Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Nov. 03, 2018 | Nov. 30, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Tailored Brands Inc | |
Entity Central Index Key | 884,217 | |
Document Type | 10-Q | |
Document Period End Date | Nov. 3, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-02 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 50,095,866 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Nov. 03, 2018 | Feb. 03, 2018 | Oct. 28, 2017 |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 68,425 | $ 103,607 | $ 126,244 |
Accounts receivable, net | 80,696 | 79,783 | 81,193 |
Inventories | 875,003 | 851,931 | 973,001 |
Other current assets | 70,433 | 78,252 | 53,566 |
Total current assets | 1,094,557 | 1,113,573 | 1,234,004 |
PROPERTY AND EQUIPMENT, net | 430,878 | 460,674 | 454,921 |
RENTAL PRODUCT, net | 102,540 | 123,730 | 125,320 |
GOODWILL | 79,475 | 120,292 | 119,125 |
INTANGIBLE ASSETS, net | 164,833 | 168,987 | 169,072 |
OTHER ASSETS | 17,257 | 12,699 | 8,859 |
TOTAL ASSETS | 1,889,540 | 1,999,955 | 2,111,301 |
CURRENT LIABILITIES: | |||
Accounts payable | 235,958 | 145,106 | 186,862 |
Accrued expenses and other current liabilities | 302,322 | 285,537 | 281,533 |
Income taxes payable | 16,277 | 6,121 | 21,224 |
Current portion of long-term debt | 9,000 | 7,000 | 8,750 |
Total current liabilities | 563,557 | 443,764 | 498,369 |
LONG-TERM DEBT, net | 1,167,906 | 1,389,808 | 1,467,735 |
DEFERRED TAXES, net AND OTHER LIABILITIES | 148,590 | 164,191 | 160,197 |
Total liabilities | 1,880,053 | 1,997,763 | 2,126,301 |
COMMITMENTS AND CONTINGENCIES | |||
SHAREHOLDERS' EQUITY (DEFICIT): | |||
Preferred stock | |||
Common stock | 501 | 492 | 492 |
Capital in excess of par | 501,835 | 491,648 | 485,299 |
Accumulated deficit | (464,993) | (479,166) | (469,463) |
Accumulated other comprehensive loss | (27,856) | (10,782) | (31,328) |
Total shareholders' equity (deficit) | 9,487 | 2,192 | (15,000) |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | $ 1,889,540 | $ 1,999,955 | $ 2,111,301 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2018 | Oct. 28, 2017 | Nov. 03, 2018 | Oct. 28, 2017 | |
Net sales: | ||||
Total net sales | $ 812,747 | $ 810,818 | $ 2,454,141 | $ 2,444,482 |
Cost of sales: | ||||
Cost of sales | 450,012 | 452,061 | 1,377,280 | 1,356,589 |
Gross margin: | ||||
Total gross margin | 362,735 | 358,757 | 1,076,861 | 1,087,893 |
Advertising expense | 37,338 | 38,664 | 117,232 | 120,804 |
Selling, general and administrative expenses | 246,305 | 243,466 | 739,654 | 750,995 |
Goodwill impairment charges | 23,991 | 23,991 | ||
Operating (loss) income | 55,101 | 76,627 | 195,984 | 216,094 |
Interest income | 207 | 159 | 414 | 324 |
Interest expense | (18,757) | (24,412) | (61,602) | (75,200) |
(Loss) gain on extinguishment of debt, net | (9,420) | 2,539 | (30,253) | 6,535 |
Earnings before income taxes | 27,131 | 54,913 | 104,543 | 147,753 |
Provision for income taxes | 13,256 | 18,021 | 27,521 | 50,551 |
Net earnings (loss) | $ 13,875 | $ 36,892 | $ 77,022 | $ 97,202 |
Net earnings per common share: | ||||
Basic (in dollars per share) | $ 0.28 | $ 0.75 | $ 1.55 | $ 1.98 |
Diluted (in dollars per share) | $ 0.27 | $ 0.75 | $ 1.52 | $ 1.97 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 50,000 | 49,206 | 49,766 | 49,040 |
Diluted (in shares) | 50,722 | 49,430 | 50,764 | 49,251 |
Cash dividends declared per common share (in dollars per share) | $ 0.18 | $ 0.18 | $ 0.54 | $ 0.54 |
Retail Segment | ||||
Net sales: | ||||
Total net sales | $ 751,741 | $ 747,522 | $ 2,274,498 | $ 2,265,825 |
Cost of sales: | ||||
Cost of sales | 405,620 | 405,465 | 1,245,606 | 1,225,062 |
Gross margin: | ||||
Total gross margin | 346,121 | 342,057 | 1,028,892 | 1,040,763 |
Corporate Apparel Segment | ||||
Net sales: | ||||
Total net sales | 61,006 | 63,296 | 179,643 | 178,657 |
Cost of sales: | ||||
Cost of sales | 44,392 | 46,596 | 131,674 | 131,527 |
Gross margin: | ||||
Total gross margin | 16,614 | 16,700 | 47,969 | 47,130 |
Goodwill impairment charges | 23,991 | |||
Retail clothing product | Retail Segment | ||||
Net sales: | ||||
Total net sales | 588,447 | 575,203 | 1,807,879 | 1,753,782 |
Cost of sales: | ||||
Cost of sales | 253,758 | 247,293 | 789,003 | 748,802 |
Gross margin: | ||||
Total gross margin | 334,689 | 327,910 | 1,018,876 | 1,004,980 |
Rental services | Retail Segment | ||||
Net sales: | ||||
Total net sales | 124,697 | 126,410 | 350,019 | 373,208 |
Cost of sales: | ||||
Cost of sales | 17,319 | 20,455 | 51,342 | 60,580 |
Gross margin: | ||||
Total gross margin | 107,378 | 105,955 | 298,677 | 312,628 |
Total alteration and other services | Retail Segment | ||||
Net sales: | ||||
Total net sales | 38,597 | 45,909 | 116,600 | 138,835 |
Cost of sales: | ||||
Cost of sales | 33,022 | 34,138 | 100,949 | 103,686 |
Gross margin: | ||||
Total gross margin | 5,575 | 11,771 | 15,651 | 35,149 |
Occupancy costs | Retail Segment | ||||
Cost of sales: | ||||
Cost of sales | 101,521 | 103,579 | 304,312 | 311,994 |
Gross margin: | ||||
Total gross margin | $ (101,521) | $ (103,579) | $ (304,312) | $ (311,994) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2018 | Oct. 28, 2017 | Nov. 03, 2018 | Oct. 28, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net earnings | $ 13,875 | $ 36,892 | $ 77,022 | $ 97,202 |
Currency translation adjustments | (4,056) | (5,257) | (26,023) | 10,857 |
Unrealized gain (loss) on cash flow hedges, net of tax | 4,980 | 2,110 | 8,949 | (2,102) |
Comprehensive income | $ 14,799 | $ 33,745 | $ 59,948 | $ 105,957 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 03, 2018 | Oct. 28, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net earnings | $ 77,022 | $ 97,202 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 78,088 | 78,929 |
Rental product amortization | 30,720 | 32,779 |
Goodwill impairment charges | 23,991 | |
Loss (gain) on extinguishment of debt, net | 30,253 | (6,535) |
Amortization of deferred financing costs and discount on long-term debt | 2,936 | 5,391 |
Loss on disposition of assets | 8,599 | 1,407 |
Asset impairment charges | 504 | 2,867 |
Share-based compensation | 11,555 | 14,850 |
Deferred tax benefit | (2,956) | (243) |
Deferred rent expense and other | 395 | 422 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (5,661) | (13,192) |
Inventories | (49,739) | (13,569) |
Rental product | (14,665) | (6,554) |
Other assets | 10,560 | 16,632 |
Accounts payable, accrued expenses and other current liabilities | 70,924 | 24,394 |
Income taxes payable | 10,313 | 19,870 |
Other liabilities | (5,022) | (2,112) |
Net cash provided by operating activities | 277,817 | 252,538 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (46,927) | (55,956) |
Proceeds from divestiture of business | 17,755 | |
Acquisition of business, net of cash | (457) | |
Proceeds from sales of property and equipment | 2,157 | |
Net cash provided by (used in) investing activities | (29,172) | (54,256) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on original term loan | (993,420) | (9,879) |
Proceeds from new term loan | 895,500 | |
Payments on new term loan | (6,750) | |
Proceeds from asset-based revolving credit facility | 465,500 | 235,900 |
Payments on asset-based revolving credit facility | (407,000) | (235,900) |
Repurchase and retirement of senior notes | (199,365) | (106,731) |
Deferred financing costs | (6,713) | (2,464) |
Cash dividends paid | (27,833) | (26,895) |
Proceeds from issuance of common stock | 6,149 | 1,334 |
Tax payments related to vested deferred stock units | (7,510) | (1,682) |
Net cash (used in) provided by financing activities | (281,442) | (146,317) |
Effect of exchange rate changes | (2,385) | 3,390 |
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (35,182) | 55,355 |
Balance at beginning of period | 103,607 | 70,889 |
Balance at end of period | $ 68,425 | $ 126,244 |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Nov. 03, 2018 | |
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. Our business results historically have fluctuated throughout the year and, as a result, the operating results of the interim periods presented are not necessarily indicative of the results that may be achieved for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended February 3, 2018. 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 August 2017, the Financial Accounting Standards Board ("FASB") i ssued Accounting Standards Update ("ASU") ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities . ASU 2017-12 amends the existing hedge accounting model in order to enable entities to better portray the economics of their risk management activities in their financial statements. ASU 2017-12 is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years. The guidance must be applied on a modified retrospective basis, while presentation and disclosure requirements set forth under ASU 2017-12 are required prospectively in all interim periods and fiscal years ending after the date of adoption . Early adoption of ASU 2017-12 is permitted. We do not expect the adoption of ASU 2017-12 to have a material impact on our financial position, results of operations or cash flows . In February 2016, the FASB issued 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. In July 2018, the FASB issued ASU 2018-11, Leases - Targeted Improvements , that provided a practical expedient that removed the requirement to restate prior period financial statements upon adoption of the standard, which we plan to elect. We have completed our review of the guidance and have made progress in our assessment phase including finalizing the practical expedient and accounting policy elections we will make upon adoption. Furthermore, we have selected a lease accounting system and are implementing processes and controls around that system to enable the preparation of the required financial information for this standard. While we are still evaluating the impact ASU 2016-02 will have on our consolidated financial statements and related disclosures, we 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. |
Divestiture of MW Cleaners
Divestiture of MW Cleaners | 9 Months Ended |
Nov. 03, 2018 | |
Divestiture of MW Cleaners | |
Divestiture of MW Cleaners | 2. Divestiture of MW Cleaners On February 28, 2018, we entered into a definitive agreement to divest our MW Cleaners business for approximately $18.0 million, subject to certain adjustments, and the transaction closed on March 3, 2018. During the first quarter of 2018, we received cash proceeds of $17.7 million and recorded a loss on the divestiture totaling $3.6 million, which is included within selling, general and administrative expenses (“SG&A”) in the condensed consolidated statement of earnings, and relates to our retail segment. During the second quarter of 2018, we recorded a $0.2 million unfavorable final working capital adjustment, which is included in SG&A in the condensed consolidated statement of earnings, and relates to our retail segment. During the third quarter of 2018, no amounts were recorded related to the divestiture. For the nine months ended November 3, 2018, the total loss on the divestiture of the MW Cleaners business totaled $3.8 million. We determined that the sale of the MW Cleaners business did not represent a strategic shift and will not have a major effect on our consolidated results of operations, financial position or cash flows. Accordingly, we have not presented the sale as a discontinued operation in the condensed consolidated financial statements. |
Termination of Tuxedo Rental Li
Termination of Tuxedo Rental License Agreement with Macy's | 9 Months Ended |
Nov. 03, 2018 | |
Termination of Tuxedo Rental License Agreement with Macy's | |
Termination of Tuxedo Rental License Agreement with Macy's | 3. 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 was completed in fiscal 2017 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. All termination-related costs were paid in fiscal 2017. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Nov. 03, 2018 | |
Earnings Per Share | |
Earnings Per Share | 4. Earnings Per Share Basic earnings per common share is computed by dividing net earnings by the weighted-average common shares outstanding during the period. Diluted earnings per common share is calculated using the treasury stock method. Basic and diluted earnings per common share are computed using the actual net earnings 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 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 (in thousands, except per share amounts): For the Three Months Ended For the Nine Months Ended November 3, October 28, November 3, October 28, 2018 2017 2018 2017 Numerator Net earnings $ 13,875 $ 36,892 $ 77,022 $ 97,202 Denominator Basic weighted-average common shares outstanding 50,000 49,206 49,766 49,040 Dilutive effect of share-based awards 722 224 998 211 Diluted weighted-average common shares outstanding 50,722 49,430 50,764 49,251 Net earnings per common share: Basic $ 0.28 $ 0.75 $ 1.55 $ 1.98 Diluted $ 0.27 $ 0.75 $ 1.52 $ 1.97 For the three and nine months ended November 3, 2018, 0.8 million and 0.6 million anti-dilutive shares of common stock were excluded from the calculation of diluted earnings per common share, respectively. 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. |
Debt
Debt | 9 Months Ended |
Nov. 03, 2018 | |
Debt | |
Debt | 5. Debt In 2014, The Men's Wearhouse entered into a term loan credit agreement that provided for a senior secured term loan in the aggregate principal amount of $1.1 billion (the "Original Term Loan") and a $500.0 million asset-based revolving credit agreement (the "ABL Facility", and together with the Original Term Loan, the "Credit Facilities") with certain of our U.S. subsidiaries and Moores the Suit People Inc., one of our Canadian subsidiaries, as co-borrowers. Proceeds from the Original Term Loan were reduced by an $11.0 million original issue discount ("OID"), which was presented as a reduction of the outstanding balance on the Original Term Loan on the balance sheet and amortized to interest expense over the contractual life of the Original Term Loan. In addition, in 2014, The Men's Wearhouse issued $600.0 million in aggregate principal amount of 7.00% Senior Notes due 2022 (the "Senior Notes"). In October 2017, The Men’s Wearhouse amended the ABL Facility in part to increase the principal amount available to $550.0 million and extend the maturity date to October 2022. In April 2018, The Men’s Wearhouse refinanced its Original Term Loan, and in October 2018, amended its term loan to reduce the interest rate margin. See Credit Facilities section below for additional information. The Credit Facilities and the Senior Notes contain customary non-financial and financial covenants, including fixed charge coverage ratios, total leverage ratios and secured leverage ratios. Should our total leverage ratio and secured leverage ratio exceed certain thresholds specified in the agreements, we would be subject to certain additional restrictions, including limitations on our ability to make significant acquisitions and incur additional indebtedness. As of November 3, 2018, our total leverage ratio and secured leverage ratio are below these thresholds and we believe these ratios will remain below the thresholds specified in the agreements for the foreseeable future, which results in the elimination of these additional restrictions. In addition, as a result of the refinancing of our Original Term Loan and amending of our ABL Facility, our ability to pay dividends on our common stock has increased from a maximum of $10.0 million per quarter to a maximum of $15.0 million per quarter. Credit Facilities In April 2018, we refinanced our Original Term Loan. Immediately prior to the refinancing, the Original Term Loan consisted of $593.4 million in aggregate principal amount with an interest rate of LIBOR plus 3.50% (with a floor of 1.0%) and $400.0 million in aggregate principal amount with a fixed rate of 5.0% per annum. Upon entering into the refinancing, we made a prepayment of $93.4 million on the Original Term Loan using cash on hand. As a result, we refinanced $900.0 million in aggregate principal amount of term loans then outstanding with a new Term Loan totaling $900.0 million (the “New Term Loan”). Additionally, we may continue to request additional term loans or incremental equivalent debt borrowings, all of which are uncommitted, in an aggregate amount up to the greater of (1) $250.0 million and (2) an aggregate principal amount such that, on a pro forma basis (giving effect to such borrowings), our senior secured leverage ratio will not exceed 2.5 to 1.0. The New Term Loan will amortize in an annual amount equal to 1.0% of the principal amount of the New Term Loan, payable quarterly commencing on May 1, 2018. Proceeds from the New Term Loan were reduced by a $4.5 million OID, which was presented as a reduction of the outstanding balance on the New Term Loan on the balance sheet and was to be amortized to interest expense over the contractual life of the New Term Loan. The New Term Loan extends the maturity date of the Original Term Loan from June 18, 2021 until April 9, 2025, subject to a springing maturity provision that would accelerate the maturity of the New Term Loan to April 1, 2022 if any of the Company’s obligations under its Senior Notes remain outstanding on April 1, 2022. The New Term Loan bears interest at a rate per annum equal to an applicable margin plus, at the Company’s option, either LIBOR (with a floor of 1.0%) or the base rate (with a floor of 2.0%). In October 2018, we amended the New Term Loan resulting in a reduction in the interest rate margin of 25 basis points. As a result of the amendment, the margins for borrowings under the New Term Loan are 3.25% for LIBOR and 2.25% for the base rate and the OID was eliminated. The maturity date for the New Term Loan remains April 9, 2025, and all other material provisions of the New Term Loan remain unchanged. The interest rate on the New Term Loan is based on 1-month LIBOR, which was 2.32% at November 3, 2018, plus the applicable margin of 3.25%, resulting in a total interest rate of 5.57%. We have two interest rate swap agreements where the variable rates due under the New Term Loan have been exchanged for a fixed rate, including an interest rate swap entered into during June 2018. At November 3, 2018, the total notional amount under these interest rate swaps is $715.0 million. Please see Note 15 for additional information on our interest rate swaps. As a result of our interest rate swaps, 80% of the variable interest rate under the New Term Loan has been converted to a fixed rate and, as of November 3, 2018, the New Term Loan had a weighted average interest rate of 5.69%. In connection with the April 2018 refinancing of the New Term Loan, we incurred deferred financing costs of $5.6 million, which was to be amortized over the life of the New Term Loan using the interest method. In addition, as a result of the refinancing, we recorded a loss on extinguishment of debt totaling $11.9 million consisting of the elimination of unamortized deferred financing costs and OID related to the Original Term Loan, which is included as a separate line in the condensed consolidated statement of earnings. In connection with the October 2018 amendment of the New Term Loan, we incurred deferred financing costs of $1.1 million, which