**Securities and Exchange Commission**

**Washington, D.C. 20549**

**Form 10-K**

| x     | **Annual  Report Pursuant To Section 13 or 15(d) of The Securities Exchange  Act of 1934 for the fiscal year ended January 28, 2006 (“Fiscal 2005”).**                                                                                                                 |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **o** | **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 0-23874]

**JOS. A. BANK CLOTHIERS, INC.**

(Exact name of registrantas specified in its charter)

| **Delaware**                                                                       | ** ** | **36-3189198**                        |
|------------------------------------------------------------------------------------|------------|---------------------------------------|
| (State of  Incorporation)                                                          |       | (I.R.S. Employer  Identification No.) |
| **500 Hanover Pike, Hampstead, MD**                                                | ** ** | **21074**                             |
| (Address of  principal executive offices)                                          |       | (zip code)                            |
| **(410) 239-2700**  (Registrant’s telephone number, including area code) |

 

Securities registered pursuant to Section 12(g) ofthe Act: Common Stock (the “Common Stock”) par value $.01 per share; and Rightsto purchase units of Series A Preferred Stock

Securities registered pursuant to Section 12(b) ofthe Act: None

Indicate by check mark if the registrant is awell-known seasoned issuer, as defined in Rule 405 of the Securities Act.

| Yes o | No x |
|------------|-----------|

Indicate by check mark if the registrant is notrequired to file reports pursuant to Section 13 or Section 15(d) ofthe Act.

| Yes o | No x |
|------------|-----------|

Indicate by check mark whether the registrant (1) hasfiled all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or forsuch shorter period that the registrant was required to file such reports) and (2) hasbeen subject to such filing requirements for the past 90 days. 

| Yes x | No o |
|------------|-----------|

Indicate by check mark if disclosure of delinquentfilers pursuant to Item 405 of Regulation S-K is not contained herein, and willnot be contained, to the best of the registrant’s knowledge, in definitiveproxy or information statements incorporated by reference in Part III forthis Form 10-K or any amendment to this Form 10-K.    ̈

Indicate by check mark whether the registrant is alarge accelerated filer, an accelerated filer, or a non-accelerated filer. Seedefinition of “accelerated filer and large accelerated filer” in Rule 12b-2of the Exchange Act. (Check one): 

| Large accelerated filer  o |   | Accelerated filer  x |   | Non-accelerated filer  o |
|---------------------------------|--------|---------------------------|--------|-------------------------------|

Indicate by check mark whether the registrant is ashell company (as defined in Rule 12b-2 of the Exchange Act).

| Yes o | No x |
|------------|-----------|

The aggregate market value of the voting and non-votingstock held by nonaffiliates of the registrant, based upon the closing price ofshares of Common Stock on the National Association of Securities DealersAutomated Quotation (“NASDAQ”) National Market System at July 30, 2005 wasapproximately $604.9 million. The determination of the “affiliate” status forpurposes of this report on Form 10-K shall not be deemed adetermination as to whether an individual is an “affiliate” of the registrantfor any other purposes.

The number of shares of Common Stock, par value $0.01per share, outstanding on March 30, 2006 was 17,997,086.

**DOCUMENTS INCORPORATED BY REFERENCE:**

The Company will disclosethe information required under Part III, Items 10-14 either by (a) incorporatingthe information by reference from the Company’s definitive proxy statement iffiled by May 30, 2006 (the first business day following 120 days fromthe close of its fiscal year ended January 28, 2006) or (b) filing anamendment to this Form 10-K which contains the required informationby May 30, 2006 (the first business day following 120 days from theclose of the Company’s fiscal year ended January 28, 2006).

 

----

**CAUTIONARYSTATEMENT FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATESECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER INFORMATION**

This Annual Report on Form 10-K includesand incorporates by reference certain statements that may be deemed to beforward-looking statements within the meaning of the Private SecuritiesLitigation Reform Act of 1995. The Private Securities Litigation Reform Act of1995 provides a “safe harbor” for certain forward-looking statements solong as such information is identified as forward-looking and isaccompanied by meaningful cautionary statements identifying important factorsthat could cause actual results to differ materially from those projected inthe information. When used in this Annual Report on Form 10-K, thewords “estimate,” “project,” “plan,” “will,” “anticipate,” “expect,” “intend,” “outlook,”“may,” “believe,” and other similar expressions are intended to identifyforward-looking statements and information. Actual results may differmaterially from those forecast due to a variety of factors outside of theCompany’s control that can affect the Company’s operating results, liquidityand financial condition. Such factors include risks associated with economic,weather, public health and other factors affecting consumer spending, thesuccessful implementation of the Company’s growth strategy including theability of the Company to finance its expansion plans, the mix and pricing ofgoods sold, the effectiveness and profitability of new concepts, the marketprice of key raw materials such as wool and cotton, seasonality, fashion trendsand changing consumer preferences, the effectiveness of the Company’s marketingprograms, the availability of lease sites for new stores, the ability to sourceproduct from its global supplier base and other factors as described under “Item1A. Risk Factors.” These cautionary statements qualify all of the forward-lookingstatements the Company makes herein. The Company cannot assure you that theresults or developments anticipated by the Company will be realized or, even ifsubstantially realized, that those results or developments will result in theexpected consequences for the Company or affect the Company, its business orits operations in the way the Company expects. The Company cautions you not toplace undue reliance on these forward-looking statements, which speakonly as of their respective dates. The Company does not undertake an obligationto update or revise any forward-looking statements to reflect actual results orchanges in the Company’s assumptions, estimates or projections. The identifiedrisk factors and others are more fully described under the caption “Item 1A.Risk Factors.”

*CommonStock Dividends.*On December 14,2005, the Company’s Board of Directors declared a 25% common stock dividendpayable on February 15, 2006 to stockholders of record as of January 27,2006. In conjunction with the distribution of the stock dividend, the Companyretired all of its previously held shares of treasury stock. Unless otherwiseindicated, all historical weighted average share and per share amounts and allreferences to the number of common shares elsewhere in the consolidatedfinancial statements, and notes thereto, have been restated to reflect thestock dividend.

*Restatements*. The consolidated financial statements for fiscalyears ended February 2, 2002, February 1, 2003 and January 31,2004 were restated in fiscal year ended January 29, 2005 (fiscal 2004) inconnection with the Company’s Annual Report on Form 10-K, which wasfiled with the Securities and Exchange Commission on April 14, 2005, tocorrect certain errors in the accounting for leases.

**PART I**

**Item 1.**                        BUSINESS

**General**

Jos. A. Bank Clothiers, Inc., a Delawarecorporation (the “Company” or “Jos. A. Bank”), is a designer, retailer anddirect marketer (through stores, catalog and Internet) of men’s tailored andcasual clothing and accessories. The Company sells substantially all of itsproducts exclusively under the Jos. A. Bank label through its 324 retail stores(as of January 28, 2006, which includes seven outlet stores and elevenfranchise stores) located throughout 40 states and the District of Columbia inthe United States, as well as through the Company’s nationwide catalog andInternet (www.josbank.com) operations.

1

----

The Company’s products are targeted at the male careerprofessional and emphasize the Jos. A. Bank brand of high quality tailored andcasual clothing and accessories. The Company’s products are offered at “ThreeLevels of Luxury,” which include the opening Jos. A. Bank collection as well asthe more luxurious Signature and Signature Gold collections. The Companysources all of its products through third party suppliers, manufacturers and/oragents using Jos. A. Bank designs and specifications.

The Company operates on a52-53 week fiscal year ending on the Saturday closest to January 31.Information presented for the fiscal years ended January 31, 2004, January 29,2005 and January 28, 2006 are hereinafter referred to as fiscal 2003,fiscal 2004 and fiscal 2005, respectively.  The fiscal year ending February 3, 2007(fiscal 2006) will be a 53-week year.

**Strategy**

The Company, established in 1905, has reinventeditself over the past six years by focusing on its “Four Pillars of Success,”which consist of:

1.    Quality

2.    Service

3.    InventoryIn-stock

4.    ProductInnovation

The Companyinstills these four factors into all aspects of its operation and believes theyhelp create a unique specialty retail environment that develops customerloyalty. Examples of the Company’s commitment to this strategy include:

·       continuallyincreasing the already high level of quality of its products by developing andmaintaining stringent design and manufacturing specifications;

·       developingits multi-channel retailing concept by opening more stores and expandingthe catalog and Internet operation, thus offering multiple convenient channelsfor customers to shop;

·       providingoutstanding customer service and emphasizing high levels of inventoryfulfillment for its customers;

·       expandingits product assortment, including developing the “Three Levels of Luxury” andcontinuing to add innovative new products; and

·       increasing its productdesign and development capabilities while eliminating the middleman in thesourcing of its products.

*The Brand.*   The Company’s branding emphasizes very high levels ofquality in all aspects of its interactions with customers, includingmerchandise and service. The Company has developed very stringentspecifications in its product designs to ensure consistency in the fit andquality of the product. The merchandise assortment has “Three Levels of Luxury”and one unwavering level of quality. The “Three Levels of Luxury” range fromthe original Jos. A. Bank collection to the more luxurious Signature collectionto the exclusive Signature Gold collection. Examples of the different levels ofluxury include the wool used in suits, sport coats and slacks, ranging fromSuper 100’s fine wool to the rare 150’s wool, and the uniqueness of tieswatches, some of which are offered in pre-numbered, limited editions.

The Company emphasizes customer service in all aspectsof the business. Sales associates focus on developing close business relationswith their customers to help serve all of the customer’s clothing needs.Inventory availability is a key focus to ensure customers can purchasemerchandise when requested, 

2

----

whether in the stores orthrough the catalog or Internet. A tailor is staffed in each store to ensureprompt, high quality alteration service for our customers.

*Multi-ChannelRetailing.*   TheCompany’s strategy is to operate its three channels of selling as an integratedbusiness and to provide the same personalized service to its customersregardless of whether merchandise is purchased through its stores, the Internetor catalog. The Company believes the synergy between its stores, its Internetsite and its catalog offers an important convenience to our customers and acompetitive advantage to the Company. The Company believes it has significantopportunity to leverage the three channels of selling by promoting each channeltogether to create awareness of the brand. For example, the Internet siteprovides store location listings and can be used as a promotional source forthe stores and catalog. The Company also uses its catalog to communicate theJos. A. Bank image, to provide customers with fashion guidance in coordinatingoutfits and to generate store and Internet traffic.

As a customer convenience, the Company’s informationsystems enable customers to purchase all products that are offered in thecatalog and Internet while in a store. Conversely, customers may have catalogpurchases shipped to a store for alteration and pickup and can return orexchange catalog and Internet purchases at a store.

*StoreGrowth.*   TheCompany believes that it has substantial opportunity to increase its store baseby adding stores throughout the country. As part of its plan to increase thechain to approximately 500 stores within the next several years, the Companyopened 25 new stores in fiscal 2002, 50 new stores in fiscal 2003, 60 newstores in fiscal 2004 and 56 new stores in fiscal 2005. The Company intends toopen new stores in existing markets which should allow the Company to leverageits existing advertising, management, distribution and sourcing infrastructure.The Company also intends to open stores in new markets where there are nostores within roughly a 50-mile radius, such as the western part of theUnited States. The Company opened its first stores in the states of Arizona,Idaho and South Dakota in fiscal 2005, and Washington and Nebraska in fiscal2004.

*ProductDesign and Sourcing.*   The Company has increased its design and developmentcapabilities in the past six years and now designs and directly sourcessubstantially all of its products. The designs are provided to a world-widevendor base to manufacture. In certain cases, the Company has eliminated themiddlemen (e.g. importers and resellers) in its sourcing process and contractsdirectly with manufacturers, although the Company used one agent to sourceapproximately 29% of its total product purchases in fiscal 2005. The Company’sproduct design and sourcing strategies have resulted in reduced product costs,which have enabled the Company to design additional quality into its products,increased gross profit margins and funding for the development of theinfrastructure needed to grow the chain.

**Segments**

The Company has two reportable segments: Stores andDirect Marketing (Internet and catalog). The Company has included informationwith regard to these segments for each of its last three fiscal years underNote 12 of its Consolidated Financial Statements.

*Stores.*   The Company’s stores segmentincludes all full-line Company-owned stores, but excludes its sevenfactory stores. The Company has targeted specialty retail centers with certainco-tenancy for new store locations and has developed and implemented a new storeprototype for all stores that have been opened since the beginning of fiscal2001.

The Company opened 56 stores in fiscal 2005 andexpects to continue the pace of store openings in subsequent years, includingplans to open between 50 to 65 stores in fiscal 2006 as the Company increasesthe chain to approximately 500 stores. The Company’s real estate strategyfocuses primarily on stores located in high-end, specialty retail centers withthe proper co-tenancy that attracts customers with demographics that aresimilar to the Company’s target customer. These specialty centers include, butare not limited to, outdoor lifestyle centers, malls anddowntown/streetfront/business districts. As of 

3

----

January 28, 2006, thestore mix of the 306 full-line Company-owned stores consisted of 80outdoor lifestyle centers, 67 malls, 32 downtown/streetfront/business districtsand 127 strip centers, power centers or freestanding stores.

The Company’s store prototype was designed in thesecond half of fiscal 2000 and was introduced in March 2001 inCharlottesville, Virginia. The design emphasizes an open shopping experiencethat coordinates the Company’s successful corporate casual and sportswear withits suits, shirts, ties and other products. The store design is based on theuse of wooden fixtures with glass shelving, numerous tables to feature fashionmerchandise, carpet and abundant accent lighting and is intended to promote apleasant and comfortable shopping environment. For stores that have been openedin the last two fiscal years, approximately 80% of their space is dedicated toselling activities, with the remainder allocated to stockroom, tailoring andother support areas. The full-line, Company owned stores averaged approximately4,900 square feet at the end of fiscal 2005. The stores opened in fiscal 2004and fiscal 2005 averaged approximately 4,350 and 4,230 square feet,respectively.

The cost to open a new store is based on store sizeand landlord construction allowances. In fiscal 2005, the average cost to builda new store was approximately $440,000, including leasehold improvements,fixtures, point-of-sale equipment and tailor shop equipment. The Company willbe reimbursed an average of approximately $170,000 of the new store build-outcost for the stores opened in fiscal 2005. New stores also require an inventoryinvestment, which varies based on the season the store opens. In fiscal 2005,store openings required an average initial investment of approximately $300,000of inventory to offer a full range of products, although amounts vary by store.The inventory levels in a new store are typically increased as the store’ssales mature.

Substantially all full-line Company owned stores havea tailor shop, which provides a range of tailoring services as a convenience tocustomers. The stores are designed to utilize Company-owned regionaloverflow tailor shops which allow the use of smaller tailor shops within eachstore. Operating the regional tailor shops has allowed the Company to optimizeits tailoring revenues in the stores by sending all overflow work to regionaltailor shops. These overflow shops experience higher productivity as thetailors focus solely on alterations, whereas store tailors assist customersduring the course of the day. In addition, the store managers and certainadditional store staff have been trained to fit tailored clothing foralterations. The Company guarantees all of the tailoring work performed.

*Other.*   TheCompany has eleven franchise locations. Generally, a franchise agreementbetween the Company and the franchisee provides for a ten-year term with anoption, exercisable by the franchisee under certain circumstances, to extendthe term for an additional ten-year period. Franchisees pay the Company aninitial fixed franchise fee and then a percentage of its net sales. Franchiseesare required to maintain and protect the Company’s reputation for high quality,classic clothing and customer service. Franchisees purchase substantially allmerchandise offered for sale in their stores from the Company at an amountabove the Company’s cost.

The Company has seven outlet stores which are used toliquidate excess merchandise and offer certain first quality products at areduced price. Because of the classic character of the Company’s merchandiseand aggressive store clearance promotions, historically, the Company has beenable to sell substantially all of its products through its full-line Companyowned stores and outlet stores and has not been required to sell significantamounts of inventory to third party liquidators.

4

----

At January 28, 2006,the Company operated 324 retail stores (including seven factory stores andeleven franchise stores) in 40 states and the District of Columbia. Thefollowing table sets forth the stores that were open at that date.

**JOS. A. BANK STORES**

| **State**      | ** ** | ** ** | ** ** | **Total #  Of Stores** | ** ** | **State** | ** ** | ** ** | ** ** | **Total #  Of Stores** |
|----------------|------------|------------|------------|------------------------|------------|-----------|------------|------------|------------|------------------------|
| Alabama(a)     |       | 6          |       | Missouri               |       | 5         |
| Arizona        |       | 2          |       | Nebraska               |       | 1         |
| Arkansas       |       | 1          |       | Nevada                 |       | 2         |
| California     |       | 18         |       | New Jersey             |       | 16        |
| Colorado       |       | 6          |       | New York               |       | 13        |
| Connecticut    |       | 10         |       | North Carolina(a)      |       | 14        |
| Delaware       |       | 1          |       | Ohio                   |       | 14        |
| Florida        |       | 20         |       | Oklahoma               |       | 4         |
| Georgia(a)(b)  |       | 14         |       | Pennsylvania(b)        |       | 18        |
| Idaho          |       | 1          |       | Rhode Island           |       | 2         |
| Illinois(a)    |       | 18         |       | South Carolina(a)      |       | 9         |
| Indiana        |       | 6          |       | South Dakota           |       | 1         |
| Iowa           |       | 3          |       | Tennessee(a)           |       | 7         |
| Kansas         |       | 3          |       | Texas                  |       | 28        |
| Kentucky       |       | 4          |       | Utah                   |       | 2         |
| Louisiana(a)   |       | 5          |       | Virginia(b)            |       | 18        |
| Maryland(b)    |       | 19         |       | Washington             |       | 2         |
| Massachusetts  |       | 8          |       | Washington, D.C.       |       | 3         |
| Michigan       |       | 9          |       | West Virginia          |       | 1         |
| Minnesota      |       | 4          |       | Wisconsin              |       | 5         |
| Mississippi(a) |       | 1          |       |                   |       |      |
|           |       |       |       | Total(c)               |       | 324       |

----

(a)           Includes one or morefranchise stores

(b)          Includes one or morefactory stores

(c)           Does not include threestores opened subsequent to fiscal 2005 year-end through March 30, 2006.

*Direct Marketing.**  *The Company’s direct marketingsegment, consisting of its catalog and Internet channels, is a key part of theCompany’s multi-channel concept. The direct marketing segment accountedfor approximately 10% of net sales in fiscal 2005. The direct marketing segmentrecorded a sales increase of 21.7% in fiscal 2005. The Company’s directmarketing segment offers potential and existing customers convenience inordering the Company’s merchandise. In fiscal 2004 and fiscal 2005, the Companydistributed approximately 9.2 and 10.0 million catalogs,respectively, representing catalogs mailed to customers and catalogsdistributed through stores.

The catalog and Internet site offer potential andexisting customers an easy way to order the full range of Jos. A. Bankproducts. They are significant resources used to communicate our high-qualityimage, providing customers with guidance in coordinating outfits, generatingstore traffic and providing useful market data on customers. The Companybelieves customers are very confident purchasing traditional business attirethrough the catalog and Internet, as suits represented approximately 22% of netsales in the direct marketing segment in fiscal 2005.

5

----

To make catalog and onlineshopping as convenient as possible, the Company maintains a toll-free telephonenumber accessible 24 hours a day, seven days a week. Catalog salesassociates can help customers select merchandise and can provide detailedinformation regarding size, color, fit and other merchandise features. In mostcases, sample merchandise is available for catalog sales associates to view,thereby allowing them to better assist customers. Merchandise purchased fromthe catalog or online may be returned to any of the Company’s stores or to theCompany by mail.

The Company hasexperienced strong growth in its Internet sales in each of the past threefiscal years. The Company has established approximately 5,000 affiliatearrangements which have helped increase Internet sales. The Company typicallypays a fee to the affiliate based on a percentage of net sales generatedthrough such affiliate. The Company expects to continue to pursue affiliatearrangements to help fuel future Internet sales increases.

The Company’s Internetsite has many customer-friendly features such as high processing speed,real-time inventory status, order confirmation, product search capabilities andan online catalog, among others. The site has enabled the Company to beresponsive to trends thereby affording the Company an opportunity to increasesales.

To process catalog orders,sales associates enter orders online into a computerized catalog order entrysystem, while Internet orders are placed by the customer and are linked to thesame order entry system. After an order is placed, it automatically updatesfiles and permits the Company to measure the response to individual catalogmailings and Internet email promotions. Computer processing of orders isperformed by the warehouse management system which permits efficient picking ofinventory from the warehouses. The Company’s order entry and fulfillmentsystems permit the shipment of most orders no later than the day after the orderis placed (assuming the merchandise is in stock). Orders are shipped primarilyby second day delivery or, if requested, by expedited delivery services, suchas United Parcel Service priority. Sales and inventory information is availableto the Company’s merchants the next day after the transaction.

**Merchandising**

The Company believes itfills a niche of providing upscale classic, professional men’s clothing withsuperior quality at a reasonable price. The Company’s merchandising strategyfocuses on achieving an updated classic look with extreme attention to detailin quality materials and workmanship. The Company offers a distinctivecollection of clothing and accessories necessary to dress the career man fromhead to toe, including formal, business and business casual, as well assportswear and golf apparel, all sold under the Jos. A. Bank label. Its productoffering includes tuxedos, suits, shirts, vests, ties, sport coats, pants,sportswear, overcoats, sweaters, belts and braces, socks and underwear, amongother items. The Company also sells branded shoes from several vendors, whichare the only major products it sells not using the Jos. A. Bank brand. Infiscal 2005, the Company introduced shoes under the Jos. A. Bank brand, whichare available for sale through the catalog and Internet channels and inselected stores.

The Company’s brandingemphasizes very high levels of quality in all aspects of its interactions withcustomers, including merchandise and service. The Company has developed verystringent specifications in its product designs to ensure consistency in thefit and quality of the product. The merchandise assortment has “Three Levels ofLuxury” and one unwavering level of quality. The “Three Levels of Luxury” rangefrom the Company’s original Jos. A. Bank collection, to the more luxuriousSignature collection to the exclusive Signature Gold collection. Examples ofthe different levels of luxury include the wool used in suits, sport coats andslacks, ranging from Super 100’s fine wool to the rare 150’s wool, and theuniqueness of tie swatches, some of which are offered in pre-numbered, limitededitions.

The Company believes itsmerchandise offering is well positioned to meet the changing trends of businessdress for its target customer. Suits accounted for 25% of the Company’s netsales in fiscal 2005 and 26% in fiscal 2004, and serve as the foundation of theCompany’s extensive offering of other products. When the corporate workenvironment trended to casual wear several years ago, the Company’s productofferings were modified to meet the needs of the Jos. A. Bank customer.

6

----

The Company has manyunique products to serve its customers’ needs and believes that continueddevelopment of innovative products is one of its “Pillars of Success.”  The TRIO collection is one of the Company’ssolutions to corporate casual attire. The TRIO consists of a tailored jacketwith two pairs of pants, one matching the jacket and one in a coordinatingpattern. Therefore, the outfit can be worn as a suit, sportcoat/slackcombination or as a casual outfit. The Company also offers its customers itsSeparates collection, a concept for purchasing suits that allows customers tocustomize their wardrobe by selecting separate, but perfectly matched, jacketsand pants from one of three coat styles, plain front or pleated pants, andnumerous updated fabric choices including Super 100’s wool and natural stretchwool. The Separates line allows a customer to buy a suit with minimalalteration that will fit his unique body size, similar to a custom-made suit.Jos. A. Bank is one of the few retailers in the country that has successfullydeveloped this concept, which the Company believes is a competitive advantage.

The Company also has avery successful line of wrinkle resistant all cotton dress shirts that are madeusing a patented process that is owned by the vendor. The Company believes ithas one of the most extensive selections of dress pants in the industry. TheCompany developed its Vacation-in-Paradise (“VIP”) line of casual vacation wearin fiscal 2002. Its David Leadbetter golf apparel offers sportshirts, sweatersand casual trousers and is a unique branded product line in the sportswearcategory.

In early fiscal 2004, theCompany introduced a wrinkle resistant, stain resistant traveler cotton piquepolo shirt and machine washable traveler wool pants, as part of its successful “Traveler”collection of products. In late fiscal 2004, it introduced a wrinkle resistant,stain-resistant suit as part of its Separates Collection. The Traveler SuitSeparates program is designed to take advantage of our expertise in suitseparates with perfectly matched suit coats and pants sold in the customer’ssize for a better fit. The 100% wool Traveler Suit Separates are stainresistant and made with new stretch comfort waist bands and stretch linings andinclude extra interior pockets. In fiscal 2005, the Company introduced the “StaysCool” suit, which features an innovative fabric incorporating fibers developedby NASA, to keep the customer cool and comfortable in any climate.

**Design andPurchasing**

Jos. A. Bank merchandiseis designed through the coordinated efforts of the Company’s buying andplanning staffs, working in conjunction with suppliers, manufacturers and/oragents around the world. The process of creating a new garment begins up totwelve months before the product’s expected in-stock date. Substantially allproducts are made to the Company’s rigorous specifications, thus ensuringconsistent fit and feel for the customer. The merchandise management staffoversees the development of each product’s style, color and fabrication. TheCompany’s planning staff is responsible for providing each channel of businesswith the correct amount of products.

