<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended August 1, 1998 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from_________ to__________
Commission file number 0-20036
THE MEN'S WEARHOUSE, INC.
(Exact Name of Registrant as Specified in its Charter)
TEXAS 74-1790172
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
5803 GLENMONT DRIVE
HOUSTON, TEXAS 77081-1701
(Address of Principal Executive Offices) (Zip Code)
(713) 592-7200
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]. No [ ].
The number of shares of Common Stock, par value $.01 per share, of the
Registrant outstanding at September 8, 1998 was 33,279,352.
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<PAGE> 2
REPORT INDEX
<TABLE>
<CAPTION>
PART AND ITEM NO. PAGE NO.
- ----------------- --------
<S> <C> <C>
PART I - Financial Information
Item 1 - Financial Statements
General Information........................................................................... 1
Consolidated Balance Sheets as of August 2, 1997 (unaudited), August 1, 1998 (unaudited)
and January 31, 1998........................................................................ 2
Consolidated Statements of Earnings for the Three and Six Months Ended August 2, 1997
(unaudited) and August 1, 1998 (unaudited).................................................. 3
Consolidated Statements of Cash Flows for the Six Months Ended August 2, 1997
(unaudited) and August 1, 1998 (unaudited).................................................. 4
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations............................................................................... 7
PART II - Other Information
Item 4 - Submission of Matters to a Vote of Security Holders.................................. 11
Item 6 - Exhibits and Reports on Form 8-K..................................................... 12
</TABLE>
<PAGE> 3
PART I, FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
GENERAL INFORMATION
The Consolidated Financial Statements herein have been prepared by the
Company without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission (the "SEC"). As applicable under such regulations,
certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. The Company believes that the presentation and
disclosures herein are adequate to make the information not misleading, and the
financial statements reflect all elimination entries and normal adjustments
which are necessary for a fair statement of the results for the three and six
months ended August 2, 1997 and August 1, 1998.
Operating results for interim periods are not necessarily indicative of the
results for full years. It is suggested that these consolidated financial
statements be read in conjunction with the consolidated financial statements for
the year ended January 31, 1998 and the related notes thereto included in the
Company's 1997 Annual Report on Form 10-K filed with the SEC.
1
<PAGE> 4
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
August 2, August 1, January 31,
1997 1998 1998
--------- --------- ---------
(Unaudited) (Unaudited) (Audited)
ASSETS
<S> <C> <C> <C>
CURRENT ASSETS:
Cash $ 27,490 $ 6,568 $ 59,883
Inventories 205,106 244,481 203,390
Other current assets 10,301 13,234 14,297
--------- --------- ---------
Total current assets 242,897 264,283 277,570
--------- --------- ---------
PROPERTY AND EQUIPMENT, NET 75,800 92,851 81,266
OTHER ASSETS 19,860 26,194 20,579
--------- --------- ---------
Total assets $ 338,557 $ 383,328 $ 379,415
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 50,392 $ 55,236 $ 51,817
Accrued expenses 21,004 23,875 33,408
Income taxes payable 2,397 2,461 9,765
Other current liabilities 181 -- 19
--------- --------- ---------
Total current liabilities 73,974 81,572 95,009
LONG-TERM DEBT 57,500 57,500 57,500
OTHER LIABILITIES 7,199 7,008 6,858
SHAREHOLDERS' EQUITY:
Common Stock 220 222 221
Capital in excess of par 109,317 112,171 109,969
Retained earnings 90,688 124,931 110,199
--------- --------- ---------
200,225 237,324 220,389
Less:
Treasury stock, at cost (341) (76) (341)
--------- --------- ---------
Total shareholders' equity 199,884 237,248 220,048
--------- --------- ---------
Total liabilities and shareholders' equity $ 338,557 $ 383,328 $ 379,415
========= ========= =========
</TABLE>
See Notes to Consolidated Financial Statements
2
<PAGE> 5
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
-------------------------- -------------------------
August 2, August 1, August 2, August 1,
1997 1998 1997 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Sales $ 133,935 $ 162,858 $ 264,556 $ 333,708
Cost of goods sold, including buying and
occupancy costs 82,744 98,966 164,932 205,971
---------- ---------- ---------- ----------
Gross Margin 51,191 63,892 99,624 127,737
Selling, general and administrative expenses 41,374 49,577 82,445 101,589
---------- ---------- ---------- ----------