will be amortized over the life of the New Term Loan using the interest method. In addition, we recorded a loss on extinguishment of debt totaling $9.4 million consisting of the elimination of unamortized deferred financing costs and OID, which is included as a separate line in the condensed consolidated statement of earnings. In October 2017, we amended our ABL Facility, which now provides for a senior secured revolving credit facility of $550.0 million, with possible future increases to $650.0 million under an expansion feature, that matures in October 2022, and is guaranteed, jointly and severally, by Tailored Brands, Inc. and certain of our U.S. subsidiaries. The ABL Facility has several borrowing and interest rate options including the following indices: (i) adjusted LIBOR, (ii) Canadian Dollar Offered Rate ("CDOR") rate, (iii) Canadian prime rate or (iv) an alternate base rate (equal to the greater of the prime rate, the New York Federal Reserve Bank (“NYFRB”) rate plus 0.5% or adjusted LIBOR for a one-month interest period plus 1.0%). Advances under the ABL Facility bear interest at a rate per annum using the applicable indices plus a varying interest rate margin of up to 1.75%. The ABL Facility also provides for fees applicable to amounts available to be drawn under outstanding letters of credit which range from 1.25% to 1.75%, and a fee on unused commitments of 0.25%. As of November 3, 2018, $58.5 million in borrowings were outstanding under the ABL Facility at a weighted average interest rate of approximately 5.3%. During the nine months ended November 3, 2018, the maximum borrowing outstanding under the ABL Facility was $104.5 million. The obligations under the Credit Facilities are secured on a senior basis by a first priority lien on substantially all of the assets of the Company, The Men’s Wearhouse and its U.S. subsidiaries and, in the case of the ABL Facility, Moores The Suit People Inc. The Credit Facilities and the related guarantees and security interests granted thereunder are senior secured obligations of, and will rank equally with all present and future senior indebtedness of the Company, the co-borrowers and the respective guarantors. We utilize letters of credit primarily as collateral for workers compensation claims and to secure inventory purchases. At November 3, 2018, letters of credit totaling approximately $33.8 million were issued and outstanding. Borrowings available under the ABL Facility as of November 3, 2018 were $457.7 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. During the second quarter of 2018, we completed a partial redemption of $175.0 million in face value of our Senior Notes. The Senior Notes were redeemed at a redemption price equal to $1,035 per $1,000 principal amount, plus accrued and unpaid interest. As a result, we recorded a net loss on extinguishment totaling $8.1 million, which is included as a separate line in the condensed consolidated statement of earnings. The net loss on extinguishment reflects a $6.1 million loss upon repurchase of the Senior Notes and the elimination of unamortized deferred financing costs totaling $2.0 million related to the Senior Notes. For the nine months ended November 3, 2018, as a result of the partial redemption of $175.0 million in face value of our Senior Notes as well as the repurchase and retirement of $17.6 million in face value of Senior Notes through open market transactions in the first quarter of 2018, we recorded a net loss on extinguishment totaling $8.9 million, which is included as a separate line in the condensed consolidated statement of earnings. The net loss on extinguishment reflects a $6.7 million loss upon repurchase and the elimination of unamortized deferred financing costs totaling $2.2 million related to the Senior Notes. Long-Term Debt The following table provides details on our long-term debt as of November 3, 2018, October 28, 2017 and February 3, 2018 (in thousands): November 3, October 28, February 3, 2018 2017 2018 Term Loan (net of unamortized OID of $0.0 million at November 3, 2018, $3.4 million at October 28, 2017, and $3.0 million at February 3, 2018) $ 893,250 $ 1,033,514 $ 990,465 Senior Notes 228,607 460,000 421,209 ABL Facility 58,500 — — Less: Deferred financing costs related to the Term Loan and Senior Notes (3,451) (17,029) (14,866) Total long-term debt, net 1,176,906 1,476,485 1,396,808 Current portion of long-term debt (9,000) (8,750) (7,000) Total long-term debt, net of current portion $ 1,167,906 $ 1,467,735 $ 1,389,808 |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Nov. 03, 2018 | |
Revenue Recognition | |
Revenue Recognition | 6. Revenue Recognition Adoption of ASC 606 Effective February 4, 2018, we adopted ASC 606, Revenue from Contracts with Customers and all related amendments (“ASC 606”), to all contracts using the modified retrospective approach. We recognized the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings. The adoption had no impact to our previously reported results of operations or cash flows. The comparative period information has not been restated and continues to be reported under the accounting standards in effect for the period presented. The following table depicts the cumulative effect of the changes made to our February 3, 2018 balance sheet for the adoption of ASC 606 (in thousands): Reported Adjusted Balance at Impact of Balance at February 3, Adoption of February 3, 2018 ASC 606 2018 Assets: Accounts receivable, net $ 79,783 $ (303) $ 79,480 Inventories 851,931 (17,837) 834,094 Other current assets 78,252 2,753 81,005 Liabilities: Accrued expenses and other current liabilities 285,537 32,378 317,915 Deferred taxes, net and other liabilities 164,191 (11,941) 152,250 Equity: Accumulated deficit (479,166) (35,824) (514,990) The adoption of ASC 606 primarily impacted the timing of revenue recognition related to our customer loyalty program, gift cards and e-commerce sales within our retail segment, as discussed in more detail below. In addition, for our corporate apparel segment, certain deferred revenue balances along with related inventory amounts were eliminated as part of the cumulative adjustment to opening retained earnings. Also, for estimated sales returns, we now recognize allowances for estimated sales returns on a gross basis rather than a net basis on the condensed consolidated balance sheets. Revenues The following table depicts the disaggregation of revenue by major source (in thousands): For the Three Months Ended For the Nine Months Ended November 3, 2018 October 28, 2017 November 3, 2018 October 28, 2017 Net sales: Men's tailored clothing product $ 342,972 $ 330,618 $ 1,055,213 $ 1,004,430 Men's non-tailored clothing product 227,069 227,520 691,780 690,312 Women's clothing product 15,109 14,795 52,138 52,722 Other (1) 3,297 2,270 8,748 6,318 Total retail clothing product 588,447 575,203 1,807,879 1,753,782 Rental services 124,697 126,410 350,019 373,208 Alteration services 38,597 37,238 114,049 112,851 Retail dry cleaning services (2) — 8,671 2,551 25,984 Total alteration and other services 38,597 45,909 116,600 138,835 Total retail sales 751,741 747,522 2,274,498 2,265,825 Corporate apparel clothing product 61,006 63,296 179,643 178,657 Total net sales $ 812,747 $ $ $ (1) Other consists of franchise and licensing revenues and gift card breakage. Franchise revenues are generally recognized at a point in time while licensing revenues consist primarily of minimum guaranteed royalty amounts recognized over an elapsed time period. (2) On March 3, 2018, we completed the divestiture of our MW Cleaners business. Please see Note 2 for additional information. Please see Note 16 for additional information regarding our reporting segments. Retail Segment For retail clothing product revenue, we transfer control and recognize revenue at a point in time, upon sale or shipment of the merchandise, net of actual sales returns and an accrual for estimated sales returns. For rental and alteration services, we transfer control and recognize revenue at a point in time, upon receipt by the customer. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Sales, use and value added taxes we collect from our customers and are remitted to governmental agencies are excluded from revenue. Loyalty Program We maintain a customer loyalty program for our Men’s Wearhouse, Men’s Wearhouse and Tux, Jos. A. Bank and Moores brands in which customers receive points for purchases. Points are generally equivalent to dollars spent on a one‑to‑one basis, excluding any sales tax dollars, and do not expire. Upon reaching 500 points, customers are issued a $50 rewards certificate which they may redeem for purchases at our stores or online. Generally, reward certificates earned must be redeemed no later than six months from the date of issuance. We believe our loyalty program represents a customer option that is a material right and, accordingly, is a performance obligation in the contract with our customer. Therefore, we will record our obligation for future point redemptions using a deferred revenue model. In prior years, we used an incremental cost approach where we accrued the estimated costs of the anticipated certificate redemptions when the certificates were issued and charged such costs to cost of sales. When loyalty program members earn points, we recognize a portion of the transaction as revenue for merchandise product sales or services and defer a portion of the transaction representing the value of the related points. The value of the points is recorded in deferred revenue on our condensed consolidated balance sheet and recognized into revenue when the points are converted into a rewards certificate and the certificate is used. We account for points earned and certificates issued that will never be redeemed by loyalty members, which we refer to as breakage. We review our breakage estimates at least annually based upon the latest available information regarding redemption and expiration patterns. Our estimate of the expected usage of points and certificates requires significant management judgment. Current and future changes to our assumptions or to loyalty program rules may result in material changes to the deferred revenue balance as well as recognized revenues from the loyalty program. For example, during fiscal 2018, we plan to test potential changes to our loyalty program in order to improve the effectiveness of the program, such as redemption of points into a rewards certificate prior to reaching 500 points. Gift Card Breakage Proceeds from the sale of gift cards are recorded as a liability and are recognized as net sales from products and services when the cards are redeemed. Our gift cards do not have expiration dates. In addition, we recognize revenue for gift cards for which the likelihood of redemption is deemed to be remote and for which there is no legal obligation to remit the value of such unredeemed gift cards to any relevant jurisdictions (commonly referred to as gift card breakage) under the redemption recognition method. This method records gift card breakage as revenue on a proportional basis over the redemption period based on our historical gift card breakage rate. We review our gift card breakage estimate based on our historical redemption patterns. In prior years, we recognized income from breakage of gift cards as a reduction of SG&A when the likelihood of redemption of the gift card was remote. Sales Returns Revenue from merchandise product sales is reported net of sales returns, which includes an estimate of future returns based on historical return rates, with a corresponding reduction to cost of sales. Our refund liability for sales returns was $6.1 million at November 3, 2018, which is included in accrued and other current liabilities and represents the expected value of the refund that will be due to our customers. We also have a corresponding asset included in other current assets that represents the right to recover products from customers associated with sales returns of $2.7 million at November 3, 2018. In prior years, we recognized an accrual for estimated sales returns on a net basis. Corporate Apparel Segment For our corporate apparel segment, we sell corporate clothing and uniforms to workforces under a contract or by purchase order. We transfer control and recognize revenue at a point in time, generally upon delivery of the product to the customer. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Sales, use and value added taxes we collect from our customers and are remitted to governmental agencies are excluded from revenue. Contract Liabilities The following table summarizes the opening and closing balances of our contract liabilities (in thousands): Balance at Increase Balance at February 3, 2018 (Decrease) November 3, 2018 As Adjusted Contract liabilities $ 141,552 $ 556 $ 142,108 Contract liabilities include cash payments received from customers in advance of our performance, including amounts which are refundable. These liabilities primarily consist of customer deposits related to rental product or custom clothing transactions since we typically receive payment from our customers prior to our performance and deferred revenue related to our loyalty programs and unredeemed gift cards. These amounts are included as “Customer deposits, prepayments and refunds payable,” “Loyalty program liabilities” and “Unredeemed gift cards,” respectively, within the accrued expenses and other current liabilities line item on our condensed consolidated balance sheet. Please see Note 10 for additional information on our accrued expenses and other current liabilities. The amount of revenue recognized for the three and nine months ended November 3, 2018 that was included in the opening contract liability balance was $10.1 million and $76.4 million, respectively. This revenue primarily consists of recognition of deposits for completed transactions as well as redeemed certificates related to our loyalty program and gift card redemptions. Practical Expedients and Impact on Fiscal 2018 Results Due to the short term nature of a significant portion of our contracts with customers, we have elected to apply the practical expedients under ASC 606 to: (1) not adjust the consideration for the effects of a significant financing component, (2) recognize incremental costs of obtaining a contract as expense when incurred and (3) not disclose the value of our unsatisfied performance obligations for contracts with an original expected duration of one year or less. In accordance with ASC 606, the following tables reflect the impact on our fiscal 2018 condensed consolidated statement of earnings and balance sheet as if we had continued to apply accounting standards in effect last year (“Legacy GAAP”) (in thousands, except per share amounts): Statement of Earnings For the Three Months Ended November 3, 2018 As Amounts Under Effect of Change Reported Legacy GAAP Increase/(Decrease) Net sales: Total retail sales $ 751,741 $ 753,195 $ 1,454 Corporate apparel clothing product 61,006 62,353 1,347 Costs and expenses: Total retail cost of sales 405,620 406,430 810 Total corporate apparel clothing product cost of sales 44,392 45,516 1,124 Selling, general and administrative expenses 246,305 245,918 (387) Provision for income taxes 13,256 13,869 613 Net earnings 13,875 14,516 641 Diluted net earnings per common share $ $ 0.29 $ 0.02 For the Nine Months Ended November 3, 2018 As Amounts Under Effect of Change Reported Legacy GAAP Increase/(Decrease) Net sales: Total retail sales $ 2,274,498 $ 2,273,821 $ (677) Corporate apparel clothing product 179,643 186,249 6,606 Costs and expenses: Total retail cost of sales 1,245,606 1,246,396 790 Total corporate apparel clothing product cost of sales 131,674 137,045 5,371 Selling, general and administrative expenses 739,654 738,522 (1,132) Provision for income taxes 27,521 27,758 237 Net earnings 77,022 77,685 663 Diluted net earnings per common share $ $ 1.53 $ 0.01 Balance Sheet November 3, 2018 As Amounts Under Effect of Change Reported Legacy GAAP Increase/(Decrease) Assets: Accounts receivable, net $ 80,696 $ 82,850 $ 2,154 Inventories 875,003 886,627 11,624 Other current assets 70,433 67,774 (2,659) Liabilities: Accrued expenses and other current liabilities 302,322 245,074 (57,248) Deferred taxes, net and other liabilities 148,590 136,623 (11,967) Equity: Accumulated deficit $ (464,993) $ (428,506) $ 36,487 |
Supplemental Cash Flows
Supplemental Cash Flows | 9 Months Ended |
Nov. 03, 2018 | |
Supplemental Cash Flows | |
Supplemental Cash Flows | 7. Supplemental Cash Flows Supplemental disclosure of cash flow information is as follows (in thousands): For the Nine Months Ended November 3, October 28, 2018 2017 Cash paid for interest $ 55,856 $ 66,628 Cash paid for income taxes, net $ 3,331 $ 17,798 We had unpaid capital expenditure purchases included in accounts payable and accrued expenses and other current liabilities of approximately $12.9 million and $7.1 million at November 3, 2018 and October 28, 2017, respectively. Capital expenditure purchases are recorded as cash outflows from investing activities in the condensed consolidated statement of cash flows in the period they are paid. |
Inventories
Inventories | 9 Months Ended |
Nov. 03, 2018 | |
Inventories | |
Inventories | 8. Inventories The following table provides details on our inventories as of November 3, 2018, October 28, 2017 and February 3, 2018 (in thousands): November 3, October 28, February 3, 2018 2017 2018 Finished goods $ 762,586 $ 873,030 $ 739,668 Raw materials and merchandise components 112,417 99,971 112,263 Total inventories $ 875,003 $ 973,001 $ 851,931 |
Income Taxes
Income Taxes | 9 Months Ended |
Nov. 03, 2018 | |
Income Taxes | |
Income Taxes | 9. Income Taxes In December 2017, the U.S. enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Reform Act”). The changes included in the Tax Reform Act are broad and complex, including, but not limited to reducing the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018. Our federal income tax expense for fiscal 2018 is based on the new rate. Our effective income tax rate increased to 48.9% for the third quarter of 2018 from 32.8% for the third quarter of 2017 primarily due to the non-deductibility of the goodwill impairment charge and certain executive compensation costs partially offset by the impact of the Tax Reform Act. Our effective income tax rate decreased to 26.3% for the first nine months of 2018 from 34.2% for the first nine months of 2017 primarily from enactment of the Tax Reform Act, the release of $3.1 million of state valuation allowances and anniversarying last year’s $2.2 million of tax deficiencies related to the vesting of stock-based awards recorded in the first nine months of 2017 resulting from the adoption of new accounting guidance related to stock-based compensation. Shortly after the Tax Reform Act was enacted, the SEC issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) which provides guidance on accounting for the Tax Reform Act’s impact. SAB 118 provides a measurement period, which in no case should extend beyond one year from the Tax Reform Act enactment date, during which a company acting in good faith may complete the accounting for the impacts of the Tax Reform Act. In accordance with SAB 118, a company must reflect the income tax effects of the Tax Reform Act in the reporting period in which the accounting is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Reform Act is incomplete, a company can determine a reasonable estimate for those effects and record a provisional estimate in the financial statements in the first reporting period in which a reasonable estimate can be determined. At the end of fiscal 2017, we recorded a provisional discrete net tax benefit of $0.3 million related to the Tax Reform Act as well as a provisional estimate of incremental withholding liabilities on our investment in foreign earnings totaling $17.3 million as we no longer intend to permanently reinvest our foreign earnings from Canada. During the first nine months of 2018, there have been no material updates to these provisional amounts; however, we expect a favorable SAB 118 adjustment in the fourth quarter of 2018. While we have made a reasonable estimate of the impact of the Tax Reform Act, we are continuing to finalize the consequences of tax reform, including analyzing additional information related to the Tax Reform Act as supplemental legislation, regulatory guidance, or evolving technical interpretations become available. We expect that our transition tax and the temporary differences that existed on the date of enactment will be presumed final once our federal return is filed. Additionally, we are currently undergoing several audits; however, we currently do not believe these audits will result in any material charge to tax expense in the future. |