The Company believes thatit gains a distinct advantage over many of its competitors in terms of qualityand price by designing its tailored and other products, selecting and, incertain cases, purchasing raw materials (finished wool) and then havingmerchandise manufactured to its own specifications by third party contractmanufacturers. Since the Company’s designs are focused on updated classicclothing, the Company believes it experiences much less fashion risk than otherretailers that offer fashions that change more frequently. Substantially allproducts manufactured must conform to the Company’s rigorous specificationswith respect to standardized sizing and quality.

The Company buys its shirts from leading U.S. andoverseas shirt manufacturers who also supply shirts to many of the Company’scompetitors. Approximately 11% of the total product purchases (including piecegoods) in fiscal 2005 were sourced from United States suppliers, andapproximately 89% were sourced from suppliers in other countries. In fiscal2005, approximately 34% of the total product purchases were manufactured inChina (including 19% from Hong Kong) and 20% in Mexico. No other countryrepresented more than 7% of total product purchases in fiscal 2005.

7

----

The Company uses one agentto source a significant portion of its products from various companies that arelocated in or near Asia (China, including Hong Kong, Indonesia, Korea,Thailand, and Bangladesh). Purchases through this agent representedapproximately 29% of the total product purchases in fiscal 2005. The Companyalso makes other purchases from manufacturers and suppliers in Asia. Two othersuppliers combined represent approximately 16% of total product purchases infiscal 2005.

The total productpurchases discussed above include direct purchases of raw materials by the Companythat are subsequently sent to manufacturers for cutting and sewing. In fiscal2005, total raw materials represented approximately 11% of the total productpurchases made by the Company. Also, in fiscal 2005, five vendors accounted forover 90% of the raw materials purchased by the Company.

The Company transactssubstantially all of its business on an order-by-order basis and does notmaintain any long-term or exclusive contracts, commitments or arrangements topurchase from any finished good supplier, piece goods vendor or contractmanufacturer other than an agreement with one raw materials supplier topurchase up to approximately $9 million of wool through fiscal 2004at a specified price. A portion of the commitment extended into 2005 and wascompleted in fiscal 2005. The Company ordinarily places orders for the purchaseof inventory approximately six to twelve months in advance.

The Company does businesswith all of its vendors in U.S. currency and has not experienced any materialdifficulties as a result of any foreign political, economic or socialinstabilities. The Company believes that it has good relationships with itspiece goods vendors, finished goods suppliers, contract manufacturers andagents and that there will be adequate sources to produce a sufficient supplyof quality goods in a timely manner and on satisfactory economic terms, but itcannot guarantee such results.

**Marketing,Advertising and Promotion**

*Strategy.**  *The Company has historically usedmass media radio and direct mail marketing, advertising and promotionactivities in support of its store and catalog/Internet operations. The Companyalso sends email promotions to its store and Internet customers. Core to eachmarketing campaign, while primarily promotional, is the identification of theJos. A. Bank name as synonymous with high quality, upscale classic clothingoffered at a value. The Company has a database of over 2.7 million namesof people who have previously made a purchase from one of the Company’s retailstores, its Internet site or catalog or have requested a catalog or otherinformation from the Company. Of these, approximately 1.6 million individualshave made such purchases or information requests in the past 24 months.The Company evaluates its database for its mailings and selects names based onexpectations of response to specific promotions, which allows the Company toefficiently use its advertising dollars.

In the fourth quarter of2004, the Company began testing cable television as a method to increase itsbrand awareness and to drive customers to its stores. The Company also beganusing national magazines to increase our brand awareness. The Company continuedto utilize these methods in 2005 and expects to continue marketing throughthese channels in 2006 to increase sales and brand awareness.

Throughout each season,the Company promotes specific items or categories at specific prices that arebelow the initial retail price originally offered to the customer. These salesare used to complement promotional events and to meet the needs of thecustomers. At the end of each season, the Company conducts clearance sales topromote the sale of that season’s merchandise.

*Corporate Card.**  *Certain organizations and companiescan participate in our corporate card program, through which all of theiremployees are eligible to receive a 20% discount off regularly-pricedJos. A. Bank merchandise. The card is honored at all full-line stores as wellas for catalog and Internet purchases. Over 130,000 companies nationally, fromsmall privately-owned companies to large public companies, are nowparticipating in the program, representing an increase of approximately 73%over the approximately 75,000 companies last year. Participating companies areable to promote the card as a free benefit to their employees. As the number ofparticipants in the corporate card program have increased significantly in thepast several years, sales from the program have become a substantial portion oftotal sales.

8

----

*Apparel Incentive Program.**  *Jos. A. Bank Clothiers apparelincentive gift certificates are used by various companies as a reward forachievement for their employees. The Company also redeems proprietary giftcertificates and gift cards marketed by major premium/incentive companies.

**Distribution**

The Company uses acentralized distribution system, under which all merchandise is received,processed and distributed through the Company’s distribution facilities locatedin Hampstead, Maryland. Merchandise received at the distribution centers ispromptly inspected to ensure expected quality in workmanship and conformity toCompany specifications. The merchandise is then allocated to individual storesor to warehouse stock (to support the direct marketing segment and to fill instores). As applicable, the merchandise is then packed for delivery and shippedto the stores, principally by common carrier. Each store generally receives ashipment of merchandise two to three times a week from the distributioncenters; however, when necessary because of a store’s size or volume, a storecan receive shipments more frequently. Inventory of basic merchandise in storesis replenished regularly based on sales tracked through its point-of-saleterminals. Shipments to catalog/Internet customers are also made from thecentral distribution facilities, and less frequently, from stores.

To support new storegrowth, the Company upgraded its distribution system over the past five yearsand it is now capable of handling up to 500 stores in most of its distributioncenter functions. In late 2004, the Company increased its distribution centercapacity by leasing and equipping approximately 289,000 square feet of space ina facility that is adjacent to its worldwide corporate headquarters. Thislocation became fully operational in early 2005.

**ManagementInformation Systems**

Many of the Company’sinformation systems have been updated in the last seven years. In August 1998,the Company installed and implemented the then-current version of itsmerchandising, warehouse, sales audit, accounts payable and general ledgersystem. While several newer updates of this system have been released by thesoftware vendor and not installed by the Company, the system meets the Company’scurrent business needs. In fiscal 1999, the Company replaced its point-of-sale(POS) system and upgraded this system in fiscal 2005. In fiscal 2000, theCompany upgraded its catalog order processing system to the then-currentversion, which was again updated in fiscal 2005. The Company also designed andimplemented a new Internet site in fiscal 2000. In fiscal 2003, the Companyimplemented a new system that increased its ability to communicate designspecifications to its worldwide vendor base. In 2004, the Company developedsystems that allow increased management and reporting of pricing elements suchas gross margins. By using these systems, the Company is able to capturegreater customer data and has increased its marketing efficiency using suchdata.

**Competition**

The Company competesprimarily with other specialty retailers of men’s apparel, department storesand other catalogers engaged in the retail sale of men’s apparel, and to alesser degree with other retailers of men’s apparel. The Company is one of onlya few national multi-channel retailers focusing exclusively on men’sapparel which the Company believes provides a competitive edge. The Companybelieves that it maintains its competitive position based not only on itsability to offer its high quality career clothing at reasonable prices, butalso on greater selection of merchandise and superior customer service andproduct innovation as part of its “Four Pillars of Success.” The Companycompetes with, among others, Brooks Brothers, Federated Department Stores,Lands End, Men’s Wearhouse and Nordstrom, as well as local and regionalcompetitors in each store’s market. Many of these major competitors areconsiderably larger and have substantially greater financial, marketing andother resources than the Company.

9

----

**Trademarks**

The Company is the owner or exclusive licensee in theUnited States of the marks “Jos. A. Bank,” “The Miracle Collection,” and “Vacation-in-Paradise.”  These trademarks are registered in the UnitedStates Patent and Trademark Office. A Federal registration is renewableindefinitely if the trademark is still in use at the time of renewal. TheCompany’s rights in the Jos. A. Bank trademark are a material part of theCompany’s business. Accordingly, the Company intends to maintain its use of thetrademark. The Company is not aware of any claims of infringement or othermaterial challenges to the Company’s right to use its marks in the UnitedStates.

In addition, the Company has registered “josbank.com”and various other Internet domain names. The Company intends to renew itsregistration of domain names from time to time for the conduct and protectionof its e-commerce business.

The Company’s net sales,net income and inventory levels fluctuate on a seasonal basis. The Company hasincreased its marketing efforts during peak selling times and expanded itsinventory to include more Corporate Casual and Sportswear, resulting in profitsgenerated during the fourth quarter holiday season becoming a larger portion ofannual profits. Seasonality is also impacted by growth as more new stores areopened in the second half of the year. Seasonal fluctuations typically affectthe Company’s inventory levels, with higher inventory carried in advance ofpeak selling periods, including the holiday season. In the fourth quarters offiscal years 2003, 2004 and 2005, the Company generated approximately 59%, 51%and 53%, respectively, of its annual net income.

**Employees**

As of March 30, 2006, the Company hadapproximately 2,995 employees, consisting of 582 part-time employees and 2,413full-time employees.

As of March 30, 2006, approximately 225 employeesworked in the tailoring overflow shop and distribution center, most of whom arerepresented by the union, UNITE-HERE. The current collective bargainingagreement was recently negotiated to extend to February 28, 2009. TheCompany believes that union relations are good, as there have been no work stoppages inmore than 20 years. The Company believes that its relations with its non-unionemployees are also good.

Approximately 50 salesassociates are union members under a separate contract which extends to April 30,2006. The Company maintains a good relationship with these employees and theirunion and does not anticipate any significant disruption in its operatingworkforce.

**Available Information**

The Company’s principalexecutive offices are located at 500 Hanover Pike, Hampstead, Maryland 21074.The Company’s telephone number is (410) 239-2700 and its websiteaddress is www.josbank.com. The Company makes its annual reports on Form 10-K,quarterly reports on Form 10-Q, current reports on Form 8-K,and amendments to these reports available on its website free of charge as soonas practicable after they are filed with the Securities and ExchangeCommission. In addition, the public may read and copy any materials filed bythe Company with the SEC at the SEC’s public reference room at 450 FifthStreet, N.W., Washington D.C. 20549. The public may obtain information on theoperation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.Also, the SEC maintains an Internet Site that contains reports, proxy andinformation statements. Its web address is www.sec.gov.

**Item 1A.**                RISKFACTORS

You should consider carefully the risks describedbelow, together with the other information contained in this report. If any ofthe following events actually occurs, the Company’s business, financial 

10

----

condition and results ofoperations may suffer materially. As a result, the market price of the Company’scommon stock could decline, and you could lose all or part of your investmentin the Company.

*GrowthRisks.*   A significant portion of the Company’sgrowth has resulted and is expected to continue to result from the opening ofnew stores. While the Company believes that it will continue to be able toobtain suitable locations for new stores, negotiate acceptable lease terms,hire qualified personnel and open and operate new stores on a timely andprofitable basis, no such assurances can be made. As the Company continues itsexpansion program, the proposed expansion may place increased demands on itsoperational, managerial and administrative resources. These increased demandscould cause the Company to operate its business less effectively, which in turncould cause deterioration in the financial performance of the existing stores.The opening of stores may adversely affect catalog and Internet sales. Inaddition, the opening of new stores in existing markets may adversely affectsales and profits of established stores in those markets. The Company expectsto fund its expansion through cash flow from operations and by borrowings underits Credit Agreement. However, if the Company experiences a reduction infunding sources (e.g. cash flows from operations or borrowings under its CreditAgreement) or a decline in performance, it may slow or discontinue storeopenings. The Company may not be able to successfully execute any of thesestrategies on a timely basis. If the Company fails to successfully implementthese strategies, its financial condition and results of operations may beadversely affected.

*Competition.**  *The retail apparel business ishighly competitive and is expected to remain so. The Company competes primarilywith specialty and discount store chains, independent retailers, national andlocal department stores, Internet retail stores and other catalogers engaged inthe retail sale of men’s apparel, and to a lesser degree with other apparelretailers. Many of these competitors are much larger than the Company and havesignificantly greater financial, marketing and other resources than theCompany. In many cases, the Company’s primary competitors sell their productsin stores that are located in the same shopping malls or retail centers as theCompany’s stores. Moreover, in addition to competing for sales, the Companycompetes for favorable site locations and lease terms in shopping malls orretail centers. The Company believes that its emphasis on classic styles makesit less vulnerable to changes in fashion trends than many apparel retailers;however, the Company’s sales and profitability depend upon the continued demandfor its classic styles. The Company faces a variety of competitive challengesincluding:

·       anticipatingand quickly responding to changing consumer demands;

·       maintainingfavorable brand recognition and effectively marketing its products to consumersin several diverse market segments;

·       developinginnovative, high-quality products in sizes, colors and styles that appeal toconsumers of varying age groups and tastes;

·       competitivelypricing its products and achieving customer perception of value; and

·       providingstrong and effective marketing support.

Increased competition could result in pricereductions, increased marketing exposures and loss of market share, any ofwhich could have a material adverse effect on the Company’s financial conditionand results of operations.

*ConsumerSpending.**  *TheCompany’s business is sensitive to a number of factors that influence thelevels of consumer spending, including political and economic conditions suchas the levels of disposable consumer income, consumer debt, interest rates andconsumer confidence. Consumer confidence may be adversely affected by nationaland international security concerns such as war, terrorism or the threat of waror terrorism. In addition, because apparel and accessories generally arediscretionary purchases, 

11

----

declines in consumerspending patterns may impact the Company more negatively as a specialtyretailer and could have an adverse effect on the Company’s operating results.

*Relianceon Management and Key Personnel.*   The Companybelieves that it has benefited substantially from the contributions of itssenior management team. In addition, the Company’s ability to anticipate andeffectively respond to changing fashion trends depends in part on its abilityto attract and retain key personnel in its design, merchandising, marketing andother staff. We face intense competition in hiring and retaining thesepersonnel. If we fail to retain and motivate our current personnel and attractnew personnel, our business, financial  condition and results of operations could bematerially adversely affected.

*Relianceon Key Suppliers.**  *Historically,the Company has bought a substantial portion of its products from a limitednumber of suppliers throughout the world. The loss of any one of thesesuppliers could cause a delay in the Company’s product supply. Any significantinterruption in the Company’s product supply, such as manufacturing problems orshipping delays, could have an adverse effect on its business due to lostsales, cancellation charges, excessive markdowns or delays in findingalternative sources, and could result in increased costs to the Company. TheCompany has not experienced any material disruptions in its sourcing in thepast several years.  However, long-termdisruptions of supply from any of these sources could have a material impact onthe Company.

The Company expectsto continue to spread its sourcing to suppliers throughout the world.Additional concentrations of sourcing will be done in certain countries. TheCompany faces a variety of risks generally associated with doing business inforeign markets and importing merchandise from abroad, such as:

·       politicalinstability;

·       impositionof new legislation or rules relating to imports that may limit thequantity of goods which may be imported into the United States from countriesor regions;

·       impositionof duties, taxes and other charges on imports;

·       currencyand exchange risks;

·       localbusiness practice and political issues, including issues relating to compliancewith domestic or international labor standards which may result in adversepublicity;

·       migrationand development of manufacturers, which can affect where the Company’s productsare or will be produced;

·       potentialdelays or disruptions in shipping and related pricing impacts;

·       volatilefuel supplies and costs;

·       disruptionof imports by labor disputes;

·       healthhazards; and

·       environmentalor natural disasters.

*Failureto Use Acceptable Labor Practice.**  *TheCompany requires manufacturers of the goods that it sells to operate incompliance with applicable laws and regulations. While the Company’s staff andagents periodically visit and monitor the operations of its independentmanufacturers, the Company does not control these manufacturers or their laborpractices. The violation of labor or other laws by an independent manufacturerused by the Company, or the divergence of an independent manufacturer’s laborpractices from those generally accepted as ethical in the United States, couldinterrupt, or otherwise disrupt the shipment of products to the Company ordamage the Company’s reputation, which may result 

12

----

in a decrease in customertraffic to the Company’s stores and therefore adversely affect its sales andnet earnings.

*MarketPrice of Raw Materials; Dependence on Vendors.**  *The Company’s products are manufactured using severalkey raw materials, including wool and cotton, which are subject to fluctuationsin price and availability. In addition, in fiscal 2005, five vendors accountedfor over 90% of the raw materials purchased by the Company. Fluctuations insupply and market demand could cause selective shortages and affect results.Historically, the Company has not experienced significant fluctuations in priceor availability. However, any significant increase in the price or decrease inthe availability of certain raw materials could have an adverse impact on theCompany’s business.

*MerchandiseTrends and Changing Consumer Preferences.**  *The Company must successfully gaugemerchandise trends and changing consumer preferences to succeed. The Company’ssuccess is dependent upon its ability to gauge the tastes of its customers andto provide merchandise that satisfies customer demand in a timely manner. Theretail business fluctuates according to changes in consumer preferencesdictated, in part, by fashion, performance, luxury and seasonality. To theextent the market for the Company’s merchandise weakens, sales will beadversely affected and the markdowns required to move the resulting excessinventory will adversely affect the Company’s operating results.

Fluctuations in the demand for tailored and casualclothing and accessories affect the Company’s inventory levels, sincemerchandise usually must be ordered well in advance of the season andfrequently before fashion trends are evidenced by customer purchases. Inaddition, as the Company’s business is becoming more seasonal in nature, theCompany must carry a significant amount of inventory, prior to peak sellingseasons when the Company builds up its inventory levels. The Company issuespurchase orders for the purchase and manufacture of merchandise well in advanceof the applicable selling season. As a result, the Company is vulnerable todemand and pricing shifts and to suboptimal selection and timing of merchandisepurchases. In addition, lead times for many of the Company’s purchases arelong, which may make it more difficult for the Company to respond rapidly tonew or changing merchandise trends or consumer acceptance for the Company’sproducts.

*Growthby Acquisition.**  *TheCompany may from time to time hold discussions and negotiations with (i) potentialinvestors who express an interest in making an investment in or acquiring theCompany, (ii) potential joint venture partners looking toward theformation of strategic alliances and (iii) companies that representpotential acquisition or investment opportunities for the Company. There can beno assurance any definitive agreement will be reached regarding the foregoing,nor does the Company believe that any such agreement is necessary to implementsuccessfully its strategic plans.

*Volumeof Retail Traffic and the Availability of Suitable Lease Space.**  *Many of the Company’s stores are located in shoppingmalls or retail centers. Sales at these stores are derived, in part, from thehigh volume of traffic in those malls or retail centers. The Company’s storesbenefit from the ability of the mall’s or retail center’s other tenants andother area attractions to generate consumer traffic in the vicinity of itsstores and the continuing popularity of malls or retail centers as shoppingdestinations. Sales volume and mall or retail center traffic may be adverselyaffected by economic downturns in a particular area and the closing of nearbystores. In addition, a decline in the desirability of the shopping environmentin a particular mall or retail center, or a decline in the popularity of mallshopping or retail center among the Company’s target consumers, would adverselyaffect its business.

Part of the Company’s future growth issignificantly dependent on its ability to operate stores in desirable locationswith capital investment and lease costs that allow the Company to maintain itsprofitability. The Company cannot be sure as to when or whether such desirablelocations will become available at reasonable costs. In addition, the Companymust be able to renew its existing store leases on terms that meet itsfinancial targets. The Company’s failure to secure favorable real estate andlease terms 

13

----

generally and upon renewalcould cause the Company to lose market share which would reduce its revenuesand gross profit.

*DeliveryFailures.**  *Thesuccess of the Company’s stores depends on their timely receipt of merchandisefrom the distribution facilities, and the success of the Company’s directmarketing segment depends on the timely delivery of merchandise to thecustomers. Independent third party transportation companies deliver the Company’smerchandise to substantially all of the stores and to the customers. Some ofthese third parties employ personnel represented by a labor union. Disruptionsin the delivery of merchandise or work stoppages by employees of thesethird parties could delay the timely receipt of merchandise, which could resultin cancelled sales, a loss of loyalty to the Company’s brand and excessinventory. The Company may be required to respond in a number of ways, many ofwhich could decrease its gross profits and net income.

*Costsof Mailing, Paper and Printing.**  *Postalrate increases and paper and printing costs will affect the cost of the Company’scatalog and promotional mailings and sales and marketing expenses. The Companyrelies on discounts from the basic postal rate structure, such as discounts forbulk mailings and sorting by zip code and carrier routes. Future paper andpostal rate increases could adversely impact the Company’s earnings if it wasunable to offset such increases by raising prices or by implementing moreefficient printing, mailing, delivery and order fulfillment systems.

*IntellectualProperty Rights Risks.**  *TheCompany’s trademarks are important to its success and competitive position. TheCompany is the owner or exclusive licensee in the United States of the marks “Jos.A. Bank,” “The Miracle Collection,” and “Vacation-in-Paradise.”  Thesetrademarks are registered in the United States Patent and Trademark Office. TheCompany is susceptible to others imitating its products and infringing on itsintellectual property rights. Imitation or counterfeiting of the Company’sproducts or other infringement of its intellectual property rights coulddiminish the value of its brand or otherwise adversely affect its revenues. Theactions the Company has taken to establish and protect its trademarks may notbe adequate to prevent imitation of its products by others or to prevent othersfrom seeking to invalidate the Company’s trademarks or block sales of itsproducts as a violation of the trademarks and intellectual property rights ofothers. In addition, others may assert rights in, or ownership of, the Company’strademarks and other intellectual property rights or in marks that are similarto the Company’s or marks that the Company licenses and/or market and theCompany may not be able to successfully resolve these types of conflicts to itssatisfaction. In some cases, there may be trademark owners who have priorrights to the Company’s marks because the laws of certain foreign countries maynot protect intellectual property rights to the same extent as do the laws ofthe United States. In other cases, there may be holders who have prior rightsto similar marks. Failure to protect the Company’s trademarks could result in amaterial adverse effect on its business. The Company is not aware of any claimsof infringement or other material challenges to the Company’s right to use itsmarks in the United States.

*Useof Consumer Information.**  *TheCompany uses its customer database to market to its customers. Any limitationsimposed on the use of such consumer data, whether imposed by federal or stategovernments or business partners, could have an adverse effect on the Company’sfuture marketing activity. In addition, to the extent the Company’s securityprocedures and protection of customer information prove to be insufficient orinadequate, the Company may become subject to litigation, which could exposethe Company to liability and cause damage to its reputation or brand.

*CentralizedDistribution Centers.**  *Thedistribution of the Company’s products is centralized in two distributioncenters in Hampstead, Maryland. All of the merchandise the Company purchases isshipped directly to its distribution centers, where it is prepared for shipmentto the appropriate stores. If the distribution centers were to shut down orlose significant capacity for any reason, the Company’s operations would likelybe seriously disrupted. As a result, the Company could incur significantlyhigher 

14

----

costs and longer leadtimes associated with distributing its products to its stores during the timeit takes for the Company to reopen or replace the distribution centers.

*Seasonality.**  *The Company’snet sales, net income and inventory levels fluctuate on a seasonal basis. TheCompany has increased its marketing efforts during peak selling times andexpanded its inventory to include more Corporate Casual and Sportswear,resulting in profits generated during the fourth quarter holiday seasonbecoming a larger portion of annual profits. Seasonality is also impacted bygrowth as more new stores are opened in the second half of the year. Seasonalfluctuations typically affect the Company’s inventory levels, with higherinventory carried in advance of peak selling periods, including the holidayseason. In the fourth quarters of fiscal years 2003, 2004 and 2005, the Companygenerated approximately 59%, 51% and 53%, respectively, of its annual netincome. Any decrease in sales or margins during this period could have adisproportionate effect on the Company’s financial condition and results ofoperations. In addition, major winter storms could negatively impact theCompany’s sales.

**Item 1B.**               UNRESOLVEDSTAFF COMMENTS

None.

**Item 2.**                        DESCRIPTIONOF PROPERTY

TheCompany owns its corporate office facility and one of its distribution centerslocated in Hampstead, Maryland, subject to certain financing liens (see Item 7,Managements’ Discussion and Analysis and “Consolidated Financial Statements—Note 6”),and leases its other distribution center located in Hampstead, Maryland. TheCompany believes that its existing facilities are well maintained and in goodoperating condition. The table below presents certain information relating tothe Company’s property as of March 30, 2006:

| **Location**         | ** ** | ** ** | ** ** | **Gross  Square Feet** | ** ** | **Owned/  Leased** | ** ** | **Primary Function**                                                                                     | ** ** |
|----------------------|------------|------------|------------|-----------------------------|------------|--------------------|------------|---------------------------------------------------------------------------------------------------------------|------------|
| Hampstead,  Maryland |       |       | 315,000    |                        |       | Owned              |       | Corporate  offices, distribution center, catalog  order and fulfillment and regional tailoring  overflow shop |       |
| Hampstead,  Maryland |       |       | 289,000    |                        |       | Leased             |       | Distribution  center and corporate offices                                                                    |       |

 

The Company also leases one overflow tailoringfacility in Atlanta, Georgia and has overflow tailoring operations in severalof its larger stores. These facilities receive customers’ goods from full-linestores, which are altered and returned to the selling store for customer pickup.Additional office space of approximately 3,000 square feet is leased inFlorida.

