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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 21, 2003
0-15898
(Commission File Number)
______________________________
CASUAL MALE RETAIL GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 04-2623104
(State of Incorporation) (IRS Employer
Identification Number)
555 Turnpike Street, Canton, Massachusetts 02021
(Address of registrant's principal executive office)
(781) 828-9300
(Registrant's telephone number)
______________________________
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
Exhibit No. Description
99.1 Press Release announcing Casual Male Retail Group,
Inc.'s Second Quarter Fiscal 2004 Results.
ITEM 12. Results of Operations and Financial Condition.
On August 21, 2003, Casual Male Retail Group, Inc. (the "Company") issued
a press release announcing, among other things, results for the second quarter
of the Company's fiscal 2004. A copy of the press release is attached hereto
as Exhibit 99.1 and is incorporated by reference herein.
The Company's press release, in addition to containing results that are
determined in accordance with accounting principles generally accepted in the
United States of America, also contains pro forma financial information, as
if the Company operated its Casual Male business for the second quarter and six
months ended August 3, 2002. On May 14, 2002, during the second quarter of the
prior fiscal year, the Company completed the acquisition of substantially all
of the assets of Casual Male Corp. and certain of its subsidiaries for a
purchase price of approximately $170 million, plus the assumption of certain
operating liabilities. In view of the significance of the Casual Male
acquisition to the growth and future identity of the Company, pro forma
financial information for the Casual Male business is included in the
Company's press release.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CASUAL MALE RETAIL GROUP, INC.
By: /s/ Dennis R. Hernreich
---------------------------
Name: Dennis R. Hernreich
Title: Executive Vice President
and Chief Financial Officer
Date: August 21, 2003
For Information, Contact:
David A. Levin
President and Chief Executive Officer
Casual Male Retail Group, Inc.
(781) 828-9300
Dennis R. Hernreich
Executive Vice President, COO/CFO
Casual Male Retail Group, Inc.
(781) 828-9300
Jeff Unger
Vice President of Investor Relations
Casual Male Retail Group, Inc.
(561) 514-0115
CASUAL MALE RETAIL GROUP INC. ANNOUNCES SECOND QUARTER
FISCAL 2004 RESULTS
CANTON, MA (August 21, 2003) -- Casual Male Retail Group, Inc. (NASDAQ/NMS:
"CMRG"), retail brand operator of Casual Male Big & Tall, Levi's(r)/Dockers(r)
Outlet by Designs, EcKo Unltd.(r) outlet stores and the George Foreman Signature
Collection and Comfort Zone, today announced its operating results for the
second quarter and six months ended August 2, 2003. The results include the
results of the Company's acquisition of its Casual Male business since May 14,
2002.
On a consolidated basis, for the second quarter of fiscal 2004, the Company
reported net income of approximately $0.7 million, or $0.02 per diluted share,
as compared to a net loss of $12.9 million, or $0.80 per diluted share, for
the second quarter of fiscal 2003. For the six months ended August 2, 2003,
the Company reported a net loss of $2.0 million, or $0.06 per diluted share,
as compared to a net loss of $14.7 million, or $0.95 per diluted share for the
comparable period last year. The prior year results for the second quarter
and six months ended August 3, 2002 include restructuring charges totaling
$11.1 million related to its Levi's(r)/Dockers(r) business.
The Company's Casual Male business reported operating income for the second
quarter of fiscal 2004 of approximately $4.2 million. On a pro forma basis,
as if the Company owned Casual Male for the full second quarter of the prior
year, the Casual Male business had operating income of approximately $3.5
million. For the six months ended August 2, 2003, the Casual Male business
reported operating income of approximately $6.7 million as compared to $3.1
million on a pro forma basis for the corresponding period of the prior year.
This improvement in operating income was achieved primarily through lower
operating expenses notwithstanding a decrease in total sales from the Casual
Male business on a pro forma basis of 3.0% and 5.0% for the three and six
months ended August 2, 2003. Similarly on a pro forma basis, the Casual Male
business reported comparable store sales decreases of 2.3% for the second
quarter of fiscal 2004 and 3.6% for the six months ended August 2, 2003.