Other Current Assets, Accrued E
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities | 9 Months Ended |
Nov. 03, 2018 | |
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities | |
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities | 10. Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities The following table provides details on our other current assets as of November 3, 2018, October 28, 2017 and February 3, 2018 (in thousands): November 3, October 28, February 3, 2018 2017 2018 Prepaid expenses $ 56,030 $ 44,473 $ 47,545 Tax receivable 965 506 20,368 Other 13,438 8,587 10,339 Total other current assets $ 70,433 $ 53,566 $ 78,252 The following table provides details on our accrued expenses and other current liabilities as of November 3, 2018, October 28, 2017 and February 3, 2018 (in thousands): November 3, October 28, February 3, 2018 2017 2018 Accrued salary, bonus, sabbatical, vacation and other benefits $ 70,378 $ 79,753 $ 84,767 Loyalty program liabilities 64,944 11,199 9,106 Customer deposits, prepayments and refunds payable 44,792 37,822 59,633 Sales, value added, payroll, property and other taxes payable 30,233 30,220 29,409 Unredeemed gift cards 26,279 34,552 39,609 Accrued workers compensation and medical costs 25,675 27,860 25,244 Accrued dividends 10,320 10,789 11,128 Accrued interest 6,055 19,550 3,281 Accrued royalties 3,287 6,020 5,032 Lease termination and other store closure costs 480 1,027 427 Other 19,879 22,741 17,901 Total accrued expenses and other current liabilities $ 302,322 $ 281,533 $ 285,537 The increase in loyalty program liabilities and the decrease in unredeemed gift cards is primarily driven by the adoption of ASC 606, effective February 4, 2018. Please see Note 6 for additional information. The following table provides details on our deferred taxes, net and other liabilities as of November 3, 2018, October 28, 2017 and February 3, 2018 (in thousands): November 3, October 28, February 3, 2018 2017 2018 Deferred and other income tax liabilities, net $ 83,179 $ 91,760 $ 95,314 Deferred rent and landlord incentives 58,458 60,040 60,136 Unfavorable lease liabilities 2,085 3,279 2,910 Other 4,868 5,118 5,831 Total deferred taxes, net and other liabilities $ 148,590 $ 160,197 $ 164,191 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 9 Months Ended |
Nov. 03, 2018 | |
Accumulated Other Comprehensive (Loss) Income. | |
Accumulated Other Comprehensive (Loss) Income | 11. Accumulated Other Comprehensive (Loss) Income The following table summarizes the components of accumulated other comprehensive (loss) income for the nine months ended November 3, 2018 (in thousands and net of tax): Foreign Currency Cash Flow Pension Translation Hedges Plan Total BALANCE— February 3, 2018 $ (11,116) $ 145 $ 189 $ (10,782) Other comprehensive (loss) income before reclassifications (26,023) 6,992 — (19,031) Amounts reclassified from accumulated other comprehensive loss — 1,957 — 1,957 Net current-period other comprehensive (loss) income (26,023) 8,949 — (17,074) BALANCE— November 3, 2018 $ (37,139) $ 9,094 $ 189 $ (27,856) 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) Amounts reclassified from other comprehensive (loss) income for the nine months ended November 3, 2018 and 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. |
Share-Based Compensation Plans
Share-Based Compensation Plans | 9 Months Ended |
Nov. 03, 2018 | |
Share-Based Compensation Plans | |
Share-Based Compensation Plans | 12. Share-Based Compensation Plans For a discussion of our share-based compensation plans, please see Note 13 in our Annual Report on Form 10-K for the fiscal year ended February 3, 2018. Non-Vested Deferred Stock Units and Performance Units The following table summarizes the activity of time-based and performance-based awards (collectively, "DSUs") for the nine months ended November 3, 2018: Weighted-Average Units Grant-Date Fair Value Time- Performance- Time- Performance- Based Based Based Based Non-Vested at February 3, 2018 1,014,689 993,631 $ 18.13 $ 19.55 Granted 627,770 254,895 Vested (1) (592,025) (131,074) Forfeited (151,398) (730,623) Non-Vested at November 3, 2018 899,036 386,829 $ $ (1) Includes 264,794 shares relinquished for tax payments related to vested DSUs for the nine months ended November 3, 2018. As of November 3, 2018, we have unrecognized compensation expense related to non-vested DSUs of $18.8 million, which is expected to be recognized over a weighted-average period of 1.5 years. Stock Options The following table summarizes the activity of stock options for the nine months ended November 3, 2018: Weighted- Number of Average Shares Exercise Price Outstanding at February 3, 2018 1,527,176 $ 21.97 Granted 232,430 Exercised (256,111) 19.22 Forfeited (210,327) Expired (41,096) Outstanding at November 3, 2018 1,252,072 $ Exercisable at November 3, 2018 676,059 $ The weighted-average grant date fair value of the 232,430 stock options granted during the nine months ended November 3, 2018 was $10.29 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 November 3, 2018: For the Nine Months Ended November 3, 2018 Risk-free interest rate Expected lives 5.0 years Dividend yield Expected volatility As of November 3, 2018, we have unrecognized compensation expense related to non-vested stock options of $2.5 million, which is expected to be recognized over a weighted-average period of 1.5 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 November 3, 2018, the liability associated with the cash settled awards was $3.9 million with $2.5 million recorded in accrued expenses and other current liabilities and $1.4 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 November 3, 2018 (in thousands): Cash Settled Awards Non-Vested at February 3, 2018 $ 8,353 Granted — Vested (2,677) Forfeited (497) Non-Vested at November 3, 2018 $ 5,179 As of November 3, 2018, we have unrecognized compensation expense related to non-vested cash settled awards of $2.5 million, which is expected to be recognized over a weighted-average period of 1.2 years. Share-Based Compensation Expense Share-based compensation expense, including cash settled awards, recognized for the three and nine months ended November 3, 2018 was $3.0 million and $14.9 million, respectively, of which $0.7 million, net of the impact of forfeited awards, was related to the retirement of our former Chief Executive Officer. Share-based compensation expense recognized for the three and nine months ended October 28, 2017 was $8.2 million and $17.2 million, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Nov. 03, 2018 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 13. 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 November 3, 2018 are as follows (in thousands): Corporate Retail Apparel Total Balance at February 3, 2018 $ 94,305 $ 25,987 $ 120,292 Goodwill impairment charge — (23,991) (23,991) Goodwill of divested business (see Note 2) (13,588) — (13,588) Translation adjustment (1,242) (1,996) (3,238) Balance at November 3, 2018 $ 79,475 $ — $ 79,475 Goodwill is evaluated for impairment at least annually. A more frequent evaluation is performed if events or circumstances indicate that impairment could have occurred. Such events or circumstances could include, but are not limited to, new significant negative industry or economic trends, unanticipated changes in the competitive environment, decisions to significantly modify or dispose of operations and a significant sustained decline in the market price of our stock. During the third quarter of 2018, sales, profitability and cash flow of our corporate apparel reporting unit underperformed in comparison to our forecast. The performance of our corporate apparel business was and continues to be impacted by increasing uncertainty surrounding Brexit, which is resulting in lower replenishment demand from existing accounts in the United Kingdom (“UK”). In addition, in the third quarter of 2018, we received notification from a significant U.S. customer of their decision not to renew their existing agreement with us in 2019. As a result of the continued uncertainty surrounding Brexit and the notification from our U.S. customer, we appropriately lowered our forecast of sales, profitability and cash flow for the corporate apparel reporting unit for the fourth quarter of 2018 and future years. As a result of the factors above, we determined that a triggering event occurred during the third quarter of 2018 and an interim goodwill impairment test for our corporate apparel reporting unit was required. We concluded that the reporting unit’s goodwill was fully impaired and recorded a non-cash goodwill impairment charge of $24.0 million during the third quarter of 2018, which is included as a separate line in the condensed consolidated statement of earnings. As of November 3, 2018, October 28, 2017, and February 3, 2018, accumulated goodwill impairment totaled $804.0 million, $778.5 million and $780.0 million, respectively. Consistent with the procedures followed in our annual impairment test, we estimated the fair value of the reporting unit using a combined income and market comparable approach. Our income approach uses projected future cash flows that are discounted using a weighted‑average cost of capital analysis that reflects current market conditions. The market comparable approach primarily considers market price multiples of comparable companies and applies those price multiples to certain key drivers of the reporting unit. We believe these two approaches are appropriate valuation techniques and we weighted the two values equally as an estimate of reporting unit fair value for the purposes of our impairment testing. Management judgment is a significant factor in the goodwill impairment evaluation process. The computations require management to make estimates and assumptions. Critical assumptions used in the interim impairment test for the corporate apparel reporting unit included: · The potential future cash flows of the reporting unit. The income approach relies on the timing and estimates of future cash flows. The projections use management’s estimates of economic and market conditions over the projected period, including growth rates in revenue, gross margin and expense (all Level 3 inputs in the fair value hierarchy). · Selection of an appropriate discount rate. The income approach requires the selection of an appropriate discount rate, which is based on a weighted‑average cost of capital analysis. The discount rate is affected by changes in short‑term interest rates and long‑term yield as well as variances in the typical capital structure of marketplace participants. The weighted‑average cost of capital used to discount the cash flows for the interim goodwill impairment test was 13.5%, which is 100 basis points higher than the last annual test, reflecting the increasing uncertainty surrounding Brexit. · Selection of comparable companies within the industry. For purposes of the market comparable approach, valuations were determined by calculating average price multiples of relevant key drivers from a group of companies that are comparable to the reporting unit being tested and applying those price multiples to the key drivers of the reporting unit. The determination of the market comparable also involves a degree of judgment. Earnings multiples used in the market comparable approach for the interim goodwill impairment test ranged from 5.5 to 8.0. During the third quarter of 2018, we also performed an interim impairment test of the intangible assets of the corporate apparel reporting unit totaling $10.7 million, consisting of a customer relationship asset with a carrying value of $8.2 million and tradenames with a carrying value of $2.5 million and determined, as of November 3, 2018, that none were impaired. Intangible Assets The gross carrying amount and accumulated amortization of our identifiable intangible assets are as follows (in thousands): November 3, October 28, February 3, 2018 2017 2018 Amortizable intangible assets: Carrying amount: Trademarks, tradenames and franchise agreements $ 16,048 $ 16,074 $ 16,273 Favorable leases 12,695 13,475 13,229 Customer relationships 26,343 26,612 28,713 Total carrying amount 55,086 56,161 58,215 Accumulated amortization: Trademarks, tradenames and franchise agreements (10,709) (10,404) (10,558) Favorable leases (5,629) (4,856) (5,010) Customer relationships (18,153) (16,078) (17,992) Total accumulated amortization (34,491) (31,338) (33,560) Total amortizable intangible assets, net 20,595 24,823 24,655 Indefinite-lived intangible assets: Trademarks and tradename 144,238 144,249 144,332 Total intangible assets, net $ 164,833 $ 169,072 $ 168,987 Pre-tax amortization expense associated with intangible assets subject to amortization totaled $1.0 million and $2.9 million for the three and nine months ended November 3, 2018. 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 associated with intangible assets subject to amortization at November 3, 2018 is estimated to be $0.9 million for the remainder of fiscal 2018, $3.7 million for fiscal 2019, $3.5 million for fiscal 2020, $3.4 million for fiscal 2021 and $2.1 million for fiscal 2022. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Nov. 03, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | 14. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a three-tier fair value hierarchy, categorizing the inputs used to measure fair value. The hierarchy can be described as follows: Level 1- observable inputs such as quoted prices in active markets; Level 2- inputs other than the quoted prices in active markets that are observable either directly or indirectly; and Level 3- unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and Liabilities that are Measured at Fair Value on a Recurring Basis Fair Value Measurements at Reporting Date Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Instruments Inputs Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total November 3, 2018— Assets: Derivative financial instruments $ — $ 12,587 $ — $ 12,587 Liabilities: Derivative financial instruments $ — $ 797 $ — $ 797 February 3, 2018— Assets: Derivative financial instruments $ — $ $ — $ Liabilities: Derivative financial instruments $ — $ $ — $ October 28, 2017— Assets: Derivative financial instruments $ — $ 235 $ — $ 235 Liabilities: Derivative financial instruments $ — $ 2,198 $ — $ 2,198 Derivative financial instruments are comprised of (1) interest rate swap agreements to minimize our exposure to interest rate changes on our outstanding indebtedness, (2) 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, (3) 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 (4) foreign currency forward exchange contracts primarily entered into to minimize our foreign currency exposure related to intercompany loans denominated in a currency different from the operating entity’s functional currency. These derivative financial instruments are recorded in the consolidated balance sheets at fair value based upon observable market inputs, primarily pricing models based on current market rates. Derivative financial instruments in an asset position are included within other current assets or other assets in the consolidated balance sheets. Derivative financial instruments in a liability position are included within accrued expenses and other current liabilities or noncurrent liabilities in the consolidated balance sheets. Please see Note 15 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, and identifiable intangibles, are periodically evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the asset carrying amount exceeds its fair value, an impairment charge is recognized in the amount by which the carrying amount exceeds the fair value of the asset. During the three and nine months ended November 3, 2018, we incurred $0.2 million and $0.5 million, respectively, of asset impairment charges, which is included within SG&A expenses in our condensed consolidated statement of earnings, related to underperforming stores. In addition, during the nine months ended November 3, 2018, we recognized a writeoff of $4.0 million of rental product related to the closure of a rental product distribution center, which is included within cost of sales in our condensed consolidated statement of earnings. 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 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 our Term Loan and Senior Notes. Management estimates that, as of November 3, 2018, October 28, 2017, and February 3, 2018, the carrying value of our financial instruments, other than our Term Loan and Senior Notes, approximated their fair value due to the highly liquid or short-term nature of these instruments. We believe that the borrowings under our ABL Facility approximate their fair value because interest rates are adjusted on a short-term basis. The fair values of our Term Loan were valued based upon observable market data provided by a third party for similar types of debt, which we classify as a Level 2 input within the fair value hierarchy. The fair value of our Senior Notes is based on quoted prices in active markets, which we classify as a Level 1 input within the fair value hierarchy. The table below shows the fair value and carrying value of our long-term debt, including current portion (in thousands): November 3, 2018 October 28, 2017 February 3, 2018 Carrying Estimated Carrying Estimated Carrying Estimated Amount (1) Fair Value Amount (1) Fair Value Amount (1) Fair Value Term Loan and Senior Notes, including current portion $ 1,118,406 $ 1,130,202 $ 1,476,485 $ 1,461,283 $ 1,396,808 $ 1,407,449 (1) The carrying value of the Term Loan and Senior Notes, including current portion is net of deferred financing costs of $3.5 million, $17.0 million and $14.9 million as of November 3, 2018, October 28, 2017 and February 3, 2018, respectively. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Nov. 03, 2018 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 15. Derivative Financial Instruments 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 November 3, 2018, the notional amount totaled $370.0 million. Under this interest rate swap agreement, we receive a floating rate based on 1-month LIBOR and pay a fixed rate of 5.31% (including the applicable margin of 3.25%) 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 June 2018, we entered into an interest rate swap agreement on an initial notional amount of $320.0 million that matures in April 2025 with periodic interest settlements. At November 3, 2018, the notional amount totaled $345.0 million. Under this interest rate swap agreement, we receive a floating rate based on 1-month LIBOR and pay a fixed rate of 6.18% (including the applicable margin of 3.25%) on the outstanding notional amount. We have designated 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 November 3, 2018, the fair value of the interest rate swaps was a net asset of $11.1 million with $2.3 million recorded in other current assets and $9.6 million recorded in other assets offset by $0.8 million recorded in accrued expenses and other current liabilities in our condensed consolidated balance sheet. The effective portion of the swaps is reported as a component of accumulated other comprehensive (loss) income. There was no hedge ineffectiveness at November 3, 2018. 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 interest rate swaps is expected to be reclassified from accumulated other comprehensive (loss) income into earnings within interest expense. If, at any time, an 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. At November 3, 2018, the notional amount of the British pound and Euro instruments totaled $25.6 million and $8.9 million, respectively, and mature at various times through December 2019. We have designated these instruments as cash flow hedges of the variability in exchange rates for those foreign currencies. At November 3, 2018, the fair value of these cash flow hedges was an asset of $0.7 million recorded in other current assets in our condensed consolidated balance sheet. The effective portion of the hedges is reported as a component of accumulated other comprehensive (loss) income. Hedge ineffectiveness at November 3, 2018 was immaterial. Changes in fair value are reclassified from accumulated other comprehensive (loss) income into earnings in the same period that the hedged item affects earnings. Over the next 12 months, $1.8 million of the effective portion of the cash flow hedges is expected to be reclassified 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. At November 3, 2018, the notional amount of these instruments totaled $4.6 million. We have not elected to apply hedge accounting to these derivative instruments. Amounts related to these transactions were immaterial to our consolidated financial statements. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Nov. 03, 2018 | |
Segment Reporting | |
Segment Reporting | 16. 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. Prior to its divestiture, MW Cleaners was also aggregated in the retail segment as its operations did not have 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, formalwear, 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, (loss) 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 November 3, 2018 October 28, 2017 November 3, 2018 October 28, 2017 Net sales: Men's Wearhouse (1) $ 454,927 $ 448,955 $ 1,347,933 $ 1,327,773 Jos. A. Bank 169,318 162,685 510,821 504,238 K&G 72,610 69,604 245,535 244,098 Moores 54,886 57,607 167,658 163,732 MW Cleaners (2) — 8,671 2,551 25,984 Total retail segment 751,741 747,522 2,274,498 2,265,825 Total corporate apparel segment 61,006 63,296 179,643 178,657 Total net sales $ 812,747 $ $ $ (1) Consists of Men's Wearhouse, Men's Wearhouse and Tux, tuxedo shops within Macy's (all 170 of which were closed during the second quarter of 2017) and Joseph Abboud. (2) On March 3, 2018, we completed the divestiture of our MW Cleaners business. Please see Note 2 for additional information. Operating income (loss) 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 November 3, 2018 October 28, 2017 November 3, 2018 October 28, 2017 Operating income: Retail $ 127,621 $ 123,628 $ 360,484 $ 352,273 Corporate apparel (20,879) 3,072 (18,127) 7,150 Shared service expense (51,641) (50,073) (146,373) (143,329) Operating income 55,101 76,627 195,984 216,094 Interest income 207 159 414 324 Interest expense (18,757) (24,412) (61,602) (75,200) (Loss) gain on extinguishment of debt, net (9,420) 2,539 (30,253) 6,535 Earnings before income taxes $ $ $ $ The results of the corporate apparel reportable segment were materially impacted by a non-cash goodwill impairment charge of $24.0 million. Please see Note 13 for additional information. Since February 3, 2018, total assets for our reportable segments have materially changed primarily as a result of the goodwill impairment charge for the corporate apparel business. Total assets by reportable segment and shared services are as follows (in thousands): November 3, October 28, February 3, 2018 2017 2018 Segment assets: Retail $ 1,424,320 $ 1,559,247 $ 1,434,992 Corporate apparel 180,046 216,391 222,872 Shared services (1) 285,174 335,663 342,091 Total assets $ 1,889,540 $ 2,111,301 $ (1) Shared service assets consist primarily of cash and cash equivalents, assets related to our distribution network and tax-related assets. |
Legal Matters
Legal Matters | 9 Months Ended |
Nov. 03, 2018 | |
Legal Matters | |
Legal Matters | 17. Legal Matters 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 on what constitutes a “week” and the Court recently issued an order granting the plaintiff’s motion and denying our motion on what period constitutes a “week.” On or about August 17, 2018, we entered into a settlement agreement for an immaterial amount consisting of a combination of cash and coupons. The settlement agreement, which is subject to preliminary and final approval of the Court, will not have a material adverse effect on our financial position, results of operations or cash flows. On August 2, 2017, two American Airlines employees, Thor Zurbriggen and Dena Catan, filed a putative class action lawsuit against our Twin Hill subsidiary in the United States District Court for the Northern District of Illinois (Case No. 1:17-cv-05648). The complaint alleged claims for strict liability, negligence, and medical monitoring based on allegedly defective uniforms Twin Hill supplied to American Airlines for its employees. On September 28, 2017, the plaintiffs filed an amended complaint adding nine additional named plaintiffs, adding American Airlines, Inc. as a defendant, and adding claims for civil battery and intentional infliction of emotional distress. Plaintiffs filed a Seconded Amended Complaint on October 4, 2018 on behalf of 39 named plaintiffs, adding PSA Airlines, Inc. and Envoy Air Inc. as defendants, adding new factual allegations and adding a new claim of fraud against American. The Second Amended Complaint included plaintiffs from the Onody (Case No. 1:18-cv-02303) and Joy (Case No. 1:18-cv-05808) matters we reported in prior filings. As a result, on October 16, 2018, the judge dismissed the separate Onody and Joy matters. We have timely answered the Second Amended Complaint and the matter will proceed in due course. 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. On December 11, 2017, the Company filed a demurrer to Plaintiff’s complaint. On February 20, 2018, the Court granted our demurrer and dismissed the plaintiffs’ Complaint. Plaintiffs filed an amended complaint on April 10, 2018 and again on April 27, 2018, which added allegations regarding Plaintiffs’ alleged injuries and named Tailored Brands as a defendant. 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, Melodie Agnello, 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. On December 11, 2017, the Company filed a demurrer to plaintiff’s complaint. On February 20, 2018, the Court granted our demurrer and dismissed the plaintiffs’ Complaint. Plaintiffs filed an amended complaint on April 27, 2018, which added allegations regarding Plaintiffs’ alleged injuries and named Tailored Brands as a defendant. 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 April 27, 2018, Alexandra Hughes, and numerous other American Airlines employees filed a lawsuit against our Twin Hill subsidiary and Tailored Brands in the Superior Court for the State of California for the County of Alameda (Case No. RG18902727). 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 April 27, 2018, Rosemary Mackonochie, and numerous other American Airlines employees filed a lawsuit against our Twin Hill subsidiary and Tailored Brands in the Superior Court for the State of California for the County of Alameda (Case No. RG18902720). 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 August 31, 2018, Michele Wagoner and several other American Airlines employees filed a lawsuit against our Twin Hill subsidiary and Tailored Brands in the Superior Court for the State of California for the County of Alameda (Case No. RG18919080). 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 |
Nov. 03, 2018 | |
Condensed Consolidating Information | |
Condensed Consolidating Information | 18. Condensed Consolidating Information As discussed in Note 5, The Men's Wearhouse (the "Issuer") issued $600.0 million in aggregate principal amount of Senior Notes. The Senior Notes are guaranteed jointly and severally, on an unsecured basis by Tailored Brands, Inc. (the "Parent") and certain of our U.S. subsidiaries (the "Guarantors"). Our foreign subsidiaries (collectively, the "Non-Guarantors") are not guarantors of the Senior Notes. Each of the Guarantors is 100% owned and all guarantees are joint and several. In addition, the guarantees are full and unconditional except for certain automatic release provisions related to the Guarantors. These automatic release provisions are considered customary and include the sale or other disposition of all or substantially all of the assets or all of the capital stock of any subsidiary guarantor, the release or discharge of a guarantor's guarantee of the obligations under the Term Loan other than a release or discharge through payment thereon, the designation in accordance with the Indenture of a guarantor as an unrestricted subsidiary or the satisfaction of the requirements for defeasance or discharge of the Senior Notes as provided for in the Indenture. The tables in the following pages present the condensed consolidating financial information for the Parent, the Issuer, the Guarantors and the Non-Guarantors, together with eliminations, as of and for the periods indicated. The consolidating financial information may not necessarily be indicative of the financial positions, results of operations or cash flows had the Issuer, Guarantors and Non-Guarantors operated as independent entities. Tailored Brands, Inc. Condensed Consolidating Balance Sheet November 3, 2018 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 981 $ 2,239 $ 65,205 $ — $ 68,425 Accounts receivable, net — 25,010 237,715 86,644 (268,673) 80,696 Inventories — 149,157 531,826 194,020 — 875,003 Other current assets 220 26,657 35,121 8,435 — 70,433 Total current assets 220 201,805 806,901 354,304 (268,673) 1,094,557 Property and equipment, net — 190,905 206,167 33,806 — 430,878 Rental product, net — 83,554 4,367 14,619 — 102,540 Goodwill — 6,160 52,128 21,187 — 79,475 Intangible assets, net — — 154,144 10,689 — 164,833 Investments in subsidiaries 157,114 1,344,748 — — (1,501,862) — Other assets — 16,046 660 80,786 (80,235) 17,257 Total assets $ 157,334 $ 1,843,218 $ 1,224,367 $ 515,391 $ (1,850,770) $ 1,889,540 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 134,700 $ 188,583 $ 91,014 $ 90,334 $ (268,673) $ 235,958 Accrued expenses and other current liabilities 7,952 170,406 105,087 35,154 — 318,599 Current portion of long-term debt — 9,000 — — — 9,000 Total current liabilities 142,652 367,989 196,101 125,488 (268,673) 563,557 Long-term debt, net — 1,167,906 — — — 1,167,906 Deferred taxes, net and other liabilities 5,195 150,209 47,637 25,784 (80,235) 148,590 Shareholders' equity 9,487 157,114 980,629 364,119 (1,501,862) 9,487 Total liabilities and shareholders' equity $ 157,334 $ 1,843,218 $ 1,224,367 $ 515,391 $ (1,850,770) $ 1,889,540 Tailored Brands, Inc. Condensed Consolidating Balance Sheet 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 $ $ $ $ $ $ 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 $ $ $ $ $ $ 2,111,301 Tailored Brands, Inc. Condensed Consolidating Balance Sheet February 3, 2018 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 51,818 $ 2,180 $ 49,609 $ — $ 103,607 Accounts receivable, net — 23,712 368,328 58,573 (370,830) 79,783 Inventories — 207,504 445,126 199,301 — 851,931 Other current assets 3,666 26,951 38,217 9,418 — 78,252 Total current assets 3,666 309,985 853,851 316,901 (370,830) 1,113,573 Property and equipment, net — 203,204 220,979 36,491 — 460,674 Rental product, net — 103,664 3,658 16,408 — 123,730 Goodwill — 6,160 67,010 47,122 — 120,292 Intangible assets, net — — 155,438 13,549 — 168,987 Investments in subsidiaries 128,458 1,424,647 — — (1,553,105) — Other assets — 11,183 805 81,846 (81,135) 12,699 Total assets $ 132,124 $ $ $ $ $ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 110,326 $ 281,838 $ 57,756 $ 66,016 $ (370,830) $ 145,106 Accrued expenses and other current liabilities 14,061 87,597 155,813 34,187 — 291,658 Current portion of long-term debt — 7,000 — — — 7,000 Total current liabilities 124,387 376,435 213,569 100,203 (370,830) 443,764 Long-term debt, net — 1,389,808 — — — 1,389,808 Deferred taxes, net and other liabilities 5,545 164,142 46,641 28,998 (81,135) 164,191 Shareholders' equity 2,192 128,458 1,041,531 383,116 (1,553,105) 2,192 Total liabilities and shareholders' equity $ 132,124 $ $ $ $ $ Tailored Brands, Inc. Condensed Consolidating Statement of Earnings (Loss) (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Three Months Ended November 3, 2018 Net sales $ — $ 453,316 $ 369,749 $ 149,863 $ (160,181) $ 812,747 Cost of sales — 219,036 283,803 107,354 (160,181) 450,012 Gross margin — 234,280 85,946 42,509 — 362,735 Operating expenses 1,443 135,498 133,986 27,658 (14,942) 283,643 Goodwill impairment charge — — 1,294 22,697 — 23,991 Operating (loss) income (1,443) 98,782 (49,334) (7,846) 14,942 55,101 Other income and expenses, net — — 14,942 — (14,942) — Interest expense, net (1,062) (20,017) 1,970 559 — (18,550) Loss on extinguishment of debt, net — (9,420) — — — (9,420) (Loss) earnings before income taxes (2,505) 69,345 (32,422) (7,287) — 27,131 (Benefit) provision for income taxes (505) 17,304 (6,844) 3,301 — 13,256 (Loss) earnings before equity in net income of subsidiaries (2,000) 52,041 (25,578) (10,588) — 13,875 Equity in earnings (loss) of subsidiaries 15,875 (36,166) — — 20,291 — Net earnings (loss) $ 13,875 $ 15,875 $ (25,578) $ (10,588) $ 20,291 $ 13,875 Comprehensive income (loss) $ 14,799 $ 20,300 $ (25,578) $ (14,089) $ 19,367 $ 14,799 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 Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Nine Months Ended November 3, 2018 Net sales $ — $ 1,343,248 $ 1,137,489 $ 442,055 $ (468,651) $ 2,454,141 Cost of sales — 664,219 862,803 318,909 (468,651) 1,377,280 Gross margin — 679,029 274,686 123,146 — 1,076,861 Operating expenses 3,408 405,344 405,062 85,165 (42,093) 856,886 Goodwill impairment charge — — 1,294 22,697 — 23,991 Operating (loss) income (3,408) 273,685 (131,670) 15,284 42,093 195,984 Other income and expenses, net — — 42,093 — (42,093) — Interest expense, net (2,749) (66,141) 6,115 1,587 — (61,188) Loss on extinguishment of debt, net — (30,253) — — — (30,253) (Loss) earnings before income taxes (6,157) 177,291 (83,462) 16,871 — 104,543 (Benefit) provision for income taxes (1,624) 37,882 (17,412) 8,675 — 27,521 (Loss) earnings before equity in net income of subsidiaries (4,533) 139,409 (66,050) 8,196 — 77,022 Equity in earnings (loss) of subsidiaries 81,555 (57,854) — — (23,701) — Net earnings (loss) $ 77,022 $ 81,555 $ (66,050) $ 8,196 $ (23,701) $ 77,022 Comprehensive income (loss) $ 59,948 $ 87,072 $ (66,050) $ (14,395) $ (6,627) $ 59,948 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 income (loss) $ 105,957 $ 100,578 $ (47,164) $ 37,886 $ (91,300) $ 105,957 Tailored Brands, Inc. Condensed Consolidating Statement of Cash Flows For the Nine Months Ended November 3, 2018 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ 29,194 $ 470,656 $ 11,157 $ (205,357) $ (27,833) $ 277,817 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures — (12,962) (28,853) (5,112) — (46,927) Proceeds from divestiture of business — — 17,755 — — 17,755 Intercompany activities — (228,450) — — 228,450 — Net cash used in investing activities — (241,412) (11,098) (5,112) 228,450 (29,172) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on original term loan — (993,420) — — — (993,420) Proceeds from new term loan — 895,500 — — — 895,500 Payments on new term loan — (6,750) — — — (6,750) Proceeds from asset-based revolving credit facility — 465,500 — — — 465,500 Payments on asset-based revolving credit facility — (407,000) — — — (407,000) Repurchase and retirement of senior notes — (199,365) — — — (199,365) Deferred financing costs — (6,713) — — — (6,713) Intercompany activities — (27,833) — 228,450 (200,617) — Cash dividends paid (27,833) — — — — (27,833) Proceeds from issuance of common stock 6,149 — — — — 6,149 Tax payments related to vested deferred stock units (7,510) — — — — (7,510) Net cash (used in) provided by financing activities (29,194) (280,081) — 228,450 (200,617) (281,442) Effect of exchange rate changes — — — (2,385) — (2,385) (Decrease) increase in cash and cash equivalents — (50,837) 59 15,596 — (35,182) Cash and cash equivalents at beginning of period — 51,818 2,180 49,609 — 103,607 Cash and cash equivalents at end of period $ — $ 981 $ 2,239 $ 65,205 $ — $ 68,425 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 original 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 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Nov. 03, 2018 | |
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. Our business results historically have fluctuated throughout the year and, as a result, the operating results of the interim periods presented are not necessarily indicative of the results that may be achieved for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended February 3, 2018. 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 August 2017, the Financial Accounting Standards Board ("FASB") i ssued Accounting Standards Update ("ASU") ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities . ASU 2017-12 amends the existing hedge accounting model in order to enable entities to better portray the economics of their risk management activities in their financial statements. ASU 2017-12 is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years. The guidance must be applied on a modified retrospective basis, while presentation and disclosure requirements set forth under ASU 2017-12 are required prospectively in all interim periods and fiscal years ending after the date of adoption . Early adoption of ASU 2017-12 is permitted. We do not expect the adoption of ASU 2017-12 to have a material impact on our financial position, results of operations or cash flows . In February 2016, the FASB issued 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. In July 2018, the FASB issued ASU 2018-11, Leases - Targeted Improvements , that provided a practical expedient that removed the requirement to restate prior period financial statements upon adoption of the standard, which we plan to elect. We have completed our review of the guidance and have made progress in our assessment phase including finalizing the practical expedient and accounting policy elections we will make upon adoption. Furthermore, we have selected a lease accounting system and are implementing processes and controls around that system to enable the preparation of the required financial information for this standard. While we are still evaluating the impact ASU 2016-02 will have on our consolidated financial statements and related disclosures, we 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. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Nov. 03, 2018 | |
