Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark one)
| x | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2006
or
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number 0-15898
CASUAL MALE RETAIL GROUP, INC. 401(K) SALARY SAVINGS PLAN
(Full title of the plan)
CASUAL MALE RETAIL GROUP, INC.
555 Turnpike Street
Canton, Massachusetts 02021
(Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office)
Table of Contents
Casual Male Retail Group, Inc. 401(k) Salaried Savings Plan
Financial Statements and Supplemental Schedule
Year ended December 31, 2006
Table of Contents
Report of Independent Registered Public Accounting Firm
To Plan Administrator and Participants
Casual Male Retail Group, Inc.
401(k) Salaried Savings Plan
We have audited the accompanying statement of net assets available for benefits of the Casual Male Retail Group, Inc. 401 (k) Salaried Savings Plan as of December 31, 2006 and 2005, and the related statement of changes in net assets available for benefits for the year ended December 31, 2006. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2006 and 2005, and the changes in its net assets available for benefits for the year ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets held for investment purposes at end of year (December 31, 2006) is presented for the purpose of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. This supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
New York, NY
June 18, 2007
Table of Contents
Casual Male Retail Group, Inc. 401(k) Salaried Savings Plan
Statements of Net Assets Available for Benefits
December 31, 2006 and 2005
| December 31, | ||||||
| 2006 | 2005 | |||||
| Assets |
||||||
| Investments, at fair value (Notes 2 and 3) |
$ | 26,223,826 | $ | 18,713,430 | ||
| Participant loans receivable |
631,611 | 576,991 | ||||
| Total Investments |
26,855,437 | 19,290,421 | ||||
| Employer contributions receivable |
539,609 | 508,016 | ||||
| Total Assets |
27,395,046 | 19,798,437 | ||||
| Liabilities | ||||||
| Excess deferred compensation contributions (Note 8) |
100,900 | 58,103 | ||||
| Net assets reflecting all investments at fair value |
27,294,146 | 19,740,334 | ||||
| Adjustment from fair value to contract value for fully benefit-responsive investment contracts |
5,829 | 1,305 | ||||
| Net assets available for benefits |
$ | 27,299,975 | $ | 19,741,639 | ||
See accompanying notes to Financial Statements.
2
Table of Contents
Casual Male Retail Group, Inc. 401(k) Salaried Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2006
| Additions |
|||
| Net appreciation in fair value of investments (Note 3) |
$ | 1,518,814 | |
| Interest and dividend income |
1,247,750 | ||
| Transfers into the Plan (Note 1) |
107,122 | ||
| 2,873,686 | |||
| Contributions: |
|||
| Employee |
1,611,339 | ||
| Employer |
539,609 | ||
| Rollovers |
158,450 | ||
| 2,309,398 | |||
| Transfer from merged employee benefit plan (Note 1) |
5,130,252 | ||
| Total additions |
10,313,336 | ||
| Deductions | |||
| Benefits paid directly to participants |
2,439,826 | ||
| Administrative Fees |
46,361 | ||
| Transfers out of the Plan (Note 1) |
268,813 | ||
| Total deductions |
2,755,000 | ||
| Net increase |
7,558,336 | ||
| Net assets available for benefits at beginning of year |
19,741,639 | ||
| Net assets available for benefits at end of year |
$ | 27,299,975 | |
See accompanying notes to Financial Statements.
3
Table of Contents
Casual Male Retail Group, Inc. 401(k) Salaried Savings Plan
Notes to Financial Statements
Note 1- Description of the Plan
The following description of Casual Male Retail Group, Inc. 401(k) Salaried Savings Plan (the “Plan”) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.
General
The Plan is a defined contribution plan covering certain eligible employees of Casual Male Retail Group, Inc. (the “Company”). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Effective July 1, 2006, the Rochester Big and Tall Profit Sharing Plan was merged with this Plan and the Company’s 401(k) Hourly Savings Plan. Accordingly, the assets of $5,130,252, for the salaried participants who met the eligibility requirements, as defined below, were transferred into the Plan.
Eligibility
All regular, full-time (as defined in the Plan) salaried employees of the Company who have completed six months of employment and are at least 21 years of age are eligible to participate in the Plan. After completing age and service requirements, the employee can enter the Plan on the first day of any subsequent month.
As participants change positions at the Company, they may change from hourly to salary status or vice versa. Assets transferred to the Casual Male Retail Group, Inc. 401(k) Hourly Savings Plan during the year ended December 31, 2006 were $268,813. Assets transferred from the Casual Male Retail Group, Inc. 401(k) Hourly Savings Plan during the year ended December 31, 2006 were $107,122.
Contributions
Each year, participants may contribute from 1% to 80% of pretax annual compensation as defined in the Plan, subject to the provisions of ERISA. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans.