The Company's Other Branded Apparel business, which includes its
Levi's(r)/Dockers(r) outlet stores and its growing EcKo Unltd.(r) outlet stores,
reported an operating loss for the second quarter of fiscal 2004 of $0.5
million as compared to an operating loss of $9.6 million for the second
quarter of fiscal 2003. For the six months ended August 2, 2003, the
Company's Other Branded Apparel business reported an operating loss of $2.8
million as compared to an operating loss of $11.7 million for the six months
ended August 3, 2002. As mentioned, the prior year results for the three
and six months ended August 3, 2002 include $11.1 million in restructuring
charges of which $7.3 million relate to the continuing operations of the
Company's Other Branded Apparel. The remaining $3.8 million of the charge
was for stores which subsequently have closed and therefore is reflected
within discontinued operations on the Company's results of operations for
the three and six months ended August 3, 2002.
The table below reflects actual results from continuing operations for the
Company for the second quarter and six months ended August 2, 2003 and is
compared to pro forma results for the second quarter and six months ended
August 3, 2002 assuming that the Company's Casual Male acquisition had
occurred on February 3, 2002. The Company has included in the table the
historical operating results of the Casual Male business prior to the
Company's acquisition. These results have been prepared on a consistent
basis with the pro forma information presented in the Company's recent
Form 10-K and Form 10-Q filings. The prior year pro forma results do not
include any adjustments for the expected annual $20 to $25 million of cost
savings and synergies for periods after the prior year. The operating
results of the Company's Other Branded Apparel business on a continuing
basis, exclusive of discontinued operations, which includes its EcKo Unltd.(r)
outlet stores, primarily reflects the operating loss associated with the
Levi's(r)/Dockers(r) outlet stores which the Company is in the process of
exiting:
Operating Results by Business Segment, exclusive of discontinued operations
For the three months ended: August 2, 2003 August 3, 2002
(pro-forma)
(in millions) Other Other
Branded Branded
Casual Male Apparel Combined Casual Male Apparel Combined
Business business Company business business Company
------------------------------ ------------------------------
Sales $ 78.9 $ 33.1 $ 112.0 $ 81.3 $ 36.6 $ 117.9
Gross margin, net of
occupancy costs 32.2 7.9 40.1 34.2 7.5 41.7
Gross margin rate 40.8% 23.9% 35.8% 42.1% 20.5% 35.4%
Selling, general and
administrative 26.4 7.8 34.2 28.8 8.6 37.4
Provision for
impairment of
assets, store closings
and severance - - - - 7.3 7.3
Depreciation
and amortization 1.6 0.6 2.2 1.9 1.2 3.1
-------- -------- -------- ------- -------- --------
Operating
income (loss) $ 4.2 $ (0.5) $ 3.7 $ 3.5 $ (9.6) $ (6.1)
======== ======== ======== ======= ======== ========
For the six months ended: August 2, 2003 August 3, 2002
(pro-forma)
(in millions) Other Other
Branded Branded
Casual Male Apparel Combined Casual Male Apparel Combined
Business business Company business business Company
------------------------------ ------------------------------
Sales $ 115.7 $ 59.8 $ 211.5 $ 159.7 $ 68.6 $ 228.3
Gross margin, net of
occupancy costs 62.4 13.1 75.5 67.4 14.8 82.2
Gross margin rate 41.1% 21.9% 35.7 42.2% 21.6% 36.0%
Selling, general and
administrative 52.6 14.7 67.3 60.1 16.8 76.9
Provision for
impairment of
assets, store closings
and severance - - - - 7.3 7.3
Depreciation
and amortization 3.1 1.2 4.3 4.2 2.4 6.6
-------- -------- -------- ------- -------- -------
Operating
income (loss) $ 6.7 $ (2.8) $ 3.9 $ 3.1 $ (11.7) $ (8.6)
======== ======== ======== ======= ======== =======
Dennis R. Hernreich, Executive Vice-President and Chief Financial Officer
commented, "Although Casual Male's sales performance in the first half of this
year was below original expectations, our strong gross margin rate and
significant cost reductions continue to positively improve the operating
profitability in the Casual Male business. With improvement in top-line
performance, the Casual Male operating margins should improve further by
leveraging upon its reduced expense base. In addition, the operating
performance of our Other Branded Businesses has improved significantly from
year ago levels resulting in an $8.9 million improvement in operating results on
a continuing basis with a corresponding drop in sales on a year to date basis of
12.8% as compared to the prior year."