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 (in thousands, except per share amounts): For the Three Months Ended For the Nine Months Ended November 3, October 28, November 3, October 28, 2018 2017 2018 2017 Numerator Net earnings $ 13,875 $ 36,892 $ 77,022 $ 97,202 Denominator Basic weighted-average common shares outstanding 50,000 49,206 49,766 49,040 Dilutive effect of share-based awards 722 224 998 211 Diluted weighted-average common shares outstanding 50,722 49,430 50,764 49,251 Net earnings per common share: Basic $ 0.28 $ 0.75 $ 1.55 $ 1.98 Diluted $ 0.27 $ 0.75 $ 1.52 $ 1.97 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Nov. 03, 2018 | |
Debt | |
Schedule of long-term debt | The following table provides details on our long-term debt as of November 3, 2018, October 28, 2017 and February 3, 2018 (in thousands): November 3, October 28, February 3, 2018 2017 2018 Term Loan (net of unamortized OID of $0.0 million at November 3, 2018, $3.4 million at October 28, 2017, and $3.0 million at February 3, 2018) $ 893,250 $ 1,033,514 $ 990,465 Senior Notes 228,607 460,000 421,209 ABL Facility 58,500 — — Less: Deferred financing costs related to the Term Loan and Senior Notes (3,451) (17,029) (14,866) Total long-term debt, net 1,176,906 1,476,485 1,396,808 Current portion of long-term debt (9,000) (8,750) (7,000) Total long-term debt, net of current portion $ 1,167,906 $ 1,467,735 $ 1,389,808 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Nov. 03, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Schedule of disaggregation of revenue | Revenues The following table depicts the disaggregation of revenue by major source (in thousands): For the Three Months Ended For the Nine Months Ended November 3, 2018 October 28, 2017 November 3, 2018 October 28, 2017 Net sales: Men's tailored clothing product $ 342,972 $ 330,618 $ 1,055,213 $ 1,004,430 Men's non-tailored clothing product 227,069 227,520 691,780 690,312 Women's clothing product 15,109 14,795 52,138 52,722 Other (1) 3,297 2,270 8,748 6,318 Total retail clothing product 588,447 575,203 1,807,879 1,753,782 Rental services 124,697 126,410 350,019 373,208 Alteration services 38,597 37,238 114,049 112,851 Retail dry cleaning services (2) — 8,671 2,551 25,984 Total alteration and other services 38,597 45,909 116,600 138,835 Total retail sales 751,741 747,522 2,274,498 2,265,825 Corporate apparel clothing product 61,006 63,296 179,643 178,657 Total net sales $ 812,747 $ $ $ (1) Other consists of franchise and licensing revenues and gift card breakage. Franchise revenues are generally recognized at a point in time while licensing revenues consist primarily of minimum guaranteed royalty amounts recognized over an elapsed time period. (2) On March 3, 2018, we completed the divestiture of our MW Cleaners business. Please see Note 2 for additional information. |
Schedule of opening and closing balance of contract liabilities | The following table summarizes the opening and closing balances of our contract liabilities (in thousands): Balance at Increase Balance at February 3, 2018 (Decrease) November 3, 2018 As Adjusted Contract liabilities $ 141,552 $ 556 $ 142,108 |
ASU 2014-09 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Schedule of cumulative effect of changes in adoption of ASU 606 | The following table depicts the cumulative effect of the changes made to our February 3, 2018 balance sheet for the adoption of ASC 606 (in thousands): Reported Adjusted Balance at Impact of Balance at February 3, Adoption of February 3, 2018 ASC 606 2018 Assets: Accounts receivable, net $ 79,783 $ (303) $ 79,480 Inventories 851,931 (17,837) 834,094 Other current assets 78,252 2,753 81,005 Liabilities: Accrued expenses and other current liabilities 285,537 32,378 317,915 Deferred taxes, net and other liabilities 164,191 (11,941) 152,250 Equity: Accumulated deficit (479,166) (35,824) (514,990) |
Impact of Adoption of ASU 606 | ASU 2014-09 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Schedule of cumulative effect of changes in adoption of ASU 606 | In accordance with ASC 606, the following tables reflect the impact on our fiscal 2018 condensed consolidated statement of earnings and balance sheet as if we had continued to apply accounting standards in effect last year (“Legacy GAAP”) (in thousands, except per share amounts): Statement of Earnings For the Three Months Ended November 3, 2018 As Amounts Under Effect of Change Reported Legacy GAAP Increase/(Decrease) Net sales: Total retail sales $ 751,741 $ 753,195 $ 1,454 Corporate apparel clothing product 61,006 62,353 1,347 Costs and expenses: Total retail cost of sales 405,620 406,430 810 Total corporate apparel clothing product cost of sales 44,392 45,516 1,124 Selling, general and administrative expenses 246,305 245,918 (387) Provision for income taxes 13,256 13,869 613 Net earnings 13,875 14,516 641 Diluted net earnings per common share $ $ 0.29 $ 0.02 For the Nine Months Ended November 3, 2018 As Amounts Under Effect of Change Reported Legacy GAAP Increase/(Decrease) Net sales: Total retail sales $ 2,274,498 $ 2,273,821 $ (677) Corporate apparel clothing product 179,643 186,249 6,606 Costs and expenses: Total retail cost of sales 1,245,606 1,246,396 790 Total corporate apparel clothing product cost of sales 131,674 137,045 5,371 Selling, general and administrative expenses 739,654 738,522 (1,132) Provision for income taxes 27,521 27,758 237 Net earnings 77,022 77,685 663 Diluted net earnings per common share $ $ 1.53 $ 0.01 Balance Sheet November 3, 2018 As Amounts Under Effect of Change Reported Legacy GAAP Increase/(Decrease) Assets: Accounts receivable, net $ 80,696 $ 82,850 $ 2,154 Inventories 875,003 886,627 11,624 Other current assets 70,433 67,774 (2,659) Liabilities: Accrued expenses and other current liabilities 302,322 245,074 (57,248) Deferred taxes, net and other liabilities 148,590 136,623 (11,967) Equity: Accumulated deficit $ (464,993) $ (428,506) $ 36,487 |
Supplemental Cash Flows (Tables
Supplemental Cash Flows (Tables) | 9 Months Ended |
Nov. 03, 2018 | |
Supplemental Cash Flows | |
Schedule of supplemental disclosure of cash flow information | Supplemental disclosure of cash flow information is as follows (in thousands): For the Nine Months Ended November 3, October 28, 2018 2017 Cash paid for interest $ 55,856 $ 66,628 Cash paid for income taxes, net $ 3,331 $ 17,798 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Nov. 03, 2018 | |
Inventories | |
Schedule of inventories | The following table provides details on our inventories as of November 3, 2018, October 28, 2017 and February 3, 2018 (in thousands): November 3, October 28, February 3, 2018 2017 2018 Finished goods $ 762,586 $ 873,030 $ 739,668 Raw materials and merchandise components 112,417 99,971 112,263 Total inventories $ 875,003 $ 973,001 $ 851,931 |
Other Current Assets, Accrued_2
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities (Tables) | 9 Months Ended |
Nov. 03, 2018 | |
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities | |
Other current assets | The following table provides details on our other current assets as of November 3, 2018, October 28, 2017 and February 3, 2018 (in thousands): November 3, October 28, February 3, 2018 2017 2018 Prepaid expenses $ 56,030 $ 44,473 $ 47,545 Tax receivable 965 506 20,368 Other 13,438 8,587 10,339 Total other current assets $ 70,433 $ 53,566 $ 78,252 |
Accrued expenses and other current liabilities | The following table provides details on our accrued expenses and other current liabilities as of November 3, 2018, October 28, 2017 and February 3, 2018 (in thousands): November 3, October 28, February 3, 2018 2017 2018 Accrued salary, bonus, sabbatical, vacation and other benefits $ 70,378 $ 79,753 $ 84,767 Loyalty program liabilities 64,944 11,199 9,106 Customer deposits, prepayments and refunds payable 44,792 37,822 59,633 Sales, value added, payroll, property and other taxes payable 30,233 30,220 29,409 Unredeemed gift cards 26,279 34,552 39,609 Accrued workers compensation and medical costs 25,675 27,860 25,244 Accrued dividends 10,320 10,789 11,128 Accrued interest 6,055 19,550 3,281 Accrued royalties 3,287 6,020 5,032 Lease termination and other store closure costs 480 1,027 427 Other 19,879 22,741 17,901 Total accrued expenses and other current liabilities $ 302,322 $ 281,533 $ 285,537 |
Deferred taxes, net and other liabilities | The following table provides details on our deferred taxes, net and other liabilities as of November 3, 2018, October 28, 2017 and February 3, 2018 (in thousands): November 3, October 28, February 3, 2018 2017 2018 Deferred and other income tax liabilities, net $ 83,179 $ 91,760 $ 95,314 Deferred rent and landlord incentives 58,458 60,040 60,136 Unfavorable lease liabilities 2,085 3,279 2,910 Other 4,868 5,118 5,831 Total deferred taxes, net and other liabilities $ 148,590 $ 160,197 $ 164,191 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive (Loss) Income (Tables) | 9 Months Ended |
Nov. 03, 2018 | |
Accumulated Other Comprehensive (Loss) Income. | |
Summary of components of accumulated other comprehensive (loss) income | The following table summarizes the components of accumulated other comprehensive (loss) income for the nine months ended November 3, 2018 (in thousands and net of tax): Foreign Currency Cash Flow Pension Translation Hedges Plan Total BALANCE— February 3, 2018 $ (11,116) $ 145 $ 189 $ (10,782) Other comprehensive (loss) income before reclassifications (26,023) 6,992 — (19,031) Amounts reclassified from accumulated other comprehensive loss — 1,957 — 1,957 Net current-period other comprehensive (loss) income (26,023) 8,949 — (17,074) BALANCE— November 3, 2018 $ (37,139) $ 9,094 $ 189 $ (27,856) 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) |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 9 Months Ended |
Nov. 03, 2018 | |
Summary of time-based and performance-based awards activity | Weighted-Average Units Grant-Date Fair Value Time- Performance- Time- Performance- Based Based Based Based Non-Vested at February 3, 2018 1,014,689 993,631 $ 18.13 $ 19.55 Granted 627,770 254,895 Vested (1) (592,025) (131,074) Forfeited (151,398) (730,623) Non-Vested at November 3, 2018 899,036 386,829 $ $ (1) Includes 264,794 shares relinquished for tax payments related to vested DSUs for the nine months ended November 3, 2018. |
Summary of stock option activity | Weighted- Number of Average Shares Exercise Price Outstanding at February 3, 2018 1,527,176 $ 21.97 Granted 232,430 Exercised (256,111) 19.22 Forfeited (210,327) Expired (41,096) Outstanding at November 3, 2018 1,252,072 $ Exercisable at November 3, 2018 676,059 $ |
Weighted-average assumptions used to calculate fair value of stock options | For the Nine Months Ended November 3, 2018 Risk-free interest rate 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 November 3, 2018 (in thousands): Cash Settled Awards Non-Vested at February 3, 2018 $ 8,353 Granted — Vested (2,677) Forfeited (497) Non-Vested at November 3, 2018 $ 5,179 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Nov. 03, 2018 | |
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 November 3, 2018 are as follows (in thousands): Corporate Retail Apparel Total Balance at February 3, 2018 $ 94,305 $ 25,987 $ 120,292 Goodwill impairment charge — (23,991) (23,991) Goodwill of divested business (see Note 2) (13,588) — (13,588) Translation adjustment (1,242) (1,996) (3,238) Balance at November 3, 2018 $ 79,475 $ — $ 79,475 |
Gross carrying amount and accumulated amortization of identifiable intangible assets | The gross carrying amount and accumulated amortization of our identifiable intangible assets are as follows (in thousands): November 3, October 28, February 3, 2018 2017 2018 Amortizable intangible assets: Carrying amount: Trademarks, tradenames and franchise agreements $ 16,048 $ 16,074 $ 16,273 Favorable leases 12,695 13,475 13,229 Customer relationships 26,343 26,612 28,713 Total carrying amount 55,086 56,161 58,215 Accumulated amortization: Trademarks, tradenames and franchise agreements (10,709) (10,404) (10,558) Favorable leases (5,629) (4,856) (5,010) Customer relationships (18,153) (16,078) (17,992) Total accumulated amortization (34,491) (31,338) (33,560) Total amortizable intangible assets, net 20,595 24,823 24,655 Indefinite-lived intangible assets: Trademarks and tradename 144,238 144,249 144,332 Total intangible assets, net $ 164,833 $ 169,072 $ 168,987 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Nov. 03, 2018 | |
Fair Value Measurements | |
Assets and Liabilities that are Measured at Fair Value on a Recurring Basis | Fair Value Measurements at Reporting Date Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Instruments Inputs Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total November 3, 2018— Assets: Derivative financial instruments $ — $ 12,587 $ — $ 12,587 Liabilities: Derivative financial instruments $ — $ 797 $ — $ 797 February 3, 2018— Assets: Derivative financial instruments $ — $ $ — $ Liabilities: Derivative financial instruments $ — $ $ — $ October 28, 2017— Assets: Derivative financial instruments $ — $ 235 $ — $ 235 Liabilities: Derivative financial instruments $ — $ 2,198 $ — $ 2,198 |
Schedule of fair value and carrying value of long-term debt, including current portion | The table below shows the fair value and carrying value of our long-term debt, including current portion (in thousands): November 3, 2018 October 28, 2017 February 3, 2018 Carrying Estimated Carrying Estimated Carrying Estimated Amount (1) Fair Value Amount (1) Fair Value Amount (1) Fair Value Term Loan and Senior Notes, including current portion $ 1,118,406 $ 1,130,202 $ 1,476,485 $ 1,461,283 $ 1,396,808 $ 1,407,449 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Nov. 03, 2018 | |
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 November 3, 2018 October 28, 2017 November 3, 2018 October 28, 2017 Net sales: Men's Wearhouse (1) $ 454,927 $ 448,955 $ 1,347,933 $ 1,327,773 Jos. A. Bank 169,318 162,685 510,821 504,238 K&G 72,610 69,604 245,535 244,098 Moores 54,886 57,607 167,658 163,732 MW Cleaners (2) — 8,671 2,551 25,984 Total retail segment 751,741 747,522 2,274,498 2,265,825 Total corporate apparel segment 61,006 63,296 179,643 178,657 Total net sales $ 812,747 $ $ $ (1) Consists of Men's Wearhouse, Men's Wearhouse and Tux, tuxedo shops within Macy's (all 170 of which were closed during the second quarter of 2017) and Joseph Abboud. (2) On March 3, 2018, we completed the divestiture of our MW Cleaners business. Please see Note 2 for additional information. |
Operating income (loss) by reportable segment, shared service expense, and the reconciliation to earnings before income taxes | Operating income (loss) 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 November 3, 2018 October 28, 2017 November 3, 2018 October 28, 2017 Operating income: Retail $ 127,621 $ 123,628 $ 360,484 $ 352,273 Corporate apparel (20,879) 3,072 (18,127) 7,150 Shared service expense (51,641) (50,073) (146,373) (143,329) Operating income 55,101 76,627 195,984 216,094 Interest income 207 159 414 324 Interest expense (18,757) (24,412) (61,602) (75,200) (Loss) gain on extinguishment of debt, net (9,420) 2,539 (30,253) 6,535 Earnings before income taxes $ $ $ $ |
Total assets by reportable segment and shared services | Since February 3, 2018, total assets for our reportable segments have materially changed primarily as a result of the goodwill impairment charge for the corporate apparel business. Total assets by reportable segment and shared services are as follows (in thousands): November 3, October 28, February 3, 2018 2017 2018 Segment assets: Retail $ 1,424,320 $ 1,559,247 $ 1,434,992 Corporate apparel 180,046 216,391 222,872 Shared services (1) 285,174 335,663 342,091 Total assets $ 1,889,540 $ 2,111,301 $ Shared service assets consist primarily of cash and cash equivalents, assets related to our distribution network and tax-related assets. |
Condensed Consolidating Infor_2
Condensed Consolidating Information (Tables) | 9 Months Ended |
Nov. 03, 2018 | |
Condensed Consolidating Information | |
Condensed Consolidating Balance Sheet | Tailored Brands, Inc. Condensed Consolidating Balance Sheet November 3, 2018 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 981 $ 2,239 $ 65,205 $ — $ 68,425 Accounts receivable, net — 25,010 237,715 86,644 (268,673) 80,696 Inventories — 149,157 531,826 194,020 — 875,003 Other current assets 220 26,657 35,121 8,435 — 70,433 Total current assets 220 201,805 806,901 354,304 (268,673) 1,094,557 Property and equipment, net — 190,905 206,167 33,806 — 430,878 Rental product, net — 83,554 4,367 14,619 — 102,540 Goodwill — 6,160 52,128 21,187 — 79,475 Intangible assets, net — — 154,144 10,689 — 164,833 Investments in subsidiaries 157,114 1,344,748 — — (1,501,862) — Other assets — 16,046 660 80,786 (80,235) 17,257 Total assets $ 157,334 $ 1,843,218 $ 1,224,367 $ 515,391 $ (1,850,770) $ 1,889,540 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 134,700 $ 188,583 $ 91,014 $ 90,334 $ (268,673) $ 235,958 Accrued expenses and other current liabilities 7,952 170,406 105,087 35,154 — 318,599 Current portion of long-term debt — 9,000 — — — 9,000 Total current liabilities 142,652 367,989 196,101 125,488 (268,673) 563,557 Long-term debt, net — 1,167,906 — — — 1,167,906 Deferred taxes, net and other liabilities 5,195 150,209 47,637 25,784 (80,235) 148,590 Shareholders' equity 9,487 157,114 980,629 364,119 (1,501,862) 9,487 Total liabilities and shareholders' equity $ 157,334 $ 1,843,218 $ 1,224,367 $ 515,391 $ (1,850,770) $ 1,889,540 Tailored Brands, Inc. Condensed Consolidating Balance Sheet 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 $ $ $ $ $ $ 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 $ $ $ $ $ $ 2,111,301 Tailored Brands, Inc. Condensed Consolidating Balance Sheet February 3, 2018 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ — $ 51,818 $ 2,180 $ 49,609 $ — $ 103,607 Accounts receivable, net — 23,712 368,328 58,573 (370,830) 79,783 Inventories — 207,504 445,126 199,301 — 851,931 Other current assets 3,666 26,951 38,217 9,418 — 78,252 Total current assets 3,666 309,985 853,851 316,901 (370,830) 1,113,573 Property and equipment, net — 203,204 220,979 36,491 — 460,674 Rental product, net — 103,664 3,658 16,408 — 123,730 Goodwill — 6,160 67,010 47,122 — 120,292 Intangible assets, net — — 155,438 13,549 — 168,987 Investments in subsidiaries 128,458 1,424,647 — — (1,553,105) — Other assets — 11,183 805 81,846 (81,135) 12,699 Total assets $ 132,124 $ $ $ $ $ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 110,326 $ 281,838 $ 57,756 $ 66,016 $ (370,830) $ 145,106 Accrued expenses and other current liabilities 14,061 87,597 155,813 34,187 — 291,658 Current portion of long-term debt — 7,000 — — — 7,000 Total current liabilities 124,387 376,435 213,569 100,203 (370,830) 443,764 Long-term debt, net — 1,389,808 — — — 1,389,808 Deferred taxes, net and other liabilities 5,545 164,142 46,641 28,998 (81,135) 164,191 Shareholders' equity 2,192 128,458 1,041,531 383,116 (1,553,105) 2,192 Total liabilities and shareholders' equity $ 132,124 $ $ $ $ $ |