As of January 28,2006, the Company had 313 Company-operated stores (including its sevenoutlet stores and excluding its eleven franchise stores) all of which wereleased. The full-line stores average approximately 4,900 square feet as of theend of fiscal 2005, including selling, storage, tailor shop and service areas.The full-line stores range in size from approximately 1,000 square feet toapproximately 18,900 square feet. In most cases the Company pays a fixed annualbase rent plus real estate taxes, insurance and utilities and, other than infreestanding locations, makes contributions toward the common area operatingcosts. Certain facility leases require contingent rental fees based on sales inaddition to or in the place of annual rental fees. Most of the Company’s leasesprovide for an increase in annual fixed rental payments during the lease term.

15

----

**Item 3.**                        LEGALPROCEEDINGS

The Company has been named as a defendant in legalactions arising from its normal business activities. Although the outcome ofthese lawsuits or other proceedings against the Company cannot be accurately predicted,the Company does not expect that any such liability will have a materialadverse effect on the business, net assets or financial position of theCompany.

In its Quarterly Reportson Form 10-Q for the second and third quarters of fiscal 2005, the Companyreported that certain claims against the Company had been made arising from theallegedly improper storage of credit card data. The matter has since beenresolved in favor of the Company and during the fourth quarter of fiscal 2005the Company reversed the $285,000 previously accrued. The Company does notanticipate that further claims, if any, in this matter would have a materialadverse effect on the business, net assets or financial position of theCompany.

**Item 4.**                        SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the Company’ssecurity holders during the quarter ended January 28, 2006.

16

----

**PART II**

**Item 5.**                        MARKETFOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUERPURCHASES OF EQUITY SECURITIES

*Market Information.*

The Company’s Common Stock is listed on The NasdaqNational Market (“NASDAQ”) under the trading symbol “JOSB.”  The following table sets forth, for theperiods indicated, the range of high and low closing prices for the CommonStock, as reported on NASDAQ. The approximate high and low closing prices forthe Common Stock tabulated below represent inter-dealer quotations whichdo not include retail mark-ups, mark-downs or commissions. Such prices do notnecessarily represent actual transactions.

On December 14,2005, the Company’s Board of Directors declared a 25% common stock dividendpayable on February 15, 2006 to stockholders of record as of January 27,2006. In conjunction with the distribution of the stock dividend, the Companyretired all of its previously held shares of treasury stock. Unless otherwiseindicated, all historical weighted average share and per share amounts and allreferences to the number of common shares elsewhere in the consolidatedfinancial statements, and notes thereto, have been restated to reflect thestock dividend.

| ** **                                             | ** ** | **High** | ** ** | **Low** | ** ** |
|--------------------------------------------------------|------------|----------|------------|---------|------------|
| 1st Quarter  fiscal 2006 (through March 30, 2006) |       | $        | 46.90      |    | $          | 41.02 |   |
|                                                        |            |          |            |         |            |  |  |

 

| ** **  | ** ** | **Fiscal 2004** | ** ** | **Fiscal 2005** | ** ** |
|-------------|------------|----------------------|------------|----------------------|------------|
| ** **  | ** ** | **High**             | ** ** | **Low**              | ** ** | **High** | ** ** | **Low** | ** ** |
| 1st Quarter |       | $                    | 25.05      |                 | $          | 18.62 |   | $ | 28.60 |   | $ | 21.68 |   |
| 2nd Quarter |       | 21.55                |       | 18.29                |       | 36.94 |   | 27.19 |   |
| 3rd Quarter |       | 26.00                |       | 18.36                |       | 36.28 |   | 29.69 |   |
| 4th Quarter |       | 25.32                |       | 19.24                |       | 40.40 |   | 32.32 |   |
|             |            |                      |            |                      |            |  |  |  |  |  |  |  |  |

 

On March 30, 2006,the closing sale price of the Common Stock was $46.90.

*Holders of Recordof Common Stock*

As of March 30, 2006,there were 87 holders of record of the Company’s Common Stock.

*Dividend Policy*

The Company intends toretain its earnings to finance the development and expansion of its businessand for working capital purposes, and therefore does not anticipate paying anycash dividends in the foreseeable future. The Company has not declared or paidany cash dividends in the last two fiscal years. In addition, the Company’sCredit Agreement prohibits the Company from paying cash dividends, withoutprior approval from the lender.

17

----

**Item 6.**                        SELECTEDCONSOLIDATED FINANCIAL DATA

Thefollowing selected consolidated financial data with respect to each of the fiscalyears ended February 1, 2003 (fiscal 2002), January 31, 2004 (fiscal2003), January 29, 2005 (fiscal 2004) and January 28, 2006 (fiscal 2005) have been derived from theCompany’s audited Consolidated Financial Statements. The fiscal 2001 amountswere derived from financial statements audited by Arthur Andersen (which is nolonger in operation) and thus the data for fiscal 2001 is unaudited. All yearsreported consisted of 52 weeks, each of which ended on the Saturdayclosest to the end of January of the respective year. The informationshould be read in conjunction with the Consolidated Financial Statements andNotes thereto that appear elsewhere in this Annual Report on Form 10-Kand Item 7, “Management’s Discussion and Analysis of Financial Condition andResults of Operations.”

| ** **                                                | ** ** | **Fiscal Year**                                                      | ** **  |
|-----------------------------------------------------------|------------|---------------------------------------------------------------------------|-------------|
| ** **                                                | ** ** | **2001**                                                                  | ** **  | **2002** | ** ** | **2003** | ** ** | **2004** | ** ** | **2005** | ** ** |
| ** **                                                | ** ** | **(In thousands, except per share information)** | ** **  |
| Consolidated Statements  of Income Information:           |       |                                                                      |        |   |   |   |   |   |   |   |   |
| **Net sales**                                             | ** ** | **$**                                                                     | **211,029** | ** ** | **$** | **243,436** | ** ** | **$** | **299,663** | ** ** | **$** | **372,500** | ** ** | **$** | **464,633** | ** ** |
| Cost of goods sold                                        |       | 101,676                                                                   |        | 109,836 |   | 127,364 |   | 147,674 | ** ** | **177,006** | ** ** |
| **Gross profit**                                          | ** ** | **109,353**                                                               | ** **  | **133,600** | ** ** | **172,299** | ** ** | **224,826** | ** ** | **287,627** | ** ** |
| Operating expenses:                                       |       |                                                                      |        |   |   |   | ** ** | ** ** | ** ** | ** ** | ** ** |
| Sales and marketing                                       |       | 76,166                                                                    |        | 89,186 |   | 110,230 |   | 143,586 | ** ** | **179,201** | ** ** |
| General and administrative                                |       | 21,290                                                                    |        | 24,310 |   | 30,554 |   | 38,003 | ** ** | **45,930** | ** ** |
| Store opening costs                                       |       | 405                                                                       |        | 528 |   | 1,539 |   | 1,184 | ** ** | **701** | ** ** |
| One-time charges(a)                                       |       | 210                                                                       |        | — |   | — |   | — |   | — |   |
| Total operating expenses                                  |       | 98,071                                                                    |        | 114,024 |   | 142,323 |   | 182,773 | ** ** | **225,832** | ** ** |
| **Operating income**                                      | ** ** | **11,282**                                                                | ** **  | **19,576** | ** ** | **29,976** | ** ** | **42,053** | ** ** | **61,795** | ** ** |
| Interest expense, net                                     |       | 1,364                                                                     |        | 1,098 |   | 1,623 |   | 1,696 | ** ** | **1,794** | ** ** |
| Income before provision for income taxes                  |       | 9,918                                                                     |        | 18,478 |   | 28,353 |   | 40,357 | ** ** | **60,001** | ** ** |
| Provision for income taxes                                |       | 3,520                                                                     |        | 7,635 |   | 12,073 |   | 15,876 | ** ** | **24,751** | ** ** |
| **Net income**                                            | ** ** | **$**                                                                     | **6,398**   | ** ** | **$** | **10,843** | ** ** | **$** | **16,280** | ** ** | **$** | **24,481** | ** ** | **$** | **35,250** | ** ** |
| Per share  information—diluted(b):                   |       |                                                                      |        |   |   |   | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Net income per share**                                  | ** ** | **$**                                                                     | **0.44**    | ** ** | **$** | **0.66** | ** ** | **$** | **0.94** | ** ** | **$** | **1.38** | ** ** | **$** | **1.95** | ** ** |
| Diluted weighted average number of shares  outstanding(b) | ** ** | **14,541**                                                                | ** **  | **16,542** | ** ** | **17,354** | ** ** | **17,789** | ** ** | **18,031** | ** ** |
| Balance Sheet  Information (as of end of fiscal year):    | ** ** | ** **                                                                | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Working capital                                           |       | $                                                                         | 37,757      |   | $ | 43,626 |   | $ | 76,214 |   | $ | 69,620 | ** ** | **$** | **96,210** | ** ** |
| Cash and cash equivalents                                 |       | 827                                                                       |        | 8,389 |   | 875 |   | 1,425 | ** ** | **7,344** | ** ** |
| Total assets                                              |       | 113,467                                                                   |        | 146,004 |   | 200,645 |   | 233,304 | ** ** | **304,832** | ** ** |
| Total debt                                                |       | 16,638                                                                    |        | 10,519 |   | 29,863 |   | 6,859 | ** ** | **5,797** | ** ** |
| Total noncurrent liabilities (including debt)             |       | 24,634                                                                    |        | 26,370 |   | 51,521 |   | 40,425 | ** ** | **43,949** | ** ** |
| Stockholders’ equity                                 |       | 51,631                                                                    |        | 64,923 |   | 86,454 |   | 114,324 | ** ** | **153,800** | ** ** |
| Other Data (as of end of  fiscal year):                   | ** ** | ** **                                                                | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Number of  stores(c)                                      |       | 135                                                                       |        | 160 |   | 210 |   | 269 | ** ** | **324** | ** ** |

----

(a)           Represents primarilyprofessional fees incurred in fiscal 2001 in conjunction with a strategicaction considered by the Board of Directors.

(b)          On December 14,2005, the Company’s Board of Directors declared a 25% common stock dividendpayable on February 15, 2006 to stockholders of record as of January 27,2006. Unless otherwise indicated, all historical weighted average share and pershare amounts and all references to the 

18

----

number of common shareselsewhere in the consolidated financial statements, and notes thereto, havebeen restated to reflect the stock dividend.

(c)           Includeseleven franchise stores.

**Item 7.**                        MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information thatfollows should be read in conjunction with the Consolidated FinancialStatements and Notes thereto that appear elsewhere in this Annual Report on Form 10-K.

**Overview**

Net income infiscal 2005 increased 44% to approximately $35.3 million compared withapproximately $24.5 million in fiscal 2004. The increased earnings infiscal 2005 were primarily attributable to:

·       24.7%increase in net sales with increases in the stores and direct marketing, orcatalog and Internet segments;

·       150basis point increase in gross profit margins; and

·       theopening of 56 new stores.

Management believes that the chain can grow toapproximately 500 stores from the fiscal 2005 year-end base of 324 stores.The Company plans to open between 50 to 65 stores in fiscal 2006 as part of itsplan to grow the chain to the 500 store level. The store growth is part of astrategic plan the Company initiated in fiscal 2000. In the past five years,the Company has continued to open new stores as infrastructure and performancehas improved. As such, there were 21 new stores opened in fiscal 2001, 25 newstores opened in fiscal 2002, 50 new stores opened in fiscal 2003, 60 newstores opened in fiscal 2004 and 56 new stores opened in fiscal 2005.

Capital expenditures are expected to be approximately$30 million to $35 million in fiscal 2006, primarily to fund theopening of approximately 50 to 65 new stores, the renovation and/or relocationof several stores, and the implementation of various systems projects. Thecapital expenditures include the cost of the construction of leaseholdimprovements for new stores of which $9-$12 million is expected to bereimbursed through landlord contributions. The Company also expects inventoriesto increase in 2006 to support new store openings and sales growth in both theCompany’s stores and direct marketing segments.

The Company ended fiscal 2005 with no revolver debt,$5.8 million of term debt and $7.3 million of cash. The Company generated $37.0million of cash from operating activities in fiscal 2005, which was used tofund a 20% increase in the number of stores and to fund increases in inventoryof approximately $49 million to support new store growth and to increase theavailability of certain core items. The Company’s Credit Agreement with itsbank extends to April 2008 and allows the Company to borrow a maximumrevolving amount under the facility up to $100 million. In addition, theCompany has the option to increase the amount borrowed to $125 million, ifrequested by April 30, 2006, if needed and if supported by its borrowingbase formula under the Credit Agreement. The Company’s availability in excessof outstanding borrowings, as supported by the existing borrowing base underits Credit Agreement, was $99.6 million at January 28, 2006, ascompared with $74.6 million at January 29, 2005.

*Common Stock Dividends.**  *On December 14,2005, the Company’s Board of Directors declared a 25% common stock dividendpayable on February 15, 2006 to stockholders of record as of January 27,2006. In conjunction with the distribution of the stock dividend, the Companyretired all of its previously held shares of treasury stock. Unless otherwiseindicated, all historical weighted average share and per share amounts and allreferences to the number of common shares elsewhere in the consolidatedfinancial statements, and notes thereto, have been restated to reflect thestock dividend.

19

----

**CriticalAccounting Policies and Estimates**

In preparing the consolidated financial statements, anumber of assumptions and estimates are made that, in the judgment ofmanagement, are proper in light of existing general economic andcompany-specific circumstances. For a detailed discussion on the application ofthese and other accounting policies, see Note 1 in the Consolidated FinancialStatements in this Annual Report on Form 10-K.

*Inventory.*   TheCompany records inventory at the lower of cost or market (“LCM”). Cost isdetermined using the first-in, first-out method.  The estimated market value is based onassumptions for future demand and related pricing. The Company reduces thecarrying value of inventory to net realizable value where cost exceedsestimated selling price less costs of disposal.

Management’s sales assumptions are based on theCompany’s experience that most of the Company’s inventory is sold through theCompany’s primary sales channels with virtually no inventory being liquidatedthrough bulk sales to third parties. The Company’s LCM reserve estimates forinventory that have been made in the past have been very reliable as asignificant portion of its sales (approximately two-thirds in fiscal 2005) areclassic traditional products that are on-going programs and that bear low riskof write-down. These products include items such as navy and gray suits, navyblazers, white and blue button-down shirts, etc. The portions of products thathave fashion elements are monitored closely to ensure that aging goals areachieved to limit the need to sell significant amounts of product below cost. Inaddition, the Company’s strong gross profit margins enable the Company to sellsubstantially all of its products at levels above cost.

To calculate the estimated market value of itsinventory, the Company periodically performs a detailed review of all of itsmajor inventory classes and stock-keeping units. The Company compares theon-hand units and season-to-date unit sales (including actual selling prices)to the sales trend and estimated prices required to sell the units in thefuture, which enables the Company to estimate the amount which may have to besold below cost. Many of the units sold below cost are sold in the Company’sfactory stores within twenty-four months of purchase. In fiscal 2004 and 2005,the Company’s costs in excess of selling price plus the cost of disposal in itsfactory stores was $1.1 million and $0.8 million, respectively. The inventorycomponent of these costs is recorded in cost of goods sold whereas the relatedcosts of disposal are recorded as selling and marketing expenses. The Companyanticipates similar results in fiscal 2006. If the inventory required to besold through the factory stores or liquidated through other means varies fromthe estimate, the Company’s LCM reserve could change.

*AssetValuation.*   Long-lived assets, such as property,plant and equipment subject to depreciation, are periodically reviewed forimpairment to determine whether events or changes in circumstances indicatethat the carrying amount of an asset may not be recoverable. Recoverability ofassets to be held and used is measured by a comparison of the carrying amountof an asset to estimated undiscounted future cash flows expected to begenerated by the asset. If the carrying amount of an asset exceeds itsestimated future cash flows, an impairment charge is recognized in the amountby which the carrying amount of the asset exceeds the fair value of the asset. Theasset valuation estimate is principally dependent on the Company’s ability togenerate profits at both the Company and store levels. These levels areprincipally driven by the sales and gross profit trends that are closelymonitored by the Company. In each of fiscal years 2004 and 2005, there havebeen no asset valuation charges as sales and profits have increased throughoutthis period.

*LeaseAccounting.*   The Company uses a consistent leaseperiod (generally, the initial non-cancelable lease term plus renewal optionperiods provided for in the lease that can be reasonably assured) whencalculating depreciation of leasehold improvements and in determining straight-linerent expense and classification of its leases as either an operating lease or acapital lease. The lease term and straight-line rent expense commences on thedate when the Company takes possession and has the right to control use of theleased premises. Funds received from the lessor intended to reimburse theCompany for the costs of leasehold improvements are recorded as a deferredcredit resulting from a lease incentive and amortized over the lease term as areduction to rent expense.

20

----

While the Company has taken reasonable care inpreparing these estimates and making these judgments, actual results could andprobably will differ from the estimates. Management believes any difference inthe actual results from the estimates will not have a material effect upon theCompany’s financial position or results of operations.

**NewAccounting Pronouncements****—In** December 2004,the FASB issued Statement of Financial Accounting Standards No. 123(Revised 2004), *Share-Based Payment*,(“SFAS 123R”). This Statement requires companies to expense the estimatedfair value of stock options and similar equity instruments issued to employees.Through the end of 2005, companies were required to calculate the estimatedfair value of these share-based payments and could elect to either include theestimated cost in earnings or disclose the pro forma effect in the footnotes totheir financial statements. The Company chose to disclose the pro forma effect.The fair value concepts were not changed significantly in SFAS 123R;however, in adopting this Standard, companies must choose among alternativevaluation models and amortization assumptions.

The Company adopted the provisions of SFAS 123R in thefirst quarter of fiscal 2006 and will apply the provisions of SFAS 123Rprospectively, under the modified prospective method, in all periods followingfiscal 2005. The valuation model andamortization assumption we used prior to adoption are acceptable methods underSFAS 123R and the Company has chosen to continue to use the Black Scholesvaluation model to estimate the fair value of stock options and similar equityinstruments issued to employees. As all stock options issued were fullyvested as of the end of the third quarter of fiscal 2005, adoption of the provisionsof SFAS 123R will not have a material impact on the future reporting periods,unless the Company grants additional options or stock-based awards. As of January 28,2006, the Company had no shares available for issuance under the current Plans.

SFAS 123R will also require us to change theclassification of any tax benefits realized (upon exercise of stock options) inexcess of that which is associated with the expense recognized for financialreporting purposes. These amounts will be presented as a financing cash inflow,rather than as a reduction of income taxes paid in our consolidated statementof cash flows.

In November 2004, theFASB issued SFAS No.151, *Inventory Costs—anamendment of ARB No. 43, Chapter 4* (“SFAS 151”).  SFAS 151 amends Accounting ResearchBulletin (“ARB”) No. 43, *Chapter 4, InventoryPricing*, to clarify that abnormal amounts of idle facility expense,freight, handling costs, and wasted material (spoilage) should be recognized ascurrent period charges. In addition, this Statement requires that allocation offixed production overheads to the costs of conversion be based on the normalcapacity of the production facilities. The provisions of this Statement areeffective for inventory costs incurred during fiscal years beginning after June 15,2005. The adoption of this statement is not expected to have a material impacton the Company’s consolidated financial position or results of operations.

21

----

**Results of Operations**

Thefollowing table is derived from the Company’s Consolidated Statements of Incomeand sets forth, for the periods indicated, certain items included in theConsolidated Statements of Income expressed as a percentage of net sales.

| ** **                                | ** ** | **Percentage of Net Sales  Fiscal Year** | ** ** |
|-------------------------------------------|------------|--------------------------------------------------------------|------------|
| ** **                                | ** ** | **2003**                                                     | ** ** | **2004** | ** ** | **2005** | ** ** |
| **Net  sales**                            | ** ** | **100**                                                      | **%**      | **100** | **%** | **100** | **%** |
| Cost of goods  sold                       |       | 42.5                                                         |       | 39.6 |   | 38.1 |   |
| **Gross  profit**                         | ** ** | **57.5**                                                     | ** ** | **60.4** | ** ** | **61.9** | ** ** |
| Sales and  marketing expenses             |       | 36.8                                                         |       | 38.6 |   | 38.6 |   |
| General and  administrative expenses      |       | 10.2                                                         |       | 10.2 |   | 9.9 |   |
| Store opening  costs                      |       | 0.5                                                          |       | 0.3 |   | 0.2 |   |
| **Operating  income**                     | ** ** | **10.0**                                                     | ** ** | **11.3** | ** ** | **13.3** | ** ** |
| Interest expense,  net                    |       | 0.6                                                          |       | 0.5 |   | 0.4 |   |
| Income before  provision for income taxes |       | 9.4                                                          |       | 10.8 |   | 12.9 |   |
| Provision for  income taxes               |       | 4.0                                                          |       | 4.2 |   | 5.3 |   |
| **Net income**                            | ** ** | **5.4**                                                      | **%**      | **6.6** | **%** | **7.6** | **%** |

 

**Fiscal 2005 Compared to Fiscal 2004**

*Net Sales*—Net sales increased 24.7% to $464.6 million infiscal 2005 compared with $372.5 million in fiscal 2004. Total full-linestore sales increased 25.6% in fiscal 2005 due primarily to an 10.6% increasein comparable store sales and the opening of 56 new stores as shown below.Direct marketing sales increased 21.7% primarily driven by increases in catalogcirculation, the Company’s database of Internet customers (over 20% increase)and Internet affiliates (over 50% increase). The catalog circulation was10.0 million in fiscal 2005 compared with 9.2 million in fiscal 2004.Comparable store sales, which include merchandise sales generated in allfull-line stores that have been open for at least thirteen full months,increased 10.6% in fiscal 2005. The increase in comparable store sales was ledby increased traffic (as measured by number of transactions), while items pertransaction increased slightly and dollars per transaction decreased slightly.

All major product categories generated sales increasesin fiscal 2005, lead by sales of sportswear which increased more than 34% overfiscal 2004 sales, and dress shirt sales which increased nearly 28% over fiscal2004 sales. Sales of the more luxurious Signature and Signature Gold suits,which together represented 38% of suit sales in fiscal 2005, increased 23% overfiscal 2004 sales. For fiscal 2005 and 2004,suits represented approximately 25% and 26% of total merchandise sales,respectively.

Netsales also increased as a result of the opening of new stores. The followingtable provides information regarding the number of stores opened and closedduring fiscal 2004 and 2005:

| ** **                                | ** ** | **Fiscal 2004** | ** ** | **Fiscal 2005** | ** ** |
|-------------------------------------------|------------|----------------------|------------|----------------------|------------|
| ** **                                | ** ** | **Stores**           | ** ** | **Square  Feet***    | ** ** | **Stores** | ** ** | **Square  Feet*** | ** ** |
| Stores open at  the beginning of the year |       |                 | 210        |                 |       |   | 1,062 |   |   |   | 269 |   |   |   | 1,318 |   |   |
| Stores opened                             |       |                 | 60         |                 |       |   | 261 |   |   |   | 56 |   |   |   | 233 |   |   |
| Stores closed                             |       |                 | (1         | )                    |       |   | (5 | ) |   |   | (1 | ) |   |   | (8 | ) |   |
| Stores open at the end  of the year       |       |                 | 269        |                 |       |   | 1,318 |   |   |   | 324 |   |   |   | 1,543 |   |   |

----

*                    Square feet ispresented in thousands and excludes the square footage of the Company’s franchisestores.

22

----

*Gross Profit*—Grossprofit (net sales less cost of goods sold) increased to $287.6 million or61.9% of net sales in fiscal 2005 from $224.8 million or 60.4% of netsales in fiscal 2004, an increase of 150 basis points on the Company’s grossprofit percentage. The increased gross profit percentage is primarily due tothe continued improvement in sourcing of merchandise, thus reducing the cost ofitems purchased, and increases in retail prices of certain products. Grossprofit margins increased in substantially all major product categories.

The Company’s gross profitclassification may not be comparable to the classification used by certainother entities. Some entities include distribution, store occupancy, buying andother costs in cost of goods sold. Other entities (including the Company)exclude such costs from gross profit, including them instead in general andadministrative and/or sales and marketing expenses.

