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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): March 25, 2004
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 Fourth Quarter and Fiscal 2003 Results.
ITEM 12. Results of Operations and Financial Condition.
On March 25, 2004, Casual Male Retail Group, Inc. (the "Company") issued
a press release announcing, among other things, results for the fourth
quarter and fiscal year ended January 31, 2004 ("fiscal 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 full fiscal year
which ended February 1, 2003. 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.
Further, the press release also contains earnings, and related earnings per
share, for the fourth quarter of fiscal 2003 and fiscal 2002 excluding
restructuring related charges and early debt retirement losses. These
measures are considered non-GAAP measures and accordingly the Company has
provided a reconciliation of the non-GAAP measure to Net Loss as reported for
both periods. The Company believes that the inclusion of such non-GAAP measure
is necessary to help investors identify the operating results of the company's
continuing business as compared to the prior fourth quarter. This information
also helps the investor gain a better understanding of our core operating
results and future prospects.
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: March 25, 2004
For Information, Contact:
Jeff Unger
Vice President of Investor Relations
Casual Male Retail Group, Inc.
(561) 514-0115
Andrew Bard
Weber Shandwick
(212) 445-8368
CASUAL MALE RETAIL GROUP INC.
REPORTS FOURTH QUARTER AND FULL-YEAR FISCAL 2003 RESULTS
- Significant Progress Reported on Company Turn Around Strategy
- Losses Significantly Reduced from Year Ago --
- - 1st Quarter 2004 Comparable Sales Trending Positive by 10%
CANTON, MA (March 25, 2004) -- Casual Male Retail Group, Inc. (NASDAQ/NMS:
"CMRG"), retail brand operator of Casual Male Big & Tall, and the exclusive
retailer of the Comfort Zone by George Foreman(tm), GF sport by George
Foreman(tm) and Signature Collection by George Foreman(tm), today announced
its operating results for the fourth quarter and fiscal year ended January
31, 2004 ("fiscal 2003").
For the fourth quarter of fiscal 2003, the Company reported a net loss of
$8.8 million, or $0.25 per share, compared to a net loss of $23.8 million,
or $0.67 per diluted share in the fourth quarter of fiscal 2002. The
results for the fourth quarter of fiscal 2003 include $15.8 million of
costs associated primarily with the early retirement of long-term debt and
discontinued operations of the Levi's(r)/Dockers(r) business. The results for
the fourth quarter of the prior year include approximately $30.2 million in
charges recorded in connection with the Company's decision to exit its
Levi's(r)/Dockers(r) and Candies(r) businesses and the write down of certain
tax assets.
"Almost two years into our company turnaround strategy, we've positioned the
business to significantly benefit from our new merchandising and marketing
programs. We expect the benefits of the past 22 months accomplishments,
focused in the four core areas of merchandising, technology, cost controls
and marketing, to provide positive momentum during 2004. Our greatest
success with marketing being the creation of our new George Foreman line,"
said David Levin, President and CEO, "A highly fragmented marketplace
combined with a rapidly growing big and tall population has created
opportunity for Casual Male to further increase market share. We have clearly
capitalized on this opportunity in 2003 and look forward to continuing our
commitment to deliver excellent products and services to our customers while
also providing maximum return to our shareholders by leveraging our highly
efficient operating structure in 2004."
For fiscal 2003, the Company reported a net loss of $12.1 million, or $0.34 per
share, compared to a net loss of $38.8 million, or $1.54 per share in fiscal
2002. The results for fiscal 2003 include $16.5 million of costs associated
primarily with the early retirement of long-term debt and discontinued
operations of the Levi's(r)/Dockers(r) business. The results for the fiscal
2002 include approximately $41.3 million in charges recorded in connection with
the Company's decision to exit its Levi's(r)/Dockers(r) and Candies(r)
businesses and the write down of certain tax assets.
Dennis Hernreich, COO/CFO stated, "The earnings for the fourth quarter, after
exclusion of restructuring related charges and early debt retirement losses
were approximately $0.11 per diluted share, which was flat to last year's
fourth quarter. At the same time, 2003 was a very critical year in terms of
establishing a lean operating base and a strong balance sheet. After the sale
of the convertible notes used to refinance Casual Male's balance sheet and
repay high cost debt, the Company is in a very strong position to benefit
from its merchandising and marketing efforts".
As previously reported, the Casual Male business reported comparable store
sales increase of 2.4% for the fourth quarter of fiscal 2003 and a decrease
of 1.3% for fiscal 2002.