Condensed Consolidating Statement of Earnings (Loss) | Tailored Brands, Inc. Condensed Consolidating Statement of Earnings (Loss) (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Three Months Ended November 3, 2018 Net sales $ — $ 453,316 $ 369,749 $ 149,863 $ (160,181) $ 812,747 Cost of sales — 219,036 283,803 107,354 (160,181) 450,012 Gross margin — 234,280 85,946 42,509 — 362,735 Operating expenses 1,443 135,498 133,986 27,658 (14,942) 283,643 Goodwill impairment charge — — 1,294 22,697 — 23,991 Operating (loss) income (1,443) 98,782 (49,334) (7,846) 14,942 55,101 Other income and expenses, net — — 14,942 — (14,942) — Interest expense, net (1,062) (20,017) 1,970 559 — (18,550) Loss on extinguishment of debt, net — (9,420) — — — (9,420) (Loss) earnings before income taxes (2,505) 69,345 (32,422) (7,287) — 27,131 (Benefit) provision for income taxes (505) 17,304 (6,844) 3,301 — 13,256 (Loss) earnings before equity in net income of subsidiaries (2,000) 52,041 (25,578) (10,588) — 13,875 Equity in earnings (loss) of subsidiaries 15,875 (36,166) — — 20,291 — Net earnings (loss) $ 13,875 $ 15,875 $ (25,578) $ (10,588) $ 20,291 $ 13,875 Comprehensive income (loss) $ 14,799 $ 20,300 $ (25,578) $ (14,089) $ 19,367 $ 14,799 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 Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Nine Months Ended November 3, 2018 Net sales $ — $ 1,343,248 $ 1,137,489 $ 442,055 $ (468,651) $ 2,454,141 Cost of sales — 664,219 862,803 318,909 (468,651) 1,377,280 Gross margin — 679,029 274,686 123,146 — 1,076,861 Operating expenses 3,408 405,344 405,062 85,165 (42,093) 856,886 Goodwill impairment charge — — 1,294 22,697 — 23,991 Operating (loss) income (3,408) 273,685 (131,670) 15,284 42,093 195,984 Other income and expenses, net — — 42,093 — (42,093) — Interest expense, net (2,749) (66,141) 6,115 1,587 — (61,188) Loss on extinguishment of debt, net — (30,253) — — — (30,253) (Loss) earnings before income taxes (6,157) 177,291 (83,462) 16,871 — 104,543 (Benefit) provision for income taxes (1,624) 37,882 (17,412) 8,675 — 27,521 (Loss) earnings before equity in net income of subsidiaries (4,533) 139,409 (66,050) 8,196 — 77,022 Equity in earnings (loss) of subsidiaries 81,555 (57,854) — — (23,701) — Net earnings (loss) $ 77,022 $ 81,555 $ (66,050) $ 8,196 $ (23,701) $ 77,022 Comprehensive income (loss) $ 59,948 $ 87,072 $ (66,050) $ (14,395) $ (6,627) $ 59,948 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 income (loss) $ 105,957 $ 100,578 $ (47,164) $ 37,886 $ (91,300) $ 105,957 |
Condensed Consolidating Statement of Cash Flows | Tailored Brands, Inc. Condensed Consolidating Statement of Cash Flows For the Nine Months Ended November 3, 2018 (in thousands) Tailored The Men’s Guarantor Non-Guarantor Brands, Inc. Wearhouse, Inc. Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ 29,194 $ 470,656 $ 11,157 $ (205,357) $ (27,833) $ 277,817 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures — (12,962) (28,853) (5,112) — (46,927) Proceeds from divestiture of business — — 17,755 — — 17,755 Intercompany activities — (228,450) — — 228,450 — Net cash used in investing activities — (241,412) (11,098) (5,112) 228,450 (29,172) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on original term loan — (993,420) — — — (993,420) Proceeds from new term loan — 895,500 — — — 895,500 Payments on new term loan — (6,750) — — — (6,750) Proceeds from asset-based revolving credit facility — 465,500 — — — 465,500 Payments on asset-based revolving credit facility — (407,000) — — — (407,000) Repurchase and retirement of senior notes — (199,365) — — — (199,365) Deferred financing costs — (6,713) — — — (6,713) Intercompany activities — (27,833) — 228,450 (200,617) — Cash dividends paid (27,833) — — — — (27,833) Proceeds from issuance of common stock 6,149 — — — — 6,149 Tax payments related to vested deferred stock units (7,510) — — — — (7,510) Net cash (used in) provided by financing activities (29,194) (280,081) — 228,450 (200,617) (281,442) Effect of exchange rate changes — — — (2,385) — (2,385) (Decrease) increase in cash and cash equivalents — (50,837) 59 15,596 — (35,182) Cash and cash equivalents at beginning of period — 51,818 2,180 49,609 — 103,607 Cash and cash equivalents at end of period $ — $ 981 $ 2,239 $ 65,205 $ — $ 68,425 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 original 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 |
Divestiture of MW Cleaners (Det
Divestiture of MW Cleaners (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Nov. 03, 2018 | Aug. 04, 2018 | May 05, 2018 | Nov. 03, 2018 | Feb. 28, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Proceeds from divestiture of business | $ 17,755 | ||||
Disposed of by sale | MW Cleaners business | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Consideration | $ 18,000 | ||||
Retail Segment | Disposed of by sale | MW Cleaners business | Selling, general and administrative expenses | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Loss on divestiture | $ 0 | $ (200) | $ (3,600) | $ (3,800) |
Termination of Tuxedo Rental _2
Termination of Tuxedo Rental License Agreement with Macy's (Details) $ in Millions | 3 Months Ended |
Apr. 29, 2017USD ($) | |
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 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2018 | Oct. 28, 2017 | Nov. 03, 2018 | Oct. 28, 2017 | |
Numerator | ||||
Net earnings | $ 13,875 | $ 36,892 | $ 77,022 | $ 97,202 |
Denominator | ||||
Basic weighted-average common shares outstanding (in shares) | 50,000 | 49,206 | 49,766 | 49,040 |
Dilutive effect of share-based awards (in shares) | 722 | 224 | 998 | 211 |
Diluted weighted-average common shares outstanding (in shares) | 50,722 | 49,430 | 50,764 | 49,251 |
Net earnings per common share allocated to common shareholders: | ||||
Basic (in dollars per share) | $ 0.28 | $ 0.75 | $ 1.55 | $ 1.98 |
Diluted (in dollars per share) | $ 0.27 | $ 0.75 | $ 1.52 | $ 1.97 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2018 | Oct. 28, 2017 | Nov. 03, 2018 | Oct. 28, 2017 | |
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) | 0.8 | 2.2 | 0.6 | 2.1 |
Debt - Summary, Narrative (Deta
Debt - Summary, Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Nov. 03, 2018 | Feb. 03, 2018 | Apr. 30, 2018 | Oct. 28, 2017 | Jun. 18, 2014 | |
Debt | |||||
Maximum quarterly dividends on common stock per debt covenants | $ 15 | $ 10 | |||
Senior Notes | |||||
Debt | |||||
Aggregate principal amount of debt issued | 600 | $ 600 | |||
Interest rate (as a percent) | 7.00% | ||||
2014 Credit Facilities | Original Term Loan | |||||
Debt | |||||
Aggregate principal amount of debt issued | $ 900 | $ 1,100 | |||
Unamortized OID | $ 0 | $ 3 | $ 3.4 | 11 | |
2014 Credit Facilities | ABL Facility | |||||
Debt | |||||
Credit facility | $ 550 | $ 500 |
Debt - Credit Facilities, Narra
Debt - Credit Facilities, Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Oct. 31, 2018USD ($) | Apr. 30, 2018USD ($) | Oct. 28, 2017USD ($) | Nov. 03, 2018USD ($) | Oct. 28, 2017USD ($) | Nov. 03, 2018USD ($)agreement | Oct. 28, 2017USD ($) | Feb. 03, 2018USD ($) | Jun. 18, 2014USD ($) | |
Debt | |||||||||
(Loss) gain on extinguishment of debt | $ (9,420) | $ 2,539 | $ (30,253) | $ 6,535 | |||||
Amended New Term Loan | |||||||||
Debt | |||||||||
Number of interest rate swap agreements | agreement | 2 | ||||||||
2014 Credit Facilities | Original Term Loan | |||||||||
Debt | |||||||||
Aggregate principal amount of debt issued | $ 900,000 | $ 1,100,000 | |||||||
Fixed rate on refinanced amount (as a percent) | 5.00% | ||||||||
Prepayment | $ 93,400 | ||||||||
Unamortized OID | $ 3,400 | $ 0 | 3,400 | $ 0 | 3,400 | $ 3,000 | 11,000 | ||
2014 Credit Facilities | Original Term Loan | LIBOR | |||||||||
Debt | |||||||||
Margin added to Base rate (as a percent) | 3.50% | ||||||||
Floor rate (as a percent) | 1.00% | ||||||||
2014 Credit Facilities | Amended New Term Loan | LIBOR | |||||||||
Debt | |||||||||
Period for variable rate basis | 1 month | ||||||||
2014 Credit Facilities | ABL Facility | |||||||||
Debt | |||||||||
Credit facility | $ 550,000 | 550,000 | 550,000 | $ 500,000 | |||||
2014 Credit Facilities | ABL Facility | LIBOR | |||||||||
Debt | |||||||||
Margin added to Base rate (as a percent) | 1.00% | ||||||||
Variable Rate Interest Rate | Original Term Loan | |||||||||
Debt | |||||||||
Aggregate principal amount of debt issued | $ 593,400 | ||||||||
Fixed Rate Interest Rate | Original Term Loan | |||||||||
Debt | |||||||||
Aggregate principal amount of debt issued | $ 400,000 | ||||||||
Fixed rate on refinanced amount (as a percent) | 5.00% | ||||||||
2018 Credit Facilities | Original Term Loan | |||||||||
Debt | |||||||||
(Loss) gain on extinguishment of debt | $ (11,900) | ||||||||
2018 Credit Facilities | Amended New Term Loan | |||||||||
Debt | |||||||||
Reduction in the interest rate margin | 0.25% | ||||||||
Total variable interest rate (as a percent) | 5.57% | 5.57% | |||||||
Deferred financing costs | $ 1,100 | $ 5,600 | |||||||
Weighted average interest rate (as a percent) | 5.69% | 5.69% | |||||||
2018 Credit Facilities | Amended New Term Loan | LIBOR | |||||||||
Debt | |||||||||
Margin added to Base rate (as a percent) | 3.25% | 3.25% | |||||||
Actual LIBOR rate (as a percent) | 2.32% | 2.32% | |||||||
2018 Credit Facilities | Amended New Term Loan | Base Rate | |||||||||
Debt | |||||||||
Margin added to Base rate (as a percent) | 2.25% | ||||||||
2018 Credit Facilities | Amended New Term Loan | Interest rate swap | |||||||||
Debt | |||||||||
Notional amount of interest rate swap | $ 715,000 | $ 715,000 | |||||||
Percentage of variable interest rate converted to a fixed rate | 80.00% | ||||||||
2018 Credit Facilities | New Term Loan | |||||||||
Debt | |||||||||
Aggregate principal amount of debt issued | 900,000 | ||||||||
Uncommitted borrowings | $ 250,000 | $ 250,000 | |||||||
Secured leverage ratio | 2.5 | 2.5 | |||||||
Amortized percentage | 1.00% | 1.00% | |||||||
(Loss) gain on extinguishment of debt | $ 9,400 | ||||||||
Unamortized OID | $ 4,500 | ||||||||
2018 Credit Facilities | New Term Loan | LIBOR | |||||||||
Debt | |||||||||
Floor rate (as a percent) | 1.00% | 1.00% | |||||||
2018 Credit Facilities | New Term Loan | Base Rate | |||||||||
Debt | |||||||||
Floor rate (as a percent) | 2.00% | 2.00% | |||||||
ABL Credit Facility | ABL Facility | |||||||||
Debt | |||||||||
Weighted average interest rate (as a percent) | 5.30% | 5.30% | |||||||
Credit facility | $ 550,000 | 550,000 | 550,000 | ||||||
Total credit facility with expansion feature | $ 650,000 | $ 650,000 | $ 650,000 | ||||||
Fees on unused commitments (as a percent) | 0.25% | ||||||||
Letters of credit issued and outstanding | $ 33,800 | $ 33,800 | |||||||
Borrowings available under credit facility | $ 457,700 | 457,700 | |||||||
ABL Credit Facility | ABL Facility | LIBOR | |||||||||
Debt | |||||||||
Period for variable rate basis | 1 month | ||||||||
ABL Credit Facility | ABL Facility | Federal funds rate | |||||||||
Debt | |||||||||
Margin added to Base rate (as a percent) | 0.50% | ||||||||
ABL Credit Facility | ABL Facility | Minimum | |||||||||
Debt | |||||||||
Fees on amounts available to be drawn (as a percent) | 1.25% | ||||||||
ABL Credit Facility | ABL Facility | Maximum | |||||||||
Debt | |||||||||
Varying interest rate margin (as a percent) | 1.75% | 1.75% | 1.75% | ||||||
Fees on amounts available to be drawn (as a percent) | 1.75% | ||||||||
Maximum borrowing outstanding under the ABL Facility during the period | $ 104,500 |
Debt - Long Term Debt, Narrativ
Debt - Long Term Debt, Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Nov. 03, 2018 | Aug. 04, 2018 | May 05, 2018 | Oct. 28, 2017 | Nov. 03, 2018 | Oct. 28, 2017 | |
Debt | ||||||
(Loss) gain on extinguishment of debt | $ (9,420) | $ 2,539 | $ (30,253) | $ 6,535 | ||
Senior Notes | ||||||
Debt | ||||||
Debt Instrument, Redemption, Value | $ 175,000 | $ 175,000 | 175,000 | |||
Redemption price (in dollars per $1000) | $ 1,035 | |||||
Repurchased and retired | $ 17,600 | |||||
(Loss) gain on extinguishment of debt | $ (8,100) | (8,900) | ||||
Loss upon repurchase | (6,100) | (6,700) | ||||
Unamortized deferred financing costs | $ (2,000) | $ (2,200) |
Debt - Components (Details)
Debt - Components (Details) - USD ($) $ in Thousands | Nov. 03, 2018 | Oct. 31, 2018 | Apr. 30, 2018 | Feb. 03, 2018 | Oct. 28, 2017 | Jun. 18, 2014 |
Debt | ||||||
Total long-term debt, net | $ 1,176,906 | $ 1,396,808 | $ 1,476,485 | |||
Current portion of long-term debt | (9,000) | (7,000) | (8,750) | |||
Total long-term debt, net of current portion | 1,167,906 | 1,389,808 | 1,467,735 | |||
Senior Notes | ||||||
Debt | ||||||
Long-term debt | 228,607 | 421,209 | 460,000 | |||
ABL Facility | ||||||
Debt | ||||||
Long-term debt | 58,500 | |||||
Term Loan and Senior Notes | ||||||
Debt | ||||||
Less: Deferred financing costs | (3,451) | (14,866) | (17,029) | |||
Total long-term debt, net | 1,118,406 | 1,396,808 | 1,476,485 | |||
2014 Credit Facilities | Original Term Loan | ||||||
Debt | ||||||
Unamortized OID | 0 | 3,000 | 3,400 | $ 11,000 | ||
Long-term debt | $ 990,465 | $ 1,033,514 | ||||
2018 Credit Facilities | New Term Loan | ||||||
Debt | ||||||
Unamortized OID | $ 4,500 | |||||
2018 Credit Facilities | Amended New Term Loan | ||||||
Debt | ||||||
Long-term debt | $ 893,250 | |||||
Less: Deferred financing costs | $ (1,100) | $ (5,600) |
Revenue Recognition - Adoption
Revenue Recognition - Adoption of ASC 606 (Details) - USD ($) $ in Thousands | Nov. 03, 2018 | Feb. 03, 2018 | Oct. 28, 2017 |
Assets | |||
Accounts receivable, net | $ 80,696 | $ 79,783 | $ 81,193 |
Inventories | 875,003 | 851,931 | 973,001 |
Other current assets | 70,433 | 78,252 | 53,566 |
Liabilities | |||
Accrued expenses and other current liabilities | 302,322 | 285,537 | 281,533 |
Deferred taxes, net and other liabilities | 148,590 | 164,191 | 160,197 |
Equity | |||
Accumulated deficit | (464,993) | (479,166) | $ (469,463) |
Impact of Adoption of ASU 606 | ASU 2014-09 | |||
Assets | |||
Accounts receivable, net | 2,154 | (303) | |
Inventories | 11,624 | (17,837) | |
Other current assets | (2,659) | 2,753 | |
Liabilities | |||
Accrued expenses and other current liabilities | (57,248) | 32,378 | |
Deferred taxes, net and other liabilities | (11,967) | (11,941) | |
Equity | |||
Accumulated deficit | 36,487 | (35,824) | |
Adjusted Balance | ASU 2014-09 | |||
Assets | |||
Accounts receivable, net | 82,850 | 79,480 | |
Inventories | 886,627 | 834,094 | |
Other current assets | 67,774 | 81,005 | |
Liabilities | |||
Accrued expenses and other current liabilities | 245,074 | 317,915 | |
Deferred taxes, net and other liabilities | 136,623 | 152,250 | |
Equity | |||
Accumulated deficit | $ (428,506) | $ (514,990) |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2018 | Oct. 28, 2017 | Nov. 03, 2018 | Oct. 28, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Total net sales | $ 812,747 | $ 810,818 | $ 2,454,141 | $ 2,444,482 |
Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 751,741 | 747,522 | 2,274,498 | 2,265,825 |
Corporate Apparel Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 61,006 | 63,296 | 179,643 | 178,657 |
Rental services | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 124,697 | 126,410 | 350,019 | 373,208 |
Retail clothing product | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 588,447 | 575,203 | 1,807,879 | 1,753,782 |
Men's tailored clothing product | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 342,972 | 330,618 | 1,055,213 | 1,004,430 |
Men's non-tailored clothing product | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 227,069 | 227,520 | 691,780 | 690,312 |
Women's clothing product | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 15,109 | 14,795 | 52,138 | 52,722 |
Other | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 3,297 | 2,270 | 8,748 | 6,318 |
Total alteration and other services | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 38,597 | 45,909 | 116,600 | 138,835 |
Alteration services | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | $ 38,597 | 37,238 | 114,049 | 112,851 |
Retail dry cleaning services | Retail Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | $ 8,671 | $ 2,551 | $ 25,984 |
Revenue Recognition - Other Var
Revenue Recognition - Other Various Policies (Details) | 9 Months Ended |
Nov. 03, 2018USD ($)item | |
Loyalty Program | |
Points equivalency to dollars spent ratio | 1 |
Loyalty point threshold | item | 500 |
Amount of rewards certificates | $ 50 |
Period after which reward certificates earned must be redeemed | 6 months |
Sales Returns | |
Refund liability current | $ 6,100,000 |
Right to recover | $ 2,700,000 |
Revenue Recognition - Contract
Revenue Recognition - Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Nov. 03, 2018 | Nov. 03, 2018 | |
Revenue Recognition | ||
Balance at February 3, 2018 | $ 141,552 | |
Increase (Decrease) | 556 | |
Balance at November 3, 2018 | $ 142,108 | 142,108 |
Revenue recognized included in contract liability balance | $ 10,100 | $ 76,400 |
Revenue Recognition - Practical
Revenue Recognition - Practical Expedients (Details) | 9 Months Ended |
Nov. 03, 2018 | |
Revenue Recognition | |
Revenue, Practical Expedient, Remaining Performance Obligation [true/false] | true |
Revenue Recognition - Impact on
Revenue Recognition - Impact on Fiscal 2018 Results (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Nov. 03, 2018 | Oct. 28, 2017 | Nov. 03, 2018 | Oct. 28, 2017 | Feb. 03, 2018 | |
Net sales: | |||||
Clothing product | $ 812,747 | $ 810,818 | $ 2,454,141 | $ 2,444,482 | |
Costs and Expenses | |||||
Cost of sales | 450,012 | 452,061 | 1,377,280 | 1,356,589 | |
Selling, general and administrative expenses | 246,305 | 243,466 | 739,654 | 750,995 | |
Provision for income taxes | 13,256 | 18,021 | 27,521 | 50,551 | |
Net earnings | $ 13,875 | $ 36,892 | $ 77,022 | $ 97,202 | |
Diluted earnings per common share | $ 0.27 | $ 0.75 | $ 1.52 | $ 1.97 | |
Assets | |||||
Accounts receivable, net | $ 80,696 | $ 81,193 | $ 80,696 | $ 81,193 | $ 79,783 |
Inventories | 875,003 | 973,001 | 875,003 | 973,001 | 851,931 |
Other current assets | 70,433 | 53,566 | 70,433 | 53,566 | 78,252 |
Liabilities | |||||
Accrued expenses and other current liabilities | 302,322 | 281,533 | 302,322 | 281,533 | 285,537 |
Deferred taxes, net and other liabilities | 148,590 | 160,197 | 148,590 | 160,197 | 164,191 |
Equity | |||||
Accumulated deficit | (464,993) | (469,463) | (464,993) | (469,463) | (479,166) |
Retail Segment | |||||
Net sales: | |||||
Clothing product | 751,741 | 747,522 | 2,274,498 | 2,265,825 | |
Costs and Expenses | |||||
