | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | 404,404 | 153,072 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (15,413) | (40,273) |
Intercompany activities | (223,800) | (19,025) |
Net cash used in investing activities | (239,213) | (59,298) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on term loan | (9,879) | (40,701) |
Proceeds from asset-based revolving credit facility | 235,900 | 517,500 |
Payments on asset-based revolving credit facility | (235,900) | (517,500) |
Repurchase and retirement of senior notes | (106,731) | (21,924) |
Deferred financing costs | (2,464) | |
Intercompany activities | (26,895) | (26,438) |
Net cash (used in) provided by financing activities | (145,969) | (89,063) |
Increase (decrease) in cash and cash equivalents | 19,222 | 4,711 |
Balance at beginning of period | 1,002 | 724 |
Balance at end of period | 20,224 | 5,435 |
Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | 34,049 | 36,198 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (36,146) | (37,055) |
Proceeds from sale of property and equipment | 2,157 | 598 |
Net cash used in investing activities | (33,989) | (36,457) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Increase (decrease) in cash and cash equivalents | 60 | (259) |
Balance at beginning of period | 1,881 | 2,243 |
Balance at end of period | 1,941 | 1,984 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | (186,263) | (12,193) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (4,397) | (3,222) |
Acquisition of business, net of cash | (457) | |
Proceeds from sale of property and equipment | 7 | |
Net cash used in investing activities | (4,854) | (3,215) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from asset-based revolving credit facility | 3,050 | |
Payments on asset-based revolving credit facility | (3,050) | |
Intercompany activities | 223,800 | 19,025 |
Net cash (used in) provided by financing activities | 223,800 | 19,025 |
Effect of exchange rate changes | 3,390 | (3,101) |
Increase (decrease) in cash and cash equivalents | 36,073 | 516 |
Balance at beginning of period | 68,006 | 27,013 |
Balance at end of period | $ 104,079 | $ 27,529 |