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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, 2007

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) HOURLY 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)

 

 

 

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Casual Male Retail Group 401(k) Hourly Savings Plan

Financial Statements and Supplemental Schedule

Year ended December 31, 2007

Table of Contents

 

Report of Independent Registered Public Accounting Firm		1
Statements of Net Assets Available for Benefits as of December 31, 2007 and 2006		2
Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 2007		3
Notes to Financial Statements		4-10
Supplemental Schedule		11
Schedule H, Line 4i – Schedule of Assets Held for Investment Purposes at End of Year (December 31, 2007)		12

 

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Report of Independent Registered Public Accounting Firm

To Plan Administrator and Participants

Casual Male Retail Group, Inc.

401(k) Hourly Savings Plan

We have audited the accompanying statement of net assets available for benefits of the Casual Male Retail Group, Inc. 401 (k) Hourly Savings Plan as of December 31, 2007 and 2006, and the related statement of changes in net assets available for benefits for the year ended December 31, 2007. 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, 2007 and 2006 and the changes in its net assets available for benefits for the year ended December 31, 2007, in conformity with accounting principles generally accepted in the United States.

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, 2007) 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.

/s/ Mahoney Cohen & Company, CPA, P.C.

New York, NY

June 26, 2008

 

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Casual Male Retail Group, Inc. 401(k) Hourly Savings Plan

Statements of Net Assets Available for Benefits

December 31, 2007 and 2006

 

		December 31
		2007			2006
Assets
Investments, at fair value (Note 2 and 3) Participant loans receivable		$	13,385,139 307,233		$	13,414,124 301,624
Total investments at fair value			13,692,372			13,715,748
Employer contributions receivable			171,636			158,306
Net assets reflecting all investments fair value		$	13,864,008		$	13,874,054
Adjustment from fair value to contract value for fully benefit-responsive investment contracts			16,597			6,126
Net assets available for benefits		$	13,880,605		$	13,880,180

See accompanying notes to financial statements.

 

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Casual Male Retail Group, Inc. 401(k) Hourly Savings Plan

Statement of Changes in Net Assets Available for Benefits

Year Ended December 31, 2007

 

Additions
Net appreciation in fair value of investments (Note 3)		$	62,687
Interest and dividend income Transfers into the Plan (Note 1)			587,710 87,145
			737,542
Contributions:
Employee			534,710
Employer Rollover			311,533 28,370
			874,613
Total additions			1,612,155
Deductions
Benefits paid directly to participants			1,402,538
Transfers out of the Plan (Note 1) Administrative fees			190,492 18,700
Total deductions			1,611,730
Net increase			425
Net assets available for benefits at beginning of year			13,880,180
Net assets available for benefits at end of year		$	13,880,605

See accompanying notes to financial statements.

 

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Casual Male Retail Group, Inc. 401(k) Hourly Savings Plan

Notes to Financial Statements

Note 1- Description of the Plan

The following description of Casual Male Retail Group, Inc. 401(k) Hourly 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 eligible employees of the 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 January 1, 2007, a new custodian (Fidelity Investments) for the Plan was appointed and assets were transferred accordingly from Putnam Investments.

Eligibility

All regular, full-time (as defined in the Plan) employees, excluding salaried employees, of the Company who have completed one year 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 an hourly to salary status or vice versa. Assets transferred to the Casual Male Retail Group, Inc. 401(k) Salaried Savings Plan during the year ended December 31, 2007 were $190,492. Assets transferred from the Casual Male Retail Group Inc. 401(k) Salaried Savings Plan during the year ended December 31, 2007 were $87,145.

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.

Through December 31, 2007, the employer matching contribution was discretionary at the option of the Company’s Board of Directors. For the year ended December 31, 2007, the Company’s matching contribution was 50% up to the first 6% of compensation that a participant contributed to the Plan. Effective January 1, 2008, the Company adopted the Safe Harbor Matching provisions permitted under the Pension Protection Act of 2006 (See Note 8).