Cost of sales | 405,620 | 405,465 | 1,245,606 | 1,225,062 | |
Retail Segment | Retail clothing product | |||||
Net sales: | |||||
Clothing product | 588,447 | 575,203 | 1,807,879 | 1,753,782 | |
Costs and Expenses | |||||
Cost of sales | 253,758 | 247,293 | 789,003 | 748,802 | |
Corporate Apparel Segment | |||||
Net sales: | |||||
Clothing product | 61,006 | 63,296 | 179,643 | 178,657 | |
Costs and Expenses | |||||
Cost of sales | 44,392 | $ 46,596 | 131,674 | $ 131,527 | |
ASU 2014-09 | Adjusted Balance | |||||
Costs and Expenses | |||||
Selling, general and administrative expenses | 245,918 | 738,522 | |||
Provision for income taxes | 13,869 | 27,758 | |||
Net earnings | $ 14,516 | $ 77,685 | |||
Diluted earnings per common share | $ 0.29 | $ 1.53 | |||
Assets | |||||
Accounts receivable, net | $ 82,850 | $ 82,850 | 79,480 | ||
Inventories | 886,627 | 886,627 | 834,094 | ||
Other current assets | 67,774 | 67,774 | 81,005 | ||
Liabilities | |||||
Accrued expenses and other current liabilities | 245,074 | 245,074 | 317,915 | ||
Deferred taxes, net and other liabilities | 136,623 | 136,623 | 152,250 | ||
Equity | |||||
Accumulated deficit | (428,506) | (428,506) | (514,990) | ||
ASU 2014-09 | Impact of Adoption of ASU 606 | |||||
Costs and Expenses | |||||
Selling, general and administrative expenses | (387) | (1,132) | |||
Provision for income taxes | 613 | 237 | |||
Net earnings | $ 641 | $ 663 | |||
Diluted earnings per common share | $ 0.02 | $ 0.01 | |||
Assets | |||||
Accounts receivable, net | $ 2,154 | $ 2,154 | (303) | ||
Inventories | 11,624 | 11,624 | (17,837) | ||
Other current assets | (2,659) | (2,659) | 2,753 | ||
Liabilities | |||||
Accrued expenses and other current liabilities | (57,248) | (57,248) | 32,378 | ||
Deferred taxes, net and other liabilities | (11,967) | (11,967) | (11,941) | ||
Equity | |||||
Accumulated deficit | 36,487 | 36,487 | $ (35,824) | ||
ASU 2014-09 | Retail Segment | Adjusted Balance | |||||
Net sales: | |||||
Clothing product | 753,195 | 2,273,821 | |||
Costs and Expenses | |||||
Cost of sales | 406,430 | 1,246,396 | |||
ASU 2014-09 | Retail Segment | Impact of Adoption of ASU 606 | |||||
Net sales: | |||||
Clothing product | 1,454 | (677) | |||
Costs and Expenses | |||||
Cost of sales | 810 | 790 | |||
ASU 2014-09 | Corporate Apparel Segment | Adjusted Balance | |||||
Net sales: | |||||
Clothing product | 62,353 | 186,249 | |||
Costs and Expenses | |||||
Cost of sales | 45,516 | 137,045 | |||
ASU 2014-09 | Corporate Apparel Segment | Impact of Adoption of ASU 606 | |||||
Net sales: | |||||
Clothing product | 1,347 | 6,606 | |||
Costs and Expenses | |||||
Cost of sales | $ 1,124 | $ 5,371 |
Supplemental Cash Flows (Detail
Supplemental Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 03, 2018 | Oct. 28, 2017 | |
Supplemental Cash Flows | ||
Cash paid for interest | $ 55,856 | $ 66,628 |
Cash paid for income taxes, net | 3,331 | 17,798 |
Unpaid capital expenditure purchases | ||
Unpaid capital expenditure purchases | $ 12,900 | $ 7,100 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Nov. 03, 2018 | Feb. 03, 2018 | Oct. 28, 2017 |
Inventories | |||
Finished goods | $ 762,586 | $ 739,668 | $ 873,030 |
Raw materials and merchandise components | 112,417 | 112,263 | 99,971 |
Total inventories | $ 875,003 | $ 851,931 | $ 973,001 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 10 Months Ended | 11 Months Ended | 12 Months Ended | ||
Nov. 03, 2018 | Oct. 28, 2017 | Nov. 03, 2018 | Oct. 28, 2017 | Nov. 03, 2018 | Dec. 31, 2017 | Feb. 03, 2018 | |
Income Taxes | |||||||
Federal statutory rate (as a percent) | 21.00% | 35.00% | |||||
Provisional discrete net tax benefit | $ (0.3) | ||||||
Incremental withholding liabilities on investment in foreign subsidiaries | $ (17.3) | ||||||
Effective income tax rate (as a percent) | 48.90% | 32.80% | 26.30% | 34.20% | |||
Accounting Standards Update 2016-09 | Measurement period adjustments | |||||||
Income Taxes | |||||||
Release of state valuation allowances | $ (3.1) | ||||||
Tax deficiencies related vesting of stock-based awards | $ 2.2 |
Other Current Assets, Accrued_3
Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes, net and Other Liabilities (Details) - USD ($) $ in Thousands | Nov. 03, 2018 | Feb. 03, 2018 | Oct. 28, 2017 |
Other current assets | |||
Prepaid expenses | $ 56,030 | $ 47,545 | $ 44,473 |
Tax receivable | 965 | 20,368 | 506 |
Other | 13,438 | 10,339 | 8,587 |
Total other current assets | 70,433 | 78,252 | 53,566 |
Accrued expenses and other current liabilities | |||
Accrued salary, bonus, sabbatical, vacation and other benefits | 70,378 | 84,767 | 79,753 |
Loyalty program liabilities | 64,944 | 9,106 | 11,199 |
Customer deposits, prepayments and refunds payable | 44,792 | 59,633 | 37,822 |
Sales, value added, payroll, property and other taxes payable | 30,233 | 29,409 | 30,220 |
Unredeemed gift cards | 26,279 | 39,609 | 34,552 |
Accrued workers compensation and medical costs | 25,675 | 25,244 | 27,860 |
Accrued dividends | 10,320 | 11,128 | 10,789 |
Accrued interest | 6,055 | 3,281 | 19,550 |
Accrued royalties | 3,287 | 5,032 | 6,020 |
Lease termination and other store closure costs | 480 | 427 | 1,027 |
Other | 19,879 | 17,901 | 22,741 |
Total accrued expenses and other current liabilities | 302,322 | 285,537 | 281,533 |
Deferred taxes and other liabilities | |||
Deferred and other income tax liabilities, net | 83,179 | 95,314 | 91,760 |
Deferred rent and landlord incentives | 58,458 | 60,136 | 60,040 |
Unfavorable lease liabilities | 2,085 | 2,910 | 3,279 |
Other | 4,868 | 5,831 | 5,118 |
Total deferred taxes, net and other liabilities | $ 148,590 | $ 164,191 | $ 160,197 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 03, 2018 | Oct. 28, 2017 | |
Change in accumulated other comprehensive (loss) income components | ||
Balance at the beginning of the period | $ 2,192 | |
Balance at the end of the period | 9,487 | $ (15,000) |
Accumulated Other Comprehensive (Loss) Income | ||
Change in accumulated other comprehensive (loss) income components | ||
Balance at the beginning of the period | (10,782) | (40,083) |
Other comprehensive (loss) income before reclassifications | (19,031) | 6,617 |
Amounts reclassified from accumulated other comprehensive loss | 1,957 | 2,138 |
Net current-period other comprehensive (loss) income | (17,074) | 8,755 |
Balance at the end of the period | (27,856) | (31,328) |
Foreign Currency Translation | ||
Change in accumulated other comprehensive (loss) income components | ||
Balance at the beginning of the period | (11,116) | (40,205) |
Other comprehensive (loss) income before reclassifications | (26,023) | 10,857 |
Net current-period other comprehensive (loss) income | (26,023) | 10,857 |
Balance at the end of the period | (37,139) | (29,348) |
Cash Flow Hedges | ||
Change in accumulated other comprehensive (loss) income components | ||
Balance at the beginning of the period | 145 | (82) |
Other comprehensive (loss) income before reclassifications | 6,992 | (4,240) |
Amounts reclassified from accumulated other comprehensive loss | 1,957 | 2,138 |
Net current-period other comprehensive (loss) income | 8,949 | (2,102) |
Balance at the end of the period | 9,094 | (2,184) |
Pension Plan | ||
Change in accumulated other comprehensive (loss) income components | ||
Balance at the beginning of the period | 189 | 204 |
Balance at the end of the period | $ 189 | $ 204 |
Share-Based Compensation Plan_2
Share-Based Compensation Plans - Deferred Stock Units, Performance Units and Restricted Stock (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Nov. 03, 2018USD ($)$ / sharesshares | |
Deferred stock units | |
Additional information | |
Shares relinquished for tax withholding | 264,794 |
Unrecognized compensation cost | |
Unrecognized compensation cost, non-vested awards | $ | $ 18.8 |
Compensation recognition period, non-vested awards | 1 year 6 months |
Time-Based DSUs | |
Awards | |
Non-Vested at the beginning of the period (in shares) | 1,014,689 |
Granted (in shares) | 627,770 |
Vested (in shares) | (592,025) |
Forfeited (in shares) | (151,398) |
Non-Vested at the end of the period (in shares) | 899,036 |
Weighted-Average Grant-Date Fair Value | |
Non-Vested at the beginning of the period (in dollars per share) | $ / shares | $ 18.13 |
Granted (in dollars per share) | $ / shares | 27.44 |
Vested (in dollars per share) | $ / shares | 21.04 |
Forfeited (in dollars per share) | $ / shares | 19.45 |
Non-Vested at the end of the period (in dollars per share) | $ / shares | $ 23.26 |
Performance-Based DSUs | |
Awards | |
Non-Vested at the beginning of the period (in shares) | 993,631 |
Granted (in shares) | 254,895 |
Vested (in shares) | (131,074) |
Forfeited (in shares) | (730,623) |
Non-Vested at the end of the period (in shares) | 386,829 |
Weighted-Average Grant-Date Fair Value | |
Non-Vested at the beginning of the period (in dollars per share) | $ / shares | $ 19.55 |
Granted (in dollars per share) | $ / shares | 28.33 |
Vested (in dollars per share) | $ / shares | 23.45 |
Forfeited (in dollars per share) | $ / shares | 21.84 |
Non-Vested at the end of the period (in dollars per share) | $ / shares | $ 19.68 |
Share-Based Compensation Plan_3
Share-Based Compensation Plans - Stock Options (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Nov. 03, 2018USD ($)$ / sharesshares | |
Additional disclosures | |
Weighted-average grant date fair value of stock options granted (in dollars per share) | $ 10.29 |
Stock Options | |
Number of Shares | |
Outstanding at the beginning of the period (in shares) | shares | 1,527,176 |
Granted (in shares) | shares | 232,430 |
Exercised (in shares) | shares | (256,111) |
Forfeited (in shares) | shares | (210,327) |
Expired (in shares) | shares | (41,096) |
Outstanding at the end of the period (in shares) | shares | 1,252,072 |
Exercisable at the end of the period (in shares) | shares | 676,059 |
Weighted-Average Exercise Price | |
Outstanding at the beginning of the period (in dollars per share) | $ 21.97 |
Granted (in dollars per share) | 28.09 |
Exercised (in dollars per share) | 19.22 |
Forfeited (in dollars per share) | 16.42 |
Expired (in dollars per share) | 51.18 |
Outstanding at the end of the period (in dollars per share) | 23.64 |
Exercisable at the end of the period (in dollars per share) | $ 28.33 |
Assumptions used to value stock options | |
Risk-free interest rate (as a percent) | 2.70% |
Expected lives (in years) | 5 years |
Dividend yield (as a percent) | 4.21% |
Expected volatility (as a percent) | 56.55% |
Unrecognized compensation cost | |
Unrecognized compensation cost, non-vested awards | $ | $ 2.5 |
Compensation recognition period, non-vested awards | 1 year 6 months |
Share-Based Compensation Plan_4
Share-Based Compensation Plans - Cash Settled Awards (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Nov. 03, 2018 | Oct. 28, 2017 | Nov. 03, 2018 | Oct. 28, 2017 | Feb. 03, 2018 | |
Share-based compensation | |||||
Share-based compensation expense | $ 3 | $ 8.2 | $ 14.9 | $ 17.2 | |
Cash Settled Awards | |||||
Share-based compensation | |||||
Vesting period (in years) | 3 years | ||||
Liability associated with the cash settled awards | $ 3.9 | $ 3.9 | |||
Awards | |||||
Non-Vested at the beginning of the period (in shares) | 8,353 | ||||
Vested (in shares) | (2,677) | ||||
Forfeited (in shares) | (497) | ||||
Non-Vested at the end of the period (in shares) | 5,179 | 5,179 | 8,353 | ||
Unrecognized compensation cost | |||||
Unrecognized compensation cost, non-vested awards | $ 2.5 | $ 2.5 | |||
Compensation recognition period, non-vested awards | 1 year 2 months 12 days | ||||
Cash Settled Awards | Accrued expenses and other current liabilities | |||||
Share-based compensation | |||||
Liability associated with the cash settled awards | 2.5 | $ 2.5 | |||
Cash Settled Awards | Other Liabilities | |||||
Share-based compensation | |||||
Liability associated with the cash settled awards | $ 1.4 | 1.4 | |||
Chief Executive Officer | |||||
Share-based compensation | |||||
Share-based compensation expense | $ 0.7 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2018 | Nov. 03, 2018 | Feb. 03, 2018 | Oct. 28, 2017 | |
Changes in the net carrying amount of goodwill | ||||
Balance at the beginning of the period | $ 120,292 | |||
Goodwill impairment charge | $ (23,991) | (23,991) | ||
Goodwill of divested business | (13,588) | |||
Translation adjustment | (3,238) | |||
Balance at the end of the period | 79,475 | 79,475 | ||
Accumulated goodwill impairment | 804,000 | $ 804,000 | $ 780,000 | $ 778,500 |
Weighted average cost of capital | 13.50% | |||
Change in basis points | 1.00% | |||
Retail Segment | ||||
Changes in the net carrying amount of goodwill | ||||
Balance at the beginning of the period | $ 94,305 | |||
Goodwill of divested business | (13,588) | |||
Translation adjustment | (1,242) | |||
Balance at the end of the period | $ 79,475 | 79,475 | ||
Corporate Apparel Segment | ||||
Changes in the net carrying amount of goodwill | ||||
Balance at the beginning of the period | 25,987 | |||
Goodwill impairment charge | (23,991) | |||
Translation adjustment | $ (1,996) | |||
Minimum | ||||
Changes in the net carrying amount of goodwill | ||||
Earning multiple | 5.5 | |||
Maximum | ||||
Changes in the net carrying amount of goodwill | ||||
Earning multiple | 8 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | Nov. 03, 2018 | Feb. 03, 2018 | Oct. 28, 2017 |
Amortizable intangible assets: | |||
Carrying amount | $ 55,086 | $ 58,215 | $ 56,161 |
Accumulated amortization | (34,491) | (33,560) | (31,338) |
Total amortizable intangible assets, net | 20,595 | 24,655 | 24,823 |
Indefinite-lived intangible assets: | |||
Trademarks and tradename | 144,238 | 144,332 | 144,249 |
Total intangible assets, net | 164,833 | 168,987 | 169,072 |
Trademarks, tradenames and franchise agreements | |||
Amortizable intangible assets: | |||
Carrying amount | 16,048 | 16,273 | 16,074 |
Accumulated amortization | (10,709) | (10,558) | (10,404) |
Favorable leases | |||
Amortizable intangible assets: | |||
Carrying amount | 12,695 | 13,229 | 13,475 |
Accumulated amortization | (5,629) | (5,010) | (4,856) |
Customer relationships | |||
Amortizable intangible assets: | |||
Carrying amount | 26,343 | 28,713 | 26,612 |
Accumulated amortization | (18,153) | $ (17,992) | $ (16,078) |
Corporate Apparel Segment | |||
Amortizable intangible assets: | |||
Carrying amount | 10,700 | ||
Corporate Apparel Segment | Trademarks, tradenames and franchise agreements | |||
Amortizable intangible assets: | |||
Carrying amount | 2,500 | ||
Corporate Apparel Segment | Customer relationships | |||
Amortizable intangible assets: | |||
Carrying amount | $ 8,200 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2018 | Oct. 28, 2017 | Nov. 03, 2018 | Oct. 28, 2017 | |
Intangible asset amortization expense | ||||
Pre-tax amortization expense associated with intangible assets | $ 1 | $ 1 | $ 2.9 | $ 3.1 |
Pre-tax amortization expense estimated for the remainder of fiscal year 2018 | 0.9 | 0.9 | ||
Pre-tax amortization expense estimated for fiscal year 2019 | 3.7 | 3.7 | ||
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 | ||
Pre-tax amortization expense estimated for fiscal year 2022 | 2.1 | $ 2.1 | ||
Corporate Apparel Segment | ||||
Intangible asset amortization expense | ||||
Intangible impairment charge | $ 0 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring and Non-Recurring (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2018 | Nov. 03, 2018 | Oct. 28, 2017 | Feb. 03, 2018 | |
Liabilities: | ||||
Goodwill impairment charge | $ 23,991 | $ 23,991 | ||
Asset impairment charges | 504 | $ 2,867 | ||
Selling, general and administrative expenses | ||||
Liabilities: | ||||
Asset impairment charges | 200 | 500 | 2,900 | |
Cost of sales | ||||
Liabilities: | ||||
Asset impairment charges | 4,000 | |||
Recurring | ||||
Assets: | ||||
Derivative financial instruments | 12,587 | 12,587 | 235 | $ 4,019 |
Liabilities: | ||||
Derivative financial instruments | 797 | 797 | 2,198 | 2,307 |
Recurring | Level 2 | ||||
Assets: | ||||
Derivative financial instruments | 12,587 | 12,587 | 235 | 4,019 |
Liabilities: | ||||
Derivative financial instruments | $ 797 | $ 797 | $ 2,198 | $ 2,307 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Thousands | Nov. 03, 2018 | Feb. 03, 2018 | Oct. 28, 2017 |
Fair Value of Financial Instruments | |||
Long-term debt, including current portion | $ 1,176,906 | $ 1,396,808 | $ 1,476,485 |
Deferred financing costs | 3,500 | 14,900 | 17,000 |
Term Loan and Senior Notes | |||
Fair Value of Financial Instruments | |||
Long-term debt, including current portion | 1,118,406 | 1,396,808 | 1,476,485 |
Term Loan and Senior Notes | Level 1 and Level 2 | |||
Fair Value of Financial Instruments | |||
Term Loan and Senior Notes, Estimated Fair Value | $ 1,130,202 | $ 1,407,449 | $ 1,461,283 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Nov. 03, 2018 | Jun. 30, 2018 | Apr. 30, 2017 | |
Interest rate swap | Designated as hedging instruments | |||
Derivative Financial Instruments | |||
Fair value of the interest rate swaps | $ 11.1 | ||
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 | (1.5) | ||
Interest rate swap | Designated as hedging instruments | Other current assets | |||
Derivative Financial Instruments | |||
Derivative asset | 2.3 | ||
Interest rate swap | Designated as hedging instruments | Accrued expenses and other current liabilities | |||
Derivative Financial Instruments | |||
Derivative asset | 0.8 | ||
Interest rate swap | Designated as hedging instruments | Other assets | |||
Derivative Financial Instruments | |||
Derivative asset | 9.6 | ||
Interest rate swap matures in June 2021 | Designated as hedging instruments | |||
Derivative Financial Instruments | |||
Notional amount | $ 370 | $ 260 | |
Fixed rate payable (as a percent) | 5.31% | ||
Applicable margin included in fixed rate (as a percent) | 3.25% | ||
Interest rate swap matures in June 2021 | Designated as hedging instruments | LIBOR | |||
Derivative Financial Instruments | |||
Period for interest rate basis for variable rate receivable | 1 month | ||
Interest rate swap matures in April 2025 | Designated as hedging instruments | |||
Derivative Financial Instruments | |||
Notional amount | $ 345 | $ 320 | |
Fixed rate payable (as a percent) | 6.18% | ||
Applicable margin included in fixed rate (as a percent) | 3.25% | ||
Interest rate swap matures in April 2025 | 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 | |||
Derivative asset | $ 0.7 | ||
Effective portion of the loss expected to be reclassified from accumulated other comprehensive (loss) income into earnings over the next 12 months | 1.8 | ||
Foreign exchange forward | Designated as hedging instruments | United Kingdom, Pounds | |||
Derivative Financial Instruments | |||
Notional amount | 25.6 | ||
Foreign exchange forward | Designated as hedging instruments | Euro Member Countries, Euro | |||
Derivative Financial Instruments | |||
Notional amount | 8.9 | ||
Foreign exchange forward | Not designated as hedging instrument | Canada, Dollars | |||
Derivative Financial Instruments | |||
Notional amount | $ 4.6 |
Segment Reporting - Number of S
Segment Reporting - Number of Segments (Details) | 9 Months Ended |
Nov. 03, 2018segment | |
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) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Nov. 03, 2018USD ($) | Oct. 28, 2017USD ($) | Jul. 29, 2017store | Nov. 03, 2018USD ($) | Oct. 28, 2017USD ($) | |