The employer matching contribution is discretionary at the option of the Company’s Board of Directors. For the year ended December 31, 2006, the Company’s matching contribution was 50% up to the first 6% of compensation that a participant contributed to the Plan.
4
Table of Contents
Casual Male Retail Group, Inc. 401(k) Salaried Savings Plan
Notes to Financial Statements
Note 1 - Description of the Plan (continued)
Participants’ Accounts
Each participant’s account is credited with the participant’s contribution, the Company’s matching contribution, plan earnings and an allocation of plan expenses. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s account.
Forfeitures
Amounts forfeited under the Plan are used to reduce future employer contributions and administrative expenses. At December 31, 2006 and 2005, forfeited non-vested accounts totaled $30,983 and $15,099, respectively.
Vesting
Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company contribution portion of their accounts plus actual earnings thereon is based on years of continuous service. A participant is 100% vested after three years of credited service.
Investment Options
Upon enrollment in the Plan, a participant may direct their elective contribution and Company contributions into various investment options offered by the Plan.
Participants may change their investment options at any time.
Participant Loans
Participants may borrow the lesser of $50,000 reduced by the individual’s highest outstanding loan balance during the preceding twelve months or 50% of the individual’s vested balance with a minimum of $1,000 per loan. Loan transactions are treated as a transfer to/(from) the investment fund and from/(to) the Participant Loans fund. Loans are secured by the balance in the participant’s account. Loan terms range from one to five years unless the loan is used to purchase a primary residence, in which case the loan may be repaid over a fifteen-year period. Other restrictions, as specified in the Plan agreement, may apply to a participant’s loan transaction. Interest rates range from 5.0% to 10.5% at December 31, 2006. Principal and interest is paid ratably through payroll deductions.
5
Table of Contents
Casual Male Retail Group, Inc. 401(k) Salaried Savings Plan
Notes to Financial Statements
Note 1 - Description of the Plan (continued)
Plan Expenses
In accordance with the Plan, all administrative expenses may be paid out of the Plan unless paid by the Company. During 2006, certain administrative expenses were paid by the Company.
Payment of Benefits
On termination of service for any reason, a participant may receive a lump sum amount equal to the vested value of the participant’s vested interest in his or her account, if the vested interest is $5,000 or less. If the participant’s vested interest is over $5,000, the participant may elect to receive payment in a lump-sum amount or installments paid over a certain number of years selected by the participant.
Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of a plan termination, participants will become 100% vested in their accounts.
Note 2 - Summary of Significant Accounting Policies
Basis of Accounting
The financial statements have been prepared on the accrual basis of accounting.
Investment Valuation
Investments are stated at fair value. Mutual funds and common stocks are stated at fair value which equals the quoted market price on the last business day of the Plan year. The fair value of units in the common collective trust fund is the net fair value of the underlying assets as determined generally by using commercial quotation services. Participant loans are valued at their outstanding balances, which approximate fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
6
Table of Contents
Casual Male Retail Group, Inc. 401(k) Salaried Savings Plan
Notes to Financial Statements
Note 2 - Summary of Significant Accounting Policies (continued)
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Adoption of New Pronouncement
As described in Financial Accounting Standards Board Staff Position, FSP AAD INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (the FSP), investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the plan. As required by the FSP, the Statement of Net Assets Available for Benefits presents the fair value of the investment contracts as well as the adjustment of the fully benefit-responsive investment contracts from fair value to contract value. The Statement of Changes in Net Assets Available for Benefits is prepared on a contract value basis. The Plan has adopted the financial statement presentation and disclosure requirements effective December 31, 2006.
Payment of Benefits
Benefits are recorded when paid.