Operating income 9,817 14,315 17,179 26,148
Interest expense, net 699 672 1,226 1,071
---------- ---------- ---------- ----------
Earnings before income taxes 9,118 13,643 15,953 25,077
Provision for income taxes 3,762 5,629 6,581 10,345
---------- ---------- ---------- ----------
Net earnings $ 5,356 $ 8,014 $ 9,372 $ 14,732
========== ========== ========== ==========
Net earnings per share:
Basic $ 0.17 $ 0.24 $ 0.30 $ 0.44
========== ========== ========== ==========
Diluted $ 0.17 $ 0.23 $ 0.30 $ 0.43
========== ========== ========== ==========
Weighted average shares outstanding:
Basic 31,715 33,236 31,595 33,201
========== ========== ========== ==========
Diluted 34,769 36,583 34,584 36,478
========== ========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE> 6
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
<TABLE>
<CAPTION>
For the Six Months Ended
------------------------
August 2, August 1,
1997 1998
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 9,372 $ 14,732
Adjustments to reconcile net earnings to
net cash used in operating activities:
Depreciation and amortization 7,800 10,128
Increase in inventories (40,966) (41,091)
(Increase) decrease in other assets (841) 1,063
Increase (decrease) in accounts payable and accrued expenses 9,418 (4,598)
Decrease in income taxes payable (4,730) (6,747)
Increase (decrease) in other liabilities (183) 134
-------- --------
Net cash used in operating activities (20,130) (26,379)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (11,880) (20,708)
Investment in trademark, tradenames and other intangibles (3,470) (6,620)
-------- --------
Net cash used in investing activities (15,350) (27,328)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock 29,961 --
Principal payments under capital lease obligations (261) (19)
Payments of deferred loan costs (197) --
Exercise of stock options 710 1,094
Option shares relinquished for tax obligations (1,356) (683)
-------- --------
Net cash provided by financing activities 28,857 392
-------- --------
DECREASE IN CASH (6,623) (53,315)
CASH, beginning of period 34,113 59,883
-------- --------
CASH, end of period $ 27,490 $ 6,568
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
4
<PAGE> 7
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Significant Accounting Policies--
The Consolidated Financial Statements include the accounts of The Men's
Wearhouse, Inc. and its subsidiaries (the "Company"). There have been no
significant changes in the accounting policies of the Company during the periods
presented. For a description of these policies, see Note 1 of Notes to
Consolidated Financial Statements in the Company's Annual Report on Form 10-K
for the year ended January 31, 1998.
2. Earnings per Share--
The following table reconciles the earnings and shares used in the basic and
diluted EPS computations (in thousands, except per share amounts):
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
-------------------------- ------------------------
AUGUST 2, AUGUST 1, AUGUST 2, AUGUST 1,
1997 1998 1997 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Basic EPS:
Net earnings $ 5,356 $ 8,014 $ 9,372 $ 14,732
========= ========= ========= =========
Weighted average number of common
shares outstanding 31,715 33,236 31,595 33,201
========= ========= ========= =========
Basic EPS $ 0.17 $ 0.24 $ 0.30 $ 0.44
========= ========= ========= =========
Diluted EPS:
Net earnings $ 5,356 $ 8,014 $ 9,372 $ 14,732
Interest on Notes, net of taxes 486 486 971 971
--------- --------- --------- ---------
As adjusted $ 5,842 $ 8,500 $ 10,343 $ 15,703
========= ========= ========= =========
Weighted average number of common
shares outstanding 31,715 33,236 31,595 33,201
Assumed exercise of stock options 526 819 461 749
Assumed conversion of Notes 2,528 2,528 2,528 2,528
--------- --------- --------- ---------
As adjusted 34,769 36,583 34,584 36,478
========= ========= ========= =========
Diluted EPS $ 0.17 $ 0.23 $ 0.30 $ 0.43
========= ========= ========= =========
</TABLE>
5
<PAGE> 8
3. Supplemental Financial Information --
Supplemental Cash Flow information (in thousands):
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
----------------------------------
AUGUST 2, 1997 AUGUST 1, 1998
-------------- --------------
<S> <C> <C>
Cash paid during the period for:
Interest $ 1,803 $ 1,628
============= =============
Income taxes $ 11,311 $ 17,073
============= =============
Non-cash investing and financing activities:
Additional paid in capital resulting from
tax benefit recognized upon exercise of
stock options $ 1,067 $ 577
============= =============
Treasury stock issued to employee stock
ownership plan $ 1,000 $ 1,500
============= =============
</TABLE>
4. Common Stock--
On June 19, 1998, the Company effected a three-for-two common stock split
by paying a 50% stock dividend to stockholders of record as of June 12, 1998.