*Sales and Marketing Expenses*—Sales and marketing expenses, which consist primarily of a) full-line store, factory store and direct marketing occupancy, payroll, sellingand other variable costs and b) total Company advertising and marketingexpenses, increased to $179.2 million in fiscal 2005 from $143.6 million infiscal 2004. As a percent of net sales, sales and marketing expenses remainedconstant at 38.6%. The $35.6 million increase in sales and marketingexpenses relates primarily to expenses supporting the opening of 56 new storesin fiscal 2005 and a full year of costs from the 60 new stores opened in fiscal2004, as well as expanded advertising programs. The higher costs includea) $13.1 million of occupancy costs, b) $12.2 million ofpayroll and related costs, and c) $10.3 million of media advertising, catalogand other marketing  and other variableselling costs, such as credit card fees. The Company expects sales andmarketing expenses to increase in fiscal 2006 primarily as a result of opening50 to 65 new stores, the full year operation of stores that were opened duringfiscal 2005, and an increase in advertising expenditures.

In the fourth quarter offiscal 2004 and during certain periods of fiscal 2005, the Company begantesting cable television as a method to increase its brand awareness and todrive customers to its stores. The Company also began using national magazinesto increase its brand awareness. The Company expects to continue marketingthrough these channels to increase sales and brand awareness.

*General and Administrative Expenses*—Generaland administrative expenses (“G&A”), which consist primarily of corporatepayroll, overhead costs and distribution center costs, increased $7.9 millionin fiscal 2005, as compared with fiscal 2004. Total corporate costs, includingpayroll, incentive compensation, taxes and other corporate overhead costs,increased $6.4 million. The increases in corporate costs were primarily due toa) higher payroll, vacation and incentive compensation costs ($4.4 million), b)higher depreciation, occupancy and other administrative costs related to theexpansion of the corporate offices ($1.6 million), and c) higher travel costsrelated to business expansion ($0.4 million). Continued growth in the storesand direct marketing segments may result in further increases in G&A.

Distribution center costsincreased $1.5 million in fiscal 2005, primarily due to higher occupancy costs,as our newly expanded distribution center became fully operational at thebeginning of fiscal 2005. The Company expects distribution center costs toincrease in the future as it expects to process an increasing amount ofinventory units to support future growth in the stores and direct marketingsegments, and as utility costs are expected to increase in the region.

*Store Opening Costs*—Storeopening costs, which include the initial promotional advertising costs as wellas other start-up costs such as travel for recruitment, training and setup ofnew stores, decreased $0.5 million primarily due to a planned reduction inadvertising for new stores, as well as fewer store openings in fiscal 2005 ascompared with fiscal 2004.

*Interest Expense, net*—Interestexpense, net increased $0.1 million from fiscal 2004 to fiscal 2005 dueprimarily to higher interest rates. While the average daily revolver loanborrowings decreased $7.0 million to $16.3 million in fiscal 2005 ascompared with $23.3 million in fiscal 2004, the weighted average interestrate increased to 6.0% in fiscal 2005 as compared with 3.3% in fiscal 2004. Managementexpects peak borrowing levels and interest to fluctuate throughout fiscal 2006as the Company borrows in order to fund the opening of additional stores andgrowth in inventory levels.

23

----

*Income Taxes*—The fiscal2005 effective income tax rate increased to 41.2% as compared with 39.3% in thefiscal 2004. The income tax rate for fiscal 2004 includes a reduction ofpreviously recorded income tax liabilities settled or otherwise resolved in2004 of approximately $0.9 million.

**Fiscal2004 Compared to Fiscal 2003**

*Net Sales*—Net salesincreased 24.3% to $372.5 million in fiscal 2004 compared with$299.7 million in fiscal 2003. Total full-line store sales increased 25.2%in fiscal 2004 due primarily to an 8.4% increase in comparable store sales andthe opening of new stores as shown below. Direct marketing sales increased22.7% due primarily to increased catalog circulation and an increase in theInternet customer database and Internet affiliates. The catalog circulation was9.2 million in fiscal 2004 compared with 7.8 million in fiscal 2003.

Comparablestore sales increased 8.4% in fiscal 2004. For comparable stores, the averagedollars per transaction increased in fiscal 2004 partially as the result ofincreased sales of higher-priced Signature and Signature Gold products and thedevelopment of new products. Traffic (as measured by transactions) incomparable stores also increased in fiscal 2004, while items per transactiondecreased.

All major productcategories generated sales increases in fiscal 2004, lead by sales ofsportswear which increased over 36%. Sales of the more luxurious Signature andSignature Gold suits, which represented 37% of suit sales in fiscal 2004,increased over 29% in that period as compared with the same period last year. For fiscal 2004 and 2003, suits representedapproximately 26% and 27% of total merchandise sales, respectively.

Netsales also increased as a result of the opening of new stores. The followingtable provides information regarding the number of stores opened and closedduring fiscal 2003 and 2004:

| ** **                                | ** ** | **Fiscal 2003** | ** ** | **Fiscal 2004** | ** ** |
|-------------------------------------------|------------|----------------------|------------|----------------------|------------|
| ** **                                | ** ** | **Stores**           | ** ** | **Square  Feet***    | ** ** | **Stores** | ** ** | **Square  Feet*** | ** ** |
| Stores open at  the beginning of the year |       |                 | 160        |                 |       |   | 846 |   |   |   | 210 |   |   |   | 1,062 |   |   |
| Stores opened                             |       |                 | 50         |                 |       |   | 216 |   |   |   | 60 |   |   |   | 261 |   |   |
| Stores closed                             |       |                 | —     |                 |       |   | — |   |   |   | (1 | ) |   |   | (5 | ) |   |
| Stores open at the end  of the year       |       |                 | 210        |                 |       |   | 1,062 |   |   |   | 269 |   |   |   | 1,318 |   |   |

----

*                    Squarefeet is presented in thousands and excludes the square footage of the Company’sfranchise stores.

Historically, JoS. A. Bankhad included new stores in its comparable store base at the end of the firstfull fiscal year after opening. Existing stores have been excluded from thecomparable store sales if a new store has opened in their immediate market area(within zero to ten miles) during the previous twelve months. In fiscal 2005,comparable store sales include merchandise sales generated in all full-line storesthat have been open for at least thirteen full months, including retaillocations that have had a new JoS. A. Bank store open in their immediate marketarea (within zero to ten miles) during the previous twelve months, similar toother specialty stores.

If the Company hadcalculated its comparable store sales using this new methodology, thecomparable store sales increase for fiscal year 2004 would have approximated7.5%, versus the 8.4% noted above, a difference of nine-tenths of onepercentage point. For fiscal year 2003, the Company previously reported a gainof 8.2% in comparable store sales. If the Company had calculated its comparablestore sales using the new methodology, the increase in comparable store salesfor fiscal year 2003 would have been approximately 7.5%, a difference ofseven-tenths of one percentage point. Total sales would remain the same undereither method, an increase of 24.3% in 2004 and 23.1% in 2003.

*Gross Profit*—Grossprofit (net sales less cost of goods sold) increased to $224.8 million or60.4% of net sales in fiscal 2004 from $172.3 million or 57.5% of netsales in fiscal 2003, an increase of 290 basis points. The increased grossprofit percentage is primarily due to the continued improvement in sourcing of 

24

----

*merchandise,thus reducing the cost of items purchased and increases in retail pricesprimarily as sales of the Company’s new products and the more luxuriousSignature and Signature Gold products increased. Gross profit margins increasedin substantially all major product categories.*

The Company’s gross profitclassification may not be comparable to the classification used by certainother entities. Some entities include distribution, store occupancy, buying andother costs in cost of goods sold. Other entities (including the Company)exclude such costs from gross profit, including them instead in general &administrative and/or sales & marketing expenses.

*Sales and Marketing Expenses*—Sales and marketing expenses, which consist primarily of a) full-line store, factory store and direct marketing occupancy, payroll, sellingand other variable costs and b) total Company advertising and marketingexpenses, increased to $143.6 million or 38.6% of sales in fiscal 2004 from$110.2 million or 36.8% of sales in fiscal 2003. The $33.4 millionincrease in sales and marketing expenses related primarily toa) $22.3 million of additional costs incurred in the 50 stores openedin fiscal 2003 and the 60 stores which opened in fiscal 2004,b) $8.7 million additional costs related to expenses in the storeswhich were open prior to fiscal 2003 and c) the costs of the direct channel forhigher circulation and sales-related costs.

*General and Administrative Expenses*—Generaland administrative expenses, which consist primarily of corporate payroll andoverhead costs and distribution center costs, increased $7.4 million in fiscal2004. Total corporate payroll including incentive compensation and corporateoverhead costs increased $2.5 million and $3.6 million, respectively, in fiscal2004. The increases in corporate overhead costs were primarily due to a) highertravel costs and other expenses related to business expansion, b) professionalfees principally related to approximately $1.5 million spent for internalcontrol documentation efforts in compliance with Section 404 of theSarbanes-Oxley Act of 2002 and c) the payment of $0.5 million to the State ofNew York as discussed in Note 10 to the Consolidated Financial Statementsincluded in the Annual Report on Form 10-K for fiscal 2004. Totaldistribution center costs were $6.3 million and $5.2 million in 2004 and 2003,respectively.

*Store Opening Costs*—Storeopening costs, which include the initial promotional advertising costs as wellas other start-up costs such as travel for recruitment, training and setup ofnew stores, decreased $0.4 million due primarily to the location of newstore openings (which impacts the travel incurred for the stores) and plannedreduced advertising for new stores in fiscal 2004 versus fiscal 2003.

*Interest Expense, net*—Interestexpense increased $0.1 million due primarily to slightly higher borrowinglevels due to higher capital expenditures related to the opening of new stores.Average revolver loan borrowings increased $3.3 million to$23.3 million in fiscal 2004 compared with $20.0 million in fiscal2003 to fund the opening of 60 new stores in fiscal 2004.

*Income Taxes*—The fiscal2004 effective income tax rate decreased to 39.3% compared with 42.6% in thefiscal 2003. The decrease was primarily due to non-deductible compensationunder Section 162 (m) of Internal Revenue Code representing a smallerpercentage of the full year profitability of the Company. The income tax ratefor fiscal 2004 includes a reduction of previously recorded income taxliabilities settled or otherwise resolved in 2004 of approximately $0.9million.

**Liquidityand Capital Resources**

The Company maintains abank credit agreement (the “Credit Agreement”), which provides for a revolvingloan whose limit is determined by a formula based on the Company’s inventoriesand accounts receivable. The Credit Agreement allows the Company to borrow amaximum revolving amount under the facility up to $100 million. Inaddition, the Company has the option to increase the amount borrowed to$125 million if requested prior to April 30, 2006, if needed and ifsupported by its borrowing base formula under the Credit Agreement. The CreditAgreement also includes a) financial covenants concerning minimum EBITDA(earnings before interest, taxes, depreciation and amortization),b) limitations on capital expenditures and additional indebtedness andc) a restriction on the payment of cash dividends. The financial covenantsare in effect only if the Company’s availability in excess of outstandingborrowings 

25

----

is lessthan $7.5 million. The Company’s availability in excess of borrowings didnot drop below $7.5 million during fiscal 2005 and the Company does notanticipate that it will be less than $7.5 million at any point during fiscal2006. As of January 28, 2006, the Company was in compliance with all loancovenants. Interest rates under the Credit Agreement are either at the primerate or at LIBOR plus an amount that is determined based on the Company’savailability in excess of borrowings (which amount was 1.25% during fiscal 2005).Additionally, the Company has $5.8 million of term debt to be repaid as notedin the contractual obligations table below.

The Company’s availabilityin excess of outstanding borrowings, as supported by the existing borrowingbase under its Credit Agreement, was $99.6 million at January 28, 2006, ascompared with $74.6 million at January 29, 2005.

Thefollowing table summarizes the Company’s sources and uses of funds as reflectedin the Consolidated Statements of Cash Flows (in thousands):

| ** **                                            | ** ** | **Fiscal 2003** | ** ** | **Fiscal 2004** | ** ** | **Fiscal 2005** | ** ** |
|-------------------------------------------------------|------------|----------------------|------------|----------------------|------------|----------------------|------------|
| Cash provided by  (used in):                          |       |                 |       |                 |       |                 |       |   |   |   |   |   |   |
| Operating  activities                                 |       |                 | $          | (7,336               | )          |                 |       | $ | 51,453 |   |   |   | $ | 37,026 |   |   |
| Investing  activities                                 |       |                 | (23,245    | )                    |       |                 | (29,032    | ) |   |   | (31,577 | ) |   |
| Financing  activities                                 |       |                 | 23,067     |                 |       |                 | (21,871    | ) |   |   | 470 |   |   |
| Net increase (decrease)  in cash and cash equivalents |       |                 | $          | (7,514               | )          |                 |       | $ | 550 |   |   |   | $ | 5,919 |   |   |

 

Cash provided by theCompany’s operating activities in fiscal 2005 was generated primarily byincreased net income and was used to support a $49 million increase ininventory to support new store growth and to increase availability of certaincore items. Cash used in investing activities in fiscal 2005 relates primarilyto capital expenditures for new stores, distribution center and systemsprojects. Cash provided by financing activities relates primarily to $1.6million of proceeds from the issuance of common stock in connection with stockoption exercises, offset by $1.1 million of repayments of long term debt.

Cash provided by theCompany’s operating activities in fiscal 2004 increased compared with fiscal2003 primarily due to lower expenditures for inventory compared with the sameperiod of fiscal 2003 and increased net income. The net increase in inventorywas $6.9 million in fiscal 2004 compared with $42.5 million for fiscal 2003. Cashused in investing activities in fiscal 2004 relates primarily to capitalexpenditures for new stores and renovations of existing stores, distributioncenter and systems projects and was partially offset by the proceeds from thedisposal of certain equipment. Cash used by financing activities relatesprimarily to $23 million of net payments under the Company’s revolving loanunder the Credit Agreement, offset by $1.1 million from the proceeds of theexercise of stock options.

Cash used by the Company’soperating activities in fiscal 2003 was primarily the result of higherinventory levels offset, in part, by higher net income before depreciation andamortization. Finished goods inventories increased by $39.8 millionprimarily to support new store expansion. Raw material inventories (wool)increased $2.7 million as a result of the Company’s continuing effort tocontract directly with clothing manufacturers and cut out the middleman. Cashused in investing activities in fiscal 2003 relates to capital expenditures in50 new stores, renovating four major stores, and the expanding of thedistribution center.  In fiscal 2003,$23.1 million of cash was provided by financing activities primarily tosupport the increase in inventories necessitated by the Company’s expansion andto build the basic inventory levels. The source of these funds was$20.5 million from the Company’s revolving loan under the Credit Agreementand $3.7 million from the proceeds of the exercise of stock options. Also,the Company used $1.1 million for the repayment of long-term debt.

For fiscal 2006, theCompany expects to spend approximately $30 million to $35 million oncapital expenditures, primarily to fund the opening of approximately 50 to 65new stores, the renovation and/or relocation of several stores and theimplementation of various systems initiatives. Management believes 

26

----

that theCompany’s cash flow from operating activities and availability under its CreditAgreement will be sufficient to fund its planned capital expenditures andoperating expenses for fiscal 2006. The capital expenditures include the costof the construction of leasehold improvements for new stores of which $9-$12million is expected to be reimbursed through landlord contributions. Theseamounts are typically paid by the landlords after the completion ofconstruction by the Company and the receipt of appropriate lien waivers fromcontractors. For the stores opened and renovated in 2005, the Companynegotiated approximately $10.2 million of landlord contributions, of which$4.0 million were collected by year-end. The balance is expected to bereceived in fiscal 2006. Also, in fiscal 2005, the Company collectedapproximately $7.4 million of landlord contributions related to fiscal 2004store openings, which was recorded within the operating activities section ofthe Consolidated Statement of Cash Flows.

*Off-Balance SheetArrangements—**The*Company has no off-balancesheet arrangements other than its operating lease agreements and letters ofcredit outstanding under its Credit Agreement as discussed below.

**Disclosures aboutContractual Obligations and Commercial Commitments**

The Company’s principalcommitments are non-cancelable operating leases in connection with its retailstores, certain tailoring spaces and equipment. Under the terms of certain ofthese leases, the Company is required to pay a base annual rent plus acontingent amount based on sales. In addition, many of these leases includescheduled rent increases.

The following tablereflects a summary of the Company’s contractual cash obligations and othercommercial commitments as of January 28, 2006:

| ** **                      | ** ** | **Payments Due by Fiscal Year  (in thousands)** | ** ** | ** **    | ** ** |
|---------------------------------|------------|---------------------------------------------------------------------|------------|---------------|------------|
| ** **                      | ** ** | **2006**                                                            | ** ** | **2007-2009** | ** ** | **2010-2011** | ** ** | **Beyond 2011** | ** ** | **Total** | ** ** |
| Long-term debt                  |       | $                                                                   | 971        |          | $          | 2,820 |   |   | $ | 1,205 | ** ** |   |   | $ | 801 | ** ** |   | $ | 5,797 |   |
| Operating  leases(a)            |       | $                                                                   | 38,689     |          | $          | 105,477 |   |   | $ | 59,284 | ** ** |   |   | $ | 69,028 | ** ** |   | $ | 272,478 |   |
| Stand-by  Letter-of-credit(b)   |       | —                                                              |       | $             | 400        |   |   | — | ** ** |   |   | — | ** ** |   | $ | 400 |   |
| Scheduled  Interest Payments(c) |       | $                                                                   | 791        |          | $          | 1,641 |   |   | $ | 235 | ** ** |   |   | $ | 240 | ** ** |   | $ | 2,907 |   |
| License Agreement               |       | $                                                                   | 165        |          | $          | 495 |   |   | $ | 165 | ** ** |   |   | — | ** ** |   | $ | 825 |   |

----

(a)           Includes various lease agreements for stores tobe opened and equipment placed in service subsequent to January 28, 2006. SeeNote 9 to the Consolidated Financial Statements.

(b)          To secure the payment of rent at one leasedlocation included in “Operating Leases” above and is renewable each yearthrough the end of the lease term (2009).

(c)           These scheduled interest payments consist of interest payments on theoutstanding long term debt. For borrowings under the Company’s revolving loanagreement, projected interest is calculated based on the outstanding principalbalance as of January 28, 2006. For borrowings under the Company’svariable rate debt instruments (including the revolving loan agreement),interest is calculated based on the interest rates in effect on January 28,2006. The principal balance of the revolver and all variable interest ratesmay, and probably will, vary in future periods.

**Item7A.**                QUANTITATIVE ANDQUALITATIVE DISCLOSURES ABOUT MARKET RISK

At January 28, 2006, therewere no derivative financial instruments. In addition, the Company does notbelieve it is materially at risk for changes in market interest rates orforeign currency fluctuations. The Company’s interest on borrowings under itsCredit Agreement is at a variable rate based on the prime rate or a spread overthe LIBOR. A 100 basis point change in interest rate would have changedinterest expense by approximately $0.2 million in fiscal 2005.

**Item8.**                        FINANCIALSTATEMENTS AND SUPPLEMENTARY DATA

Refer to pages F-1to F-24 of this Annual Report on Form 10-K, which areincorporated by reference.

27

----

**Item9.**                        CHANGES INAND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

**Item9A.**                CONTROLS ANDPROCEDURES

**DisclosureControls and Procedures and Changes in Internal Control Over FinancialReporting**

*Limitations on Controlsand Procedures.**  *Becauseof their inherent limitations, disclosure controls and procedures and internalcontrol over financial reporting (collectively, “Control Systems”) may notprevent or detect all failures or misstatements of the type sought to beavoided by Control Systems. Also, projections of any evaluation of theeffectiveness of the Company’s Control Systems to future periods are subject tothe risk that controls may become inadequate because of changes in conditions,or that the degree of compliance with the policies or procedures maydeteriorate. Management, including the Company’s Chief Executive Officer (the “CEO”)and Chief Financial Officer (the “CFO”), does not expect that the Company’sControl Systems will prevent all error or all fraud. A Control System, nomatter how well conceived and operated, can provide only reasonable, notabsolute, assurance that the objectives of the Control System are met. Further,the design of a Control System must reflect the fact that there are resourceconstraints, and the benefits of controls must be considered relative to theircosts. Because of the inherent limitations in all Control Systems, noevaluation can provide absolute assurance that all control issues and instancesof fraud, if any, within the Company have been detected. These reports bymanagement, including the CEO and CFO, on the effectiveness of the Company’sControl Systems express only reasonable assurance of the conclusions reached.

*Disclosure Controls and Procedures—*The Company maintains disclosure controls andprocedures that are designed to ensure that information required to bedisclosed in the Company’s reports under the Securities Exchange Act of 1934,as amended (the “Exchange Act”), is recorded, processed, summarized, andreported within the time periods specified in the SEC’s rules and forms,and that such information is accumulated and communicated to management,including the CEO and CFO, as appropriate, to allow timely decisions regardingrequired disclosure.

Management, with theparticipation of the CEO and CFO, has evaluated the effectiveness, as of January 28,2006, of the Company’s disclosure controls and procedures (as defined in Rule 13a—15(e) and15d—15(e) under the Exchange Act). Based on that evaluation, the CEO andCFO have concluded that the Company’s disclosure controls and procedures wereeffective as of January 28, 2006.

*Management’s Annual Report on Internal Control over Financial Reporting—*Management is responsible for establishing andmaintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and15d-15(f) under the Exchange Act). Management, with theparticipation of the CEO and CFO, has evaluated the effectiveness, as of January 28,2006, of the Company’s internal control over financial reporting. In makingthis evaluation, management used the criteria set forth by the Committee ofSponsoring Organizations of the Treadway Commission in its publication InternalControl-Integrated Framework. Based onthat evaluation, the CEO and CFO have concluded that the Company’s internalcontrol over financial reporting was effective as of January 28, 2006.

*Changes in Internal Control over Financial Reporting—*There were no changes in the Company’s internalcontrol over financial reporting identified in connection with the evaluationrequired by paragraph (d) of Section 240.13a-15 of the ExchangeAct that occurred during the Company’s last fiscal quarter (the Company’s fourthquarter in the case of an annual report) that have materially affected, or arereasonably likely to materially affect, the Company’s internal control overfinancial reporting.

*AttestationReport of the Registered Public Accounting Firm*—The Company’s independent registeredpublic accounting firm, Deloitte & Touche, LLP, has issued thefollowing attestation report on the Company’s assessment and opinion on theeffectiveness of the Company’s internal control over financial reporting:

28

----

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM**

To the Board of Directors and Stockholders of Jos. A.Bank Clothiers, Inc.:

We have audited management’s assessment, included inthe accompanying Management’s Annual Report on Internal Control over FinancialReporting, that Jos. A. Bank Clothiers, Inc. and subsidiaries (the “Company”)maintained effective internal control over financial reporting as of January 28,2006 based on criteria established in *Internal Control—IntegratedFramework* issued by the Committee of Sponsoring Organizations of theTreadway Commission. The Company’s management is responsible for maintainingeffective internal control over financial reporting and for its assessment ofthe effectiveness of internal control over financial reporting. Ourresponsibility is to express an opinion on management’s assessment and anopinion on the effectiveness of the Company’s internal control over financialreporting based on our audit.

We conducted our audit in accordance with thestandards of the Public Company Accounting Oversight Board (United States). Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether effective internal control over financial reporting wasmaintained in all material respects. Our audit included obtaining anunderstanding of internal control over financial reporting, evaluatingmanagement’s assessment, testing and evaluating the design and operatingeffectiveness of internal control, and performing such other procedures as we considerednecessary in the circumstances. We believe that our audit provides a reasonablebasis for our opinions.

A company’s internal control over financial reportingis a process designed by, or under the supervision of, the company’s principalexecutive and principal financial officers, or persons performing similarfunctions, and effected by the company’s board of directors, management, andother personnel to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles. A company’sinternal control over financial reporting includes those policies andprocedures that (1) pertain to the maintenance of records that, inreasonable detail, accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accountingprinciples, and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition, use, or disposition of the company’sassets that could have a material effect on the financial statements.

Because of the inherent limitations of internalcontrol over financial reporting, including the possibility of collusion orimproper management override of controls, material misstatements due to erroror fraud may not be prevented or detected on a timely basis. Also, projectionsof any evaluation of the effectiveness of the internal control over financialreporting to future periods are subject to the risk that the controls maybecome inadequate because of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Companymaintained effective internal control over financial reporting as of January 28,2006, is fairly stated, in all material respects, based upon the criteriaestablished in *Internal Control—Integrated Framework*issued by the Committee of Sponsoring Organizations of the Treadway Commission.Also, in our opinion, the Company maintained, in all material respects,effective internal control over financial reporting  as of January 28, 2006, based upon thecriteria established in *Internal Control—IntegratedFramework* issued by the Committee of Sponsoring Organizations of theTreadway Commission.

We have also audited, inaccordance with the standards of the Public Company Accounting Oversight Board(United States), the consolidated financial statements as of and for the yearended January 28, 2006, 

29

----

of theCompany and our report dated April 11, 2006 expressed an unqualifiedopinion on those financial statements.

**/s/ *DELOITTE & TOUCHE LLP***

Baltimore, MDApril 11, 2006

30

----

**Item 9B.**               OTHERINFORMATION

None.