7
Table of Contents
Casual Male Retail Group, Inc. 401(k) Salaried Savings Plan
Notes to Financial Statements
Note 3 - Investments
During 2006, the Plan’s investments (including investments purchased, sold as well as held during the year) appreciated in fair value as follows:
| Net Appreciation in Fair Value of Investments | |||
| Mutual funds |
$ | 764,908 | |
| Common collective trusts |
426,485 | ||
| Common stock |
327,421 | ||
| $ | 1,518,814 | ||
Investments that represent 5% or more of the Plan’s net assets available for benefits is as follows:
| December 31, | ||||||||||||
| 2006 | 2005 | |||||||||||
| Putnam Stable Value Fund |
$ | 4,589,478 | 16.8 | % | $ | 4,662,221 | 23.6 | % | ||||
| Putnam S&P 500 Fund |
3,026,806 | 11.1 | % | 2,987,527 | 15.1 | % | ||||||
| American Funds Growth Fund of America Class |
2,886,226 | 10.6 | % | 1,617,559 | 8.2 | % | ||||||
| Putnam RetirementReady 2010 |
2,552,814 | 9.4 | % | — | — | |||||||
| PIMCO Total Return Adm |
— | — | 1,220,039 | 6.2 | % | |||||||
| Putnam RetirementReady Maturity |
2,521,026 | 9.2 | % | — | — | |||||||
| The George Putnam Fund of Boston |
— | — | 2,799,100 | 14.2 | % | |||||||
| $ | 15,576,350 | 57.1 | % | $ | 13,286,446 | 67.3 | % | |||||
8
Table of Contents
Casual Male Retail Group, Inc. 401(k) Salaried Savings Plan
Notes to Financial Statements
Note 4 - Investment Contract with Insurance Company
The Plan entered into a benefit-responsive investment contract with Putnam Investments (Putnam). Putnam maintains the contributions in a general account. The account is credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses. The guaranteed investment contract issuer is contractually obligated to repay the principal and a specified interest rate that is guaranteed to the Plan.
As described in Note 2, because the guaranteed investment contract is fully benefit-responsive, contract value is the relevant measurement attribute for that portion of the net assets available for benefits attributable to the guaranteed investment contract. Contract value, as reported to the Plan by Putnam, represents contributions made under the contract, plus earnings, less participant withdrawals and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value.
There are no reserves against contract value for credit risk of the contract issuer or otherwise. The crediting interest rate is based on a formula agreed upon with the issuer, but it may not be less than zero percent. Such interest rates are reviewed on a quarterly basis for resetting.
Certain events limit the ability of the Plan to transact at contract value with the issuer. Such events include the following: (1) amendments to the Plan documents (including complete or partial plan termination or merger with another plan), (2) changes to the Plan’s prohibition on competing investment options or deletion of equity wash provisions, (3) bankruptcy of the plan sponsor or other plan sponsor events (for example, divestitures or spin-offs of a subsidiary) that cause a significant withdrawal from the Plan, or (4) the failure of the trust to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA. The Plan administrator does not believe that the occurrence of any such event, which would limit the Plan’s ability to transact at contract value with participants, is probable.
9
Table of Contents
Casual Male Retail Group, Inc. 401(k) Salaried Savings Plan
Notes to Financial Statements
Note 4 - Investment Contract with Insurance Company (continued)
The guaranteed investment contract does not permit the insurance company to terminate the agreement prior to the scheduled maturity date.
| Average yields: |
2006 | 2005 | ||||
| Based on actual earnings |
4.69 | % | 4.72 | % | ||
| Based on interest rate credited to participants |
5.07 | % | 5.19 | % |
Note 5 - Nonparticipant-Directed Investments
Information about the net assets and the significant components of the change in net assets relating to the nonparticipant-directed investments is as follows:
| December 31, | ||||||
| Net assets: |
2006 | 2005 | ||||
| Putnam Stable Value Fund |
$ | 30,983 | $ | 15,099 | ||
| Changes in net assets: |
For the Year Ended December 31, 2006 |
|||
| Interest and dividend income |
$ | 670 | ||
| Forfeitures relating to current year distributions and withdrawals |
33,506 | |||
| Administrative expenses |
(18,292 | ) | ||
| $ | 15,884 | |||
Note 6 - Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits.
10
Table of Contents
Casual Male Retail Group, Inc. 401(k) Salaried Savings Plan
Notes to Financial Statements
Note 7 - Income Tax Status
The underlying non-standardized prototype plan has received an opinion letter from the Internal Revenue Service (IRS) dated August 9, 2002 stating that the form of the plan is qualified under Section 401 of the Internal Revenue Code and, therefore, the related trust is tax-exempt. In accordance with Revenue Procedure 2002-6 and Announcement 2001-77, the Plan Sponsor has determined that it is eligible to and has chosen to rely on the current IRS prototype plan opinion letter. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan has been amended since receiving the determination letter. However, the plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax-exempt.
Note 8 - Excess Deferred Compensation Contributions
Excess contributions to the Plan for the year ended December 31, 2006 were $123,253. The Company returned $100,900 of the excess contribution to the participants on March 15, 2007 and $22,353 on March 29, 2007. The $100,900 is recorded as a deduction from contributions for the year ended December 31, 2006 and the $22,353 will be shown as distributions for the year ended December 31, 2007.
Excess contributions to the Plan for the year ended December 31, 2005 were $167,391. The Company returned $58,103 of the excess contribution to the participants on March 14, 2006 and $109,288 on October 30, 2006.
Note 9 - Subsequent Event
Effective January 1, 2007, the assets of the Plan were transferred to Fidelity Investments.