All share and per share information included in the accompanying consolidated
financial statements and related notes have been restated to reflect the stock
split.
6
<PAGE> 9
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
For supplemental information, it is suggested that "Management's
Discussion and Analysis of Financial Condition and Results of Operations" be
read in conjunction with the corresponding section included in the Company's
Annual Report on Form 10-K for the year ended January 31, 1998. References
herein to years are to the Company's 52-week or 53-week fiscal year which ends
on the Saturday nearest January 31 in the following calendar year. For example,
references to "1998" mean the fiscal year ending January 30, 1999.
In large part, changes in net sales and operating results are impacted
by the number of stores operating during the fiscal period. The following table
presents information with respect to stores in operation during each of the
respective fiscal periods.
<TABLE>
<CAPTION>
FISCAL YEAR
THREE MONTHS ENDED SIX MONTHS ENDED ENDED
---------------------------- ------------------------------- -------------
AUGUST 2, AUGUST 1, AUGUST 2, AUGUST 1, JANUARY 31,
1997 1998 1997 1998 1998
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Stores open at beginning of period 359 402 345 396 345
Opened 11 13 26 18 50
Acquired 6 -- 6 4 6
Closed (2) (1) (3) (4) (5)
----------- ----------- ----------- ----------- ----------
Stores open at end of period 374 414 374 414 396
=========== =========== =========== =========== ==========
</TABLE>
RESULTS OF OPERATIONS
Three Months Ended August 2, 1997 and August 1, 1998
The Company's net sales increased $28.9 million, or 21.6%, to $162.9 million
for the quarter ended August 1, 1998 due primarily to sales resulting from the
increased number of stores and increased sales at existing stores. Comparable
store sales (which are calculated by excluding the net sales of a store for any
month of one period if the store was not open throughout the same month of the
prior period) increased 10.6% from the same prior year quarter. The comparable
store sales increase for the second quarter of 1998 does not include sales from
stores acquired in the first quarter of 1998. These acquired stores accounted
for $4.0 million of the sales increase.
Gross margin increased to $63.9 million in the second quarter of 1998 which
was a 24.8% increase from the same prior year quarter. As a percentage of sales,
gross margin increased from 38.2% in the second quarter of 1997 to 39.2% in the
second quarter of 1998. This increase in gross margin predominantly resulted
from a decrease in occupancy, product and alteration costs as a percentage of
sales in traditional Men's Wearhouse stores. These gross margin improvements
were offset, in part, by the lower product margin realized at the Value Priced
Clothing Division ("VPC").
Selling, general and administrative ("SG&A") expenses decreased as a
percentage of sales from 30.9% for the quarter ended August 2, 1997 to 30.4% for
the quarter ended August 1, 1998, while such expenses increased by $8.2 million
to $49.6 million. On an absolute dollar basis, the principal components of SG&A
expenses increased primarily due to the Company's growth. The decrease in SG&A
expenses as a percentage of sales was related primarily to the impact of
traditional store comparable sales increases and the operations of VPC stores,
which have lower operating costs than traditional stores. Advertising expense
decreased from 6.6% to 5.9% of net sales, store salaries decreased from 12.5% to
12.4% of net sales and other SG&A expenses increased from 11.8% to 12.1% of net
sales.
Interest expense, net of interest income, remained constant at $0.7 million
in the second quarters of 1997 and 1998. Weighted average borrowings outstanding
decreased $0.2 million from the prior year to $57.5 million in the second
quarter
7
<PAGE> 10
of 1998, while the weighted average interest rate on outstanding indebtedness
was constant at 6.3%. Interest expense associated with the 5 1/4% Convertible
Subordinated Notes was offset by interest income of $0.3 million for the second
quarter 1997 and $0.2 million for the second quarter of 1998 resulting from the
investment of excess cash.
The Company's effective income tax rate for the quarter ended August 1,
1998 was 41.3% which was unchanged from the same prior year quarter. The
effective tax rate was higher than the statutory federal rate of 35% primarily
due to the effect of state income taxes and the nondeductibility of a portion of
meal and entertainment expenses.
