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Table of Contents
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
 
FORM 10-Q
 
x
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.
 
For the quarterly period ended August 3, 2002
 
OR
 
¨
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.
 
For the transition period from                              to                             .
 
Commission File Number 0-23874
 
 
JOS. A. BANK CLOTHIERS, INC.
(Exact Name of Registrant as specified in its charter)
 
Delaware
  
5611
  
36-3189198
(State of Incorporation)
  
(Primary Standard
Industrial Classification
Code Number)
  
(I.R.S. Employer
Identification Number)
 
500 Hanover Pike, Hampstead, MD
  
21074-2095
(Address of Principal Executive Offices)
  
(Zip Code)
 
Registrant’s Telephone Number, Including Area Code: (410) 239-2700
 
None
(Former name or former address, if changed since last report)
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x  No  ¨
 
Indicate the number of shares of each of the issuer’s classes of common stock, as of the latest practicable date:
 
Class
  
Outstanding as of September 13, 2002
Common Stock, $.01 par value per share
  
6,177,472
 

Table of Contents
JOS. A. BANK CLOTHIERS, INC.
 
INDEX
 
         
Page No.
Part I.    
   
Financial Information
     
Item 1.
   
Financial Statements
     
       
3
       
4
       
5
       
6-10
Item 2.
      
10-14
Item 3.
      
15
Item 4.
      
15
Part II.    
   
Other Information
     
Item 4.
      
15
Item 6.
      
16
  
16
  
17

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Table of Contents
 
PART I.    FINANCIAL INFORMATION
 
Item 1.    Condensed Consolidated Financial Statements
 
JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
 
    
Three Months Ended
   
Six Months Ended
    
August 4,
2001
   
August 3,
2002
   
August 4,
2001
   
August 3,
2002
Net sales
   
$
46,106
   
$
51,868
   
$
93,512
   
$
107,628
    
  
  
  
Costs and expenses:
                            
Cost of goods sold
   
 
23,318
   
 
24,417
   
 
47,214
   
 
50,828
General and administrative
   
 
4,347
   
 
5,440
   
 
8,900
   
 
11,289
Sales and marketing
   
 
17,540
   
 
19,987
   
 
35,196
   
 
40,329
Store opening costs
   
 
127
   
 
173
   
 
196
   
 
200
One-time charge
   
 
—  
   
 
—  
   
 
210
   
 
—  
    
  
  
  
    
 
45,332
   
 
50,017
   
 
91,716
   
 
102,646
    
  
  
  
Operating income
   
 
774
   
 
1,851
   
 
1,796
   
 
4,982
Interest expense, net
   
 
312
   
 
252
   
 
531
   
 
545
    
  
  
  
Income before provision for income taxes
   
 
462
   
 
1,599
   
 
1,265
   
 
4,437
Provision for income taxes
   
 
171
   
 
657
   
 
468
   
 
1,764
    
  
  
  
Net income
   
$
291
   
$
942
   
$
797
   
$
2,673
    
  
  
  
Earnings per share:
                            
Net income:
                            
Basic
   
$
0.05
   
$
0.15
   
$
0.13
   
$
0.44
Diluted
   
$
0.05
   
$
0.13
   
$
0.13
   
$
0.38
Weighted average shares outstanding:
                            
Basic
   
 
5,956
   
 
6,168
   
 
5,956
   
 
6,107
Diluted
   
 
6,171
   
 
7,082
   
 
6,191
   
 
6,951
 
See accompanying notes

3

Table of Contents
 
JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
    
February 2,
2002
     
August 3,
2002
  
           
(Unaudited)
  
ASSETS
                  
Current Assets:
                  
Cash and cash equivalents
   
$
827
 
   
$
2,587
 
Accounts receivable
   
 
2,364
 
   
 
2,535
 
Inventories:
                  
Raw materials
   
 
5,018
 
   
 
6,046
 
Finished goods
   
 
59,624
 
   
 
57,557
 
    
  
Total inventories
   
 
64,642
 
   
 
63,603
 
    
  
Prepaid expenses and other current assets
   
 
7,126
 
   
 
7,060
 
    
  
Total current assets
   
 
74,959
 
   
 
75,785
 
    
  
Property, plant and equipment, at cost
   
 
64,559
 
   
 
69,146
 
Accumulated depreciation and amortization
   
 
(32,018
)
   
 
(34,606
)
    
  
Net property, plant and equipment
   
 
32,541
 
   
 
34,540
 
Other assets
   
 
957
 
   
 
963
 
    
  