11
Table of Contents
Casual Male Retail Group, Inc. 401(k) Salaried Savings Plan
EIN: 04-2623104/Plan Number: 004
Schedule H, Line 4i – Schedule of Assets Held For Investment Purposes at End of Year
(December 31, 2006)
| Identity of Issue, |
Description of investment including |
Shares/Units | Current Value | ||||
| Commingled funds held through Putnam Investments: |
|||||||
| *Putnam Stable Value Fund (1) |
4,589,478 | $ | 4,589,478 | ||||
| *Putnam S&P 500 Fund |
81,783 | 3,026,806 | |||||
| Mutual funds held through Putnam Investments: |
|||||||
| American Funds Growth Fund of America Class |
88,944 | 2,886,226 | |||||
| Pimco Total Return Adm |
127,979 | 1,328,422 | |||||
| Columbia Acorn Fund |
30,468 | 884,174 | |||||
| Dodge & Cox Stock Fund |
5,589 | 857,760 | |||||
| Hotchkis & Wiley Lg Cap Value Fund |
33,919 | 855,089 | |||||
| Janus Mid Cap Value Fund |
30,667 | 730,192 | |||||
| Dodge & Cox International Fund |
15,861 | 692,482 | |||||
| Artisan Mid Cap Fund |
21,906 | 667,272 | |||||
| Columbia Small Cap Value Fund II |
35,450 | 484,242 | |||||
| MSIF Small company Growth Fund |
34,597 | 436,959 | |||||
| Victory Diversified Stock |
23,373 | 421,881 | |||||
| *Putnam Retirementready Maturity |
44,105 | 2,521,026 | |||||
| *Putnam International Equity Fund |
35,762 | 1,120,411 | |||||
| *Putnam Retirementready 2010 Fund |
43,984 | 2,552,814 | |||||
| *Putnam Retirementready 2015 Fund |
9,416 | 625,717 | |||||
| *Putnam Retirementready 2020 Fund |
5,963 | 402,821 | |||||
| *Putnam Retirementready 2030 Fund |
4,286 | 308,741 | |||||
| *Putnam Retirementready 2025 Fund |
3,436 | 257,299 | |||||
| *Putnam Retirementready 2040 Fund |
1,186 | 90,223 | |||||
| *Putnam Retirementready 2045 Fund |
521 | 40,041 | |||||
| *Putnam Retirementready 2035 Fund |
483 | 35,401 | |||||
| *Putnam Retirementready 2050 Fund ClassA |
4 | 240 | |||||
| *Casual Male Retail Group, Inc – Common Stock |
31,719 | 413,938 | |||||
| * Participant loans |
5.0% - 10.5% |
631,611 | |||||
| $ | 26,861,266 | ||||||
| * | Indicates party-in-interest to the Plan. |
| (1) | Includes $30,983 of nonparticipant-directed, unallocated forfeitures for which historical cost approximates to current value. |
12
Table of Contents
Index to Exhibits
| 23.1 | Consent of Independent Registered Public Accounting Firm | |
| 32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes –Oxley Act of 2002 | |
Table of Contents
Signatures
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
| Casual Male Retail Group, Inc. 401(k) Salary Savings plan | ||
| By: | /s/ Dennis R. Hernreich | |
| Dennis R. Hernreich, Executive Vice President, Chief | ||
| Financial Officer and Chief Operating Officer of Casual Male Retail Group, Inc., the Plan Administrator | ||
June 26, 2007
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (Form S-8, Reg. No. 333-112218) pertaining to the Casual Male Retail Group, Inc. 401(k) Salaried Savings Plan of Casual Male Retail Group, Inc of our report dated June 18, 2007, with respect to the financial statements and schedule of the Casual Male Retail Group, Inc. 401(k) Salaried Savings Plan included in this Annual Report on Form 11-K for the year ended December 31, 2006.
/s/ Mahoney Cohen & Company, CPA, P.C
New York, New York
June 26, 2007
Exhibit 32.1
Certification Pursuant to
18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906
Of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report on Form 11-K of the Casual Male Retail Group, Inc. 401(k) Salary Saving Plan (the “Plan”) for the period ending December 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dennis R. Hernreich, Executive Vice President, Chief Financial Officer and Chief Operating Officer of Casual Male Retail Group, Inc., the Plan Administrator, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and |
| (2) | The information contained in the Report fairly presents, in all material respects, the net assets available for benefits, and changes in net assets available for benefits of the Plan. |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Casual Male Retail Group, Inc. and will be retained by Casual Male Retail Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
| /s/ DENNIS R. HERNREICH |
| Dennis R. Hernreich Executive Vice President, Chief Financial Officer, Chief Operating Officer of Casual Male Retail Group, Inc., the Plan Administrator |
June 26, 2007