Six Months Ended August 2, 1997 and August 1, 1998
The Company's net sales increased $69.2 million, or 26.1%, to $333.7 million
for the six months ended August 1, 1998 due primarily to sales resulting from
the increased number of stores and increased sales at existing stores.
Comparable store sales increased 12.9% from the same prior year period. The
comparable store sales increase for the first six months of 1998 does not
include sales from stores acquired in the first quarter of 1998. These acquired
stores accounted for $ 7.5 million of the sales increase.
Gross margin increased to $127.7 million in the first half of 1998 which was
a 28.2% increase from the same prior year period. As a percentage of sales,
gross margin increased from 37.7% in the first six months of 1997 to 38.3% in
the first six months of 1998. This increase in gross margin predominantly
resulted from a decrease in product, occupancy and alteration costs as a
percentage of sales in traditional Men's Wearhouse stores. The gross margin
improvement was offset, in part, by the lower product margin realized at VPC.
Selling, general and administrative expenses decreased as a percentage of
sales from 31.2% for the six months ended August 2, 1997 to 30.4% for the six
months ended August 1, 1998, while such expenses increased by $19.1 million to
$101.6 million. On an absolute dollar basis, the principal components of SG&A
expenses increased primarily due to the Company's growth. The decrease in SG&A
expenses as a percentage of sales was related primarily to the impact of
traditional store comparable sales increases and the operations of VPC stores,
which have lower operating costs than traditional stores. Advertising expense
decreased from 6.5% to 6.1% of net sales, store salaries decreased from 12.5% to
12.0% of net sales and other SG&A expenses increased from 12.1% to 12.3% of net
sales.
Interest expense, net of interest income, decreased from $1.2 million in the
first six months of 1997 to $1.1 million in the first six months of 1998.
Weighted average borrowings outstanding decreased $0.3 million from the prior
year to $57.5 million in the first half of 1998, while the weighted average
interest rate on outstanding indebtedness increased from 6.2% to 6.4%. This
increase was due to higher commitment fees related to increased borrowing
availability and other costs associated with the new revolving credit agreement
entered into during the second quarter of 1997. Interest expense associated with
the 5 1/4% Convertible Subordinated Notes was offset by interest income of $0.6
million for the first six months of 1997 and $0.8 million for the first six
months of 1998 resulting from the investment of excess cash.
The Company's effective income tax rate for the six months ended August 1,
1998 was 41.3% and remained unchanged from the same prior year period. The
effective tax rate was higher than the statutory federal rate of 35% primarily
due to the effect of state income taxes and the nondeductibility of a portion of
meal and entertainment expenses.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $20.1 million in the first six
months of 1997 and $26.4 million in the first six months of 1998. These amounts
primarily represent net earnings plus depreciation and amortization, offset by
increases in inventories and decreases in payables. Inventories increased $41.0
million and $41.1 million for the six months ended August 2, 1997 and August 1,
1998, respectively. The inventory increases primarily relate to seasonal
inventory buildup and the addition of inventory for new and/or acquired stores
and stores expected to be opened in the following quarter.
Working capital was $182.7 million at August 1, 1998, which is a slight
increase from $182.6 million at January 31, 1998 and up from $168.9 million at
August 2, 1997. Historically, the Company's working capital has been at its
lowest level in January and February, and has increased through November as
inventory buildup is financed with both short-term and long-term borrowings in
preparation for the fourth quarter selling season. The relatively modest change
in working capital from
8
<PAGE> 11
January 31, 1998 to August 1, 1998 is principally due to the use of available
cash balances at year end to meet working capital and other requirements.
Cash used in investing activities was $15.4 million and $27.3 million in the
first six months of 1997 and 1998, respectively. For the six months ended August
1, 1998, cash used in investing activities was primarily comprised of capital
expenditures related to the enterprise-wide project to upgrade the Company's
information technology infrastructure, new stores opened during the year or
under construction at the end of the first two quarters and the construction of
the new distribution center. In addition, $6.6 million of cash was used in the
first half of 1998 to purchase trademarks and other intangible assets associated
with an acquisition.
In July 1997, the Company issued 1,000,000 shares of Common Stock for net
proceeds of $30.0 million. The Company used the proceeds from such offering to
fund its continued expansion and upgrade its information technology
infrastructure. The remaining cash has been invested in short-term securities
and will be used to fund the Company's continued expansion and to upgrade its
information technology, with any remaining proceeds used to minimize
indebtedness under the Company's credit agreement.