David A. Levin, President and Chief Executive Officer of Casual Male Retail
Group, Inc., added, "We are enthusiastic about the prospects for improved sales
performance during the second half of the year as many of our new merchandising
initiatives will be evident in the stores, particularly during the fourth
quarter. In the second half of this year, Casual Male's major merchandising
initiatives will be introduced to the stores, such as, the new key item
merchandising strategy, extended sizes focused toward the tall consumer, and the
expansion of our young men's assortments. We also are in the process of gearing
up for next spring's launch of Comfort Zone by George Foreman and the George
Foreman Signature Collection lines of big and tall apparel, which will be
exclusive to our Casual Male stores, catalog, and internet. Lastly, our
Levis/Dockers outlet stores continue to experience sales declines although we
are pleased with its operating performance, and the EcKo outlet stores continue
to perform extremely well and expect the chain to reach 22 stores by the fourth
quarter."
CMRG, the largest retailer of big and tall men's apparel, operates 476 Casual
Male Big & Tall stores, Casual Male e-commerce site, Casual Male catalog
business, 80 Levi's(r) Outlet by Designs and Dockers(r) Outlet by Designs
stores, 18 Ecko Unltd(r) outlet stores and the George Foreman Signature
Collection and Comfort Zone line of apparel. The Company is headquartered in
Canton, Massachusetts and its common stock is listed on the Nasdaq National
Market under the symbol "CMRG".
The discussion of forward-looking information requires management of the Company
to make certain estimates and assumptions regarding the Company's strategic
direction and the effect of such plans on the Company's financial results. The
Company's actual results and the implementation of its plans and operations may
differ materially from forward-looking statements made by the Company. The
Company encourages readers of forward-looking information concerning the Company
to refer to its prior filings with the Securities and Exchange Commission that
set forth certain risks and uncertainties that may have an impact on future
results and direction of the Company. The Company does not report on its
progress during a quarter until after the quarter has been completed and its
results have been appropriately disclosed.
(Tables to follow)
CASUAL MALE RETAIL GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
For the three months ended For the six months ended
8/2/2003 8/3/2002 8/2/2003 8/3/2002
Sales $ 112,034 $ 110,016 $ 211,500 $ 141,987
Cost of goods sold
including occupancy 71,915 71,922 136,013 96,703
--------- --------- --------- --------
Gross profit 40,119 38,094 75,487 45,284
Expenses:
Selling, general
and administrative 34,207 32,723 67,330 40,764
Provision for
impairment of assets,
store closings and
severance - 7,250 - 7,250
Depreciation and
amortization 2,206 2,801 4,268 4,062
------ ------ ------- ------
Total expenses 36,413 42,774 71,598 52,076
------ ------ ------- -------
Operating income
(loss) 3,706 (4,680) 3,889 (6,792)
Interest expense, net 2,976 2,706 5,861 3,060
------ ------- -------- -------
Income (loss) from continuing
operations before
minority interest and
income taxes 730 (7,386) (1,972) (9,852)
Minority interest (20) - (92) -
Provision for
income taxes - 1,053 - -
------- --------- -------- ---------
Net income (loss) from
continuing operations 750 (8,439) (1,880) (9,852)
------- --------- -------- ---------
Loss from discontinued
operations (92) (4,476) (217) (4,858)
-------- --------- -------- ---------
Net income (loss) $ 658 $(12,915) $(2,097) $(14,710)
========= ========= ======== =========
Net income (loss) per share
- - basic and diluted
Income (loss) from continuing
operations -basic and diluted $0.02 ($0.53) ($0.05) ($0.64)
Loss from discontinued
operations -basic and diluted ($0.00) ($0.28) ($0.01) ($0.32)
------- -------- -------- -------
Net income (loss)
- -basic and duluted $0.02 ($0.80) ($0.06) ($0.95)
Weighted-average number of common shares outstanding:
Basic 35,839 16,050 35,796 15,421
Diluted 36,891 16,050 35,796 15,421
CASUAL MALE RETAIL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
August 2, 2003 and February 1, 2003
(In thousands)
August 2, February 1,
2003 2003
ASSETS (unaudited)
----------- ----------
Cash and investments $ 4,322 $ 4,692
Inventories 100,910 103,222
Other current assets 14,122 9,689
Property and equipment, net 66,267 64,062
Goodwill and other intangibles 81,356 81,427
Other assets 4,045 3,853
--------- ---------
Total assets $ 271,022 $ 266,945
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses
and other liabilities $ 66,480 $ 68,285
Notes payable 50,314 55,579
Long-term debt, net of current portion 60,054 50,996
Minority interest 3,127 1,018
Stockholders' equity 91,047 91,067
Total liabilities ---------- ---------
and stockholders' equity $ 271,022 $ 266,945
========== =========