"While we will not be reporting 1st Quarter sales until May and there still
remains six weeks left to the first quarter, the sales performance for the
first seven weeks have been exceeding our expectations, with a comparable
sales increase of approximately +10.0% even with less traffic than a year
ago. The launch of the national advertising campaign featuring George
Foreman and the Comfort Zone by George Foreman(tm) line of clothing started
on March 16, 2004, and therefore, much of the sales improvement we are
currently seeing has more to do with the many new merchandising initiatives,
such as young men's apparel, chain wide suit separates, size extensions, key
items, and the Comfort Zone by George Forman(tm) line of clothing that we
introduced in the Casual Male stores over the past few quarters. As a
result of these merchandising initiatives customer conversion rates are
trending significantly higher than a year ago. We actually anticipate
seeing the customer traffic improvements related to the George Foreman brand
marketing campaign during the second half of the year, so while we're
excited with our current successes, we look forward to continued improvement
as we begin to fully realize the benefits and full potential of the Foreman
partnership," stated Levin.
Operating Results by Business Segment
The table below reflects actual results from continuing operations on a segment
basis for the Company for the three months and fiscal year ended January 31,
2004 compared to the actual results from continuing operations for the three
months ended February 1, 2003. The results from continuing operations for
full fiscal year ended February 1, 2003 are 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 accompanying 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. The operating results of the Company's Other Branded
Apparel business includes its Ecko Unltd.(r) outlet stores and excludes
discontinued operations from closed stores.
For the three months ended: January 31, 2004 February 1, 2003
(actual) (actual)
(in millions) Other Other
Branded Branded
Casual Male Apparel Combined Casual Male Apparel Combined
Business business Company business business Company
(1)
------------------------------ ------------------------------
Sales $ 94.5 $ 32.4 $ 126.9 $ 94.8 $ 29.2 $ 124.0
Gross margin, net of
occupancy costs 40.0 8.3 48.3 40.9 (0.5) 40.4
Gross margin rate 42.3% 25.6% 38.1% 43.1% - 32.6%
Selling, general and
administrative 29.4 7.6 37.0 27.9 6.0 33.9
Provision for impairment
of assets, store
closings and
severance - (0.6) (0.6) - 5.1 5.1
Depreciation
and amortization 1.8 0.7 2.5 2.8 1.0 3.8
Operating -------- ------- --------- ------- ------- ------
income (loss) $ 8.8 $ 0.6 $ 9.4 $ 10.2 $(12.6) $ (2.4)
======== ======= ========= ======= ======= ======
(1) includes $12.3 million of charges associated with the exit of
Levi's(r)/Dockers(r) business
For the fiscal year ended: January 31, 2004 February 1, 2003
(actual) (pro forma)
(in millions) Other Other
Branded Branded
Casual Male Apparel Combined Casual Male Apparel Combined
Business business Company business business Company
(1)
------------------------------ ------------------------------
Sales $ 319.2 $ 110.3 $ 429.5 $ 329.2 $ 113.9 $ 443.1
Gross margin, net of
occupancy costs 132.5 28.7 161.2 140.1 19.3 159.4
Gross margin rate 41.5% 26.0% 37.5% 42.6% 16.9% 36.0%
Selling, general and
administrative 109.3 27.5 136.8 116.0 27.4 143.4
Provision for impairment
of assets, store
closings and severance - (0.6) (0.6) - 10.7 10.7
Depreciation and
amortization 6.7 2.4 9.1 8.5 3.5 12.0
Operating income ------- -------- ------- ------- -------- -------
(loss) $ 16.5 $ (0.6) $ 15.9 $ 15.6 $ (22.3) $ (6.7)
======= ========= ======= ======= ========= =======
(1) includes $18.0 million of charges associated with the exit of
Levi's(r)/Dockers(r) business
In addition to the historical financial measures prepared in accordance with
generally accepted accounting principles (GAAP), we presented pro forma results
for fiscal 2002. Further, the Company refers to above earnings per share of
$0.11 for the fourth quarter of fiscal 2003 and fiscal 2002, which excludes
certain charges. These earnings per share amounts were calculated assuming a
normalized tax basis, which reflects an effective tax rate of 35% on pre-tax
earnings. These measures are considered non-GAAP measures. Pro forma
information reflects the operating results of the Casual Male business assuming
the acquisition had occurred on February 3, 2002. The non-GAAP earnings per
share of $0.11 for the fourth quarter of fiscal 2003 and fiscal 2002, which is
reconciled below, was provided to help the investor identify the operating
results of the Company's continuing business as compared to the prior fourth
quarter. 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.