On August 14, 1998, the Company gave notice to the holders of its
outstanding 5 1/4% Convertible Subordinated Notes (the "Notes") that the Company
will exercise its provisional call rights to redeem the Notes on September 14,
1998. Any Notes not previously converted into Common Stock will be redeemed at
103.5% of the face amount. Interest for the period from September 1, 1998 (the
last interest payment date) to September 14, 1998 will also be paid on the Notes
upon redemption, however any Notes that convert into Common Stock after
September 1, 1998 will not be paid interest. The Notes are convertible at any
time on or before September 10, 1998, at the option of the holder, at $22.75
into shares of Common Stock. Funds required for the redemption of Notes and the
payment of interest are available under the Company's Credit Agreement.
In June 1997, the Company entered into a new revolving credit agreement with
its bank group (the "Credit Agreement") which replaced a previously existing
credit facility. The Credit Agreement provides for borrowing of up to $125
million through April 30, 2002. As of August 1, 1998, there was no indebtedness
outstanding under the Credit Agreement.
Advances under the Credit Agreement bear interest at a rate per annum equal
to, at the Company's option, (i) the agent's prime rate or (ii) the reserve
adjusted LIBOR rate plus an interest rate margin varying between .875% to
1.375%. The Credit Agreement provides for fees applicable to unused commitments
of .125% to .275%.
The Credit Agreement contains certain restrictive and financial covenants,
including the requirement to maintain a minimum amount of Consolidated Net Worth
(as defined). The Company is also required to maintain certain debt to cash
flow, cash flow coverage and current ratios and must keep its average store
inventories below certain specified amounts. In addition, the Credit Agreement
limits additional indebtedness, creation of liens, Restrictive Payments (as
defined) and Investments (as defined). The Credit Agreement also prohibits
payment of cash dividends on the Common Stock of the Company. The Credit
Agreement permits, with certain limitations, the Company to merge or consolidate
with another company, sell or dispose of its property and make acquisitions. The
Company is in compliance with the covenants in the Credit Agreement.
The Company anticipates that its existing cash and cash flow from
operations, supplemented by borrowings under the Credit Agreement, will be
sufficient to fund its planned store openings, other capital expenditures and
operating cash requirements for at least the next 12 months.
In connection with the Company's direct sourcing program, the Company may
enter into purchase commitments that are denominated in a foreign currency. The
Company generally enters into forward exchange contracts to reduce the risk of
currency fluctuations related to such commitments. The majority of the forward
exchange contracts are with one financial institution. Therefore, the Company is
exposed to credit risk in the event of nonperformance by this party. However,
due to the creditworthiness of this major financial institution, full
performance is anticipated. The Company may also be exposed to market risk as a
result of changes in foreign exchange rates. This market risk should be
substantially offset by changes in the valuation of the underlying transactions
being hedged.
9
<PAGE> 12
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement No.
133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"), which requires that an entity recognize all derivative instruments as
either assets or liabilities on its balance sheet at their fair value. Gains and
losses resulting from changes in the fair value of derivatives are recorded each
period in current earnings or comprehensive earnings, depending on whether a
derivative is designated as part of a hedge transaction, and, if it is, the type
of hedge transaction. Gains and losses on derivative instruments reported in
comprehensive earnings will be reclassified as earnings in the period in which
earnings are affected by the hedged item. SFAS 133 is effective for fiscal years
beginning after June 15, 1999. The Company is currently evaluating the impact,
if any, of SFAS 133 on its financial position and results of operations.
YEAR 2000
In mid-1997, the Company commenced an enterprise-wide project to
upgrade its information technology, which is designed to increase the efficiency
and the future productivity of its operations. In completing these
modifications, the Company expects to achieve Year 2000 date conversion
compliance. Capital expenditures related to the project are anticipated to be
between approximately $12.0 million and $20.0 million. The amount of
expenditures related specifically to Year 2000 date conversion compliance are
not separable from this amount. The Company expects that all of its business
systems will be Year 2000 compliant by mid-1999. The Company does not anticipate
that the cost will have a material effect on the Company's consolidated
financial position or results of operations in any given year. However, no
assurances can be given that the Company will be able to completely identify or
address all Year 2000 compliance issues, or that third parties with whom the
Company does business will not experience system failures as a result of the
Year 2000 issue, nor can the Company fully predict the consequences of
noncompliance.