 

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Casual Male Retail Group, Inc. 401(k) Hourly 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 contributions, 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, 2007 and 2006, forfeited non-vested accounts totaled $6,888 and $2,360, 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. For the year ended, December 31, 2007, a participant was 100% vested after three years of credited service. Changes to the vesting provisions were adopted effective January 1, 2008 (See Note 8).

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 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 ten-year period. Other restrictions, as specified in the Plan agreement, may apply to a participant’s loan transaction. Interest rates range from 5% to 9.25% at December 31, 2007. Principal and interest is paid ratably through payroll deductions.

 

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Casual Male Retail Group, Inc. 401(k) Hourly 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 2007, certain administrative expenses were paid by the Company.

Payment of Benefits

On termination of service for any reason, a participant shall receive a lump-sum amount equal to the 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 stock are stated at fair value which equals the quoted market price on the last business day of the Plan year. The 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.

 

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Casual Male Retail Group, Inc. 401(k) Hourly Savings Plan

Notes to Financial Statements

Note 2- Summary of Significant Accounting Policies

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.

New Accounting Pronouncements

The FASB issued SFAS No. 157, Fair Value Measurements (“SFAS No. 157”). SFAS No. 157 provides a common definition of fair value to be applied to existing generally accepted accounting principals requiring the use of fair value measures, establishes a framework for measuring fair value and enhances disclosure about fair value measures under other accounting pronouncements, but does not change existing guidance as to whether or not an asset or liability is carried at fair value. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, and, as such, will be adopted by the Plan in 2008. Adoption of SFAS 157 is not expected to have a material impact to the Plan.

Payment of Benefits

Benefits are recorded when paid.

Note 3- Investments

During 2007, 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		$	203,150
Common Stock			(140,463	)
		$	62,687

Investments that represent 5% or more of the Plan’s net assets available for benefits are as follows:

 

		December 31,
		2007						2006
Fidelity Advisor Stable Value Fund		$	4,174,575		30.1	%
JP Morgan Equity Index			1,413,481		10.2	%
Fidelity Advisor Freedom 2010			1,335,704		9.6	%
Fidelity Advisor Freedom 2005			1,328,868		9.6	%
T Rowe Price Growth Stock			713,995		5.1	%
Putnam Stable Value Fund								$	4,823,442		34.8	%
Putnam S&P 500 Fund									1,506,362		10.8	%
Putnam Retirementready 2010									1,451,853		10.5	%
Putnam Retirementready Maturity									1,080,841		7.8	%
		$	8,966,623		64.6	%		$	8,862,498		63.9	%

 

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Casual Male Retail Group, Inc. 401(k) Hourly Savings Plan

Notes to Financial Statements

Note 4- Investment Contract with Insurance Company

During 2007, the Plan entered into a benefit-responsive investment contract with Fidelity Investments (Fidelity). Fidelity 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.

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 Fidelity, 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.

 

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Casual Male Retail Group, Inc. 401(k) Hourly 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:		2007			2006
Based on actual earnings		4.85	%		4.69	%
Based on interest rate credited to participants		4.15	%		5.07	%

Note 5- Nonparticipant-Directed Investments

Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant-Directed investments are as follows:

Net Assets:

 

		December 31,
		2007			2006
Fidelity Advisor Stable Value Fund		$	5,488		$	—
Fidelity Advisor Freedom 2010 A			1,400			—
Putnam Stable Value Fund			—			2,360
		$	6,888		$	2,360

Change in Net Assets:

 

		Year End December 31,2007
Interest and dividend income		$	177
Forfeitures relating to current year			4,515
Distributions and withdrawals
Administrative Fees			(164	)
		$	4,528

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.