The following table reconciles the above referenced "earnings for the fourth
quarter, after exclusion of restructuring related charges and early debt
retirement losses of approximately $0.11 per diluted share."
For the fourth quarter ended: January 31, 2004 February 1, 2003
--------------- ----------------
(in millions, except per share amounts)
Net loss, as reported $ (8.8) $ (23.8)
Adjustments:
Restructuring charges (income) (0.6) 30.2
Early retirement of long-term debt charges 13.7 --
Discontinued operations for 25 stores closed
during fiscal 2003 (2.1) --
------------- --------------
Adjusted pre-tax income $ 6.4 $ 6.5
Adjusted net income, assuming normalized ---------- --------------
tax rate $ 4.1 $ 4.2
============ ==============
Earnings per share, as adjusted for above
charges on a diluted basis $ 0.11 $ 0.11
============= ==============
Weighted average number of common
shares o/s- diluted 36.5 36.7
CMRG, the largest retailer of big and tall men's apparel, operates 484
Casual Male Big & Tall stores, Casual Male e-commerce site, Casual Male
catalog business, 58 Levi's(r) Outlet by Designs and Dockers(r) Outlet by
Designs tores, 23 Ecko Unltd(r) outlet and retail stores located throughout
the United States and Puerto Rico. 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 its fiscal 2003 earnings results. The conference call will
broadcast live today on Thursday, March 25, 2004 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)
Three months ended Twelve months ended
January 31, February 1, January 31, February 1,
2004 2003 2004 2003
(fiscal 2003) (fiscal 2002) (fiscal 2003) (fiscal 2002)
-------------------------- -------------------------
Sales $126,911 $123,949 $429,524 $356,566
Cost of goods sold
including occupancy 78,589 83,511 268,332 234,539
________ ________ ________ ________
Gross profit 48,322 40,438 161,192 122,027
Expenses:
Selling, general and
administrative 37,029 33,970 136,846 106,470
Provision (income)for
restructuring, store closings
and impairment of assets, (646) 5,042 (646) 10,747
Depreciation and
amortization 2,519 3,767 9,070 9,498
_______ ______ _______ ______
Total expenses 38,902 42,779 145,270 126,715
_______ ______ _______ ______
Operating income (loss) 9,420 (2,341) 15,922 (4,688)
Other expenses, principally
debt reduction costs 13,688 - 14,113 -
Interest expense, net 2,193 2,851 11,189 9,081
_______ ________ _______ ______
Loss before minority
interest and income taxes (6,461) (5,192) (9,380) (13,769)
Minority interest 225 76 280 207
Provision for income taxes - 7,978 - 7,978
Loss) from ________ _______ ________ _________
continuing operations $(6,686) $(13,246) $(9,660) $(21,954)
Loss from discontinued
operations (2,075) (10,520) (2,401) (16,846)
________ ________ ________ _________
Net loss $(8,761) $(23,766) $(12,061) $(38,800)
======== ======== ======== ==========
Net loss per share basic and diluted:
Loss from continuing
operations -basic and diluted ($0.19) ($0.37) ($0.27) ($0.87)
Loss from discontinued
operations -basic and diluted ($0.06) $0.30 ($0.07) ($0.67)
--------- -------- -------- ---------
Net loss ($0.25) ($0.67) ($0.34) ($1.54)
Weighted-average number of
common shares outstanding:
Basic 35,240 35,446 35,702 25,117
Diluted 35,240 35,446 35,702 25,117
CASUAL MALE RETAIL GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
January 31, 2004 and February 1, 2003
(In thousands)
January 31, February 1,
2004 2003
----------------------------
ASSETS
Cash and investments $ 4,179 $ 4,692
Inventories 98,673 103,222
Other current assets 9,963 9,689
Property and equipment, net 68,345 64,062
Other assets 91,582 85,280
--------- ----------
Total assets $ 272,742 $ 266,945
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses
and other liabilities $ 62,100 $ 68,285
Notes payable 3,623 55,579
Long-term debt, net of current portion 122,374 50,996
Minority interest 3,804 1,018
Stockholders' equity 80,841 91,067
--------- ----------
Total liabilities and stockholders' equity $ 272,742 $ 266,945
========= ==========
###