**PART III**

**Item10.**                 DIRECTORS ANDEXECUTIVE OFFICERS OF THE REGISTRANT

Item 10, other than thefollowing information concerning the Company’s code of ethics, is omitted bythe Company in accordance with General Instruction G to Form 10-K.The Company will disclose the information required under this item either by (a) incorporatingthe information by reference from the Company’s definitive proxy statement iffiled by May 30, 2006 (the first business day following 120 days fromthe close of its fiscal year ended January 28, 2006) or (b) filing anamendment to this Form 10-K which contains the required informationby May 30, 2006.

The Company has adopted a “codeof ethics” as defined by applicable rules of the Securities and ExchangeCommission and the NASDAQ Stock Market, which is applicable to, among others,its chief executive officer, chief financial officer, principal accountingofficer and other senior financial and reporting persons and its directors. Ifthe Company makes any amendments to the code of ethics for its senior officers,financial and reporting persons or directors (other than technical,administrative, or other non-substantive amendments), or grants any waivers,including implicit waivers, from a provision of this code to such persons, theCompany will disclose the nature of the amendment or waiver, its effective dateand to whom it applies on its website or in a report on Form 8-Kfiled with the Securities and Exchange Commission. The Company has posted itscode of ethics on its Internet website at www.josbank.com.

**Item11.**                 EXECUTIVECOMPENSATION

Item 11 is omitted by theCompany in accordance with General Instruction G to Form 10-K. TheCompany will disclose the information required under this item either by (a) incorporatingthe information by reference from the Company’s definitive proxy statement iffiled by May 30, 2006 (the first business day following 120 days fromthe close of its fiscal year ended January 28, 2006) or (b) filing anamendment to this Form 10-K which contains the required informationby May 30, 2006.

**Item12.**                 SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS

Item 12 is omitted by theCompany in accordance with General Instruction G to Form 10-K. TheCompany will disclose the information required under this item either by (a) incorporatingthe information by reference from the Company’s definitive proxy statement iffiled by May 30, 2006 (the first business day following 120 daysfrom the close of its fiscal year ended January 28, 2006) or (b) filingan amendment to this Form 10-K which contains the requiredinformation by May 30, 2006.

**Item13.**                 CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS

Item 13 is omitted by theCompany in accordance with General Instruction G to Form 10-K. TheCompany will disclose the information required under this item either by (a) incorporatingthe information by reference from the Company’s definitive proxy statement iffiled by May 30, 2006 (the first business day following 120 daysfrom the close of its fiscal year ended January 28, 2006) or (b) filingan amendment to this Form 10-K which contains the requiredinformation by May 30, 2006.

**Item14.**                 PRINCIPALACCOUNTANT FEES AND SERVICES

Item 14 is omitted by the Company in accordance withGeneral Instruction G to Form 10-K. The Company will disclose theinformation required under this item either by (a) incorporating theinformation by reference from the Company’s definitive proxy statement if filedby May 30, 2006 (the first business day following 120 days fromthe close of its fiscal year ended January 28, 2006) or (b) filing anamendment to this Form 10-K which contains the required informationby May 30, 2006.

31

----

**PART IV**

**Item 15.**                 EXHIBITSAND FINANCIAL STATEMENTS SCHEDULES

(a)           (1) **List of Financial Statements**

Thefollowing Consolidated Financial Statements of Jos. A. Bank Clothiers, Inc.and the related notes are filed as part of this Annual Report pursuant to Item 8:

|                                                                                                                                                   | ** ** | **Page** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------|------------|
| Report of  Independent Registered Public Accounting Firm—January 28, 2006 and  January 29, 2005 and for the years then ended       |       |     | F-1        |   |   |
| Report of Independent Registered Public Accounting  Firm—For the year ended January 31, 2004                                            |       |     | F-2        |   |   |
| Consolidated Balance Sheets as of January 29,  2005 and January 28, 2006                                                                |       |     | F-3        |   |   |
| Consolidated Statements of Income for the Years  Ended January 31, 2004, January 29, 2005 and January 28, 2006                     |       |     | F-4        |   |   |
| Consolidated Statements of Stockholders’ Equity for  the Years Ended January 31, 2004, January 29, 2005 and  January 28, 2006 |       |     | F-5        |   |   |
| Consolidated Statements of Cash Flows for the Years  Ended January 31, 2004, January 29, 2005 and January 28, 2006                 |       |     | F-6        |   |   |
| Notes to  Consolidated Financial Statements                                                                                                       |       |     | F-7        |   |   |

 

(a)           (2) **List of Financial Statement Schedules**

All requiredinformation is included within the Consolidated Financial Statements and thenotes thereto.

(a)           (3) **List of Exhibits**

| 3.1     |   | — |   | Restated Certificate of Incorporation of the  Company.*(1)                                                                                                                                                                  |
|---------|--------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2     |   | — |   | Amended and Restated  By-Laws of the Company as of April 15, 2003.*(15)                                                                                                                                                |
| 4.1     |   | — |   | Form of Common  Stock certificate.*(1)                                                                                                                                                                                 |
| 4.2     |   | — |   | Rights Agreement, dated  as of September 19, 1997, including Exhibit C thereto (the Certificate  of Designation governing the Company’s Series A Preferred Stock).*(4)                                  |
| 10.1    |   | — |   | 1994 Incentive Plan.*(1)†                                                                                                                                                                                              |
| 10.1(a) |   | — |   | Amendments, dated as of  October 6, 1997, to Incentive Plan.*(5)†                                                                                                                                                 |
| 10.2    |   | — |   | Amended and Restated  Credit Agreement, dated as of January 6, 2004, by and among the Company,  certain Lenders which are signatories thereto and Wells Fargo Retail Finance  II, LLC, as agent for such Lenders.*(17) |
| 10.3    |   | — |   | Amended and Restated  Employment Agreement, dated as of May 15, 2002, between David E. Ullman  and Jos. A. Bank Clothiers, Inc.*(12)†                                                                   |
| 10.3(a) |   | — |   | First Amendment, dated  April 30, 2003, to Amended and Restated Employment Agreement, dated as  of May 15, 2002, by and between David E. Ullman and Jos. A. Bank  Clothiers, Inc.*(15)†                 |

32

----

 

| 10.3(b) |   | — |   | Second Amendment, dated  as of April 4, 2005, to Amended and Restated Employment Agreement, dated  as of May 15, 2002, by and between David E. Ullman and Jos. A. Bank  Clothiers, Inc.*(20)†        |
|---------|--------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.3(c) |   | — |   | Third Amendment, dated  as of April 5, 2006, to Amended and Restated Employment Agreement, dated  as of May 15, 2002, by and between David E. Ullman and Jos. A. Bank  Clothiers, Inc.*(22)†         |
| 10.4    |   | — |   | Jos. A. Bank  Clothiers, Inc. Nonqualified Deferred Compensation Trust Agreement,  dated January 20, 2004.*(21)†                                                                                          |
| 10.5    |   | — |   | Employment Agreement,  dated as of September 19, 1997, between Gary W. Cejka and Jos. A.  Bank Clothiers, Inc.*(5)†                                                                                  |
| 10.6    |   | — |   | Amended and Restated  Employment Agreement, dated May 15, 2002, by and between Charles D.  Frazer and Jos. A. Bank Clothiers, Inc.*(12)†                                                             |
| 10.6(a) |   | — |   | First Amendment, dated  as of April 30, 2003, to Amended and Restated Employment Agreement,  dated as of May 15, 2002, by and between Charles D. Frazer and  Jos. A. Bank Clothiers, Inc.*(15)† |
| 10.6(b) |   | — |   | Second Amendment, dated  as of April 4, 2005, to Amended and Restated Employment Agreement, dated  as of May 15, 2002, by and between Charles D. Frazer and Jos. A.  Bank Clothiers, Inc.*(21)† |
| 10.6(c) |   | — |   | Third Amendment, dated  as of April 5, 2006, to Amended and Restated Employment Agreement, dated  as of May 15, 2002, by and between Charles D. Frazer and Jos. A.  Bank Clothiers, Inc.*(22)†  |
| 10.7    |   | — |   | Employment Agreement,  dated as of November 1, 1999, between Robert N. Wildrick and  Jos. A. Bank Clothiers, Inc.*(7)†                                                                               |
| 10.7(a) |   | — |   | First Amendment, dated  as of March 6, 2000, to Employment Agreement, dated as of  November 1, 1999, by and between Robert N. Wildrick and Jos. A. Bank  Clothiers, Inc.*(8)†                        |
| 10.7(b) |   | — |   | Second Amendment, dated  as of May 25, 2001, to Employment Agreement, dated as of November 1,  1999, by and between Robert N. Wildrick and Jos. A. Bank  Clothiers, Inc.*(10)†                       |
| 10.7(c) |   | — |   | Third Amendment, dated  as of October 2, 2003, to Employment Agreement, dated as of  November 1, 1999, by and between Robert N. Wildrick and Jos. A. Bank  Clothiers, Inc.*(16)†                     |
| 10.8    |   | — |   | Employment Agreement,  dated as of November 30, 1999, by and between Robert Hensley and  Jos. A. Bank Clothiers, Inc.*(7)†                                                                           |
| 10.8(a) |   | — |   | First Amendment, dated  as of January 1, 2000, to Employment Agreement, dated as of  November 30, 1999, by and between Robert Hensley and Jos. A. Bank  Clothiers, Inc.*(9)†                    |
| 10.8(b) |   | — |   | Second Amendment, dated  as of March 16, 2001, to Employment Agreement, dated as of  November 30, 1999, by and between Robert Hensley and Jos. A. Bank  Clothiers, Inc.*(9)†                         |

33

----

 

| 10.8(c)  |   | — |   | Third Amendment, dated  as of April 15, 2002, to Employment Agreement, dated as of  November 30, 1999, by and between Robert Hensley and Jos. A. Bank  Clothiers, Inc.*(11)†  |
|----------|--------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.8(d)  |   | — |   | Fourth Amendment, dated  as of May 28, 2002, to Employment Agreement, dated as of  November 30, 1999, by and between Robert Hensley and Jos. A. Bank  Clothiers, Inc.*(12)†   |
| 10.8(e)  |   | — |   | Fifth Amendment, dated  as of April 30, 2003, to Employment Agreement, dated as of  November 30, 1999, by and between Robert Hensley and Jos. A. Bank  Clothiers, Inc.*(15)†  |
| 10.8(f)  |   | — |   | Sixth Amendment, dated  as of April 4, 2005, to Employment Agreement, dated as of  November 30, 1999, by and between Robert Hensley and Jos. A. Bank  Clothiers, Inc.*(20)†   |
| 10.8(g)  |   | — |   | Seventh Amendment, dated  as of April 5, 2006, to Employment Agreement, dated as of  November 30, 1999, by and between Robert Hensley and Jos. A. Bank  Clothiers, Inc.*(22)† |
| 10.9     |   | — |   | Employment Agreement,  dated as of December 21, 1999, by and between R. Neal Black and  Jos. A. Bank Clothiers, Inc.*(8)†                                                     |
| 10.9(a)  |   | — |   | First Amendment, dated  as of March 16, 2001, to Employment Agreement, dated as of  December 21, 1999, by and between R. Neal Black and Jos. A. Bank  Clothiers, Inc.*(9)†    |
| 10.9(b)  |   | — |   | Second Amendment, dated  as of April 15, 2002, to Employment Agreement, dated as of  December 21, 1999, by and between Neal Black and Jos. A. Bank  Clothiers, Inc.*(11)†     |
| 10.9(c)  |   | — |   | Third Amendment, dated  as of May 29, 2002, to Employment Agreement, dated as of  December 21, 1999, by and between R. Neal Black and Jos. A. Bank  Clothiers, Inc.*(12)†     |
| 10.9(d)  |   | — |   | Fourth Amendment, dated  as of April 30, 2003, to Employment Agreement, dated as of  December 21, 1999, by and between R. Neal Black and Jos. A. Bank  Clothiers, Inc.*(15)†  |
| 10.9(e)  |   | — |   | Fifth Amendment, dated  as of April 4, 2005 to Employment Agreement, dated as of  December 21, 1999, by and between R. Neal Black and Jos. A. Bank  Clothiers, Inc.*(20)†     |
| 10.9(f)  |   | — |   | Sixth Amendment, dated  as of April 5, 2006 to Employment Agreement, dated as of December 21,  1999, by and between R. Neal Black and Jos. A. Bank Clothiers, Inc.*(22)†      |
| 10.10    |   | — |   | Employment offer letter,  dated November 20, 2000, from Jos. A. Bank Clothiers, Inc. to Jerry  DeBoer.*(9)†                                                                        |
| 10.10(a) |   | — |   | Written description of  2006 base salary for Jerry DeBoer.*(22)†                                                                                                                             |
| 10.11    |   | — |   | Employment offer letter,  dated September 18, 2000, from Jos. A. Bank  Clothiers, Inc. to Gary Merry.*(12)†                                                              |
| 10.12    |   | — |   | 2002 Long-Term Incentive  Plan.*(14)†                                                                                                                                                        |
| 10.13    |   | — |   | Form of stock  option agreement under the 2002 Long-Term Incentive Plan.*(20)†                                                                                                          |
| 10.14    |   | — |   | Collective Bargaining  Agreement, dated March 1, 2003, by and between Joseph A. Bank Mfg.  Co., Inc. and Baltimore Regional Joint Board, UNITE.*(23)†                              |
| 10.15    |   | — |   | Descriptions of Basic  Bonus Plan, Incentive Bonus Plan and Contractual Bonus Plan.*(23)†                                                                                                    |

34

----

 

| 16.1 |   | — |   | Letter from Arthur  Andersen, LLP to the Securities and Exchange Commission, dated May 1,  2002.*(13)          |
|------|--------|--------|--------|---------------------------------------------------------------------------------------------------------------------|
| 16.2 |   | — |   | Letter from KPMG, LLP to  the Securities and Exchange Commission, dated April 20, 2004.*(18)                   |
| 16.3 |   | — |   | Letter from Ernst &  Young, LLP to the Securities and Exchange Commission, dated May 14,  2004.*(19)  |
| 21.1 |   | — |   | Company subsidiaries.*(21)                                                                                          |
| 23.1 |   | — |   | Consent of  Deloitte & Touche LLP.*(23)                                                                    |
| 23.2 |   | — |   | Consent of KPMG, LLP.*(23)                                                                                          |
| 31.1 |   | — |   | Certification of  Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley  Act of 2002.*(23) |
| 31.2 |   | — |   | Certification of  Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley  Act of 2002.*(23) |
| 32.1 |   | — |   | Certification of  Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley  Act of 2002.*(23) |
| 32.2 |   | — |   | Certification of  Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley  Act of 2002.*(23) |

----

| *(1)  |   | — |   | Incorporated by reference to the Company’s Registration  Statement on Form S-1 filed May 3, 1994.                  |
|-------|--------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|
| *(2)  |   | — |   | Incorporated by  reference to the Company’s Annual Report on Form 10-K for the year  ended February 3, 1996.       |
| *(3)  |   | — |   | Incorporated by  reference to the Company’s Annual Report on Form 10-K for the year  ended February 1, 1997.       |
| *(4)  |   | — |   | Incorporated by  reference to the Company’s Form 8-K dated September 22, 1997.                                     |
| *(5)  |   | — |   | Incorporated by  reference to the Company’s Annual Report on Form 10-K for the year  ended January 31, 1998.       |
| *(6)  |   | — |   | Incorporated by  reference to the Company’s Annual Report on Form 10-K for the year  ended January 30, 1999.       |
| *(7)  |   | — |   | Incorporated by  reference to the Company’s Quarterly Report on Form 10-Q for the  quarter ended October 30, 1999. |
| *(8)  |   | — |   | Incorporated by  reference to the Company’s Annual Report on Form 10-K for the year  ended January 29, 2000.       |
| *(9)  |   | — |   | Incorporated by  reference to the Company’s Annual Report on Form 10-K for the year  ended February 3, 2001.       |
| *(10) |   | — |   | Incorporated by  reference to the Company’s Quarterly Report on Form 10-Q for the  quarter ended May 5, 2001.      |
| *(11) |   | — |   | Incorporated by  reference to the Company’s Annual Report on Form 10-K for the year  ended February 2, 2002.       |

35

----

 

| *(12)  |   | — |   | Incorporated by  reference to the Company’s Quarterly Report on Form 10-Q for the  quarter ended May 4, 2002.     |
|--------|--------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------|
| *(13)  |   | — |   | Incorporated by  reference to the Company’s Current Report on Form 8-K, dated  May 8, 2002.                       |
| *(14)  |   | — |   | Incorporated by  reference to the Company’s Definitive Proxy Statement on Schedule  14(A) filed May 20, 2002.     |
| *(15)  |   | — |   | Incorporated by  reference to the Company’s Annual Report on Form 10-K for the year  ended February 1, 2003.      |
| *(16)  |   | — |   | Incorporated by  reference to the Company’s Quarterly Report on Form 10-Q for the  quarter ended November 1, 2003 |
| *(17)  |   | — |   | Incorporated by reference to the Company’s Annual  Report on Form 10-K for the year ended January 31, 2004.       |
| *(18)  |   | — |   | Incorporated by  reference to the Company’s Current Report on Form 8-K, dated  April 20, 2004.                    |
| *(19)  |   | — |   | Incorporated by  reference to the Company’s Current Report on Form 8-K, dated  May 14, 2004.                      |
| *(20)  |   | — |   | Incorporated by  reference to the Company’s Current Report on Form 8-K, dated  April 7, 2005.                     |
| *(21)  |   | — |   | Incorporated by  reference to the Company’s Annual Report on Form 10-K for the year  ended January 29, 2005.      |
| *(22)  |   | — |   | Incorporated by  reference to the Company’s Current Report on Form 8-K, dated  April 6, 2006.                     |
| *(23)  |   | — |   | Filed herewith.                                                                                                                  |
| † |   | — |   | Exhibit represents a  management contract or compensatory plan or arrangement.                                                   |

 

36

----

Pursuant to the requirements of Section 13 or l5(d) ofthe Securities Exchange Act of 1934, the registrant has duly caused this Reportto be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 11,2006

| ** ** | ** ** | **JOS. A. BANK CLOTHIERS, INC.**      |
|------------|------------|--------------------------------------------|
| ** ** | ** ** | **(registrant)**                           |
| ** ** | **By:**    | **/s/ ROBERT N. WILDRICK**                 |
| ** ** | ** ** | **ROBERT  N. WILDRICK**                    |
| ** ** | ** ** | **CHIEF  EXECUTIVE OFFICER AND PRESIDENT** |

 

Pursuantto the requirements of the Securities Exchange Act of 1934, this Report hasbeen signed below by the following persons in the capacities and on the datesindicated.
| Name                   | ** ** | **Title**                                                       | ** ** | **Date**             |
|------------------------|------------|-----------------------------------------------------------------|------------|----------------------|
| /s/ ROBERT N. WILDRICK |       | Director, Chief Executive  Officer and President                |       | April 11,  2006 |
|                   |       | (Principal Executive Officer)                                   |       |                 |
| /s/ DAVID E. ULLMAN    |       | Executive Vice President,  Chief Financial Officer              |       | April 11,  2006 |
|                   |       | (Principal Financial Officer and Principal Accounting  Officer) |       |                 |
| /s/ ANDREW A. GIORDANO |       | Director, Chairman of the  Board                                |       | April 11,  2006 |
| /s/ GARY S. GLADSTEIN  |       | Director                                                        |       | April 11,  2006 |
| /s/ WILLIAM E. HERRON  |       | Director                                                        |       | April 11,  2006 |
| /s/ DAVID A. PREISER   |       | Director                                                        |       | April 11,  2006 |
| /s/ SIDNEY H. RITMAN   |       | Director                                                        |       | April 11,  2006 |

 

37

----

**Draftv7—For Management Discussion Only**

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM**

To the Board of Directorsand Stockholders of Jos. A. Bank Clothiers, Inc.:

We have audited the accompanying consolidated balancesheets of Jos. A. Bank Clothiers, Inc. and subsidiaries (the “Company”) asof January 28, 2006 and January 29, 2005 and the related consolidatedstatements of income, stockholders’ equity, and cash flows for year ended January 28,2006 (“fiscal 2005”) and for the year ended January 29, 2005 (“fiscal 2004”).These financial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on the consolidated financialstatements based on our audits. The financial statements of the Company for theyear ended January 31, 2004 were audited by other auditors whose report,dated March 25, 2004 (except as to the effects of the eighth paragraph ofNote 1, which is as of April 13, 2005) expressed an unqualified opinion onthose statements.

We conducted our audits in accordance with thestandards of the Public Company Accounting Oversight Board (United States). Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such fiscal 2005 and fiscal 2004consolidated financial statements present fairly, in all material respects, thefinancial position of Jos. A. Bank Clothiers, Inc. and subsidiaries as of January 28,2006 and January 29, 2005, and the results of its operations and its cashflows for the years then ended, in conformity with accounting principlesgenerally accepted in the United States of America.

We have also audited, inaccordance with the standards of the Public Company Accounting Oversight Board(United States), the effectiveness of the Company’s internal control overfinancial reporting as of January 28, 2006, based on the criteria  established in *Internal  Control—Integrated  Framework* issued by the Committeeof Sponsoring  Organizations of theTreadway Commission and our report dated April 11, 2006, expressed anunqualified opinion on management’s assessment of the effectiveness of theCompany’s internal control over financial reporting and an unqualified opinionon the effectiveness of the Company’s internal control over financialreporting.

/s/ DELOITTE &TOUCHE LLP

Baltimore, MDApril 11, 2006

F-1

----

**Report of Independent Registered Public Accountant**

The Board of DirectorsJos. A. Bank Clothiers, Inc.:

We have audited the accompanying consolidatedstatements of income, stockholders’ equity and cash flows of Jos. A. BankClothiers, Inc. and subsidiaries for the year ended January 31, 2004.These consolidated financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audit.

We conducted our audit in accordance with thestandards of the Public Company Accounting Oversight Board (United States). Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessingthe accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audit provides a reasonable basis for our opinion.

In our opinion, theconsolidated financial statements referred to above present fairly, in allmaterial respects, the results of operations and cash flows of Jos. A. BankClothiers, Inc. and subsidiaries for the year ended January 31, 2004,in conformity with U.S. generally accepted accounting principles.
| /s/ KPMG LLP                                                                                     |
|--------------------------------------------------------------------------------------------------|
| March 25, 2004,  except as to the effects of the eighth paragraph of note 1, which is as of |
| April 13, 2005                                                                              |

 

F-2

----

**JOS.A. BANK CLOTHIERS, INC.CONSOLIDATED BALANCE SHEETSJANUARY 29, 2005 AND JANUARY 28, 2006(In Thousands, Except Share and Per Share Information)**

| ** **                                                                                                                                                                                   | ** ** | **January 29, 2005** | ** ** | **January 28, 2006** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------|------------|--------------------------------|------------|
| **ASSETS**                                                                                                                                                                                   |       |                           |       | ** **                     |       |   | ** ** | ** ** |   |
| **CURRENT ASSETS:**                                                                                                                                                                          |       |                           |       | ** **                     |       |   | ** ** | ** ** |   |
| Cash and cash equivalents                                                                                                                                                                    |       |                           | $          | 1,425                          | ** ** |   |   | **$** | **7,344** | ** ** |   |
| Accounts receivable, net                                                                                                                                                                     |       |                           | 4,798      | ** **                     |       |   | **6,455** | ** ** |   |
| Inventories, net                                                                                                                                                                             |       |                           | 127,693    | ** **                     |       |   | **176,642** | ** ** |   |
| Prepaid expenses and other current assets                                                                                                                                                    |       |                           | 11,892     | ** **                     |       |   | **12,852** | ** ** |   |
| Deferred income taxes                                                                                                                                                                        |       |                           | 2,367      | ** **                     |       |   | **—** | ** ** |   |
| Total current assets                                                                                                                                                                         |       |                           | 148,175    | ** **                     |       |   | **203,293** | ** ** |   |
| **NONCURRENT ASSETS:**                                                                                                                                                                       |       |                           |       | ** **                     |       |   | ** ** | ** ** |   |
| Property, plant and equipment, net                                                                                                                                                           |       |                           | 83,621     | ** **                     |       |   | **100,973** | ** ** |   |
| Other noncurrent assets                                                                                                                                                                      |       |                           | 1,508      | ** **                     |       |   | **566** | ** ** |   |
| Total assets                                                                                                                                                                                 |       |                           | $          | 233,304                        | ** ** |   |   | **$** | **304,832** | ** ** |   |
| **LIABILITIES  AND STOCKHOLDERS’ EQUITY**                                                                                                                                               |       |                           |       | ** **                     |       |   | ** ** | ** ** |   |
| **CURRENT LIABILITIES:**                                                                                                                                                                     |       |                           |       | ** **                     |       |   | ** ** | ** ** |   |
| Accounts payable                                                                                                                                                                             |       |                           | $          | 40,133                         | ** ** |   |   | **$** | **42,678** | ** ** |   |
| Accrued expenses                                                                                                                                                                             |       |                           | 37,505     | ** **                     |       |   | **52,480** | ** ** |   |
| Current portion of long-term debt                                                                                                                                                            |       |                           | 917        | ** **                     |       |   | **971** | ** ** |   |
| Deferred tax liability                                                                                                                                                                       |       |                           | —     | ** **                     |       |   | **10,954** | ** ** |   |
| Total current liabilities                                                                                                                                                                    |       |                           | 78,555     | ** **                     |       |   | **107,083** | ** ** |   |
| **NONCURRENT LIABILITIES:**                                                                                                                                                                  |       |                           |       | ** **                     |       |   | ** ** | ** ** |   |
| Long-term debt, net of current portion                                                                                                                                                       |       |                           | 5,942      | ** **                     |       |   | **4,826** | ** ** |   |
| Noncurrent lease obligations                                                                                                                                                                 |       |                           | 30,318     | ** **                     |       |   | **35,007** | ** ** |   |
| Noncurrent deferred tax liability                                                                                                                                                            |       |                           | 3,227      | ** **                     |       |   | **2,697** | ** ** |   |
| Other noncurrent liabilities                                                                                                                                                                 |       |                           | 938        | ** **                     |       |   | **1,419** | ** ** |   |
| Total liabilities                                                                                                                                                                            |       |                           | 118,980    | ** **                     |       |   | **151,032** | ** ** |   |
| **COMMITMENTS AND CONTINGENCIES**                                                                                                                                                            |       |                           |       | ** **                     |       |   | ** ** | ** ** |   |
| **STOCKHOLDERS’ EQUITY:**                                                                                                                                                               |       |                           |       | ** **                     |       |   | ** ** | ** ** |   |
| Preferred stock, $1.00 par, 500,000 shares  authorized, none issued or outstanding                                                                                                           |       |                           | —     | ** **                     |       |   | **—** | ** ** |   |
| Common stock, $.01 par, 20,000,000 shares  authorized, 19,417,125 issued and 16,825,370 outstanding at January 29,  2005 and 17,283,804 issued and outstanding at January 28, 2006 |       |                           | 124        | ** **                     |       |   | **173** | ** ** |   |
| Additional paid-in capital                                                                                                                                                                   |       |                           | 67,594     | ** **                     |       |   | **66,757** | ** ** |   |
| Retained earnings                                                                                                                                                                            |       |                           | 51,664     | ** **                     |       |   | **86,870** | ** ** |   |
| Treasury stock, 2,591,755 shares of common stock, at  cost, at January 29, 2005 and -0- at January 28, 2006                                                                        |       |                           | (5,058     | )                              |       |   | — | ** ** |   |
| Total stockholders’ equity                                                                                                                                                              |       |                           | 114,324    | ** **                     |       |   | **153,800** | ** ** |   |
| Total liabilities  and stockholders’ equity                                                                                                                                             |       |                           | $          | 233,304                        | ** ** |   |   | **$** | **304,832** | ** ** |   |

 

The accompanying notes are an integral part of these consolidated financial statements.