 

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Casual Male Retail Group, Inc. 401(k) Hourly 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- Subsequent Event

Effective January 1, 2008, the Plan approved and adopted the Safe Harbor Matching provisions permitted under the Pension Protection Act of 2006 and the following changes were made:

 

•

The Plan will allow for automatic enrollment. All eligible employees who have not elected to participate in the Plan upon their enrollment date will automatically be enrolled. Compensation for those employees will be reduced by 3% for each payroll period and the employer will make a pre-tax deferral contribution. Eligible employees may make an affirmative election not to have automatic enrollment. Unless an eligible employee affirmatively elects not to contribute, the pre-tax deferral will increase annually by 1% not to exceed 10%.

 

•

The Company will contribute a match equal to the sum of (i) 100% of the participant’s elective deferrals for the first 1% of compensation plus (ii) 50% of the participant’s elective deferrals for the next 5% of compensation.

 

•

The participant’s vesting with respect to the Company contribution will change from the current three-year straight-line vesting to a two-year cliff vesting. Participants, who joined the Plan during fiscal 2007, will be entitled to receive a partial vesting equal to 34% for their first year of completed service.

 

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Supplemental Schedule

 

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Casual Male Retail Group, Inc. 401(k) Hourly Savings Plan

EIN: 04-2623104/Plan Number: 005

Schedule H, Line 4i – Schedule of Assets Held For Investment Purposes at

End of Year

(December 31, 2007)

 

Identity of Issue, Borrower, Lessor, or Similar Party		Description of investment including maturity date, rate of interest, collateral, par, or maturity value		Shares/Units		Current Value
Commingled funds held through Fidelity Investments:
		* Fidelity Advisor Stable Value Fund(1)		4,191,172		$	4,174,575
Mutual funds held through Fidelity Investments:
		Cash-interest bearing * Fidelity Advisor Leveraged Company Stock Fund		—   9,345			1,188 358,002
		* Fidelity Advisor High Income Adv.		2,078			20,970
		* Fidelity Advisor Strategic Income		968			11,249
		* Fidelity Advisor Freedom 2010(2)		107,372			1,335,704
		* Fidelity Advisor Freedom 2020		15,337			211,038
		* Fidelity Advisor Freedom 2030		2,186			32,020
		* Fidelity Advisor Freedom 2040		2,869			43,242
		* Fidelity Advisor Freedom 2005		110,555			1,328,868
		* Fidelity Advisor Freedom 2015		38,290			482,070
		* Fidelity Advisor Freedom 2025		20,033			266,842
		* Fidelity Advisor Freedom 2035		568			7,864
		* Fidelity Advisor Freedom 2045		1,197			13,851
		* Fidelity Advisor Freedom 2050		883			10,194
		Federated Bond Fund		46,798			411,821
		Columbia Acorn USA		4,203			114,458
		First America Midcap Value		7,268			181,470
		Columbia Acorn International		13,724			595,896
		Columbia Small Cap Val II		3,603			48,498
		JP Morgan Equity Index		42,358			1,413,481
		Columbia Acorn A		15,528			448,294
		Goldman Sachs Large Cap		47,692			658,626
		Alliance Bernstein International Value T Rowe Price Growth Stock Fund		19,123 21,499			423,964 713,995
		*Casual Male Retail Group, Inc – Common Stock		14,857			76,959
*Participant loans		5.0% - 9.25%					307,233
						$	13,692,372

 

*	Indicates party-in-interest to the Plan.

(1)	Includes $5,488 of nonparticipant-directed, unallocated forfeitures for which historical cost approximates to current value.

(2)	Includes $1,400 of nonparticipant-directed unallocated forfeitures for when historical cost approximates to current value.

 

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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

 

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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.

 

June 30, 2008

 

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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) Hourly Savings Plan of Casual Male Retail Group, Inc. of our report dated June 26, 2008, with respect to the financial statements and schedules of the Casual Male Retail Group, Inc. 401(k) Hourly Savings Plan included in this Annual Report on (Form 11-K) for the year ended December 31, 2007.

/s/ Mahoney Cohen & Company, CPA, P.C

New York, New York

June 30, 2008

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) Hourly Saving Plan (the “Plan”) for the period ending December 31, 2007 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.

 

June 30, 2008