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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): November 20, 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 Third Quarter Fiscal 2004 Results.
ITEM 12. Results of Operations and Financial Condition.
On November 20, 2003, Casual Male Retail Group, Inc. (the "Company") issued
a press release announcing, among other things, results for the third quarter
and nine months ended November 1, 2003. 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 nine months ended
November 2, 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: November 20, 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 THIRD QUARTER
FISCAL 2004 RESULTS
CANTON, MA (November 20, 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
third quarter and nine months ended November 1, 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 third quarter of fiscal 2004, the Company
reported a net loss of approximately $1.2 million, or $0.03 per diluted
share, as compared to a net loss of $0.3 million, or $0.01 per diluted share,
for the third quarter of fiscal 2003. For the nine months ended November 1,
2003, the Company reported a net loss of $3.3 million, or $0.09 per diluted
share, as compared to a net loss of $15.0 million, or $0.69 per diluted share
for the comparable period last year. The prior year results for the nine
months ended November 2, 2002 include restructuring charges totaling
$11.1 million related to its Levi's(r)/Dockers(r) business. Assuming a
normalized tax rate of 35% for fiscal 2004, the net loss for the three and
nine months ended November 1, 2003 would be $0.02 loss per diluted share
and $0.06 loss per diluted share, respectively.
The Company's Casual Male business reported operating income for the third
quarter of fiscal 2004 of approximately $1.3 million as compared to
operating income of $2.4 million for the third quarter of the fiscal 2003.
This decrease was primarily the result of a decrease in total sales for the
quarter of 2.3% and also due to an increase in occupancy costs for the
Casual Male stores. In addition, the Company recorded charges of
approximately $0.4 million in the third quarter of fiscal 2004 related to
the early termination of a portion of its long- term debt. For the nine
months ended November 1, 2003, the Casual Male business reported operating
income of approximately $8.0 million as compared to $5.4 million on a
pro forma basis for the corresponding period of the prior year. The
improvement in operating income on a year to date basis was achieved
primarily through lower operating expenses notwithstanding a decrease in
total sales from the Casual Male business on a pro forma basis of 4.1% for
the nine months ended November 1, 2003. Similarly on a pro forma basis, the
Casual Male business reported comparable store sales decreases of 1.1% for
the third quarter of fiscal 2004 and 2.8% for the nine months ended
November 1, 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 operating income for the third quarter of fiscal 2004 of $0.9
million as compared to operating income of $0.4 million for the third
quarter of fiscal 2003. For the nine months ended November 1, 2003, the
Company's Other Branded Apparel business reported an operating loss of
$1.9 million as compared to an operating loss of $11.3 million for the
nine months ended November 2, 2002. The results of the Ecko Unltd(r) joint
venture generated approximately 6% of the Company's total sales for the
third quarter this year compared to approximately 1.5% in last year's
third quarter. Furthermore, the Ecko Unltd(r) joint venture profitability
is helping to improve the operating income performance of the Company's
Other Branded Apparel business. As mentioned above, the prior year results
for the nine months ended November 2, 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 closed and therefore is
reflected within discontinued operations on the Company's results of
operations for the nine months ended November 2, 2002.
The table below reflects actual results from continuing operations for the
Company for the three and nine months ended November 1, 2003 compared to the
actual results from continuing operations for the three months ended
November 2, 2002. The results from continuing operations for the nine months
ended November 2, 2002 is presented on a pro forma basis assuming that the
Company's Casual Male acquisition had occurred on February 3, 2002 (whereas
the results from continuing operations reflected in the Consolidated
Statements of Operations are presented on an actual basis reflecting
results of Casual Male subsequent to the acquisition date of May 14, 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. These results do not
reflect the effect of the recently announced private placement of the
Company's new 5% convertible notes due 2024. The operating results of the
Company's Other Branded Apparel business on a continuing basis, which includes
its Ecko Unltd.(r) outlet stores and excludes discontinued operations from
closed 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: November 1, 2003 November 2, 2002
(actual) (actual)
(in millions) Other Other
Branded Branded
Casual Male Apparel Combined Casual Male Apparel Combined
Business business Company business business Company
------------------------------ ------------------------------
Sales $ 73.0 $ 41.0 $ 114.0 $ 74.7 $ 44.3 $ 119.0
Gross margin, net of
occupancy costs 30.1 10.6 40.7 31.2 10.4 41.6