Net sales: | |||||
Total net sales | $ 812,747 | $ 810,818 | $ 2,454,141 | $ 2,444,482 | |
Number of shops closed | store | 170 | ||||
Retail Segment | |||||
Net sales: | |||||
Total net sales | 751,741 | 747,522 | 2,274,498 | 2,265,825 | |
Retail Segment | Men's Wearhouse | |||||
Net sales: | |||||
Total net sales | 454,927 | 448,955 | 1,347,933 | 1,327,773 | |
Retail Segment | Jos. A. Bank | |||||
Net sales: | |||||
Total net sales | 169,318 | 162,685 | 510,821 | 504,238 | |
Retail Segment | K&G | |||||
Net sales: | |||||
Total net sales | 72,610 | 69,604 | 245,535 | 244,098 | |
Retail Segment | Moores | |||||
Net sales: | |||||
Total net sales | 54,886 | 57,607 | 167,658 | 163,732 | |
Retail Segment | MW Cleaners | |||||
Net sales: | |||||
Total net sales | 8,671 | 2,551 | 25,984 | ||
Corporate Apparel Segment | |||||
Net sales: | |||||
Total net sales | $ 61,006 | $ 63,296 | $ 179,643 | $ 178,657 |
Segment Reporting - Operating I
Segment Reporting - Operating Income Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2018 | Oct. 28, 2017 | Nov. 03, 2018 | Oct. 28, 2017 | |
Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes | ||||
Operating income | $ 55,101 | $ 76,627 | $ 195,984 | $ 216,094 |
Interest income | 207 | 159 | 414 | 324 |
Interest expense | (18,757) | (24,412) | (61,602) | (75,200) |
(Loss) gain on extinguishment of debt, net | (9,420) | 2,539 | (30,253) | 6,535 |
Earnings before income taxes | 27,131 | 54,913 | 104,543 | 147,753 |
Shared services | ||||
Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes | ||||
Operating income | (51,641) | (50,073) | (146,373) | (143,329) |
Retail Segment | Reportable segments | ||||
Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes | ||||
Operating income | 127,621 | 123,628 | 360,484 | 352,273 |
Corporate Apparel Segment | Reportable segments | ||||
Operating income by reportable segment, shared service expense, and the reconciliation to earnings before income taxes | ||||
Operating income | $ (20,879) | $ 3,072 | $ (18,127) | $ 7,150 |
SegmentReporting - Assets by Se
SegmentReporting - Assets by Segment (Details) - USD ($) $ in Thousands | Nov. 03, 2018 | Feb. 03, 2018 | Oct. 28, 2017 |
Segment reporting | |||
Segment assets | $ 1,889,540 | $ 1,999,955 | $ 2,111,301 |
Reportable segments | Retail Segment | |||
Segment reporting | |||
Segment assets | 1,424,320 | 1,434,992 | 1,559,247 |
Reportable segments | Corporate Apparel Segment | |||
Segment reporting | |||
Segment assets | 180,046 | 222,872 | 216,391 |
Shared services | |||
Segment reporting | |||
Segment assets | $ 285,174 | $ 342,091 | $ 335,663 |
Condensed Consolidating Infor_3
Condensed Consolidating Information - Balance Sheet (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Nov. 03, 2018 | Feb. 03, 2018 | Oct. 28, 2017 | Jun. 18, 2014 | |
CURRENT ASSETS: | ||||
Cash and cash equivalents | $ 68,425 | $ 103,607 | $ 126,244 | |
Accounts receivable, net | 80,696 | 79,783 | 81,193 | |
Inventories | 875,003 | 851,931 | 973,001 | |
Other current assets | 70,433 | 78,252 | 53,566 | |
Total current assets | 1,094,557 | 1,113,573 | 1,234,004 | |
Property and equipment, net | 430,878 | 460,674 | 454,921 | |
Rental product, net | 102,540 | 123,730 | 125,320 | |
Goodwill | 79,475 | 120,292 | 119,125 | |
Intangible assets, net | 164,833 | 168,987 | 169,072 | |
Other assets | 17,257 | 12,699 | 8,859 | |
Total assets | 1,889,540 | 1,999,955 | 2,111,301 | |
CURRENT LIABILITIES: | ||||
Accounts payable | 235,958 | 145,106 | 186,862 | |
Accrued expenses and other current liabilities | 318,599 | 291,658 | 302,757 | |
Current portion of long-term debt | 9,000 | 7,000 | 8,750 | |
Total current liabilities | 563,557 | 443,764 | 498,369 | |
Long-term debt, net | 1,167,906 | 1,389,808 | 1,467,735 | |
Deferred taxes, net and other liabilities | 148,590 | 164,191 | 160,197 | |
Shareholders' (deficit) equity | 9,487 | 2,192 | (15,000) | |
Total liabilities and shareholders' (deficit) equity | 1,889,540 | 1,999,955 | 2,111,301 | |
Eliminations | ||||
CURRENT ASSETS: | ||||
Accounts receivable, net | (268,673) | (370,830) | (268,564) | |
Other current assets | (75,233) | |||
Total current assets | (268,673) | (370,830) | (343,797) | |
Investments in subsidiaries | (1,501,862) | (1,553,105) | (1,386,577) | |
Other assets | (80,235) | (81,135) | (6,300) | |
Total assets | (1,850,770) | (2,005,070) | (1,736,674) | |
CURRENT LIABILITIES: | ||||
Accounts payable | (268,673) | (370,830) | (268,564) | |
Accrued expenses and other current liabilities | (67,957) | |||
Total current liabilities | (268,673) | (370,830) | (336,521) | |
Deferred taxes, net and other liabilities | (80,235) | (81,135) | (13,576) | |
Shareholders' (deficit) equity | (1,501,862) | (1,553,105) | (1,386,577) | |
Total liabilities and shareholders' (deficit) equity | (1,850,770) | (2,005,070) | (1,736,674) | |
Senior Notes | ||||
Condensed Consolidating Balance Sheet | ||||
Aggregate principal amount of debt issued | 600,000 | $ 600,000 | ||
Interest rate (as a percent) | 7.00% | |||
Tailored Brands, Inc. | Reportable Legal Entities | ||||
CURRENT ASSETS: | ||||
Accounts receivable, net | 7,414 | |||
Other current assets | 220 | 3,666 | 7,275 | |
Total current assets | 220 | 3,666 | 14,689 | |
Investments in subsidiaries | 157,114 | 128,458 | 77,901 | |
Total assets | 157,334 | 132,124 | 92,590 | |
CURRENT LIABILITIES: | ||||
Accounts payable | 134,700 | 110,326 | 87,758 | |
Accrued expenses and other current liabilities | 7,952 | 14,061 | 18,911 | |
Total current liabilities | 142,652 | 124,387 | 106,669 | |
Deferred taxes, net and other liabilities | 5,195 | 5,545 | 921 | |
Shareholders' (deficit) equity | 9,487 | 2,192 | (15,000) | |
Total liabilities and shareholders' (deficit) equity | 157,334 | 132,124 | 92,590 | |
The Men's Wearhouse, Inc. | Reportable Legal Entities | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | 981 | 51,818 | 20,224 | |
Accounts receivable, net | 25,010 | 23,712 | 19,518 | |
Inventories | 149,157 | 207,504 | 198,429 | |
Other current assets | 26,657 | 26,951 | 87,450 | |
Total current assets | 201,805 | 309,985 | 325,621 | |
Property and equipment, net | 190,905 | 203,204 | 207,432 | |
Rental product, net | 83,554 | 103,664 | 107,222 | |
Goodwill | 6,160 | 6,160 | 6,160 | |
Investments in subsidiaries | 1,344,748 | 1,424,647 | 1,308,676 | |
Other assets | 16,046 | 11,183 | 7,780 | |
Total assets | 1,843,218 | 2,058,843 | 1,962,891 | |
CURRENT LIABILITIES: | ||||
Accounts payable | 188,583 | 281,838 | 189,756 | |
Accrued expenses and other current liabilities | 170,406 | 87,597 | 139,577 | |
Current portion of long-term debt | 9,000 | 7,000 | 8,750 | |
Total current liabilities | 367,989 | 376,435 | 338,083 | |
Long-term debt, net | 1,167,906 | 1,389,808 | 1,467,735 | |
Deferred taxes, net and other liabilities | 150,209 | 164,142 | 79,172 | |
Shareholders' (deficit) equity | 157,114 | 128,458 | 77,901 | |
Total liabilities and shareholders' (deficit) equity | $ 1,843,218 | 2,058,843 | 1,962,891 | |
Guarantor Subsidiaries | ||||
Condensed Consolidating Balance Sheet | ||||
Ownership of Guarantor subsidiaries (as a percent) | 100.00% | |||
Guarantor Subsidiaries | Reportable Legal Entities | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | $ 2,239 | 2,180 | 1,941 | |
Accounts receivable, net | 237,715 | 368,328 | 287,688 | |
Inventories | 531,826 | 445,126 | 458,603 | |
Other current assets | 35,121 | 38,217 | 26,185 | |
Total current assets | 806,901 | 853,851 | 774,417 | |
Property and equipment, net | 206,167 | 220,979 | 212,213 | |
Rental product, net | 4,367 | 3,658 | 2,327 | |
Goodwill | 52,128 | 67,010 | 68,510 | |
Intangible assets, net | 154,144 | 155,438 | 155,884 | |
Other assets | 660 | 805 | 821 | |
Total assets | 1,224,367 | 1,301,741 | 1,214,172 | |
CURRENT LIABILITIES: | ||||
Accounts payable | 91,014 | 57,756 | 81,409 | |
Accrued expenses and other current liabilities | 105,087 | 155,813 | 109,718 | |
Total current liabilities | 196,101 | 213,569 | 191,127 | |
Deferred taxes, net and other liabilities | 47,637 | 46,641 | 83,342 | |
Shareholders' (deficit) equity | 980,629 | 1,041,531 | 939,703 | |
Total liabilities and shareholders' (deficit) equity | 1,224,367 | 1,301,741 | 1,214,172 | |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | 65,205 | 49,609 | 104,079 | |
Accounts receivable, net | 86,644 | 58,573 | 35,137 | |
Inventories | 194,020 | 199,301 | 315,969 | |
Other current assets | 8,435 | 9,418 | 7,889 | |
Total current assets | 354,304 | 316,901 | 463,074 | |
Property and equipment, net | 33,806 | 36,491 | 35,276 | |
Rental product, net | 14,619 | 16,408 | 15,771 | |
Goodwill | 21,187 | 47,122 | 44,455 | |
Intangible assets, net | 10,689 | 13,549 | 13,188 | |
Other assets | 80,786 | 81,846 | 6,558 | |
Total assets | 515,391 | 512,317 | 578,322 | |
CURRENT LIABILITIES: | ||||
Accounts payable | 90,334 | 66,016 | 96,503 | |
Accrued expenses and other current liabilities | 35,154 | 34,187 | 102,508 | |
Total current liabilities | 125,488 | 100,203 | 199,011 | |
Deferred taxes, net and other liabilities | 25,784 | 28,998 | 10,338 | |
Shareholders' (deficit) equity | 364,119 | 383,116 | 368,973 | |
Total liabilities and shareholders' (deficit) equity | $ 515,391 | $ 512,317 | $ 578,322 |
Condensed Consolidating Infor_4
Condensed Consolidating Information - Earnings (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2018 | Oct. 28, 2017 | Nov. 03, 2018 | Oct. 28, 2017 | |
Condensed Consolidating Statement of Earnings (Loss) | ||||
Clothing product | $ 812,747 | $ 810,818 | $ 2,454,141 | $ 2,444,482 |
Cost of sales | 450,012 | 452,061 | 1,377,280 | 1,356,589 |
Total gross margin | 362,735 | 358,757 | 1,076,861 | 1,087,893 |
Operating expenses | 283,643 | 282,130 | 856,886 | 871,799 |
Goodwill impairment charges | 23,991 | 23,991 | ||
Operating (loss) income | 55,101 | 76,627 | 195,984 | 216,094 |
Interest income | 207 | 159 | 414 | 324 |
Interest expense | 18,757 | 24,412 | 61,602 | 75,200 |
Interest expense, net | (18,550) | (24,253) | (61,188) | (74,876) |
(Loss) gain on extinguishment of debt | (9,420) | 2,539 | (30,253) | 6,535 |
Earnings before income taxes | 27,131 | 54,913 | 104,543 | 147,753 |
Provision (benefit) for income taxes | 13,256 | 18,021 | 27,521 | 50,551 |
(Loss) earnings before equity in net income of subsidiaries | 13,875 | 36,892 | 77,022 | 97,202 |
Net earnings (loss) | 13,875 | 36,892 | 77,022 | 97,202 |
Comprehensive income (loss) | 14,799 | 33,745 | 59,948 | 105,957 |
Eliminations | ||||
Condensed Consolidating Statement of Earnings (Loss) | ||||
Clothing product | (160,181) | (284,542) | (468,651) | (539,796) |
Cost of sales | (160,181) | (284,542) | (468,651) | (539,796) |
Operating expenses | (14,942) | (16,425) | (42,093) | (45,021) |
Operating (loss) income | 14,942 | 16,425 | 42,093 | 45,021 |
Other income and expenses, net | (14,942) | (16,425) | (42,093) | (45,021) |
Equity in (loss) earnings of subsidiaries | 20,291 | (35,135) | (23,701) | (82,545) |
Net earnings (loss) | 20,291 | (35,135) | (23,701) | (82,545) |
Comprehensive income (loss) | 19,367 | (31,988) | (6,627) | (91,300) |
Tailored Brands, Inc. | Reportable Legal Entities | ||||
Condensed Consolidating Statement of Earnings (Loss) | ||||
Operating expenses | 1,443 | 917 | 3,408 | 2,599 |
Operating (loss) income | (1,443) | (917) | (3,408) | (2,599) |
Interest expense, net | (1,062) | (129) | (2,749) | 223 |
Earnings before income taxes | (2,505) | (1,046) | (6,157) | (2,376) |
Provision (benefit) for income taxes | (505) | (337) | (1,624) | 1,441 |
(Loss) earnings before equity in net income of subsidiaries | (2,000) | (709) | (4,533) | (3,817) |
Equity in (loss) earnings of subsidiaries | 15,875 | 37,601 | 81,555 | 101,019 |
Net earnings (loss) | 13,875 | 36,892 | 77,022 | 97,202 |
Comprehensive income (loss) | 14,799 | 33,745 | 59,948 | 105,957 |
The Men's Wearhouse, Inc. | Reportable Legal Entities | ||||
Condensed Consolidating Statement of Earnings (Loss) | ||||
Clothing product | 453,316 | 447,936 | 1,343,248 | 1,324,731 |
Cost of sales | 219,036 | 227,612 | 664,219 | 648,900 |
Total gross margin | 234,280 | 220,324 | 679,029 | 675,831 |
Operating expenses | 135,498 | 135,740 | 405,344 | 425,912 |
Operating (loss) income | 98,782 | 84,584 | 273,685 | 249,919 |
Interest expense, net | (20,017) | (27,789) | (66,141) | (79,010) |
(Loss) gain on extinguishment of debt | (9,420) | 2,539 | (30,253) | 6,535 |
Earnings before income taxes | 69,345 | 59,334 | 177,291 | 177,444 |
Provision (benefit) for income taxes | 17,304 | 19,267 | 37,882 | 57,951 |
(Loss) earnings before equity in net income of subsidiaries | 52,041 | 40,067 | 139,409 | 119,493 |
Equity in (loss) earnings of subsidiaries | (36,166) | (2,466) | (57,854) | (18,474) |
Net earnings (loss) | 15,875 | 37,601 | 81,555 | 101,019 |
Comprehensive income (loss) | 20,300 | 39,114 | 87,072 | 100,578 |
Guarantor Subsidiaries | Reportable Legal Entities | ||||
Condensed Consolidating Statement of Earnings (Loss) | ||||
Clothing product | 369,749 | 404,531 | 1,137,489 | 1,146,271 |
Cost of sales | 283,803 | 317,262 | 862,803 | 860,944 |
Total gross margin | 85,946 | 87,269 | 274,686 | 285,327 |
Operating expenses | 133,986 | 134,433 | 405,062 | 405,988 |
Goodwill impairment charges | 1,294 | 1,294 | ||
Operating (loss) income | (49,334) | (47,164) | (131,670) | (120,661) |
Other income and expenses, net | 14,942 | 16,425 | 42,093 | 45,295 |
Interest expense, net | 1,970 | 1,543 | 6,115 | 4,804 |
Earnings before income taxes | (32,422) | (29,196) | (83,462) | (70,562) |
Provision (benefit) for income taxes | (6,844) | (9,441) | (17,412) | (23,398) |
(Loss) earnings before equity in net income of subsidiaries | (25,578) | (19,755) | (66,050) | (47,164) |
Net earnings (loss) | (25,578) | (19,755) | (66,050) | (47,164) |
Comprehensive income (loss) | (25,578) | (19,755) | (66,050) | (47,164) |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Condensed Consolidating Statement of Earnings (Loss) | ||||
Clothing product | 149,863 | 242,893 | 442,055 | 513,276 |
Cost of sales | 107,354 | 191,729 | 318,909 | 386,541 |
Total gross margin | 42,509 | 51,164 | 123,146 | 126,735 |
Operating expenses | 27,658 | 27,465 | 85,165 | 82,321 |
Goodwill impairment charges | 22,697 | 22,697 | ||
Operating (loss) income | (7,846) | 23,699 | 15,284 | 44,414 |
Other income and expenses, net | (274) | |||
Interest expense, net | 559 | 2,122 | 1,587 | (893) |
Earnings before income taxes | (7,287) | 25,821 | 16,871 | 43,247 |
Provision (benefit) for income taxes | 3,301 | 8,532 | 8,675 | 14,557 |
(Loss) earnings before equity in net income of subsidiaries | (10,588) | 17,289 | 8,196 | 28,690 |
Net earnings (loss) | (10,588) | 17,289 | 8,196 | 28,690 |
Comprehensive income (loss) | $ (14,089) | $ 12,629 | $ (14,395) | $ 37,886 |
Condensed Consolidating Infor_5
Condensed Consolidating Information - Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 03, 2018 | Oct. 28, 2017 | |
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | $ 277,817 | $ 252,538 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (46,927) | (55,956) |
Proceeds from divestiture of business | 17,755 | |
Acquisition of business, net of cash | (457) | |
Proceeds from sale of property and equipment | 2,157 | |
Net cash provided by (used in) investing activities | (29,172) | (54,256) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on original term loan | (993,420) | (9,879) |
Proceeds from new term loan | 895,500 | |
Payments on new term loan | (6,750) | |
Proceeds from asset-based revolving credit facility | 465,500 | 235,900 |
Payments on asset-based revolving credit facility | (407,000) | (235,900) |
Repurchase and retirement of senior notes | (199,365) | (106,731) |
Deferred financing costs | (6,713) | (2,464) |
Cash dividends paid | (27,833) | (26,895) |
Proceeds from issuance of common stock | 6,149 | 1,334 |
Tax payments related to vested deferred stock units | (7,510) | (1,682) |
Net cash (used in) provided by financing activities | (281,442) | (146,317) |
Effect of exchange rate changes | (2,385) | 3,390 |
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (35,182) | 55,355 |
Balance at beginning of period | 103,607 | 70,889 |
Balance at end of period | 68,425 | 126,244 |
Eliminations | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | (27,833) | (26,895) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Intercompany activities | 228,450 | 223,800 |
Net cash provided by (used in) investing activities | 228,450 | 223,800 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Intercompany activities | (200,617) | (196,905) |
Net cash (used in) provided by financing activities | (200,617) | (196,905) |
Tailored Brands, Inc. | Reportable Legal Entities | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | 29,194 | 27,243 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Cash dividends paid | (27,833) | (26,895) |
Proceeds from issuance of common stock | 6,149 | 1,334 |
Tax payments related to vested deferred stock units | (7,510) | (1,682) |
Net cash (used in) provided by financing activities | (29,194) | (27,243) |
The Men's Wearhouse, Inc. | Reportable Legal Entities | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | 470,656 | 404,404 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (12,962) | (15,413) |
Intercompany activities | (228,450) | (223,800) |
Net cash provided by (used in) investing activities | (241,412) | (239,213) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on original term loan | (993,420) | (9,879) |
Proceeds from new term loan | 895,500 | |
Payments on new term loan | (6,750) | |
Proceeds from asset-based revolving credit facility | 465,500 | 235,900 |
Payments on asset-based revolving credit facility | (407,000) | (235,900) |
Repurchase and retirement of senior notes | (199,365) | (106,731) |
Deferred financing costs | (6,713) | (2,464) |
Intercompany activities | (27,833) | (26,895) |
Net cash (used in) provided by financing activities | (280,081) | (145,969) |
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (50,837) | 19,222 |
Balance at beginning of period | 51,818 | 1,002 |
Balance at end of period | 981 | 20,224 |
Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | 11,157 | 34,049 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (28,853) | (36,146) |
Proceeds from divestiture of business | 17,755 | |
Proceeds from sale of property and equipment | 2,157 | |
Net cash provided by (used in) investing activities | (11,098) | (33,989) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | 59 | 60 |
Balance at beginning of period | 2,180 | 1,881 |
Balance at end of period | 2,239 | 1,941 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Consolidating Statement of Cash Flows | ||
Net cash provided by (used in) operating activities | (205,357) | (186,263) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (5,112) | (4,397) |
Acquisition of business, net of cash | (457) | |
Net cash provided by (used in) investing activities | (5,112) | (4,854) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Intercompany activities | 228,450 | 223,800 |
Net cash (used in) provided by financing activities | 228,450 | 223,800 |
Effect of exchange rate changes | (2,385) | 3,390 |
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | 15,596 | 36,073 |
Balance at beginning of period | 49,609 | 68,006 |
Balance at end of period | $ 65,205 | $ 104,079 |