F-3

----

**JOS.A. BANK CLOTHIERS, INC.CONSOLIDATED STATEMENTS OF INCOMEFISCAL 2003, 2004 AND 2005(In Thousands, Except Per Share Information)**

| ** **                                | ** ** | **Fiscal 2003** | ** **  | **Fiscal 2004** | ** ** | **Fiscal 2005** | ** **  |
|-------------------------------------------|------------|----------------------|-------------|----------------------|------------|----------------------|-------------|
| **NET  SALES**                            | ** ** |                 | **$**       | **299,663**          | ** ** |                 |        | **$** | **372,500** | ** ** |   |   | **$** | **464,633** | ** ** |   |
| Cost of goods  sold                       |       |                 | 127,364     | ** **           |       |                 | 147,674     | ** ** |   |   | **177,006** | ** ** |   |
| **GROSS  PROFIT**                         | ** ** |                 | **172,299** | ** **           |       |                 | **224,826** | ** ** |   |   | **287,627** | ** ** |   |
| OPERATING EXPENSES:                       |       |                 |        | ** **           |       |                 | ** **  | ** ** |   |   | ** ** | ** ** |   |
| Sales and marketing                       |       |                 | 110,230     | ** **           |       |                 | 143,586     | ** ** |   |   | **179,201** | ** ** |   |
| General and administrative                |       |                 | 30,554      | ** **           |       |                 | 38,003      | ** ** |   |   | **45,930** | ** ** |   |
| Store opening costs                       |       |                 | 1,539       | ** **           |       |                 | 1,184       | ** ** |   |   | **701** | ** ** |   |
| Total operating  expenses                 |       |                 | 142,323     | ** **           |       |                 | 182,773     | ** ** |   |   | **225,832** | ** ** |   |
| **OPERATING  INCOME**                     | ** ** |                 | **29,976**  | ** **           |       |                 | **42,053**  | ** ** |   |   | **61,795** | ** ** |   |
| Interest expense,  net                    |       |                 | 1,623       | ** **           |       |                 | 1,696       | ** ** |   |   | **1,794** | ** ** |   |
| Income before  provision for income taxes |       |                 | 28,353      | ** **           |       |                 | 40,357      | ** ** |   |   | **60,001** | ** ** |   |
| Provision for  income taxes               |       |                 | 12,073      | ** **           |       |                 | 15,876      | ** ** |   |   | **24,751** | ** ** |   |
| **NET  INCOME**                           | ** ** |                 | **$**       | **16,280**           | ** ** |                 |        | **$** | **24,481** | ** ** |   |   | **$** | **35,250** | ** ** |   |
| **EARNINGS PER SHARE**                    | ** ** |                 | ** **  | ** **           |       |                 | ** **  | ** ** |   |   | ** ** | ** ** |   |
| **Net income:**                           | ** ** |                 | ** **  | ** **           |       |                 | ** **  | ** ** |   |   | ** ** | ** ** |   |
| **Basic**                                 | ** ** |                 | **$**       | **1.06**             | ** ** |                 |        | **$** | **1.47** | ** ** |   |   | **$** | **2.07** | ** ** |   |
| **Diluted**                               | ** ** |                 | **$**       | **0.94**             | ** ** |                 |        | **$** | **1.38** | ** ** |   |   | **$** | **1.95** | ** ** |   |
| Weighted average shares  outstanding:     |       |                 |        | ** **           |       |                 | ** **  | ** ** |   |   | ** ** | ** ** |   |
| Basic                                     |       |                 | 15,310      | ** **           |       |                 | 16,680      | ** ** |   |   | **17,021** | ** ** |   |
| Diluted                                   |       |                 | 17,354      | ** **           |       |                 | 17,789      | ** ** |   |   | **18,031** | ** ** |   |

 

The accompanying notes are an integral part of these consolidated financial statements.

F-4

----

**JOS.A. BANK CLOTHIERS, INC.CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITYFISCAL 2003, 2004 AND 2005(In Thousands, Except Share Information)**

| ** **                                                                                 | ** ** | **Shares of  common   stock** | ** ** | **Common  stock** | ** ** | **Additional  paid-in  capital** | ** ** | **Retained  earnings** | ** ** | **Treasury  stock** | ** ** | **Total  stockholders’  equity** | ** ** |
|--------------------------------------------------------------------------------------------|------------|-----------------------------------------|------------|-------------------|------------|----------------------------------|------------|------------------------|------------|---------------------|------------|---------------------------------------|------------|
| **BALANCE, FEBRUARY 1, 2003**                                                         | ** ** | **14,528,550**                          | ** ** |              | **$**      | **110**                          | ** ** |                   |       | **$**               | **58,968** | ** **                            |       |   | **$** | **10,903** | ** ** |   |   | **$** | **(5,058** | **)** |   |   | **$** | **64,923** | ** ** |   |
| Net income                                                                                 |       | —                                  |       |              | —     | ** **                       |       |                   | —     |                |       |                                  | 16,280     |   |   |   | — | ** ** |   |   | 16,280 |   |   |
| Issuance of common stock pursuant to Incentive Option  Plan and stock compensation expense |       | 1,953,201                               |       |              | 12         | ** **                       |       |                   | 3,711      |                |       |                                  | —     |   |   |   | — | ** ** |   |   | 3,723 |   |   |
| Income tax benefit from exercise of non-qualified  stock options                      |       | —                                  |       |              | —     | ** **                       |       |                   | 1,528      |                |       |                                  | —     |   |   |   | — | ** ** |   |   | 1,528 |   |   |
| **BALANCE, JANUARY 31, 2004**                                                         | ** ** | **16,481,751**                          | ** ** |              | **$**      | **122**                          | ** ** |                   |       | **$**               | **64,207** | ** **                            |       |   | **$** | **27,183** | ** ** |   |   | **$** | **(5,058** | **)** |   |   | **$** | **86,454** | ** ** |   |
| Net income                                                                                 |       | —                                  |       |              | —     | ** **                       |       |                   | —     |                |       |                                  | 24,481     |   |   |   | — | ** ** |   |   | 24,481 |   |   |
| Issuance of common stock pursuant to Incentive Option  Plan                                |       | 345,452                                 |       |              | 2          | ** **                       |       |                   | 1,166      |                |       |                                  | —     |   |   |   | — | ** ** |   |   | 1,168 |   |   |
| Income tax benefit from exercise of non-qualified  stock options                      |       | —                                  |       |              | —     | ** **                       |       |                   | 2,256      |                |       |                                  | —     |   |   |   | — | ** ** |   |   | 2,256 |   |   |
| Stock dividend fractional share repurchase                                                 |       | (1,833                                  | )          |              | —     | ** **                       |       |                   | (35        | )                   |       |                                  | —     |   |   |   | — | ** ** |   |   | (35 | ) |   |
| **BALANCE, JANUARY 29, 2005**                                                         | ** ** | **16,825,370**                          | ** ** |              | **$**      | **124**                          | ** ** |                   |       | **$**               | **67,594** | ** **                            |       |   | **$** | **51,664** | ** ** |   |   | **$** | **(5,058** | **)** |   |   | **$** | **114,324** | ** ** |   |
| Net income                                                                                 |       | —                                  |       |              | —     | ** **                       |       |                   | —     |                |       |                                  | 35,250     |   |   |   | — | ** ** |   |   | 35,250 |   |   |
| Retirement of treasury stock, at cost                                                      |       | —                                  |       |              | —     | ** **                       |       |                   | (5,058     | )                   |       |                                  | —     |   |   |   | 5,058 | ** ** |   |   | — |   |   |
| Issuance of common stock pursuant to Incentive Option  Plan                                |       | 460,156                                 |       |              | 5          | ** **                       |       |                   | 1,596      |                |       |                                  | —     |   |   |   | — | ** ** |   |   | 1,601 |   |   |
| Income tax benefit from exercise of non-qualified  stock options                      |       | —                                  |       |              | —     | ** **                       |       |                   | 2,694      |                |       |                                  | —     |   |   |   | — | ** ** |   |   | 2,694 |   |   |
| Stock dividend fractional share repurchase                                                 |       | (1,722                                  | )          |              | —     | ** **                       |       |                   | (69        | )                   |       |                                  | —     |   |   |   | — | ** ** |   |   | (69 | ) |   |
| Stock dividend transfer of par value                                                       |       | —                                  |       |              | 44         | ** **                       |       |                   | —     |                |       |                                  | (44        | ) |   |   | — | ** ** |   |   | — |   |   |
| **BALANCE,  JANUARY 28, 2006**                                                        | ** ** | **17,283,804**                          | ** ** |              | **$**      | **173**                          | ** ** |                   |       | **$**               | **66,757** | ** **                            |       |   | **$** | **86,870** | ** ** |   |   | **$** | **—** | ** ** |   |   | **$** | **153,800** | ** ** |   |

 

The accompanying notes are an integral part of these consolidated financial statements.

F-5

----

**JOS. A. BANK CLOTHIERS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSFISCAL 2003, 2004 AND 2005(In Thousands)**

| ** **                                                                                   | ** ** | **Fiscal 2003** | ** ** | **Fiscal 2004** | ** ** | **Fiscal 2005** | ** ** |
|----------------------------------------------------------------------------------------------|------------|----------------------|------------|----------------------|------------|----------------------|------------|
| **CASH FLOWS FROM OPERATING  ACTIVITIES:**                                                   |       |                 |       |                 |       |                 |       |   |   |
| Net income                                                                                   |       |                 | $          | 16,280               |       |                 | $          | 24,481 |   | $ | 35,250 |   |
| Adjustments to reconcile  net income to net cash provided by (used in) operating activities: |       |                 |       |                 |       |                 |       |   |   |
| Deferred tax expense                                                                         |       |                 | 886        |                 |       | 1,906                |       | 12,791 |   |
| Depreciation and amortization                                                                |       |                 | 9,382      |                 |       | 10,498               |       | 13,020 |   |
| Loss on disposition of assets                                                                |       |                 | 29         |                 |       | 4                    |       | 31 |   |
| Income tax benefit from exercise of non-qualified  stock options                             |       |                 | 1,528      |                 |       | 2,256                |       | 2,694 |   |
| Changes in assets and  liabilities:                                                          |       |                 |       |                 |       |                 |       |   |   |
| Increase in accounts receivable                                                              |       |                 | (1,371     | )                    |       | (597                 | )          | (1,657 | ) |
| Increase in inventories                                                                      |       |                 | (42,532    | )                    |       | (6,905               | )          | (48,949 | ) |
| Increase in prepaid expenses and other assets                                                |       |                 | (3,653     | )                    |       | (1,569               | )          | (960 | ) |
| (Increase) decrease in non-current assets                                                    |       |                 | —     |                 |       | (273                 | )          | 942 |   |
| Increase (decrease) in accounts payable                                                      |       |                 | (625       | )                    |       | 11,385               |       | 2,545 |   |
| Increase in accrued expenses                                                                 |       |                 | 8,534      |                 |       | 263                  |       | 16,149 |   |
| Increase in noncurrent lease obligations                                                     |       |                 | 5,771      |                 |       | 10,266               |       | 4,689 |   |
| Decrease in other noncurrent liabilities                                                     |       |                 | (1,565     | )                    |       | (262                 | )          | 481 |   |
| Net cash provided by (used in) operating activities                                          |       |                 | (7,336     | )                    |       | 51,453               |       | 37,026 |   |
| **CASH FLOWS USED FOR INVESTING  ACTIVITIES:**                                               |       |                 |       |                 |       |                 |       |   |   |
| Payments for capital expenditures                                                            |       |                 | (23,245    | )                    |       | (29,939              | )          | (31,577 | ) |
| Proceeds from disposal of assets                                                             |       |                 | —     |                 |       | 907                  |       | — |   |
| Net cash used for investing activities                                                       |       |                 | (23,245    | )                    |       | (29,032              | )          | (31,577 | ) |
| **CASH FLOWS FROM FINANCING  ACTIVITIES:**                                                   |       |                 |       |                 |       |                 |       |   |   |
| Borrowings under revolving loan agreement                                                    |       |                 | 87,165     |                 |       | 80,360               |       | 106,185 |   |
| Repayment of borrowings under revolving loan  agreement                                      |       |                 | (66,688    | )                    |       | (100,947             | )          | (106,185 | ) |
| Repayment of other long-term debt                                                            |       |                 | (1,133     | )                    |       | (2,417               | )          | (1,062 | ) |
| Proceeds from issuance of common stock, net of  fractional share repurchase                  |       |                 | 3,723      |                 |       | 1,133                |       | 1,532 |   |
| Net cash provided by (used in) financing activities                                          |       |                 | 23,067     |                 |       | (21,871              | )          | 470 |   |
| Net increase (decrease) in cash and cash equivalents                                         |       |                 | (7,514     | )                    |       | 550                  |       | 5,919 |   |
| **CASH  AND CASH EQUIVALENTS, beginning of year**                                            | ** ** | ** **           | **8,389**  |                 | ** ** | **875**              | ** ** | **1,425** | ** ** |
| **CASH AND CASH EQUIVALENTS, end  of year**                                                  | ** ** | ** **           | **$**      | **875**              |       | ** **           | **$**      | **1,425** | ** ** | **$** | **7,344** | ** ** |

 

The accompanying notes are an integral part of these consolidated financial statements.

F-6

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:**

**Description of Business—****Jos.**A.Bank Clothiers, Inc. is a nationwide retailer of classic men’s clothingthrough conventional retail stores, catalog and Internet direct marketing andfranchisees.

**Principles of Consolidation—****The**consolidatedfinancial statements include the accounts of Jos. A. Bank Clothiers, Inc.and its wholly-owned subsidiaries (collectively referred to as the “Company”).All significant intercompany balances and transactions have been eliminated inconsolidation.

**Common Stock Dividend—****On**December 14,2005, the Company’s Board of Directors declared a 25% common stock dividendpayable on February 15, 2006 to stockholders of record as of January 27,2006. In conjunction with the distribution of the stock dividend, the Companyretired all of its previously held shares of treasury stock. Unless otherwiseindicated, all historical weighted average share and per share amounts and allreferences to the number of common shares elsewhere in the consolidatedfinancial statements, and notes thereto, have been restated to reflect thestock dividend.

**Fiscal Year—****The**Companymaintains its accounts on a fifty-two/fifty-three week fiscal year endingon the Saturday nearest to January 31. The fiscal years ended January 31,2004 (fiscal 2003), January 29, 2005 (fiscal 2004) and January 28,2006 (fiscal 2005) each contained fifty-two weeks.

**Seasonality—****The**Company’snet sales, net income and inventory levels fluctuate on a seasonal basis. TheCompany has increased its marketing efforts during peak selling times andexpanded its inventory to include more Corporate Casual and Sportswear,resulting in profits generated during the fourth quarter holiday seasonbecoming a larger portion of annual profits. Seasonality is also impacted bygrowth as more new stores are opened in the second half of the year. Seasonalfluctuations typically affect the Company’s inventory levels, with higherinventory carried in advance of peak selling periods, including the holidayseason. In the fourth quarters of fiscal years 2003, 2004 and 2005, the Companygenerated approximately 59%, 51% and 53%, respectively, of its annual netincome.

**Use of Estimates—****The**preparationof the consolidated financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expensesduring the reporting period. Estimates have been prepared on the basis of themost current and best information and actual results could differ from thoseestimates. Significant estimates in these financial statements include netrealizable value of inventory, estimates of future cash flows associated withasset impairments and useful lives for depreciation and amortization.

**Reclassifications—****Certain**amountsfor fiscal 2004 have been reclassified to conform with the presentation infiscal 2005. The Company reclassified certain deferred taxes in theaccompanying Consolidated Balance Sheets and certain sales and related costsfor new stores between the stores and direct marketing segments in Note 12 tothe Consolidated Financial Statements.

**Restatements—****The**consolidatedfinancial statements for fiscal years ended February 2, 2002,February 1, 2003 and January 31, 2004 were restated in fiscal yearended January 29, 2005 in connection with the Company’s Annual Report onForm 10-K, which was filed with the Securities and Exchange Commission onApril 14, 2005, to correct certain errors in the accounting for leases.

F-7

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**1.**   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:(Continued)

**Cash and Cash Equivalents—****Cash**andcash equivalents include overnight investments with maturities of 90 days orless at the date of acquisition.

**Interest Expense—****Interest**expense,net includes interest income of approximately $16, $129 and $135 in fiscal2003, 2004 and 2005, respectively.

**Supplemental Cash Flow Information—****Interest**and income taxes paidwere as follows:

| ** **        | ** ** | **Fiscal 2003** | ** ** | **Fiscal 2004** | ** ** | **Fiscal 2005** | ** ** |
|-------------------|------------|----------------------|------------|----------------------|------------|----------------------|------------|
| Interest paid     |       |                 | $          | 1,474                |       |                 |       | $ | 1,616 |   |   |   | $ | 1,809 |   |   |
| Income taxes paid |       |                 | $          | 6,785                |       |                 |       | $ | 13,918 |   |   |   | $ | 6,828 |   |   |

** **

**Inventories—****The**Companyrecords inventory at the lower of cost or market (“LCM”). Cost is determinedusing the first-in, first-out method. The Company capitalizes into inventorycertain warehousing and freight delivery costs associated with shipping itsmerchandise to the point of sale. The Company periodically reviews quantitiesof inventories on hand and compares these amounts to the expected sales of eachproduct. The Company records a charge to cost of goods sold for the amountrequired to reduce the carrying value of inventory to net realizable value.

**Franchise Fees—****Monthly**franchisefees are recognized when earned under the franchise agreements, which is at thetime the franchisee generates a sale. The fees are based on a percentage ofsales generated by the franchise stores and are included in net sales in theConsolidated Statements of Income. Initial franchise fees are fully earned uponexecution of the franchise agreements and there are no further obligations onthe part of the Company in order to earn the initial franchise fee.

The Company does not have any controlling interest inany of its franchisees through voting rights or any other means and, inaccordance with the revised Financial Accounting Standards Board InterpretationNo. 46, “Consolidation of Variable Interest Entities,” does notconsolidate these entities. The Company sells inventory to its franchise storesat prices above cost and the franchise stores have the right to returninventory to the Company.

**Gift Cards and Certificates—****The**Companysells gift cards to individuals and companies in its stores segment and throughits direct marketing segment. The Company’s apparel incentive gift certificatesare used by various companies as a reward for achievement for their employees.The Company also redeems proprietary gift cards and gift certificates marketedby major premium/incentive companies. The Company records a liability when agift card/certificate is purchased by the customer. As the giftcard/certificate is redeemed by a customer, the Company reduces the liabilityand records revenue.

**Vendor Rebates—****The**Companyreceives credits from vendors in connection with inventory purchases. Thecredits are separately negotiated with each vendor. Substantially all of thesecredits are earned in one of two ways: a) as a fixed percentage of purchaseswhen an invoice is paid or b) as an agreed-upon amount in the month a new storeis opened. There are no contingent minimum purchase amounts, milestones orother contingencies that are required to be met to earn the credits. Thecredits described in a) above are recorded as a reduction to inventories in theConsolidated Balance Sheet as the inventories are purchased and the creditsdescribed in b) above are recorded as a reduction to inventories as new storesare opened. In both cases, the credits are recognized as reductions to cost ofgoods sold as the product is sold.

F-8

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**1.**   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued)

**Landlord Contributions—****Landlord**contributionsare accounted for as an increase to current and noncurrent lease obligationsand as an increase to prepaid and other current assets until collected. Whencollected, the Company records cash and reduces the prepaid and other currentassets account. The landlord contributions are presented in the consolidatedstatements of cash flows as an operating activity. The noncurrent leaseobligations are amortized over the life of the lease in a manner that isconsistent with the Company’s policy to straight-line rent expense over theterm of the lease. The amortization is recorded as a reduction to sales andmarketing expense which is consistent with the classification of lease expense.The amortization of noncurrent lease obligations recognized in the ConsolidatedStatements of Income were $2.0 million, $2.8 million and $3.7 million in fiscalyears 2003, 2004 and 2005, respectively.

**Catalog—****Costs**relatedto mail order catalogs, including design, printing and distribution, areincluded in prepaid expenses and other current assets consistent with Statementof Position No. 93-7, “Reporting on Advertising Costs.”  These costs are amortized based on actualrevenue for the period as compared to aggregate projected revenue over thebenefit period in which customers order from a particular catalog, which istypically four months. The benefit period is based on historical orderingpatterns. As of January 29, 2005 and January 28, 2006, the amountsincluded in prepaid expenses and other current assets related to catalog costswere $0.9 million and $1.3 million, respectively.

**Marketing Expenses—****Marketing**expensesconsist of advertising, display, list rental and Internet costs, but excludecatalog costs. Marketing costs are recognized as expenses the first time themarketing takes place. Marketing expense, excluding catalog costs, wasapproximately $18.6 million, $25.9 million and $31.1 million in fiscal 2003,2004 and 2005, respectively. These amounts exclude catalog production costs ofapproximately $5.1 million, $5.9 million and $6.6 million for fiscal 2003, 2004and 2005. Marketing and catalog costs are included in “Sales and Marketing” inthe accompanying Consolidated Statements of Income.

**Contingent Rental Expense—****The**Companyhas certain store leases that determine all or a portion of its rent based onannual aggregate sales from that store. The Company recognizes contingentrental expense prior to achievement of the specified target that triggers thecontingent rental provided that achievement of that target is probable. Theamount is recorded on a straight-line basis throughout the year.

**Property, Plant and Equipment—****Property,**plantand equipment are stated at cost. The Company depreciates and amortizesproperty, plant and equipment on a straight-line basis over the followingestimated useful lives:

| **Asset Class**             | ** ** | ** **         | ** ** | **Estimated  Useful Lives** | ** ** | ** ** |
|-----------------------------|------------|--------------------|------------|-----------------------------|------------|------------|
| Buildings and  improvements |       | 25 years           |
| Equipment                   |       | 3-10 years         |
| Furniture and fixtures      |       | 10 years           |
| Leasehold improvements      |       | Generally 10 years |

 

The Company amortizes leasehold improvements over theshorter of the lease term or the useful life of the improvements. Depreciationand amortization expense of property, plant, and equipment for fiscal 2003,2004 and 2005 was approximately $9.4 million, $10.5 million and $13.0 million,respectively. Maintenance and repairs that do not extend the lives of theassets are expensed as incurred.