FORWARD-LOOKING STATEMENTS
Certain statements made herein and in other public filings and releases by
the Company contain "forward-looking" information (as defined in the Private
Securities Litigation Reform Act of 1995) that involve risk and uncertainty.
These forward-looking statements may include, but are not limited to, future
sales, earnings, margins, costs, number and costs of store openings, demand for
men's clothing, market trends in the retail men's clothing business, currency
fluctuations, inflation and various economic and business trends.
Forward-looking statements may be made by management orally or in writing,
including but not limited to, this Management's Discussion and Analysis of
Financial Condition and Results of Operations section and other sections of the
Company's filings with the Securities and Exchange Commission under the
Securities Exchange Act of 1934 and the Securities Act of 1933.
Actual results and trends in the future may differ materially depending on a
variety of factors including, but not limited to, domestic economic activity and
inflation, the Company's successful execution of internal operating plans and
new store and new market expansion plans, performance issues with key suppliers,
foreign currency fluctuations, government export and import policies and legal
proceedings. Future results will also be dependent upon the ability of the
Company to continue to identify and complete successful expansions and
penetrations into existing and new markets and its ability to integrate such
expansions with the Company's existing operations.
10
<PAGE> 13
PART II, OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO
A VOTE OF SECURITY HOLDERS
On June 24, 1998, the Company held its annual meeting of stockholders. At
the meeting, the stockholders voted on the following matters:
1. To elect nine directors of the Company to hold office until the next
Annual Meeting of Shareholders or until their respective successors are
duly elected and qualified.
2. To consider and act on a proposal to adopt the Company's Employee Stock
Discount Plan.
3. To ratify the appointment by the Board of Directors of the firm Deloitte
& Touche LLP as independent auditors for the Company for 1998.
All proposals received the affirmative vote required for approval. The
number of votes cast for, against and withheld, as well as the number of
abstentions, as to each matter were as follows (adjusted to reflect the 50%
stock dividend to shareholders of record as of June 12, 1998):
<TABLE>
<CAPTION>
Proposal
- -------- Shares Voted For Shares Withheld
---------------- ---------------
<S> <C> <C>
1. Election of Directors
George Zimmer 31,658,164 349,811
David H. Edwab 31,660,144 347,831
Richard E. Goldman 31,660,276 347,699
Robert E. Zimmer 31,661,590 346,385
James E. Zimmer 31,661,590 346,385
Harry M. Levy 31,661,590 346,385
Rinaldo Brutoco 31,661,590 346,385
Michael L. Ray 31,661,590 346,385
Sheldon I. Stein 31,661,590 346,385
<CAPTION>
Affirmative Votes Negative Votes Abstentions
----------------- -------------- -----------
<S> <C> <C> <C>
2. Employee Stock
Discount Plan 31,953,549 42,294 12,132
3. Ratification of
Auditors 31,990,107 12,717 5,151
</TABLE>
11
<PAGE> 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT INDEX
------- -------------
<S> <C>
27.1 -- Financial Data Schedule (Filed herewith).
</TABLE>
(b) Reports on Form 8-K.
None.
12
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant, The Men's Wearhouse, Inc., has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
THE MEN'S WEARHOUSE, INC.
Dated: September 11, 1998
By /s/ DAVID H. EDWAB
------------------
David H. Edwab
President
By /s/ GARY G. CKODRE
------------------
Gary G. Ckodre
Vice President - Finance and Principal Financial
and Accounting Officer
13
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT INDEX
------- -------------
<S> <C>
27.1 -- Financial Data Schedule (Filed herewith).
</TABLE>
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-30-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> AUG-01-1998
<CASH> 6,568
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 244,481
<CURRENT-ASSETS> 264,283
<PP&E> 153,111
<DEPRECIATION> 60,260
<TOTAL-ASSETS> 383,328
<CURRENT-LIABILITIES> 81,572
<BONDS> 57,500
0
0
<COMMON> 222
<OTHER-SE> 237,026
<TOTAL-LIABILITY-AND-EQUITY> 383,328
<SALES> 333,708
<TOTAL-REVENUES> 333,708
<CGS> 205,971
<TOTAL-COSTS> 205,971
<OTHER-EXPENSES> 101,589
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,071
<INCOME-PRETAX> 25,077
<INCOME-TAX> 10,345
<INCOME-CONTINUING> 14,732
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,732
<EPS-PRIMARY> 0.44
<EPS-DILUTED> 0.43
</TABLE>