Gross margin rate 41.2% 25.9% 35.7% 41.8% 23.5% 35.0%
Selling, general and
Administrative 27.1 9.0 36.1 27.4 9.1 36.5
Depreciation
and amortization 1.7 0.7 2.4 1.4 0.9 2.3
Operating -------- ------- --------- ------- ------- ------
income (loss) $ 1.3 $ 0.9 $ 2.2 $ 2.4 $ 0.4 $ 2.8
======== ======= ========= ======= ======= ======
For the nine months ended: November 1, 2003 November 2, 2002
(actual) (pro forma)
(in millions) Other Other
Branded Branded
Casual Male Apparel Combined Casual Male Apparel Combined
Business business Company business business Company
------------------------------ -----------------------------
Sales $ 224.7 $ 100.8 $ 325.5 $ 234.4 $ 112.9 $ 347.3
Gross margin, net of
occupancy costs 92.5 23.7 116.2 99.2 25.2 124.4
Gross margin rate 41.2% 23.5% 35.7% 42.3% 22.3% 35.8%
Selling, general and
Administrative 79.6 23.8 103.4 88.1 25.8 113.9
Provision for impairment
of assets, store
closings and severance - - - - 7.3 7.3
Depreciation and
Amortization 4.9 1.8 6.7 5.7 3.4 9.1
Operating income ------- -------- ------- ------- -------- -------
(loss) $ 8.0 $ (1.9) $ 6.1 $ 5.4 $ (11.3) $ (5.9)
======= ========= ======= ======= ========= =======
In addition to the historical financial measures prepared in accordance with
generally accepted accounting principles (GAAP), we use the non-GAAP measures
of pro forma results and a normalized tax rate. Pro forma information reflects
the operating results of the Casual Male business assuming the acquisition had
occurred on February 3, 2002. Normalized tax basis reflects a 35% effective tax
rate on the pre-tax loss. We believe that the inclusion of such non-GAAP
measures helps investors to gain a better understanding of our core operating
results and future prospects, consistent with how management measures and
forecasts the Company's performance, especially when comparing such results to
previous periods or forecasts. However, the non-GAAP financial measures
included in this press release are not meant to be considered superior to or as
a substitute for results of operations prepared in accordance with GAAP.
CMRG, the largest retailer of big and tall men's apparel, operates 482 Casual
Male Big & Tall stores, Casual Male e-commerce site, Casual Male catalog
business, 57 Levi's(r) Outlet by Designs and Dockers(r) Outlet by Designs
stores, 22 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".
Investors are invited to listen to a broadcast of the Company's conference
call to discuss third quarter earnings results. The conference call will
broadcast live today on Thursday, November 20, 2003 at 11:00 a.m. Eastern
Time at www.casualmale.com/investor. The call will be archived online
within one hour after its completion. Participating in the call will be
Seymour Holtzman, Chairman; David Levin, President and Chief Executive
Officer and Dennis Hernreich, Executive Vice President, Chief Operating
Officer and Chief Financial Officer.
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 nine months ended
11/1/2003 11/2/2002 11/1/2003 11/2/2002
-------------------------- -------------------------
Sales $114,029 $119,037 $325,529 $261,024
Cost of goods sold
including occupancy 73,331 77,378 209,344 174,081
________ ________ ________ ________
Gross profit 40,698 41,659 116,185 86,943
Expenses:
Selling, general and
administrative 36,125 36,521 103,453 77,278
Provision for impairment of
assets, store closings and
severance - - - 7,250
Depreciation and
amortization 2,405 2,355 6,674 6,417
_______ ______ _______ ______
Total expenses 38,530 38,876 110,127 90,945
_______ ______ _______ ______
Operating income (loss) 2,168 2,783 6,058 (4,002)
Interest expense, net 3,135 3,170 8,996 6,229
_______ ________ _______ ______
Income (loss) from continuing
operations before minority
interest and income taxes (967) (387) (2,938) (10,231)
Minority interest 147 132 55 131
Provision for income taxes - - - -
Net income (loss) from ________ _______ ________ _________
continuing operations $(1,114) $(519) $(2,993) $(10,362)
Loss from discontinued
operations (90) 189 (307) (4,669)
________ ________ ________ _________
Net income (loss) $(1,204) $(330) $(3,300) $(15,031)
======== ======== ======== ==========
Net income (loss) per share
basic and diluted:
Income (loss) from continuing
operations -basic and diluted ($0.03) ($0.02) ($0.08) ($0.48)
Loss from discontinued
operations -basic and diluted ($0.00) $0.01 ($0.01) ($0.22)
--------- -------- -------- ---------
Net income (loss)
- -basic and duluted ($0.03) ($0.01) ($0.09) ($0.69)
Weighted-average number of
common shares outstanding:
Basic 35,992 33,984 35,855 21,633
Diluted 35,992 33,984 35,855 21,633
CASUAL MALE RETAIL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
November 1, 2003 and February 1, 2003
(In thousands)
November 1, February 1,
2003 2003
----------------------------
ASSETS (unaudited)
Cash and investments $ 6,169 $ 4,692
Inventories 119,891 103,222
Other current assets 10,472 9,689
Property and equipment, net 67,020 64,062
Goodwill and other intangibles 81,331 81,427
Other assets 4,276 3,853
--------- ----------
Total assets $ 289,159 $ 266,945
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses
and other liabilities $ 78,020 $ 68,285
Notes payable 49,474 55,579
Long-term debt, net of current portion 64,555 50,996
Minority interest 3,406 1,018
Stockholders' equity 93,704 91,067
--------- ----------
Total liabilities and stockholders' equity $ 289,159 $ 266,945
========= ==========
###