F-9

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**1.**   SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES: (Continued)

**Other Noncurrent Assets—****Other**noncurrentassets includes deferred financing costs and deposits. Deferred financing costsare amortized as additional interest expense over the remaining term of thedebt agreements using the effective interest method. Amortization expense forfiscal 2003, 2004 and 2005 was $40, $68 and $74, respectively.

**Long-Lived Assets—****Long-lived**assets,such as property, plant, and equipment, subject to depreciation andamortization, are reviewed for impairment whenever events or changes incircumstances indicate that the carrying amount of an asset may not berecoverable. Recoverability of assets to be held and used is measured by acomparison of the carrying amount of an asset to estimated undiscounted futurecash flows expected to be generated by the asset. If the carrying amount of anasset exceeds its estimated future cash flows, an impairment charge isrecognized in the amount by which the carrying amount of the asset exceeds thefair value of the asset.

**Fair Value of Financial Instruments—****For**cashand cash equivalents, accounts receivable and accounts payable, the carryingamount is a reasonable estimate of fair value. For long-term debt, ratesavailable for debt with similar terms and remaining maturities are used toestimate the fair value of existing debt. As January 29, 2005 and January 28,2006, the fair value of the Company’s debt approximated the carrying value.

**Net Sales—****In**theCompany’s stores segment, net sales are recognized at the point-of-sale. In theCompany’s direct marketing segment, sales are recognized when products areshipped to the customer. The Company provides for sales returns based onestimated returns in future periods. The sales return reserve for fiscal years2003, 2004 and 2005 were $0.4 million, $0.5 million and $0.5 million,respectively.

**Classification of Expenses—****Cost**ofgoods sold includes cost of merchandise, cost of tailoring and freight fromvendors to the distribution center and from the distribution center to thestores. Merchandise management, distribution, warehousing and corporateoverhead costs are included in General and Administrative expenses.

**Lease Expense—****Rent**expenseon leases, including the amortization of landlord contributions, is recorded ona straight-line basis over the term of the lease and the excess of expense overcash amounts paid are included in “noncurrent lease obligations” in theaccompanying Consolidated Balance Sheets. The term of the lease begins on thedate the Company has the right to control the use of the leased property,generally approximately five to eight weeks prior to opening the store.

**Store Opening Costs—****Costs**incurredin connection with initial promotion and other start-up costs, such as travelfor recruitment, training and setup of new store openings, are expensed asincurred.

**Income Taxes—****Income**taxesare accounted for under the asset and liability method. Deferred tax assets andliabilities are recognized for the future tax consequences attributable todifferences between the financial statement carrying amounts of existing assetsand liabilities and their respective tax bases and operating loss and taxcredit carry forwards. Deferred tax assets and liabilities are measured usingenacted tax rates expected to apply to taxable income in the years in whichthose temporary differences are expected to be recovered or settled. The effecton deferred tax assets and liabilities of a change in tax rates is recognizedin income in the period that includes the enactment date.

F-10

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**1.**   SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES: (Continued)

The Company establishes an estimated liability forfederal and state income tax exposures that arise and meet the criteria foraccrual under SFAS No. 5, *Accounting forContingencies*.  This liabilityaddresses a number of issues for which the Company may have to pay additionaltaxes and interest when all examinations by taxing authorities are concluded. Theliability amounts for such matters are based on an evaluation of the underlyingfacts and circumstances, a thorough research of the technical merits of theCompany’s filing positions and an assessment of the chances of the Companyprevailing in its positions.  The Companyoperates in 40 states and significantly more local tax jurisdictions and hasunaudited open tax years with many of these taxing authorities.

**Earnings Per Share**(“EPS”)—Basicnet income per share is calculated by dividing net income by the weightedaverage number of common shares outstanding for the year. Diluted net incomeper share is calculated by dividing net income by the diluted weighted averagecommon shares, which reflect the potential dilution of stock options. Theweighted average shares used to calculate basic and diluted earnings per shareare as follows:

| ** **                                           | ** ** | **Fiscal 2003** | ** ** | **Fiscal 2004** | ** ** | **Fiscal 2005** | ** ** |
|------------------------------------------------------|------------|----------------------|------------|----------------------|------------|----------------------|------------|
| Weighted average  shares outstanding for basic EPS   |       |                 | 15,310     |                 |       |                 | 16,680     |   |   |   | 17,021 |   |   |
| Dilutive effect  of stock options                    |       |                 | 2,044      |                 |       |                 | 1,109      |   |   |   | 1,010 |   |   |
| Weighted average shares  outstanding for diluted EPS |       |                 | 17,354     |                 |       |                 | 17,789     |   |   |   | 18,031 |   |   |

 

The Company uses the treasury method for calculatingthe dilutive effect of stock options. The effects on weighted average sharesoutstanding of options to purchase common stock of the Company were included inthe computation of diluted net income per share in all years presented. As of January 31,2004 (fiscal 2003) and January 28, 2006 (fiscal 2005), there were no stockoptions which were antidilutive. As of January 29, 2005 (fiscal 2004),there were 24 stock options which were antidilutive and have been excluded fromthe calculation of dilutive EPS.

**Incentive Plans—****Incentive**plansprovide cash incentive compensation to certain employees based upon theattainment of certain annual earnings and performance goals, as well as certaindiscretionary goals. At each quarter-end, the Company estimates the probabilitythat such goals will be attained based on results-to-date and the likelihood ofdiscretionary payments and records incentive compensation accordingly. Anyadditional incentive compensation which is likely to be paid for the year isexpensed based on the proportion of the earnings-to-date to projected annualearnings.

**Proforma Disclosures of Stock-Based Compensation—****The**Companyapplies the intrinsic-value-based method of accounting prescribedby Accounting Principles Board (“APB”) Opinion No. 25, *Accounting for Stock Issued to Employees*, and relatedinterpretations including Financial Accounting Standards Board Interpretation No. 44,*Accounting for Certain Transactions Involving StockCompensation*, issued in March 2000, to account for itsfixed-plan stock options. Under this method, compensation expense is recordedon the date of grant only if the current market price of the underlying stockexceeds the exercise price. Historically, the Company has issued all options atthe market price on the date of grant.  Statement of Financial Accounting Standards (“SFAS”) No. 123,*Accounting for Stock-Based Compensation* (“SFAS 123’’)as amended by SFAS No. 148, *Accounting for Stock BasedCompensation-Transition and Disclosure*(“SFAS 148’’),established accounting and disclosure requirements using a fair-value-basedmethod of accounting for stock-based employee compensation plans. As allowed bySFAS 123, the 

F-11

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**1.**   SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES: (Continued)

Company has elected tocontinue to apply the intrinsic-value-based method of accounting describedabove, and has adopted only the disclosure requirements of SFAS 123, asamended by SFAS 148.

TheCompany recognized $0.2 million in fiscal 2003 related to certain variable planstock options. No further compensation expense will be recognized with respectto these options. The following table illustrates the effect on net income ifthe fair-value-based method had been applied to all outstanding and unvestedawards in each year.

| ** **                                                                                                                                                                                                       | ** ** | **Fiscal 2003** | ** ** | **Fiscal 2004** | ** ** | **Fiscal 2005** | ** ** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------|------------|----------------------|------------|----------------------|------------|
| Net income, as  reported                                                                                                                                                                                         |       |                 | $          | 16,280               |       |                 |       | $ | 24,481 | ** ** |   |   | **$** | **35,250** | ** ** |   |
| Deduct total  stock-based employee compensation expense determined under fair-value-based  method for all awards in excess of compensation recognized under intrinsic  method of $230 in fiscal 2003, net of tax |       |                 | 3,191      |                 |       |                 | 442        | ** ** |   |   | **180** | ** ** |   |
| Pro forma net  income                                                                                                                                                                                            |       |                 | $          | 13,089               |       |                 |       | $ | 24,039 | ** ** |   |   | **$** | **35,070** | ** ** |   |
| Basic net income  per common share, as reported                                                                                                                                                                  |       |                 | $          | 1.06                 |       |                 |       | $ | 1.47 | ** ** |   |   | **$** | **2.07** | ** ** |   |
| Pro forma basic  net income per common share                                                                                                                                                                     |       |                 | $          | 0.85                 |       |                 |       | $ | 1.44 | ** ** |   |   | **$** | **2.06** | ** ** |   |
| Diluted net  income per common share, as reported                                                                                                                                                                |       |                 | $          | 0.94                 |       |                 |       | $ | 1.38 | ** ** |   |   | **$** | **1.95** | ** ** |   |
| Pro forma diluted net  income per common share                                                                                                                                                                   |       |                 | $          | 0.75                 |       |                 |       | $ | 1.35 | ** ** |   |   | **$** | **1.94** | ** ** |   |

 

The fair value of each stock option granted isestimated on the date of grant using the Black-Scholes option pricingmodel with the following weighted average assumption used for grants in fiscal2003, 2004 and 2005:

| ** **                       | ** ** | **Fiscal 2003** | ** ** | **Fiscal 2004** | ** ** | **Fiscal 2005** | ** ** |
|----------------------------------|------------|----------------------|------------|----------------------|------------|----------------------|------------|
| Risk free  interest rate         |       | 3.3-3.8%             |       | 2.9-3.2%             |       | 3.88                 | %          |
| Expected  volatility             |       | 44-58%               |       | 49-50%               |       | 34                   | %          |
| Expected life                    |       | 3 to 7 years         |       | 3 to 7 years         |       | 3 years              |       |
| Contractual life                 |       | 3 to 10 years        |       | 1 to 10 years        |       | 1 to 10 years        |       |
| Expected dividend  yield         |       | —               | %          | —               | %          | —               | %          |
| Fair value of  options granted   |       | $                    | 10.18      |                 | $          | 7.85                 |       | $ | 7.24 |   |
| Options granted                  |       | 824                  |       | 36                   |       | 36                   |       |
| Weighted average  exercise price |       | $                    | 13.45      |                 | $          | 21.62                |       | $ | 26.29 |   |

 

**New Accounting Pronouncements—****In**December 2004,the FASB issued Statement of Financial Accounting Standards No. 123(Revised 2004), *Share-Based Payment*,(“SFAS 123R”). This Statement requires companies to expense the estimated fairvalue of stock options and similar equity instruments issued to employees. Currently,companies are required to calculate the estimated fair value of theseshare-based payments and can elect to either include the estimated cost inearnings or disclose the pro forma effect in the footnotes to their financialstatements. The Company has chosen to disclose the pro forma effect. The fairvalue concepts were not changed significantly in SFAS 123R; however, inadopting this Standard, companies must choose among alternative valuationmodels and amortization assumptions.

F-12

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**1.**   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued)

The Company adopted the provisions of SFAS 123R in thefirst quarter of fiscal 2006 and will apply the provisions of SFAS 123Rprospectively in all periods following the fiscal year ended January 28,2006. The valuation model and amortizationassumption we used prior to adoption are acceptable methods under SFAS 123R andthe Company has chosen to continue to use the Black Scholes valuation model toestimate  the fair value of stock optionsand similar equity instruments issued to employees. As all stock optionsissued were fully vested as of the end of the third quarter of fiscal 2005,adoption of the provisions of SFAS 123R will not have any impact on futurereporting periods, unless the Company grants additional options. As of January 28,2006, the Company had no shares available for issuance under the current Plans.

SFAS 123R will also require us to change theclassification of any tax benefits realized upon exercise of stock options inexcess of that which is associated with the expense recognized for financialreporting purposes. These amounts will be presented as a financing cash inflow,rather than as a reduction of income taxes paid in our consolidated statementof cash flows.

In November 2004, theFASB issued SFAS No. 151, *Inventory Costs—anamendment of ARB No. 43, Chapter 4*(“SFAS 151”). SFAS 151amends Accounting Research Bulletin (“ARB”) No. 43, *Chapter 4*,*Inventory Pricing* to clarify thatabnormal amounts of idle facility expense, freight, handling costs, and wastedmaterial (spoilage) should be recognized as current period charges. Inaddition, this Statement requires that allocation of fixed production overheadsto the costs of conversion be based on the normal capacity of the productionfacilities. The provisions of this Statement are effective for inventory costsincurred during fiscal years beginning after June 15, 2005. The adoptionof this statement is not expected to have a material impact on the Company’sconsolidated financial position or results of operations.

**2.   INVENTORIES:**

Inventoriesas of January 29, 2005 and January 28, 2006, consist of thefollowing:

| ** **             | ** ** | **January 29, 2005** | ** ** | **January 28, 2006** | ** ** |
|------------------------|------------|--------------------------------|------------|--------------------------------|------------|
| Finished goods         |       |                           | $          | 119,143                        |       |   |   | $ | 169,068 |   |   |
| Raw materials          |       |                           | 8,550      |                           |       |   | 7,574 |   |   |
| Total inventories, net |       |                           | $          | 127,693                        |       |   |   | $ | 176,642 |   |   |

 

**3.   PREPAID EXPENSESAND OTHER CURRENT ASSETS:**

Prepaid expenses and other current assets as of January 29,2005 and January 28, 2006, consist of the following:

| ** **                                            | ** ** | **January 29, 2005** | ** ** | **January 28, 2006** | ** ** |
|-------------------------------------------------------|------------|--------------------------------|------------|--------------------------------|------------|
| Landlord  contribution receivable                     |       |                           | $          | 7,442                          |       |   |   | $ | 6,600 |   |   |
| Prepaid expenses  and other current assets            |       |                           | 4,450      |                           |       |   | 6,252 |   |   |
| Total prepaid expenses  and other current assets, net |       |                           | $          | 11,892                         |       |   |   | $ | 12,852 |   |   |

 

 

F-13

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**4.**   PROPERTY, PLANT AND EQUIPMENT:

Property,plant and equipment as of January 29, 2005 and January 28, 2006,consists of the following:

| ** **                                       | ** ** | **January 29, 2005** | ** ** | **January 28, 2006** | ** ** |
|--------------------------------------------------|------------|--------------------------------|------------|--------------------------------|------------|
| Land                                             |       |                           | $          | 349                            |       |   |   | $ | 349 |   |   |
| Buildings and  improvements                      |       |                           | 11,588     |                           |       |   | 12,014 |   |   |
| Leasehold  improvements                          |       |                           | 68,480     |                           |       |   | 82,336 |   |   |
| Furniture and  fixtures                          |       |                           | 36,164     |                           |       |   | 47,927 |   |   |
| Equipment and  other                             |       |                           | 26,329     |                           |       |   | 28,683 |   |   |
|                                             |       |                           | 142,910    |                           |       |   | 171,309 |   |   |
| Less: accumulated  depreciation and amortization |       |                           | (59,289    | )                              |       |   | (70,336 | ) |   |
| Property, plant and  equipment, net              |       |                           | $          | 83,621                         |       |   |   | $ | 100,973 |   |   |

 

**As of January 29,2005 and January 28, 2006, payments for capital expenditures included inthe Consolidated Statements of Cash Flows excludes $6.7 million and $5.5million of accrued property, plant and equipment additions that have beenincurred but have not been completely invoiced by vendors, and therefore, notpaid by the respective year-ends.**

**5.**   ACCRUEDEXPENSES:

Accruedexpenses as of January 29, 2005 and January 28, 2006, consist of thefollowing:

| ** **                             | ** ** | **January 29, 2005** | ** ** | **January 28, 2006** | ** ** |
|----------------------------------------|------------|--------------------------------|------------|--------------------------------|------------|
| Accrued  compensation and benefits     |       |                           | $          | 10,915                         |       |   |   | $ | 13,494 |   |   |
| Gift card and  certificate payable     |       |                           | 5,807      |                           |       |   | 6,983 |   |   |
| Accrued property,  plant and equipment |       |                           | 6,714      |                           |       |   | 5,539 |   |   |
| Accrued federal  income tax            |       |                           | 2,275      |                           |       |   | 5,533 |   |   |
| Other accrued  expenses                |       |                           | 11,794     |                           |       |   | 20,931 |   |   |
| Total                                  |       |                           | $          | 37,505                         |       |   |   | $ | 52,480 |   |   |

 

Other accrued expensesconsist primarily of liabilities related to state income taxes, interest, salestaxes, property taxes, customer deposits, and other store opening costs.

**6.**   LONG-TERMDEBT:

Long-term debt asof January 29, 2005 and January 28, 2006, consists of the following:

| ** **                                                                                                                                                                       | ** ** | **January 29, 2005** | ** ** | **January 28, 2006** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------|------------|--------------------------------|------------|
| Bank Credit  Agreement—                                                                                                                                                     |       |                           |       | ** **                     |       |   | ** ** | ** ** |   |
| Borrowings under revolving loan agreement                                                                                                                                        |       |                           | $          | —                         | ** ** |   |   | $ | — | ** ** |   |
| Mortgage loan  secured by corporate office and distribution center, interest at 8.15%  payable in monthly installments through April 1, 2013                                |       |                           | 4,283      | ** **                     |       |   | 3,902 | ** ** |   |
| Loan payable  secured by certain distribution center equipment, variable interest (7.28% at  January 28, 2006) payable in monthly installments through August 1,  2009 |       |                           | 2,103      | ** **                     |       |   | 1,676 | ** ** |   |
| Other notes  payable                                                                                                                                                             |       |                           | 473        | ** **                     |       |   | 219 | ** ** |   |
| Total long-term  debt                                                                                                                                                            |       |                           | 6,859      | ** **                     |       |   | 5,797 | ** ** |   |
| Less: current  portion                                                                                                                                                           |       |                           | 917        | ** **                     |       |   | 971 | ** ** |   |
| Long-term debt,  net of current portion                                                                                                                                          |       |                           | $          | 5,942                          | ** ** |   |   | $ | 4,826 | ** ** |   |

** **

F-14

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**6.**   LONG-TERM DEBT: (Continued)

 

**Bank Credit Agreement**—The Company has a line of credit agreement (the “CreditAgreement”) with an available maximum borrowing amount up to $100 million andwhich extends to April 2008. In addition, the Company has the option toincrease the amount borrowed to $125 million if requested prior to April 30,2006, if needed and if supported by the borrowing base formula under the CreditAgreement. Borrowings are limited by a formula, which considers certain of theCompany’s asset values, including inventories and accounts receivable.Aggregate borrowings outstanding bear interest at Prime or LIBOR plus an amountthat is determined based on the Company’s availability in excess of borrowings(which amount was 1.25% during fiscal 2005), and are secured by substantiallyall assets of the Company with the exception of its distribution center andcertain equipment.

Under the provisions of the Credit Agreement, theCompany must comply with certain covenants, if the availability under the lineof credit in excess of outstanding borrowings is less than $7.5 million. Thecovenants include a minimum earnings before interest, taxes, depreciation andamortization (“EBITDA”), limitations on capital expenditures and additionalindebtedness, and restrictions on cash dividend payments. There were noborrowings outstanding under the line of credit as of January 29, 2005 andJanuary 28, 2006. Additionally, the Company has $6.9 million and $5.8million of term debt as of January 29, 2005 and January 28, 2006,respectively.

As of January 28, 2006, the Company’s availableborrowings under the Credit Agreement were $99.6 million. The average dailyoutstanding balances under the Credit Agreement for fiscal 2004 and 2005 wereapproximately $23.4 million and $16.3 million respectively. The Company had astandby letter of credit of $0.4 million at January 29, 2005 and January 28,2006, which secures the payment of rent at one leased location.

The aggregate maturities of the Company’s long-termdebt as of January 28, 2006, are as follows for fiscal years: 2006—$1.0million, 2007—$1.0 million, 2008—$1.0 million, 2009—$0.8 million, 2010—$0.6million, and thereafter—$1.4 million.

**7.**   INCOMETAXES:

Theprovision for income taxes consisted of the following:

| ** **                  | ** ** | **Fiscal 2003** | ** ** | **Fiscal 2004** | ** ** | **Fiscal 2005** | ** ** |
|-----------------------------|------------|----------------------|------------|----------------------|------------|----------------------|------------|
| Federal:                    |       |                 |       | ** **           |       |                 | ** ** | ** ** |   |   | ** ** | ** ** |   |
| Current                     |       |                 | $          | 9,011                |       |                 |       | $ | 11,444 |   |   |   | $ | 10,192 | ** ** |   |
| Deferred                    |       |                 | 887        |                 |       |                 | 2,014      |   |   |   | 10,491 | ** ** |   |
| State:                      |       |                 |       |                 |       |                 |       |   |   |   |   | ** ** |   |
| Current                     |       |                 | 2,176      |                 |       |                 | 2,526      |   |   |   | 1,768 | ** ** |   |
| Deferred                    |       |                 | (1         | )                    |       |                 | (108       | ) |   |   | 2,300 | ** ** |   |
| Provision for income  taxes |       |                 | $          | 12,073               |       |                 |       | $ | 15,876 |   |   |   | $ | 24,751 | ** ** |   |

 

F-15

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**7.**   INCOMETAXES: (Continued)

Provisionfor income tax is reconciled to the amount computed by applying the statutoryFederal income tax rate of 35% for fiscal 2003, 2004 and 2005 to income beforeprovision for income taxes as follows:

| ** **                                            | ** ** | **Fiscal 2003** | ** ** | **Fiscal 2004** | ** ** | **Fiscal 2005** | ** ** |
|-------------------------------------------------------|------------|----------------------|------------|----------------------|------------|----------------------|------------|
| Computed federal  tax provision at statutory rates    |       |                 | $          | 9,923                |       |                 |       | $ | 14,125 |   |   |   | $ | 21,000 |   |   |
| State income  taxes, net of federal income tax effect |       |                 | 1,414      |                 |       |                 | 1,621      |   |   |   | 2,653 |   |   |
| Non-deductible  compensation                          |       |                 | 916        |                 |       |                 | 755        |   |   |   | 907 |   |   |
| Change in tax  reserves                               |       |                 | —     |                 |       |                 | (861       | ) |   |   | 101 |   |   |
| Other, net                                            |       |                 | (180       | )                    |       |                 | 236        |   |   |   | 90 |   |   |
| Provision for income  taxes                           |       |                 | $          | 12,073               |       |                 |       | $ | 15,876 |   |   |   | $ | 24,751 |   |   |

 

Thetax effects of temporary differences that give rise to significant positions ofdeferred tax assets and deferred tax liabilities as of January 29, 2005and January 28, 2006 are as follows:

| ** **                                | ** ** | **January 29, 2005** | ** ** | **January 28, 2006** | ** ** |
|-------------------------------------------|------------|--------------------------------|------------|--------------------------------|------------|
| Deferred tax assets:                      |       |                           |       | ** **                     |       |   | ** ** | ** ** |   |
| Inventories                               |       |                           | $          | 1,146                          |       |   |   | $ | — |   |   |
| Accrued liabilities and other             |       |                           | 14,898     |                           |       |   | 18,205 |   |   |
|                                      |       |                           | 16,044     |                           |       |   | 18,205 |   |   |
| Deferred tax  liabilities:                |       |                           |       |                           |       |   |   |   |   |
| Inventories                               |       |                           | —     |                           |       |   | (12,129 | ) |   |
| Property, plant and equipment             |       |                           | (16,202    | )                              |       |   | (18,528 | ) |   |
| Prepaid expenses and other current assets |       |                           | (702       | )                              |       |   | (1,199 | ) |   |
|                                      |       |                           | (16,904    | )                              |       |   | (31,856 | ) |   |
| Net deferred tax assets  (liability)      |       |                           | $          | (860                           | )          |   |   | $ | (13,651 | ) |   |

 

In assessing the realizability of deferred tax assets,management considered whether it was more likely than not that some portion orall of the deferred tax assets will be realized. The ultimate realization ofthe deferred tax assets is dependent upon existence of taxable income incarryback periods and the generation of future taxable income during periods inwhich temporary differences become deductible. Management considered incometaxes paid during the previous two years and projected future taxable income inmaking this assessment. Based upon the level of historical taxable income andprojections for future taxable income over the periods in which the temporarydifferences are deductible, management has determined that no valuationallowance was required at January 29, 2005 and January 28, 2006.

In fiscal 2004, theCompany filed a request with the Internal Revenue Service (“IRS”) to change itstax return method of accounting for inventory to the retail method from thelower of first-in first-out, cost or market. The IRS approved the request infiscal 2005. As a result, the impact on the Company’s tax provision is todecrease taxes currently payable and increase deferred tax liabilities. The newmethod was reflected in the Company’s income tax return, which was filed on October 15,2005, and has not been audited by the IRS. The Company expects an IRSexamination of this method in the future.

F-16

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**8.**   BENEFIT PLANS:

Defined Benefit Pension & Post-RetirementPlans—**The**Company maintains a noncontributorydefined benefit pension plan and a post-retirement benefit plan which covercertain union employees. The annual contributions are not less than the minimumfunding standards set forth in the Employee Retirement Income Security Act of1974, as amended. The plans provide for eligible employees to receive benefitsbased principally on years of service with the Company. The Company does notpre-fund the benefits from the post-retirement benefit plan. The Companyrecords the expected cost of these benefits as expense during the years thatemployees render service.