Total assets
   
$
108,457
 
   
$
111,288
 
    
  
LIABILITIES AND SHAREHOLDERS’ EQUITY
                  
Current Liabilities:
                  
Accounts payable
   
$
16,528
 
   
$
22,417
 
Accrued expenses
   
 
19,930
 
   
 
17,639
 
Current portion of long-term debt
   
 
744
 
   
 
1,233
 
    
  
Total current liabilities
   
 
37,202
 
   
 
41,289
 
Noncurrent Liabilities:
                  
Long-term debt
   
 
15,894
 
   
 
9,813
 
Accrued rent
   
 
3,109
 
   
 
3,079
 
    
  
Total liabilities
   
 
56,205
 
   
 
54,181
 
    
  
Shareholders’ equity:
                  
Common stock
   
 
71
 
   
 
73
 
Additional paid-in capital
   
 
56,558
 
   
 
58,738
 
Retained earnings
   
 
681
 
   
 
3,354
 
    
  
    
 
57,310
 
   
 
62,165
 
Less treasury stock
   
 
(5,058
)
   
 
(5,058
)
    
  
Total shareholders’ equity
   
 
52,252
 
   
 
57,107
 
    
  
Total liabilities and shareholders’ equity
   
$
108,457
 
   
$
111,288
 
    
  
 
See accompanying notes

4

Table of Contents
 
JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
      
Six Months Ended
  
      
August 4,
2001
       
August 3,
2002
  
Cash flows from operating activities:
                      
Net income
     
$
797
 
     
$
2,673
 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
                      
Depreciation and amortization
     
 
2,216
 
     
 
2,674
 
Net (increase) decrease in operating working capital
     
 
(11,320
)
     
 
4,496
 
      
    
Net cash (used in) provided by operating activities
     
 
(8,307
)
     
 
9,843
 
      
    
Cash flows from investing activities:
                      
Additions to property, plant and equipment
     
 
(5,845
)
     
 
(4,673
)
      
    
Net cash used in investing activities
     
 
(5,845
)
     
 
(4,673
)
      
    
Cash flows from financing activities:
                      
Borrowings under long-term Credit Agreement
     
 
34,164
 
     
 
16,107
 
Repayment under long-term Credit Agreement
     
 
(26,883
)
     
 
(25,995
)
Borrowing of other long-term debt
     
 
5,500
 
     
 
4,675
 
Repayment of other long-term debt
     
 
(304
)
     
 
(379
)
Net proceeds from issuance of common stock through exercise of options
     
 
—  
 
     
 
2,182
 
      
    
Net cash provided by (used in) financing activities
     
 
12,477
 
     
 
(3,410
)
      
    
Net (decrease) increase in cash and cash equivalents
     
 
(1,675
)
     
 
1,760
 
Cash and cash equivalents—beginning of period
     
 
3,126
 
     
 
827
 
      
    
Cash and cash equivalents—end of period
     
$
1,451
 
     
$
2,587
 
      
    
 
See accompanying notes

5

Table of Contents
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
1.    BASIS OF PRESENTATION
 
Jos. A. Bank Clothiers, Inc. (the “Company”) is a nationwide retailer of classic men’s clothing through conventional retail stores and catalog/internet direct marketing. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
 
The results of operations for the interim periods presented in this report are not necessarily indicative of results to be expected for the fiscal year. In the opinion of management, the information contained herein reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. These adjustments are of a normal recurring nature.
 
Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the Company’s February 2, 2002 Annual Report on Form 10-K.
 
2.    SIGNIFICANT ACCOUNTING POLICIES
 
Inventories are stated at the lower of first-in, first-out, cost or market. The Company capitalizes into inventory certain warehousing and delivery costs associated with shipping its merchandise to the point of sale.
 
Costs related to mail order catalogs and promotional materials are included in prepaid expenses and other current assets. These costs are amortized over the expected periods of benefit, not to exceed six months.
 
The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards (SFAS) No. 109—Accounting for Income Taxes. This standard requires, among other things, recognition of future tax benefits, measured by enacted tax rates attributable to deductible temporary differences between financial statement and income tax basis of assets and liabilities and to tax net operating loss carryforwards, to the extent that realization of such benefits is more likely than not.
 
Reclassifications—Certain reclassifications have been made to the August 4, 2001 financial statements in order to conform with the August 3, 2002 presentation.

6

Table of Contents
 
3.    WORKING CAPITAL
 
The net change in operating working capital is composed of the following (in thousands):
 
    
Six Months Ended
  
    
August 4,
2001
     <