Thefollowing table sets forth the plans’ benefit obligations, fair value of planassets, and funded status at December 31, 2004 and 2005: 

| ** **                                                             | ** ** | **Pension Benefits** | ** ** | **Postretirement  Benefits** | ** ** |
|------------------------------------------------------------------------|------------|---------------------------|------------|------------------------------|------------|
| ** **                                                             | ** ** | **2004**                  | ** ** | **2005**                     | ** ** | **2004** | ** ** | **2005** | ** ** |
| Accumulated  benefit obligation                                        |       | $                         | 449        |                         | $          | 501 |   | $ | 326 |   | $ | 410 |   |
| Fair value of  plan assets                                             |       | 450                       |       | 536                          |       | — |   | — |   |
| Funded status                                                          |       | $                         | 1          |                         | $          | 35 |   | $ | (326 | ) | $ | (410 | ) |
| Accrued (prepaid)  benefit cost recognized in the balance sheets  |       | $                         | (246       | )                            | $          | (275 | ) | $ | 510 |   | $ | 547 |   |

 

Weighted-average discount rate assumption usedto determine benefit obligations as of December 31, 2004 and 2005 (thedates of the latest actuarial calculations) was 6.0% for both years. Weighted-averageassumptions used to determine net cost for fiscal 2004 and 2005 includeddiscount rate of 6.0% and return on plan assets assumption of 8.0% for bothyears.

The Company’s overall expected long-term rate ofreturn on assets is 8.0%. Plan assets of the Company’s pension benefits as of December 31,2004 and December 31, 2005 consisted primarily of balanced mutual fundsand short-term investment funds.

Pension expense recognized in the Company’s statementsof income for fiscal 2003, 2004 and 2005 was $49, $46 and $55, respectively.The Company contributed $44 and $85 in fiscal 2004 and fiscal 2005,respectively, to the pension plan. The Company does not expect to be requiredto contribute significant amounts of cash in fiscal 2006 to the pension plan.

Profit Sharing Plan—**The**Company maintains a defined contribution 401(k) profit sharing plan forits employees. All non-union and certain union employees are eligible toparticipate at the beginning of the month after 90 days of service.Employee contributions to the plan are limited based on applicable sections ofthe Internal Revenue Code. The Company’s contribution to the 401(k) planis discretionary based on achieving certain annual earnings per share goals.Amounts expensed by the Company related to the plan were approximately $0.4million, $0.5 million and $0.6 million for fiscal 2003, 2004, and 2005,respectively.

F-17

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**8.**   BENEFIT PLANS: (Continued)

Deferred Compensation Plan—**The**Company also maintains a non-qualified deferred compensation plan designed toprovide certain highly-compensated employees with retirement benefits.All assets of the plan are fully subject to the Company’s creditors. There wereno matching contributions by the Company for fiscal 2003, 2004 and 2005,although contributions were made by certain employees. Included in the Company’sConsolidated Balance Sheets is an equal asset and liability of $0.6 million at January 29,2005 and $0.8 million at January 28, 2006.

**9.**   COMMITMENTS ANDCONTINGENCIES:

Litigation—**Lawsuits**andclaims are filed from time to time against the Company in its ordinary courseof business. Management, after reviewing developments to date with legalcounsel, is of the opinion that the outcome of such matters will not have amaterial adverse effect on the Company’s net assets, results of operations orthe accompanying consolidated financial statements taken as a whole.

In September 2005, a lawsuit was filed againstthe Company alleging unlawful wage payment and employment practices with regardto a purported class of persons. The Company estimates such class to be lessthan 45 people. The essential allegations of this suit are duplicated in alawsuit filed against the Company in February 2006. Pending completion ofdiscovery (or such portion thereof as is sufficient to warrant a differentresponse to the litigation), the Company intends to contest vigorously thecases. No evaluation of the likelihood of an unfavorable outcome, nor estimateof potential loss, can be made at this time. Although the outcome of theselawsuits or other proceedings against the Company cannot be accuratelypredicted, the Company does not expect that any such liability will have amaterial adverse effect on the business, net assets or financial position ofthe Company.

The Company previouslyreported that certain claims against the Company had been made arising from theallegedly improper storage of credit card data. The matter has since beenresolved in favor of the Company and during the fourth quarter of fiscal 2005the Company reversed the $0.3 million previously accrued. The Company does notanticipate that further claims, if any, in this matter would have a materialadverse effect on the business, net assets or financial position of theCompany.

Employment Agreements—**The**Companyhas employment agreements with certain of its executives expiring at variouspoints through January 2009, aggregating base compensation of $6.8 million(not including annual adjustments) over the terms. These executives would alsobe entitled to aggregate severance up to approximately $4.2 million (notincluding annual adjustments) depending on the circumstances of termination.The contracts also provide for additional incentive payments subject to performancestandards. In addition, other employees are eligible for incentive paymentsbased on performance, including store managers and regional sales directors.The Company expensed approximately $4.6 million, $4.8 million and $6.5 millionfor incentive compensation for all eligible employees in fiscal 2003, 2004 and2005, respectively.

Lease Obligations—**The**Company hasnumerous noncancelable operating leases for retail stores, certain tailoringspace and equipment. Certain facility leases provide for annual base minimumrentals plus contingent rentals based on sales. Renewal options are availableunder the majority of the leases.

F-18

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**9.**   COMMITMENTS AND CONTINGENCIES: (Continued)

Future minimum leasepayments, including rent escalations, under noncancelable operating leases forstores opened and equipment placed in service as of January 28, 2006, wereas follows:

| **Fiscal Year** | ** ** | ** ** | ** ** | **Amount** | ** ** |
|----------------------|------------|------------|------------|------------|------------|
| 2006                 |       | $          | 38,689     |       |
| 2007                 |       | 37,362     |       |
| 2008                 |       | 35,657     |       |
| 2009                 |       | 32,458     |       |
| 2010                 |       | 30,562     |       |
| Thereafter           |       | 97,750     |       |
| Total                |       | $          | 272,478    |       |

 

The minimum rentals above do not include additionalpayments for percentage rent, insurance, property taxes and maintenance coststhat may be due as provided for in the leases. Many of the noncancelableoperating leases include scheduled rent escalations.

Total rental expense for operating leases, includingcontingent rentals, was approximately $19.8 million, $25.7 million and $33.2million for fiscal 2003, 2004 and 2005, respectively. Contingent rent expensein fiscal 2003, 2004 and 2005, which are based on a percentage of net sales,was approximately $1.1 million, $1.5 million and $1.9 million, respectively.

As of January 29,2005, the Company has also entered into various lease agreements for stores tobe opened and equipment placed in service subsequent to year end. The futureminimum lease payments under these agreements were $0.7 million in fiscal 2006,$0.9 million in fiscal 2007, $0.9 million in fiscal 2008, $0.9 million infiscal 2009, $0.9 million in fiscal 2010 and $4.8 million thereafter.

**Inventories—**The Company ordinarily places orders for thepurchases of inventory at least one to two seasons in advance. In fiscal 2005,five vendors accounted for over 92% of the raw materials purchased by theCompany. In fiscal 2005, the Company purchased approximately 29% of itsfinished product through an agent who sources the products from variousvendors. Approximately 11% of the total product purchases (including piecegoods) in fiscal 2005 were sourced from United States suppliers, andapproximately 89% were sourced from suppliers in other countries. In fiscal2005, approximately 34% of the total product purchases were manufactured inChina (including 19% from Hong Kong) and 20% in Mexico. No other country representedmore than 7% of total product purchases in fiscal 2005.

Other—**The**Companyhas an agreement with David Leadbetter, a golf professional, which allows theCompany to produce golf and other apparel under Leadbetter’s name, whichexpires in January 2011. The minimum annual commitment under thisagreement through fiscal 2005 was $0.2 million and represents the amount paidin each of fiscal 2003, 2004 and 2005. Beginning in fiscal 2006 through fiscal2010 the minimum annual commitment is $0.2 million.

F-19

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**10.**   INCENTIVE STOCKOPTION PLAN:

Effective January 28, 1994, the Company adoptedan Incentive Plan (the “1994 Plan”). The 1994 Plan generally provides for thegranting of stock, stock options, stock appreciation rights, restricted sharesor any combination of the foregoing to the eligible participants, as definedfor issuance of up to 2,238 shares of common stock in the aggregate, of whichall had been granted as of January 28, 2006. On September 14, 1999,the Company adopted an Incentive Plan (“the 1999 Plan”) which provides for theissuance of up to 1,406 shares of common stock in the aggregate, of which allhad been granted as of January 28, 2006. In March 2002, the Companyadopted an Incentive Plan (the “2002 Plan”) which provides for issuance of upto 937 shares of common stock in the aggregate, of which all had been grantedas of January 28, 2006. The exercise price of an option granted under boththe 1994 Plan and the 2002 Plan may not be less than the fair market value ofthe underlying shares of Common Stock on the date of grant, and employeeoptions expire at the earlier of termination of employment or ten years fromthe date of grant. All options covered under the 1994 Plan, 1999 Plan and the2002 Plan are fully vested as of January 28, 2006.

The aggregate number of shares of Common Stock as towhich awards may be granted under any of the Company’s Plans, the number ofshares of Common Stock covered by each outstanding award under the Plans andthe price per share of Common Stock in each outstanding award, are to beproportionately adjusted for any increase or decrease in the number of issuedshares of Common Stock resulting from a subdivision or consolidation of sharesor other capital adjustment, or the payment of a stock dividend or other increaseor decrease in such shares, effected without receipt of consideration by theCompany, or other change in corporate or capital structure; provided, however,that any fractional shares resulting from any such adjustment are to beeliminated.

Changesin options outstanding were as follows: 

| ** **                        | ** ** | **Fiscal 2003** | ** ** | **Fiscal 2004**                   | ** ** | **Fiscal 2005** | ** ** |
|-----------------------------------|------------|----------------------|------------|----------------------------------------|------------|----------------------|------------|
| ** **                        | ** ** | **Shares**           | ** ** | **Weighted  Average  Exercise  Price** | ** ** | **Shares**           | ** ** | **Weighted  Average  Exercise  Price** | ** ** | **Shares** | ** ** | **Weighted  Average  Exercise  Price** | ** ** |
| Outstanding at  beginning of year |       | 3,310                |       |                                   | $          | 2.53                 |       |   |   | 2,075 |   |   |   | $ | 7.18 |   |   |   | 1,758 |   |   |   | $ | 8.22 |   |   |
| Granted                           |       | 824                  |       |                                   | $          | 13.45                |       |   |   | 36 |   |   |   | $ | 21.62 |   |   |   | 36 |   |   |   | $ | 24.39 |   |   |
| Exercised                         |       | (1,953               | )          |                                   | $          | 1.78                 |       |   |   | (346 | ) |   |   | $ | 2.90 |   |   |   | (460 | ) |   |   | $ | 3.48 |   |   |
| Canceled                          |       | (106                 | )          |                                   | $          | 9.88                 |       |   |   | (7 | ) |   |   | $ | 9.88 |   |   |   | — |   |   |   | $ | — |   |   |
| Outstanding at end of  year       |       | 2,075                |       |                                   | $          | 7.18                 |       |   |   | 1,758 |   |   |   | $ | 8.22 |   |   |   | 1,334 |   |   |   | $ | 10.34 |   |   |

 

Options exercised in fiscal 2005 resulted in anincrease of $4.3 million in stockholders’ equity, consisting of $1.6 million ofcash proceeds and $2.7 million of tax benefit, related to compensationdeductions for income tax purposes.

F-20

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**10.**   INCENTIVE STOCK OPTION PLAN: (Continued)

The following tablesummarizes information about stock options outstanding and exercisable as of January 28,2006:

| ** **                                  | ** ** | **Options Outstanding** | ** ** | **Options Exercisable** | ** ** |
|---------------------------------------------|------------|------------------------------|------------|------------------------------|------------|
| **Range of Exercise Prices** | ** ** | ** **                   | ** ** | **Number  Outstanding**      | ** ** | **Weighted Average  Remaining  Contractual Life  per Share** | ** ** | **Weighted  Average  Exercise Price  per Share** | ** ** | **Number  Exercisable** | ** ** | **Weighted  Average  Exercise Price  per Share** | ** ** |
| $1.49-$1.76                                 |       |                         | 55         |                         |       |   | 3.25 |   |   |   | $ | 1.53 |   |   |   | 55 |   |   |   | $ | 1.53 |   |   |
| $2.03-$2.80                                 |       |                         | 65         |                         |       |   | 4.30 |   |   |   | $ | 2.28 |   |   |   | 65 |   |   |   | $ | 2.28 |   |   |
| $4.59                                       |       |                         | 293        |                         |       |   | 6.12 |   |   |   | $ | 4.59 |   |   |   | 293 |   |   |   | $ | 4.59 |   |   |
| $6.12-$6.35                                 |       |                         | 239        |                         |       |   | 6.48 |   |   |   | $ | 6.34 |   |   |   | 239 |   |   |   | $ | 6.34 |   |   |
| $9.88                                       |       |                         | 262        |                         |       |   | 7.12 |   |   |   | $ | 9.88 |   |   |   | 262 |   |   |   | $ | 9.88 |   |   |
| $16.42-$16.58                               |       |                         | 113        |                         |       |   | 7.82 |   |   |   | $ | 16.43 |   |   |   | 113 |   |   |   | $ | 16.43 |   |   |
| $19.26-$19.55                               |       |                         | 241        |                         |       |   | 7.70 |   |   |   | $ | 19.27 |   |   |   | 241 |   |   |   | $ | 19.27 |   |   |
| $22.10-$27.60                               |       |                         | 66         |                         |       |   | 8.94 |   |   |   | $ | 24.39 |   |   |   | 66 |   |   |   | $ | 24.39 |   |   |
| Total                                       |       |                         | 1,334      |                         |       |   | 6.75 |   |   |   | $ | 10.34 |   |   |   | 1,334 |   |   |   | $ | 10.34 |   |   |
|                                             |            |                              |            |                              |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

In fiscal 2003, theCompany granted certain stock options (the “Contingent Options”) at an exerciseprice (dividend-adjusted) of $9.88 per share, the vesting of which wascontingent on the grantees meeting annual goals as stated in the optionagreements. Due to the contingent vesting mechanism, the Company concluded thatvariable plan accounting was proper in accordance with SFAS No. 123. Accordingly,the Company recorded $0.2 million of compensation expense relating to theContingent Options. The expense was recorded from the date of grant to the datethe Contingent Options were cancelled in 2003. Since the Contingent Optionswere cancelled in 2003, no future expense is required.

**11.   RIGHTS PLAN:**

The Company maintains a Stockholder Rights Plan inwhich preferred stock purchase rights (“Rights”) were distributed as a dividendat the rate of one Right for each share of the Company’s outstanding CommonStock held as of the close of business on September 30, 1997. The numberof Rights associated with each share of the Company’s Common Stock has beenproportionally adjusted in connection with the stock dividends issued by theCompany in accordance with the Stockholder Rights Plan such that, after givingeffect to the Company’s 25% stock declared on December 14, 2005, one Rightcorresponds to every 2.34 shares of the Company’s Common Stock held. Inaddition, the Stockholder Rights Plan provides that at the time Rightscertificates evidencing the Rights are to be issued, the Company will not berequired to issue Rights certificates that evidence fractional Rights. In lieuof such fractional Rights, the Company will pay to the persons to whichfractional Rights would otherwise be issuable, an amount in cash equal to thefraction of the market value of a whole Right.

Each Right will entitle stockholders to buy one 1/100th of a share of the newly designatedSeries A Preferred Stock of Jos. A. Bank at an exercise price of $40. TheRights will be exercisable only if a person or group acquires beneficialownership of 20 percent or more of the Company’s outstanding Common Stock(without the approval of the board of directors) or commences a tender orexchange offer upon consummation of which a person or group would beneficiallyown 20 percent or more of the Company’s outstanding Common Stock.

F-21

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**11.**   RIGHTSPLAN: (Continued)

If any person becomes thebeneficial owner of 20 percent or more of the Company’s outstanding commonstock (without the approval of the board of directors), or if a holder of20 percent or more of the Company’s Common Stock engaged in certainself-dealing transactions or a merger transaction in which the Company is thesurviving corporation and its Common Stock remains outstanding, then each Rightnot owned by such person or certain related parties will entitle its holder topurchase, at the Right’s then-current exercise price, units of the Company’s Series APreferred Stock (or, in certain circumstances, Common Stock, cash, property orother securities of the Company) having a market value equal to twice thethen-current exercise price of the Rights. In addition, if the Company isinvolved in a merger or other business combination transaction with anotherperson after which its Common Stock does not remain outstanding, or sells50 percent or more of its assets or earning power to another person, eachRight will entitle its holder to purchase, at the Right’s then-current exerciseprice, shares of common stock of such other person having a market value equalto twice the then-current exercise price of the Rights. The Company will generallybe entitled to redeem the Rights at $0.01 per Right at any time until the tenthbusiness day following the public announcement that a person or group hasacquired 20 percent or more of the Company’s Common Stock.

**12.**   SEGMENT REPORTING:

The Company has two reportable segments: stores anddirect marketing. The stores segment includes all Company owned storesexcluding factory stores. The direct marketing segment includes catalog andInternet. While each segment offers a similar mix of men’s clothing to theretail customer, the stores segment also provides complete alterations, whilethe direct marketing segment provides certain limited alterations.

The accounting policies of the segments are the sameas those described in the summary of significant policies. The Companyevaluates performance of the segments based on “four wall” contribution whichexcludes any allocation of “management company” costs, distribution centercosts (except order fulfillment costs which are allocated to direct marketing),interest and income taxes.

The Company’s segments are strategic business unitsthat offer similar products to the retail customer by two distinctivelydifferent methods. In the stores segment, the typical customer travels to thestore and purchases men’s clothing and/or alterations and takes their purchaseswith them. The catalog/direct marketing customer receives a catalog in his orher home, office and/or visits our web page via the Internet and eithercalls, mails, faxes or places an order online. The merchandise is then shippedto the customer.

Segmentdata is presented in the following table: 

| **Fiscal 2003**           | ** ** | ** ** | ** ** | **Stores** | ** ** | **Direct  Marketing** | ** ** | **Other** | ** ** | **Total** | ** ** |
|--------------------------------|------------|------------|------------|------------|------------|-----------------------|------------|-----------|------------|-----------|------------|
| Net sales(a)                   |       | $          | 257,365    |       |       | $                     | 32,229     |      |       | $         | 10,069     |   | $ | 299,663 |   |
| Depreciation and  amortization |       | 6,863      |       |       | 65         |                  |       | 2,454     |       | 9,382     |       |
| Operating  income(b)           |       | 54,683     |       |       | 9,524      |                  |       | (34,231   | )          | 29,976    |       |
| Interest expense,  net         |       | —     |       |       | —     |                  |       | 1,623     |       | 1,623     |       |
| Total assets(c)                |       | 162,162    |       |       | 24,116     |                  |       | 14,367    |       | 200,645   |       |
| Capital expenditures(d)        |       | 21,108     |       |       | 41         |                  |       | 2,096     |       | 23,245    |       |
|                                |            |            |            |            |            |                       |            |           |            |           |            |  |  |  |  |  |  |

** **

F-22

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**12.**   SEGMENT REPORTING:(Continued)

| **Fiscal 2004**           | ** ** | ** ** | ** ** | **Stores** | ** ** | **Direct  Marketing** | ** ** | **Other** | ** ** | **Total** | ** ** |
|--------------------------------|------------|------------|------------|------------|------------|-----------------------|------------|-----------|------------|-----------|------------|
| Net sales(a)                   |       | $          | 325,304    |       |       | $                     | 36,513     |      |       | $         | 10,683     |   | $ | 372,500 |   |
| Depreciation and  amortization |       | 8,720      |       |       | 69         |                  |       | 1,709     |       | 10,498    |       |
| Operating  income(b)           |       | 70,299     |       |       | 11,492     |                  |       | (39,738   | )          | 42,053    |       |
| Interest expense,  net         |       | —     |       |       | —     |                  |       | 1,696     |       | 1,696     |       |
| Total assets(c)                |       | 198,641    |       |       | 17,147     |                  |       | 17,516    |       | 233,304   |       |
| Capital expenditures(d)        |       | 25,056     |       |       | 18         |                  |       | 4,865     |       | 29,939    |       |
|                                |            |            |            |            |            |                       |            |           |            |           |            |  |  |  |  |  |  |

 

| **Fiscal 2005**           | ** ** | ** ** | ** ** | **Stores** | ** ** | **Direct  Marketing** | ** ** | **Other** | ** ** | **Total** | ** ** |
|--------------------------------|------------|------------|------------|------------|------------|-----------------------|------------|-----------|------------|-----------|------------|
| Net sales(a)                   |       | $          | 408,452    |       |       | $                     | 44,453     |      |       | $         | 11,728     |   | $ | 464,633 |   |
| Depreciation and  amortization |       | 10,777     |       |       | 70         |                  |       | 2,173     |       | 13,020    |       |
| Operating income(b)            |       | 94,694     |       |       | 15,815     |                  |       | (48,714   | )          | 61,795    |       |
| Interest expense,  net         |       | —     |       |       | —     |                  |       | 1,794     |       | 1,794     |       |
| Total assets(c)                |       | 257,499    |       |       | 30,982     |                  |       | 16,351    |       | 304,832   |       |
| Capital expenditures(d)        |       | 29,238     |       |       | 44         |                  |       | 2,295     |       | 31,577    |       |
|                                |            |            |            |            |            |                       |            |           |            |           |            |  |  |  |  |  |  |

----

(a)           Direct marketing netsales represent catalog and Internet sales. Net sales from other operatingsegments below the quantitative thresholds are attributable primarily to threeoperating segments of the Company. Those segments are factory stores, sales tofranchisees’ franchise stores and regional tailor shops. None of these segmentshave ever met any of the quantitative thresholds for determining reportablesegments and are included in “Other.”

(b)          Operating income for thestores and direct marketing segments represents profit before allocations ofoverhead from the corporate office and the distribution center (which areincluded in the “Other” segment), interest and income taxes. Total operatingincome represents profit before interest and income taxes.

(c)           Identifiable assetsinclude cash and cash equivalents, accounts receivable, inventories, prepaidexpenses and other current assets and property, plant and equipment residing inor related to the reportable segment. Assets included in “Other” are primarilycash and cash equivalents, property, plant and equipment associated with thecorporate office and distribution center, deferred tax assets, and inventories,which have not been assigned to one of the reportable segments.

(d)          Capitalexpenditures include purchases of property, plant and equipment made for thereportable segment.

F-23

----

**JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FISCAL 2003, 2004 AND 2005 (Amounts in Thousands, Except Per Share Amounts or as Otherwise Noted)**

**13.**   QUARTERLYFINANCIAL INFORMATION (Unaudited):

Summarizedquarterly financial information in fiscal 2004 and 2005 as follows:
|                                  | ** ** | **First  Quarter**                                                    | ** ** | **Second  Quarter** | ** ** | **Third  Quarter** | ** ** | **Fourth  Quarter** | ** ** | **Total** | ** ** |
|----------------------------------|------------|-----------------------------------------------------------------------|------------|---------------------|------------|--------------------|------------|---------------------|------------|-----------|------------|
| ** **                       | ** ** | **(In thousands, except per share amounts)** | ** ** |
| **Fiscal  2004**                 |       |                                                                  |       |                |       |               |       |                |       |      |       |
| Net sales                        |       | $                                                                     | 79,929     |                | $          | 81,994             |       | $                   | 82,634     |      | $          | 127,943 |   | $ | 372,500 |   |
| Gross profit                     |       | 49,035                                                                |       | 49,111              |       | 48,540             |       | 78,140              |       | 224,826   |       |
| Operating income                 |       | 9,463                                                                 |       | 6,418               |       | 5,142              |       | 21,030              |       | 42,053    |       |
| Net income                       |       | 5,271                                                                 |       | 3,432               |       | 3,202              |       | 12,576              |       | 24,481    |       |
| Diluted income per common share  |       | $                                                                     | 0.30       |                | $          | 0.19               |       | $                   | 0.18       |      | $          | 0.71 |   | $ | 1.38 |   |
| **Fiscal  2005**                 |       |                                                                  |       |                |       |               |       |                |       |      |       |
| Net sales                        |       | $                                                                     | 96,575     |                | $          | 98,588             |       | $                   | 105,639    |      | $          | 163,831 |   | $ | 464,633 |   |
| Gross profit                     |       | 60,613                                                                |       | 61,178              |       | 63,472             |       | 102,364             |       | 287,627   |       |
| Operating income                 |       | 11,782                                                                |       | 9,397               |       | 8,546              |       | 32,070              |       | 61,795    |       |
| Net income                       |       | 6,737                                                                 |       | 5,339               |       | 4,652              |       | 18,522              |       | 35,250    |       |
| Diluted income  per common share |       | $                                                                     | 0.38       |                | $          | 0.30               |       | $                   | 0.26       |      | $          | 1.02 |   | $ | 1.95 |   |

 

F-24

----